How to Brand Next Generation Product - a Study by Hbs Marketing Faculty

1867 words 8 pages
RESEARCH & IDEAS

How to Brand a Next-Generation Product
Published: April 23, 2012 Author: Carmen Nobel Upgrades to existing product lines make up a huge part of corporate research and development activity, and with every upgrade comes the decision of how to brand it. Harvard Business School marketing professors John T. Gourville and Elie Ofek teamed up with London Business School's Marco Bertini to suss out the best practices for naming next-generation products. Key concepts include: • Companies often take one of two tacks in naming a next-generation product—the sequential naming approach or the complete name change approach. • Experimental research showed that each naming approach affects customer expectations. With a name change,
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reward
Companies also must assess risk versus reward when branding a product upgrade. On the one hand, changing the brand name may induce excitement among prospective consumers who value new bells and whistles over small improvements. On the other hand, customers may worry that new features pose the risk of new glitches and a steep learning curve. It's important for a firm to predict the likelihood of risk aversion in its branding decision. Sometimes this is an unpredictable matter of a consumer's individual personality; for every Cautious Carl in the world, there's a Risky Rita. But many times, it's a matter of the situation at hand. Ofek cites the example of Intel, which in 2001 introduced a 64-bit processor called Itanium, indicating that the product was markedly different than Xeon, its 32-bit predecessor. These types of processors power huge computer servers, which play vital roles in companies' day-to-day operations. Servers are a major expenditure, and a faulty server can lead to a crisis. "Even though Intel promised that Itanium had backward compatibility with Xeon, IT directors really worried about it," Ofek says. "That created a real delay in purchasing for Itanium, which really never took off." To illustrate this point scientifically, the professors conducted an experiment with 203 participants, who

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