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Research Insight | When Do Consumers Prefer Newer Brands over Established Ones?

Consider a consumer choosing between two brands of chocolates: Suchard (established in 1826) and Max Chocolatier (established in 2009). Which brand are they more likely to prefer? Now consider the consumer choosing between two virtual reality headsets: Valve (established in 1996) and Avegant (established in 2012). Which brand is preferable? Previous research suggests that consumers prefer older, more established brands, but is this always the case? New research takes a contingent perspective to examine how consumers’ preferences are affected by their expectations of innovativeness. Researchers analyzed Amazon sales data and conducted seven experimental studies showing that consumers’ preference for older brands decreases with their expectations of category innovativeness. The rationale is that with expectations of innovativeness, consumers place less importance on consistency-related brand traits (e.g., stability, reliability) and more on excitement-related brand traits (e.g., dynamic, adventurous). Because older brands are associated with consistency, preference for older brands diminishes with expectations of innovativeness.

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What You Need to Know

  • Older brands’ advantage declines as expectations of product innovativeness increase. These expectations can be defined as the extent to which a product category is believed to have changed in the past and is expected to change in the future.
  • This decline is stronger for older brands that do not have a well defined, established image.
  • Managers of younger brands should emphasize the innovativeness in their products and/or nudge consumers to seek uniqueness.
 

Abstract

Unlike previous research that suggests a predominant preference for older brands, this research takes a contingent perspective to examine how consumers’ preference for older brands is affected by their expectations of category innovativeness. Results from the analysis of sales data from Amazon and seven experimental studies demonstrate that consumers’ preference for older brands decreases with their expectations of category innovativeness. The rationale is that with expectations of category innovativeness, consumers place less importance on consistency-related brand traits (e.g., stability, reliability) and more on excitement-related brand traits (e.g., dynamic, adventurous). Because older brands are associated with consistency, preference for older brands diminishes with expectations of category innovativeness. Further, this research identifies two factors that moderate the effects of category innovativeness on preference for older (vs. younger) brands. First, familiarity with the older brand moderates the effect of category innovativeness on brand preferences such that category innovativeness increases preferences for younger brands only when consumers are choosing between unfamiliar brands. Second, consumers’ need for uniqueness reduces the effect of category innovativeness on preferences for younger brands. Together, the findings suggest that the dominance of older brands reduces with expectations of category innovativeness. The findings are important from both theoretical and managerial perspectives.

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