Abstract
Prior research has demonstrated that customer evaluations of a new product are directly related to the degree to which a company’s skills are perceived to “fit” with those required to provide the new product. This finding has led to recommendations that firms focus on perceptually close new product areas. However, many firms have successfully entered perceptually distant markets. We reconcile this apparent contradiction by proposing that the effect of perceived fit on new product evaluation is not direct, but is mediated by the certainty a customer has that a company can deliver the proposed new product. Our findings indicate that, by itself, perceived fit has a positive impact on industrial product evaluations. However, the relationship between fit and new product evaluations, previously held to be direct, is instead mediated by customer certainty. That is, when the effect of customer certainty is considered, the direct effect of fit disappears. Implications for theory and practice are discussed.
Similar content being viewed by others
References
Aaker, David A. and Kevin Lane Keller. 1990. “Consumer Evaluations of Brand Extensions.”Journal of Marketing 54 (January): 27–41.
Anderson, James C. and David W. Gerbing. 1988. “Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach.”Psychological Bulletin 103 (March): 411–423.
Ansoff, H. Igor. 1965.Corporate Strategy: An Analytical Approach to Business Policy for Growth and Expansion. New York: McGraw-Hill.
Armstrong, J. Scott and Terry S. Overton. 1977. “Estimating Nonresponse Bias in Mail Surveys.”Journal of Marketing Research 14 (August): 396–402.
Bagozzi, Richard P. and Youjae Yi. 1988. “On the Evaluation of Structural Equation Models.”Journal of the Academy of Marketing Science 16 (Spring): 74–94.
Bagozzi, Richard P., Youjae Yi, and Lynn W. Phillips. 1991. “Assessing Construct Validity in Organizational Research.”Administrative Science Quarterly 36 (September): 421–458.
Baron, Reuben M. and David A. Kenny. 1986. “The Moderator-Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations.”Journal of Personality and Social Psychology 51 (6): 1173–1182.
Barsalou, Lawrence W. (1985). “Ideals, Central Tendency, and Frequency of Instantiation as Determinants of Graded Structure in Categories.”Journal of Experimental Psychology: Learning, Memory and Cognition 11 (4): 629–648.
Bentler, Peter M. 1989.EQS Structural Equations Program Manual. Los Angeles: BMDP Statistical Software Inc.
————— 1990. “Comparative Fit Indexes in Structural Models.”Psychological Bulletin 107 (2): 238–246.
Biggadike, Ralph E. 1977.Entering New Markets: Strategies and Performance. Report No. 77–108. Cambridge, MA: Marketing Science Institute.
Boush, David M. and Barbara Loken. 1991. “A Process-Tracing Study of Brand Extension Evaluation.”Journal of Marketing Research 28 (February): 16–28.
Cooper, Robert G. 1980. “Project NewProd: Factors in New Product Success.”European Journal of Marketing 14 (5/6): 277–292.
Cooper, Robert G. and E. J. Kleinschmidt. 1987. “Success Factors in Product Innovation.”Industrial Marketing Management 16 (August): 215–223.
Dacin, Peter A. and Daniel C. Smith. 1994. “The Effect of Brand Portfolio Characteristics on Consumer Evaluations of Brand Extensions.”Journal of Marketing Research 31 (May): 229–242.
Gatignon, Hubert, Barton Weitz, and Pradeep Bansal. 1990. “Brand Introduction Strategies and Competitive Environments.”Journal of Marketing Research 27 (November): 390–401.
Gerbing, David W. and James C. Anderson. 1992. “Monte Carlo Evaluations of Goodness of Fit Indices for Structural Equation Models.”Sociological Methods and Research 21 (November): 132–160.
Hair, Joseph F., Jr., Rolph E. Anderson, Ronald L. Tatham, and William C. Black. 1992.Multivariate Data Analysis Third Edition. New York: MacMillan.
Huber, Joel and John McCann. 1982. “The Impact of Inferential Beliefs on Product Evaluations.”Journal of Marketing Research 19 (August): 324–333.
Kardes, Frank and Chris Allen. 1991. “Perceived Variability and Inferences about Brand Extensions.” InAdvances in Consumer Research. Eds. Rebecca H. Holman and Michael R. Solomon. Provo, UT: Association for Consumer Research, 392–398.
Keller, Kevin L. and David A. Aaker. 1992. “The Effects of Sequential Introduction of Brand Extensions.”Journal of Marketing Research 29 (February): 35–50.
Kihlstrom, Richard E. and Michael H. Riordan. 1984. “Advertising as a Signal.”Journal of Political Economy 92 (31): 427–450.
Kirmani, Amna. 1990. “The Effect of Perceived Advertising Costs on Brand Perceptions.”Journal of Consumer Research 17 (September): 160–171.
Kirmani, Amna and Peter Wright. 1989. “Money Talks: Perceived Advertising Expense and Expected Product Quality.”Journal of Consumer Research 16 (December): 344–353.
Knowles, Patricia A., Stephen J. Grove, and W. Jeffrey Burroughs. 1993. “An Experimental Examination of Mood Effects on Retrieval and Evaluation of Advertisement and Brand Information.”Journal of the Academy of Marketing Science 21 (Spring): 135–142.
LaBarbera, Priscilla A. 1982. “Overcoming a No-Reputation Liability through Documentation and Advertising Regulation.”Journal of Marketing Research 19 (May): 223–228.
Lim, Jeen-Su and John Kim. 1992. “Impact of Consumers’ Confidence in Judgements about Missing Information on Product Evaluations.”Journal of Business Research 25 (December): 215–229.
Loken, Barbara and Deborah Roedder-John. 1993. “Diluting Brand Beliefs: When Do Brand Extensions Have a Negative Impact?”Journal of Marketing 57 (July): 71–84.
MacInnis, Deborah J. and Kent Nakamoto. 1990. “Cognitive Associations and Product Category Comparisons: The Role of Knowledge Structure and Context.” Working paper. School of Business, University of Arizona.
Mervis, Carolyn B. and Eleanor Rosch. 1981. “Categorization of Natural Objects.”Annual Review of Psychology 32: 89–115.
Milgrom, Paul and John Roberts. 1986. “Price and Advertising Signals of Product Quality.”Journal of Political Economy 94 (August): 796–821.
Minnesota Consumer Behavior Seminar. 1987. “Affect Generalization to Similar and Dissimilar Brand Extensions.”Psychology and Marketing 4 (Fall): 225–237.
Moore, William L. 1982. “Concept Testing.”Journal of Business Research 10: 279–294.
Moore, William L. and Edgar A. Pessemier. 1993.Product Planning and Management. New York: McGraw-Hill.
Moskowitz, Howard and Samuel Rabino. 1983. “The Trading of Purchase Interest for Concept Believability: Strategical Implications for Advertising Planners and Product Developers.”International Journal of Advertising 2 (July/September): 265–274.
Mullich, Joe. 1993. “New Product Needs New Identity.”Business Marketing 78 (August): 63.
Nelson, Phillip. 1974. “Advertising as Information.”Journal of Political Economy 82 (July/August): 729–754.
Park, C. Whan, Sandra Milberg, and Robert Lawson. 1991. “Evaluation of Brand Extensions: The Role of Product Feature Similarity and Brand Concept Consistency.”Journal of Consumer Research 18 (September): 185–193.
Porter, Michael E. 1985.Competitive Advantage. New York: Free Press.
Prahalad, C. K. and Gary Hamel. 1990. “The Core Competence of the Corporation.”Harvard Business Review 68 (May–June): 79–91.
Rogers, Everett M. 1983.Diffusion of Innovations. New York: Free Press.
Smith, Daniel C. and C. Whan Park. 1992. “The Effects of Brand Extensions on Market Share and Advertising Efficiency.”Journal of Marketing Research 29 (August): 296–313.
Trout, Jack and Al Ries. 1993. “The Name Game.”Sales and Marketing Management 145 (December): 37.
Wells, J. Roland. 1984. “In Search of Synergy.” Unpublished doctoral dissertation. Harvard University.
Wernerfelt, Birger. 1988. “Umbrella Branding as a Signal of New Product Quality: An Example of Signalling by Posting a Bond.”Rand Journal of Economics 19 (Autumn): 458–466.
Williams, Larry J. and John T. Hazer. 1986. “Antecedents and Consequences of Organizational Turnover: A Reanalysis Using a Structural Equations Model.”Journal of Applied Psychology 71 (May): 219–231.
Wolinsky, Asher. 1983. “Prices as Signals of Product Quality.”Review of Economic Studies 50 (October): 647–658.
Wright, Peter and Barton Weitz. 1977. “Time Horizon Effects on Product Evaluation Strategies.”Journal of Marketing Research 14 (November): 429–443.
Yates, J. Frank, Carolyn M. Jagacinski, and Mark D. Faber. 1978. “Evaluation of Partially Described Multiattribute Options.”Organizational Behavior and Human Performance 21 (April): 240–251.
Author information
Authors and Affiliations
Additional information
His research interests include management of brand equity, and competitive analysis. His research has been published inJournal of Marketing Research, Journal of Marketing, Journal of Consumer Research, Strategic Management Journal, Journal of Advertising Research, Industrial Marketing Management, Journal of Services Marketing andPlanning Review. He received his Ph.D. from the University of Pittsburgh.
Her research interests are in “marketing creativity,” and the management of mature products. Her research has been published in theJournal of Services Marketing and in the proceedings of the American Marketing Association. She received her Ph.D. from the University of Wisconsin-Madison.
Rights and permissions
About this article
Cite this article
Smith, D.C., Andrews, J. Rethinking the effect of perceived fit on customers’ evaluations of new products. JAMS 23, 4–14 (1995). https://doi.org/10.1007/BF02894607
Issue Date:
DOI: https://doi.org/10.1007/BF02894607