Paper Els Gijsbrechts accepted for publication at the International Journal of Research in Marketing
The paper “The Dark Side of Innovation: How New SKUs Affect Brand Choice in the Presence of Consumer Uncertainty and Learning” by Els Gijsbrechts, co-authored with Bernadette van Ewijk, a former Tilburg PhD who is currently at the UvA and Jan-Benedict Steenkamp from UNC in Chapel Hill, has been accepted for publication at the International Journal of Research in Marketing.
Abstract
New product activity is critical for sustained success of consumer packaged goods (CPG) brands. However, the impact of new SKUs on the perceived quality, quality uncertainty and subsequent choice of the brand as a whole is, as of yet, not well understood. The authors study how new additions to the brand line shape consumers’ quality perceptions, and how this – next to the mere line length effect – influences their choice of brands over time. They do so in the setting of an emerging market (China), where new product activity is particularly pervasive. Using a unique scanner panel dataset of Chinese households over the period 2011-2014, they estimate a Bayesian learning model that accommodates varying quality, on two CPG categories, and for two types of new-product additions (new sensory SKUs vs. new non-sensory SKUs). They show that while adding new SKUs may lift the brand’s perceived quality level, it also makes consumers more uncertain about the quality of the brand – dampening their brand choice. This holds especially for light customers – an important part of the brand clientele. Managerial implications are discussed.