Leveraging Constraints for Innovation

3THE CONSUMER AS THE LAST CONSTRAINT: ADDRESSING PSYCHOLOGICAL CONSTRAINTS IN NEW PRODUCT DEVELOPMENT

Nadine Hietschold

University of Zurich, Zurich, Switzerland

Introduction

New products fail at rates of approximately 40%, and a major reason for the flop of almost half of the new products is relatively simple: Consumers resist purchasing and using the innovation. In times of increasing availability of best-practice tools in management and marketing, new product failure rates are still surprisingly high. Although innovations usually possess an objective advantage over existing substitutes, companies still often fail to attract a large consumer group beyond some eager early adopters.

3.1 The Consumer as Constraint: Why Firms Manage Consumers Insufficiently

Why do so many innovations fail on the market despite the tremendous efforts of companies to understand their customers? The main reason is that most current market research methods focus on consumer needs but ignore the fact that consumers' personalities and the way they make purchase decisions substantially differ. The decision-making process of individuals is determined by their personality traits (i.e. psychological characteristics), such as the follower tendency (i.e. the tendency to conform to others instead of diverging from others). Such personality traits can have a negative effect on adoption and constrain innovation success. For example, if a company launches an innovative smartwatch that is targeted at young ...