Producers of new products must be aware of perceived similarities with other products. Bram Kuijken wrote his PhD about the importance of the categorisation of new products.
Why did the Segway not succeed? The electric two-wheeled vehicle that transports people while standing upright was introduced in 2001 with great fanfare in the market as it promised to change transport radically and would become 'more important than the Internet'. That promise has never been fulfilled. Today the vehicle is mainly used by tourists in big cities.
In his thesis Bram Kuijken examines how new products or new innovations of existing products are marketed. ‘The big problem is that new products or innovations are difficult to categorise’, says Kuijken. ‘They fall outside of the existing and familiar product categories, or they have characteristics of different existing categories. When producers are aware of that, they can respond to that more effectively.’
Kuijken received his PhD in December 2015 at the Amsterdam Business School (ABS) under the guidance of Nachoem Wijnberg, Professor of Cultural Entrepreneurship and Management. The title of his thesis is "Undecidable? Categorisation and its effects”. Kuijken also received his Master’s in Business Administration from the ABS. Currently he is an Assistant Professor in Entrepreneurship and Innovation.
In his thesis, Kuijken poses the question how should producers act when their product cannot be classified within an existing category. Thus, in the case of the Segway, the product did not clearly fit into an existing category of transportation modes. Is it a walking scooter, an electric bicycle or an unicylcle? Both consumers and policymakers were never able to give it a clear product 'label', which is one of the reasons why it did not succeed.
‘When producers introduce an radically new product in the market, they may choose to seek connection with existing categories’, says Kuijken. The idea is that consumers refer to their knowledge of existing product categories in order to determine the value of an unknown product. That connection is found when the product provides certain textual or visual cues, or it can easily be equipped with a specific label. Thus one can keep in mind that domestic appliances like washing machines usually are white and that wine is sold in bottles. ‘Yet it is not always necessary to conform to well-known labels’, says Kuijken.
Kuijken tested how ‘radically innovative products’ can best be marketed. ‘The theory says that in radically new products it doesn’t work as well to conform to existing labels, and it is therefore better to come up with a totally new one’, adds Kuijken. For his experiments Kuijken developed an online auction. The participants, numbering several thousand, were able to place offers on auction products.
The first test was carried out with a device that scans food and presents the nutritional values on a person’s smartphone. ‘We then divided the bidders into two groups’, says Kuijken. ‘In the first group we labelled the product as "calorie counter" which relates to familiar concepts. In the other group, the product was labelled as "smart food analyser", which is a new label. On average bidders valued the product labeled smart food analyser higher. This was in line with our expectations that it is better to use a new label for a radically new product’, says Kuijken.
Kuijken also tested products with new applications or combinations of existing products, called incrementally innovative products. ‘The theory predicts in this case that it is beneficial to conform to existing category labels.’ A set of three cutting boards was used whereby each board had its own symbol - used as an index - which indicated whether they were meant for fish, meat or vegetables respectively.
One group of test subjects could purchase the product under the name “plastic cutting boards”, which conformed to a known category. The second was labelled "smart index cutting boards”.
Between the two groups there did not appear to be a significant difference. ‘This was not in line with theory’, says Kuijken. 'The general conclusion is therefore that labels are particularly important for radically new products and that one should therefore make up a new label.’
Kuijken also studied the so-called classification gap. This occurs when the producer and consumer classify the product differently. ‘This is a situation that you should always avoid’, says Kuijken. ‘It leads to cognitive dissonance among consumers with the result that the consumer does not purchase the product.’
To study this problem Kuijken did research for several famous Dutch annual music festivals such as Pinkpop and the North Sea Jazz Festival. ‘The problem is that different artists perform each year. Public perception of the genre is dependent on the artists that are performing. The producer may perceive the genre differently than the consumer.’
Kuijken interviewed numerous producers and consumers who had gone to a particular festival in the last year and therefore could be seen as experts. ‘The theory was correct. As the classification gap increased, consumers were less likely to visit the festival. The conclusion is that a producer should match the category according consumers’ beliefs. Unless you want to educate the consumer, and explain what the product really is.’
In addition to teaching, Kuijken leads a private company that emerged from his experiments with online auctions. This concerns a research and marketing platform (https://alleeup.com) that offers products that have as a common denominator: they are not easily categorised. Whereas it is relatively straightforward to categorise the floor lamp, the name Spot-Nik, the “Natural hydration system” and the “balkonbar” are less easily recognisable.