In the eye of the beholder? The effect of product appearannce on shareholder value

Bornemann, Torsten ; Schöler, Lisa ; Homburg, Christian

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Document Type: Article
Year of publication: 2015
The title of a journal, publication series: The Journal of Product Innovation Management
Volume: 32
Issue number: 5
Page range: 704-715
Place of publication: Oxford
Publishing house: Blackwell Publ.
ISSN: 0737-6782 , 1540-5885
Publication language: English
Institution: Business School > Business-to-Business Marketing, Sales & Pricing (Homburg 1998-)
Subject: 650 Management
Abstract: In times of convergence with regard to product functionality and performance, the appearance of a product constitutes an important source of competitive advantage. Astonishingly, only a few studies have empirically examined the relationship between design-related aspects and firm value. Moreover, existing studies predominantly use accounting-based and/or subjective performance measures. Against this background, the present work assesses the contribution of the three most important product design dimensions (i.e., aesthetic, ergonomic, and symbolic value) to the creation of firm value in the context of the automotive and consumer electronics industry. To do so, we examine stock market reactions to the unveiling of a new product's appearance to the public using event study methodology. In particular, we combine perceptual data at the consumer level with stock market data to examine how target consumers' perceptions of the aforementioned design dimensions are related to abnormal returns following the unveiling of a new product. Results reveal that ergonomic value is positively related to abnormal returns, while aesthetic value only exerts a significant positive effect on abnormal returns if the product also exhibits a certain degree of functional product advantage. Finally, symbolic value exerts a negative influence on stock market reactions. These findings have important implications for the allocation of design-related investments to aesthetic, ergonomic, and symbolic design features.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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