'Success follows form’ : the effect of creative equity on consumers’ product evaluations and purchase intentions

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‘Success follows form’: The effect of

creative equity on consumers’ product

evaluations and purchase intentions

Author: Ioana Ruxandra Vega

Student number: 6262066

Supervisor: Dr. Ir. Ellis van den Hende

2

nd

_{supervisor: Dr. Ir. Mark A.A.M. Leenders}

University of Amsterdam

Faculty of Economics and Business

Master Thesis Business Studies

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ABSTRACT

The aesthetic response of consumers to product appearance is a popular topic among researchers,

but there is still limited empirical evidence on how individuals actually perceive and respond to

product design. This study advanced the concept of creative equity to refer to products that are

able to differentiate themselves through superior design. In this context, an experimental study

was conducted to understand how creative equity influences consumers’ response,

conceptualized as product evaluations and purchase intentions. Four additional variables were

included in the model: extraversion, openness to experience, the availability of individuals’

cognitive resources as potential moderators, and positive affect as a mediator of the relationship

between creative equity and consumer response. In order to test the proposed conceptual model,

an experiment was conducted and data was collected via an online questionnaire from a sample

of 168 respondents. The results of the experiment showed that consumers’ response to high

creative equity products is more positive than their response to low creative equity products.

Moreover, extraversion, and the availability of cognitive resources have a significant influence

on the above-‐‑mentioned relationship. More precisely, respondents who were under high cognitive

load showed no difference in the evaluation of high vs. low creative equity products, whereas

respondents who were under low cognitive load evaluated more positively the products with high

creative equity compared to low creative products. The findings of the study have a series of

implications for managers looking for innovative and efficient ways to gain a sustainable

competitive advantage through creative equity

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1. Introduction

The success of a company is influenced by many factors but lately a lot of emphasis has been placed on product design as it is considered a source of differentiation in the marketplace. Simply put, “a company’s success has many parents, and good design is one of them” (Rodriguez, 2010, p. 1). There are many firms that realized that in a competitive environment one way to stand out is to create products not only with an attractive appearance, but also create products that fulfill consumers’ needs, that are easy to understand, easy to use, and that work just the way consumers want them to (Kotler, Armstrong, Saunders, & Wong, 1999; Norman, 2004). Good design “makes you fall in love with the product” and positively influences the quality of consumers’ life (Bloch, 1995, p. 20). As a consequence, many companies have embraced it and use it as a major marketing tool to compete in the national or international arena. There are many examples in this sense, from Nike in the apparel industry, Swatch with its colorful and stylish watches, IKEA furniture that “reflects the dominance of traditional Scandinavian materials of light wood, linen and cotton textiles” (Kotler et al., 1999, p.569) or Apple that managed to create a real Mac culture all over the world. All these are only a few examples of the way in which “design determines not only existence, but also self: through products people communicate with each other, define themselves in social groups, in this way defining their place in society” (Bürdek, 2005, p. 11).

Krippendorff (1989) argues that in certain circumstances (e.g., when consumers want to express their self image or ideal self image) consumers might assign secondary role to the functional criteria of the product. For example, when Mini Cooper was launched, many complained about its dynamic attributes. However, in a review in The New York Times it was described as follows: “it is fair to say that almost no new vehicle in recent memory has provoked more smiles” (Swan, 2002, p. 1). It was its unique, “smiles provoking” design that contributed to its final success, as indicated by the demand it created after it was launched. Hertenstein, Platt, & Veryzer (2005) found that firms that can differentiate themselves through good design are stronger on all financial measures than firms that score low on the design of their products, and therefore expenditures on industrial design can be viewed as investments since they are capable of generating financial returns.

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The focus of the present study is the concept of creative equity and how it influences the way consumers perceive and evaluate the products in consumption situations. Creative equity is an organizational asset and it can be defined as “a recognizable look or feel that companies use consistently” (Crawford & Di Benedetto, 2008, p. 294) in order to increase the success of their products in the marketplace (Person & Schoormans, 2010). However, the way consumers perceive it might be influenced by a series of factors such as personality traits, feelings and cognitive resources. Previous studies that investigated the influence of product design on consumers’ perception focused on factors such as individual tastes and preferences, innate design preferences (Bloch, 1995) or design principles such as unity and proportion (Veryzer, 1993), but none has investigated the effect of affective states, extraversion, openness to experience and cognitive load on the way product design is perceived and evaluated.

Therefore, the main purpose of this study is to investigate how creative equity influences consumers’ product evaluations and purchase intentions. The second purpose of the paper is to determine how cognitive load influences the relationship between creative equity and product evaluations/purchase intentions. Thirdly, extraversion and openness to experience are considered to moderate the relationship between creative equity and product evaluation/purchase intentions. The last purpose of the study is to determine whether positive affect mediates the effect of creative equity on product evaluations and purchase intentions. The following research questions are answered throughout the study:

RQ1: Are high creative equity products more positively evaluated than products with low creative equity? Do consumers have higher purchase intentions for high creative equity products than for low creative equity products?

RQ2: When consumers are under high cognitive load, how do they evaluate high creative equity products as compared to low creative equity products?

RQ3: Do high creative equity products generate affective states, which in turn influence consumers’ product evaluations and purchase intentions?

RQ4: Are high creative equity products more positively evaluated by individuals who score high on extraversion compared to individuals who score low on extraversion?

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The paper is structured as follows: the next section reviews the relevant theory regarding the concepts used. Based on the theoretical concepts, a series of hypotheses are formulated and a conceptual model is built. Next, the methodology section presents the research design used to test the hypotheses, the data collection and sampling method. Then the results of the study are presented and the statistical analyses that were performed to test the proposed hypotheses. The study ends with a discussion of the main findings, followed by a series of managerial and academic implications, and the limitations of the study.

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2. Literature review

2.1. Product design: process or outcome?

Design is a considered to have a multidisciplinary nature (Desmet & Hekkert, 2007). As Bürdek (2005, p. 13) states, “the manifold currents and tendencies of design are reflected in the very use of the concept of “design”, up to and including sometimes rather diffuse definitions of the word”. However, it is important to mention that relevant to this study is the concept of industrial design or product design, which was investigated from different perspectives throughout the business-‐‑related literature and has been found to contribute to the commercial success of the companies that manage it efficiently (Kotler & Rath, 1984; Hertenstein et al., 2005; Veryzer, 1995; Yamamoto & Lambert, 1994).

Surprisingly, given the acknowledged importance of product design and the growing interest of scholars in this topic, there is still hard to find one accepted definition of the term throughout the literature. For example, Veryzer (1995, p. 641) argues that the objective of the industrial design process is to produce “a particular product configuration” and that the outcome of this process (i.e., the design) plays a crucial role in communicating a product’s use or function. Similarly, Yamamoto & Lambert (1994) state that industrial design is more than the creation of pleasing product shapes and styles, but it can be viewed as an efficient way of communicating quality and product integrity. Kotler & Rath (1984) consider that the aim of design is to create high satisfaction for the target market and profits for the company.

But besides its objectives and the roles it plays within a company, what exactly is industrial design and how can it be defined? In order to answer this question I will consider the study of Luchs & Swan (2011) who propose to solve this problem by conducting a broad analysis of the design literature since 1995 onwards and introduce a definition of design that reflects the breadth of the topic sufficiently. However, the authors distinguish between product design, which refers to and is related to the artifact or to the product and product design as a process, which generates the artifact. This observation is in line with the studies of Veryzer (1995), Kotler

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& Rath (1984), and Creusen (2011), who also make a distinction between these two facets of design. Therefore, the two distinct definitions are:

Product design: The set of properties of an artifact, consisting of the discrete properties of

the form (i.e., the aesthetic value of the product/service) and the function (i.e., its capabilities) together with the holistic properties of the integrated form and function (Luchs & Swan, 2011, p. 338).

Product design process: the set of strategic and tactical activities, from idea generation to

commercialization, used to create a product design (Luchs & Swan, 2011, p. 338).

2.2. Product Aesthetics

The outcome of the design process is the product or the physical artifact, which is considered to be perceived by the senses (Rafaeli & Pratt, 2006) and to elicit certain reactions in those who interact with it (Crilly, Moultrie, & Clarkson, 2004). Strongly related to product design is the concept of product aesthetics (i.e., product appearance), which refers to “what the product presents to the senses” (Crilly et al., 2004, p. 549). These aesthetic considerations, central to product design, are considered to be “quite complex and broad in scope since aesthetics (i.e., form, configuration) often play a central role in object perception, recognition, interpretation, understanding, and use” (Veryzer, 1995, p. 641). Therefore, product aesthetics refer to the appearance of the product, the final form that consumers actually see. As Yamamoto & Lambert (1994) argue, the role of product aesthetics is to enhance the desirability of the product. When being faced with the choice between product alternatives that are similar in function and price, consumers will prefer the one that looks better (Creusen & Schoormans, 2005), and this is due to the fact that consumers “don’t just buy a product, they buy value in the form of entertainment, experience and identity” (Crilly et al., 2004, p. 548).

In her book called “The substance of style”, Virginia Postrel (2003) makes clear how aesthetics (i.e., product form), once considered having no legitimate value, have become part of our personal, economic, and social lives. She claims that “in order to maintain a healthy balance

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between substance and surface, we can no longer simply pretend that surfaces don’t matter” (Postrel, 2003, p. 23). And what is even more important is that aesthetics not only apply in the case of industrial design but also to the environments that surround the products as well as in the case of personal appearance. Design accompanies us in all aspects of life: in education, in health services, in sports, in the transport of people and goods, in the public sphere, “everything is designed, intentionally or not” (Bürdek, 2005, p.11). Similarly, Lindgaard & Whitfield (2004) state that aesthetics is not a trivial function, as it might be considered by those who value more the ergonomic functions. Aesthetics are present in every aspect of our life, “from the clothes we buy to the homes that we furnish to the cars that we drive to the offices that we work in” (Lindgaard & Whitfield, 2004, p. 74).

2.3. Aesthetic, functional, and symbolic value of products

Differently from product aesthetics, there is also the concept of aesthetic value of a product that derivers from the pleasure of seeing it, without consideration of its utility (Creusen & Schoormans, 2005). All the products are considered to posses specific functional, symbolic and aesthetic properties, which are derived from the product’s outer form or appearance and these three dimensions are essential to an artifact’s analysis (Rafaeli & Pratt, 2006; Rindova & Petkova, 2007; Rafaeli & Vilnai-‐‑Yavetz, 2004). Throughout the literature these three specific caracteristics can be found under different names. For example, in his book called Emotional Design, Norman (2004) emphasizes the same three aspects of design, but he calls them visceral (i.e., aesthetics), behavioral (i.e., functional) and reflective (i.e., symbolic). Other authors have added new roles that product apearance might play for consumers, such as ergonomic value, attention-‐‑drawing and categorization (Creusen & Schoormans, 2005). The conclusion of all these observatios is the fact that product appearance has profound effects on the way consumers appreciate products and its influence spans from the aesthetic value that is attached to the product, to its perceived quality, ease of use or more abstract values such as pride or ideal self-‐‑ image.

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Regarding the functional value of products, the product form can emphasize the functionality of the product (Rindova & Petkova, 2007), its effectiveness of use (Norman A. D., 2004), the utilitarian functions it can perform (Creusen & Schoormans, 2005) or its quality level (Kotler & Rath, 1984). As (Crilly, Moultrie, & Clarkson, 2004) mention, there is a commonly promoted notion that the appearance of a product should be determined by its functionality. For example, Hoegg & Alba (2011) advance this proposition in their study, and instead of emphasizing the aesthetic aspects of product design, they focus on the functionality of the product that is communicated by its appearance. However, as Veryzer (1995, p.643) argues, this form/function distinction might be somehow misleading because “the appearance of a product determines both how the product looks (i.e., aesthetics) and how it might be used (i.e., form).”

Furthermore, the symbolic value of a product relates to the inner values of an individual, as the choice for a specific product might signal the kind of person someone is or wants to be (Creusen & Schoormans, 2005). The product form can communicate a rich set of messages through which the product is interpreted and meanings are attached to it (Rindova & Petkova, 2007). Therefore, when studying the effect of product appearance on consumers’ perceptions it is important to take into consideration all these dimensions that product form can generate. As Rindova & Petkova (2007, p.228) argue, the product appearance has a strong effect on the way consumers understand and attach meaning to the product, and as a consequence “the outer form is critical to the perception, recognition and creation of value through product innovations.”

2.4.Creative equity

Before defining the concept of creative equity, I will briefly mention what good design means for a company and for the consumers that interact with it. Veryzer (1995, p. 641) argues that an optimal design is expected “to perform its intended functions well, to be economical (i.e., profitable for the manufacturer and a good value for consumer), and to be pleasant to behold.” Kotler & Rath (1984) consider that a high-‐‑quality design, which is managed in an efficient way can create corporate distinctiveness, can make a newly launched product stand out or increase

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consumer’s interest in mature products. From a consumer perspective, the authors argue that a successful design can communicate a certain value, make selection easier, inform and entertain. “Effective design calls for a creative balancing of performance, quality, durability, and appearance variables at a price that the target market can afford” (Kotler & Rath, 1984, p. 18). From a different perspective, Gabrielsen, Grønhaug, Kahle, Kristensen, Plenborg, & Wilke (2009) mention three elements of particular relevance to a good design: functionality, credibility and expression.

The focus of this study is the product appearance or the product design (i.e., the outcome of the design process), and the value that successful product design brings to the companies that manage to use it as a differentiation tool in the marketplace. Person & Schoormans (2010, p. 50) call this value “creative equity” and they define it as “what differentiates a brand’s product design styles on the market”. A similar concept is described by Crawford & Di Bendetto (2008, p. 294), and they argue that many companies worldwide have established “visual equity” across their products. They define visual equity as “a recognizable look or feel that companies use consistently”, which can successfully influence the public perception of the firm and build its corporate identity. Noble & Kumar (2010, p. 651) use the term of high design to describe the products “with a dominant emphasis on aesthetic and form elements and a strong overall sense of style” and mention that there is a broad range of consumers who are drawn to this type of products. As Person & Schoormans (2010, p. 50) argue, “creative equity is an organizational asset expressed in a company’s product designs and fostered by the market reception of these products”. Firms like Alessi, Apple, Bang & Olfusen, Dyson or Kartell are a good example of companies that successfully managed creative equity by investing in the design of their products and as a consequence, their product’s visual appearance acts as the main mean for differentiation in the marketplace (Talke, Salomo, Wieringa, & Lutz, 2009).

Even though the study of Person & Schoormans (2010) refers to Scandinavian companies, well known throughout the world for their outstanding and innovative designs, it does not mean that the concept of creative equity is limited to the Scandinavian industry. On

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the contrary, there are many firms worldwide that manage creative equity and strategically develop it as an asset (Pearson & Schoormans, 2010; Crawford & Di Bendetto, 2008). These companies have realized that in order to differentiate themselves in the marketplace and increase their market shares they have to produce superiorly designed products for their target markets (Kotler & Rath, 1984). In line with these observations, Rindova & Petkova (2007) state that product form contributes to value creation and should be given strategic importance. Consumers go beyond the utilitarian value and demand products that distinguish themselves through their aesthetic design. As Postrel (2003, p.43) argues, “we are entering an era in which the look and feel of products will determine their success”.

2.5. Creative equity vs. Brand equity

An important mention is the fact that creative equity distinguishes itself from brand equity in the sense that the latter refers to the value that a powerful brand gives to consumers and to the company. More specifically, Keller & Lehman (2006) state that brands manifest their impact at three primary levels: customer market, product market, and financial market. The value accrued by these various benefits is often called brand equity. Similar to brand equity, creative equity gives companies a competitive edge, but the difference is that it provides market differentiation by increasing the consumer appeal of their products through products’ design (Person & Schoormans, 2010).

2.6. The traits of creative equity

Person & Schoormans (2010) identified four essential traits of creative equity designs, which were observed in products that score high on creative equity dimension: expressive, qualitative, authentic and coherent. This study will build upon these four core traits, as they are considered “to be equally applicable to all industries, and thus be relevant to design management in general” (Person & Schoormans, 2010, p.51).

Expressive: Person & Schoormans (2010, p.52) define this trait as “the stylistic verve of

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(2009, p.15), the expressiveness of a product is considered of particular relevance in the case of good design and it is described as “an aesthetic indication that the design was to be judged as attractive”. The expressiveness of a product can generate a wide range of emotions and feelings, as these products offer to consumers both symbolic and functional value.

Qualitative: The product appearance can be an effective indicator of quality and performance,

which can influence consumers’ expectation of the product (Noble & Kumar, 2010). Usually, the products that stand out through their design are appreciated by consumers as being highly qualitative. According to Desmet & Hekkert (2007, p. 63), “users may infer a higher quality of a product from its beauty, which in turn implies a better usability”. Good design is by nature the equivalent of high quality and consumers bear that in mind when purchasing a certain product.

Authentic: Authenticity refers to a product’s capacity to “deliver on its promise” (Person &

Schoormans, 2010, p. 53). Beverland (2006) identifies six attributes of authenticity based on a series of interviews with luxury wine consumers: heritage, stylistic consistency, quality commitments, relationship to place, method of production, and downplaying commercial motives. Even though the six attributes were determined from the context of one industry, the author mentions that they can be successfully transferred to other contexts. Consider Levi Strauss that emphasizes originality as one of their core values, by claiming a proud heritage in the industry of blue jeans. They claim being “the pioneers of a spirit that started in 1873 with the very first pair of blue jeans” (Levi Strauss website, 2011).

Coherent: Pearson & Schoormans (2010) argue that coherence in design can improve a

company’s designs “by giving them a family resemblance that raises the profile of all the products, across the board”. In their book “Universal Principles of Design”, Lidwell, Holden, & Butler (2003) call this trait aesthetic consistency and they state that it refers to consistency of style and appearance and it plays an important role in enhancing recognition, communicating membership, and setting emotional expectations. Aesthetic consistency can establish unique identities that can be easily recognized. The Apple products, all sharing a coherent design language, are the best example in this sense. “The subtle cues that link the devices make each one feel like it is part of something greater, namely the Apple brand” (Kuang, 2010, p. 1).

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2.7. Creative Equity and Product Evaluation/ Purchase intentions

This study aims to explore how consumers perceive creative equity and how it influences their decisions in the marketplace. Bloch (1995) proposes that the appearance of products is a critical determinant of consumer response and product success, and it affects consumers’ beliefs about the product and about the brand. In his study of aesthetic response, Veryzer (1993) investigated how two design principles (i.e., unity and proportion) influence consumers’ response, measured on a Likert scale from dislike to like. The findings suggest that the products that were consistent with the design principles of unity and proportion generated more favorable responses from consumers. Similarly, Page & Herr (2002) conducted a series of experiments and proved that product design has a positive effect on consumers’ liking evaluations as well as on their quality judgments. As Yamamoto & Lambert (1994, p.310) mention, considering that the product fills a need, “product aesthetics could act as one of the factors enhancing the desirability of a given offering.”

Moreover, product form is considered to generate a series of aesthetic responses in consumers, including an engagement of attention and strong positive emotions (Bloch, 1995; Rindova & Petkova, 2007). Similarly, Desmet & Hekkert (2007) argue that an aesthetically pleasing product may activate an experienced meaning of exclusiveness and an emotional response of desire. In the case of high creative equity products, the definition implies that this type of products have an identifiable design style that consumers associate with quality (Person & Schoormans, 2010). Moreover, the products that score high on creative equity possess four main characteristics: authenticity, quality, expressiveness, and coherence. Through these traits, creative equity acts as a differentiation tool by increasing the aesthetic appeal of the products in the market. The aesthetic responses of consumers to high creative equity products can be viewed as being more affective in nature, such as liking evaluations, or more cognitive, such as buying intentions, or quality assessment (Page & Herr, 2002). Regarding the present study, I propose that creative equity positively influences consumers’ product evaluations and purchase intentions, thus the following hypotheses are proposed:

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2.8. Creative equity and Cognitive Load

Dewitte, Pandelaere, Briers, & Warlop (2005) argue that the decision process is qualitatively different depending on whether consumers analyze the available information in a deep or a shallow way. Shiv & Huber (2000) examine how the preferences of consumers change when their focus is on the anticipated satisfaction with a purchase rather than the choice itself. The authors propose that anticipated satisfaction from the part of consumers influences their preferences. This is due to the fact that “an orientation to anticipated satisfaction, where consumers assess the likely satisfaction with each item before making the final choice” (Shiv & Huber, The Impact of Anticipating Satisfaction on Consumer Choice, 2000, p. 202) involves intensive mental processing and as a consequence consumers allocate fewer resources to the task itself. Therefore, when being under cognitive demanding situations, consumers’ decisions in the marketplace might be different. The cognitive resources they are able to allocate to the task they have to perform are restricted and as a consequence “their ability to carefully test and evaluate the expected quality of the different pieces of information will decline” (Fischer, Jonas, Frey, & Schulz-‐‑Hardt, 2005, p. 473). Smith, Fabrigar, Powell, & Estrada (2007, p. 950) also argue that when individuals are faced with exceeding cognitive resources (i.e., high cognitive load situations) they might “select the first information they encounter or select information randomly”. Therefore, it would be interesting to examine whether and how cognitive load influences the effect of creative equity on consumer response. Based on the previous observations, I expect that cognitive load moderates the relationship between creative equity H1a: Creative equity has a positive effect on product evaluation. The products with high creative equity are more positively evaluated than the products with low creative equity. H1b: Creative equity has a positive effect on purchase intentions. The products with high creative equity generate higher purchase intentions than the products with low creative equity.

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and consumer response. More specifically, when being under high cognitive load, consumers’ response to high creative equity is similar to their response to low creative equity, whereas at low cognitive load consumers’ evaluations of high creative equity products are more positive compared to evaluations of low creative equity products. The following hypotheses are proposed:

2.9. Creative Equity and Positive Affect

From a semiotic perspective on product design, in which products are viewed as signs capable of representation, Crilly et al. (2004) present a framework for design as a process of communication. In this process, the designer is the source that generates the message (i.e., the designed product), which in turn is perceived by a receiver (i.e., consumers’ perceptual senses). Through senses consumers form a specific response, which is viewed as the destination of the message. The destination is divided into three aspects of consumer response, namely cognition, affect, and behavior.

Norman (2002) considers both affect and cognition information processing systems, but with different functions. While the affective system is judgmental and assigns value to the environment (e.g. liking), the cognitive system “interprets and makes sense of the world” (e.g. purchase intentions, quality assessment) (Norman, 2002, p. 38). However, it is important to mention that affect and cognition influence each other in the sense that cognition can trigger H2a: The effect of creative equity on product evaluation is moderated by cognitive load. At high cognitive load, the product evaluation for high vs. low creative equity products will be similar, whereas at low cognitive load the product evaluation for high creative equity products is more positive than the evaluation of low creative equity products. H2b: The effect of creative equity on purchase intentions is moderated by cognitive load. At high cognitive load, the purchase intentions for high vs. low creative equity products will be similar, whereas at low cognitive load the purchase intentions for high creative equity products are higher than the purchase intentions for low creative equity products.

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certain emotions and affective states, while affect influences cognition. Finally, the emotional system is also responsible for behavior, preparing the body to respond appropriately to a given situation (Norman, 2004).

The affective system helps people determine which things in the environment are dangerous or safe, good or bad (Norman, 2004). Throughout the literature, the term affect has been used in relation to emotions, moods and arousal states or feelings (Crilly et al., 2004; Matthews, Deary, & Whiteman, 2009; Norman, 2002). Norman (2004, p.11) argues that “the term affect is used to refer to the judgmental system, whether conscious or subconscious, while emotions are considered the conscious experience of affect, complete with attribution of its cause and identification of its object”. In this study the terms affect and emotion are used interchangeably to refer to “the consumer’s psychological response to the semiotic content of the product” (Demirbilek & Sener, 2003, p. 1347).

As Rindova & Petkova (2007, p.447) observe, positive emotional reactions to a product can have a direct influence on how consumers perceive its value. This is due to the fact that people experiencing positive emotions “like just about everything better: themselves, their health, their cars, other people, the future, even politics”. Therefore, we can no longer state that decisions are taken based on a rational, logical thought, as the affective state, whether positive or negative, changes how we think (Norman A. D., 2004). Products that manage to trigger affective states through their appearance have a strong impact on consumers’ final evaluation, as they become predisposed to evaluate the products more positively overall (Rindova & Petkova, 2007). Affect can be viewed as a mediator between products’ appearance and the final perceptions of consumers, which can be expressed as affective responses (product evaluation or linking) or more cognitive evaluations such as quality assessment or purchase intentions.

Regarding the present study, I propose that positive affect acts as a mediator of the relationship between creative equity and consumer response, conceptualized as product evaluations and purchase intentions. Therefore I expect that products with high creative equity generate positive affect, which in turn influences copnsumers’ product evaluations/purchase intentions. The following hypothesis are proposed:

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2.10. Creative equity, Extraversion, and Openness to Experience

Norman (2004, p.32) considers that “traits and personality are aspects of the different ways in which people’s minds work, especially along the affective, emotional domain”. The author defines personality as “the collection of traits that a person has over a long period of time or even lifetime” (Norman, 2004, p.32). According to McCrae & Costa (2003) traits can be defined as dimensions of individual differences in tendencies to show consistent patterns of thoughts, feelings, and actions. The more a certain trait characterizes a person, the more intensely that person acts and reacts in relevant situations. Olver & Mooradian (2003) proved that the personality traits openness to experience, conscientiousness, agreeableness, as well as extraversion are good predictors of personal values. Matzler, Bidmon, & Grabner-‐‑Krauter (2006) tested the effect of personality traits on the perceived hedonic value (defined as the pleasure potential of a product class) and brand affect and their findings suggest that customers who score high on extraversion and openness to experience respond stronger to affective stimuli. Bloch (1995) proposes a model of consumers’ responses to product form and he mentions that rather than occurring in isolation, consumer’s reactions to product appearance are moderated by several factors such as design preferences and tastes, design acumen, and personality traits. This study aims to contribute to the understanding of consumers’ response to product form. Therefore, I will consider two of the Big Five well-‐‑established personality traits (McCrae & Costa, 2003), extraversion and openness to experience, as potential moderators of the relationship between creative equity and product evaluation and purchase intentions. The reason why only these two traits have been chosen is because the personal characteristics of the individuals who score high on extraversion and openness to experience are more likely than the other three established traits (i.e., neuroticism, agreeableness, conscientiousness) to explain the H3a: Positive affect mediates the relationship between creative equity and product evaluations.

H3b: Positive affect mediates the relationship between creative equity and purchase intentions.

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individuals’ response to product design. Extraversion, which is considered one of the fundamental personality dimensions of individuals (Murray, 2008; Costa & McCrae, 2003; Barrick & Mount, 1991), has been frequently associated with sociable, gregarious, assertive, talkative, and active individuals. Differently, the trait of openness to experience has been the most difficult to identify of all traits (Barrick & Mount, 1991), but usually it is associated with an individual inclination towards culture, aesthetic sensitivity, vivid imagination, and originality (Costa & McCrae, 2003; Barrick & Mount, 1991). Given the popularity of extraversion throughout the research literature that deals with consumer behavior, and the claimed relationship between openness to experience and individuals’ aesthetic preference, only these two personality traits have been chosen as potential moderators of consumers’ response to product design.

Extraversion -‐‑ Introversion

Taking as a starting point Jung’s classification of personality types, Murray (2008) presents the opposing aspects of introversion and extraversion and he argues that they are considered to occur in every individual, but one of them predominates in frequency and intensity. Therefore, an individual cannot be characterized as solely extraverted or solely introverted, as these two traits are present in every individual, but one of them being more pronounced than the other. While the extravert is considered “to give determining value to the outer world (i.e., social relations, possessions, prestige, public opinion), the introvert values the inner world (i.e., his feelings, fantasies, personal judgments, reflections, theories)” (Murray, 2008, p. 235). The extravert constantly looks for change, excitement and fresh adventure; the introvert prefers familiar objects and occupations, as he is “distrustful of novelty” (Murray, 2008, p.237). Regarding the materialistic possessions, the extravert values most what is obvious and authentic (i.e., money, position, prestige); the introvert, who is “idealistic and tender-‐‑minded” (2008, p.238), assesses what is true, beautiful and good based on his own feelings and sentiments. Costa & McCrae (2003) argue that the facets of extraversion can be divided into three interpersonal traits (i.e., warmth, gregariousness, and assertiveness) and three temperamental traits (i.e., activity, excitement seeking, and positive emotions). They describe

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extraverts as energetic and forceful, constantly searching for excitement, preferring to be surrounded by environments that stimulate them. Usually they have an exciting and active life, enabling them to experience a wide range of positive emotions.

Chang (2001) studied how the personality traits of individuals influence their evaluation of products. The findings suggest that the evaluation of products differ within the personality types, regardless of the advertising appeals employed. More specifically, the extroverts appreciated the products more positivelly than the introverts did. Individuals varying along the introversion-‐‑extraversion axis might have different perspectives on their surroundings. While the extroverts are “attracted to rewards and see their environment from a more positive perspective, the introvers’ goal is to avoid risks and pay more attention to negative aspects of their environment” (Chang, 2001, p. 32). Matzler, Faullant, Renzl, & Leiter (2005) examined whether affective responses to a consumption situation might be determined by the personality characteristics of customers and they found that extraversion directly relates to positive emotions in consumption situation. As mentioned earlier, product aesthetics have the ability to generate a series of positive emotions and affective responses such as linking. As extroverted individuals are more likely to respond to these affective cues, I expect that they have a more positive response to high creative equity products than to low creative equity products. Therefore, I propose that extraversion moderates the relationship between creative equity and consumers response, conceptualised as product evaluation and purchase intentions. The following hypotheses are proposed:

H4a: Individuals who score high on extraversion have a more positive evaluation to high creative equity products than to low creative equity products, whereas individuals who score low on extraversion have similar evaluation to high vs. low creative equity products.

H4b: Individuals who score high on extraversion have higher purchase intentions to high creative equity products than to low creative equity products, whereas individuals who score low on extraversion have similar purchase intentions to high vs. low creative equity products.

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Openness to experience

Openness to experience, also called intellect, is the only one of the five personality traits that is by definition related to a preference for aesthetics. As Costa & McCrae (2003) note, the aesthetic experience is “the epitome of openness”. The individuals who score high on this personality trait show an active imagination, aesthetic sensitivity, attentiveness to inner feelings, a preference for variety, intellectual curiosity, and independence of judgment (Matzler et al., 2006). Due to this inclination of open individuals to appreciate and be influenced by aesthetics, I consider openness to experience as a second moderator of the relationship between creative equity and consumer response. Regarding individuals who score low on openness to experience, I expect no difference at different levels of creative equity. Thus, the last hypotheses of the study are:

H5a: Individuals who score high on openness to experience have a more positive evaluation to high creative equity products than to low creative equity products, whereas individuals who score low on openness to experience have similar evaluations to high vs. low creative equity products.

H5b: Individuals who score high on openness to experience have higher purchase intentions to high creative equity products than to low creative equity products, whereas individuals who score low on openness to experience have similar purchase intentions to high vs. low creative equity products.

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2.11 The Conceptual Model

Based on the concepts reviewed till now a series of hypothesis were formulated and a conceptual model has been built. The representation of the variables and the expected relationships between is presented in Figure 1 below. The methodology used to test the proposed conceptual model is presented in the following chapter.

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3. Research Methodology

This chapter presents the methodology used to test the hypothesis proposed in the first part of the study. Prior to the experiment a pre-‐‑test was conducted, thus the chapter begins with the presentation of the pre-‐‑test results, followed by the research method and experimental design used to test the conceptual model. Afterwards, the sample characteristics are discussed, followed by the measures used throughout the study and their construction.

3.1. Pre-test

One pre-‐‑test was conducted prior to the experiment in order to determine whether the stimuli chosen for the study are perceived differently in terms of creative equity. There were chosen two product categories: citrus squeezers and iPod dock stations. For the first category there were considered two types of citrus squeezers, one being high in creative equity (Salif) and the other being low in creative equity (Juicer). The second category of products consisted of two types of iPod dock stations, one being high in creative equity (BeoSound) and the other being low in creative equity (Beats). A sample of 13 respondents was chosen and they received an online questionnaire, which presented them the four product images, each of them being followed by a brief narrative. After each image, respondents answered to 11 questions that formed the perceived creative equity scale (for a detailed description of the construct see section 3.4 of this chapter).

Two paired-‐‑samples t-‐‑tests were conducted to evaluate the influence of the creative equity stimuli on the perceived creative equity scores (11 items on 7-‐‑point scales that were summed to form an overall creative equity score, see Appendix 1 for the items). The results of the first t-‐‑test showed a significant decrease in perceived creative equity scores from Salif (Mhigh= 55.23, SD= 8.08) to Juicer (Mlow= 46.31, SD= 9.65), t (12)= 2.56, p< .05 (two-‐‑tailed). The mean decrease in perceived creative equity scores was 8.92 with a 95% confidence interval ranging from a lower bound of 1.34 to an upper bound of 16.50. The eta-‐‑squared statistic was calculated and it had a value of 0.35, which indicates a large effect size, with a substantial difference in the perceived creative equity scores for Salif and Juicer.

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The results of the second paired-‐‑samples t-‐‑test showed a significant decrease in perceived creative equity scores from BeoSound (Mhigh= 60.08, SD= 8.39) to Beats (Mlow= 50.69, SD= 12.45), t (12) =2.59, p<. 05, (two-‐‑tailed). The mean decrease in CE scores was 9.38 with a 95% confidence interval ranging from a lower bound of 1.47 to an upper bound of 17.29. The eta-‐‑ squared statistic was calculated and it had a value of 0.35, which indicates a large effect size, with a significant difference in the perceived creative equity scores for BeoSound and Beats. The results of the t-‐‑tests confirm that the stimuli chosen for the manipulation of creative equity were perceived accordingly on the perceived creative equity scale. Thus, the same product images were used in the experiment in the manipulation of creative equity.

3.2. Research method and design

The present study takes a deductive approach, as it is most suitable given the research questions that aim to be answered. The hypotheses proposed in the first part of the paper were tested using numerical estimation and statistical inference, thus a quantitative method was used. The participants’ responses to the experimental stimuli were collected online, via self-‐‑administered questionnaires that were uploaded on thesistools.com.

A 2x2x2 factorial design was used, 2(product replications: citrus squeezers vs. iPod dock stations) x 2(creative equity: high vs. low) x 2(cognitive load: high vs. low). Creative equity was manipulated through product images that differed in terms of design, followed by short narratives. Two product categories were chosen: citrus squeezers and iPod dock stations. Based on pretest data, two products were considered within each category, and they were combined with the high vs. low cognitive load conditions. This resulted in eight experimental conditions, as it can be observed in Figure 2. The experimental stimuli used in the manipulation of creative equity are presented in Appendix 2.

After checking for differences within each product category and finding the desired effects of creative equity both for citrus juicers and iPod dock stations (i.e., no interactions between the product replication and the other independent variables were present on dependent measures), the product replications were collapsed into one factor. Thus, for the

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Creative Equity

simplicity of the analyses a 2x2 factorial design was used throughout the study instead of a 2x2x2 factorial design.

Participants were asked to access a link that randomly assigned them to one of the eight experimental conditions. They were told that the aim of the study was to investigate people’s cognitive abilities, and they were asked to memorize a 2-‐‑ or 8-‐‑digit number, depending on the cognitive load condition they have been assigned to. In their study on consumer decision-‐‑ making, affective states, and cognitive resources, Shiv & Fedorikhin (1999) use the same procedure for manipulating cognitive load. After memorizing the number, respondents were presented with one of the four product images and a narrative that emphasized the high or low creative equity condition. After seeing the stimuli and reading the narratives, participants completed a questionnaire, which was identical for all experimental conditions. Appendix 3 presents the survey questions that each respondent had to answer to after seeing the experimental stimuli. The measures used in the questionnaire are presented in section 3.4 of this chapter.

Figure 2: The Experimental Conditions

High CL Low CE& High CL Juicer

Low CE& High CL Dock station

High CE& High CL Juicer

High CE& High CL Dock station

Low CL Low CE& Low CL Juicer

Low CE& Low CL Dock station

High CE& Low CL Juicer

High CE& Low CL Dock station

Low CE

Juicer

Low CE Dock

station

High CE

Juicer

High CE Dock

station Co gn it iv e Lo ad

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3.3. Sample characteristics

The population of interest to this study is an adult population, with no restrictions of gender, nationality or education. As the experiment focuses on product design and product evaluation/purchase intentions, the respondents are expected to have been involved at least once in a purchase decision. However, the population that was accessible to the present study consisted of international students from different European universities. This convenience sample was chosen instead a random sample because it allowed collecting sufficient responses within the limits of this study.

The sample size was 168, of which 76 were males and 92 were males, with ages ranging from 20 to 43 years old. Most of respondents (48%) have a Bachelor’s degree, followed by almost 40% with a Master’s degree. 28 different nationalities participated in the study, but most of respondents were from Romania (84 respondents) and from the Netherlands (23 respondents). As mentioned above, the majority of respondents (63%) were students, followed by those employed part-‐‑time (18%) and those employed full-‐‑time (18%). 44% of respondents had an annual income of less than 5000 Euro, followed by 26% with an annual income ranging from 5001 to 10 000 Euro, and 10% mentioned they earn between 10 001 and 20 000 Euro annually. Table 1 below summarizes the above-‐‑mentioned characteristics of the sample.

Table 1: Sample Characteristics

There was a total of 168 respondents who completed the survey, with an average of 20 respondents per experimental condition.

Gender 76 males

92 females

Education Completed High school: 19 BSc: 80

MSc: 67

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Occupation Student: 105 Unemployed: 3 Employed part-‐‑time: 30 Employed full-‐‑time: 30 Age Mean: 23.9 Mode: 22 SD: 3.53

Annual Income < 5000 EUR: 73 5001 – 10 000 EUR: 43 10 001 – 20 000 EUR: 17 20 001 – 30 000 EUR: 4 30 001 – 40 000 EUR: 3 40 001 – 50 000 EUR: 4 > 50 001: 1

Country of Origin 28 nationalities

Romania: 84 Netherlands: 23 Germany: 6 Greece: 6 China: 5 And others

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3.4. Measures

Most of the measures used throughout the study are based on existing scales from the research literature. The description of each construct is detailed below.

Product Evaluation: Respondents were asked evaluate the product they have been shown on four 7-‐‑point scales: negative/positive, bad/good, dislikeable/likeable, unattractive/attractive. Purchase Intentions: The construct was measured by asking respondents to indicate the trial likelihood and the buying likelihood on 7-‐‑point scales.

Positive Affect: The scale consists of 10 items, of which 7 were part of the PANAS scale (Watson, Clark, & Tellegen, 1988), and 3 items were part of the Consumption Emotions Set scale (Richins, 1997). Respondents were asked to report on 7-‐‑point scales from not at all to very much to what degree they are ‘interested’, ‘excited’, ‘inspired’, ‘determined’, ‘enthusiastic’, ‘active’, ‘proud’, ‘happy’, ‘pleased’, ‘joyful’.

Perceived Creative Equity: The scale consists of 11 items and it was developed taking into consideration the four traits that characterize creative equity products, namely expressiveness, authenticity, quality, and coherence. As there was no existing scale in the literature of product design to measure perceived creative equity, the scale was based on a combination of items that measured the four characteristics. Mittal (1988) conceptualizes expressiveness of a product as consisting of two constructs, one that captures the aspect of one’s inner enjoyment and self-‐‑ concept congruence and another one that captures the public-‐‑display aspect. From the product expressiveness scale developed by Mittal (1988), I selected two items that refer to the private self (i.e., `Express my self-‐‑image` and `Looks like it will feel pleasant to my senses`) and one that refers to the public self or one’s public image (i.e., `I could proudly display it`), which were measured on a 7 point Likert scale from strongly disagree to strongly agree. Liao & Ma (2009) investigated the perceived characteristics of product authenticity in relation to the characteristics of consumers who show a preference for authentic products. Based on a series of interviews and focus groups, the authors identified six main characteristics of authenticity: (1) originality, (2) quality commitment & credibility, (3) heritage & style persistence, (4) scarceness, (5) sacredness

'Success follows form’ : the effect of creative equity on consumers’ product evaluations and purchase intentions