The Effect of Product Innovation on Brand Equity, Purchase Intention and Customer Satisfaction: The Moderating Effect of Corporate Reputation. (An Applied Study on Food and Beverage Brands in Egypt)

Abstract

Recently innovation has turned out to be an unavoidable term in the business world, governmental plans and academic research. Most of the business markets has achieved a very high level of saturation and maturity with regards to product development. New products and services are developed to find a solution to a consumer problem perhaps from the analysis of an idea or after detecting or creating new needs in consumers’ demands. As a result, firms are doing an ongoing product development as to overcome the fierce competition as each product development decision could have a clear impact on the final product perceived by the customer. Duo to this changing environment, it became very essential for companies to manage their innovation process to be able to compete in this competitive business world. Sriram, Balachander, and Kalwani (2007) believe that product innovation has a great impact on brand equity. Nevertheless, Andrews and Kim (2007) argue that a company can impact the consumer’s buying decision by offering a new innovation to the market with distinctive product attributes and features in relation to competitors. They also said that one of the most widely used method to create a strong brand image and to differentiate the brand’s offering is through the introduction of a new product feature or improving an existing product feature. Moreover, many researchers proved that product innovation has not only a great impact on consumers purchase decision but also on the corporate reputation. (Boyd, and Charlotte, 1999; Shiau, 2014).