Nowadays, industries struggle major turmoils in both the national and international environment. Globalization and fierce competition, with persisting climate changes, have occurred on consumer’s preferences and behaviors. Such circumstances engaged companies in solutions search processes, aiming to fit customers’ requirements, through innovation and innovativeness.

Innovation and innovativeness are closely related concepts, but they have distinct meanings in the context of creativity and problem-solving. Innovation refers to the process of creating something new or significantly improving something that already exists. It can involve developing new products, services, technologies, or ideas that offer unique solutions to existing problems or meet new demands. Innovation is about tangible outcomes and the implementation of creative ideas into practical solutions that have value.

Innovativeness, on the other hand, is the characteristic or quality of being innovative. It refers to the ability or mindset of individuals or organizations to generate creative ideas, solutions, or approaches. Innovativeness is more about a company's capacity to embrace new possibilities.

From marketing perspectives, the progress of innovativeness is a valuable asset for companies that maintains their brands vitality. Brand innovativeness is deamed one of the major factors influencing brand equity and consequently consumer purchase intention. Moreover, innovation creates sustainable competitive advantages and raise entry barriers toward new competitors. Innovativeness is crucial in achieving brand performance (Srinivasan et al., 2009; Atalay et al., 2013; Fauji & Utami, 2013). When assessing new offerings, customers refer to the brand recognition as long as their perception of the new product and/or service (Shams et al, 2015). Successful innovations lead companies to achieve differentiation and create a market leader image. Brand consistency is deamed one of the most valuable assets and a key success factor allowing the company to influence constomer’s purchase decision.

Strong brands achieve loyalty insights, as they are the most preferred by contomers. Consequently, we believe that studying the relationship between brand equity and consumer-perceived brand innovativeness is non-trivial. This research focuses on brand equity from the customer’s perspective. Brand equity is a multidimensional concept that includes the following dimensions: brand awareness, brand loyalty, brand leadership, and brand image. Despite the importance of innovativeness in brand success and performance, the number of studies that have investigated its relationship with brand equity is very limited and the few researches that have addressed this relationship have focused mainly on loyalty and neglected other dimensions of brand equity. Sanaye et al (2013) studied the effects of brand innovativeness on consumer attitude by considering the moderating role of consumer-perceived innovation. As for Pappu & Quester (2016), they focused on the impact of perceived innovation on a single dimension of brand equity, namely loyalty. To highlight the role of innovation in brand success, it is important to look at all dimensions of brand equity from the consumer's perspective. Our research aims to enrich the literature in the field of innovation and to deepen the understanding of the relationship between consumer-perceived brand innovativeness and brand equity.

What is a differentiation in Porter’s Theory?

According to Porter (1985), differentiation allows companies to generate additional value and position themselves uniquely. By distinguishing itself, a company is able to attract the attention of customers, retain them and distinguish its offers from those of its competitors. A brand builds its own identity and thus stand out from the competition by innovating. Thus, innovation is an effective way to achieve this. According to Kapferer (2007), in order to preserve the power of brands, companies have to nurture the cognitive and the affective parts in the relationships of its brands with customers.

Innovation gives the brand the opportunity to distinguish itself objectively and increase awareness. To maintain the brand equity, it is essential to renew the brand frequently in order to adjust it to current expectations. Subsequently, differentiation could be highlighted primarily through advertising (Kapferer, 2007). Meanwhile, in an overwhelming competition, uniquely innovation can improve brand visibility and generate loyalty (Keller, 2013; Mahdiraji et al., 2024).

By generating systematic repurchase through innovation, innovation can preserve, extend and strengthen a brand's leadership (Porter, 1985; Beverland et al., 2007; Pappu & Quester, 2016). Therefore, innovative concepts, technologies, products or services generate customer values and lead the brand standout from its competitors (Porter, 2008; Ateljević et al., 2023; Keller, 2013; Iglesias et al. 2022).

Customer’s Perception of the Brand Innovativeness

The literature on innovativeness highlights two levels of conceptualization. The first deals with the company’s product or service innovation, while the second concerns the company’s organization, known also as the corporate innovativeness (Shams et al., 2015). To spot product innovativeness, customers use two dimensions: 1-Novelty, which stems from the breadth between the new offer and the previous ones, 2- Usefulness of the new offer (Shams et al, 2015). Hoonsopon & Ruenron (2012) and Atalay et al (2013) investigated product innovativeness as the creation of new products that are to satisfy consumer needs more accurately than previous products. For Helena Forsman (2011), innovativeness represents the ability of a company to successfully improve or create products. Many previous studies have conceptualized consumer-perceived product innovativeness by focusing on technological innovations (Shams et al., 2015). However, product innovativeness can succeed for their technological characteristics (Danneels & Kleinschmidt, 2001; McNally et al., 2010), as well as for the symbolic meanings they convey to consumers or for both (Dell'Era & Verganti, 2011). Shams et al (2015) cited as an example the Apple brand, which is widely perceived as synonymous with innovativeness.

According to authors, Apple was able to create an image of innovativeness by successfully relying on both the technological characteristics of the product and the meanings of the brand (color, design, logo, etc.). Refering to company’s innovativeness, customers view the organization's ability to propose innovative and creative ideas and solutions that have major effects on the market (Kunz et al., 2011). The company's capacity for innovation is the result of several years of innovations perceived as successful by consumers (Henard & Dacin, 2010). The innovation literature has extensively addressed conceptualizations of perceived innovation from customer’s perspective, such as product innovation (Calantone et al., 2006) and corporate innovation, and has only recently begun to address brand innovativness.

Brand innovativeness is the customer’s perceptions of a brand’s tendency to engage in and support new ideas, novelties, experimentation, and creative processes identified in different ways (Ouellet, 2006). However, Shams et al (2015) believe that this conceptualization suffers from clarity and that the authors do not specify the difference between new ideas and novelty, and the term experimentation is very vague. For Wells et al. (2010), novelty represents the degree of perception of novelty and usefulness of an innovation by the consumer compared to an existing product, while innovation is the creation of new products (Kunz et al, 2011). Therefore, novelty is a necessary condition for innovation (Crawford & Di Beneditto, 2003). While, Eisingerich and Rubera (2010) identify brand innovattiveness as the extent to which customers perceive brands as capable of providing new and useful solutions to their needs". This definition has few limitations. Indeed, the authors confuse the notion of product innovation and brand innovativeness, although the concept of brand is broader than that of the product and they equate novelty with the usefulness of the product. Then, they believe that brand innovativeness corresponds to its ability to satisfy customer’s needs (Shams et al., 2015). However, a customer can still believe in a brand innovativeness, even though he/she does not need its offerings. Shams et al (2015) define the perception of brand innovativeness as "customer’s' perception of a brand's track record in terms of product innovation, degree of creativity and potential for innovative and continued activity in the future in a given market". Perceived brand innovativeness is the result of an idiosyncratic assessment, involving consumer perception that can be related to technological, symbolic innovations as well as new offerings such as products or services (Nigam & Kaushik, 2011).

Brand Innovativeness and Brand Equity

Relevant brand strategies enable companies to have strong brands, achieve performance and be competitive in a competitive market (Kumar et al., 2003). Thus, strong brands create value for the company, which alludes to brand equity.

Two approaches explain the brand equity. The first is based on business or finance according to which brand equity can be considered as the ability entrusted to products signed by a brand to achieve high profits, which they could not achieve without or under another brand. As for the second approach, it is based on customer’s perception and identifies brand equity as "the ability to improve the perceived value and desirability of customers towards the brand through the products and services offered" (Lassar et al., 1995). Our study focuses on the consumer approach, because the success of a brand depends largely on the attitudes and behaviors of its consumers. Many brands frequently generate innovations and raise tremendous budgets to foster an innovativeness image to customers (Henard & Dacin, 2010).

Nevertheless, literature lacks on how brand Customer perceived innovativeness influences brand equity. Some researchers have shown that product innovativeness is positively related to brand equity through brand image, brand awareness, brand loyalty and brand leadership (Hanaysha & Hilman, 2015; Hanaysha, 2016). In the same vein, Henard and Dacin (2010), have proven that there is a positive link between product innovativeness and only two components of brand equity, namely: brand image and brand loyalty. However, these different studies focus on product innovativeness while the concept of brand is broader than that of the product. McNally et al (2010) and Holland et al (2011) showed the upgraded customer’s innovativeness perception that innovation investment could reach. Meanwhile, Pappu and Quester (2016) highlighted the positive effect of brand innovativenss on loyalty. Eisingerich and Rubera (2010) found a direct relationship between innovativeness and brand commitment, however other researchers have shown that this relationship is not direct but depends on other variables such as satisfaction (Kunz et al., 2011). According to Pappu and Quester (2016), miscellaneous results are caused by the omission of the perceived quality effect. By studying ailine companies, Lin (2015) reveal that the experience of an innovative brand has a positive impact on brand equity and brand satisfaction. Brand experience reflects the sensations, feelings, cognitions and behavioral responses caused by brand stimuli. These stimuli are related to the design, identity, communications and the environment of the brand. An innovative brand experience occurs when the customer perceives these stimuli as innovative (Mahdiraji et al., 2024). Bollaert (2017) proved that the perceived innovativeness by customers has a positive and significant effect on brand equity.

Following the various studies presented above, we propose the first hypothesis:

• H1: Customer preceived brand innovativeness influences positively brand equity.

Brand Equity as a Second Order Construct

Brand equity is a multidimensional concept. Indeed, Aaker (1991) identified four dimensions namely perceived quality, brand awareness, brand loyalty, brand image and other proprietary goods. Later, Aaker (1996) proposed two new dimensions called brand leadership and market share and considered them as important components of brand equity. It seems useful to study the relationship between customer perceived brand innovativeness and each dimension of brand equity.

Brand innovativeness and brand awareness

Brand awareness is the ability of customers to recognize or recall the brand in a particular product category (Aaker, 1991). Keller (1993) highlights two dimensions in brand awareness: brand recall and brand recognition. Brand recognition involves customers’ ability to confirm that they have been previously exposed to the brand when it is presented as a cue, while brand recall is related to consumers’ ability to retrieve the brand when the product category or other element is given as a cue. Brands oriented towards innovation and the launch of creative products tend to increase their awareness compared to those that lack innovation (Holland et al., 2011). Brands introducing innovations disseminate information to their customers regarding the benefits of purchasing these innovations (Karjalainen, 2006; Muller, 2001). This information contributes in brand awareness enhancement.

Empirically, Hanaysha Hilman (2015) and Hanaysha (2016) showed that product innovativeness has a positive and significant effect on brand awareness. When launching innovative products, the company increases its advertising expenditures, which strengthens brand awareness (Sriram et al., 2007). Hamid et al (2012) confirmed that innovativeness influences brand recognition. Although most research has focused on product innovativeness, which is only a special case of brand innovativeness, it can be assumed that:

• H1(a): Customer perceived brand innovativeness influences positively brand awareness.

Brand innovativeness and brand image

Keller (1993) defined the brand image as “brand perceptions reflected by brand associations retained in the consumer’s memory. Brand associations are the other information nodes linked to the brand node in memory and contain the meaning of the brand ".

Basically, these associations are the basis of the brand positioning and ensure its differentiation from its competitors (Jara, 2009). They can be shaped through company's advertising campaigns or through the customers’ experience with the brand. By offering high-quality innovations, the company can influence customer perceptions and improve the image of its brands (Hanaysha & Hilman, 2015). Offering products with unique designs and features creates distinctive associations and a strong brand image. The association of innovation with market orientation allows the brand to strengthen its image (Gehani, 2001). Empirical studies have also confirmed the positive and significant effect of innovativeness on brand image (Hanaysha et al. 2014; Beverland et al., 2007; Ponnam & Balaji, 2015; Sriram et al., 2007; Zou & Fu, 2011). Innovations allow the brand to have a strong image and to differentiate itself from competing brands (Sjöberg & Wallgren, 2013; Shiau, 2014). Therefore, we assume that:

• H1(b): Brand innovativeness perceived by the consumer influence positively brand image.

Brand innovativeness and brand leadership

Brand leadership represents the brand's ability to maintain itself in a competitiveness market thanks to its reputation, quality and innovation (Aaker, 1996). Leadership is achieved when the brand is perceived relevant, attractive and unique. Beverland et al (2007) believe that innovative products improve brand’s reputation and position and enhance its leadership. Similarly, Hanaysha et al. (2014) found that innovativeness allows companies to gain a sustainable competitive advantage and upgrade leadership; whether Hanaysha and Hilman (2015) showed that innovativeness has a positive effect on brand leadership. For instance, brands like Sumsung and Apple have managed to offer innovations with attractive product designs and high-quality interior features. These innovations have enabled these brands to distinguish themselves from competitors and be among the leaders. Consequently, we can expect that the brand perceived innovativeness has a positive effect on its leadership.

• H1(c): Brand innovativeness perceived by customers influences positively brand leadership.

Brand Innovativeness and Brand Loyalty

Brand loyalty is the dimension that best expresses the strength of the brand (Aaker, 1991). It is important to distinguish between passive loyalty effectively linked to purchasing behaviors (behavioral approach to loyalty) and more active loyalty linked to a favorable attitude (attitudinal approach to loyalty) or even a strong affection towards the brand (Benoît, 2003). Moulins (1998) thus proposes a definition that emphasizes the distinction between behavioral loyalty and attitudinal loyalty, namely: "Brand loyalty is not reduced to simple repetition of purchases, even intentional, but is based on the trust granted to the exchange partner and is defined as the desire to anchor the commercial relationship over time, by developing a common history."

Studies on brand loyalty offer two explanations that account for the intentional nature of such behavior (Lacoeuilhe, 1997), the belief in the functional and utilitarian superiority of the brand over competing brands, shaping an emotional affective bond between the brand and the individual, expressed by the notion of brand attachment. Papp & Quester (2016) showed the significant link between brand loyalty and consumer-perceived innovativeness. This relationship is influenced by perceived quality. Empirically, Ko et al (2009); Nemati et al (2010); Hussain et al (2012); Naveed et al (2012); Hanaysha & Hilman (2015) have shown that product innovation is positively related to brand loyalty. As mentioned above, all research has focused on product innovation, while the latter is only a special case of brand innovativeness. Consequently, we assume that:

H1(d): Brand innovativeness perceived by customers influences positively brand loyalty.

Based on the hypotheses outlined above, the figure below represents theoretical model of this research.

Fig. 1. Theoretical model.

Sample

To test the hypotheses, we selected Smartphones to study customer’s behavior for several reasons. Indeed; this category is rich in terms of innovativeness, and relevant of several brands acting in the market.

To identify the Smartphone brands that will be the subject of this study, a test was carried out with a convenience sample of 50 consumers, who were asked to name the most innovative and least innovative Smartphone brands. The results of the analysis of the responses show that iPhone and Samsung are perceived as the most innovative Smartphone brands, while Nokia and Motorola are perceived less innovative. We chose to use the Samsung and Motorola brands in the main study. By applying the convenience sampling approach, we conducted a survey, and a total of 200 responds were collected. Our sample is composed of 46.6% women and 53.4% ​​men aged over 20. Interviewees, who are concerned with the survey drugged with their verbal consents, are deamed to be in the majorhood.

Measures

To measure the variables of our model, we relied on measurement instruments developed and used in previous research, for which the respondent should indicate his/her degree of agreement or disagreement on a five-point Likert scale (see Table 1). To measure brand equity, we proceeded in the same way as Hanaysha & Hilman, (2015) and Hanaysha (2016), thus we used the scale proposed by Aaker (1996) which consists of combining the four dimensions of brand equity, namely brand awareness, brand image, brand leadership and brand loyalty.

Table I. Measures

ANALYSIS

We tested the research hypotheses based on the data collected during the survey. We used SPSS (23). Thus, we standed to make simple sortings in order to identify frequencies and sample size. Then, we carried out a factor analysis (in principal components) in order to see the possibility of reducing the variables into a limited number of factors, we also calculated Cronbach's alpha for each measurement scale. Finally, we tested the causal relationships between the different variables, using the PLS (Partial least square) method.

Exploratory analysis

The table 2 shows the results of the reliability test of the measurement scales, and those of the principal component analysis. This analysis allows us to deduce the factors of each concept and to study the unidimensionality of the measurement scales

Table II. Reliability test and principal component analysis

Reliability analysis is relevant to study the quality of the measurement scales of the different constructs. It provides a general index of the consistency or internal coherence of the scale as a whole. Using "Cronbach's Alpha" coefficient, we tested the reliability of the measurement scales. The results of the test show that the values ​​found for Cronbach's alpha statistics exceed the threshold of 0.7 recommended by researchers (Peterson, 1995). This allows us to conclude that the scales studied are statistically reliable.

Concerning the principal component analysis, finding lead to the following observations:

- The scales studied are one-dimensional with the exception of the scale relating to brand capital at the level of which two factorial axes were extracted. A first axis, which restores 60.995% of explained variance while the second axis explains 11.898%.

- The items selected are the best representatives of each concept. Indeed, the values ​​of the KMO index are satisfactory and exceed the threshold of 0.5 (Akrout, 2000). Thus, the analysis carried out is acceptable and allows the construction of concepts that are correlated with their items.

- Variance Analysis: more than half of the total variance explained is generated by the items for each concept (an average percentage of 77.35%).

Confirmatory analysis

We used a confirmatory factor analysis to better understand the impact of brand innovativeness perceived by the consumer on brand equity as well as on its different dimensions, namely: brand awareness, image, leadership and loyalty. We used the PLS method (Tenenhaus, 1999), as the consequence of coping with the non-necessary normality requirements.

Measurement Model

The quality of the measurement model depends on three criteria, namely the reliability of the manifest variables, the convergent validity and the discriminant validity. The reliability can be assessed through two measures, Cronbach's Alpha and composite reliability (Chin, 1998). The values ​​of the Cronbach's alpha and composite reliability indices that we calculated for each latent variable are greater than 0.7, according to the recommendations of Tenenhaus et al. (2005) these results are satisfactory. For convergent validity, Fornell & Larcker (1981) use the AVE indicator (average variance extracted) which must be greater than 0.5. Convergent validity is also based on examining the correlations (or loadings) of the measures with their respective construct. The correlation coefficient is greater than 0.7, which implies that there is more shared variance between the construct and its measurement than variance error. We check that each item is more correlated with its construct than with the others.

According to Table 3, the convergent validity of the measurement model is relevant. In order to verify that there is no correlation between the items of one construct with the items of another, we implemented the discriminant validity analysis. The verification is based on the comparison of the square root of the average variance extracted (AVE) of each latent variable with the correlation of the different latent variables two by two (Chin et al., 2010). According to Table 3 the square root of the AVE is greater than the correlations between the different dimensions of our model. Therefore, we can affirm the discriminant validity of the latent variables.

Table III. The Measurement Model

Quality of the structural model

The structural model is evaluated on the basis of the predictive relevance of the latent variables. It is appropriate to analyze R², to assess ​​the contribution of each exogenous variable to the prediction of the endogenous variable.

Table IV. Evaluation of the structural model

According to Chin et al. (2010), the usual values ​​of R² are 0.67 (substantial), 0.33 (moderate) and 0.19 (low). As showen in Table 4, we admit that the contribution of the independent variable to the prediction of dependent variable is substantial; it has a value of 0.721. Therefore, the model is significant.

Table V. The influence of brand innovativeness perceived by customers on brand equity

Analysis of the relationship between the innovativeness of the brand perceived by the consumer and brand equity.

Based on the results of the statistical tests presented in Table 5, we find that the effect of customer-perceived brand innovativenss on brand equity and its dimensions is significant. Indeed, consumer-perceived brand innovativenss has a positive and significant effect on brand equity. The value of the Student statistic associated with this variable is 73.520 (t >1.96) with zero probability. Thus, consumer-perceived brand innovativenss is a determinant of brand equity. This result confirms hypothesis H1 according to which "Customer-perceived brand innovativenss is positively related to brand equity" and confirms the result found by Lin (2015) in a study conducted on an innovative airline brand.

Analysis of the relationship between customer-perceived brand innovativenss and brand equity dimensions

The results shown in Table 5 also reflect the effect of customer-perceived brand innovativeness on brand awareness, image, leadership and loyalty, respectively. The values ​​of the calculated Student statistic exceed the threshold given by its tabulated value (1.96) (i.e. respective values ​​of 10.965, 31.526, 73.322 and 30.178 > 1.96). This means that customer-perceived brand innovativeness has a significant and positive impact on the different dimensions of brand equity. Consequently, hypotheses H1(a), H1(b), H1(c), H1(d) are validated. These results support and extend the work of Pappu & Quester (2016), who proved the effect of perceived innovativeness on a single dimension of brand equity, namely loyalty.

Findings of the present work lead us to conclude that the brand innovativeness perceived by the customer has a positive and significant influence on brand equity as well as on its different dimensions. This study showed that perceived innovativeness has a significant positive impact on brand leadership. This means that the brand's ability to offer innovativeness allows it to differentiate itself from competitors, to be among the major brands and to achieve a leading position in certain target markets. Similarly, the perceived brand innovativeness can generate new associations in the memory of customers, and make it different from its competitors. Brand innovativeness also has a significant effect on loyalty. Thus, the more a brand is perceived as innovative, the more loyalty it gains. Brands, that are oriented towards innovativeness and launching creative products, tend to increase their brand awareness. These innovative brands disseminate information to customers about the benefits of purchasing these innovations and this information contributes to increasing their brand awareness. Thus, either introducing successful brand innovativeness based on high-tech creative features or attractive product design can help companies improve their brand image, awareness, loyalty, leadership and enhance its value.

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