Exploring The Role Of New Product Type, Comparison Matrix, And Online Review In New Product Recommendation

Online recommendation agents (RAs) are software agents that aid consumers in screen products by generating recommendations. Online RAs help consumers avoid information overload and improve decision quality, thereby increasing revenue for online shopping websites.Owing to the importance of new products in maintaining and extending customers and maintaining competitiveness for companies, investigating new product recommendations are vital. However, previous studies on RAs have paid little attention on new-product recommendations. Although past studies have identified the effect of online RAs on consumers’ decision-making process and outcome may differ for different product types, such as product experience and search, how consumers evaluate new-product recommendations remains unknown. Moreover, whereas the effect of presentation strategies for recommendation on recommendation evaluation and adoption have been explored more extensively compared with how to effectively present new-product recommendations.This research explores how new-product recommendations are evaluated and proposes strategies to enhance its effectiveness based on the psychological process of evaluating new-product recommendations by drawing on literature. Among the studies focusing on consumer behavior toward new products, the evaluation of new products is commonly explained using incongruity theory. However, we found gaps in the research on incongruity theory as well as in our application of the theory in formulating strategies for new-product recommendations. First, the environment under which new products are evaluated has been rarely discussed. Thus, in this paper, we consider the characteristics of the recommendation context and explore how consumers evaluate a new product when it is recommended. Second, in explaining how different types of a new product are evaluated, most studies on incongruity theory focus on the functional value induced by the incongruity but hardly examine the social value created by such an incongruity. Third, the contingent factors that moderate the relationships between product incongruity and value perceptions, such as functional and social values, have yet to be investigated. Fourth, the role of incongruity has been analyzed based only on cognitions, and the models used do not include emotions brought by the incongruity. Fifth, although incongruity theory is used to explain how new-product recommendations are evaluated, this theory is rarely used as basis for the development of strategies for new-product recommendations.To fill these research gaps, the present study proposes that incongruity affects emotions and two value perceptions, namely, functional and social values. In addition, some contingent factors moderate the effects of the incongruity on perceived functional and social values. Likewise, this study proposes several strategies based on incongruity theory to help consumers determine product differences and values. In particular, we investigate how comparison matrix (CM) moderates the relationship between a new product type and perceived incongruity. This study also explores how online product reviews (e.g., without review vs. consumer review vs. expert review) exert informational and normative influences (i.e., social influences), as well as how these social influences affect the consumers’ judgments of the functional and social values of new products.A scenario-based study is conducted to validate the hypotheses. The results indicate that perceived differentiation (i.e., product incongruity) generates arousal and curiosity (i.e., emotions) and perceived novelty benefits (i.e., functional value perceptions) and perceived social differentiation (i.e., social value perceptions). The contingent analysis indicates that the relationship between perceived differentiation and perceived novelty benefits is moderated by incongruity resolution (i.e., informational influences), whereas the relationship between perceived differentiation and perceived social differentiation is moderated by perceived social approval (i.e., normative influences). Furthermore, online reviews, made either by consumers or experts, help in incongruity resolution. Such effect is more salient for really new products than for incremental new products. Moreover, consumer reviews evoke a higher perceived social approval compared with the group without product reviews.The present study contributes to the literature on online RAs, incongruity theory, CM, and online review. Moreover, this paper has important practical implications on designing RAs for different new products in online shopping websites.