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1 Postprit This is the accepted versio of a paper preseted at 7th IEEE Iteratioal Coferece o Maagemet of Iovatio ad Techology (ICMIT2014), Sigapore, Sigapore, September, Citatio for the origial published paper: Totii, G., Solberg Søile,. (2014) How to Use Improvemet Gap Aalysis to Idetify Which Icremetal Iovatios Should be Icorporated ito Products: Maagerial Recommedatios. I: 2014 IEEE Iteratioal Coferece o Maagemet of Iovatio ad Techology (ICMIT) (pp ). Piscataway, NJ: IEEE Press N.B. Whe citig this work, cite the origial published paper. Permaet lik to this versio:

2 How to use Improvemet Gap Aalysis to idetify which Icremetal Iovatios should be icorporated ito Products: maagerial recommedatios* G. Totii 1,. Solberg Søile 2 1 Departmet of Busiess Maagemet, Regioal Uiversity of Blumeau, Blumeau, Brazil 2 Halmstad Uiversity, SET, Halmstad, Swede (gersototii@gmail.com, klasol@hh.se) Abstract - This paper aims to show how the Improvemet Gap Aalysis method (IGA) evaluates the possible impact of icremetal iovatios o customer satisfactio, ad to give guidelies about applyig this techique i practice. Customers of two differet products, that are used at home, aswered questios about their curret satisfactio, expected satisfactio, ad expected dissatisfactio, with attributes for each product. The results show that IGA ca suggest icremetal iovatios that could be offered i fial products, ad which oes may ot. eywords Customer Satisfactio, Icremetal Iovatios, Improvemet Gap Aalysis, ao Model I. INTRODUCTION The itroductio of iovatios i products ad i services is oe of the greatest factors for log term compay survival. The pheomeos of adical ad/or icremetal iovatios are beig discussed ad explored more ofte i the scietific literature. Some researchers defed that radical iovatio ca serve as a foudatio for icremetal iovatios, which geerate profit's icome, which agai ehaces the compay s ability to pursue radical iovatio opportuities [1]. The earlier icremetal iovatios are itroduced; the greater the impact o market share [2]. Due to fast techology developmet, high market competitio, ad ever crescet customer expectatios, it is more importat to use good methods to idetify which iovatios a compay should offer for its survival i the log term. Amog other methods, perhaps Importace- Performace Aalysis (IPA) [3] is the most-used techique, used to idetify what should be improved or offered i products or services. Although largely used, this method has several limitatios [4] [5]. Eve though some limitatios have bee overcome by differet ways of usig IPA [6], there are still limitatios regardig the idetificatio of which icremetal iovatios should be developed [7]. Improvemet Gap Aalysis [7], a fusio betwee IPA [3] ad ao Model [8], has the potetial to overcome these limitatios. It also has the advatage that it is simple eough to be used by compaies that oly eed to iterview its ow customers. This paper has as objectives to preset IGA ad to explore its ability to idetify which icremetal iovatios should be icorporated i products. The paper first presets the IGA method. The, it shows a applicatio to two case studies. At the ed a sessio of maagerial guidelies is preseted, i order to help compaies put the applicatio of this method ito practice. II. THE IMPROVEMENT GAP ANALYSIS METHOD - IGA Usig a quadrat aalysis, IGA compares differet attributes relevace based o the expected impact o customer satisfactio if they are improved or offered, ad o the expected dissatisfactio if they have a low performace. Basically, customers are asked to provide iformatio about their estimated satisfactio or dissatisfactio with each attribute by respodig to two hypothetical questios: a fuctioal questio (ESFQ), wherei the attribute is cosidered to have high performace; ad a dysfuctioal questio (ESDQ), wherei it has low performace, or it is ot preset. A questio regardig satisfactio with curret attributes performace is also asked. Fig. 1 shows examples of the three questios. The aswers are re-coded ito a scale ragig from -4 (highly dissatisfied) to +4 (highly satisfied). The mea of expected satisfactio of all respodets with the fuctioal questio (AESFQ), the dysfuctioal questio (AESDQ) ad the curret satisfactio (ACS) with each attribute are calculated accordig to (1), where = umber of respodets. ESFQ ESDQ CS i 1 AESFQ AESDQ i 1 ACS i 1 (1) The, the possible improvemet gap (IG) for each attribute is calculated, subtractig "curret satisfactio" from "expected satisfactio", accordig to (4), where is the umber of attributes. IG k = AESFQ k ACS k for k = 1 to, (2) Improvemet priorities deped o attributes relevace that, i most cases, is idetified i terms of stated importace [3]. As customers are reasoig about the importace of the attributes, stated importace teds to have low discrimiatio power, which may result i socially acceptable or status quo aswers [9].

3 Expected Dissatisfactio Low High Neutral Neutral * Research supported by the Natioal Research Coucil (CNPq), Coordiatio of Improvemet of Higher Educatio Persoel (CAPES), ad the Sciece without Borders Program, Brazil. To decrease reasoig, IGA uses expected How would you feel if your TV set: Has a remote cotrol? Does ot have remote cotrol? What is your curret satisfactio with Remote cotrol Fig. 1. Example of Improvemet Gap Aalysis questios dissatisfactio with attribute lack of performace (AESDQ) as a measure of attributes relevace (1). I this case, customers imagie a bad situatio ad aswer accordigly, with a lower reasoig if compared to stated importace. AESDQ AESDQ AESDQ AESDQ IG ad AESDQ, for all attributes, are stadardized (3). The results plotted o the x-axis ad y-axis of the matrix, with attributes aalyzed accordig to their positio o it (Fig. 2). A attribute is classified as attractive whe the improvemet gap is higher tha 0 ad the possible dissatisfactio with the attribute s absece is lower tha 0." It is classified as critical to improve if both, the improvemet gap ad expected dissatisfactio are higher tha 0." It should be kept as it is whe the improvemet gap is lower tha 0," ad the dissatisfactio with its absece, or poor performace, is higher tha 0. It should be evaluated if eeded whe both, the improvemet gap ad dissatisfactio, are lower tha 0 (Fig. 2). Quadrat I eep as it is IG IG Std. IG (3) IG Quadrat II- Critical for improvemet A attribute is cosidered critical if it falls o the border betwee quadrat II, ad I or III. If it falls o the border betwee quadrats IV ad I, it should be kept as it is, ad if it falls betwee IV ad III, it should be evaluated if eeded. I ay case, depedig o the specific attributes i these situatios, commo sese ad experiece should idicate the fial classificatio. II. THEORETICAL ASPECTS The reasoig behid IGA is that customers ted to imagie the ideal or desired situatio ad mark their expected satisfactio whe aswerig the fuctioal questio. The, the improvemet gap idicates the possible gai i satisfactio if the attribute is improved to the desired situatio. Similarly, whe aswerig the dysfuctioal questio about dissatisfactio, customers imagie the worst-case sceario, ad respod accordigly. The use of expected dissatisfactio, with attributes if they have low performace or are ot preset i the product, to idetify attributes relevace, is differet of statistically iferred methods ad of the stated importace. I fact, previous researches already show that differet methods for this idetificatio are measurig differet aspects [10]. Stated importace is based o customer memory ad expectatios, ad ca be staed as predicted importace. Customers are ratioalizig about the expected beefits of the attributes good performace, the potetial sacrifices due to low performace, ad socially acceptable aswers. Statistically iferred importace is called experietial importace, ad depeds o customers previous ad preset experieces with the attribute [10]. Expected dissatisfactio, used i the IGA, lies betwee ratioal ad experietial importace [11]. O the other axis of IGA, the gap betwee expected satisfactio ad curret satisfactio (improvemet gap) is differet of the gap used o the SERVQUAL model [12]. I SERVQUAL the expectatio-performace gap is based o the differece betwee expected mius curret performaces. I IGA the differece is betwee satisfactio with a desired level of performace ad satisfactio with the curret performace. Expected performace is more related to stated importace tha expected satisfactio with the existece or high performace of a attribute [11]. I fact, some papers propose the evaluatio of the SERVQUAL gap i terms of stated importace mius curret performace [13]. Thus, these methods have differet approaches ad results [7][11]. Low Quadrat IV- Evaluate if eeded Quadrat III - Attractive High A. Collected Data III. METHODOLOGY Customers of 2 products volutarily accepted to take part of the preset research. A total of two hudred ad twety respodets aswered persoal questios ad two Improvemet Gap Fig. 2. Improvemet Gap Aalysis matrix

4 other sectios, oe for satisfactio with the product s attributes ad aother about expected satisfactio with presece (or high performace) ad with absece (or low performace) of each researched attribute. Questioaires with ivalid or icosistet aswers were elimiated. It icludes those i which the respodets aswered all questios i the same way; those with excessive reverse aswers (e.g. satisfied with low courtesy ad dissatisfied with high courtesy ), ad those with a excess of blak aswers. Table I ad II show fial respodets profiles. The preset study has o itetios to idetify what should be offered or improved o these products. Thus, the results are oly valid for this research s respodets. TABLE I RESPODENTS PROFILE MOSQUITO REPELLENT DEVICE were iovatios durig the time of research. Figure 4 shows a example of this device (already existig). Fig. 3 Uiversal AC Power Socket Do you use mosquito repellet device? Age (years old) Yes No 93 9 ~ >20 <=20 <= Frequecy of use: >25 <=30 16 Daily Weekly 81 9 >30 >35 <=35 <= Less tha oce a week 12 >40 ~ 12 Total Respodets: 102 Geder: Male 65 Female - 37 *No respodet kows device s brad, maufacturer or model. TABLE II RESPODENTS PROFILE UNIVERSAL AC POWER SOCET Age (years old) ~ <=20 3 >30 <=35 12 >20 <=25 55 >35 <=40 10 >25 <=30 20 >40 ~ 5 Total Respodets: 105 Geder: Male - 55 Female - 45 *No respodet kows device s brad or maufacturer. B. Researched Devices ad Attributes Customers of the mosquito repellet device ad of the uiversal AC power socket aswered questios about te attributes for each product. Attributes of uiversal AC power socket were aalyzed: At01 electrical groud termial; At02 - safety to use; At03* - ability to fit various kids of plugs; At04 desig; At05 - easiess of use; At06* beig made of recycled material; At07 - variety of models; At08 - electricity isolatio; At09 durability; At10* - wires storage support. Of these attributes, durig the time of research iovatios are: At03*, related to the capability of pluggig differet kids of plugs stadards o the same socket; At06*, to be made of recycled material; ad At10*, support for storig wires. Figure 3 shows the propositio of this researched device. For the mosquito repellet device, attributes aalyzed are: At01 variety of repelled mosquitos; At02* device beig recyclable; At03 variety of appearace desig; At04 weight; At05 portability; At06* - device color optios; At07 protectio rage (area); At08 - resistace (ot break); At09 easiess of hadlig; At10 device warraty. For these attributes, At02* ad At06* IV. RESULTS A. Uiversal AC Power Adaptor Table III shows the results for the researched attributes. TABLE III RESULTS FOR UNIVERSAL AC POWER SOCET Curret ACS Fig. 4 - Mosquito Repellet Device AESFQ Dissatisf AESDQ Gap AESFQ - ACS At At At03* At At At06* At At At At10* Mea * Icremetal Iovatios at time of research.

5 As ca be see i table III, iovative attributes have differet levels of curret satisfactio (ACS) ad expected satisfactio (AESFQ) if icluded. Customers are slightly dissatisfied with curret sockets regardig At3* - plugs' flexibility," ad would be very satisfied with it existig. O the other had, customers are satisfied with the curret situatio of At6* - made with recycled material (2.46) ad At10* - wires storage support (3.07). They also do ot expect to stay highly satisfied if these attributes are preset. These three attributes have almost the same expected dissatisfactio by their absece. Figure 5 shows the Improvemet Gap Aalysis matrix for all attributes. The attributes At03* - plugs flexibility ad At04 desig are idetified as attractive, meaig if offered, they brig satisfactio to customers, but if abset they do ot brig high dissatisfactio eep as it is Evaluate Critical for Improvemet Attractive Gap. Fig. 5 IGA Uiversal AC Power Socket The attributes At01 electrical groud termial ad At02 safety to use are critical for improvemet. IGA is dealig with customers' feelig. It meas that, although stadard rules about safety ad egieers are always cocered about these attributes, respodets are still afraid of the dager with electricity. The attributes At08 electricity isolatio ad At09 durability should be kept as they are. It meas customers would be very dissatisfied if the product has low performace, but they are already satisfied with the performace level of isolatio ad durability of the AC adaptors. The attribute At07 variety of models is o the evaluate regio of IGA. It may be that this attribute is ot really a relevat questio for the respodets. The At05 easiess of use fell i the border betwee evaluate ad keep as it is regios. A reaso why some attributes fall i this regio may be due to the fact that respodets are used to it, ot kowig how they would feel havig low performace or ot existig. The other two iovative attributes, At10* - support for storig wires ad At06* made of recycled material should also be evaluated if eeded. Three reasos may be the cause of a attribute fallig i this regio of IGA. Oe reaso may be due to customers ot kowig how they would feel with the presece of it (ot kowig what it is). This may be a case of radical iovatios. Aother reaso may be because customers do ot care about it, meaig the compay should ot iclude it i the product. At last, but ot less relevat, the compay should evaluate if customers uderstood the questio about the attribute. B. The Mosquito Repellet Device Table IV, ad Fig 6, show the results for the researched attributes. The iovative attribute, At02* device beig recyclable," has curret customer satisfactio betwee slightly dissatisfied to eutral, beig the lowest satisfactio level amog the researched attributes. TABLE IV RESULTS FOR MOSQUITO REPELLENT DEVICE Curret ACS AESFQ Dissatisf AESDQ Gap AESFQ ACS At01 2,56 1,28 3,65 0,59-3,13 1,54 1,09 At02* -0,98 1,32 1,09 1,19-0,94 1,30 2,07 At03 1,53 1,09 1,32 1,52-0,24 0,87-0,21 At04 2,52 0,85 2,70 0,89-2,48 0,69 0,18 At05 3,15 0,91 2,47 1,01-2,67 0,79-0,68 At06* 0,48 1,46 1,83 1,49-0,65 0,68 1,35 At07 2,89 0,79 3,60 0,78-3,00 0,80 0,71 At08 2,46 1,15 3,76 0,47-2,89 0,97 1,30 At09 2,17 0,69 2,23 1,27-2,65 1,10 0,06 At10 2,13 1,52 3,82 0,45-3,36 0,95 1,69 Mea 1,89 2,65-2,20 0,76 1,26 1,03 1,14 0,89 * Icremetal iovatios at the time of the research eep as it is Evaluate Critical Attractive Fig. 6 The IGA Mosquito Repellet Device The other iovative attribute, At06* - device color optios," is also a icremetal iovatio i the researched market. Uits ad models of the same maufacturer have geerally the same color, white. For this attribute, customers have close to eutral curret satisfactio. Both attributes, At02* ad At06*, fall o the attractive quadrat of IGA matrix. If offered, customers

6 may recogize it, but they do ot stay highly dissatisfied if the product stays as it is. Attributes At01 - variety of repelled mosquitos, At08 resistace (ot breakig), ad At10 device warraty, are critical for improvemet. Customers shall ted to recogize improvemet, but become highly dissatisfied with these attributes havig low performace. The attribute At03 - variety of desig appearace falls i the evaluate regio of IGA. As every maufacturer makes products with its ow desig, customers have a great amout of variety to choose from. If they do ot like the desig of oe brad, they look at the other. Nevertheless, if customers like the desig ad have a variety of colors to choose from (At06), they may be very satisfied. The attributes At04 weight, At05 portability," ad At09 easiess of hadlig should be kept as they are. They achieved a level that, if improved, customers wo t stay more satisfied. O the other had, they may get very dissatisfied if these attributes have a low performace. We may say that the attribute At07 protectio rage falls i the border betwee critical for improvemet ad keep as it is regios. As idicated by Fig. 2, i this case the attribute should be cosidered as critical for improvemets. V. DISCUSSION Both of the case studies of the preset research show that IGA ca idicate what should ad what should ot be improved or offered. It ca suggest which icremetal iovatios may be attractive to customers ad which oes do ot. Furthermore, besides dealig with icremetal iovatios, IGA is capable of idicatig critical attributes for improvemet, which oes should be kept as they are, ad which oes should be evaluated if eeded, or ot. We otice that, mathematically speakig, for the Mosquito Repellet Device customers have curret satisfactio i a level that is above the expected satisfactio with presece or superior performace of two attributes ( At03 - variety of desig appearace, At05 portability ). It does ot mea that existig performace is above the desirable level. We may say that these attributes performace is already fulfillig customer eeds. The statistical paired t-test ad the Wilcoxo Siged Raks Test [14] do ot cofirm a differece betwee satisfactio with desired level ad curret satisfactio, for both attributes (At03: t-test p-value = 0.25; Wilcoxo Siged Raks Test p-value = At05: t-test p-value = 0.14; Wilcoxo Siged Raks Test p- value = 0.10). VI. MANAGERIAL GUIDELINES AND RECOMMENDATIONS Beig a simple method, IGA also has limitatios. Attributes classificatios are relative to each other, ad customers are aswerig accordig to their expected feeligs. It is importat to kow that, i real situatios, there are iteractios betwee attributes performace ad betwee product s attributes ad exteral factors (ex: price, competitors, etc.). Some aspects will be observed to ehace its performace for helpig compaies to idetify what should be improved or offered: Put i the research differet type of attributes, from basic to attractive oes. The divisio of regios i the IGA method is relative. It is based o the mea values of the attributes improvemet gap ad of expected dissatisfactio. If, for example, oly iovative attributes are put uder aalysis, some will be classified as critical for improvemet ad others as attractive, keep as it is ad evaluate. It is importat to iclude the research attributes which classificatios are already kow, coverig basic, critical, etc. oes. I the preset case studies of Uiversal AC power Socket, attributes At08 - electricity isolatio, durability, ad At02 - safety to use are very basic. They are i the research to equilibrate results. eep the umber of researched attributes per questioaire aroud 10 to 20. The questioaire to be aswered by customers must have at least three sectios (Curret satisfactio, Expected satisfactio, Expected dissatisfactio). Thus, for 10 attributes, it shall have a miimum of 30 questios, besides the stratificatio questios (age, geder, frequecy, etc.). More questios may brig stress to respodets because it the becomes too log. If a larger umber of attributes eeds to be researched, make more tha oe ivestigatio with differet attributes i each. Questios of Expected Satisfactio ad Dissatisfactio must be i a sectio separated from questios about Curret Satisfactio. As questios related to expected satisfactio ad dissatisfactio, with presece ad absece of attributes, are related to hypothetical situatios, they should be i a differet sectio of questios about curret satisfactio with attributes. It is related to the existig feelig of respodets. Questios about Expected Satisfactio ad Dissatisfactio shall be i a radom order. IGA focuses o customers feelig, ot reasoig. Thus, a radom order of questios reduces customers' reasoig about aswerig for the existece ad o-existece of a attribute. Each questio must ask about oe attribute oly.

7 Avoid puttig i the same questio more tha oe attribute. Questios must be specific. For example, do ot put: How do you feel if the restaurat has a private ad roofed parkig area. Separate the attributes i differet questios (private parkig ad roofed parkig area separately). VII. FINAL CONSIDERATIONS Both case studies show that IGA ca idicate what should ad what should ot be improved or offered i products. It ca suggest which icremetal iovatios may be attractive to customers ad which oes are ot. Furthermore, besides dealig with icremetal iovatios, IGA is capable of idicatig critical attributes for improvemet, which oes should be kept as they are, ad which oes should be evaluated if eeded or ot. Thus, this method may be used ot oly to evaluate iovative ideas, but also to direct improvemet efforts. IGA shows a capability of discerig icremetal iovatios, ot about radical iovatios. Radical iovatios, as the ame already says, are ot kow by customers. They ca t aswer about their feeligs with the existece ad o-existece of attributes. I this case, it is very probable that the attribute would fall i the evaluate regio. The preset paper has o itetio to prove scietific applicability of IGA. The objective is to preset how to use it. Other papers have preseted, gradually developed, ad scietifically defeded it. For more scietific aalysis, ad a compariso with other methods for idetificatio of what should or could be improved i products ad services, see refereces [7][11]. Although showig what should/could be icluded i the products, based o the expected icrease of satisfactio with the attribute, this method is ot evaluatig the fial impact o geeral customer satisfactio. Thus, more research should be coducted to evaluate it. ACNOWLEDGMENT The authors would like to thak the followig studets of the udergraduate course i Productio Egieerig, of Regioal Uiversity of Blumeau - FURB, Brazil, for collectig the data used i the preset aalysis: César Busardo Neto, David Reiser dos Satos, Édipo Emilio Packer, Reato Ferraro de Souza, Rodrigo Masur Thiese, Thomas Adreas Milchert, Tiago Iva Doerer, ad Vaderso Hipólito Brus. REFERENCES [1] R. Varadaraja, Fortue at the bottom of the iovatio pyramid: The strategic logic of icremetal iovatios, Busiess Horizos, vol. 52, o. 1, pp , [2] C. M. Babury, W. Mitchell, The effect of itroducig importat icremetal iovatios o market share ad busiess survival, Strategic Maagemet Joural, vol. 16, o. 1, pp , [3] J. A. Martilla, J. C. James, Importace-performace aalysis, Joural of Marketig, vol. 41, o. 1, pp , [4] H. Oh, Revisitig importace-performace aalysis, Tourism Maagemet, vol. 22, o. 6, pp , [5] E. Azzopardi, R. Nash, A critical evaluatio of importace performace aalysis, Tourism Maagemet, vol. 35, pp , [6] N. Slack, The importace-performace matrix as a determiat of improvemet priority, Iteratioal Joural of Operatios & Productio Maagemet, vol. 14, o. 5, pp , [7] G. Totii, J. D. Picolo, Idetifyig the impact of icremetal iovatios o customer satisfactio usig a fusio method betwee importaceperformace aalysis ad ao model, Iteratioal Joural of Quality & Reliability Maagemet, vol. 31, o. 1, pp , [8] N. ao, N. Seraku, F. Takahashi, ad S. Tsuji, Attractive quality vs must be quality, Joural of the Japaese Society for Quality Cotrol, vol. 14, o. 2, pp , [9] A. Gustafsso, M. D. Johso, Determiig attribute importace i a service satisfactio model, Joural of Service Research, vol. 7, o. 2, pp [14] J. F. Hair, W. C. Black, B. J. Babi, ad R. E. Aderso, Multivariate Data Aalysis: A Global Perspective. 7th ed. Upper Saddle River: Pretice Hall, [10] R. Smith, B. Deppa, Two dimesios of attribute importace, Joural of Cosumer Marketig, vol. 26, o. 1, pp , [11] G. Totii, J. D. Picolo, A. Silveira, Which icremetal iovatios should we offer? Comparig Importace-Performace Aalysis with Improvemet Gap Aalysis, Total Quality Maagemet & Busiess Excellece, vol. 25, o. 7, [12] A. Parasurama, V. A. Zeithaml, L. L. Berry, SERVQUAL: a multiple-item scale for measurig cosumer perceptios of service quality, Joural of Retailig, vol. 64, o. 1, pp , [13] J. B. Ford, M. Joseph, B. Joseph, Importaceperformace aalysis as a strategic tool for service marketers: the case of service quality perceptios of busiess studets i New Zealad ad the USA, Joural of Services Marketig, vol. 13, o. 2, pp , 1999.