Building Capacity for Marketing Innovation - Essay Example

Introduction Innovation is a concept highly applicable to marketing, yet a greatly misconceived one. Innovation is extremely important in the present competitive era where firms consistently confront the threats of fierce local and global competition. In such an environment, it becomes imperative for the firms to innovate and introduce offerings that could go beyond what is explicitly desired by the consumers to something that could stimulate their unexpressed needs. This requires a willingness and capability to innovate. Willingness to innovate cannot arise unless the concept is freed from surrounding misconceptions. It is because innovation is perceived to be forcing marketers to move beyond the actual concept of marketing. It is an established phenomenon that marketers should only concentrate on what is expressively demanded by consumers so as to enhance the firm's profitability. However, the marketing concept does not only require the marketers to evaluate and satisfy the expressed demands of individuals but also dig into the needs that are rarely expressed. The capability for marketing innovation depends upon several internal and external attributes of an organisation. In Chinese society, the willingness and capability of firms to innovate in more difficult because of the differences in external economic and social environment as compared to those of market economies. This paper provides an insight into the notion of innovation in the context of marketing concept. It presents a study into the capability building for marketing innovation in the companies. The paper also sheds light on the concept of capability building for marketing innovation in the context of Chinese market. Marketing Innovation- The Concept Innovation is a concept highly misconceived in the context of marketing. Innovation is said to be the most crucial responsibility of companies operating in the competitive environment of 21st century. The concept of innovation encompasses the notion of doing something for the first time or introducing a product into the market that is outright new to the firm as well as the consumers. In the context of marketing, it refers to the marketers' ability to envision new ideas, give it a form of strategy, introduce it to the market and make consumers love it. Innovation is strictly important in the age of global competition where firms are continuously striving to gain a sustainable competitive advantage. A firm does not necessarily have to bring about a drastic change in the organization in order to be 'innovative.' According to Weerawardena, "innovativeness refers to a corporate environment that promotes and supports novel ideas, experimentation and creative processes that may lead to new products, techniques or technologies." (2003, p. 18) It all lies in the culture of an organization to encourage people to bring new ideas and promote the willingness for innovation. Innovation is something evidently related with the internal and external environment of any firm. A firm in order to be successful and be able to compete in the market needs to adapt with the environment and any changes taking place in the market. Carrying out new ideas successfully in the business either of manufacturing or services concern shows the innovation. One must know about the trends and changes that have come into the market during the period to innovate accordingly as they both go parallel to each other. (Calantone, Cavusgil and. Zhao, 2002). Innovation is about encouraging new ideas that are to be implemented to the business to compete in the market i.e. innovation of product, business structure, services etc. In the context of marketing concept, innovation primarily lies in coming up with offerings that have never been introduced before to consumer markers. It is about an offering which bears the capacity to stimulate the unexpressed demands of consumers. The core concept of marketing is highly misunderstood to be against the notion of innovation. Marketing does not create barriers in the way of innovation; rather it facilitates to reinforce the idea in the context of consumer needs. It is a widely held belief that the concept of marketing enables marketers to focus too narrowly on the expressed needs of consumers. Marketers formulae their strategies and structure their marketing activities in the light of customer need evaluation. Therefore, in order to best meet the needs of consumers, marketers are more likely to come up with the solutions that are expressively desired by the customers. This also leads to the tendency among marketers to rely on products and services that are already liked and desired by the consumers. Lawson and Samson state this phenomenon in the words that "today's profit relies on the sale of established products and services." (2001, p. 382) However, in the long run, this strategy might lead a company to be extremely vulnerable to external environment and fierce global competition. It is right to state that marketing greatly focuses on the evaluation and satisfaction of customer needs and wants. It is so because the success of all the activities performed by an organisation, as a whole, depends on consumers. However, it would be wrong to state that marketing emphasises on the evaluation and satisfaction of 'expressed needs' of consumers. If marketers were to rely on the needs that were explicitly expressed by consumers, there would not have been any efforts on the part of companies to continuously bring new ideas and innovate. Houston asserts that "unfortunately, many marketers have taken the marketing concept to mean that marketers should take their lead from the expressed needs and wants of customers." (1986, p. 85) It remains to be the utmost responsibility of marketers to go beyond the expressed needs of consumers and figure out their unexpressed needs so as to be more able to satisfy them in the age of global competition. This is where innovation takes place by empowering the firm to sustain a competitive advantage in the form of an innovative product, service or idea liked by consumers. The notion of innovation does not require marketers to move beyond the concept of marketing. Innovation actually facilitates a firm's marketing process. Houston illuminates that "if the marketer sees an innovative offering that has the potential to satisfy needs and wants and is willing to develop his offerings with the customer's satisfaction in mind, the marketing concept is being used" (1986, p. 86) In this competitive era, marketers have a responsibility to bring forth new ideas that could stimulate the unexpressed needs of consumers purely complying with the concept of marketing. However, for an innovation to be successful, it is entirely important that marketers realise the ability of an innovative offering to satisfy these needs of consumers in the most effective and efficient manner. In marketing, the greatest success lies in being able to truly recognise the needs of consumers, which becomes the basis of a company's market positioning. Innovativeness refers to the idea that every body in the organization irrespective of their hierarchical level viz. lower, middle or the top management should be always motivated and encouraged for new ideas. They should highly regard transformation and innovation as a compulsory element of the survival of the organization (Hurley and. Hult, 1998). A firm's journey towards innovation cannot be completed unless it has the people who are motivated to innovate. A firm's endeavour to introduce an innovative offering to the consumer market cannot bear desired fruits unless it instigates an internal environment where new ideas and initiatives are truly encouraged and supported. This innovation is a complete collective process rather than an individual effort. Being innovative does not also require an organisation to move beyond its original market of consumer base. Innovation does not mean that an organization has to enter into a new market to survive but it simply means that it should continuously strive to move towards the most suitable status quo. Innovation can even refer to bringing adaptation in a company's administrative structure. The example of Xerox Corporation is noteworthy in this relation that successfully brought about changes in its administration. The company did not enter in new markets for the purpose of innovation neither did it change its entrepreneurship (Hurley and. Hult, 1998). This suggests that innovation does not refer to introduce new offerings to the market but it also lies in a company's ability to do the old things in a new and efficient manner i.e. new ideas and plans, betterment in products and services, marketing standards and process etc. Hence, firms need to innovate in order to harness the most suitable situation with respect to the whole marketing process, organisational structure, culture and administration. Capability for Marketing Innovation Being aware of the importance of marketing innovation in the age of global competition, it becomes thoroughly necessary to find ways to instigate a capability in the firm for marketing innovation. Capacity to innovate is an important construct of innovation that reflects a company's ability to implement those ideas which the management has proposed. The firm having good capacity to innovate gets the better results and able to give keen competition in the market. The organization should also know that when it has to implement new plans and ideas (Hurley and. Hult, 1998). When an organisation has an environment that encourages and supports new ideas coming from every part and level of its internal structure, it becomes easier to make people participate in the process of innovation. Lawson and Samson (2001) identify vision, strategy, organisational intelligence, creativity, idea management, structure, system, organisational climate, culture and technology management as the core components of a firm's innovation capability. Having a vision and communication of shared goals is of utmost importance for a firm in the process of innovation. A firm's innovative capability is determined by the ability of its people to move towards a shared goal. An organization must remain in touch with the new development in the market because without having proper knowledge of changes and modifications taking place a firm can not adapt accordingly. Market knowledge not only increases the firm overall performance but its abilities to innovate accordingly. The fact is that people cannot come up with new ideas in the organisation if they do not have a shared goal. There are various departments working to gather and interpret the market information in a continuous manner and through different sources e.g. the marketer has different information to collect in order to come up with new ideas, whereas the R&D department could be concentrating on the technical things. The lack of coordination may also create barriers to innovate the business and to avoid this, the companies emphasize on sharing the vision (Calantone, Cavusgil and. Zhao, 2002). This suggests how important it is for a firm to have a shared vision in order to venture into the process of innovation. This should not only rely on the efforts and activities of marketers to develop and implement new ideas to form an innovative offering. It is rather a collective on the part of various departments such as R&D, product development etc. In order to create capability for marketing innovation, firms should strive to formulate strategies through which the marketers' innovative offering can be quickly offered to the market. Lawson and Samson illustrate that "high performing innovators are able to maintain a giant juggling act of capabilities, and consistently bring new high quality products to the market faster, more frequently and at a lower cost than competitors." (2001, p. 381) This also requires collective efforts on the part of all the departments in an organisation. When the marketers have come up with an innovative offering to be presented to the consumers, the process of product development gets started. In this situation, the role of shared vision is very important so as to ensure the completion of the process in an efficient manner. It is the vision that stimulates people to work collectively for a goal the outcomes of which are the least predictable. Because of the fact that innovation encompasses the element of exquisite uniqueness, the outcomes are unpredictable, yet the success of innovation itself lies in a firm's ability to stimulate consumer needs. Ma and Guan (2003) refer to several kinds of innovation capabilities, for instance, learning capabilities that reflect a firm's ability to gather knowledge about how it can survive successfully in the market. Second is R&D capabilities. That means the ability of a firm to know about the latest development held in. Third is manufacturing capabilities which tell about the production and market needs though R&D. Fourth one is marketing capabilities which refer to the ability to know about the customer's present and future need for the purpose of innovation. Fifth is organizational capacity which relates to the strong organizational structure where seeks the better place to coordinate with each other to accomplish firm's objective. It may also be useful in affecting the innovation processes that are created for development of a firm. Sixth is a resource exploiting capability it talks about the firm's resources i.e. human, technological and financial resources that usefully it circulates and expand its resources. Last but not least is strategic capabilities refer to various strategies that a firm adopt under different circumstances and environment to tackle it. Capabilities to innovate refer to firm abilities to adapt as per the circumstances. Firm must have the complete knowledge about all the internal and external factor and ability to bring the ideas in practical form. Building Marketing Innovation Capability- China China is one of the growing economies of the world. It is gradually moving towards a market economy which is of crucial importance for the firms to innovate. Chinese companies are now increasingly entering into global competition necessitating for them the willingness to innovate. Li and Atijahene-Gima (2001) suggests that when a Chinese firm endeavours to provide something new to its customers by accelerating the efforts of R&D department, building a number of products new to the firm itself and struggle to develop products similar to foreign brands so as to provide more benefits to the consumers reflect that the firm is building its capacity to innovate. This is true for Chinese companies in the present environment in which the competition is intense and firms greatly need to innovate in order to remain competitive and extant in the market. These companies' willingness to innovate reflects from the fact that they are consistently striving to bring their products up to the standards of foreign goods available in the market. Companies confronting an environment characterised by intense competition from giant firms need to come up with some innovative offerings and move beyond the notion of satisfying the expressed needs of consumers. It is because without the capability to innovate, firms cannot sustain a competitive advantage. Luo, Sivakumar and Liu put forward that "the link between innovation capability and performance will be strengthened when firms aggressively seek highly competitive global markets and source products globally." (2005, p. 57) This is why it has become of utmost importance to Chinese companies to innovate and offer such products to the consumers that could induce consumers to become eager to buy the products from local companies rather than switching over to foreign brands for the satisfaction of their needs. In order to harness the power of innovation, only the willingness to innovate is not required, however. The firms need to have a highly conducive internal and external environment in order to innovate successfully. In China, although the economic environment in gradually changing, yet it is far from the freedom enjoyed by companies operating in market economies. Li and Atijahene-Gima "[n]ew technology ventures in China face more complex environmental situations than their counterparts in market economies." (2001, p. 1125) Chinese firms are highly enthusiastic about technological innovations for new product offerings; however, this effort is constrained unless the economic environment is provided to these companies is conducive for such innovation. Innovation requires freedom to think, act, implement and introduce; if such attributes are constrained, the Chinese firms would not be able to innovate freely so as to survive in the global markets. For Chinese firms to grow competitive with the help of innovation, it is imperative that such steps are taken so as to make the environment conducive for them. The vision, the culture, the marketing efforts and the collaboration cannot lead a company to innovate unless it feels that such an innovation would lead to a success. Introducing an innovative offering to Chinese society is far more difficult than introducing it to American or British society. This also lies in the probability of acceptance of such an innovative idea, product or service. Thus here the point becomes valid that innovation does not only require a suitable internal environment but also depends to a great extent on the external market conditions. Conclusion This paper discusses the notion of innovation in the context of marketing concept. It establishes that the marketing concept does not involve evaluating and satisfying the explicitly expressed needs and demands of consumers, but it also requires marketers to trace out the unexpressed consumers needs. The concept of marketing itself leads companies towards the process of innovation. In the present competitive environment where the firms are continuously confronting marketing challenges, it is very important to innovate in order to have a strong competitive advantage in the form of an innovative offering. The capability for marketing innovation in any firm depends on the core elements such as shared vision, communication of goals and an environment that could encourage the flow of new ideas in the organisation. If such environment is not provided, the marketers' efforts alone cannot lead to the accomplishment of the innovation process. Chinese firms are confronting a globally competitive environment where the local firms are consistently entering into competition with foreign brands. However, the process innovation is very difficult because of the economic environment which is less conducive as compared to market economies. Apart from that, the social construct of Chinese market also makes is difficult for firms to predict the acceptability of an innovative offering among Chinese consumers. Nevertheless, innovation is the requirement of today's environment and no firm can escape it because of the issue of its survival and competitiveness in the market. References Calantone, R.J, Cavusgil, S.T and Zhao, Y (2002) 'Learning orientation, firm innovation capability, and firm performance', Industrial Marketing Management, 31(6) p515- 524 Houston, F.S. (April, 1986). 'The Marketing Concept: What is It and What It is Not.' Journal of Marketing, 50, pp. 81-87 Li, H. and Atijahene-Gima, K. (2001). 'Product Innovation Strategy and the Performance of New Technology Ventures in China.' Academy of Management Journal, 44(6), pp. 1123-1134 Hurley, R.F and Hult, G.T.M (1998) 'Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination', Journal of marketing, 62(3) Lawson, B. and Samson, D. (September, 2001). 'Developing Innovation Capability In Organisations: A Dynamic Capabilities Approach.' International Journal of Innovation Management, 5(3), pp. 377-400 Luo, X., Sivakumar, K. and Liu, S.S. (2005). 'Globalization, Marketing Resources, and Performance: Evidence from China.' Academy of Marketing Science Journal, Winter; 33(1), pp. 50-65 Ma, N. and Guan, J. (2003) 'Innovative capability and export performance of Chinese firms', Technovation', 23(9) p737-747 Weerawardena, J. (2003). 'The Role of Marketing Capability in Innovation-Based Competitive Strategy.' Journal of Strategic Marketing, 11, pp. 15-35 Read More