The Importance of Marketing and Innovation - Essay Example

?Introduction: In today’s international arena, Marketing is an important tool since it contributes greatly to the success of the business and its products. Productivity and sales are largely dependent on companies’ marketing strategies. On the other hand, engineering is also an important aspect as it allows innovation in an organization which aims to bring positive change to boost customer or producer value. Most often, innovation is conducted as a private activity within an organization in a series of narrowly managed steps. Keeping in mind the importance of marketing and innovation, companies must understand their product to be able to market them. According to Bill Campbell in an interview, only engineers know the information that they should get and deliver about the product they have produced and only effectively communicating that information to the customers would yield desired results. Now, this effective communication is done by our super-creative marketers. Therefore, it is important that marketers and engineers work hand in hand to effectively deliver what customers want. Marketers know their customers and their goal is to create customer value whereas engineers know their product and their goal is to create producer value. Therefore, when marketers and engineers work together, they yield innovative products that are customer-oriented. In an investigation, it was found that those firms are more successful at innovative product development in which the employees are well equipped with the required skills to strategize marketing as a whole. Recently, a product-development process called Quality Function Deployment (QFD) has been adopted by U.S. and Japanese firms who promotes communication within the core team (marketing, engineering and manufacturing) and changes communication patterns from “top-to-bottom” management to focus more on horizontal routes where core team members communicate directly with each other and come up with better results. One of the greatest examples of integrating innovation with marketing is of Apple Inc., a multinational corporation which is ranked as the world’s most innovative company and who markets its designs and products as the customer’s need. Thus given, the importance of innovation in today’s business world, this paper focuses on how the MSC for innovation can be implemented and applied in other countries in the light of present marketing concepts and theories. Current Home Position of the Market: MSc innovation and enterprise is a relatively new program offered. It is not being offered at any other university in the UK. The scope of this program is very different and unique. However, there are some competitor courses being offered. A search undertaken in this regard unveiled that at the moment there are some 571 PG courses with “innovation” in the title. Most of these courses tend to cover everything related to innovation and have little relevance to the current job market. Many believe that number of courses offered with any relevance tend to be lower than 300. The search results were obtained using all of the following subject areas: Accounting and Finance Art and Design Business and Management Studies Economics Environmental science and Ecology Food Sciences Information Sciences and Librarianship Manufacturing Management Marketing and Advertising Studies Social Sciences Sports Science Tourism and Travel Industries Most if not all are concentrating on single aspects of innovation, whereas the projected MSc Innovation & entrepreneurship course at UWBS aims to cover multiple strands of “innovation” including skills development. The offerings in the West Midlands are more limited and do not include any “business skills ” oriented innovation courses. From this point of view it would appear that there is a gap in the market. Thus there is a dearth of courses being offered in the market that are promoting this particular concept or mode of teaching. They don’t take into consideration the skill requisite requirement by SMEs and neither of these programs are especially tailored for newly appointed managers. Thus, the concept is relatively new at home and recruiting 20-25 people per batch won’t be an issue. In the light of the current business market at home and the potential of this course and its long term benefits, it would be beneficial to expand its offerings to other countries. In this bid, I propose that this course be implemented in Spain as well. International Market Analysis On the international front, marketers have to keep tab of the potential of a particular product in a particular market and watch out for the opportunities and threats imbibed within the organization. International marketing involves rather more complex environments. There are innumerable number of reasons as to why an organization may choose to go global. The most basic one being to increase profits and help the firm grow, to improvise and increase efficiencies and reduce protective barriers in target national market. It’s always a good idea to expand especially when the market at home is saturated and there is little scope for development There are two markets that can be considered for the implementation of the MSc innovation and enterprise. One is the European market and the other is the Asian Market. In the European market, most countries are going through an economic crisis. There is rising unemployment and inflation. However these markets are high on literacy rates. The key to the successful implementation of this program is technology access. This is something which European markets excel at. They have successful integrated themselves with technology, a factor which will be very beneficial for the implementation of this program. Some of the markets in this regard that can be considered would be Spain, Scotland, Italy and Romania. Asian markets are rapidly emerging on the economic forefront. Some of the current bigwigs in this name are China, India, Vietnam and Malaysia. While countries like Pakistan and Afghanistan also exist, the political environment in these countries will not be conducive to the implementation of this technology. However, of the four aforementioned countries, the best bet would be India. This is because India is home to 2 billion people, is a rising economy and is home to the world’s largest English speaking population. While China is functioning better then India, there is growing resentment in China over the use of English language as a standard medium. Thus India would be a more lucrative market compared to China. The two countries that the paper would analyze henceforth would be India and China. SPAIN Macro Environmental Analysis: One of the main things that one needs to do when assessing a marketing strategy for an organization is check whether its macro environmental factors will affect the decisions of the managers or the organization. Macro environment factors include factors related to tax changes, trade obstacles, demographic changes, government policies, political environment etc. In order to analyze these factors, managers have categorized them under the PESTEL model. The PESTEL model asserts the following factors: 1. Political factors. Political factors are largely governed by government policies. These maybe the degree of government involvement with the economy. To what extent is the government facilitating in the provision of goods and services. Is it subsidizing any firms, is it offering any other incentives. Political decisions are very impactful on business environment. They impact different things, for e.g., the education and literacy of the employee work force, the medical state of the nation, the quality of the infra structure of the economy such as transportation facilities. MSC in Innovation and Enterprise will be very conducive in Spain given the recent government policies announced by the government over there. Spain’s government has come up with a lot of policies to increase investment in education, encourage economic responsiveness and improve the technological and transport infrastructure along with the energy sector and the labor market have all contributed to Spain’s increased economic efficiency. Like for example, foreign investors are permitted to adopt any kind of investment or take over any company in Spain. Spain has been a member of NATO since 1982 and also the European Union since 1986. This EU membership represents a very significant part of its foreign policy and supports the efforts of European political mechanisms. Therefore, a stable political situation and diplomatic relations assure development opportunities for organizations that are doing business in Spain, and lessens any risk of possible conflicts and disagreements. 2. Economic factors: = Various economic factors should also be kept into account when assessing strategy. Economic factors such as interest rates, tax charges, and overall economic growth, exchange and inflation rates. Economic factors can have a huge impact on the overall behaviour of a firm. Recession had hard hit the world. For instance, In order to build employee confidence and assure them that recession won’t lead to lying off; the management in different organizations needs to secure their jobs as an organization’s success is largely dependent on a fast and motivating staff.Other factors also need to be checked upon. For example, high interest rates may obstruct investment as it costs more to borrow. A strong currency will create more problems of exporters as it will raise the price for exporters in terms of foreign currency. Inflation may lead to employees demanding more wages and eventually raise costs. If the nation’s income growth is high, it will trigger demand for a firm’s products. The 2008-2009 financial crises in Spain generated by long term loans have raised the unemployment rate in the economy at the same time reducing government revenues. Spain is the eighth largest economy in the world and its GDP had a growing trend since 1994 until 2008 when after the financial crisis the country’s GDP has been on a contracting trend which indicates a not very appropriate climate for investment. Estimated GDP for the year 2009 has been -3.6% and forecasted for 2010 has been -0.4.These are important factors because they will influence this program’s implementation in Spain. Spain presents welcoming environment for foreign direct investment. To do this both the Spanish government and local communities offer a range of economic benefits for companies which are setting up their operations in the country. These incentives may include financial subsidies, access to credit, bonuses for obtaining certain material, real estate grants, benefits for research and development, tax exemptions, bonuses and rewards for hiring and training workers and low interest loans. All these incentives ae as much available to foreign firms as Spanish firms (Department of Foreign Affairs and Trade ;2001; n.p). Thus it can be seen that the rising unemployment will encourage new business ideas for the unemployed, something that this program is aiming at. Moreover, the program will also give rise to a new set of skills to the employed in the market. 3. Social Factors: Changing social paradigm can also affect a firm’s products, its availability, and the willingness of individuals to work together. Rising unemployment has brought about moral awakening in the people of Spain to excel and find jobs for themselves. This program will be a good reason for them to go out and seek how they can unleash their potential. 4. Technological factors: New technology paves way for better and improved process and products. Today iPods, touch screens, computer games, mp3 games, online gambling and high definition TVs have all created their own market in technological advances. Online shopping, CAD, bar coding, are all big improvements which have given a new name to the way we conduct business. Technology can cut down on costs, give way for better quality and also pave way for innovation. Spain is riding high on technology implementation. MSC program is for people who are remote. This means that this program is for people who would be busy with their respective schedules and don’t have time to enroll themselves for regular full time programs. 5. Environmental factors: Environmental factors include climatic conditions and weather related aspects. Changes in temperature can affect various industries such as farming, insurance and tourism. Today Global warming has taken over the climate and is being given a lot of importance. Firms are being compelled to consider environmental issues before taking any concrete steps. For instance more taxes are being charge for air travel and automobile companies are being encouraged to come up with environmentally friendly cars.However weather conditions of Spain are conducive to such kind of foreign investment. There will be no obstacles to the implementation of MSc Innovation and Enterprises if this program is implemented. 6. Legal factors: Legal factors have to do with the legal environment in which the organization is working. In the last couple of years, there have been various legal changes in UK which have affected the way organizations work and operate there. For instance the age discrimination barrier, disability discrimination law, increase in minimum wages are to name a few. Spanish government gives incentives aimed at promoting the creation of industrial estates, innovation, technological improvement, research, development, and job creation. Spanish companies and MNCs operating in Spain may both receive subsidies from the government. The benefits are given by local, regional or national authorities, and may consist of cash subsidies on their investment expenditures. However the companies are supposed to meet the requirements established to be granted with these subsidies. Depending on the kind of business government aids are made available. Apart from these the company needs to comply with the country’s health and safety, labor, pricing and promotion laws and regulations. There are fines set by the government on companies on their failure to meet the standard of laws. Taking in account the Spanish employment laws, the employees in Spain are entitled to certain benefits like working conditions, maternity leave etc. Spanish government appreciates job creation by giving subsidies to entrepreneurs. Moreover, under some reforms, 100 per cent foreign ownership of equity is now allowed and capital movements have also been liberalized. Spain offers many developing incentives for new businesses including low labor and transport costs. Since Spain is an EU member it can also transit goods within the EU without fulfilling any unnecessary formalities like exchange rate fluctuations or transaction costs (Department of Foreign Affairs and Trade ;2001; n.p). The overall profile of Spain offers a lot of benefits for foreign businesses including its geographic location and climate, stable political situation, economy and attractive development opportunities. To do successful business in Spain knowledge of the country’s business culture and its national mentality is also required. INDIA: PESTEL ANALYSIS On the political front, India is relatively more stable compared to its neighbouring nations such as Pakistan and Srilanka. It is the world’s largest democracy too. India is shining and has been branded as such. It is home to 2 billion people and is going on to grow and become one of the world’s largest economy. India has shown remarkable economic growth for the past three years of its running. For a decade, it has been registering an economic growth of 7% plus which has led to reduction in poverty by 10 %. However 60% of India’s population continues to thrive on agriculture which makes a poverty alleviation a major economic channel. The fact that droughts and floods are still common in the nation, does not sit too well with the agents of economic growth. According to a hypothetical analysis that was recently conducted, one main reason behind India’s economic growth has been the structural transformation that has been adopted by the national government. India’s economic growth has been oft conceived as directly related to that of its performance in the service sector in particular. Its growth rate was above 11 % in 2007 and contributes to 53 % of GDP today. Investment in industrial sector has been another key component of its growth and it contributes to 29% of its GDP where as agriculture is 17 % of its economy. Manufacturing sector has emerged rapidly and has shown remarkable progress between 2005 and 2006. It grew by 12 % during this time where as communication and storage sectors grew by 16 %. (Indian Economy overview n.d.) Other factors that have contributed to this robust environment include sustained investment and high saving rates. However, this is not where the problems end. As stated by an economic analyst, “are still major issues around federal vs. state bureaucracy, corruption and tariffs that require addressing. India’s public debt is 58% of GDP according to the CIA World Fact book, and this represents another challenge’s.” Thus all these aforementioned factors are conducive to the implementation of a successful MSC Innovation and Enterprise program. Porter’s five forces Model to assess strategy: Porter’s five force model can be used to assess an organization’s strategy. The following factors need to be taken into account for this analysis: Competitive Rivalry: The number of competitors in the market who will affect the strategy. Threat of substitutes: Are there any substitute products in the market? Can they affect the organization’s objectives? Threat of buying power of buyers: How easily buyer preferences change. Do they have a lot of bargaining power? Threat of bargaining power of supplier: How many suppliers are there in the market? How important are they. What is the bargaining power of every supplier? All such questions need to be considered and looked into when assessing an organization’s strategy. (Porter) For instance let’s consider Spain. Competitive Rivalry : The total number of competitors in this market is very little. There are named few competitors. The program will be implemented at a very little scale which in itself wont pose a huge problem. The threat of Substitutes : There are various substitutes out there in different industries such as movies, games, sports and entertainment. The Bargaining Power of Buyers : . The buying power of these buyers in this industry is not there. This is strictly education and there are fixed costs of education. Financial aid and assistance may apply depending on the need.. The Treat of New Entrants There is no perceived threat from new entrants. Porter’s Five Force Model: India Competitive Rivalry : There are no competitors to this kind of teaching in the market at the moment. The threat of Substitutes : No substitutes The Bargaining Power of Buyers : The buyers will not be willing to pay heavy tution fees in India. The population in India is relatively poor so education costs will be comparatively less. The Treat of New Entrants There is no perceived threat from new entrants. Strategy Assessment: In order to asses, whether a particular organizational strategy is suitable for an organization it is important to conduct a SWOT analysis. The SWOT analysis points out the strengths, weaknesses, opportunities and threats of the organization in question. To assess how effective an organizational strategy would be, it is very important to conduct a SWOT analysis. SWOT analysis is an overall strategic planning methodology. It is used to assess a strategy from the point of view of its strengths, weaknesses, opportunities and threats. It involves the business environment and the business objective of a particular project and how internal and external factors will help achieve those objectives. The technique was developed by Albert Humphrey. He led a convention during his stay at Stanford University in the 1960s and the 1970s. He incorporated data from some Fortune500 companies. A SWOT analysis usually begins with clearly defined state and objectives. Strengths: In strengths it is checked which attributes of the company will help in achieving the desired objectives. Weaknesses: In weaknesses it is checked which attributes of the company will be harmful in achieving the objectives. Opportunities: What opportunities will work in favor of the desired objectives? Threats: What are the external conditions which would rather bring about damage to the objectives intended? Identification of SWOTs is very important to figure out how successful a strategy would be for an organization. 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