Marketing Innovations; a literature review

November 2012

Abstract 1. Introduction 2. Methodology and tools 3. 4. Discussion and Conclusion References

Lee et. al. [2010] in Journal of Innovative Marketing discussed the positive influence of knowledge management and marketing innovation strategies on marketing performance, taking the example of the biggest and the most representative Taiwans funeral service company Lung Yen. The rise of customer self-consciousness has brought forth consciousness of autonomy which consists in peoples demand for quality and variety. In order to increase the enterprises competitiveness, it has become crucial to have knowledge management and market sensitivity to make business strategies that can help an enterprise cope with the ever-changing market environment, enhance its competitiveness, and provide help in examining internal organization coordination. In Management guru Peter Drucker view, only the customers truly understand the market; therefore, enterprises must carry out exhaustive market investigation and analysis to understand customer behavior by constantly asking them questions, and anticipate their possible future needs, going from a passive marketing approach to an active one. The importance of this aspect has gradually gained recognition in the corporate world. A knowledge construction model composed of 7

procedures: create, identify, collect, adopt, organize, apply, and share. This knowledge management helps in adopting effecting marketing innovation. Authors contend that innovation is not equal to creativity but is the practical application of creativity, helping the organization to achieve its aims in a more efficient way. Drucker viewed that the term of innovation is basically non-technological in nature, and ought to belong to economic or social sciences; innovation should mean change in the value and satisfaction obtained from resources by the customer. It may also be said that only what is valuable for economy or society can be called innovation. In the framework of the study, two types of creation in marketing innovation strategy, namely, production innovation and marketing method innovation are proposed to explain the structure of marketing. The fact that knowledge management and marketing innovation strategy are both latent variables that cannot be measured by value means that research in this regard is subject to limitations, and authors way of bypassing this problem consists of dividing these two variables into five explicit variables or sub-dimensions. Knowledge management is divided into knowledge absorption, knowledge sharing, knowledge storage, and marketing innovation strategy into product innovation and marketing method innovation: the five sub-dimensions being used as the dimensions for measurement. The empirical results of the study show that knowledge management and marketing innovation strategy both have positive influence on marketing performance. Furthermore, the study uses sales growth rate as a measurement index, illustrating the possibility to change the way performance is measured, for example, by adding financial performance indexes (ROE or ROA). Vikash Naidoo [2010] in Journal for Industrial Marketing Management investigates whether marketing innovation, defined as improvements in the marketing mix, can assist Chinese small and medium manufacturing enterprises (SMEs) in withstanding the challenges

of operating under the current economic conditions where the global manufacturing sector is collapsing due to economic downturn. The need for innovation has been recognized to withstand the gales of creative destruction, more so, in times of environmental turbulences such as during an economic crisis. For cash-strapped manufacturers operating in the grips of the current economic crisis (often, but not always, SMEs), marketing innovation can present an attractive strategy (given its relative affordability) to attempt reversing the flow of declining sales. The logic of marketing innovation emphasises sales growth by shifting consumer demand from elastic to more inelastic market segments through the delivery of better value (actual or perceived) to the consumer. Further, Innovation is the mechanism for firms to ensure that strategic assets are hard to imitate by competitors and hence the marketing innovation capability of a small-to-medium manufacturer is positively related to its competitive advantage. This competitive advantage of a small-to-medium manufacturer is positively related to its survival. Three key findings are derived in the study. First, the examined Chinese manufacturing SMEs had a greater perceived likelihood of survival had they developed and sustained a competitive advantage. Second, marketing innovation assisted in developing and sustaining competitive advantages based on differentiation and cost leadership strategies. Third, marketing innovation capabilities improved when the examined manufacturing SMEs were competitor oriented and had good inter-functional capabilities.