View of THE IMPACT OF MARKETING INNOVATION ON THE COMPETITIVENESS OF ENTERPRISES

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Vol. 05,Special Issue 02, (IC-IRSHEM-2020) February 2020, Available Online: www.ajeee.co.in/index.php/AJEEE

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THE IMPACT OF MARKETING INNOVATION ON THE COMPETITIVENESS OF ENTERPRISES

Dr. Aditi Baghla

Assistant Professor, D.A.V College, Abohar

Abstract:- The aim of the research was to analyze the impact of marketing innovation on competitive advantage in the enterprises. The researcher used various theories to explore the relationship between innovation and competiveness in the marketing concepts and practices. This study shows that a successful business relationship between a brand and its distributors can allow both the parties to participate in a competitive market to gain the competitive advantage.

The changes in the economy is greatly influenced by the globalization process, radical and continual changes, as well as the increasing importance of knowledge based applications through the planned implementation of innovation. These factors directly affect the competitive advantage of enterprises. In today’s economy, enterprises that have the capability to develop and adapt the invention and innovations in a short span of time and profitably implement it in all spheres of business, will help the business to achieve competitive advantage in short period of time. In new era, the term innovation is not only limited to improvement in production process and production technology, but it also includes innovation in the field of human resources, with special reference to marketing management. From the above discussed reasons, the researcher pays a special attention to the innovation in marketing and its impact on the process of accomplish sustainable competitive advantage. Although, the findings of the study are also subject to certain limitations and give recommendations for future research on the topic.

Keywords: Marketing Innovation, Sustainable Development, Competitive Advantage, Creativity.

1. INTRODUCTION

A marketing innovation is the application of a new marketing methods that involves significant changes in the design of a product, packaging, channels of physical distribution, product promotion and pricing strategies.

Innovations in marketing aims at addressing customer needs, targeting new markets and better positioning a firm’s product in the market, with the purpose of increasing the firm’s revenue.

The different features of a marketing innovation is the implementation of a new marketing methods not previously used by the firm. It represents a new marketing concepts and strategies that shows a significant withdrawal from the firm’s existing marketing methods. The new marketing method and techniques can either be developed by the firm itself or be adopted from other organizations. New marketing methods and strategies can be implemented for new and as well as for existing products.

The word innovation means "to renew or change." The term innovation is broadly used in marketing and it generally refers to the introduction of more effective products, better production processes, new technologies, or ideas that influence organizations, government, and society as a whole. Innovation is different from invention, as innovation generally signifies a substantial amount of change as compare to entirely new changes.

Innovation in business is different from creativity that the creativity is generally linked with the generation of new ideas and concepts. Whereas, innovation is associated with taking those new ideas and concepts and implementing them in the market. Business researchers often associate company success to creativity and innovation. Because of increasing competition, innovation became most crucial for organizations to gain the competitive advantage. The factors that contributes to innovation in the business, includes the research and development, market needs, company strategy and limited company resources.

Along with the drastic innovations of products and services, it is also related to the innovation in processes that involves the collection and processing of ideas and their implementations.

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The objective of marketing innovation is to revamp the identification process and successful satisfaction of customer needs. By applying of new marketing techniques and activities enterprises aims to create a closer relationship with consumers and takes them into a situation when consumers become promoters of the enterprises and consumers become loyal to the enterprises and suggested it to their reference groups.

The significance of marketing innovation into new and advanced markets i.e.

bettering the visibility level and existence of the new product in the market as well as accomplishing high sales frequency. Marketing innovation is depends upon the promotion of the few instruments that are inter-related and focused on meeting the consumer needs by achieving a sustainable competitive advantage. So, we can say that marketing innovation involves the implementation of new marketing strategies, new marketing methods that have never been implemented in the organization.

Innovations in marketing concept means conducting market research to understand customer needs, consumer behaviors and trends, develop a prototype within product designing, introducing a new product in a unique place, new pricing strategies, promoting products in an unique way, etc. For an example, Grand Shoes is a Sweden based shoes store that deals in plus sizes i.e. size 12 to size 17 branded footwear. The enterprise not targeted mass consumers rather they innovatively targeted the market with unique plus Size that consumer don’t get everywhere.

Marketing Innovation is based on the combination of the following elements:

 Significant improvements in product design (changes in packaging and product form)

 Application of new pricing strategies,

 Introduction of completely new distribution channels,

 Implementation of completely new promotional strategies.

2. REVIEW OF LITERATURE

Aydin et al. (2007) investigated the association between marketing and new product development and its impact on org. performance. The researchers found that marketing performance is linked with a new product life cycle time and innovation capability of a firm. Moreover, marketing policies, innovative capability and product design capability affect a org. performance. Managers should put greater emphasis on the vital role of innovation and new product design capability in order to attain competitive advantage against potential competitors. However, the organization’s innovative capability requires R & D activities and increased budget expenditures as well as organizational commitment towards the same.

Haddad and Alghadeer (2004) studied that pharmaceutical organizations pays a significant attention regarding the introduction of new products and developing existing products, however, these firms did not pay much attention to the ideas that was considered strange for the first glance. The authors also found that there was a significant relationship between firm size and its use to the innovation and creativity.

Almaashar and Sabah (2004) studied that top level management support, decentralization and less organizational barriers had a positive impact on increasing organization’s ability to innovate. The researchers suggested that for organization’s to be innovative, it had to make changes in their working environment and delegate their employees with more authorities.

Aljayyashee (2003) concluded that the performance of the organization is highly influenced by the applicability of marketing innovation and creativity.

Moreover, the results of the research study also revealed that innovation in selling and distributing was the main factor that influenced organization's performance as compare to other marketing activities.

Tollin (2002) examined that there is a strong relationship between organization’s marketing strategies and innovative product development process. The research also concentrates on the urgency of paying more attention to the Research and Development department in order to obtain a competitive advantage and finally,

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the researcher concluded that for a organization to be innovative and creative, it should be more focused on the information about customers.

3. RESEARCH PROBLEM

The significant transformation of the industries due to technology in India is clear evident from changes that have occurred in the financial markets, financial institutions and manufacturing industries. All this necessitates a transformation; a transformation in the mindset, a transformation in the business processes and finally, a transformation in knowledge management. Hence, it is significant to study all these marketing innovations and creativity opted by enterprises to obtain better insight into customer needs .

3.1 Research gap

From the earlier reviewed studies, it is recognized that marketing innovation is playing a significant role in satisfying customer needs. Various research studies have been carried out on marketing innovation and the researcher aims to fill the gap in the available marketing literature by reviewing academic knowledge on the competitiveness and marketing innovation. Thus, the research study addresses the question: What steps the manufacturing companies and the reseller enable the adoption of innovative and creative marketing practices?

3.2 Objective of the study

This study aims to examine that how innovations and creativity are transforming organizations. The study also explores future prospects and emerging challenges in the way of transforming organizations through innovations and creativity. In general, this research is concerned with the following objectives:

 To assess the current status of marketing innovations in the Enterprises.

 To explore the potential strategies adopted by the enterprises for marketing innovations.

4. RESEARCH METHODOLOGY

The present review paper is mainly based on secondary data. The secondary data has been obtained from different sources like scholarly articles, various journals, newsletters, and various web sites.

4.1 The role of Innovative Marketing in obtaining competitive advantage

The role of innovation and creativity in marketing is to find out new markets to increase profitability of the firm. Innovations in marketing are related to the dynamics of business and changes are taking place on regular basis and companies are changing their marketing strategies as well. Enterprises know that traditional marketing methods are not effective and efficient anymore and now they are adopting the advanced technology. Innovative and creative strategies of marketing allow enterprises to trace the performance and modify the strategies to better cater the consumer needs.

The research findings further entails that only the successful application and implementation of innovation with a continuous focus on improving profitability and growth can give the guarantee of sustainable development of enterprises and the entire nations. An enterprise obtains sustainable competitive advantage by strengthening its organizational culture that fosters innovation with technology adoption and management approach of customer satisfaction. The term customer satisfaction is explained as the ability of the enterprise to deliver enhanced value to the consumer in order to attain a higher degree of loyalty. “Total customer satisfaction represents a set of factors that differentiate the organization from its competitors and give it a unique position on the market (Porter, 2007)”.

A marketing innovation is the application or implementation of a new marketing methods that involves significant changes in the design of a product, packaging, channels of physical distribution, product promotion and pricing strategies.

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4 4.1.1 Innovations in Product design

Marketing innovation in product design means significant changes in the shape and packaging as essential parts of the marketing concept (Kotler and Keller, 2006). More specifically, marketing innovation in terms of product design includes significant changes in terms of packaging form or product style without affecting the functioning and usage characteristics of the product (Stošić, 2007, pp. 3-20).

Marketing innovation in product design includes significant changes in the following elements: the implementation of a entirely new design in order to obtain different and special appearance; different shape, color and style in order to obtain a new appearance of the product and it also includes significant improvement in the packaging materials, reliability and customer satisfaction related with packaging.

Product design does not necessarily imply the usage of new technologies to create new products. Typically, it includes the refinement and upgrading of already existing designs, to revamp functionality, performance and appeal of the products. Another aim is to cut down the cost of manufacturing for gaining competitive advantage. The production process can acts as an change agent for innovation.

The three key concepts behind innovative product design are: aesthetics, functionality, and value.

Aesthetics and Functionality means that your product looks entirely different from similar ones and the enterprise must ensure it is intuitive and very usable. When the enterprise try to provide value, that’s when innovation starts in product design.

4.1.2 Innovation of pricing strategy

According to the economist point of view, price of product is a balance between supply and demand. That is the imp reason why the pricing strategies are used as profitability point and as the basis of innovation. The rule is that enterprise sets the lower limit of product’s price as the turning point (point of return). The price level above the point of return is based on a variable cost influenced by the demand level. Marketing innovation in pricing of products involves the usage of a completely new pricing strategies that the enterprises applies for the first time on its products in a particular market (OECD, 2005, pp. 9-25).

Marketing innovation in pricing means application of a new variable cost calculation based entirely on demand factors for a particular product or service in a particular market.

An example of marketing innovation is the application of the new method in the enterprise and it involves the approval of discounts for customers that have certain preferential cards issued by enterprises. Discounts may be financial (lower prices) or physical when a customer gets a greater quantity at the same price or obtain a completely new product as a bonus. Another example of pricing innovation is introduction of a new interactive method of

“online” pricing on the company’s website.

4.1.3 Innovation of distribution channels

The introduction of new distribution channels includes the implementation of entirely new marketing techniques that are used for selling products/services to consumers. The implementation of new distribution channels helps in improving logistics and supply chain.

The real life examples of sales innovation is related to the introduction of new distribution channels that are zero or direct channels.

4.1.4 Innovation of promotional methods

The promotional activity is based on effective communication process. The concept of promotion is an instrument for communication and exchange of information between customers and enterprises. The word promotion includes to inform, influence and persuade customers to purchase and consume the products (Trott, 2008, pp. 351-385). Marketing innovation in promotional methods is the application of a new marketing techiniques to promote products or services of an enterprise.

Enterprises are required continuous marketing efforts to create brand awareness in such a way that have a significant impact on consumer and also on squeezing the marketing budgets of enterprises. If enterprises are unable to deliver the same, they can lose their market share to new entrants of the industry.

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Following are the innovative marketing techniques that can help enterprises to attract and retain more customers within defined marketing budgets.

1. Word of Mouth Marketing: This is the most powerful technique of marketing as it is done by satisfied and delighted customers. The main aim of the enterprise is to create and deliver a unique customer experience in such a way to go beyond customers’ expectations. A satisfied and delighted consumer will always be loyal to your brand.

2. Social Media Marketing: In the today’s era, social media have democratized both organizations and customer engagements. This means that the marketing manager who has the best ideas and new techniques will surely win a big market share rather than the one who spend a huge budget on advertising. Based upon the target market and demographic profile of consumers, social media provides the platform which can fill the gaps between product and consumer.

3. Retain Your Existing Customers: As per the research studies if the organization acquire new customer it is seven times more costlier then retaining the current customers. The enterprise must ensure that their existing consumers are retained forever.

4. Explore New Geographies: As per Milton Berle, “If opportunity doesn’t knock, build a door,” Whenever the company products are difficult to attract consumers, it is always better to serve new geographies. New market place with less competition and high demand will always have low initial cost of a product and service.

5. Brand Repositioning: Once Hunter Hayes says “It’s time to reset, rethink, and reposition”. When the organization is not doing well, it is the right time for the enterprise to rethink about the strategies of organization. The enterprise should conduct a SWOT analysis to find out the business strengths and weaknesses.

6. Show Your Expertise: The organization can use different platforms to address customer issues and problems in a quick way. The enterprise should use blogs, use social media platforms and maintain the position of the organization as an expert in the industry. For an example, Neil Patel, who is using various digital and social media platforms and he proved himself as an expert in the industry.

4.2 Various Examples of Innovative Marketing Strategies 4.2.1 Instagram

Instagram has an outstanding compatibility with renowned industries for an example fashion and fitness, which already have a strong relationship with target customers.

Instagram has already applied several innovative marketing techniques that enhanced the consumer experiences.

4.2.2 Netflix

The brand has achieved greater success through producing best quality services. Netflix takes data very sincerely as it informs their production and content endeavors and its marketing techniques. The best thing was that Netflix used this data and converted it into ideas which inform content at a detailed level which is unbelievably innovative technique.

4.2.3 L’Oreal

The designing and launching of an application is the proof of the understanding of digital era customers. With the help of L’Oreal’s Makeup app, the consumer can use their smart phones for a complete digital makeover. Customers responded positively and the application is downloaded many times.

4.3 The relationship between Innovation and Competitive Advantage

Innovation means to provide enterprises with a means of obtaining a sustainable competitive advantage that is very important in today’s environment. Innovation is also considered as a driver of economic growth and development. Various research scholars have concluded that innovation is a platform by which enterprises can use their core competencies and converting the same into performance outcomes that is critical for success (Reed and DeFillippi, 1991).

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Organizations are required to use the resources to innovate. Innovation can be of various kinds, the most important is the product design innovation to gain the competitive advantage. According to Han et al. (1998) innovation has a positive and significant effect on enterprise performance. Firm performance is one of the indicator to measure the company's achievements in terms of finance, production and sales. Despite of achieving good performance, the firm must have a high bargaining power to competitors. Based on the research studies, we specify that the higher competitive advantage, will leads to enhanced firm performance.

5. CONCLUSION

Innovations are known as an important asset of the organization, which is directly influenced by the feedback of marketing. Innovation is the vital component of competitiveness. In this digital era it is very significant to use maximum new communication technologies in marketing and sales. The real challenges faced by the company management is which marketing tools to use and amplify, which marketing tool to leave and which marketing strategies are the most effective ones? In today’s era, it is not enough to know what your customers are looking for rather company should put emphasis on becoming familiar with market trends. The changes now a days have become more frequent and more specific. The frequent changes have become “the law of the market”. Despite of all, the biggest threat is the accelerating the speed of changes. The change is a significant factor for managers in marketing and sales. Sometimes it is best strategy for the enterprise to maintain market position and retain market share.

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