INNOVATION ACTIVITIES
CHAPTER 5: INNOVATION ACTIVITIES
5.4 Marketing Innovation
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5.4 Marketing Innovation
Marketing innovation is de�ined as the implementation of a new marketing method involving signi�icant changes in product design or packaging, product placement, product promotion or pricing (Oslo Manual, 2005). Marketing innovations are aimed at better addressing customer needs, opening up new markets, or newly positioning a company’s product on the market, with the objective of increasing the company’s sales. Among them are the introduction of new
�lavours for a food product in order to target new customers and the use of a fundamentally new bottle design for body lotion, which is intended to give the product a distinctive look and appeal to the new market.
Table 5.6 and Figure 5.8 show the marketing innovation in the manufacturing and services sectors. For the manufacturing sector, the highest marketing innovation was on new or signi�icantly improved methods of product design or packaging with 58.21%, followed by new or signi�icantly improved product promotion or pricing (56.29%) and new or improved product distribution or placements (48.83%). For the services sector, 57.66% have carried out new or signi�icantly improved product promotion or pricing. This is followed by 35.48% introducing new or improved product distribution or placements, and 27.15% for new or signi�icantly improved methods of product design or packaging.
Table 5.6 Marketing Innovation Activities Based on Business Sectors Marketing
Innovation Manufacturing Services
Yes % No % Total Yes % No % Total
New or signi�icantly improved methods of product design or packaging
273 58.21 196 41.79 469 202 27.15 542 72.85 744
New or signi�icantly improved product distribution or placement
229 48.83 240 51.17 469 264 35.48 480 64.52 744
New or signi�icantly improved product promotion or pricing
264 56.29 205 43.71 469 429 57.66 315 42.34 744
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Figure 5.8 Marketing Innovation Activities Based on Business Sectors
Table 5.7 illustrates the development of marketing innovation based on the number of innovations carried out by the manufacturing and services sectors. The development of marketing innovation is based on closed, joint and open innovations. For closed innovation, both manufacturing and services have the highest response for product promotion or pricing with 33.77% and 36.59%, respectively (Figure 5.9). For joint innovation, the highest response was on product distribution or placement with 33.84% in the manufacturing sector and 34.53% in the services sector (Figure 5.10). As for the open innovation, the highest response was on product distribution or placement for manufacturing (34.20%) and product design and packaging in services sectors with 35.39% (Figure 5.11).
Table 5.7 Developers of Marketing Innovation Based on Business Sectors
Developers
New or Significantly Improved Product design/ packaging Product distribution/
placement Product promotion or pricing
Manufacturing Services Manufacturing Services Manufacturing Services Closed
Innovation 355 430 351 374 360 464
Joint
Innovation 397 459 402 461 389 415
Open
Innovation 405 458 419 432 401 404
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Figure 5.9 Developers of Marketing Innovation (Closed Innovation)
Figure 5.10 Developers of Marketing Innovation (Joint Innovation)
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Figure 5.9 Developers of Marketing Innovation (Closed Innovation)
Figure 5.10 Developers of Marketing Innovation (Joint Innovation)
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Figure 5.11 Developers of Marketing Innovation (Open Innovation)
Figure 5.12 shows the comparison of marketing innovations based on sector by company size.
For marketing innovation on the methods of product design or packaging, small size companies show the highest percentage of this innovation (35.84%) in the manufacturing sector, while medium size companies show the highest percentage (25.86%) in the services sector.
For new or significantly improved product distribution or placement, large size companies show the highest percentage (32.79%) in manufacturing sector, while medium size companies show the highest percentage (34.48%) in services sector. For new or significantly improved product promotion or pricing, small size companies recorded the highest percentage with 34.64% in manufacturing and as for the services sector, large size companies recorded the highest percentage with 54.05%. As a whole, the small size companies in manufacturing sector are seen to have the highest percentage on the methods of product design or packaging, and also on new or significantly improved product promotion or pricing for the year 2012 to 2014.
On the other hand, the medium size companies in services sector are seen to have the highest percentage on the methods of product design or packaging, and also on new or significantly improved product distribution or placement for the same period.
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Figure 5.12 Comparisons of Marketing Innovations Based on Business Sectors and Company Size
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Box 6: Product, Process and Organisational Innovations - Admal Sdn. Bhd.
Admal Sdn. Bhd. was founded in 2001 by a group of experienced personnel in the aviation industry. The main activities of Admal Sdn. Bhd. are aircraft maintenance and consultancy to clients in the South East and South Asian region. The company also deals with leasing and sales of aircrafts and aircraft parts.
The company has on its register one Engineer, �ive fully Licensed Aircraft Engineers (LAEs) and 18 technical personnel. For product innovation, the company provides distinct services for major and specialist repairs up to Stage D (major maintenance overhaul) in normal aircraft servicing schedules. The company also undertakes repairs and maintenance services in unconventional places such as airport in remote areas.
Admal Sdn. Bhd. is an approved Aircraft Management Service Operator (AMSO) Part 145 Organisation, Department of Civil Aviation (DCA) and Directorate General Technical Airworthiness (DGTA) Malaysia. This certi�ication recognises this company as a capable and competent organisation in process innovation, especially to undertake major services and repairs of civil and military aircraft.
Other than specialist jobs, Admal implements organisational innovation by distinguishing itself from its competitors by having a quick response team that could travel and undertake jobs in its operation area within 24 hours of a con�irmed contract. These sort of jobs bring in more than 40% of the company’s annual revenues. The company is able to do this because of the expertise available on hand, and solid backing from its strategic partner, the bank, Kuwait Finance House. The bank also collaborates with the company in its aircraft �inance, lease and sale business.
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