Research Application in Global Business: Marketing Innovation Study

This report critically appraises research objectives and methodologies within the context of global business, specifically focusing on the survival of Chinese small and medium enterprises (SMEs) amidst economic crises. The study investigates the impact of marketing innovation, marketing orientation, and competitive advantage on manufacturers. It examines how marketing innovation, including changes in product, price, place, and promotion, can help SMEs navigate economic downturns and achieve sustainable competitive advantage. The research employs a survey methodology, collecting data from 184 SMEs in China, primarily clothing and footwear enterprises. The report analyzes the responses to assess the relationship between market orientation, innovation, competitive advantage, and organizational survival, using scales developed from existing literature and Porter's generic strategies. The findings highlight the importance of adapting marketing strategies, particularly the marketing mix, to address market demands during economic instability. The study concludes with an assessment of limitations and provides insights into how businesses can leverage marketing innovation to enhance their performance and competitiveness in the global market.

Research
Application in
global business
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TABLE OF CONTENTS
(A) Critical appraisal of research objectives ...................................................................................3
(B) Critical appraisal of research methodologies ............................................................................5
(C) Research conclusion .................................................................................................................7
(D) Limitations of the study ............................................................................................................9
References......................................................................................................................................11
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(A) CRITICAL APPRAISAL OF RESEARCH OBJECTIVES
In modern era, due to the global economic crises, the manufacturing sector all around the
world is collapsing. It has been also observed that most of the businesses are finding it very
difficult even to survive. One of the main objective behind carrying out this study is to identify
whether marketing innovation can help manufacturers to survive in current market and economic
conditions. Further rather than focusing on manufacturers through the world, Chinese
manufacturing small and medium enterprise has been taken into consideration. This has helped
in developing an deeper knowledge regrading the study. In the present study, the researcher has
developed and used a conceptual model linked with marketing orientation, innovations,
competitive advantage and organizations survival. This has guided in developing knowledge
regrading how the above stated factors are interrelated with each other and help a firm to operate
smoothly even in situation of economic crises.
It has been observed that recession have a direct impact on growth and profitability of
manufacturers. The purchasing power of people in market gets reduced which directly lower
down the overall demand of products in market. Further it can be stated that with the help of this
research, the investigator aims at examining a marketing innovation model which can help small
and medium enterprise to survive in crises. Innovation here means the modification or changes in
the product, price, place and promotion of the above stated manufacturers (Beverland and
Lindgreen, 2007). The demand of products in market is declining at a very fast pace and thus,
manufacturers are required to take some corrective actions so that they can create the demand
again. Other than this, the study focuses on three key aspects which are whether sustainable
competitive advantage help Chinese manufacturers to survive in long run. Second whether
marketing innovations can assist in getting competitive advantage over other market players. At
last do the innovating capabilities of a firm gets increased when it is competitor oriented.
It has been observed that marketing orientation and innovation plays a very significant
role in success of manufacturers. Marketing orientation can be defined as the process in which
businesses try to identify and satisfy the need of people in market with the help of marketing mix
(Danneels 2002). Further it can be stated it enhances the overall performance of an organization
by providing them with effective abilities to interact with customers and retain them for long
period of time. It has been also observed that when companies try to communicate and interact
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with customers they become aware about the need and demand of people in market. This
interaction help as a guideline which assists manufacturers in innovating and developing some
new products. One of the main advantage of such orientation is that it helps manufacturers to
carry out more focused production (Barney, 2000). Further only those goods are produced which
have adequate demand in market. As per the view of many authors, delivering products as per
the need of people in market helps in getting competitive advantage as it result in customer
loyalty and repeat purchase. On the other hand, marketing orientation also enhances the long
term sales and profitability of manufacturers. Therefore, it can be said that marketing orientation
act as a catalyst in various kinds of innovation. Other than this, it has been also found that
innovations marketing mix is very essential for manufacturers in order to survive in economic
crises. The integration of four element which is product, price, place and promotion is termed as
marketing mix (Lawson and Samson, 2001). Many authors has explained that at the time of
economic crises, the demand of products is reduced. Thus, in such situations businesses are
required to make innovations in their marketing mix.
Changes or modification can be done in existing products or for a short term price can be
reduced. This will help in generating the demand again in market and will also assist in getting
competitive advantage (Deshpandé and Farley, 2004). In addition to this, manufacturers can also
change their place or can opt for some of the new and effective promotion techniques to maintain
demand in market. As per the view of various authors it can be stated that marketing innovations
as directly linked with competitive advantage of small and medium enterprise. Porter three
generic strategy has been used in order to determine the strategies which can help in getting
competitive advantage. Firms can adopt the strategy of cost leadership in which they try to lower
down their cost of production and become the lowest cost manufacturer in the entire market
(Grewal and Tansuhaj, 2001). Thus, by selling products at low price, businesses can easily
achieve competitive advantage.
On the other hand the small and medium enterprise can also use the strategy of focus
where it narrow down its market segment and starts delivering products as per the need of a
particular group of people in market. The strategy of differentiation can help in delivering some
new and unique products in market (Sinha and Noble, 2008). One of the best way to survive in
long run and earn adequate profits is by getting competitive advantage. Such kind of advantage is
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very beneficial for manufactures as it forces customers to choose the products of one
manufactures over others. Companies are required to offer some unique and different products
which no other market player is offering. Thus, it can be state that marketing orientation leads to
innovations which helps a company to gain competitive advantage and through such advantage
survival even in case of economic crises become very easy. It has been found that the major 4 P's
of marketing play a very important role in the marketing orientation process of a company. At
the time of economic crises companies are required to manufacture only those products and
services which are in market demand. Further producing products which are in very less demand
will create problem in achieving the growth and profitability (Augusto and Coelho, 2009). On
the other hand, enterprise are also required to use low price strategies in such situations. This will
help in creating and maintaining the demand of a particular product in market. Small and
medium businesses in China are the one which have employees less than or equal to 500.
Therefore ,these firms are also required to carry out effective promotion activities in order to
create demand in market for their products and services at the time of economic crises. The use
of effective marketing mix will help in accomplishment of marketing orientation easily which
will further help businesses to innovate new products and make a differentiation.
(B) CRITICAL APPRAISAL OF RESEACH METHODOLOGIES
In the present study, survey method has been taken into consideration in order to collect
accurate and the most relevant information regarding the topic of study. Further cross sectional
data has been accepted in the existent literature. As per the proposed conceptual model, various
measures are developed form the business literature. In order to present the measures, survey
present and exploratory qualitative interviews are used. The researchers has also taken care of
the fact that there are no unclear or inappropriate questions preset in this research. Such
questions has been removed or modified. The study has taken place in Chinese context and thus,
the questionnaires which have been used are translated to Mandarin Chinese from English. Then
the finalized surveys was distributed to some of the small and medium enterprise of china.
Further the distribution was on random basis and mainly clothing and footwear enterprise were
targeted. A professional market research agency was the one which has provided the sampling
frame. According to the Chinese context small mediums enterprise are those businesses which
has a workforce of less than 500 employees and annual turnover of around $500,000.
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It can be also stated that total 1000 questionnaires were distributed to small and medium
enterprise. The industries located arrround areas such as Wenzhou (76),
Guangdong (245), Jiangsu (92), Shandong (215),
Zhejiang (102), Fujian (84), Chongqing (68), Hebei (82) and Dalian (36) are majorly targeted.
Further it has been observed that these are the cluster which contributes more than 80% of the
total Chinese export. In order to get the most accurate and desired information, the investigator
has appointed a assistant which was fluent in Mandarin. One of the main advantage of this was
that the scholar was easily able to get suitable information after communicated the aim and
objectives of study to the small medium enterprise. It can be also stated that it would not have
been possible to get such appropriate data without the assistance. Most of the people do not
know anything about English language and the researcher has done very good thing by hiring a
assistant. The response rate was around 18.4 % as out of the total 1000 questionnaires, 184
useful and completed questionnaires were received back. The response rate is very low which
was not expected by the scholar.
One more attempt was made by the researcher in order to address the low rate of response
from the small medium enterprise who were the actual respondents. Those who have responded
late are also not taken into consideration and have been grouped under the category of non-
respondents. The scholar has always taken care of the fact that the survey remain confidential
and it was conducted at the time when the small and medium enterprise of china collapse due to
the economic crises. One of the main reason behind selecting this time is that the main objective
of this study was to determine whether marketing innovation can help manufacturers to survive
easily in situation of economic crises. Questions related to market orientation, innovation and
competitive advantage has been asked to the respondents. In terms of survey items used it can be
stated that the the items were completely based on Likert nine-point scale format and it was
completely taken form the literature. For reducing and eliminating the chances of errors and
mistakes, the scholar has developed various multi-item measures.
All the questions has been asked only at the time of economic crises so that the most
accurate information get be gathered as per the topic of the study. The main focus of researcher
was to take information only when the respondents were going through the stage of economic
crises instead of taking response from them before or after crises. The scale which has been
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developed by Narver and Slater in the year 1990 has been taken into consideration in order to
measure market orientation. On the other hand, Hurley and Hult scale was used to measure the
marketing innovations. It can be also stated that in depth information regarding competitive
advantage has been derived by using three generic strategies of Porter which are cost leadership,
differentiation and focus. It has been identified that the cost leadership strategies is used by
businesses when they want to become a lowest cost manufacturer of products in the entire
market.
A focus strategy is used when companies gain competitive advantage by narrowing down
their market segment and focusing on the need of some specific people in market. Other than
this, differentiation strategy is used to gain competitive advantage by offering some new and
unique products in market. Out of the total number of respondents 63% belongs to consumer
manufacturing firms whereas the remaining 37% were industrial manufacturing firms. In terms
of employment size it can be stated that there were 12 firms having employees between 1-9 and
the majority of respondents were those businesses which has workforce between 10 to 49
employees. It has been observed that only those business which have annual turnover of less
than or equal to $500,000 are considered as small and medium enterprise. As per the age it cab
be stated that most of the respondents were the companies which are operating form last 11- 20
years. 19% of the business were those which are operating from last 51-100 years and there were
only 2% of the respondent which are carrying out their business greater than 101 years. Some of
the major factors which has been taken into consideration at the time of deriving mean, standard
deviation and standard loading are customer orientation, competitor orientation, inter- functional
coordination, marketing innovation, competitive advantage and firm survival. All these has
assisted in getting some useful information regarding the topic of the study. In addition to this,
all the research methods have been taken into consideration as per the nature of the research.
(C) RESEARCH CONCLUSION
This study has helped in developing a deep understanding with regards to how the current
t economic crises have affected the sales, profitability and performance of Chinese small and
medium manufacturers. This has helped in evaluating whether marketing innovation can assist a
firm in getting competitive advantage and survive in market in situation of economic crises. It
can be conclude that one of the best way to survive in market is by using the strategy of
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marketing orientation. It has been observed that marketing orientation helps companies to
manufactures only those products and services which are in demand. This assist in enhancing
stupefaction level of customers and also provide the base for innovation. The three key element
which can be concluded from this research are competitive advantages has helped Chinese
manufactures to survive in situation of crises, marketing innovations helps in getting competition
advantage and when manufactures are competition oriented their marketing innovation
capabilities are improved.
With the help of a resources based strategy and organization capability theory it can be
concluded that, marketing innovation is one of the key and most important resource of
manufacturers. In addition to this, it helps firms to operate as per existing market situations and
survive easily even in situation of economic crises. From the above study, it can be also stated
that marketing orientation is directly linked with marketing innovations of manufactures. Further
it also help in developing and enhancing the innovation capabilities of a firm, which directly
results in increasing its overall performance. It can be concluded that one of the best way to
survive in situation such as economic crises is by using the strategy of differentiation. It has been
found that innovation in elements such as product, price, place and promotion assists small and
medium manufactures to gain competitive advantage. Further people in market are encouraged to
choose products of a particular manufacturer over the other market players.
From the empirical modelling which was conducted using information from Chinese
small and medium enterprise, it can be also concluded that competition oriented manufactures
are more capable of marketing innovations. It has been observed that when manufacturers have
competition oriented culture, their ability to identify customer needs is improved along with their
strengths. It also supports in lowering down or eliminating the weakness of businesses. It can be
also stated that Chinese manufacturing small medium enterprise are required to undertake the
concept of marketing innovation. The capabilities of marketing innovation assist the Chinese
enterprise to attain competitive advantage with the help of cost leadership. It can be concluded
that the best way to deal with the challenges of economic crises is by doing market orientation.
This will help in understanding the need of people in market and will provide guideline for
innovation. Further innovative products will assist in getting competitive advantage over other
market players which will make it very easy for small and medium enterprise to survive in crises.
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It can be also stated that in economic crises most of the firms find it very difficult even to
survive as the demand in market is very low and there are various alternatives available in
market. Thus, a business can survive only when it is having competitive advantage over other
market players. Further it can be concluded that companies can select any of the three generic
strategies of Porter. One of the most suitable and appropriate strategy among them for small and
medium enterprises is of differentiation. Form the findings of the study it can be stated that
market orientation, innovation, competitive advantage and firms survival all these things are
interrelated with each other.
(D) LIMITATIONS OF THE STUDY
Every study has some sort of limitation which needs to be taken care of by the scholar
which is carrying out a study. The first limitation is related to warnings which are related to self
reported questionnaires which has been used in this study. Another limitation which was present
in this limitation was related to time. It can be stated that the researcher was not having
appropriate time for the study. Approaching small medium enterprise in different location of
China and encouraging them to fill questionnaire was a very time consuming job. Gathering
information has consumed a lot of time and without this relevant and accurate information would
not have been collected. Thus, it can be stated that time was one of the major limitation which
has created obligations in carrying out this study in effective and desired manner. On the other
hand, cost has been another limitation of this research. Approaching various small and medium
enterprise of China and collecting information from them has increased the cost of the study. In
addition to this, the researcher has also hired a assistant who was fluent in Mandarin Chinese
language. The main reason behind this was to communicate easily with the small and medium
enterprise and get some useful information from them. The researcher was also required to pay
certain amount to his assistant for giving his time and efforts to carry out the study in most
desirable manner. The study has been limited with Chinese context as only those small medium
enterprise which were suffering from economic crises have been taken into consideration. Rather
than discussing about the overall impact of economic recession on small and medium enterprise
all around the world, this study is limited to Chinese market only. Other than this, only clothing
and footwear manufactures have been taken into considerate which can be also termed as one of
the limitation of this research.
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REFERENCES
Books and journals
Augusto, M. and Coelho, F., 2009. Market orientation and new-to-the-world products:
Exploring the moderating effects of innovativeness, competitive strength and
environmental forces. Industrial Marketing Management. 38. pp. 94−108
Barney, J., 2000. Firm resources and sustained competitive advantage. Advances in
Strategic Management. 17. pp. 203−227
Beverland, M. B.. and Lindgreen, A., 2007. Implementing market orientation in industrial
firms: A multiple case study. Industrial Marketing Management. 36. pp. 430−442.
Danneels, E., 2002. The dynamics of product innovation and firm competences.
Strategic Management Journal. 23(12). pp. 1095−1121
Deshpandé, R. and Farley, J. U., 2004. Market orientation, innovativeness and
organizational Culture: Thai firms adapt to the Asian economic crisis. January: Asian
.Journal of Marketing 5–19.
Grewal, R. and Tansuhaj, P., 2001. Building organizational capabilities for managing
economic crisis: The role of market orientation and strategic flexibility. Journal of
Marketing. 65(2). pp. 67−80.
Lawson, B. and Samson, D., 2001. Developing innovation capability in organizations: A
dynamic capabilities approach. International Journal of Innovation Management. 15(3). pp.
337−400
Sinha, R. K. and Noble, C. H., 2008. The adoption of radical manufacturing technologies
and firm survival. Strategy Management Journal. 29. pp. 943−962.
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