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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Marketing innovation is defined by Cascio (2011) as “the degree of novelty in the implementation of three core business processes: product development management; supply chain management; and customer relationship management”. Marketing innovation is argued to be a strong contributor to firm competitiveness which Goksoy, Vayvay and Ergeneli, (2013) describe as a company's ability to “offer superior products and services for consumers comparing with the products and services offered by competitors”.

Authors such as Haddad and Algadeer (2004) argue that a firm's ability to create and sustain its competitive advantage is strongly influenced by its ability to employ marketing innovation. This argument is supported by Alsamydai, Alnawas and Yousif, (2010) who state that marketing innovation significantly contributes to firm competitiveness as it allows firms to continuously enhance the performance of their products and services as well as their overall firm presence.

OBJECTIVE

The objective of this paper is to discuss the extent of marketing innovation's function in developing and protecting a company's strategic competitive advantage. It will do so by examining the role played by the following types of marketing innovation in the competitiveness of several companies:

• Product Innovation;

• Process Innovation;

• Position Innovation;

• Organisational Innovation; and

• Service Innovation

DISCUSSION

Product Innovation

Product innovation which Utterback and Abernathy (1975, p.642) describe as the introduction of a new technology or combination of technologies to meet a user or a market need has played a critical role in the competitiveness of companies such as Apple. As White (2015) explains, Apple established its competitiveness when it introduced its first iPhone in 2007, as the phone's multi-touch inter-face and mobile internet functionality addressed a consumer need that had not been met by other smartphone producers such as BlackBerry, i.e. the need for user friendly functionality and technology.

Apple has maintained its competitiveness, through the introduction of new innovations such as its iPhone 3G and as Sun (2015) reported, registered a 255% growth in shares during the period 2010-2015. As he explains Apple has been able to maintain this type of competitive advantage because its major competitors such as Samsung, Sony and HTC have been unable to match its brand appeal in the high-end market.

Process Innovation

Process innovation defined by the OECD (2005) as the implementation of a fresh or greatly improved production method has contributed significantly to the competitiveness of firms like Amazon.  As Curtis (2013) explains, Amazon established its competitive advantage over companies such as Wal-mart and Target, through process innovations such as its ‘1-Click' and ‘Recommendations' as they made the online ordering process a significantly faster and more personal one, at a time when consumer demand for personalised hassle-free shopping was very high due to the growing popularity of online shopping.

Al Imran (2014) states Amazon has protected its competitiveness through its continued commitment to employing such process innovations like its ‘Amazon Wish List' which have significantly improved the online shopping experience. Research done by Wahba (2016) of Fortune, revealed that in 2016 online retail competitors Walmart and Target suffered 5% drops in their stock while Amazon's stock reflected a 1.5% increase for the same period.

Position Innovation

Position innovation which Bessant and Tidd (2011) describe as the change in the “perception of an established product in a particular user context” is what Häagen Dazs employed in the 1990s to reposition the perception of ice-cream as a cheap dessert for children to one where ice-cream was now a luxurious dessert for adults.

According to Alonso et al (2012), this use of position innovation paid off for Häagen Dazs in 2001, when a new wave of consumerism emerged where the need to be associated to superior brands such as Häagen Dazs as a sign of high economic status became a priority for many consumers, allowing the company to establish its competitive advantage. As they explain, Häagen Dazs has been able to protect its competitive advantage, through its fervent attention to maintaining the premium quality of its product and brand. In 2016 it was ranked no. 2 in ice-cream brands by Forbes (2016) with sales at US $2.09 billion ahead of competitors such as Cornetto and Ben & Jerry which registered sales of $1.60 billion and $1.23 billion respectively.  

Organisational Innovation

Organisational innovation described by Gunday et al (2011) as the implementation of a new organisational method by a firm in its business practice is largely credited for the success of Trinidad and Tobago's First Citizens Group. According to the firm's Corporate Profile, organisational innovations such as the expansion of its organisational structure, through ventures like the acquisition of Caribbean Money Market Brokers Limited in 2009, and Butterfield Bank in Barbados in 2012 have helped the Group to establish its competitive advantage. The Profile explains that these innovations enabled the Group to offer a wide array of consumer financial needs and become one of the first in Trinidad and Tobago's financial sector to attend to the growing need of the consumer for one-stop shop banking. According to its 2016 Annual Report, the Group's profits (TT$26.6 million) and sustained competitiveness reflected by its large customer base can be attributed to its devotion to attending to its client's needs through innovations such as the E-First brand and internet banking.   

Service Innovation

Service innovation which Miles (2005) (cited in Randhawa and Scerri, 2015, p.29) define as transformations in several aspects of a service, has been largely responsible for the success of firms such as the FedEx Company. As Enterprise Innovation (2011) explains FedEx's introduction of service innovations such as the ‘FedEx Mobile for iPhone and BlackBerry' applications in 2011 provided customers access to the most up-to-date tracking information for their shipments in real time, and satisfied a growing consumer need for a more reliable and convenient package delivery method.

According to a recent report by (Bloomberg 2016), the company's ability to register a US$14.7 billion increase in sales and maintain its competitiveness over companies such as DHL are credited mainly to its high investment in IT systems and continuous upgrade of its major delivery systems.

SUMMARY

As discussed above, a company's ability to create and protect its competitive advantage is strongly influenced by its ability to effectively employ marketing innovation.  In today's globalised world, the need to embrace this has become even more critical for firms as they are now being forced to compete with similar product and/or service providers all around the world.

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