The Impact Of Innovative Marketing Strategy On Small Firms Performance In Niger State
This study is to examine the impact of innovative marketing strategy on small firm’s performance in Niger State with a specific reference to Nigerian Bottling Company Plc, Niger. The fundamental objectives of the study are to identify the the impact of innovative marketing strategy on small firm’s performance in Niger State, to determine how product innovation improve on the profit of the organization and to ascertain the level of consumers’ satisfaction of the company. The primary and secondary sources of data were used for data collection. Questionnaire was administered to 80 staff of the reference organization. Data gathered from the respondents was analyzed and the finding revealed that shortfall in sales and profit is responsible for product innovation due to competitors’ market influence; that there is need to increase company’s turnover and maximize profit ; that consumers’ satisfaction is enhanced; that shareholders fund should be maximized through increase in rate of turnover and profit. It was concluded that the idea behind product innovation does not end in the satisfaction of changing taste of the consumer. It also helps to increase sales and profit of the organization. It was recommended that companies should engage in it regular interval so as to cut down the cost of value analysis strategy which is a segment of product innovation and Companies should ensure that Research and Development Department as well as other sources where new product strategic plan emanated from should be explored not neglected.
1.1 Background To The Study
A driving force for competitive scuffle in the present chaotic environment is innovative marketing strategy. Introducing new products and services are at the nucleus of economic growth and development. The ability to innovate has caused researchers to study activities leading to initiative advancement of individuals and organizations. Small firms all over the world furnish a strong increase to employment and economic growth specifically due to their innovative activities which becomes a main force of explaining competitive advantage and firm performance (Ussahawanitchakit, 2012). Accordingly, the values fashioned by innovative marketing strategy shows potential circumstances that uncovered new ways of doing things or new products and processes that add benefits to economic fortunes.
A firm performance is related to the ability of the firm to gain profit and growth in order to achieve its general strategic objectives (Neu & brown, 2005). It is a consequence of the interaction between actions taken in relation to competitive forces that allow the firm to adapt to the external environment, thereby integrating competence and usefulness In both developed and developing countries of the world, small companies have proofed to be prominent in terms of employment and added values to gross domestic product, ‘yet their full potential remains untapped’ Schlogl, (2004). The support given for the start up of small firms, necessitate them to becoming important engines for innovation and technological advancement especially in the field of marketing. In 2007, The World business council for sustainable development gave a summary of the weight small firms in general lend to government and individuals.Small firms that are properly supervised become means of employment prospect and affluence creation. They aid in the generation of revenue and create communal solidity. Bigger organizations are provided with local services and supplies and communities have access to affordable goods and services at lower costs. Furthermore, ‘by working closely with small firms, large corporations can develop a new customer base that may not be accessible to the traditional distribution networks of these corporations’ (Menna, 2013). Thus small firms are a reliable source of supply and have understanding of the pattern of procurement.
Small firms, world over have been found to provide jobs for about 75% of the workforce of any country. In periods of liberalization and privatization small firms especially in emerging economics, has become vital economic tools and bedding seeds for entrepreneurship development and indigenous technology that create employment and are better positioned over bigger firms in their capacity to be innovative. However there are barriers to the activities of innovative marketing strategy in small firms which according to Menna (2013) include a lack in capital investment, infrastructure, education and training systems, encumber regulations, and in general deficiencies in know-how and skills acquisition. Other barriers include constrained managerial capabilities, difficulty in utilizing technology which results in low productivity among others. Consequently, investing in innovative marketing strategy strengthens the profit base, knowledge of employees and individuals that drive resilience of the organizations to create new products, processes, and new behaviour of working that generates improve competitiveness and achievement of necessary goals to shape performance.
Existing literature has described innovative marketing strategy differently. For example Aremu (2010) affirmed there are three types of innovative marketing strategy, product, process and strategy or business model innovation. Hussien (2010) explains innovative marketing strategy to include five types: new products, new methods of production, new sources of supply, the exploitation of new markets, and new ways to organize business. For Allocca & Kessler (2006), innovative marketing strategy will only be effective when there is a process of equipping in new, improved capabilities or increased utility. The present study seeks to examine the effect of innovative marketing strategy on small firm’s performance.
1.2 Statement Of The Problem
It is understood that innovative marketing strategy has become a key driver for better competitiveness of firms. Some studies have found that innovative marketing strategy is closely associated with firm performance (Rosli et al., 2012; Mukhamad et al., 2011; Pla-Barber & Alegre, 2007; Gunday et al., 2011; Gary et al., 2008; Nada et al., 2008; Morgado et al., 2008; Gunnar et al., 2009). Others suggested that the effect of process involved in innovative marketing strategy to have produced different results for firm performance (Geroski & Machin, 1993). Mark (2004) further argued that innovative marketing strategy did not explain performance, whereas others discovered that the process improvement did influence sales growth of small firms (Wolff & Pett, 2006). However, this study is conducted on the innovative marketing strategy of small firms to find out if innovative activities in the marketing strategy have impact on firm performance. This study attempts to gauge how strong that innovative marketing strategy affects the performance of small firms, with special reference to the mediating effect of organizational productivity and effectiveness.
1.3 Objectives Of The Study
The general objective of this study is to analyze the impact of innovative marketing strategy on small firm’s performance in Niger State while the following are the specific objectives:
- To examine the impact of innovative marketing strategy on small firms performance in Niger State.
- To identify the types of innovative marketing strategy that can promote small firm’s performance.
- To determine the factors limiting small firm’s performance in Niger state.
1.4 Research Questions
- What is the impact of innovative marketing strategy on small firm’s performance in Niger State?
- What are the types of innovative marketing strategy that can promote small firm’s performance?
- What are the factors limiting small firm’s performance in Niger state?
HO: Innovative marketing strategy does not enhance small firm’s performance
HA: Innovative marketing strategy does enhance small firm’s performance
1.6 Significance Of The Study
This study on the impact of innovative marketing strategy on small firm’s performance in Niger State will educate stakeholders in business sector especially the marketers and the management team on the benefits of innovative marketing strategy emphasizing how it can enhance the customer base of an organization leading to improved firm’s performance. The study may also contribute to the existing body of knowledge on the impact of innovative marketing strategy on small firm’s performance. The study will be a good reference material to students who may wish to use this study as a springboard to undertake their own research.
1.7 Scope/Limitations Of The Study
This study on the impact of innovative marketing strategy on small firm’s performance in Niger State will cover all the small firms in Niger State by examine how innovative marketing strategy has improved their performance. This study will also cover different types of innovative marketing strategy and other factors limiting small firm performance in Niger state.
1.8 Definition Of Terms
The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract.
A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.
The process of translating an idea or invention into a good or service that creates value or for which customers will pay.
Summary, Conclusion And Recommendations
This research brings to light some of the benefits of product innovation, which can be regarded as organization’s survival strategy. Product innovation can be described as a situation where product is improved upon to meet the ever-changing needs of consumers, organizational turnover and profit. An “old” product can be placed as a “new” product in the market after making some minor changes .On the other hand, an entirely new product can also be introduced into the market as a result of research findings. Most technology based company innovations are mostly technology-driven contrary to market-driven technology, which is stimulated by the consumers’ needs.
Products like any other living beings undergo a normal lifecycle and at every stage of the life cycle, the product experiences some changes in the demand for them. Product innovation can be also be carried out on product already in the market. Also, the research outlines that the company could achieve its short-term and long-term objective through product innovation which would enhance increase in sales, profit maximization and consumers’ satisfaction.
In this research paper, the impact of product innovation on the performance of manufacturing company was examined. The background has revealed that most products require innovation due to constant changes in the taste of consumers and the need for company to increase sales and maximized profit.
It appears that philosophy of marketing concept is yet to be taken seriously, most companies reckon with this concept in practice. In the practical sense, the needs and wants of the consumers are satisfied through the company’s product(s). For a product to meet these objectives of satisfactions, it must undergo product innovation at regular intervals because of the dynamic nature of consumer’s needs and wants that changes over time.
The idea behind product innovation does not end in the satisfaction of changing taste of the consumers, this aspect of product innovation also helps the company to have an edge over competing products in terms of sales. Sales would increase over time because more consumers would be attracted to the new product. Not only would these, product innovation enhance the attainment of profit maximization to the company as a result of increase in turnover. The rate at which consumers patronize such product has facilitated profit maximization.
Finally, it is worthy to note that product innovation is not limited to once in a product’s lifetime. A product can be innovated as many times as possible. This aspect of product innovation is mostly done on consumers’ goods. This is so because the cost in carrying out product innovation on consumers good is not that high as the amount that will be spent in carrying out innovation on industrial goods.
Having undertaken a thorough study of the impact of product innovation on the performance of manufacturing company, it is deemed necessary to give some useful suggestions and recommendations, which would help in improving the quality of consumer goods and improving the satisfaction of consumers. The recommendations are as follows:
- Companies should engage in extensive research, to find out the actual needs of the consumers in relation to what should be produced. This would go a long way in preventing the production of products which are not actually needed because of its failure to satisfy the needs and wants of the consumers;
- In addition, companies should carry our research on the changing taste of the consumers periodically so as to adjust the already existing product, to meet the dynamic taste of consumers because failure to do so would reduce the product sales and profit;
- Since product innovation helps in reducing cost of consumer goods, Nigerian Bottling Company management should engage in it at regular interval so as to cut down the cost of value analysis strategy which is segment of product innovation;
- Management of Nigerian Bottling Company should ensure that Research and Development Department as well as feedback of consumers from sales personnel where new product strategic plan emanated from should be explored and made use of so as to enhance provision of products that are expected by consumers. Such report includes that from sales persons who are always in touch with the consumers and understand most of the competing products and in addition they know the position of their company’s product in terms of competition in the market;
- Finally, in carrying out product innovation, management of Nigerian Bottling Company should ensure that the “new” product is real improvement on the old one. Consumers should not just be deceived that a product quality has improved while in the actual sense, there is no alteration on the product.
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