The Influence Of Marketing Capabilities On Corporate Endogenous Innovation

1. Research ObjectiveThe Corporation endogenous innovation which has drawn a wide attention in industrial field and academic field will be a major driving force for the sustainable development of Chinese mainland economy. The reason why we would depend much more on endogenous innovation is because that nature resource and labor force resource which have made a huge contribution in China's past economic development has become relatively more and more scarce. Recently many Chinese researchers have done lots of work on innovation from different angles, for example, innovaton environment, innovation resource, innovation strategy etc. But the relationship between marketing capabilities and endogenous innovation still remains unanswered. The great management master Peter Drucker (1954) said that any firm has and only has two functions: marketing and innovation. Therefore, exploring the relationship between marketing capabilities and innovation will make a contribution in the development of marketing and management theory, and guide the Chinese firms to build effective innovation strategies based on marketing capabilities.Recently, most researches are talking about innovation from the point of government policy. This dissertation makes an explanation of Chinese corporations'low endogenous innovation level from the point of marketing capabilities. And we propose that government policy will work only if firms have an innovation desire, and marketing capabilities will lead to innovation desire. Therefore, improving Chinese corporations marketing capabilities, which inclue branding, reputation, and customer relationship management, will not only improve the corporations'performance directly, but also enhance the corporations'innovation initiative.2. Study ContentThis research content can be devided into three parts: the positive influence mechanism of marketing capabilities on firms'endogenous innovation; the dual effect of marketing capabilities on firms'endogenous innovation; marketing strategy research on the background of radical innovation. The three essays capture the essence of the relationship between marketing capabilities and innovation, and reflect the author's cognitive and research process about this issue.First of all, based upon two facts that Chinese corporations'marketing capabilities are relatively weak and Chinese corporations'endogenous innovation level is also relatively low compared with western multinationals, we propose that Chinese corporations'low endogenous innovation level is not because Chinese corporations do not recognize the significance of innovation, but the weak marketing capabilities hinder the corporations'innovation initiative.Secondly, as we further think about the relationship between marketing capabilities and endogenous innovation, we found that marketing capabilities should impose dual effect on corporations'endogenous innovation. The reason is that if we take Chinese corporations'low innovation level as a disease and the marketing capabilities as treatment, commonsense tells me that any treatment has side-effects. Theoretically, Christensen's disruptive technology theory also provides some support for this intuition. So we propose that under some conditions the marketing capabilities will impose negative effect on endogenous innovation, and environment turbulence may be a key moderator variable.Thirdly, after exploring the relationship between marketing capabilities and endogenous innovation, we make some research on how to improve marketing capabilities to effectively ensure the market success of corporations'endogenous innovation. Because radical endogenous innovation is a big issue in terms of innovation, we did some research on how to craft effective marketing strategies to win the battle of standard competition in the last part.3. Study ConclusionsThrough construct measurement development, data collection and the application of structural equation modeling, we get the empirical conclusions of the three parts.(1) The positive influence mechanism of marketing capabilities on endogenous innovationThe empirical conclusion indicates that marketing capabilities do have a positive effect on corporations'endogenous innovation. Plus the fact that Chinese corporations'innovation and marketing capabilities are relatively weak compared with western multinationals; we can draw the conclusion that marketing capabilities hinder the corporations'endogenous innovation. So in order to improve the corporations'endogenous innovation, we have to improve Chinese corporations'marketing capabilities. The empirical conclusion also indicates that marketing capabilities influence the whole innovation process which includes innovation initiative, innovation expectancy, innovaition performace, so we could say that marketing capabilities have a"chain effect"on innovation which means a small variance in marketing capabilities will lead to big difference in endogenous innovaiton.(2) The dual effect of marketing capabilities on endogenous innovationIn this part we get two research conclusions: firstly, marketing capabilities are a complex construct, its componets have different effect on endogenous innovation; secondly, environment moderates the relationship between marketing capabilities and endogenous innovaiton. The second empirical study indicates that the first part study is only a special case in the relationship between marketing capabilities and endogenous innovation. When environment turbulence is low, marketing capabilities impose a positive effect on endogenous innovaiton, improving marketing capabilities is always right. But when environment turbulence is high, there is a possibility that marketing capabilities could impose a negative effect on endogenous innovaiton. So we'd better be careful about impoving marketing capabilities. This conclusion tells us that when firms face low environment turbulence, improving marketing capabilities especially branding, reputation, and customer relationship management, is always a necessity. But when firms face high environment turbulence, Chinese corporations could pursue disruptive technology and adopt radical innovation to compete with western multinationals.(3) Marketing strategy research with the background of radical innoaiton: empirical study based on standard battle and consumer regulatory focus.The study conclusion of this part indicates that the standard competition of radical innovation imposes a significant impact on consumers'adoption willingness. The standard competition will increase the consumers'buying risk and therefore will definitely lose some consumers. This part study conclusion also indicates that regulatory focus is a very important segmentation variable when firms are crafting marketing strategies for radical innovations. If Chinese corporations want to win the standard battle, they have to establish the network effect and initiate the positive feedback mechanism of consumer adoption, and adopting regulatory focus as a segmentation variable is a key to the success of standard battle.4. Theoretical Contribution(1) We have tested the relationship between marketing capabilities and corporations'endogenous innovation process under the condition of Chinese business world. And the empirical study conclusion supports out hypothesis that the relative weakness of Chinese corporations'marketing capabilities impedes their endogenous innovation process.(2) We have presented that in order to improve the innovation initiative and endurance of Chinese corporations we have to imprve Chinese corporations'marketing capabilities in advance. And during improve marketing capabilities; Chinese corporations have to put branding, reputation and customer management at the top priority.(3) Marketing discipline and management discipline hold different view towards the relationship between marketing capabilities and innovation. In this study we have resolved this paradox by building a model which indicates that marketing capabilities impose dual effect on endogenous innovation, and presented the judgement condition for this dual effect. This part study implies that the previous part study is just a special case which only draws a conclusion about the gross effect of marketing capabilities on endogenous innovaiton. As the environment becomes highly turbulent, there is a possibility that marketing capabilities could impose negative effect on endogenous innovation. So to overthrow the market dominance of western multinationals, Chinese corporations should grasp the chance of disruptive technologies which often occur under the condition of high environment turbulence.(4) From the point of regulatory focus, we have made a research on the consumers'adaptation willingness to different radical innovation products with different standards. The empirical study conclusion indicates that promotion focused consumers are much more willing to adopt radical innovation products than prevention focused consumers. Therefore regulatory focus could be a significant segmentation variable which implies that marketer should identify those promotion focused consumers and take them as target customers in order to win the standard battle.(5) Methodology characteristics. Firstly, applying frontier psychometric technologies to study the relationship between marketing capabilities and endogenous innovation; secondly, in the application of structural equation modeling, we adopt not only classic direct effect but also indirect effect which includes mediates effect and moderate effect. Thirdly, we have made some adaptation about western mature measurement on some constructs such as regulatory focus, marketing capabilities, innovation performance, and environment turbulence. During the adaptation of these constructs, we add some important dimensions, for example, we add branding, reputation, and customer relationship management into the measurement of marketing capabilities. For those constructs which have not been measured in the western academic field, we have developed the measurement independently.5. Research limitation and future research directionAlthough we have paid much attention to the scientific methodology, but constrained with research budget, we have only collected the survey data in Sichuan provience and two undergraduate classes, so there could be some regional bias. To impove the study validity we'd better collect national survey data. And the survey data we have collected is cross-sectional; we could not draw a conclusion about the dynamic relationship between marketing capabilities and sellf-innovation.This dissertation has made a thorough study on the relationship between marketing capabilities and endogenous innovation, but the research about how to improve marketing capabilities and craft effective marketing strategies has only been made in the circumstances of radical innovation which is only a type of endogenous innovation. Therefore, future research could discuss the crafting of marketing strategies under other conditions.