A Study On The Relationship Between Marketing Capability And Innovation Behavior

BackgroundSchumpeter was the first to raise the importance of innovation. Innovation was illustrated as a kind of transition in production function as well as rearrangement of agents and conditions of production introduced into production process that induce consequent reform in technology system. After Schumpeter, innovation became the most discussed theme in the domain of economics and management. The concept of innovation was as well extended to a wide range of realms other than technology. These all illustrated the significance of innovation.Innovation is the source of differentiation and exclusion. Companies can wield it to build up monopoly in market or something approximate, thus could grant super profits. Anyhow, competition in market will foster diffusion in technology causing augmentation in the supply of similar products, which will diminish the super profit. So in a competitive environment, the capability to innovate continually becomes the pivotal of sustainable market power and profitability. This fact has been confirmed by many positive researches.Out of the importance of innovation, many researches focused on the factors which determine the success or failure of innovation, of which the hidden motive is to enhance innovation's chance of survival through manipulation on those factors. Yet there are some withdraws which could be fatherly improved.Of innovation, many notations were coined, while summation lacks; innovation is scarcely denoted as an integral process which spans resource input at one end and outcome at the other, or incorporates psychological factors. Of marketing capability, the measures of scales are generally confined to certain marketing operation, such as marketing research, launching activities, which could only provide us with limited knowledge on marketing's influence. Though some other researches expand the measures, they are generally based on 4P. Few researches discern marketing activity through scale development. Of the relationship between marketing capability and innovation, a great portion of the researches focused on market-orientation's other than marketing capability's influence on innovation. Most researches are set in America and Europe, only limited numbers are set in developing countries, among which researches set in China are rather rare.ContentIn the dissertation, innovation behavior is denoted to incorporate the psychological and substantial process of innovation. The latter is decomposed into product realization and commercialization. Product realization starts with input of innovation resources, which is consequently transformed into technical outcome through technical capability. Commercialization commences at technical outcome, which is consequently transformed into commercial outcome through commercialization capability. Commercialization capability manipulates the expectation of commercial outcome, which consequently manipulates the innovativeness. Innovativeness then manipulates innovation resource input.The theoretical relationship between marketing capability and innovation behavior comprised the direct and indirect relationship between marketing capability and innovation input, technical capability, technical outcome, commercialization capability, innovativeness and expectation on commercial outcome. Yet constrained by the methodology and robustness of the scale newly developed, the testing model only comprises marketing-capability's direct influence on innovation input, technical and commercial outcome. Its influence on commercialization capability is transferred into its influence on the relationship between technical and commercial outcome.Sichuan Client Evaluation Center Co. LTD is entrusted with the task of scales distribution, recycle and data key-in. The scale consists of two parts, one contains 69 measures of marketing capability, and the other contains 17 measures of innovation input and outcome. Finally,1104 samples are available in the data set which is a bit less than the planned sample amount. After screening the sample by any default in any measure in the scale,890 samples are available at last.Structural Equation Model was manipulated to verify marketing capability's direct influence on other variables. And its influence on the relation between technical and commercial outcome is verified with Bayesian model. Main ConclusionsMarketing capability has positive effect on innovation input, which is stronger on input intensity than on input amount. Intensity and amount of input both have positive effect on technical outcome, while the effect from input amount is stronger. Technical outcome has positive effect on market performance. Marketing capability has positive effect on the transitional effectiveness from technical outcome to market performance, and this effect demonstrate a quadratic form showing that the marginal effect is diminishing.The moderating effect from company scale is insignificant. But its aggregate effect on market performance in path analysis demonstrates a quadratic form. The moderating effect from marketing capability is significant.There is essential difference between technical outcome and market performance. Marketing capability's effect on technical outcome and market performance is quite different. First, its effect on technical outcome is negative otherwise positive on market performance. Secondly, marketing capability shows different moderating effect on them.ImplicaitonThe difference between technical outcome and market performance is confirmed in this research. This implies that technical outcome and market performance have to be treated as two distinctive latent variables otherwise their mixture will mislead the conclusion.As marketing capability's positive effect on market performance has been confirmed, entrepreneurs have to balance between technical and marketing activities under the constraints of limited resources. Regarding innovation as a process of technical activities may lead to scarcity in marketing enhancement, which would finally impair innovation.To sustain innovation activities, the structural indicator like R&D staff and investment intensity must be maintained at a certain level in the long run. While in the sort term, overhead for innovation must be guaranteed, otherwise innovation activity is prone to shrink rapidly.To enhance innovation among Chinese enterprises, numerous policies have been put forward, but most of them are determined to hatch innovation having little to do with its growth. Most innovations are applicative innovation, their existence hinge on their survival in market. The current policy is too focused on bringing up innovation, ignoring enhancing its ability to survive the following competition. So, policy should be tilted toward helping enterprises enhance their capability of marketing innovation.DiscussionMany potential moderators and mediators are absent from the testing model. Their effects would be fatherly discussed on the testing model developed in the research. The testing model doesn't incorporate the direct influence of marketing capability on psychological factors. Those influences would certainly be incorporated as the robustness of the marketing capability scales are fatherly verified. Cross section data are manipulated to test the model, which is only a secondly choice theoretically due to panel data's unavailability.ContributionA Bayesian model is developed to observe the effect from marketing capability on the transition effectiveness between technical and commercial outcome, which is not observed in past literatures of this field yet. The deduction pillar of the model entitles it with further application on a wider range of subject like customer behavior and market segmentation. The scale developed measuring marketing capability could be applied in practice after further improvement. It could be useful in marketing capability evaluation. An integrative frame of innovation behavior is developed in the dissertation, which could be fatherly polished and modified to incorporate more moderator, mediator and antecedents.