Download The Interaction and Integration of Enterprises Technology Innovation and Marketing Innovation

The Interaction and Integration of Enterprises Technology Innovation
and Marketing Innovation
WANG Yujing, LIU Xiaojun
School of Economy, Tianjin University of Commerce, Tianjin, P.R.China, 300134
[email protected]
Abstract: Although technology innovation is quite crucial for enterprises development, without
acceptance by the market the new technology and product will become meaningless. The paper
expounds the interaction between technology innovation and marketing innovation and points out that
technology innovation is oriented by the market and transforms the scientific and technological potential
to marketing advantage. Meanwhile, some marketing innovation forms and approaches to integrating
technology and marketing innovation are analyzed. Technology innovation needs being guided by
market so as to integrate new product, commercialize production and popularize market application and
share.
Keywords: technology innovation, marketing innovation, interaction, integration
1. Introduction
With the rapid scientific technology development and the fierce market competition, the survival and
growth of enterprises more and more depend on the power of technology and its innovation fruit.
However, only if the innovation is realized in the market, can it become the true impetus for the
enterprise development. In the knowledge economy age, technology product market shifts fast and the
life cycle of demand, technology and product shorten. It is essential for the enterprises to study the
interaction between innovation and marketing and to integrate technology, marketing and innovation on
strategy, R&D, manufacturing, marketing and service in order to enhance the competitive power.
2. Literature Review
The study of technology innovation can be traced to Joseph Schumpeter in his work “The theory of
Economic Development”[1]. He defined innovation as the new integration of production factors by
entrepreneurs, consisting of the introduction of a new good, the introduction of a new method of
production, the opening of a new market, the conquest of a new source of supply of raw materials or
half-manufactured goods and the carrying out of the new organization of any industry. G. Lynn considers
innovation is a complete process starting with the recognition of commercial potential of technology and
ending with transferring technology to commercial products. NFS report argues that technology
innovation introduces new or improved product, process or service into market. In OECD report, it is
demonstrated that technology innovation includes the new product, new technique and their obvious
technical alterations. The innovation is accomplished if new products invented in market or new
technique adopted in production. Therefore, innovation comprises series of activities such as science,
technology, organization, finance and business. Recent years, some scholars studied innovation from
different perspectives, Luecke and Katz(2003) explain that innovation is generally understood as the
successful introduction of a new thing or method .and innovation is the embodiment, combination, or
synthesis of knowledge in original, relevant, valued new products, processes, or services[2]. Davila et al.
(2006) think that innovation, like many business functions, is a management process that requires
specific tools, rules, and discipline[3].
In empirical study, J. Langrish et al investigated 48 projects which won Technology Innovation Prize
rewarded by the U.K Queen and concluded that the clear cognition of market is quite vital for the
successful enterprises innovation. Freeman compared 40 pair of items of innovation success and failure
and found that the difference between success and failure could be explained by that the successful
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innovators pay much more attention to the market and have better understanding of the clients’
demand[4]. Drucker(2001) demonstrates two points. The former is that the basic task for any enterprise is
the identical---to find customers. The latter is that marketing is so essential that it cannot be regarded as
sole function. From the final activity, that is the customer perspective, marketing is the whole
enterprise’s activity[5].
Some Chinese scholars put forward their ideas on innovation. Xu C.Q. considers technology innovation
is the process of transforming knowledge, materials and labor to product. It is the first commercial
application of new technology and the phase of direct transition from science to productivity. Fu J.J.
indicates that technology innovation is the process in which the entrepreneurs take the potential
advantage of the market and restructure production factors and organization to establish stronger, high
efficient and lower cost operation system[6].
All the researching outcomes show that market orientation is the key to successful innovation.
Technology innovation needs being guided by market so as to integrate new product, commercialize
production and popularize market application and share. Therefore, technology innovation is
commercial process and can be significant only by actualizing it value in the market.
3. The Interaction Between Technology Innovation and Marketing Innovation
3.1 Understanding marketing innovation from the perspective of technology innovation
Marketing innovation is the idea of technology innovation. Since the technology progress gradually
shortens product life cycle, new products are pouring in. To adapt to the change, the marketing concept
should shift from satisfying consumers need to technology innovation so as to induce and create
consumers new demand.
Marketing innovation relies on the material foundation of technology innovation. Technology
innovation has not only restricted in the field of product exploitation and equipment; instead, it has
extended to all functions and factors of enterprises, like strategy, management, production and financing.
As far as marketing is concerned, it is demonstrated on the aspects of marketing engineering
construction and marketing technology progress as well as expanding market occupying.
Technology innovation guides marketing innovation. The marketing history shows that new product,
new sales promotion method and new sales channel greatly depend on the new technology, new material,
new telecommunication method and new computer software. In recent decades, marketing innovation
activities are directly pushed by the information technology, especially for the internet marketing. The
need for marketing innovation will more directly impel technology progress, while the achievement of
technology progress will also act on the marketing process.
3.2 The interaction between technology innovation and marketing innovation
First, technology innovation requires the enterprises’ marketing system innovation. From the peripheral
environment, marketing system is the rule prevailing or adapted in the commercial society, which
consisting of practice, moral, law and regulation to coordinate the interests among various marketing
principal parts. Theses rules play very important role in the process of commerce flow, logistics,
currency flow and information flow from producers to consumers. The performance of marketing
innovation is restricted by marketing system. The unhealthy marketing system will suppress the
marketing innovation momentum and result the distortion of enterprises marketing activity. From the
inner environment, marketing system innovation indicates the enterprise’s marketing organization and
marketing management innovation.
Secondly, technology innovation requires enterprises marketing purpose innovation. The dynamic
imbalance of technology innovation results in the fierce competition among enterprises. The enterprises
must take the top priority of the new products when setting up the marketing aim and must pay great
attention to the value created by the innovation when pursuing the profit.
Thirdly, marketing method innovation needs technology innovation. The technology innovation impels
marketing innovation in the field of using system theory and information theory to arrange distribution.
System theory is helpful to integrate the marketing subject, object and other factors into a
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interdependent complete system. Information theory is used to manage the various marketing
information. Such new marketing modes as net marketing, customized services, cultural marketing,
service marketing and relationship marketing immerging in recent years reflect the tendency of
marketing innovation.
Fourth, technology innovation is the innovation of market chain. The enterprise's survival and the
development should be oriented by the market. The technological innovation must pay attention to the
sci-tech achievement transformation and application and rely on the technology progress and industry
upgrade to improve enterprises competitive power. Therefore, technology innovation needs effective
cooperation with marketing innovation to ensure the successful innovation and proceeds.
Generally, technology innovation is the kind of innovation oriented by the market and transforming the
scientific and technological potential to marketing advantage. This requires the coordination between
innovation and marketing department and personnel in many fields such as establishing purpose,
budgeting, studying market demand, setting up target market, pricing and service[7]. The dynamic
interacting relationship between the technology innovation and marketing innovation can be reflected in
Fig.1.
Technology innovation
Product innovation
Market innovation
Marketing innovation
Marketing
innovation
system
Figure 1.
Marketing
innovation
field
Marketing purpose
innovation
Marketing
innovation
modes
The interaction between technology innovation and marketing innovation
4. The Integration of Technology Innovation and Marketing Innovation
4.1The form of marketing innovation
4.1.1 Product innovation
The focuses on product innovation normally lie on three aspects. One is standard innovation, which
means while conforming to international certificate standard, enterprises should satisfy the consumer to
the greatest extent by adopting more flexible standards. The other is brand innovation, which shows that
not only renews the brand design and use in accordance with the era and competition but also create
nationwide and worldwide famous brand. The last one is service innovation. As service is the extension
of tangible product and can bring more benefit and better satisfaction to the consumers, it becomes more
and more important part of product. The key to future competition is the additional value products can
supply which including packing, consulting, purchasing credit, prompt delivery and various services can
be measured by value.
4.1.2 Marketing method innovation
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This innovation consists of some aspects [8].
• Event marketing is to make use of a special or important event to strengthen marketing and expand
market.
• Flexible marketing means the enterprise can flexibly and timely adjust marketing resources and
activities to satisfy consumers individualizing demand. This method requires enterprises to adopt
flexible scattering management mode so as to establish new marketing mode, in which, producers and
consumers contact closely through the medium of information net.
• Internet marketing implies that enterprises can market products on internet by setting up their own
website.
• Zero stock marketing indicates that orders are prior to production to ensure zero stock. The key to this
marketing method is to secure orders and it is very important to guarantee quantitive orders.
4.1.3 Notion innovation
Being the perspective on objective matters notion is invisible but directly influences people’s action.
Notion innovation is the soul of marketing innovation and requires enterprises not only meet the
customers need but also create customers demand. Some ideas of notion innovation are worthy of
attaching importance to.
• Knowledge marketing notion is a concept which fits knowledge economy and is based on scientific
and technological revolution, centered by information technology. It focuses highly on knowledge,
information and intelligence and its succeed depends on knowledge not the experience.
• Green marketing has become the new tendency in 21 century. It requires enterprises aim at sustainable
development and attach importance to coordination between ecology and economy and the reuse of
resources. Green marketing emphasizes the benefit unification among consumers, enterprises, society
and ecology and regards ecological benefit as the key to obtaining the other three benefits.
• Global marketing notion means enterprises should put themselves in the worldwide background and
guide their marketing activity based on globalization.
，
4.2 The approach to integrate technology and marketing innovation
The approaches to integrate technology and marketing are various in different demand, technology and
product life cycle [9].
In the initial stage of R&D or enterprises establishment, the market risk taken by the enterprises are
great since the consumers are not familiar with the new product and the product performance is not
sufficiently stable. The main approach in this stage is to make the technology and marketing as carriers
reciprocally. Taking the technology as carrier means to give prominence to the adaptability of product
and promulgate the brand and marketing channel to find and meet consumers various demands. Making
marketing as the carrier is to develop unique product technique and try to occupy global market.
In the enterprises developing stage or product growth period, the technology is mature and the
consumers are familiar with the product. The main point is to combine technology and marketing
innovation. Oriented by marketing, technology is used as the methods to change the marketing channels.
In this stage, the enterprises can accomplish the shifting from production field to marketing field, and
finally actualize the product value.
In the product mature stage, the market is saturated and the sales volume growth rate has been stable
even declining. The numbers of new customers are difficult to increase while the market competition is
more severe. At this phase, enterprises will stimulate technology innovation and combine various
advantageous resources to organize research and marketing team to strengthen the integration of
technology and marketing.
At the last stage or product recession period, sales volume drops and the price is cut to the bottom. Most
enterprises are forced to retreat from the market and the remaining ones often cut down their budget to
maintain the minimum operating level. In order to create new situation, enterprises will shift from
technology first to market first and further push technology progress. For instance, Dell in 1992 focused
on technology innovation and customized their products according to clients’ requirement. On the other
hand, deep marketing innovation such as event marketing, experience marketing and individuation
marketing methods based on technology innovation can raise the combining efficiency of supply,
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technology and service. By way of deep integration of technology innovation and marketing innovation,
technology and market can unite completely.
5. Conclusion
Technology innovation and marketing innovation, like the wings of the enterprises, are equally
important. The market demand and technology actualization are the premise of technology innovation
while the degree of market realization is the final standard to verify the success of technology
innovation. The competition advantage depends on the fair interaction and synergy between technology
innovation and marketing mode innovation. In addition, it is advisable that enterprises should analyze
market risks and cut down product research and developing cost.
References
[1]. Schumpeter .J (1934). The Theory of Economic Development, Boston, Harvard University Press
[2]. Luecke, R. Katz (2003). Managing Creativity and Innovation, Boston, MA: Harvard Business
School Press
[3]. Davila T. Marc J. Epstein. Shelton R (2006). Making Innovation Work: How to Manage It,
Measure It, and Profit from It. Upper Saddle River: Wharton School Publishing
[4]. Chris Freeman, Luc Soete (2004).Industry Innovation Economics, Beijing, Beijing University
Press
[5]. Peter F. Drucker (2001). The Best of Sixty Years of Peter Drucker's Essential Writings on
Management, Harper Collins, New York
[6]. Yan. Q, Wang Q (2006). The Contribution of Technology Innovation on Marketing Innovation,
Commerce Modernization, (5):74-75(in Chinese).
[7]. Lin. Y.Y. (2003). The Interaction between Technology Innovation and Marketing Mode Innovation,
Industrial technology Economy, (1): 103-105(in Chinese)
[8]. Fang X. (2006) Study on Marketing Innovation in Enterprises Technology Innovation. Science
Information, (10):47-48, (in Chinese)
[9]. Luo X.D. (2008) The Integration of Technology and Marketing Innovation. Logistic Economy,
(6):72-73 (in Chinese)
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