Download On Marketing Innovation of SMEs in Conjunction with Customer Satisfaction

On Marketing Innovation of SMEs in Conjunction with Customer
Satisfaction
Zuo Li
School of Economics and Management, Beijing Jiaotong University, P.R.China, 100044
Abstract: This paper discusses the necessity and feasibility of marketing innovation in Chinese medium
and small enterprises by analyzing the environments and their own features, and further discusses the
means and tactics of marketing innovation based on customer satisfaction in the medium and small
enterprises of our country.
Key words: medium and small enterprise marketing innovation customer satisfaction
1 Introduction
With the development of science and technology, gradually shortening of product life cycle, gradually
intense market competition, the development of diversified and individualized market demands,
enterprises must constantly innovate marketing to gain more and more loyal customers, thereby gaining
competitive advantage. Now competitions between enterprises have been based on customer resources
instead of product. Customer resources have been becoming the most important resources instead of the
product technology itself. Paying close attention to customers, studying customers, discussing “how to
satisfy customer” have been the most elements for enterprises to gain competitive advantage. Just like
the saying by the famous enterpriser Ford “The enterprise who can meet the customer need most
effectively is the final survivor.” So, marketing innovation based on customer satisfaction has more
reality meaning.
To the medium and small enterprises in China, it is more important. After the fast development in the
past 20 years, these enterprises meet great pressures. They cannot adapt the new environment just
relying on the past marketing experience, but the successful marketing experiences of international
enterprises seem to be not suited to domestic conditions. So, Chinese medium and small enterprises
need marketing innovation more and must find the suitable marketing method.
2 The necessity and feasibility of marketing innovation in Chinese medium and
small enterprises
2.1 The necessity of marketing innovation in Chinese enterprises
During the past 20 years, Chinese enterprises have basically finished the primitive accumulation in
capital, the growth of capital of part of them even get up to thousands times and ten thousands times. In
the mean time, Chinese enterprises unceasingly have learned the advanced experience of western
[1]
developed country, and gained the great progress on the marketing concepts and ability .
But the same improving also brings the same questions. Firstly, during the more than 20 years, Chinese
enterprises have been copying western enterprises on marketing theories and methods, but the advanced
experiences of western developed country are the summary and sublimation on the western mature
economy, which is not in harmony with Chinese markets in some place. Secondly, now in Chinese
markets almost all the enterprises produce the same products and the marketing methods are almost
[2]
same too, almost all the Chinese enterprises meet a bottleneck . Thirdly, after entering the 21st century,
the marketing environments have changed greatly, the enterprises in china and in the western country all
meat the same new environments, such as the organic world, network economics, knowledge economics,
sustainable development and so on. The traditional marketing methods are not suitable for the new
environments, all the enterprises in the world including Chinese enterprises meet the same new
problems, and must look for the new methods.
2.2 The necessity of marketing innovation in Chinese medium and small enterprises
To the medium and small enterprises in China, the marketing innovation is more important.
Firstly, in reality most Chinese medium and small enterprises are in the dispersed industry. Because of
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high centralization, low entry barrier, and easiness of copying, their marketing structure is always
between entire competition and monopolistic competition. So these medium and small enterprises must
constantly innovate to gain the initiative in the marketing competition.
Secondly, marketing demands are more personal and segmenting, which provide broader life space for
Chinese medium and small enterprises, and also challenge their positioning in their target marketing.
Thirdly, at the present Chinese medium and small enterprises generally have many problems, such as
shortness of capital, weakness of the power of science and technology, insensitivity of information, lack
of talent, backwardness of management and lack of support from government in policy. All of these
restrict the development and innovation of Chinese medium and small enterprises. According to the
developing trends and problems, Chinese medium and small enterprises must choose marketing
innovation to help themselves.
2.3 The feasibility of marketing innovation in Chinese medium and small enterprises
Most of the medium and small enterprises think “innovation” as some creation or invention on the
technique, which means scientific and technical progress, update on equipments. It seems that we cannot
do any innovation if we don’t input large of people, money and material resources. So medium and
small enterprises dare not innovate, they think innovation is the “patent” of large enterprises. In fact,
medium and small enterprises have its own advantages.
1. The history of most medium and small enterprises is short, so they have less constraint from
tradition, and accept innovative marketing concept more easily under the competitive pressure.
Especially the managers of medium and small enterprises are more willing to bear risk and
innovation.
2. The size of medium and small enterprises is small, and the levels of internal management are simple,
thus the loss of internal information in the communication can be reduced greatly, the effectiveness
of management and organization can be higher. So, the medium and small enterprises are easier to
adjust themselves according to the trends. And it is easier to communicate between all the staffs and
managers, to get the common views. This enterprise culture is benefit to stimulate the spirit of
enterprise innovation.
3. Because of lack of strength, weakness of resisting risk, medium and small enterprises pay more
attention to the change of markets and customers.
Because of the above reasons, in reality the medium and small enterprises are apparently superior to the
large enterprises in innovation efficiency and innovation times. According to the research of Jerman in
1976, the medium and small enterprises are superior to the large enterprises in the amounts, speed and
the rate of success of innovation. So the medium and small enterprises must utilize their own advantages
and constantly innovate to improve their competitive.
3 Marketing innovation based on customer satisfaction
3.1 Marketing innovation and customer satisfaction
Marketing innovation is the inevitable outcome of market competence, and also the necessary method
for the enterprises to survive and develop in the competence. There are many explanations about
innovation. Combining the innovation theory and marketing theory, this paper thinks marketing
innovation is a process that marketers including managers, salesmen in an enterprise combine all the
marketing elements and resources they possess in all kinds of new ways, and transform all kinds of
market demands to the new enterprise challenge constantly, to create new customers and innovate new
values, and gain lasting competitive advantages [3]. So the aim of marketing innovation is constantly to
create customers and satisfy customers’ needs, and achieve the final marketing result of innovating and
raising values. At the mean time, the way of marketing innovation is an entire innovation system, is a
systematic engineering including concept innovation, technique innovation, product innovation and
organization innovation. So basically, marketing innovation must innovate marketing concept, technique,
product and organization to satisfy customers. The basic aim of marketing innovation is to achieve
customer satisfaction. Under this concept, enterprises have the more definite aims and more various
marketing methods that can coordinate with each other.
Marketing innovation is a systematic and complicated engineering, which need correct concept and a
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series of effective tactics to support. But most medium and small enterprises in China have not master
the professional marketing knowledge really. They still have had the “selling concept” and the “product
concept”, only few of them have the “marketing concept”. So to Chinese medium and small enterprises,
it is more important to innovate marketing based on customer satisfaction.
3.2 The contents of marketing innovation based on customer satisfaction
3.2.1
Marketing concept innovation based on customer satisfaction
Chinese medium and small enterprises must not only really realize the nature of marketing concept, but
also innovate marketing concept oriented by customer satisfaction, to improve competitive ability. The
concept innovation is as following:
1. The concept of retaining lasting customers
Most of Chinese medium and small enterprises do their best to look for new customers, and gain
customers from competitors. But they ignore retaining old customers who know enterprises more than
new customers, can save cost for enterprises, pay more reliable, buy products or services again and
again, contain mistakes made by enterprises and products defects, and recommend products or services
to their friends. So Chinese medium and small enterprises should pay more attention to retaining lasting
customers, and gain the most customer life value.
2. Creating market concept
With the market competition getting more and more intensely, the market blanks Chinese medium and
small enterprises can choose are getting less and less. They must change the past behaviors: acting
according market feelings, competing with more enterprises for only one market demand. They should
do marketing research, and study customers’ psychology constantly, to produce new product, create new
market demand and new markets.
3. Total customer satisfaction concept
Customer satisfaction is not just satisfaction with products, which is influenced by many effects, such as
company’s images, convenience of paying, environments of shopping, delivery without delay, and so on.
So besides producing proper products, Chinese medium and small enterprises need practice whole staff
marketing. All the staff must set up customer satisfaction concept to satisfy the customer from all kinds
of aspects.
4. Cooperation concept
In order to overcome the lack of resources and ability in the process of marketing, Chinese medium and
small enterprises must cooperate with all the stockholders, including suppliers, customers, competitors
and so on, and share the information, do the best to satisfy the customer altogether.
3.2.2
Technique innovation based on customer satisfaction
Technique innovation may be the most fundamental, most effective and the most difficult one in all the
innovations. The enterprises have to input large quantities of people, capital, and all kinds of resources
to do research. But this just is the disadvantage of Chinese medium and small enterprises (see Table 1[4]).
So it is more difficult for Chinese medium and small enterprises to innovate technique. Chinese medium
and small enterprises must innovate technique according to the customers’ need, make use of the limited
resources to the best.
Table 1 The comparison of R&D and profit rate between some representative enterprises in the worldwide
computer and mobile phone industry
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No.
Manufacturer
1
2
3
4
5
6
7
8
9
IBM
Dell
Lenovo
Intel
Microsoft
Bird mobile phone
TCL mobile phone
Texas Instruments Inc
Qualcomm
Revenue
（hundred
million
dollars）
891
350
30
301
322
13
11.5
98
39.7
R&D
（hundred
million
dollars）
51
44
66
17.5
5.2
Net profit
Profit rate
R&D/R
evenue
76
21
1.35
56
75
0.3
1
22
8.3
8.5%
5.99%
4.5%
18.6%
23.4%
2.3%
3.5%
22.4%
20.9%
5.7%
（hundred
million
dollars）
3%
14.6%
20.4%
3%
3.28%
17.8%
13.1%
3.2.3
Product innovation based on customer satisfaction
To innovate product enterprises must know what is “new product” at first. The new product guided by
customer satisfaction should bring customers new benefits, no matter whether has been used the new
technology. And product innovation is not only function innovation, but also package innovation, brand
innovation and even positioning innovation.
The development trend of product form is that the inner structure of product is getting more and more
complicated, while the interface of product is getting more and more simple, even “fool”. With this
trend a lot of technological innovations are hidden by simple product interface. If there were no
marketing communication activities to suggest, customers might not be able to sense the achievements
in the technological innovations. So product innovation guided by customer satisfaction should pay
more attention to not only technology, but also the communication works.
So for Chinese medium and small enterprises, the salesman, marketing researcher, and the promotion
people should be responsible for the product innovation with technology department altogether.
3.2.4
Organization innovation based on customer satisfaction
At present, the marketing organization of most Chinese medium and small enterprises still stay at the
stage of selling department who just pay attention to the selling of present products and ignore the
forecast and research of market demands. Even some enterprises have set the marketing department,
most of them just collect market information, provide after-sale services, manage distributor, and so on.
Facing the new marketing environment, Chinese medium and small enterprises must change the
unsuitable factors in the present marketing organization and procedures, and innovate marketing
organization based on customer satisfaction, that is to replace the traditional marketing organization
guided by selling with the marketing organization guided by customers’ need. Customers are the
destination of marketing, while they should also be the beginning of marketing. Chinese medium and
small enterprises should set marketing organization following this concept to build up a real circulatory
marketing management system. Chinese medium and small enterprises should put more human
resources in the marketing research, collection of information, monitoring the environment, customer
management to reinforce the sensitivity to the market. Chinese medium and small enterprises should
also build the organization structure in which customers are the core, marketing department is the link,
and other departments all aim at customer satisfaction.
3.2.5
Marketing means innovation based on customer satisfaction
In fact, there are many specific marketing means. But facing the new environments, Chinese medium
and small enterprises should use the following marketing means to achieve customer satisfaction.
1. To set up customer database
Customer database can greatly help enterprises to excavate the customers’ need deeply, analyze the
customers’ behavior totally, solve the customers’ problem timely, and practice the target marketing. So
Chinese medium and small enterprise can make use of customer database to achieve total customer
satisfaction.
2. To create the experience opportunity
One of the important factors influenced the customer satisfaction is to understand the product
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thoroughly before buy it, including knowing its value, use conditions, use methods and its suitability,
Customers know more about the product before they buy it, the risk of buying it is lower, and the
customer expectation of the product and the effect after using is more coincident, the degree of customer
satisfaction is higher.
In order to make customers know the product thoroughly before they buy it, experience is a good way.
But at present most Chinese medium and small enterprises always ignore this means, because they lack
of confidence and they are unwilling to pay more money on it. So in the future, with the quality of
products improving, they should create more opportunity on experience.
3. To promote enterprises’ images
Enterprises’ image effects the customers’ expectation of product, also is an important psychological
factor by which customers evaluate products value. So Chinese medium and small enterprises should
promote images by all kinds of ways besides advertising.
4 Conclusion
Facing the challenge of new marketing environment, Chinese medium and small enterprises meet the
bottleneck of marketing, and must innovate marketing. Though they have many weaknesses, they also
have many strengths in marketing innovation. They should innovate marketing concept, technology,
product, organization and some marketing means based on customer satisfaction. Guided by customer
satisfaction the marketing innovation is more suitable for Chinese medium and small enterprises.
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