qolloqium presentation-3rd edit

Postgraduate QolloqiumFEM

Hazrita Abdul Rahim 2011

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Name : HAZRITA ABDUL RAHIMID Number : 410008615th November 2011

Research Title


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The impact of innovative promotion onSME performance : An evidence from Malaysia

PhD Supervior :Dr. Kalsom Abd. Wahab

Definition of SME The Malaysian SME adopts the definition

of National SMEs Development Corporation (2006) which currently classifies SMEs as follows :

Annual Sales Turnover not exceeding RM 5 million

Employees not exceeding 150 staffsHazrita Abdul Rahim 2011

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Classification of SME

Overview


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The Subject of Study :Small and Medium Enterprise in Malaysia

The Object of Study :The Innovative Promotion Practice Amongst SME

The Theory


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Schumpeter’s Theory of Innovation mentioned 100 years ago that survival of a business depends very much on innovation (Schumpeter, 1934)

Schumpeter suggests that innovations are imperative for economic growth, commercial profit and thus public wealth

Theory of Innovation by Schumpeter


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After analyzing the capitalist model Schumpeter tried to understand what companies would be in a better position to innovate. He developed a theory where a company’s ability to innovate was mainly connected to its size.

Initially he defended that small companies should be in a better position due to their flexibility while large companies might get trapped in bureaucratic structures. (The Service Industry Journal, January 2004, Volume 24, Number 1)

Theory of Resource Based View Teece et al, 1997 mentioned that competitive advantage

comes from aligning skills, motives and etc. With organizational systems, structures and processes that achieve capabilities at the organization level.

Nelson & Winter, 1982 mentioned that technological innovation and creativity are the basis of competitive advantage. A strategic resource to one firm will be a strategic resource to another firm.

Theory of Marketing


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Marketing is a science as well as an at which are driven by creativity and innovation. To leverage creativity and innovation fully, science needs to step in. To be robust, the marketing function needs the rigor of science

Mak Joshi, Product Marketing, Abbot Labs, Sept 10th 2008

Theory of Innovative Marketing

Innovative marketing is not simply focused on product innovation, instead it covers the whole spectrum of marketing activity with an SME. (Rogers, 1995)

Consequently, there is likely to be more innovation in other aspects of marketing activity than there will be around the product or service (Rogers, 1995)


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Concept Definition


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Entrepreneur - a person who has possession of a new enterprise, venture or idea and assumes significant accountability for the inherent risks and the outcome (Foundation of Entrepreneurship, Pearson Education, 2011)

Innovation - a new way of doing something or "new stuff that is made useful". It may refer to incremental and emergent or radical and revolutionary changes in thinking, products, processes, or organizations (Foundation of Entrepreneurship, Pearson Education, 2011 )

Concept Definition

Marketing

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

American Marketing Association Board of Directors, 2004


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Significant of the Problem


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Find strategies to have more innovative promotion as SME usually struggle to be known

Introduction of ICT have changed the landscape of promotion

Effective and efficient new methods, achieve what you want to achieve at lower cost

As a result of innovative promotion, customers will have better unit cost per price item

Significant of the Problem The concept of promotion innovation have not been

explored in greater depth

Previously promotional effort are costly and SME with limited resources cannot afford it

SME Annual Report 2006 stated that SME accounted for 99.2% of total business but only contribute 32% of GDP. This show vast opportunity


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Literature review


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“ It is evident that innovative marketing in SME can be a proactive and/or reactive integrated organizational approach on refinement, newness, image management, product quality and the formation of strategic alliances with key constituents in the context of competitive market circumstances”. Innovative marketing in SMEs : an empricial study. Michele O’Dwyer, Audrey Gilmore and David Carson. Journal of Strategic Marketing, Vol 17, No. 5, October 2009

Literature Review The evolution of marketing in small firms. David Carson.

European Journal of Marketing, 19 (5). 1985

Innovative marketing is fundamentally important for SME as SME are major providers of new jobs ( Audretsch, Verheul, Wennekers & Thurik, 2002)

Drucker (1985) mentioned that innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a business or service. It is capable of being learned and practiced


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Literature Review

Marketing and innovation produces results ; all the rest are costs. (Drucker and Maciariello 2008, p 30)

Amit et all mentioned that SME need to keep up with creativity and innovation capacity in order to sustain in the competitive business environment.


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Literature Review


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Marketing planning in small enterprises : A model and some emphirical evidence. Carson D, Cromie S. Journal of Marketing Management (1989)

Effects of self concept traits and EO on firm performance. Poon, Ainuddin & Junit 2006. International Small Business Journal 24(1)

Hypothesis


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Hypothesis 1 :

Null : There is a direct relation between innovative promotion and performance of SME

Alternative : There is no direct relation between innovative promotion and performance of SME

Hypothesis Hypothesis 2 :

Null : There is a direct relationship between tools of promotion and the performance of SME

Alternative : There is no direct relationship between tools of promotion and the performance of SME


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Null : There is a direct relationship between techniques of promotion and the performance of SME

Alternative : There is no direct relationship between techniques of promotion and the performance of SME


Null : There is a direct relationship between process of promotion and the performance of SME

Alternative : There is no direct relationship between process of promotion and the performance of SME

Research Design


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Survey Method

Cross sectional data with hypo-deductive approach

Likert Scale (1 to 5)Range : Highly innovative to Not innovative at all

Survey Questions Design Questions will be based on :

Tools Process Techniques Environment Comparison of conventional and new

Research Questions

Will innovative promotion environment effects the performance of SME?

Will innovative promotion process effect the performance of SME?

Will innovative promotion tools effect the performance of SME?


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Research Questions Will innovative promotion techniques effect the

performance of SME?

Will innovative promotion have greater impact on performance compared to conventional promotion?

Unit of Analysis Firm level

Questionnaire distribution to CEO and MD of the selected SME


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Unit Of Analysis


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200 companies based on :

High growth capacityUndergoing substantial changePosses history of managementA wide range of industrial sector11-100 employee size

Assumption model 1


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Adapting StandardTextbook MarketingFrameworks

InnovativeMarketing

NetworkMarketing

CompetencyMarketing

MarketingCommunicatio

n

Assumption Model 2


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The FirmThe Strategy

The Entrepreneur

X

Marketing mix concept

Marketing Mix

Price

Product

Promotion

Place/Distribution

Theoretical Framework


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Performance of SME

Innovative

Conventional

Innovative

Conventional

Conventional

Innovative

Tool

Conventional

Innovative

ProcessEnvironment

Technique

Research Conduct Model


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INPUT

Promotion InnovationVariables:

1)Tools2)Techniques3)Process4)Environment

OUTPUT

SME Performance :

1)Competitive advantage2)Keep with the trend3)Adapting to ICT approach4)Bigger market share5)Segmented audience6)Global Market7)Cost efficient8)Increase profit9)Business expansion

Islamic Perspective on Promotion There is no room in Islam to justify any

cover up of promotional behavior. Qur’an condemns all forms and shapes of false assertions (Kadhb),unfounded accusations, concoctions and false testimonies (Al-Qur’an 43:19, 80; 33:19, 58; 58:17–19; 102:8; 100:8; 3:14).


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Islamic Perspective on Promotion In terms of Islamic marketing ethics, it is

unethical for the salesperson to over praise his products and attribute to them qualities which they do not possess (Al-Ukhuwa, 1938, p 23).

References Carson, D. (1985), “The evolution of marketing in small firms”,

European Journal of Marketing,Vol. 5, pp. 7-16. Carson, D. (1990), “Some exploratory models for assessing small

firms’ marketing performance (a qualitative approach)”, European Journal of Marketing, Vol. 234 No. 11, pp. 8-51.

Carson, D. (1993), “A philosophy for marketing education in small firms”, Journal of Marketing Management, Vol. 9, pp. 189-204.

Carson, D. and McCartan-Quinn, D. (1995), “Non-practice of theoretically based marketing in small business – issues arising and their implications”, Journal of Marketing Theory and Practice, Vol. 3 No. 4, pp. 24-31.


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References Carson, D., Gilmore, A. and Grant, K. (1997), “Qualitative marketing

factors which contribute to growth in the developing small firm: a discussion and proposed methodology”, ConferenceProceedings: Research at the Marketing/Entrepreneurship Interface, University of Illinois at Chicago, Chicago, IL, pp. 461-72.

Carson, D., Gilmore, A., Cummins, D., O’Donnell, A. and Grant, K. (1998), “Price setting in SMEs: some empirical findings”, Journal of Product and Brand Management, Vol. 7 No. 1, pp. 74-86.

Doole, I., Grimes, T. and Demack, S. (2006), “An exploration of the management practices and processes most closely associated with high levels of export capability in SMEs”, Marketing Intelligence and Planning, Vol. 24 No. 6, pp. 632-47.

Drucker, P.F. (1954), The Practice of Management, Harper and Row, New York, NY.


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THANK YOU

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