Innovative Marketing Strategy
Studies of disruptive innovation provide a mixed testimonial on the performance of marketing in innovative environment. Christensen (1997) identifies what he calls “the tyranny of the served market”, that ties marketers to yesterday’s products for today’s customers rather than breakthrough innovations that stay at the heart of new markets and industries. This tyranny is especially tricky for established successful firms. Their very success holds them back to commercialise even their most brilliant ideas, simply because their current customers do not value their innovations.
That opens up opportunities for start-up companies operating from small, neglected niches that provide high potential for growth. Quite frequently, these disruptors are able to outpace incumbents and even break into their core segments. 3 module: „Innovation Marketing” So is there no role for marketing in innovation processes? Not for some standard textbook versions of marketing. For most of its history, marketing has been a function within large dominant incumbent firms. However, early on pioneering marketers like Theodore Levitt realised that sustainable marketing is concerned with potential rather than existing products.
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The marketing discipline is undertaking significant innovations, in its values, approaches, methods and technologies.
1. 1 Marketing and Innovation The fate of a business organization operating in a market environment is ruled by its customers. If customers value the goods and services more than the costs for their creation, the business thrives, otherwise it needs external support or goes bust. This led Peter Drucker to the conclusion: “Because the purpose of business is to create a customer, the business enterprise has two and only two basic functions: marketing and innovation” (Drucker, 1973).
By intuition, we would expect businesses that excel in marketing to thrive at innovation.
However, management research has shown that this is not necessarily the case. The tyranny of the served market (Christensen, 1997; Christensen and Bower, 1996) demonstrates that: market leaders can face a systematic handicap on markets, while outsiders can innovate simply because they can ignore established market standards. How can we explain this counterintuitive phenomenon? Let us first take a close look at the role of marketing and innovation in business life.
According to the American Marketing Association, “Marketing is the aactivity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (AMA 2007). Core activities of marketing are market research and customer relationship management