This research paper helps in exploring the importance of market oriented product innovation in small firms. The research paper would underline the importance of product innovation on the basis of market orientation for small firms. The paper would also highlights the different internal and external factors which are supposed to be considered in market oriented product innovation process. The purpose of this paper is to evaluate critically different techniques which can be implemented by small firms. The paper will also evaluate the impact of market oriented product innovation strategy on the success of an organization.
The data are collected with the help of a well defined research methodology. The data will be evaluated both in qualitative and quantitative manner to reach the final outcomes of the study. Additionally, both primary and secondary research methods will be employed in the data collection process. The research approach is significant in evaluating the impact of market oriented product innovation adopted by small firms.
The study also helps to make some significant conclusions on the basis of the study done in the research paper. It is understood with the help of research paper that small firms need to analyze all information related with customers, competitors, and external factors before implementing product innovation in the organization.
The term innovation can be used in different aspects in a business organization. The innovation can happen in business process, internal process, or in the products and services given by an organization. In this research paper, the term innovation will mean the products which are new for the firms itself. Basically innovation or changes in products are done on the basis of inputs or external information which is new for the company. In recent times, the market oriented product innovation has become common concept both in small firms as well as in large firms. Innovation can happen at different levels in an organization; regional level, and in the particular projects undertaken by the organization (Hallberg, 2000). This research paper will be based on market oriented product innovation in small firms. The various aspects of innovation in small firms considering their limited financial and technological resources will be analyzed in this paper.
Market oriented production innovation is an important factor for the success of small firms. Small firms should know about the current trends in mart so that they can design their products accordingly. Small firms should also recognize the fact that the performance of the company and survival in the market also depends on their product innovation ability as per market orientation. The global business environment has become more competitive, hence small firms need to implement market oriented product innovation in organizations.
The business practices are further revolutionized by technological advancements across the globe in the form of communication and information technology. Technological advancements have helped various market to remain connected with each other more effectively. The changing life styles and patterns of customers have further increased the significance of product innovation in small firms. In this scenario, it has become more important for small firms to take advantage of technological advancements in product innovation as per market orientation. In this way, small firms would be able to produce products as per consumer preferences and tastes (Lu and Sexton, 2001).
Market oriented product innovation in small firms is important because of a few reasons. Market oriented product innovation is important for small firms so that they can cope up with increased competition in the market, to deliver products as per changes in customers’ needs and demands, short life cycle of products, and to utilize the technological opportunities available in the market. As a result of all these factors, market oriented product innovation becomes more important for small firms.
It can be said that market oriented product innovation is a process in which products are produces considering customer preferences to ensure high customer satisfaction level in the market. High customer satisfaction is a key to get a competitive advantage in the market; therefore product innovation becomes more important for small firms. In this regard, to meet the existing requirement in the market and customer preferences, high quality products are developed by small firms. Innovative products help small firms in satisfying ever changing customer preferences and demands. Product innovative nature helps small firms to become market responsive (Mohr, 2006). Small firms should encourage their employees to generate new ideas and creativity in their job. Small firms should always try to explore new opportunities in the market and need to capitalize on those opportunities. It will help in developing market oriented product in small firms.
The research paper will deeply analyze and evaluate different factors related with market oriented product innovation in small firms. The paper also focuses on different factors which makes product innovation important for small firms. Apart from this, a different factor which needs to be considered by small firms in product innovation process will also be considered in this research paper. The various tools and techniques used for product innovation process will also be discussed in this research paper.
There is no particular definition of a small firm. Generally, the size of an organization is decided on the number of employees employed in the organization. The firms which have employee strength of 5 to 50 employees are categorized under small or medium sized firm. The significance of small firms in Europe can be understood by the fact that in European Union 34% of the total workforce in working in firms with 10 or less than 10 employees (). Another feature of a small, firm is that it runs in the direct supervision of its owner. In terms of market oriented product innovation small firm have certain advantages over large firms in implementation of this strategy in the organization (Vinten, 2005).
The internal flexibility, high responsiveness to the environment as compared to large firms makes them market oriented product innovation more easy to implement. The goals and objectives of managers in small firms are more clear. The information technology systems are simple in small firms. At the same time, the large firms have some advantages over small firms. The large firms complete the various activities with high expertise as compared with small firms. The high availability of financial and technical resources gives more competitive advantage to large firms.
The major significance of this research paper is that it would suggest various methods for small firms to remain competitive in the market. The study in the paper will help small firms to know about the product development process based on market information. The implementation of product innovation would definitely help small firms in improving organizational performance and development. This research paper would help to understand the significance of market oriented product innovation for small firms. The success of small firms largely depends on its ability to produce market oriented products. Market oriented product innovation has been considered as a crucial factors for the success of small firms. The study reveals that market oriented product innovation has a positive impact on small firms operating in various industries. Market oriented product innovation is important for both large and small firms. However, the research paper will be focused on market oriented product innovation in small firms (Rothwell and Zegveld, 1985).
Market oriented product innovation is more important for small firms because small firms mostly operate in important sectors like retail, agriculture, and service provider. Product innovation done on the basis of market innovation also impacts the organizational performance. Product innovation is related with the culture of the organization where innovations is adopted to ensure higher customer satisfaction level in the industry. Small firms which are concerned about customer satisfaction level always produce high quality products so that they can achieve high customer satisfaction level, which is the most important factor for the growth of the organization (Jawahir et al, 2011).
This study helps to understand that customer needs and demand always changes with time. Hence, small firms are required to be market responsiveness so that they can produce products as per customer demand and expectations. Small firms are required to produce an innovative product and deliver new services as per changing scenario in market. Market oriented product innovation can also be described as an ability to satisfy customer needs by implementing marketing activities better than the competition in the industry. In this way, market orientation product innovation also helps in getting competitive advantage in the industry.
This research also helps to understand that there are three factors which are required to be focused by small firms in market product innovation process. A few of these factors include; focus on customer needs, competitors focus, and level of inter functional co-ordination in an organization. The study further helps to understand that market orientation depends on three basic factors. These factors are to get all relevant information about the customer’s expectations and external environmental conditions, it is equally necessary for the organization to pass this information to all required departments in the organization, and organization need to develop and implement strategies as per information collected from the market.
Apart from this, the study helps to understand that market oriented product innovation largely depends on organization’s ability and resources to collect continuous and systematic information regarding customers preferences in the market. The collected information has no significance until and unless all important functions in a firm are informed about it and the organizations also need to be responsiveness to changes in market scenario. Thus, the research paper will provide an opportunity to understand a number of facts related with market oriented product innovation in small firms (Zanni, 2004).
The success of an organization is defined by its ability to change and develop products. The product innovation strategy can definitely help small firms in achieving competitive edge in their respective industry. The research paper would produce information that can helps small firms in developing managerial strategies and developing technologies and products on the basis of market information. The paper also underlines the importance of strategic information in the development of techniques and products. The paper helps small firms to know that information related to the external environment is extremely important to target firms’ potential customers. The external information may consist if customers motivations and unmet needs, strengths and weaknesses of their competitors, and the factors which impacts the industry. The information regarding political and legal implication is also equally important for firms. In this regard, the product developed with the help of this all knowledge will definitely help small forms in improving their performance (Cook, 2010).
The research paper is focused on market oriented product innovation adopted by small firms. Small firms adopt market oriented product innovation to get a competitive advantage as well as to increase their market share. It is believed that market orientation and organizational performance have strong links with each other. In order to adopt market orientation strategy, organizations are supposed in various environmental factors that can have an impact over organizational ability to achieve customer satisfaction level more than their competitors. The feedback received from the market encourages organization to adopt changes to meet the requirements of the external environment (Phillips, 2001).
The study focuses on different aspects related with market oriented product innovation strategy adopted by small firms. The market oriented product innovation strategy helps small firms to improve organizational performance. This strategy helps small firms to produce market oriented products which are likely to be more successful in the organization. The higher the market orientation ability of the organization, higher will be its performance. However, there are chances that external factors like weaker economy, high market turbulence, and strong competition in the market can impact the organization performance level.
In the current competitive scenario, the need for external information to formulate marketing strategies has become extremely important for organizations. The external factors of a place can have a huge impact on organizational success. Thus, external information regarding competition, uncertainty in the market, and customer’s needs are extremely important for an organization to operate in an effective manner. Moreover, thus kind of information helps organizations to produce high quality products to meet the customers’ expectations. The marketing information helps small firms in meeting the challenges created by uncertain and volatile market conditions. The research paper suggests that small organization can acquire market oriented information by increasing their feasibility in the market and setting strong relationship among customers and suppliers. Small firms are suggested to use both knowledge base resources as well as creative and coordinated skills to collect the required information. Small firms are required to remain updated with environmental changes, technological; advancements, and competitor’s analysis (Dobson, 1998).
Market orientation helps small firms to produce an innovative product which can be more popular among customers in the industry. The research topic will help in analyzing different aspects related with market oriented product innovation in small firms. The research paper will be extremely helpful to understand the concept of market oriented product innovation. The paper will outline the importance of market focus in the development process of a product. Apart from this, the research topic will help to know the various factors which are important to consider in market oriented product innovation. The research will highlights the various factors which are important to be considered by small firms in product development based on market orientation. Apart from this, topic will also focus on different parameters which can ensure successful product innovation in small firms will also be discussed in this research paper.
Research Aim: The aim of this research paper is to identify the importance of product innovation based on market orientation in small firms.
Research Objectives: In order to achieve the aim of the paper, few research objectives are being identified. These research objectives will be helpful in proper analysis of the need and importance of market orientation and innovation for small firms. These objectives will also be helpful in the evaluation of the effectiveness of innovation and market orientation techniques to the small firms.
Objectives: The research objectives are mentioned below.
1. What is the need and importance of market orientated product innovation for small size firms?
2. What are different techniques which can be used by small firms in relation to the market orientated product innovation to attain competitive advantage?
3. Which are the different factors which should be consider by small firms for market orientated product innovation?
1. What is the effect of market orientated product innovation on small firms?
2. How do market orientation and product innovation techniques could enable small firms to attract new customers to the firm?
3. How does product innovation could help small size firms to compete with large firms and to get a competitive advantage?