Outside-in marketing approach and strategy

Jeff Bezos, the founder and chairman of Amazon.com is a champion of the outside-in marketing approach and strategy; said,’’ Rather than ask what we are good at and what else can we do with that skill, you ask, who are our customers? What do they need? And then you say we’re going to give that to them regardless of whether we have the skills to do so, and we will learn these skills no matter how long it takes…There is a tendency I think for executives to think that the right course of action is to stick to the knitting— stick with what you are good at. That may be a generally good rule, but the problem is the world changes out from under you if you are not constantly adding to your skill set” (Lyons 2010, p.20).

Reference

Lyons, Daniel (January 4, 2010), “The Customer Is Always Right,” Newsweek, 85–86.

Adam Smith famous quotation

    ”It is not from the benevolence of the baker, the brewer and the butcher that we get our daily meal but from their own interests”  Adam Smith (1723-1790)

In a nutshell, He/she is described as a capitalist employer seeking profit; a risk taker, a monopolist, a coordinator an innovator and an organizer of means of production. A person of all these attributes in operations may be termed as entrepreneur.He is a person who organizes, operates and assumes the risk of a business venture.

Failure Is the Secret to Success

By Richard Branson / Source: Business Day

    I recently hosted the annual Sunday Times Fast Track 100 event at my Oxfordshire home. It brings together leaders from the 100 fastest-growing private companies in Britain, a number of other leading entrepreneurs and a few aspiring entrepreneurs from the Branson Centre for Entrepreneurship in Johannesburg and from the British government's Start-Up Loans Scheme, which Virgin administers.

We spent the day listening to each other and sharing stories of achievement and innovation. There was lots of laughter and some great conversations. Looking at the people gathered around our dinner table, I had a wonderful opportunity to reflect on what makes a successful entrepreneur. I found myself going back to basics: the three key attributes that can make a real difference to a person's career.

While I've touched on these points before, some of the entrepreneurs' stories highlighted them in new ways. If you have these basics down, you can give your risky idea a go with the confidence that you're prepared to ride out any trying times ahead.

1. Keep it simple

The best and most successful ideas are those that improve people's lives. Their founders often have a simple plan focused on a single product or service, one that is prompted by frustration.

Paul Lindley, the founder of Ella's Kitchen, started his business because he could not get his daughter to eat. He wanted to create a convenient product that would make mealtimes fun for babies and young children, along with their parents.

Paul came up with the idea of producing colourful, tactile pouches filled with organic meals. The innovative recipes wowed parents and toddlers alike, and took market leaders such as Heinz and Hipp Organic in Britain by surprise, since their rather stale offerings relied on glass jars and traditional flavours. Ella's Kitchen has captured 19% of the market in the UK and copycats are packaging their products in pouches.

As he told his story, it was clear that Paul truly loves his work. He turned his momentary frustration about the difficulty of feeding his daughter into something that is making mealtimes more enjoyable for families.

2. If at first you don't succeed...

Few first ventures work out. It is how a novice entrepreneur deals with failure that sets that person apart. In fact, failure is one of the secrets to success, since some of the best ideas arise from the ashes of a shuttered business.

If you are an entrepreneur and your first venture wasn't a success, welcome to the club — every successful businessperson has experienced a few failures along the way. In the US, most investors will look at an entrepreneur's past failures before making a decision, not because they are worried about it but because they want to see that the person can withstand the occasional knock. Resilience is one of the hallmarks of an entrepreneur who stays in business in the long term.

Talking with the team who runs the Branson Centre in Johannesburg, I was heartened by Dylan Jonsson's story, as it shows that our entrepreneurs are learning from their mistakes and building new ventures. Dylan is a trained chef who started a restaurant, which then failed because of poor planning. However, he has since launched his next venture, A Thyme to Dine, which is a catering business that also sells four types of chocolate balsamic reductions he developed while running the restaurant.

This skill in identifying a winning formula despite his despair at seeing his restaurant close marks Dylan as one to watch. Some of his sauces and drink powders have been picked up by two national chains in South Africa and he is looking to start international sales soon.

3. Are you having fun yet?

If you don't like being an entrepreneur, you're doing it wrong. When you can't wait to get to work in the morning and you are generally having a good time, there is a far greater chance that you'll create a positive, innovative atmosphere and your business will flourish.

Keith Bete, a Branson Centre entrepreneur, epitomises this attitude perfectly. He founded Ubuntuism, a clothing venture based on Ubuntu, an African humanist philosophy that focuses on building a peaceful, prosperous community where riches are shared and people are treated with respect. His passion and enthusiasm is infectious: everyone he met at the conference wanted to buy a T-shirt and learn more about his company.

How have these three traits helped you in your career? Have you picked yourself up after a failure?

The success of yesterday

The success of yesterday if not improved upon will be a failure today.The success of today is just good for today.Unless strategies are changed to carter for tomorrow challenges; what you call   success today will be a great shame tomorrow.

How International business & Multinational companies can spearhead innovation in developing countries

This is the essay that contains summary of key findings on how international business act as a source of innovation in countries behind technology frontier and the role that MNCs  in enhancing innovation in developing countries and explanation on scope of theoretical advancement.

How international business acts as a source of innovation in countries behind technology frontier

Globalization has facilitated international business through trade expansion due to greater integration of economic and social activities around the world. In the same vein expansion of international trade has been propelled due to reduction in communication and transportation costs combined with trade liberalization (Dahlman, 2008). Moreover, Globalization has facilitated world economy through openness to trade, Foreign Direct Investment of Multination firms, the use of international location as sources of patenting by MNCs and international migration of world population between countries (Athreye & Cantwell, 2007).

International business has assisted the generation of technology in the developed and developing countries especially in the general purpose technologies such as Information technology and Bio technology. This has been made possible due to demand of new technological innovations, human capital and existing technology. Moreover it has caused new nations to emerge as technology producers. For example there has emerged some countries without US patenting of technology such as Singapore, S. Korea, India, Taiwan, Sweden, China, Israel, Finland, Russia and New Zealand (Athreye & Cantwell, 2007).Among these countries, for example, Singapore has emerged as new technology producers through FDI while Korea didn’t depend much on FDI but depended on trade, copying, reverse engineering and technology licensing plus enhancing the R&D policies and development in higher education (Glass and Sagi, 1998).

Additionally, International business has made possible new emerged technological producer countries to have a share of patents and licensing revenues which are the measure of technology development of a country. This is facilitated by private R&D and Government policies that have enabled the upgrading of technologies in these countries. Licensing as a measure of technological innovation has gained large speed from 1990’s to date. Nonetheless, licensing is more sensitive to local institutions and Governance of a specific country; this implies licensing flourishes in the countries with adequate institutions (Athreye & Cantwell, 2007).

THE ROLE OF MULTINATIONAL COMPANIES IN INNOVATION OF COUNTRIES BEHIND TECHNOLOGY FRONTIER

Piscitello (2003) argued that Multinational companies have become important economic agents with respect to generation, commercialization and international transfer of technological knowledge. Technology generated by the MNC can be used in its home country or to its subsidiaries to generate rents. MNC and FDI observe that knowledge is the key source of ownership and advantage held by them; hence, multinational firms are viewed as distributor and integrated innovation network that enables the firms to assimilate, generate and diffuse knowledge on a global basis. Knowledge or technology flows from multination firms manifests itself in terms of  R&D capabilities and equipment, manufacturing know how, marketing resources, work practices and managerial techniques, supplier and distribution expertise; it  involves physical transfer of resources to new locations or sharing resources without physical transfer between parts involved.

Liefner, Hennemann and Xin (2006) argued that in the process of technological upgrading and innovation; companies in the developing world make use of knowledge originating from foreign companies or universities or Public research organizations. Cooperation with foreign companies helps domestic companies to get new ideas that enable them to enter the market with new products. Moreover, Balcet and Evangelista (2005) argued that subsidiaries of MNC tend to rely more than domestic firms on innovations developed externally and on tight technological linkages with parent company and other firms of multinational group they belong to. This implies that domestic companies can absorb new knowledge from different sources including foreign companies. Furthermore, domestic companies make use of international linkages in innovation process depending on their absorption capacities which is in the form of knowledge base, skilled human resources and some form of in house knowledge generation.  This concur with Cantwell and Athreye(2007) statement that MNC through their FDI promotes technological catch up to the countries that have already acquired sufficient absorptive capacity and spill over through skilled labour and innovation infrastructures such as R&D institutions.

Marin and Bell (2005) argued that Multinational Companies’ subsidiaries are leaky containers at the end of the technological transfer process of technology spill over. This implies that MNCs subsidiaries own knowledge creation and have significant source of spill over potential.  However, limited absorptive capacity of the domestic firms can act as a constraint of the technology transfer tunnel. Innovation Spill over occur in the advanced industries such as electronics than traditional industries because they employ skilled workers and undertake more of R&D. Moreover Glass and Sagi (1998) argued that technology transfer from FDI is linked to the rate of imitation of best technology available by the local firms.

Indicators of leaking  of MNC subsidiaries technological innovation to domestic firms are such as R&D intensity(Reported expenditures on R&D), employees’ training intensity, Skills intensity of employment of people employed in production such as engineers, professionals and technicians; others are  Investment in licensed technology (Evidenced in licensed designs, know how), Investment in capital embodied technology-Investment on IT, Investment on equipment for innovation and  report on expenditure to introduced new products. However, Spill over is not automatic phenomenon as it occurs to a particular group of domestic firms that do  investment in technology infrastructures and in training of human resources (Marin & Bell (2005)

Eapen (2012) argued that domestic firms with network ties to foreign firms compared to those without ties are better positioned to overcome innovation technological search and technological search constraints. Additionally, the network ties based on friendship basis facilitate technological search between foreign and domestic firms. This is because knowledge transfer is not easy as many MNCs fear competitive cost of sharing information with domestic competitors. This is because knowledge and information given to competitors costs the giver in terms of relative competitive position. However at times the foreign firms can have incentive of sharing information with domestic competitors due to personal relationship between decision makers on both sides of foreign and domestic firms as well as due to anticipation of future reciprocity of information that is valuable they expect to receive in return. Moreover, domestic firms with past ties with foreign firms are likely to possess complementary routines and capabilities relevant to the technology. Network with foreign firms help to reduce innovation technology search and transfer constraints.

Meyer and Sinani (2009) argued that Local firms experience inward FDI as both competitors and a source of advanced technologies and managerial knowledge. Spill over benefits increases with technological gap between local recipient firms and foreign investors. Although Institutional development attracts FDI, Very poor and very rich countries benefit alike from inward FDI. This argument is also supported by Zhou and Xin (2003) who found that relationship between MNC and local firms is interdependent and evolutionary. This imply that when local firms collaborate with MNC; the MNC provide them with vital technological and organizational training of which local firms can use them strategically to develop market networks and innovative capacity. Learning capacity is however improved by research and development facilities, presence of other related enterprises and developmental state in a market oriented cluster. Moreover, MNC depend on local firms for marketing and servicing of their products, they transfer considerable technical and management expertise resources to local firms such as R&D capacity, firms market expertise and opportunity for advancement and growth.

Balcet and Evangelista (2005) argued that the international spread and decentralization of innovation activities takes place from MNC to domestic firms when the combination of various factors are in operational such as good scientific infrastructures and human capital in the host country, Size and growth rates of foreign markets, High R&D intensity, capacity of the MNC to manage efficiently complex research systems and innovation networks, firms with complimentary or similar technological capability abroad, high  cost of research and lack of scientific infrastructure in the home country.

Greatest scope for continued theoretical advancement

Governments and policy makers should not only concentrate on attracting foreign investors but they should encourage appropriate ties between domestic firms and foreign companies that will serve as channels of innovation spill over. Target should be to specific groups of domestic firms that have higher potential for absorbing innovation spill over; those domestic firms with complimentary capabilities and lower resistance to change (Eapen, 2012)

Moreover technological innovation catch up such as licensing tend to flourish in the countries with adequate Institutions. This means ethics has a role in facilitating technological innovation. Therefore theoretical advancement should be geared on the areas of ethics to explain the importance of enforcing good governance among developing countries nations since local institutions and good governance of a specific country play a great role in making innovation possible; put it differently licensing flourishes in the countries with adequate institutions (Cantwell and Athreye, 2007).

Conclusion

International business has assisted the emergence of new nations as technology producers without US patenting of technology. This has been possible due to openness to trade, Foreign Direct Investment of Multination firms, use of international location as sources of patenting by MNCs and international migration of world population between countries (Athreye & Cantwell, 2007). Additionally, MNCs has enhanced technological innovation flows in developing countries technology through  R&D capabilities and equipment, manufacturing know how, work practices and managerial techniques, supplier and distribution expertise; firms market expertise and opportunity for advancement and growth through innovation technology search and transfer. Furthermore scope for continued theoretical advancement should focus on encouraging appropriate ties between domestic firms and foreign companies as they serve as channels of innovation spill over; additionally enforcing adequate institutions should be prioritized since it is a prerequisite behind innovation catch up.

UNDERSTANDING SUSTAINABILITY

 Meaning of Sustainability

Sustainability is a buzzword commonly used by business leaders, politicians, activists and academicians just to mention a few. It is a word used to mean different things to different people (Shearman, 1990). Shearman (1990) argued that sustainability as a word carry no meaning other than a modifier to the context in which it is used. Additionally, it is a discriminating term that distinguishes sustainable and unsustainable instances. Moreover it differs from the context in which it is used. Sustainability can be used as a dictionary meaning (lexical meaning) and implicative definition which explain the significance of something with the focus on long term orientation.

There are three pillars of sustainability which are environment, society (social) and economy sustainability (Hacking & Guthrie, 2008) but I concur with Shearman (1990) who added ethics and good governance as another pillar of sustainability to make four pillars of sustainability. Social definition of sustainability is continued satisfaction of human needs such as food, security freedom, education, employment and recreation whereas the ecological definition of sustainability refers to continued productivity and functioning of ecosystems whereas sustainable economic development refers to continued process that sets its goal towards the improvement of social well being through the production and acquisition of economic goods or services (Shearman, 1990). Packalen (2010) defined sustainability as a discourse about ways of thinking, values, culture and lifestyle that aim at shaping human kind for a desirable future. Implying that if one wants to make sustainability agenda sustainable, one has to start by changing people’s way of thinking into right and positive thinking then other variables in the sustainability equation such as economy, environment and biodervisty will be sustainable as well.

The term sustainability, however, has been politicised deliberately to justify the significance of environmental sensitive programs and usage of funds (O’ Riordan, 1988).This implies that people who consider sustainability as a word that refers to external physical environment only are wrong since they forget very important element in the sustainability equation called human element. Human element comprises of individuals, societies, business leaders, military and political leaders. That is why Packalen (2010) commented that in order to have sustainable world for human kind in the future, all stakeholders must be involved. Additionally, Karp (2003) argued that management of many corporations fail because they think very narrowly based on language of economics and profit gains only without thinking about vast needs of other stakeholders such as employees, local and  central governments, biodiversity and societies/communities where the businesses operate just to mention a few.

Similarly, World commission on environment and development (1987) pointed out critical issues that need to be considered in the pursuit of sustainability or sustainable development such as political systems that secure effective citizen participation in decision making, economic system that is able to generate surpluses, technological knowledge on self reliant and sustainable basis, social system that provides for solution for the tension arising from disharmonious development, production system that respects the obligation to preserve the ecological base for development, technological system that search for new solutions and international system that fosters sustainable patterns of trade and finance plus administrative system which is flexible and has capacity for self correction.

This essay takes its definition on sustainability from Shearman (1990) and Packalen (2010).

Dilemma of the Marketing as a Profession

Introduction

This is an essay on the marketing. It consists of brief observation of the status and scope of field of marketing and what marketing field should do so as to remain relevant in the future.

Current status and scope of the marketing field

Gok and Hacioglu (2010) stated that for more than two decades forces such as globalisation, technology, competition and increasing complexity in customer demands have led to changes in marketing concepts and related activities. Furthermore, marketing activities have been diversified and are carried out by several companies in such a way that marketing has undergone is called ‘crisis of identity’; thus marketing field has to re-define its identity so to sustain its relevance. Crisis of identity has led to the query of validity of marketing since most of its activities are outsourced and many of its roles are dispersed throughout the organizations. This is interpreted as the death of the marketing field by narrow minds. However, this is not necessarily a death of the marketing field but a symbol of growth of the marketing function as most of its activities seem to be mainstreamed to the organizations. Moreover, it implies that there is application of marketing orientation and customer care in all organizations’ functions. Furthermore, outsourcing of marketing tasks implies that there is a growth of marketing field as a profession. However, there has been a lack of proof about the role of marketing field in business performance and its contribution in the society well being. This happens because many marketing managers use opinion rather than data in making managerial decisions. This calls for data based decision making among marketing managers.

In connection to the above point, marketing activities today are acting as routine job of communication and building stakeholders’ relationship. However, this is not what should be, since marketing field needs to be business discipline rather than communication discipline. This implies that marketing has to carter for business development role rather than product development and communication role.

Additionally, Reibstein et al (2009) argued that in the marketing field today there is a gap and silo between marketing academics and senior marketing and corporate officers. This means that there is division between main marketing stakeholders.  In connection to that, marketing academics seem not to have great impact on the practice of marketing field because they are busy in advancing theory and methods which do not deal with difficult problems facing corporations, business world and society at large. Some of the challenges  that marketing academics  is struggling to solve are such as unethical marketing practices, blurring value chains, lack of confidence in global financial system, energy conservation and increasing obesity just to mention a few. In addition to that, marketing academics has failed to influence the business world on the significance of networking between marketing academics and industry. Thus, in order to solve business challenges there should be collaboration between academic marketers and industry. This will help to bridge the silo and gulf between two sides and enable the development of marketing theories that can be used and experimented in responses to business challenges.

Moreover, there is a challenge of business education especially the MBA courses. They seem to lack relevance because of shallowness and narrowness in analytical, cognitive skills, lack of business experience and self centred careerism. Furthermore, marketing field seems to be replaced with Strategy field since Strategy field seems to take some elements of marketing in such a way that one can think it has replaced marketing field (Reibstein etal, 2009).

Furthermore, marketing field is currently in pathetic state due to short term focus. This has made the field to fail to solve long term challenges that encompasses business value creation system of all stakeholders involved in the value chain. Hence, marketing field seems to solve short term financial performance of businesses focusing only on customers instead of long term large challenges. As a result, marketing is struggling to improve the living standard of all people by creating value at all levels of society within socio economic system; for example social responsibility role is one of the issue that marketing field need to focus on; as it gives competitive advantage of the organizations by building confidence and reputation that can enable business organizations to secure licence to operate in the community where organizations are doing business. In addition to that, social responsibility engagement has to be the win win engagement where the business organisations gets profits as well as solving the fundamental problems and economic challenges facing the societies where they operate through sharing the ownership of the societal problems and vision of the solution  from the start rather than doing the philanthropic type of engagement such as building schools, healthcare provisions and housing as such kind of engagements can’t prevent societal uprising in the long run such as Marikana uprising and Mara uprising and killing of Barrick Gold mines in Tanzania. That is why in the midst of philanthropic corporate social responsibility done by marketing organisations, the societies are experiencing rampant poverty, discontentment and dissatisfaction expressed in terms of riots and strikes; the civil commotions that have resulted into deaths because of confrontations with police forces. Solution should be to address societal challenges through mutual understanding and agreement between business organizations and societies where businesses are operating in addressing the real problems facing the concerned communities (Webster & Lusch, 2012, Karp, 2003; Bowen etal, 2010, Porras & Collins, 1994). Thus, Financial times (2002) advised business leaders to serve the society in which their business organizations are operating, if they want to succeed in the long run.

Finally, marketing field scope is still narrow and focuses on making profit and expanding corporations’ sphere of influence through attracting more customers only. As a result of this mentality, it has been difficult to create abundant life to the society and to the world at large because of selfish profit motive of the firms at the expense of consumers. The consequences selfish profit motive of the firms is lack of ethics and responsibility of market organizations which results into a number of crises such as global financial crisis, environmental degradation and extreme poverty to the majority of world population rather than abundant life to all citizen consumers (Webster & Lusch, 2012; Karp, 2003). 

Steps and stance that Marketing field need to embark on so as to remain relevant

Reibstein et al, (2009) stated that the relevance of any field comes from its ability to solve community problems; in the same vein, marketing as a decision science accrue its relevance on how it solves pertinent challenges that face the world. Solution that marketing field need to address so as to remain relevant are such as rebuilding confidence in global financial system, encourage energy conservation and clean energy  plus innovating new best practices that  improve  business performance.

Gok and Hacioglu (2010), argued that in order to remain relevant as esteemed field to business and society, marketing need to manage and improve networks, relationships and skills of the actors in the industry such as marketing academics, marketing managers, corporation CEOs and  sales people just to mention a few. Moreover, the field has to seek new business opportunities. Seeking new business opportunities will make marketing more visible in its contribution to business success. Furthermore, marketing managers need to disseminate knowledge management to the company, create a return on investment; a culture that embraces every marketing initiative through data driven decision making as opposed to opinion decision making. In addition to that, marketing field need to develop strong management skills such as integration, organizing, negotiation and conflict management. Additionally, marketing managers need to acquire interpersonal skills such as analytical skills, knowledge dissemination skills and holistic vision that capture all aspects of the business process rather than departmental views. 

Reibstein et al (2009) argues that in order for marketing field to be relevant, it has to make a difference in solving business as well as societal problems. This can be done through collaborations between marketing academics and senior marketing and corporate officers. Collaboration can bring impact into the marketing practice and field in creating successful cases and findings that can help the marketing field to move forward. Additionally, marketing academics can use their researches into growth and development of the field. However, in order this practice to be viable marketing researchers should ask CEOs and marketing managers about critical marketing challenges that marketing field needs to address.

Similarly, marketing field needs to incorporate new economic, social, political, environment and dynamic characteristics into academics as well as providing solution through research relevance and rigour to pertinent challenges such as renewable energy, ecosystem biodiversity, climate change, obesity and pollution and ethics. This will prevent the field from being outdated (Varadarajan, 2003, Ketolla, 2010).

Finally, marketing field has to create value to customers and all the stakeholders in the value chain who are the consumers of the business organization offerings. This implies that, marketing field has to address broader concerns that affect the creation of flourishing and abundant life. Issues to be addressed are such as ethics, culture and innovation in and their impact to sales, advertisement and to the business organization performance at different market place contexts. For example, marketing field has to emphasize on ethics in all its operations because ethics addresses principles and standards that define acceptable conduct in the marketing field despite pressure to meet performance objectives or manipulation and deception to take advantage of the marketing situation so as to make profit.

Conclusion

Marketing like many other fields undertaken by organizations is facing the crisis of identity. Solution of this challenge is to redefine its identity in order to sustain its significance. The complexity comes from multiple factors and forces such as globalization, technology, competition and increasing complexity in customer demand just to mention a few. These factors are also a manifestation of the ever increasing interdependence between and among organizational functions.

In order for marketing as a field to retain its relevance, it has to solve pertinent challenges that face the world such as rebuilding confidence in global financial system, encourage energy conservation and clean energy plus innovating new best practices that improve business performance. Moreover marketing need to manage and improve networks, relationships and skills of all the actors in the industry such as marketing academics, marketing managers, corporation CEOs and  sales people just to mention a few; moreover the  field has to seek new business opportunities. Lastly, it has to make a difference in solving business as well as societal problems by creating value to customers and all the stakeholders in the value chain who are the consumers of the business organization offerings.

Reference

Bowen, F., Newenham-Kahindi, A.,  & Herremans I.,(2010).When suits Meets Roots: The Antecedents and Consequences of Community Engagement Strategy. Journal of Business Ethics, 95(2), 297-318.

Financial times (2002, November 18).Truants, nerds and supersonics, financial times, pp 7.

Gok.,& Hacioglu, G.,(2010).The organizational roles of marketing and marketing managers, Marketing intelligence and planning,28(3),291-309.

Karp, T., (2003).  Socially Responsible Leadership. Foresight 5(2), 15-23.

Ketolla T., (2010).Responsible leadership. Building Blocks for Individual, Organization and Societal behaviour .Corporate Social Responsibility Management, 17, 173-184.doi:10.1002/csr

Porras, J.I., & Collins J.C., (1994). Build to last-successful habit of visionary, New York. Harper Collins Publishers.

Reibstein, D.J., Day, G., & Wind J., (2009).Guest editorial: Is marketing academia losing its way? Journal of Marketing, 73(4),1-3.

Varadarajan P.R., (2003).Musings on relevance and rigour of scholarly research in marketing, Journal of  the Academy of marketing science 31(4),368-376.

Webster Jr F.E., & Lusch, R.F.,(2013).Elevating marketing: marketing is dead! Long live marketing! Journal of the Academy of Marketing Science, 41(4)1-11.