The Relationship Between Innovation and Marketing Performance in Business Organi

[a] Faculty of Planning and Management， Al-Balqa’ Applied University， Jordan.

*Corresponding author.

Received 2 October 2012； accepted 22 November 2012

Abstract

This paper aimed at determining the relation between the innovation marketing and the marketing performance. In reality， the problem represents in the lack of care in the innovation marketing by the industrial organizations and their care towards producing typical product， performing the routine daily practices and achieving profits thought the increase of sales. In addition， it gushes from the limited understanding of the relation between the innovation marketing and the marketing performance， which， in turn， has a vital role in providing the competitive features needed. The research identified the limit to which the sample organization recognizes the concept of the innovation marketing and its significant aspects. The study concludes that there is a strong correlation between the correlative marketing and the marketing performance.

Key words： The innovation marketing； Marketing performance； Business organizations

Mohammed A. Al-Zyadaat， Mousa A. Saudi， Mohammed A. Al-Awamreh （2012）. The Relationship Between Innovation and Marketing Performance in Business Organizations： An Empirical Study on Industrial Organizations in the Industrial City of King Abdullah II. International Business and Management， 5（2）， -0. Available from： http：///index.php/ibm/article/view/j.ibm.1923842820120502.1135

DOI： http：///10.3968/j.ibm.1923842820120502.1135

INTRODUCTION

Developing new ideas differently and getting them into practice within marketing practices is considered an innovation. It is known that the origin of all products is ideas that have been born， refined， classified and evaluated in terms of suitability for application to be tested. The creative process is continuous and sustainable in organizations that want to survive in the market and continue in work and growth. Further， this process is valid in all organizations， possessing a certain marketing status in the consumer’s mind. Existing organizations， or rather the contemporary ones， are not measured by size or magnitude of the buildings， but by the success of these organizations in the market and by internationalizing their products.

1. RESEARCH PROBLEM AND QUESTIONS

Due to the initial survey carried out by the researchers in a number of industrial companies in the industrial city of King Abdullah II， the study problem has been formulated through the following questions：

・ Do the organizations investigate understand the concept of Innovation and the relationship between marketing Innovation and the raising level of marketing performance？

・ Do the organizations investigate know the areas of marketing Innovation and its impact on improving marketing performance？

・ Do the organizations investigate realize that the development of the level of marketing performance is attributed to marketing creations in their products， distributional channels， the price， or the promotion？

・ Is the organization’s success in the market resulting from the creative marketing of the organization？

1.1 The Research Objectives

This study aims at：

・ Identifying the extent to which the organizations investigated realize the concept of marketing Innovation， importance， scope， impact and reflection on the marketing performance of those organizations.

・ Identifying the reality of marketing Innovation and its impact on marketing performance in the study sample organizations.

・ Identifying the correlation between marketing Innovation and marketing performance.

1.2 The Significance of Research

The research is significant because it represents a contribution to shed light on this vital subject， which is generally considered as a key element of the success of the organizations investigated. In addition， it would develop new products and innovative marketing methods which are compatible with the nature of the products of the study sample organizations. Besides， the research also shows the lack of studies and research in the areas of marketing Innovation and its reflection on the marketing performance of business organizations.

1.3 The Model

Figure 1

The Study Model

1.4 The Research Hypotheses

The research is based on the following assumptions：

HO1-1： There is no significant correlation between product innovation and marketing performance at the significant level 5%.

HO1-2： There is no significant correlation between the pricing innovation and marketing performance at the significant level 5%.

HO1-3： There is no significant correlation between distribution innovation and marketing performance at the significant level 5%.

HO1-4： There is no significant correlation between promotion innovation and marketing communications and marketing performance at the significant level 5%.

2. LIMITATIONS

・ Spatial limitations： This research has been carried out in a number of industrial organizations in Amman.

・ Temporal limitations： questionnaires were distributed and retrieved during December 2012.

3. METHODOLOGY

The descriptive analytical method was adopted to test the hypotheses through examining the relationship between the primary and secondary variables and dependent variables and through collecting data related to the study sample and organizations investigated. Obtaining the data and information needed to complete the search and accessing to the desired results and the objectives， the researchers adopted the following methods.

3.1 The Theoretical Framework

The researchers relied on many of the secondary data of scientific references such as books， journals， studies， theses， online data in order access to the data required to cover the theoretical side.

3.2 The Field Framework

The researchers used a questionnaire as a study tool in addition to personal interviews and objective data in collecting the needed information as a primary data.

3.3 Personal Interviews

A member of the study sample including managers and the members of the Board of Directors were， when necessary， interviewed in order to clarify the questionnaire items in order to ensure the correct answer and to identify the extent to which marketing Innovation is applied and contributed to enhance the marketing performance of business organizations under investigation.

4. RELIABILITY AND VALIDITY

4.1 The Pretests

（1） Testing Face Validity to make sure of the tool validity. The questionnaire was reviewed by a group of reviewers in the field of marketing and business so as to make sure the validity of questionnaire items and their suitability for research hypotheses and objectives. Accordingly， some items were either deleted or amended.

（2） Testing reliability： reliability of the questionnaire was tested by asking the reviewers certain questions related to reliability of its direction and factors. Accordingly， some items were either deleted or amended.

4.2 Posttests

（1） Objectivity： the researchers have tried to retrieve all questionnaires distributed to achieve objectivity concerning the responses of the members of the research sample. Every director has been given the suitable chance to fill the questionnaire.

（2） Internal consistency： In order to verify the authenticity of the questionnaire content， the researchers test the internal consistency between the items， representing the dimensions of research variables. Cronbach’s Aalpha Scale was used， and the value of alpha was 88% which is considered as an acceptable value in the field of Management Science statistically.

5. COMMUNITY AND SAMPLE OF THE STUDY

The study community represents all the companies of business organizations registered in the industrial city of King Abdullah II either the small， medium or large ones regardless of the type of economic conduct. A randomly simple sample of managers and department heads was selected. Those people have adequate information about the company duties and decisions. 115 questionnaires were distributed. The managers have been given the chance to identify individuals who have a role in the marketing Innovation process. The researchers interviewed all study samples to clarify the wording of questionnaire.

6. REVIEW OF RELATED LITERATURE

There are a number of foreign studies addressing this topic with practical difference in terms of place， which does not affect the essence of the study. In detail， Han and Srivestava （1998） clarified the nature of the relationship between marketing innovation orientation and performance by testing a set of hypotheses. The study found out that the impact of innovation is regarded as a mediator of the relationship between market orientation and marketing performance. In addition， it indicated that there was a positive impact to focus on innovation especially in areas of marketing. The study also showed that this kind of marketing innovation is related to the administrative and technical aspects.

Voss and Voss （2000） aimed at determining the relationship between the strategic marketing orientation of the organization and performance. They claimed that there are a set of variables in between including： innovation of product characteristics， which is fully associated with the competitive position of the organization in terms of both cost leadership and differentiation. This approach was measured by product orientation， whereas the performance has been measured by market share （MS）， financial performance， and new product development. The results found out that the interrelationship between the strategic marketing orientation and performance depends on the quality standards， taken to measure performance. Unfortunately， this study was limited to two indicators while our study relied on four indicators for measuring marketing performance.

Matsuno and Mentzer （2000） aimed at determining the impact of type strategy to adopt the concept marketing and its relationship to performance. The study selected a random sample from the American community of industrial projects， taking into consideration that they represent the unit of study， which， in turn， do not go in harmony with the current study. Concerning the secondary variable， they relied on growth sales and market share which is in line with the current study.

Baringer and Bluedorn （2000） identified the characteristics of innovation of industrial small projects and market strategy in addition to its impact of the project performance. The study found out that business organizations characterized by leadership， Innovation and initiative are successful in developing creative marketing strategies， based on the collection of accurate information about the total environment and its role in participating with all the activities within the project. This is considered as one of market orientation components， confirming the relationship with marketing innovation.

Daston and Mangles （1997） stated that innovation has a direct role in developing new products and in developing the industrial enterprises. The study indicates that customer expectations towards new productive Innovation helps penetrate existing markets. Further， it claimed that the industrial enterprises have to continue developing quality， reducing costs， and increasing the effectiveness of labor， which was confirmed by Kholi and Jaworski （1999）. Of other studies that deal with important topic are Nasri Aldeen and Mansouri Zein， Murad （2010） and Sarhan （2005）.

6.1 The Analysis and Testing Hypotheses

The latest version of the statistical program （SPSS） was adopted to analyze and test the hypotheses. Table 1 indicates the characteristics of the study sample， whereas Table 2 indicates the demographic characteristics of the owners of organizations.

Table 1

Characteristics of the Study Sample

Characteristics with statistical statement Net numbers

Community 370

Sample 115

Exception 14

Response 101

The exception （%） 87.83 %

The response （%） 31.08%

Table 2

The Demographic Characteristics of the Owners of Organizations

Characteristics Category Percentage %

Age 39-20 35.1

59-40 24.3

More than 60 40.6

Educational level Less than diploma 42.5

BA 44.8

Graduate studies 12.7

Experience （years） Less than 4 29.4

9-5 years 58.2

More than 10 years 12.4

Sex Male 87.5

Female 12.5

The productive age Less than 5 years 18.4

9-5 years 27.6

More than 10 years 54

As it is clear from the previous Tables 1， 2 that the organizations that responded to the study amounts to 87.83%， given that they are registered in the industrial city of King Abdullah II （Sahab） as a subsidiary of the industrial cities （which was formerly known as the institution of industrial cities）. The largest percentage was 54% of their productive age is 10 years and most of the owners were male with 87.5% over the age of 60 years.

6.2 Testing Hypotheses

Multiple regression was used to find F value. The statistical rule states that the null hypothesis （HO） is rejected when the F-calculated value is greater than the value of F-tabulated at the significant level less 0.05 with appropriate degrees of freedom. Simple regression test was used to calculate the value of t in the same way of that of F in terms of acceptance and rejection. Bearson Correlation was used between each independent variable and dependent variable at the significant level Sig. P = 0.05. In addition， finding and analyzing the coefficient of determination R2 was to measure the ability of independent variables in marketing Innovation to explain the change of marketing Innovation of business organizations investigated. Likert scale was used for the items of the study collected by independent variables and the dependent variable without searching in sub-items of the questionnaire due to less importance and repetition of elements of the marketing mix 4Ps with the difference in the study community， time and development. The results were as follow.

6.3 The First Hypothesis： HO1

・ There is no significant correlation between product innovation and marketing performance at the significant level 5%.

・ There is no relationship， at the significant level （5%）， between productive Innovation.

・ The rate of investment return.

・ Market share.

・ Profits magnitude.

・ Sales magnitude.

The results of descriptive statistics of the first independent variable and marketing performance indicator as the dependent variable are shown in Table 3.

Table 3

The Results of Descriptive Statistics of the first Independent Variable and Marketing Performance Indicator

Dependent variable indicator Marketing performance indicators X δ

Productive Innovation *Product Development

*Market Penetration

*Market development

*product variety

*innovation ROI 3.78 1.20

MS 4.01 1.51

Achieving sales growth 3.51 1.34

Increasing profits magnitudes 3.70 1.52

The results of multiple and simple regression test according to hypotheses testing are shown in Table 4 below：

Table 4

The Results of Multiple and Simple Regression Test of Product Innovation

Statistical statement

change indicators of production Sig. R R2 Statistical result Tt Tc Ft Fc B

Rejection 1.96 2.01 3.92 4.04 0.21 0.044 0.21 0.001 Market share

Sales magnitude 0.005 0.24 0.058 0.24 6.30 3.84 2.51 1.96 Rejection

Profit magnitude 0.03 0.25 0.0625 0.25 3.57 3.84 1.89 1.96 Rejection

Investment return percentage 0.04 0.23 0.053 0.23 3.8 3.84 1.95 1.96 Rejection

Based on Table 4， the statistical results indicate that there are statistically significant relationships between the adoption of productive innovation in business organizations investigated and marketing performance indicators for each separately. That is clear by drawing a comparison between the value （f， t） calculated and effect coefficient beta in addition to the moral result of test gis which is less than 0.05.

Concerning the results of the statistical statement of productive innovation and marketing performance， they are shown in the following table， representing the values ??（B）， known as the effect coefficient， in addition to the moral result of test （gis） which is less than （0.05）. The statistical results indicate that productive Innovation and its impact on marketing performance explains accounts for （41%） of the change in the marketing performance of business organizations （companies）. This marketing performance can be attributed to market share， the rate of investment， or sales and profits magnitude. The correlation between the two variables was about （29%）， indicating there is a positive correlation between productive Innovation and marketing performance， which was much authenticated by many theoretical studies in the marketing aspects.

Table 5

Results of the First Hypothesis

Productive innovation

sig. R R2 Rejection

HO1

B

0.003 0.29 0.0841 0.413

6.4 The Second Sub-Hypothesis （HO2）

There is no statistically significant relationship at the significant level （0.05） between pricing Innovation and marketing performance indicators. Several sub-hypotheses， relevant to indicators of marketing Innovation emerge from this hypothesis.

・ There is no significant correlation between pricing Innovation and market share： HO2-a

・ There is no significant correlation between pricing Innovation and sales magnitude： HO2-b

・ There is no significant correlation between pricing Innovation and profit magnitude： HO2-c

・ There is no significant correlation between the pricing Innovation and rate of investment return. HO2-d

To determine the relationship between marketing performance and pricing Innovation of organizations investigated， the sub hypotheses of second hypothesis， statistical analysis and previous statistical rules were used. As a result， there is a statistically significant relationship in Table 6 between pricing Innovation and marketing performance indicators in business organizations in the industrial city of King Abdullah II. Besides， there is a relationship concerning the marketing performance itself but with correlation varying from one indicator to another. This means that the second null hypothesis with indicators. That indicates that innovation in pricing policy has a positive impact on market shares with competitors， the profits magnitude， sales magnitude， and rate of investment return （ROI）. These are of the indicators of financial marketing， related to the financial performance of these organizations which promotes their competitive structure.

Table 6

Statistical Test Results of Pricing Innovation and Marketing Performance Indicators （Second Hypothesis with Sub-Hypotheses）

Rejection of null hypothesis The relationship with pricing innovation Beta value

（?） Square of correlation

（R2） Correlation value

（R） Moral

（Sig） Marketing performance indicators/ statistical statement

0.213

0.301

0.315

0.29 0.045

0.091

0.099

0.085 0.213

0.301

0.315

0.291 0.001

0.000

0.000

0.002 （ROI）

Market share

Sales magnitude

Profit magnitude

Marketing performance 0.152 0.023 0.151 0.031 Pricing innovation

The results of statistical statement， which is less than 5% and Beta coefficient， confirm the previous results as indicated in Table 6. Statistical results indicate that pricing Innovation， being a characteristic of business organizations under study， accounts for （15%） of the change in the performance of the marketing activity of these organizations. In addition， they indicate a significant relationship between each of the marketing performance indicators that characterize business organizations and pricing Innovation. Accordingly， this Innovation is very essential for survival of the organization. This may be due to the customers’ satisfaction towards quality of products.

6.5 The Third Sub Hypothesis （HO3）：

HO3： There is no significant correlation between distribution Innovation and marketing performance at the significant level 5%.

In order to test such a hypothesis， it has been divided into four sub-hypotheses：

・ There is no significant correlation between distribution Innovation and rate of investment return. H03-a

・ There is no significant correlation between distribution Innovation and market share：HO-3b

・ There is no significant correlation between distribution Innovation and sales magnitude： H03c

・ There is no significant correlation between distribution Innovation and profit magnitude： H03-d

・ Table 7 shows the relationship between distribution Innovation and taking the appropriate distributional channel and the ability of this method to achieve marketing performance and to raise the four indicators.

Table 7

Results of Simple and Multiple Regression of Distributional Innovation as an Independent Variable and Its Relationship to Improving Marketing Performance as a Dependent Variable

Independent variable Sig. R R2 B Statistical statement

The distributional Innovation 0.002 0.0101 0.010 0.021 Rejection of HO3

Table 8

Marketing Performance Indicators

ROL 0.85 0.02 0.00 0.02 Acceptance 3A

（MS） market share 0.0 0.11 0.01 0.11 Rejection 3B

（S） sales magnitude 0.010 0.19 0.03 0.19 Rejection 3C

Profits magnitude 0.00 0.18 0.03 0.18 Rejection 3D

Values in Table 7 indicate that there was a statistically significant relationship between the distributional Innovation method as a strategy in business organizations under study and the ability of this creative strategy to achieve profit and sales magnitude and market share as indicators of marketing performance. This is clear from the result of statistical decision augmented by the value of Sig. or by comparing the calculated values against the tabulated ones for each of the values ??（f， t）. The SPSS results indicate that the management use of the strategy of distributional innovation accounts for 2%， which is a low percentage as compared with other elements of Innovation. Further， there is a significant relationship between distributional Innovation and each of the market share， sales magnitude， and the value of profits. Besides， the relationship between it and sales magnitude was the strongest relationship， since it interprets the same value correlation B = R with 19% to improve marketing performance.

6.6 The Fourth Hypothesis

There is no significant correlation between promotion Innovation and marketing communications and marketing performance.

In order to test such a hypothesis， it has been divided into four sub-hypotheses：

・ There is no significant correlation between promotional Innovation and rate of investment return. HO4-a

・ There is no significant correlation between promotional Innovation and sales magnitude： HO4-b

・ There is no significant correlation between promotional Innovation and： profit magnitude HO4-c

・ There is no significant correlation between promotional Innovation and market share： HO4-d

Table 9 shows the relationship between promotional Innovation and marketing contact and the creative ability to achieve market share， sales and profits magnitude， rate of investment return. The values indicate that there is a statistically significant relationship between promotional Innovation and marketing contact and marketing performance for business organizations. Thus， innovation strategy is able to strengthen promotional marketing activity and improve its performance. The results also showed a significant relationship between marketing performance indicators and the fourth independent variable in these organizations. This is evident from the results of the statistical decision as shown in the previous table through moral values which is less than 5%. The promotional Innovation and the strategy of marketing contact with target markets in the business organizations under study accounts for 42.49% of the magnitude of change in the dependent variable for the performance of marketing activity. This ration is not simple as compared with other elements of the creative elements.

Table 9

The Results of Statistical Test for Promotional Innovation and Marketing Contact and its Relationship with Marketing Performance Indicators of Business Organizations in the Industrial City of King Abdullah II

Independent variable Sig. R R2 B Statistical statement

Promotional innovation 0.001 0.57 0.3249 0.71 Rejection 4HO

ROI 0.000 0.37 0.1369 0.37 Rejection a 4-HO

Profits magnitude 0.003 0.38 0.1444 0.38 Rejection b 4-HO

（MS） 0.002 0.28 0.0784 0.28 Rejection c 4-HO

（S） sales magnitude 0.001 0.27 0.0729 0.27 Rejection d 4-HO

As shown in the Table 9， the strongest correlation was between the profits magnitude and marketing performance by 38%. As soon as the organization increases and enhances its creative operation in promoting and improving the marketing contact， the magnitude of profits will be increased by 38%， providing that other factors held constant at an acceptable statistical level of significance.

As for testing hypotheses according to the four elements of the marketing Innovation with marketing performance towards the business organizations in the industrial city of King Abdullah II， Table 10 indicates the statistical test results of the four hypotheses of the elements of the marketing Innovation and its relationship with the overall marketing performance elements for organizations working in the industrial city of King Abdullah II.

Table 10

Results of a Statistical Analysis of the Relationship Between the Four Independent Variables and the Dependent Variable for Innovation （Productive， Distributive， Promotional and Pricing Innovation and Its Relationship with Marketing Performance）

Independent variables/ statistical statement Sig. R R2 B fc ft tc T t Statistical decision

Productive Innovation 0.002 0.28 0.078 0.28 21.30 3.84 4.615 1.96 REJ.

HO1

pricing Innovation 0.00 0.31 0.096 0.31 14.30 3.84 3.781 1.96 REJ. HO2

Distributional Innovation 0.00 0.15 0.022 0.15 61.07 3.84 7.815 1.96 REJ. HO3

Promotional Innovation 0.003 0.23 0.053 0.23 26.25 3.84 5.123 1.96 REJ. HO4

The values in Table 10 indicate that there is a statistically significant positive and direct relationship correlation between the independent variables separately and marketing contact and the dependent variable of performance marketing for business organizations under investigation. These results come clear when drawing a comparison between the values of FC against those of FT and the effect coefficient beta in addition to the significant value which is less than 5% for all variables. The results indicate that pricing Innovation is most creative elements， accounting for the changes occurring in the marketing performance by 31%. Thus， the strategy of innovation in the pricing policy of these organizations will increase positively when improving marketing performance by 31% which is high as compared with the Innovation in the distributional element by 15%. The productive Innovation ranked second through adding certain enhancements affecting the quality and leading to an increasing demand for these products. These values are supported by the results of stepwise regression analysis in Table 11.

Table 11

Results of Stepwise Regression Analysis Test of the Elements of the Marketing Innovation with the Dependent Variable

Independent variable Sig R FC R2

Pricing innovation （1） 0.002 0.41 145.48 0.1681

Pricing innovation + product innovation （2） 0.003 0.48 85.12 0.2304

Promotional innovation （2） 0.000 0.52 51.02 0.2704

Pricing innovation + product innovation （2） 0.001 0.55 43.25 0.3025

Promotional innovation+ distributional innovation

Based on Table 11， it can be claimed that all the independent variables have a significant relationship with marketing performance indicators of organizations under study and are able to account for 43.25% of the change in the dependent variable performance marketing.

7. RESULT AND RECOMMENDATION

7.1 Results

Despite the significant value of pricing Innovation， the availability of the spirit of Innovation in product-based organizations involved in this study have a direct impact and prerequisites， resulting by ideas and creative skills from technological development and some improvements by R = 0.28. This is referred to by previous studies， stating that the increase in the expenses of scientific research by 1% would bring an increase in production by 30%. So that， Industrial Estates Corporation pay attention to scientific research， lading to producing new products with certain specifications in response to future requests and finding new outlets and distribution methods to sell the products.

Marketing performance， supported by Innovation， is considered of the elements of marketing promotion， which is intended to develop change and get new unconventional ideas into practice in the marketing practices of the marketing elements combined together. The pricing Innovation showed a high rate of change in the statistical analysis to construct marketing activity. Hence， old competitors were replaced.

・ The marketing performance in the study sample in creative elements can be accounted for by the availability of spirit of technological development and the interaction between these organizations and target markets， especially in promotions and marketing contact as shown by the values of ??（beta）， in addition to financial strength and the presence of mechanisms to support professionally to enhance marketing status as well as the interaction with the problems of distributional channel accurately and soberly.

・ Marketing Innovation is represented in the nature of production as a basis for Innovation， and this is represented by introducing new industrial goods having a relationship with the composition of product， and other related to the impact on the composition of technological product itself.

7.2 Recommendations

The study recommends：

・ Training continuously on Innovation， innovation and new strategies in this area to raise the degree of efficiency of the workforce in the field of marketing.

・ Paying attention to viable Innovation basics in terms of： science， research， development and technology.

・ Orienting towards the development of new ideas for innovation in the marketing mix， so that they become into practice in non-traditional marketing practices.

・ Encouraging the spirit of creative risk and not standing against attempts of Innovation in any of the elements of the marketing mix.

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