Abstract This study examines how market orientation affects a firm's service innovation and consequently, the firm's market and financial performance. The findings indicate that if firms use customer orientation, the firm is more likely to adopt incremental service innovation, while if a firm uses competitor orientation, the firm is more likely to adopt radical service innovation. Finally, incremental and radical service innovations lead to greater market performance and in turn, greater financial performance.
1 Introduction
How service firms use market orientation has attracted great attention in innovation literature (Agarwal et al. 2003; Manzano et al. 2005). Market orientation refers to ‘‘the organizational culture that most
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Inter-functional coordination, a third component of market orientation, coordinates a firm’s resources and market-related activities. Because customer and competitive orientations are two primary ways that service firms use to cope with markets (Zhou et al. 2009), this study focuses on the customer and competitor orientations and regards inter-functional coordination as a control variable.
The degree of service innovation ranges from a totally new or discontinuous innovation to a service involving a minor improvement or a dramatic change (Griffin, 1997; Avlonitis et al., 2001; Garcia and Calantone, 2002). Although several service innovation types have been proposed (Gadrey et al. 1995; Debackere et al. 1998; Avlonitis et al. 2001; Berry et al. 2006; Paswan et al. 2009), in this study, because we are concerned with the greatest and the least degree of service innovation, service innovation is differentiated into incremental and radical innovation. Such a differentiation has been frequently used in similar innovation research (Olsen and Sallis 2006; Min et al. 2006; Song and Thieme 2009).
Incremental service innovation is related to customer-led strategies that focus on manifest needs (Connor 1999; Slater and Narver 1999) and is posited to be the most common form of innovation (Bell et al. 2002; Slater and Narver 1999). Customer-led businesses focus on understanding the expressed desires of the customers in their
Service innovation happens when a company changes and improves their customer service methods. This makes the company’s product more desirable to customers because they are offered better customer service. This also gives the company the opportunity to build a better relationship with their customers. Often service innovation involves getting customer feedback on how to better their customer service. Better customer service creates more customers and; therefore, more cash flow and profits are experienced by the company.
Service innovation. Customers are open to increasingly outsourcing supply chain and logistics activities to third parties. Flexible and innovative solutions are highly important to gain and retain profitable market share.
The 'Customer orientation' is almost common orientation used in modern marketing. It includes a firm primarily basing its marketing plans throughout the marketing concept, and thus supplying products to satisfy new consumer taste. Also it’s the mostly used by organizations
Service Strategy from a business perspective is a critical component for customer retention, satisfaction and growth opportunities. A successful Service Strategy is designed to meet the need of an audience and is the forefront of delivering the right products and services to meet the demand of the customer. It provides guidance on leveraging service management capabilities to effectively deliver value to customers and illustrate value for service providers. Management is responsible for strategically developing target markets, setting objectives and expectations, benchmarking customer satisfaction/feedback and identifying opportunities and weaknesses for strategy improvement. Service strategy provides foresight into future growth positioning along with thorough analysis of the return on investment (ROI). Service Strategy defines management style by focusing on IT management along with primary purposes including: perspective, positions, plans and patterns.
This essay will start to explore and define the meaning of customer orientation in depth. The marketing concept and the marketing mix will help discover after what it means to be a customer focused firm. This will occur through the scrutiny of the term in respect to product, price, place and promotion.
The main thing behind marketing in a business is finding the customer’s needs and produce the product/ services to satisfy their needs, this way the customer can choose what they would want included in their product/ service. A business that follows this rule is market-orientated.
The contemporary school of thought in service science is currently dominated by the notion of service-centric services (Lusch & Vargo, 2008), whereby it is believed that the end users are the determinant of value of a given service and co-producing a service with the end users would enhance the value of the service. A main assumption made by this school of thought is that all aspect of services, from creation to delivery process, is the domain of the service providers. However, the emergence of disruptive technologies such as the internet, social media, etc has reduced the operational barriers, empowering the end users to become services provider themselves. This empowerment has led to the creation of what is known as
The aim of the report is to discuss the development of a service innovation in a hospital care setting.
Tangible goods, or rather manufactured goods, have been the dominant medium of exchange for centuries. However, recent decades have proved that it is no longer the case as there has been a prevalence of being service oriented (Vargo and Lusch, 2004:1-2). Services, as defined by Vargo and Lusch (2004), are “the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself (p.2).” Utilizing services gives businesses an edge, a competitive advantage, particularly in an evolving competitive market, something which Metalfrio is definitely part of (Vargo and Lusch, 2004:9). Those businesses that learn to adapt tend to do well. In addition, Vargo and Lusch (2004) write this shift to services is also a shift from producer perspective to a customer perspective (p.2). Thus, it leads to more of a collaborative effort where co-creation leads to adding value to the service rather than a product having value (Vargo and Lusch, 2004:6). Also, customers rather develop relationships with those that can provide a range of related services over an extended period of time, thus allowing businesses retain their clients for the long term (Vargo and Lusch, 2004:13). Overall, service oriented marketing is a direction that businesses should be headed towards to ensure that they can remain relevant and competitive in the
Service firms are increasingly using customer service to develop sustainable competitive advantage – through value generation as well as differentiation. This
With few exceptions, the field has largely neglected important micro aspects of strategy innovation in light of employee motivation. As Cardwallader et al (2009) opined, employees often “are the service” in the service contexts, as such, service innovations will succeed only insofar as the employees embrace, execute, and promote them. This research will provide the management of BFS with a fresh approach to marketing hence giving them a competitive advantage over its
According to Posselt & Förstl (2012) previous research has shown that one main contributor to successful implementation of new services is a unique or superior service. Storey and Hull (2010) coincide and further explained that it is not possible to use a “one size fits all” approach when developing personal services. They conducted a study, which investigated the effect of different organizational knowledge management strategies on the process of service development. They stated that for organizations, which rely mainly on personalized information where services involve personal interactions and
In today’s modern era, the world is moving faster than ever, every organization is running a race of gaining maximum market share, and so as the customers, for their organization’s long-term growth but only those companies who transform themselves according to the need and requirement of the customers are able to achieve success and profit they desire and that’s what exactly said by Theodore Levitt (Head of the Marketing area at the Harvard Business School) in his article “The Marketing Imagination”.
In recent years, with the economy era full challenge, marketing theory and practice are accelerating the pace of innovation. Marketing not only has widely exploited in the economy and society field, but also more and more enterprises constantly innovate new performance, new competitive, new brilliance in unprecedented enthusiasm. Therefore, diverse strategies are adopted by most firms to discover and meet the needs and desires of its customers (Jobber & Fahy, 2009). Marketing orientation is one of the most successful strategies, such as the Apple company, it put to use and reap significant profit. Some specialists argue that product orientation can be used in all firms, while others debate that marketing orientation is more suitable for all products. However, several obstacles are faced by firms when they intend to move from a product to a marketing orientation. This essay will briefly describe that definition of the marketing orientation and product orientation, examples for some firms use marketing orientation and product orientation respectively as well. Furthermore, it mostly discusses key obstacles for if a firm moves from product to marketing orientation and give some reasonable solutions.
....................14 3.2.2 Commercial principles....................................................................................18 Chapter4 Service innovation in hotel industry...................................................................20 4.1 Roles redefinition.....................................................................................................20 4.2 Value co-creation.....................................................................................................22 4.3 Competitive advantages .........................................................................................26 4.4 Potential problems...................................................................................................31 Chapter5 Market opportunity analysis in China.................................................................37 5.1 China market introduction........................................................................................37 5.2 Typical local businesses..........................................................................................43 5.3 Opportunities...........................................................................................................45 5.4 Difficulties and risks.................................................................................................49 Chapter6 Conclusion............................................................................................................52