General introduction

207 Pages·2010·2.95 MB·English

Democratic and Popular Republic of Algeria
Ministry of Higher Education and scientific research

AbouBekrBelkaїdUniversity of Tlemcen
Faculty of Economics, Mangement and Trade Sciences

Magister Dissertation in Management
Doctoral school: International Business Management
Option: International Marketing

THE ROLE OF MARKETING IN INITIATING AND ENHANCING
INNOVATION WIT HIN ALGERIAN FIRMS
(AN EXPLOR ATORY STUDY)

Student:METAÏCHE Mohammed El Amine

Supervisor:Professor BENHABIB Abderrezak

JURY:

Pr. DERBAL Abdelkader University of Oran President
Pr. BENHABIB Abderrezak University of Tlemcen Supervisor
Pr. BENBOUZIANE Mohammed University of Tlemcen Examiner
Dr. MALIKI Samir B.E University of Tlemcen Examiner

AcademicYear : 2010-2011
This work is dedicated to my Mother, and my
Father.
Acknowledgements
The completion of this research has left me with the challenge of expressing my
gratitude for the acts of encouragement and support offered by so many people; and as every
author and researcher knows, it is impossible to write a couple of papers without the advice,
ideas, and support of other people. I believe that I am a fortunate person to have so many
wonderful people mike those in my life starting by my Father, and mother into the farthest
friend of mine, thereby I wish I could fill this dissertation only with thanks to everyone in my
life. Anyway, my indebtedness goes far beyond a thank you. To those who contributed, directly
or otherwise, I offer my deepest gratitude and appreciation.

First of all, I express my deep thankfulness and gratitude to My supervisor Pr
BENHABIB A., whose encouragement, guidance and support. Furthermore, My sincere
gratitude goes to all the members of the committee, Who have accepted to read, evaluate and
comment the present dissertation; and who have been always by our side to help us, guide us
and support us, I mean: Pr A.E.K. DERBAL, Pr M. BENBOUZIANE, and Dr S.B.E MALIKI.

Special thanks to Dr SMAHI A, Dr. BERROUIGUET A, Dr ARIF S.E, Mr TAHIR A.E.R,
Mr. ALLAL R, Dr BENMANSOUR A, Dr BOUHANA A, Mr MALACHE A, and Mr
BANAMAR A…

My gratefulness goes to my friends and classmates, each by name, and especially
SAHRAOUI N., BENBOUZIANE M., H. Khadidja, and S. Imane, Meriem. Those who have been
and are still inspiring me in my life, and whose support and help were really and truly undying
during the realization of this work.

Similarly, I would like to convey my special appreciation and regards to all my teachers
at the faculty of Economics, Management and Trade Sciences; at the Abou Bekr Belkaid
University of Tlemcen.
Finally, I am grateful for all my Brothers and sisters, for all their continuous support,
encouragement, and inspiration during all my life, Yamina, Ben Amer, Khadidja, Fatima, A.E.
Kader, Samira, A.E. Rahim, Adel, and Mohammed.
I am thankful to the MECAS Laboratory, its Stuff and Members, mainly because this
work wouldn‟t have been done without their help.
Last but not least, I offer my best regards and blessings to all of those who supported me
during the achievement of this work. Nevertheless, all errors found in this work are my own.
SUMMARY:
Metaiche Mohammed El Amine

Summary:

Introductory Chapter:
Chapter 1: Innovation a theoretical Background
Introduction
I. Innovation: a conceptual background
1. Definition of innovation
2. Incremental Innovation and Radical Innovation
3. Models of Innovation
4. Innovation Diffusion and product life cycle
5. New Product Development (NPD) models: Theoretical perspectives
6. Innovation Types

II. Sources and factors of innovation
1. Sources of Innovation
2. What Drives Innovation?
3. Innovation and firm size
4. Innovation and market structure

III. Importance of innovation
1. Innovation and economic growth
2. The advantages of Innovation
3. Who profits from an Innovation
4. Measuring Innovation
Conclusion
Chapter 2: Marketing and its use in Innovation activities
Introduction
I. Marketing: a conceptual background
1. Marketing definition
2. Marketing Activity
3. Product Lifecycle
4. Definition of Customer
II. Relationship between innovation and customer satisfaction
1. Studying Consumer buyer behavior types and factors
2. Importance of Customer Information
3. Customer Experience Cycle
4. Customer Satisfaction
5. The relationship between customer satisfaction and customer loyalty
6. Market Orientation and Innovation

III. Interaction between marketing and innovation
1. Interdepartmental integration
2. Marketing and R&D linkage during NPD projects
3. The relationship between Marketing and Innovation
4. Marketing barriers to Innovation
Conclusion
Chapter 3: The empirical study
Introduction
I. National Innovation systems -International comparison
I.1. Conceptual background: A brief overview on the National Innovation System
(NIS) concept
I.2. National Innovation systems and economic performance
I.3. The Applicability of the NIS concept in developing countries

II. Empirical study: Methodology and discussion
II.1. Data Description
II.2. Econometric Specification and Estimation Techniques
II.3. Variables Description
II.4. Our findings and discussion
II.5. Our Model
II.6. Our findings Conclusion
Conclusion
General Conclusion
INTRODUCTORY CHAPTER :

Introductory Chapter:
Drucker and Maciariello (2008) 1 say that “There is only one valid definition of business purpose: to
create a customer.‖[…] And, ―Because the purpose of business is to create a customer, the business
enterprise has two—and only two basic functions: marketing and Innovation. Marketing and Innovation
produce results; all the rest are costs […]‖From this short statement we started our research path
investigating the importance and the relationship between marketing and Innovation, in an
effort to analyse the innovation activity of Algerian firms, and to weight up the Innovation
obstacles, in ways that allow us knowing how to help the local economic actors enhancing
innovation within the business sector. We attempt also to measure the Algerian National
Innovation System (NIS), through comparing it with some countries‟ NISs, just like those of
Tunisia and Morocco, using data and statistics gathered from different sources such as the
UNESCO Institute for Statistics, the World Bank, and some others…
We, in fact, have taken this subject for our masters‟ thesis, obviously because Algerian firms are
supposed not to be innovative at all, and according to the importance related to firms‟
innovativeness and creativity and its huge impact on the whole economic performance and
success, we have tried to highlight the levels of innovation of Algerian firms and to identify the
problems and obstacles that slow down innovation. So that we tried at first to check out the
innovativeness of Algerian firms, and then we have to talk about what drives Innovation; and
especially that mainly firms managers, employees and even economists do not really recognize
the Innovation drivers and how a simple firm can be innovative; Then we had to answer the
following question:
 What are the obstacles for Algerian firms to be innovative?
This general question yields three principal questions on which we built our research;
 What is Algerian Firms’ degree of innovativeness?
 What are the barriers and the upholders of Algerian firms to be innovative?
 What is the degree of marketing influence on Innovation process within Algerian Firms?

1 Drucker, P. F, & J. A. Maciariello. (2008). “Management”: revised edition. NY: Harper Collins. p 30.Noticed in “Joseph Maciariello, (2008)
“Marketing and Innovation in the Drucker Management System”, Journal of the Academy of Marketing Science; CA, USA.”

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INTRODUCTORY CHAPTER :

Hypotheses:
In an attempt to understand the degree of innovation within Algerian firms, as well as to be
aware of the barriers to Innovation within the Algerian market, and to see the linkages and
cooperation either intra or inert-firms between Marketing, production and R&D departments in
order to check out the roles played by Marketing to enhance innovation and the
competitiveness of firms; we give two main hypotheses from which the paths will be planned to
illustrate and analyze our subject.
H1: Innovation: Algerian firms do not innovate: obviously Algerian firms are not innovative at
all, but empirically; studies have shown that there exists some Innovations within the Algerian
market, but firms do not innovate very often and that is because of several reasons, named
Innovation drivers, upholders; and barriers to Innovation which we are going to illustrate with
more details in this work.
H2: Marketing: Interdepartmental Integration of Marketing department with the other
departments creates a synergy that helps enhancing and fostering the innovation activities and
innovative performance of firms.
To validate or invalidate these hypotheses we take our First Chapter named “Innovation a
theoretical Background” to talk about Innovation first of all from a theoretical background,
through exploring the links found in the economic literature between Innovation and other
concepts just like economic growth, firm size, creativity, competitiveness and market structure;
we explore the literature review of Innovation through highlighting the Innovation concept so
that we will identify it, we illustrate in the same chapter the sources and models of Innovation,
and the diffusion of Innovation where we will talk about the S-curve to show how Innovations
are diffused.
Besides, in the second chapter which is called “Marketing and its use in Innovation activities “
we talk about Marketing and some interesting aspects for our research because we think that
we cannot talk about Marketing and its links with Innovation without emphasizing on a
number of concepts including products and production, consumers, consumer buyer behavior,
product lifecycle (PLC), customer experience cycle, customer satisfaction, marketing barriers to
Innovation, Marketing and R&D linkage during NPD projects, new product marketing,
Innovation marketing, and some other economic concepts. While in our third chapter which is
dedicated to highlight the empirical study of this work we rely on a couple of studies which are

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INTRODUCTORY CHAPTER :

1) investigating National Innovation Systems (NIS) in Algeria, and using an international
comparison of NISs between different countries, we discuss the role and impacts of R&D and
Innovation on the economic performance of countries, 2) making an empirical study on the
innovation capabilities and levels of some Algerian industrial firms through using a
questionnaire structured on our data needed, data were gathered with surveillance and help of
some local and national organizations such as: the Chamber Of Commerce And Of Industry (La
Tafna) of Tlemcen, the direction Of Small And Middle-Size Enterprises, The National Institute
Of Industrial Property (INAPI). Our questionnaire was directed also by a web designs company
named F-kar web designs located in Tlemcen also and which helped making the E-form of our
questionnaire and uploading it onto their web site in order to facilitate the data collection and to
help the respondents filling the questionnaire. Our empirical study includes 56 industrial firms,
which are mainly located in the western region of Algeria, we use the Logistic regression to test
and analyse our findings, so that we introduced two Logistic models to test our hypotheses. We
take the Logit model because we divided our sample to those firms which do innovate and
those which do not, we take a variable named INNO which is a dichotomous qualitative
variable and which takes the value 1 if the firm has already undertaken process or product
Innovation within the Algerian market and the value 0 otherwise, However; as to take INNO as
the dependent variable for the econometric purpose, and because this variable is a dichotomous
qualitative variable we utilize the binomial logit model due to its Binomial qualitative nature,
and moreover for the reason that the logistic regression is useful in case the endogenous
variable is dichotomous whereas the exogenous variables are either qualitative or quantitative.
Consequently, the logistic regression allows us to estimate Innovation propensity of the firm as
a function of its R&D expenditures, its R&D intensity, its Cooperation with other firms and
organizations, its Marketing efforts, its Size as well as moderator variables.
Another variable named RD is a dichotomous qualitative variable also which takes the value 1
if the firm has R&D activities and takes the value 0 otherwise, In case the firm has R&D activity
we define another variable RDI as R&D intensity which means the share of R&D costs in the
total of expenditures dedicated to Innovation, RDI is codified over an ordinal scale of 0-4, but as
we have seen from our survey, almost all Algerian firms do not have R&D departments, and
then both R&D and Innovation activities are included in other activities such as production. So
that we have taken RDI through asking the managers about it, in our questionnaire but it does
not rely on numbers or fact but only on the respondent‟s view point, which may be wrong.
Algerian firms seem to have a very little rates of R&D expenditures so that the proportion of the

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INTRODUCTORY CHAPTER :

turnover to Innovation activities is very low, from our study we found that Algerian Firms‟
expenditures of Innovation includes the cost of employees‟ training, product improvements and
patents acquisition… We take other descriptive variables including the variable SIZE which is a
multinomial variable to measure the size of the firms and is codified aver an ordinal scale also
of 1 to 5. MKGI (Marketing Intensity) is a variable that measures the expenditures on marketing
activities as a proportion of the firm‟s turnover and it is codified over an ordinal scale ranged
from 0-4; where 0 for the lowest expenditures proportion and 4 for the highest proportion. COO
is the cooperation made by the firm with other economic, organizational and social actors
including universities, research centres, Labs, both local and foreign firms and institutions…
this variable (COO) is codified over an ordinal scale of 0-4 to measure the average of
cooperation between the firms questioned and the other organization through having in mind
the number of the firm‟s partners, where 0 for the lowest rates of Cooperation between the firm
questioned and other firms and organizations, and 4 is for the highest rates of cooperation.
MAR is the variable which measures the degree at which the Marketing function and activities
are integrated into other departments and especially during new product development stages,
and it is codified over an ordinal scale ranged from 0-4; where 0 for the lowest rates of
integration between Marketing and other departments and functions within the same firm, and
5 for the highest rates of integration. QI is a variable that measures the skilled employees
intensity and is calculated on the basis of the proportion of qualified and high qualified
employees including managers and high qualified personnel in the administrative, technical
and R&D departments… over the Total number of the firm‟s employees. This variable (QI) is
codified over an ordinal scale ranged from 0-4; where 0 for the lowest skilled proportion and 4
for the highest proportion. OBLEV is a variable that measures the level of obstacles which face
the firm to be innovative, this variable is codified over an ordinal scale ranged from 0-4; where 0
for the lowest levels of Innovation obstacles, and 5 for the highest levels of obstacles, but we
must add here that it is sometimes due to the sector in which the firm performs, because in
some sectors there are more Innovation obstacles than in others.
While the sample seems to be limited and little to generalize our findings, but at least it has
been a serious work in this domain, like that we will be able to include other firms to our
sample in ways that help us getting better results, we will use some descriptive statistical tools
to test our findings and analyse our data, in order to include the right variables to each model of
our binary logistic models given in this research.

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