CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The present globalization market has made organizations to consider the internationalization as an approach to stay competitive. Marketing strategy has become significant apparatus all around for any firm to stay in serious market condition and was more grounded. Aremu and Lawal (2012) considers strategy to be an example of resource allocation choices made all through an organization. This embodies both wanted objectives and convictions about what are satisfactory and most basically unsuitable methods for accomplishing them. Aremu and Lawal, (2012) stated that strategy infers that the investigation of the market and its condition, customers’ purchasing behaviour, competitive activities and the need and capacities of promoting mediators. Outside marketing strategy consequently, can be characterized as a strategy by which an organization endeavors to arrive at its target markets.
Outside marketing strategy begins with market research where needs and attitudes and contenders' products are evaluated and proceeds through into advertising, promotion, circulation and where appropriate, client servicing, packaging, deals and distribution. Outside marketing system must concentrate on conveying more noteworthy incentive to clients and the organization at a lower cost (Chiliyaet al, 2009). Owomoyela et al, (2013) additionally consider outside marketing strategy to be a method of giving a quality product that fulfills customers’ needs, offering reasonable cost and taking part in more extensive distribution and back it up with viable promotion technique. Marketing strategy is an indispensable essential of industry's capacity to fortify its market share and limit the effect of the competition.
Several researches have consistently shown that the elements of outside marketing strategies (such as pricing, product development, marketing communication) constitute important sources of competitive advantage (Angulo-Ruiz, Donthu, Prior, & Rialp, 2014; Morgan, Vorhies, & Mason, 2009; Vorhies & Morgan, 2005). However, an emerging body of research challenges the effectiveness of these elements of outside marketing strategies, arguing that such organization strategies are static and inadequate to adapt to increasingly complex and fast-changing market environments (Day, 2011, 2014; Mu, 2015). Scholars of this research camp contend that it is outside marketing strategy rather than internal marketing strategy that ensure long-term profitability and competitiveness by helping organizations to adapt to volatile markets (Day & Moorman, 2010; Mu, 2015). Yet another research stream suggests that a firm's capability to appropriately allocate resources rather than mere possession of resources drives superior performance (Newbert, 2007). Scholars in this stream argue that strategic flexibility is what sustains profitability in complex and highly unpredictable environments (Grewal & Tansuhaj, 2001). In sum, there is an important gap in our understanding of 1) which capability –outside-in capability, inside-out capability, or strategic flexibility – should be focused on as a primary driver of firm performance, and 2) whether these capabilities affect performance separately or in combination, which will help us identify intermediate stages when looking for early performance impacts (Moorman & Day, 2016).
Moreover, the marketing literature generally neglects possible synergies created between marketing capabilities and human capital on firm performance despite a constant advocacy for inter-departmental coordination (Narver & Slater, 1990). The outside marketing strategy perspective suggests that though internal marketing capability is important for firm performance, its impact on performance should depend on how it is managed and deployed (Day, 2011). According to Moorman and Day (2016), research is needed to understand how alignment between human capital that resides in individuals and higher-order constructs such as marketing capabilities impacts firm performance. They also recommend taking a top-down (starting with leaders) or a bottom-up (starting with employees) approach to understand how human capital aligns with other marketing organization elements such as performance. Previous research reveals that transformational leadership is required to better align firm efforts with the emergent opportunities identified through outside marketing strategy to be about better productivity on the part of the organization and also on the employees (Adner & Helfat, 2003). Moreover, when rapid responses are needed in the face of turbulent business competition and market velocity, employees need to be more proactive in anticipating and acting upon market changes (Day, 2011). This study shall therefore explore the impact of outside in marketing strategy on organizational performance by using Amazon Incorporated as a case study.
1.2 Statement of the Problem
In this current business environment, the success, growth or failure of any business organization depends on how best such organization can satisfy its customers and this act places huge task and responsibility by way of promotion on any organization intending to achieve success at satisfying their customers. The duty involves identifying the precise needs of their customers/clients and deciding on how best to handle their products and services so as to satisfy the wants of both prospective buyers and sellers (as represented by clients/customers).
The main concern of every business organization is to maximize profit and to achieve this objective; it befits the marketing manager of any rational business organization to plan and execute policies which will maximize the income per unit of capital employed in the business. It is said that understanding of consumer needs and wants is important to successful marketing just as competition is significant at influencing how successful an organization's business enterprise can be. It is pertinent to understand that it is not simply a matter of producing a good product or service alone that meet the customers' wants and needs that give customer satisfaction, but how well the product or service is showcased and appealing to them. In one way or the other, some firms and organizations are able to do this but some are more successful in the market place than others. The question that then arises is why is this so? With reports of the varying degree of successes and failures recorded by organizations in different parts of the world, it is imperative to attempt to carry out a detail study of the various outside marketing strategies being adopted by organizations in carrying out their operations with a view to establishing the place of marketing in their organizational performances.
1.3 Objectives of the Study
The purpose of this study is to examine the impact of outside in marketing strategy on organizational performance by using Amazon Incorporated as a case study. The specific objectives include the following:
i) To investigate the outside in marketing strategy adopted by Amazon Incorporated?
ii) To examine the relationship between packaging strategy and organizational performance
iii) To understand the impact of promotion strategy on organizational performance
iv) To determine the effect of product strategy on organizational performance
1.4 Research Questions
The questions asked here will serve as the basis on which this research will be analyzed.
i) What is the outside in marketing strategy adopted by Amazon Incorporated?
ii) Is there any relationship between packaging strategy and organizational performance?
iii) What is the impact of promotion strategy on organizational performance?
iv) Does product strategy have any effect on organizational performance?
1.5 Research Hypothesis
In the course of carrying out this study, the following hypotheses were formulated:
i) Packaging strategy does not have any significant correlation with organizational performance
ii) There is a significant relationship between promotion strategy and organizational performance
iii) There is no significant correlation between product strategy and organizational performance
1.6 Significance of the Study
The relationship between marketing strategies and organizational performance needs further investigation for small business survival because small businesses have been able to expand local economies by offering employment opportunities. The study goal was to determine the pattern of business startups that survive in the nearest future; interpreted through interviews from respondents. The researcher's intent is to understand the effect of outside marketing strategies on business startups and its impacts in the nearest future, by studying marketing and decision-making practices of successful businesses like Amazon Inc.
1.7 Scope of the Study
This research is a case study on Amazon Inc where employees and customers are contacted to gather their insight about the firm’s level of outside marketing strategies implementation and organizational performance respectively. The rationale of choosing Amazon Inc is due to its largest market share and contribution in the global economic development. The study will be confined to Amazon Inc and its customers.
1.8 Limitations of the Study
Research comes with strengths and weaknesses; challenges beyond the researchers’ control, which limit the study (Diefenbach, 2009). The first limitation was that the study was restricted to a single case study. To an extent, generalizing the results of a single case study could cause difficulties when attempting to assign the outcome(s) to the business population as a whole. Also, depending on the small business, the sample size of participants within the area could pose difficulties for a single case study. The second limitation was that the researchers decided to use an e-commerce type of business for the study. The data collected from interviews by questionnaires insufficient may not have provided adequate information to analyze the Amazon Inc whereas a physical business could have offered larger amounts of samples. The results could differ from a small merchandising company.
