Marketing Capability Development and Integration: A Study of Market Information Implementation in Small Firms from the Northern Irish Agri-food Industry

Research Aim This research aims to investigate whether an increase in the level of market information possessed by a small firm is positively related to the development and integration of small firm marketing capabilities... [ view full abstract ]

Research Aim

This research aims to investigate whether an increase in the level of market information possessed by a small firm is positively related to the development and integration of small firm marketing capabilities over a longitudinal period.

Theoretical Background

Market knowledge in firms is reliant on the level of market information resource, which addresses customers, competitors, supply-chain and the broader environment. Market information represents a particularly important knowledge resource as it provides firms with insights into which value-adding activities they should undertake, and how these should be implemented to match market conditions (Day, 1994; Slater and Narver, 1995). A criticism of the resource based view of the firm (RBV) is its inability to explain how resources, such as market information, can be deployed to achieve competitive advantage (Priem and Butler, 2001). Consequently, RBV literature has extended into capabilities theory, based on the premise that resource deployments are more effective drivers of sustainable competitive position, than resources alone (Teece et al. 1997; Teece, 2007). This moves away from the RBV, as developed by authors such as Barney (1991), where resource heterogeneity was thought to drive competitive advantage. Rather, capabilities theory concludes that by successfully deploying resources, at the product-market level, through marketing capabilities, enables the repeated delivery of desired benefit bundles to customers, and thus, an improved competitive position (Noble, 1999).

Several authors have highlighted the potential of market information for small firms (Cacciolatti and Fearne 2012; O’Connor and Kelly, 2017; Simmons and Donnelly 2013; Simmons et al. 2008; 2011). Despite this, research indicates that small firms tend not to invest in market information, due to time, expertise or monetary constraints (Donnelly and Simmons, 2013). This can render them incapable of understanding which idiosyncratic resources and capabilities to invest in, such as strategic planning or pricing and promotional strategies. A lack of such competences may result in a firm becoming disadvantaged against those competitors effectively using market information. It seems timely therefore, to consider the influence of market information upon marketing capabilities in the small firm context.

Methodology

This research is currently being conducted through a qualitative, fine-grained approach, across 8 small firms in Northern Ireland’s agri-food industry, on a longitudinal basis. As a part of a wider study, this research runs alongside a 3 year Invest NI and DAERA funded project to increase environmental insights and improve the marketing skills of NI agri-food firms. From a pool of firms engaged with the overall project, 8 case study firms have been selected through a sampling criterion.

Firm engagement began officially in September 2017, with research to take place over a longitudinal period of 12-months. During this period, the researcher will formally interview case study firms at two important time stages: Stage 1: Interview 1 at the beginning of the longitudinal study (Oct – Dec 2017), at this time, market information, directly related to firm product listings and environment was supplied. Stage 2: Interview 2 will be conducted at the end of the processes (July – Sept 2018). The marketing function, market information usage and marketing capabilities will be assessed through semi-structured interview questions at each interview stage. To ensure structure and rigor of this research, the researcher will make contact on a bi-monthly basis and remain available for contact initiated by any firm through telephone, meetings and email. Requests for further market information and additional informal meetings will be encouraged throughout.

All interviews and informal discussions are to be recorded and transcribed verbatim, whilst all email communications will be collated and used to support and verify the activities of the firms as discussed per interview. To address the complexity of the large volumes of qualitative data that will be collected, the researcher will adopt a systematic process to allow the extraction of key themes from the data. Interview transcripts will be analysed with the purpose of identifying the impact of market information exposure on small firms, through emergent patterns, relationships and other developing categories within the data.

Early Findings

Through September-December first interviews were conducted with case study firms and there are some patterns emerging at this early stage. In some instances, firms have been willing to freely engage and are excited by the prospective benefits that the data provides and are willing to discuss their understanding of its value. In other cases, concerns over time and financial constraints (although the latter is alleviated), has created difficulty in communication. Further, an inherent fear of change and the unknown, particularly of statistical reports, have left some firms more reluctant to communicate and engage to their fullest potential. It is our aim, in part, to remove these fears and encourage firms to interact with the data.

Originality of Research

Everelles et al. (2015) notes that extant research evaluating the relationship between market information and marketing capabilities has focused on large firms. These best practices are not applicable to small firm infrastructure, built on limited resources and reactionary behaviour. Indeed, there are significant challenge for small firms in market information adoption, residing in the continued collection, analysis of data, management and the integration of marketing capabilities across the business to create value for customers (Reinartz et al., 2004; Wahlberg et al., 2009). While a challenge, the potential of market information for small firms holds substantial interest with several significant questions that researchers currently do not have an answer for. For example, can market information resource lead small firms to adopt a more systematic and structured approach to understanding their market? Will this new approach lead to informed decision making and a greater efficiency in meeting the needs of their customers against competition? In this study, we seek to address these questions by assessing the influence of market information resource upon marketing capability development and integration, with a focus on small firms.

Contributions to Practice

Governmental reports have acknowledged the significant volatility of the food and drink industry over the past 10 years (now with the added uncertainty of a looming Brexit). This study aims to improve the competitive position of the Northern Ireland food industry by augmenting the sectors access to market and customer information, but also by developing its marketing skill sets with the purpose of invigorating the growth of the industry, enabling it to compete strongly in local, national and international markets.

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