Marketing and Open Innovation: Toward Sustainable Innovation (SustaINovation)

Introduction

The marketing concept holds that the key to achieving organizational goals is to be more effective and efficient than competitors in determining and catering to the needs of target markets. In a similar manner, innovation enables the successful implementation and commercial utilization of new ideas to be more efficient and effective to fulfill the needs and wants of target markets. That being the case, marketing and innovation are closely interconnected. As Drucker articulated long ago: “Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation” (Drucker, n.d., p.20). By the same token, owing to its coordination between business functions, marketing acts as a source of innovation within firms. Consequently, it can be postulated that there exists an ipso facto convergence between marketing and innovation, subsequently, the new “emergent marketing paradigm” and open innovation, and at a further level, between “sustainable marketing paradigm” and post open innovation as shall be discussed in the subsequent sections.

Until the outset of the new millennium, both disciplines sought to create value within the closed doors of firms, regarding consumers as passive receivers, disregarding other prospective partners within the value chain. As substantial creators of value for consumers, clients, and society, over the last few decades, both marketing and innovation have been going through drastic changes concerning how they operate to achieve results through the utilization of co-creation, user-generated content, co-design, and co-innovation by means of crowdsourcing particularly via online digital platforms. Reinforcing this statement, Von Hippel (2005) stressed the importance of user-generated content in developing creative solutions and making innovations. Nishikawa et al. (2013) demonstrated that Japanese consumer goods brand Muji’s user-generated furniture products outstrips designer-generated ones regarding unit sales, gross profit, and product novelty in the first year of introduction by harnessing the power of their users. Furthermore, aggregate sales data of user-generated products is further amplified over a longer period. Drawing on that empirical study, it could be inferred that user-driven innovative firms who mobilize external agents into their product development processes could reap substantial benefits in achieving superior market performance. However, this upstream approach to both marketing and innovation requires a deviation from conventional firm-centric business approaches.

Over the last few decades, there has been a paradigm shift in both marketing and innovation fields pertaining to how they create and deliver value. As an illustration, marketing’s firm-centric value creation has transformed into participatory value co-creation, where customers, clients, and partners are perceived as co-producers and co-innovators. This view is supported by various researchers (Ramirez, 1999; Sheth et al., 2000; Prahalad & Ramaswamy, 2004) who argue that value is not created by the provider but instead in the customers’ value-generating process. In conjunction with the transformation from exchange to value, the changing definition of marketing from 1985 to 2014 also reinforces the shift from the regnant exchange paradigm to the value paradigm, where the former dominated the discipline for almost two decades. To the same degree, with a paradigm change in marketing during the onset of the new millennium, innovation management had also been subjected to a profound change, from closed innovation paradigm to open innovation paradigm.

Taken together, the recent developments both in marketing and open innovation suggest that both disciplines have been gravitating from a linear to connected and networked, from hierarchical to democratized, from centralized to decentralized, and from firm-centric to society-centric. These shifts reveal a contradiction to the silo mentality of “marketing as usual” or “received marketing paradigm” and conventional corporate research labs.