Analyzing Market Exploitation and Market Exploration Dyad for Marketing Strategy Implementation
Effectiveness in Malaysian Fertilizer Industry: A Conceptual Paper
A. A. Norazlina
1,
, A. M. Izaidin
1
, K. M. Hasfarizal
1
, M. N. Shahrina
1,2
, F. W. Lai
2
1
Universiti Teknikal M alaysia M elaka, Jalan Hang Tuah, M elaka, M alaysia
2
Universiti Teknologi PETRONAS, Bandar Seri Iskandar, 31350 Tronoh, Perak, M alaysia
Abstract
Analyzing the marketing strategy ele ments that influence the effectiveness of its imp le mentation has been the subject of sizeable e mp irica l research. The purpose of this paper is to address simultaneous management of market
e xploitation and market e xp loration in the marketing strategy on imple mentation effect iveness among the most relevant new product introduction success factors in Malaysian fertilize r industry. The proposed frame work has theoretical significance in
filling the gap in the body of knowledge in the imp le mentation of marketing strategy in the Malaysian fertilizer industry. This
paper discusses issues in relation to the role of ma rket ing strategy which have profound impact on organizational imple mentation effectiveness.
Keywords
Market Explo itation, Market Exp loration, Ma rket ing Strategy, Effect iveness, New Product Introduction
1. Introduction
The study of marketing strategy-imple mentation effectiveness relationship is not new. In the marketing
literature, a firm’s ma rket ing strategy has a positive effect on its market e ffectiveness[1, 2]. Ma rket e xp loitation and
ma rket e xp loration a re t wo e le ments of marketing strategy that are arguably a mong the most relevant success factors
in introducing
new product[3]. Rapid g rowth in new
technologies, increasingly diverse and demanding customers, intensifying market co mpetition, and globalizat ion has
significantly enhanced the importance of innovation to the success of a firm[4].
Exp lo itation and exploration, two key organizational learning concepts, represent important capabilities in the
innovation process[5]. Re f[3] indicate that the choice between e xploitat ion and e xp loration depends on the goals of
new product development.
Fu rt he rmo re, they found th at bo th e xp lo itat ion an d e xp lo rat ion constitute impo rtant success factors when it
comes to launching new products. Simultaneous investments in the explo itation of e xisting product innovation capabilities
a n d t he e xp lo ra t ion o f ne w o n es ma y h e lp c rea te a
Corresponding author: babylina_loveyahoo.com A. A. Norazlina
Published online at http:journal.sapub.orgeconomics Copyright © 2013 Scientific Academic Publishing. All Rights Reserved
competitive advantage[6]. The firm has to keep a balance between explorat ion and explo itation to survive and
prosper[7]. In support of new product launch of high tech firms, the
imple mentation of marketing strategy must be clear, uniform and in an integrated manner in order to link with
performance[8]. The introduction of new products depends on the ability to transform organizational co mpetence into
reliable input to ma rket innovation[9].
The ma in knowledge contribution of this paper is to address a conceptualizat ion of ma rket ing strategy by the
simu ltaneous manage ment of market e xp loitation and ma rket e xp loration for the new product introduction in
Malaysian fertilize r industry. Furthermore, for a co mpany to survive and prosper there has to be a balance between
e xploration and e xp loitation.
2. Literature Review
2.1. Market Expl oitati on
Exp lo itation pertains chiefly to re fin ing and e xtending e xisting skills and capabilit ies. Explo itation represents a
capability to refine e xisting competencies and resources to improve operational effic iency[10]. It is in part icular through
research and development processes that existing competencies are shared across firm boundaries to generate
synergy[11].
Strategy Implementation Effectiveness in M alaysian Fertilizer Industry: A Conceptual Paper Ref.[12] state that exp loitation focuses on increasing the
productivity and effic iency of capita l and assets through standardizat ion, systematic cost reductions, and improve me
nts to existing technologies, skills, and capabilities. According to ref.[13], they defined the explo itation fit as
the extent to which task and partner-related characteristics pertaining to the ab ility to e ffective ly ma rket products align
with e xp lic it alliance formation motives to leverage e xisting products and sell the m in new ma rkets. Thus, e xplo itation is
less tacit and more e xp lic it than explo ration[10]. The e xploitation re inforce current institutionalized lea rning and
are intended to respond to the current environmental conditions by adapting existing technologies and further
meet ing the needs of e xisting customers[14].
Exp lo itation involves the development of new knowledge about the firms e xisting ma rkets, products, and abilities,
while e xplorat ion entails the cha llenge of e xisting ideas and the development of new knowledge about new ma rkets,
products, technologies, and skills[7, 15]. Explo itation is based on intensive search, which means e xperimentation
along an existing knowledge dimension[16].
Ref.[17] suggest that explo itation has two distinct phases, which are use and development of things that already know
or e xist. They define development as the expansion of the firm’s current stock of knowledge while the term use as the
appropriation of economic returns of the current stock of knowledge. Explo itation provides effic ient solutions and
supports current organizational viability through near and clear returns[18].
A typical exa mp le of e xp loitation entails the use of economies of scale; to benefit from such explo itation, firms
must emp loy modernizat ion and automatic production processes, along with effic ient capacity utilizat ion[19].
Therefore, e xp loitation relies on cumulative learn ing, and future behaviour does not deviate much fro m the firms past
trajectory[10].
2.2. Market Expl or ation
