This document summarizes Hazrita Abdul Rahim's 2011 postgraduate colloquium on the impact of innovative promotion on SME performance in Malaysia. The summary discusses: 1) The study examines innovative promotion practices among SMEs in Malaysia and how they impact firm performance. 2) The theoretical framework draws from Schumpeter's theory of innovation and marketing theory to hypothesize relationships between innovative promotion tools, techniques, processes and environment, and SME performance. 3) The research design involves a survey of 200 Malaysian SMEs using a Likert scale to measure levels of innovative promotion and collect data to test four hypotheses regarding the relationships with performance.

1. Postgraduate Qolloqium
FEM
Hazrita Abdul Rahim 2011
1
Name : HAZRITA ABDUL RAHIM
ID Number : 4100086
15th
November 2011

2. Research Title
Hazrita Abdul Rahim 2011
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The impact of innovative promotion on
SME performance : An evidence from Malaysia
PhD Supervior :
Dr. Kalsom Abd. Wahab

3. Definition of SME
 The Malaysian SME adopts the definition of
National SMEs Development Corporation
(2006) which currently classifies SMEs as
follows :
 Annual Sales Turnover not exceeding RM 5
million
 Employees not exceeding 150 staffs
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4. Classification of SME

5. Overview
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The Subject of Study :
Small and Medium Enterprise in Malaysia
The Object of Study :
The Innovative Promotion Practice Amongst
SME

6. The Theory
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Schumpeter’s Theory of Innovation mentioned
100 years ago that survival of a business
depends very much on innovation (Schumpeter,
1934)
Schumpeter suggests that innovations are
imperative for economic growth, commercial
profit and thus public wealth

7. Theory of Innovation by Schumpeter
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After analyzing the capitalist model Schumpeter tried to
understand what companies would be in a better position
to innovate. He developed a theory where a company’s
ability to innovate was mainly connected to its size.
Initially he defended that small companies should be in a
better position due to their flexibility while large
companies might get trapped in bureaucratic structures.
(The Service Industry Journal, January 2004, Volume 24,
Number 1)

8. Theory of Resource Based
View
 Teece et al, 1997 mentioned that competitive advantage
comes from aligning skills, motives and etc. With
organizational systems, structures and processes that
achieve capabilities at the organization level.
 Nelson & Winter, 1982 mentioned that technological
innovation and creativity are the basis of competitive
advantage. A strategic resource to one firm will be a
strategic resource to another firm.

9. Theory of Marketing
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Marketing is a science as well as an at which
are driven by creativity and innovation. To
leverage creativity and innovation fully, science
needs to step in. To be robust, the marketing
function needs the rigor of science
Mak Joshi, Product Marketing, Abbot Labs, Sept
10th
2008

10. Theory of Innovative Marketing
 Innovative marketing is not simply focused on
product innovation, instead it covers the whole
spectrum of marketing activity with an SME.
(Rogers, 1995)
 Consequently, there is likely to be more
innovation in other aspects of marketing
activity than there will be around the product
or service (Rogers, 1995)
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11. Concept Definition
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Entrepreneur - a person who has possession of a new
enterprise, venture or idea and assumes significant
accountability for the inherent risks and the outcome
(Foundation of Entrepreneurship, Pearson Education,
2011)
Innovation - a new way of doing something or "new stuff
that is made useful". It may refer to incremental and
emergent or radical and revolutionary changes in
thinking, products, processes, or organizations
(Foundation of Entrepreneurship, Pearson Education,
2011 )

12. Concept Definition
 Marketing
Marketing is the activity, set of institutions, and
processes for creating, communicating, delivering, and
exchanging offerings that have value for customers,
clients, partners, and society at large.
American Marketing Association Board of Directors,
2004
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13. Significant of the Problem
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 Find strategies to have more innovative promotion as
SME usually struggle to be known
 Introduction of ICT have changed the landscape of
promotion
 Effective and efficient new methods, achieve what you
want to achieve at lower cost
 As a result of innovative promotion, customers will have
better unit cost per price item

14. Significant of the Problem
 The concept of promotion innovation have not been
explored in greater depth
 Previously promotional effort are costly and SME with
limited resources cannot afford it
 SME Annual Report 2006 stated that SME accounted for
99.2% of total business but only contribute 32% of GDP.
This show vast opportunity
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15. Literature review
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“ It is evident that innovative marketing in SME
can be a proactive and/or reactive integrated
organizational approach on refinement,
newness, image management, product quality
and the formation of strategic alliances with
key constituents in the context of competitive
market circumstances”. Inno vative m arke ting in
SMEs : an e m pricial study. Miche le O ’Dwye r, Audre y
Gilm o re and David Carso n. Jo urnal o f Strate g ic
Marke ting , Vo l1 7 , No . 5, O cto be r 20 0 9

16. Literature Review
 The evolution of marketing in small firms. David Carson.
European Journal of Marketing, 19 (5). 1985
 Innovative marketing is fundamentally important for SME
as SME are major providers of new jobs ( Audretsch,
Verheul, Wennekers & Thurik, 2002)
 Drucker (1985) mentioned that innovation is the specific
tool of entrepreneurs, the means by which they exploit
change as an opportunity for a business or service. It is
capable of being learned and practiced
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17. Literature Review
 Marketing and innovation produces results ; all the rest
are costs. (Drucker and Maciariello 2008, p 30)
 Amit et all mentioned that SME need to keep up with
creativity and innovation capacity in order to sustain in
the competitive business environment.
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18. Literature Review
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Marketing planning in small enterprises : A
model and some emphirical evidence. Carson
D, Cromie S. Journal of Marketing
Management (1989)
Effects of self concept traits and EO on firm
performance. Poon, Ainuddin & Junit 2006.
International Small Business Journal 24(1)

19. Hypothesis
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Hypothesis 1 :
Null : There is a direct relation between innovative
promotion and performance of SME
Alternative : There is no direct relation between innovative
promotion and performance of SME

20. Hypothesis
Hypothesis 2 :
Null : There is a direct relationship between tools of
promotion and the performance of SME
Alternative : There is no direct relationship between tools
of promotion and the performance of SME
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21. Hypothesis
Hypothesis 3 :
Null : There is a direct relationship between techniques of
promotion and the performance of SME
Alternative : There is no direct relationship between
techniques of promotion and the performance of SME

22. Hypothesis
Hypothesis 4 :
Null : There is a direct relationship between process of
promotion and the performance of SME
Alternative : There is no direct relationship between
process of promotion and the performance of SME

23. Research Design
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 Survey Method
 Cross sectional data with hypo-deductive
approach
 Likert Scale (1 to 5)
Range : Highly innovative to Not innovative at
all

24. Survey Questions Design
 Questions will be based on :
 Tools
 Process
 Techniques
 Environment
 Comparison of conventional and new

25. Research Questions
 Will innovative promotion environment effects
the performance of SME?
 Will innovative promotion process effect the
performance of SME?
 Will innovative promotion tools effect the
performance of SME?
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26. Research Questions
 Will innovative promotion techniques effect the
performance of SME?
 Will innovative promotion have greater impact
on performance compared to conventional
promotion?

27. Unit of Analysis
 Firm level
 Questionnaire distribution to CEO and MD of
the selected SME
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28. Unit Of Analysis
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200 companies based on :
High growth capacity
Undergoing substantial change
Posses history of management
A wide range of industrial sector
11-100 employee size

29. Assumption model 1
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Adapting Standard
Textbook Marketing
Frameworks
Innovative
Marketing
Network
Marketing
Competency
Marketing
Marketing
Communication
Marketing
Communication

30. Assumption Model 2
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The FirmThe Strategy
The Entrepreneur
X

31. Marketing mix concept
Marketin
g Mix
Price
Product
Promotion
Place/
Distribution

32. Theoretical Framework
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Performance of SME
Innovative
Conventional
Innovative
Conventional
Conventional
Innovative
Tool
Conventional
Innovative
ProcessEnvironment
Techniqu
e

33. Research Conduct Model
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INPUT
Promotion
Innovation
Variables:
1)Tools
2)Techniques
3)Process
4)Environment
OUTPUT
SME Performance :
1)Competitive advantage
2)Keep with the trend
3)Adapting to ICT approach
4)Bigger market share
5)Segmented audience
6)Global Market
7)Cost efficient
8)Increase profit
9)Business expansion

34. Islamic Perspective on
Promotion
 There is no room in Islam to justify any cover
up of promotional behavior. Qur’an condemns
all forms and shapes of false assertions
(Kadhb), unfounded accusations, concoctions
and false testimonies (Al-Qur’an 43:19, 80;
33:19, 58; 58:17–19; 102:8; 100:8; 3:14).
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35. Islamic Perspective on
Promotion
 In terms of Islamic marketing ethics, it is
unethical for the salesperson to over praise his
products and attribute to them qualities which
they do not possess (Al-Ukhuwa, 1938, p 23).

36. References
 Carson, D. (1985), “The evolution of marketing in small firms”,
European Journal of Marketing,Vol. 5, pp. 7-16.
 Carson, D. (1990), “Some exploratory models for assessing small
firms’ marketing performance (a qualitative approach)”, European
Journal of Marketing, Vol. 234 No. 11, pp. 8-51.
 Carson, D. (1993), “A philosophy for marketing education in small
firms”, Journal of Marketing Management, Vol. 9, pp. 189-204.
 Carson, D. and McCartan-Quinn, D. (1995), “Non-practice of
theoretically based marketing in small business – issues arising and
their implications”, Journal of Marketing Theory and Practice, Vol. 3
No. 4, pp. 24-31.
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37. References
 Carson, D., Gilmore, A. and Grant, K. (1997), “Qualitative marketing
factors which contribute to growth in the developing small firm: a
discussion and proposed methodology”, ConferenceProceedings:
Research at the Marketing/Entrepreneurship Interface, University of
Illinois at Chicago, Chicago, IL, pp. 461-72.
 Carson, D., Gilmore, A., Cummins, D., O’Donnell, A. and Grant, K.
(1998), “Price setting in SMEs: some empirical findings”, Journal of
Product and Brand Management, Vol. 7 No. 1, pp. 74-86.
 Doole, I., Grimes, T. and Demack, S. (2006), “An exploration of the
management practices and processes most closely associated with
high levels of export capability in SMEs”, Marketing Intelligence and
Planning, Vol. 24 No. 6, pp. 632-47.
 Drucker, P.F. (1954), The Practice of Management, Harper and
Row, New York, NY.

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THANK YOU
Q & A