The influence of marketing exploitation and exploration on business-to-business small and medium-sized enterprises

Liu, Gordon; Chen, Yantai and Ko, Wai Wai (2024). The influence of marketing exploitation and exploration on business-to-business small and medium-sized enterprises. Industrial Marketing Management, 117 pp. 131–147.

DOI: https://doi.org/10.1016/j.indmarman.2023.12.012

Abstract

Organisational learning theory proposes firms can gain market knowledge through adaptive processes - marketing exploitation and exploration. Our study examines how these processes impact pioneering orientation, firms’ emphasis on launching innovative products ahead of competitors, in business-to-business (B2B) small- and medium-sized enterprises (SMEs). The prevailing view is firms should simultaneously pursue both processes or focus on just one. We challenge this notion and posit B2B SMEs should generally prioritise one process over the other to effectively shape pioneering orientation. However, certain circumstances like upstream supply chain (SC) integration and strong information technology (IT) competence enable firms to optimise benefits by alternating between processes. Our longitudinal analysis of 213 Chinese B2B SMEs supports this argument, revealing marketing exploration has a stronger positive influence on pioneering orientation than exploitation. Furthermore, our analysis shows upstream SC integration alone does not moderate, but combined with robust IT competence, can increase the advantages of marketing exploitation over exploration when fostering pioneering orientation in B2B SMEs.

Plain Language Summary

This study delves into the impact of adaptive processes—specifically, marketing exploitation and exploration—on the pioneering orientation of small- and medium-sized business-to-business enterprises (B2B SMEs). Pioneering orientation refers to a firm's focus on introducing innovative products before competitors. While the prevailing belief suggests that firms should simultaneously engage in both marketing processes or concentrate on one, our research challenges this idea. We argue that B2B SMEs are better off prioritizing one process over the other to effectively shape their pioneering orientation. However, under specific circumstances, such as upstream supply chain integration and robust information technology (IT) competence, firms can optimize benefits by alternating between these processes. Our longitudinal analysis of 213 Chinese B2B SMEs supports our argument, revealing that marketing exploration has a more substantial positive influence on pioneering orientation compared to exploitation. Additionally, we find that upstream supply chain integration, when combined with strong IT competence, enhances the advantages of marketing exploitation over exploration in fostering pioneering orientation among B2B SMEs.

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