The Relationship Between Resources and Market Innovation in Smallholder Agricultural Cooperatives Based in Mchinji District, Malawi

Abstract

innovation is a fundamental component of achieving growth and sustainability for SACs However, currently little is known in terms of nature of market innovation in SACs and how availability of intangible resources affect adoption and levels of market innovation in SACs. Overall, this study found that SACs in Mchinji District in Malawi have some levels of intangible resources as well as varying forms of market innovation. The results showed that all SACs have some level of intangible resources such as members’ relationship, attitude, and reputation of brand as well as education and skills. However, patent was not present in all SACs as an intangible resource. The extent to which the SACs have these intangible resources varied across the three categories of market innovation namely; product design, product distribution, and product promotion. In addition, the study found existence of market innovation with the SACs. In terms of product/design innovation, SACs reported some level of innovation to add value to their groundnuts and this is mostly in terms of selling shelled, graded, flour, butter, oil, feed cake. In terms of product distribution all SACs reported they innovate to increase numbers of distribution channels, mainly in terms of buyers coming, institutions helping, using middlemen and members searching for market. In terms of product promotion innovation results, SACs showed some level of innovation and this is mainly in terms of radio, verbal and displays, agencies/ through institutions, trade fare, and through phone text messages. The extent to which the SACs reported market innovation in terms of prevalence and diversity of what constitute market innovation varied across the three categories of market innovation namely product design, product distribution, and product promotion. Further, the study sought to establish whether intangible resources had a direct impact on marketing innovation (i.e. in terms of product design, distribution and promotion). Using the Bivariate/Pearson’s correlation and scatter plots the results showed that there exist a positive relationship between intangible resources and product design innovation as well as product promotion innovation. The study found no relation between intangible resources and product distribution innovation. However, although the Pearson estimates could not be tested for statistical significance, due to the limited sample size of this study, the qualitative findings confirmed of SACs reports of positive relationship between intangible resources and market innovation. Overall, this study provided evidence that SACs in Mchinji District in Malawi need additional support to developing their existing intangible resources so they can be more effective in adopting relevant forms of market innovation. Based on results of this study, it cannot be denied that in future, only SACs with skills, brand reputation, effective memberships, and attitude will have the competitive advantage to adopt and implement effective forms of market innovation for their products to achieve growth and sustainability.