chapter 4-final + mod

Chapter 4 – Data Analysis and Results

This chapter aims to determine the influence of innovative distribution channels on the

performance of market. For this particular purpose, a questionnaire survey was conducted with

the FMCG employees regarding the development of distribution systems. In total, the

questionnaire incorporated 163 questions all of which were linked with the influence of

innovation on the size, growth, and profitability of the FMCGs. With 500 questionnaires, only

104 were returned where the frequency of males and females was 71 and 33 respectively. In the

same manner, the respondents had different qualification levels which ranged from high school

to PHD with their respective departments and majors. The age group of the respondents had a

range of 18 till 65.

The data reflects the analysis of 40 different companies. However, the data is not

adequate enough due to time shortage or lack of interest demonstrated from the respondents but

still it would help in analysing the data reflecting the main theme of the research study along

with the hypothetical tests as well.

Data Analysis

The following section will analyse the data that is collected from the respondents in

accordance with the questionnaire survey. It includes a general analysis of the respondents and

some other essential variables in order to comprehensively analyze the data.

1

Gender Distribution

For the repondents who were interviewed, it included a total of 107 respondents of which

74 were males while 33 were females.

Gender Distribution Percentage

Male 74 69%

Female 33 31%

Total 107

2

Age Distribution

There was a diverse range of age group for the respodents which ranged from 18 till 65. It

is quite clear that through the opinions and viewpoints of different age groups, it would be easier

to have diverse perspectives about the innovative distribution channel on the profitability and

growth of FMCGs. Hence, the ages are divided in to several age groups which are illustrated

below:

Age Frequency Percentage Mean Standard Deviation

18-25 2 2% 21.4 22.79912279

26-35 44 41%

36-45 48 45%

46-55 11 10%

56-65 2 2%

Total 107

From the above table, it was found that the critical age group that was involved in this

study ranged from 26-55. This was the potential age group for this research. These age groups

can provide relevant and critical information that would be quite significant for the research

being conducted. Hence, the analysis of data would be quite fair enough.

3

Educational Qualification

Educational qualification is quite necessary for the researcher to be aware of for this

particular study. Since in accordance with the respective qualification, the researcher will be able

to understand the dependency of the relevant viewpoints on the actual question being surveyed.

However, one thing is for sure that the higher the qualification, the more accurate and suitable

4

answers would be available for the research to proceed further quite smoothly. The data for

educational distribution is illustrated below:

Qualification Frequency (N) Percentage (%)

High school 14 13.5

Under graduate 30 28.8

Bachelor 22 21.1

Masters 36 34.6

Phd 2 1.9

High school Under graduate Bachelor Masters Phd0

5

10

15

20

25

30

35

40

14

30

22

36

2

Qualification

The most number of respondents had the qualification of undergraduate, Bachelors and

Masters. The highly qualified PHDs included only 2 respondents. Qualification can be positively

related to the responses for this particular research because the more knowledge a person has in

5

accordance with his qualification, the more accurately he will be able to answer the questions

within the questionnaire keeping in mind his broad knowledge and deep insights.

Work Experience

The work experience will also be significant element for this particular research. This is

because the more experience within the company an individual would possess, the more easily

and relevantly the ability to answer would be there. Therefore, it is quite pivotal to learn about

the work experience so as to make sure the data is reliable and effective. The data for work

experience is as below:

Years Frequency (N) Percentage (%)

1-5 25 24.0

6-10 41 39.4

11-15 22 21.1

16-20 14 13.5

21-25 2 1.9

6

1-5 6-10 11-15 16-20 21-25

25

41

22

14

2

Work Experience

From the above data, the work experience of more than 15 years did not include that

much respondents as mentioned earlier that with a greater work experience, the responses from

the respondents will be fairly appropriate but it can also be said that the those have less than or

equal to 10 years of work experience could have the ability to observe critical patterns and trends

in the innovative distribution within their respective FMCG company. Hence, the work

experience of 6-10 years had the most number of respondents for this particular research.

Respondents Position

It is quite true that the department of the respondent is quite important for this research

survey. This is due to the fact that if the research survey is linked with the exact department and

designation of the respondent, the answer would be quite nearer to 100% or even 100% valid.

Hence, the position of the participants is quite necessary to be learnt. In this particular research,

there were several positions/departments included in the survey. Among them illustrated below,

the most effective ones would be related to marketing, physical distribution, CEO and corporate

function as well. The results in accordance with the respodents position are as below:

7

Description Frequency (N) Percentage (%)

Corporate function 17 16.5

Sales 34 33.2

Marketing 12 11.5

Physical distribution 6 5.8

CEO/Owner 10 9.82

Daughter/Subsidiary company 6 5.8

Mother company 11 10.6

Planning department 1 0.821

Purchasing department 1 0.821

Accounting 1 0.821

Category and channel sales development 1 0.8218

Information and communications technology 1 0.821

Consultant 1 0.321

Production 2 1.9

0102030 17

34

126 10

6 111 1 1 1 1 1 2

Respondents Organizatonal Department

From the above table, it can be said that the respondents from the sales department were

included in a greater amount so as to learn about the effectiveness of innovative distribution.

This could be due to the fact that a product distribution influences the sales and hence, a greater

number of respondents were included in the research survey. This would then be emulated by the

correlation with the factors like the quality of product, positioning, and reputation of marketers

9

along with the efforts of marketing, corporate function, CEO and finally a need for coordination

among such elements.

Company Characteristics

It should be accepted that the characteristics of any particular company would facilitate in

this research to learn the impact of innovative distribution on the performance within the market

itself. The characteristics will itself prove to be essential factors that could have a close link with

the innovative distribution. The innovative ability is perceived today as one noteworthy approach

to acquire competitive advantage for the marketing of the services and products specifically and

within the corporate world generally. A firm that is innovative would promptly lend the support

to novelty, new ideas, and the innovative procedures that may bring about new products,

technological process along with the services. One conventional method for acquiring

competitive advantage is to make new product yet can be effectively replicated. Minimal

products costs as a competitive advantage likewise experiences sustainability while the name of

the brand as a competitive advantage is conceivable just if there is a well reputed brand. The data

for the characteristics of the company is as below:

10

Running head: [Shortened Title up to 50 Characters] 11

Variable Description Frequency(N) Percentage

(%)

No of employees in

company

≤ 50 23 22.34

50-250 12 11.5

250-5,000 35 34.5

5,000-10,000 8 7.63

10,000-50,000 17 16.54

>50,000 9 8.71

How old is company ≤10 years 20 19.81

10-25 years 44 43.22

25-50 years 7 6.57

50-100 years 12 11.5

>100 years 21 20.98

Company’s annual turnover 0.5-1 billion € 10 9.82

> 1billion € 30 29.76

≤ 5 billion € 20 19.81

5-10 billion € 8 7.63

10-20 billion € 7 6.57

12

20-100 billion € 19 18.76

100-500 billion € 10 9.82

Company’s yearly R and D

spending

There is no budget for R and D 31 30.23

≤ 0.5% 15 14.33

0.5-1% 16 15.76

1-2% 8 7.63

2-4% 9 8.71

4-6% 8 7.63

>6% 17 16.54

No of FMCG brands,

company is dealing with

≤ 5 35 34.44

5-15 18 17.83

15-50 20 19.81

>50 31 30.23

No of different FMCG

products

≤10 13 12.56

10-50 12 11.5

50-100 9 8.71

>100 70 69.31

Type of FMCG products Electric/electronic products 18 17.56

Food products 17 16.54

12

13

Care products (toiletries) 2 1.9

Medicine/drug 1 0.821

Products for animals 1 0.821

Cigarettes 2 1.9

Beauty products 1 0.821

Drinks 1 0.821

Type of FMCG products

(multiple products)

Electric/electronic products 38 37.67

Food products 50 49.54

Care products (toiletries) 53 52.43

Household products 50 49.14

Medicine/drug 13 12.56

Products for animals 22 21.1

Automotive parts 1 0.821

Cosmetics 1 0.821

Accessories for phones 1 0.821

Personal care products 43 42.56

Newspapers and magazines 1 0.821

13

14

In accordance with the characteristics of the company, it could be that after the data gets

analyzed, it can be known perfectly the basic charactertistics of the company that has the most

effective and innovative distribution strategy. These characteristics would definitely reflect

towards that company that has the reliable innovative distribution strategy through which every

business and company will come to know the ideal requirement for the company where

innovative distribution can be implemented either directly or indirectly.

Innovative Investments

This is one of the most significant aspect of the research study. This would let the

researcher know about the time plan for innovative investments. It is quite critical to

know that innovations can facilitate in the exploration of the opportunities that basically

exist or can even emerge in the near future (Vaile, 2010). Businesses not only fulfill the

organizational or customer needs, but also make an anticipation of trends in future and

hence, make a development of a service, product or idea which would further allow them

the reach the demand for future quite instantly ('Training delivers for distribution company',

2010). Due to innovation, it will definitely bolster the market competitiveness, trends shift

and technologies as well. The data for this particular aspect is as below:

Description Frequency (N) Percentage (%)

Rarely 12 11.5

Whenever there is need 16 15.44

Whenever there is a chance 8 7.63

14

15

Once in 2 years 12 11.5

Only when forced from outside 3 2.53

1-2 times per year 21 20.81

3-5 times per year 2 1.9

Permanently 27 26.72

Never 2 1.9

More than 10 times per year 1 0.821

Once in 5 years 1 0.821

Rarely

Whene

ver th

ere is

need

Whene

ver th

ere is

a ch

ance

Once i

n 2 ye

ars

Only w

hen f

orced

from

outsi

de

1-2 tim

es pe

r year

3-5 tim

es pe

r year

Perman

ently

Never

More th

an 10

times

per y

ear

Once i

n 5 ye

ars0

5

10

15

20

25

30

Innovative Investments

Majority of the respondents answered in favor of the permanent innovative

investment. Numerous organizations are making an adoption of the measures to fortify

innovative ability. Such organizations are developing a framework for development and 15

16

innovation which is found to be a critical component of corporate sustainability. Research

has shown that when competition is blended with a significant demand is a noteworthy

innovative driver. The competitive intensity is the determinant of productivity and

innovation. Innovation, other than services and products, additionally incorporates new

methods of management, new processes and new business frameworks, which have a

critical effect on efficiency and development. However, more than 15 respondents also

confirmed that company makes innovative investments at least 1-2 times annually

(Eklund & Waluszewski, 2015). Some companies make innovative investment whenever

there is a need to do so. Some of the other factors like forceful innovation were not

favored completely.

Market Position

The market position of the company would let the researcher know as to in what

market the FMCG operates in. This would let the research to understand which

companies implements innovation in which market and that where the market

performance has boosted considerably due to innovation. Therefore, this data is also

important and significant aspect of the study. It is illustrated below:

Description Agree N (%) Partially

Agree N (%)

Neutral N

(%)

Company is in FMCG industry 67 (66.5) 14 2

16

17

(13.5) (1.9)

Company is in FMCG retail 8

(7.63)

25 (24.39) 14

(13.43)

Company is in FMCG wholesale 24

(23.32)

23

(22.34)

12 (11.59)

Company is in FMCG distribution 13 (12.97) 47

(46.55)

14

(13.43)

Company is in FMCG manufacturer 2

(1.9)

58

(57.46)

16

(15.48)

Domestic is main market 12 (11.59) 53

(52.61)

11

(10.69)

Europe is main market 4

(3.45)

54

(53.35)

34

(33.17)

Whole world is market 32

(31.49)

20

(19.47)

5

(4.26)

Surrounding countries is main market 23

(22.34)

28

(27.91)

34

(33.17)

17

18

Compa

ny is

in FM

CG indu

stry

Compa

ny is

in FM

CG retai

l

Compa

ny is

in FM

CG who

lesale

Compa

ny is

in FM

CG distr

ibutio

n

Compa

ny is

in FM

CG man

ufactu

rer

Domest

ic is

main m

arket

Europe

is m

ain m

arket

Whole

world i

s mark

et

Surrou

nding

coun

tries i

s main

mark

et0

10203040506070

Market Position of Company

Agree N (%) Partially Agree N (%) Neutral N (%)

Majority of the respondents were of the view that the company is in FMCG

industry. In the FMCG industry, the sector is mainly characterized by the need to

diminish time to market and make a discovery of the new developmental ideas for

generating new products, firms are always looking forward for innovation and ideas that

will give them a competitive position (Barge-Gil, 2013). Significant enterprises need brand

new technology and ideas to enhance the innovative processes. However, it can be said

that still small firms are critical innovative generators however are ordinarily constrained

by a resource.

18

19

Innovation, Implementation and reflection to the employer’s Company

The data gathered for this particular scenario is illustrated below:

Description Agree N

(%)

Partially

Agree N

(%)

Neutral

N (%)

Partially

disagree

N (%)

Disagree

N (%)

Company develops innovations

itself

48 30 8 6 8

Company prefers improvements in

distributions than innovations

24 37 10 12 16

Company is always in search for

new and innovative distribution

33 33 10 15 9

Company focuses on innovation in

distribution from outside

22 43 17 7 11

Company is not using third party

solution in distribution

7 21 18 20 35

Company use external consultants

for innovation

17 31 17 14 21

Satisfactory innovation

implementation in the company

15 41 20 13 11

Company has a culture of

innovation

17 38 21 8 16

19

20

Company has certain model for

innovation

32 29 16 9 14

There is a team within the company

which search for innovations that

can be used in the FMCG

Distribution

16 32 23 11 18

The company innovates by

implementing new technology

22 21 13 20 23

The company is searching for the

new possibilities in distribution

34 37 15 7 7

The company is testing different

innovative models (i.e. linear

model, user model, private-

collective model

41 38 12 5 5

The company innovates in physical

distribution

18 19 33 14 17

The company innovates in

marketing

18 37 18 13 14


assortment

34 36 9 14 7

The company innovates in new

marketing channels

45 40 7 6 3

20

21


distribution channels

34 37 9 9 10

The company innovating in sales

channels

30 38 9 12 10

The company awards creativity

and innovativity

38 38 7 6 10

The importance of the innovation has grown significantly. This means that

inventiveness is found to be a core factor for influencing the strategic planning. Before,

numerous associations have possessed the capacity to survive even with extremely

constrained measures of innovation. Their main focus is to make a provision of quality

products and upgrade them to such an extent that helps them to acquire a competitive

advantage within the market. Such methodology is still applicable to a few products that

have fewer opportunities for innovation and longer life cycles.

As of late on the other hand, a few patterns have been developed that drive the

process of innovation. Because of variables, for example, outsourcing and globalization,

it is explored that there are a lot of efforts made to enhance productivity and efficiency of

the companies or organizations. Organizations require more than great products to

survive; they oblige those processes that are innovative emulated by the management that

can drive down expenses and enhance efficiency (Barge-Gil, 2013).

21

22

That is the main reason as to why majority of the respondents have agreed to the

fact that the company develops the innovation by itself. Their responses are illustrated

below

Agree Partially Agree Neutral Partially Disagree Disagree

48%

30%

8% 6% 8%

Developing Innovation Itself

On the other hand, distribution is found to be as one of the essential marketing

mixes.The distribution has a very important role in marketing and in the entire economy

that can detailed out below:

The concept of marketing stresses on the profit earning through customer

satisfaction. Other than the research within the market for the sales and development of

merchandise as per the wants and needs of buyers, the distribution channel participants

likewise assist the producers in accordance with the new goods production.

The function of distribution serves to enhance standard of life for the customers

within the society. An appropriate distribution of essential services and products to the

buyers effectively at the suitable and appropriate time fulfill them as well as leads to the

bringing of change in the standard of their life. Distribution results in the enhancement in

22

23

the standard of purchasers through increase in income, employment generation and

exchange of proprietorship. Consequently, it acquires constructive outcome within the

general society. The elements of distribution, for example, warehousing, transportation,

inventory management and so forth build the significance of products by developing time

utility, place utility along with quality utility as well. The distribution mix assumes an

essential part to enhance the value of products through the delivery of merchandise in an

appropriate quantity, at perfect place and ideal time. Distribution serves as connection

between consumers and producers. Producers can make an informational flow and

messages to shoppers about their price, product, its promotion and so forth through the

members of the channel. So also, they get data about competitors, clients and changes

within the environment from the members of the channel. Due to this, 24% of the

respondents have agreed with the statement that companies prefer improvements in the

distribution rather than innovation. In the same manner, 37% have partially agreed with

this. The data for this illustrated below:

Agree Partially Agree Neutral Partially Disagree Disagree

24%

37%

10%12%

16%

Improvements in Distribution rather than Innovation

23

24

16% of the respondents prefer improvements in innovation rather than distribution

while 12% partially disagree with this. It is quite critical to point out those who agree and

disagree because their viewpoints are quite significant for the researcher to understand

their opinions. Both of the groups would have their own experience in the FMCG

industry and they have respondents as per their experience, knowledge and insight.

Therefore, both answers can be considered significant keeping in mind that innovation

and distirbution both are quite critical for the success of the company to acquire a

strategic advantage and become dominant enough to be the leader of the industry over the

competitors.

It is definitely true that innovative distribution strategy is one of the significant features

associated with the purchase as to where and when a person can purchase the product. In

accordance with the innovative distribution strategy, one can acquire the capability of enhancing

sales and capturing it from the rivals while being more available or convenient than different

choices. For instance, would one be able to review the brand of gas purchased the last time one

halted at the roadway rest stop? Most likely this is not the case at all, on the grounds that it didn't

make a difference as to which brand was being offered at that time and the person purchased it in

light of the fact that one figures out to obtain one of the slots at that stop which is utilizing a

distribution strategy. Innovative distribution is found to be range of activities that are associated

with reliable and efficient movement of the finished product from productive operation to the

buyer. Innovative distribution is found to be as one of the environments where the management

of sales operates basically. It is also noticed that sales service, innovative distribution, product or

service brand management were found to be the interface of sales associated with marketing and

these accounted to a significant extent for the organizational market share that operates within the

industries. The data analysis for this variable is illustrated below:

24

25

A g r e e P a r t i a l l y A g r e e

N e u t r a l P a r t i a l l y d i s a g r e e

D i s a g r e e

22

43

17

711

Innovative Distribution

The figure illustrates the importance of innovative distribution as 33% of the respondents

agreed with the fact that the company is always in search of innovative distribution while 33%

partially agreed with this.

It is further explored that almost innovations happen outside that boundaries that are self

imposed and that is the reason, organizations need to stretch out to every one of their limits.

Organizations comprehend that today innovation is not only within the walls of one specific

organization. The world "assimilates" more innovation than individuals can transform into more

noteworthy value however they have to put in endeavors to acquire this and check whether and

where its quality can mismatch. This will be accomplished probably within an innovative

distribution which would demand that everybody add to innovative ideas and give them on a

reliable premise the feasible context and content fit that is needed particularly. In this way,

organizations need to keep on continuing to push the innovation made regularly locally, provides

support to the organization in a form of back up so it can conceivably transform such insights

towards innovation that will discover a place in the reality that provided enhancement on the

existing which was found to be something that they contributed as well, that can be exceedingly

motivating. In order to make it happen, organizations need to perceive the reliance and inter

25

26

dependency that an expanded, distributed group of engaged people can put in endeavors for

bolstering innovation to explore, share and then work on the ideas that can be turned in to an

innovative solution. For this particular reason, 22% of the respondents agree with the fact that the

companies focuses on innovation in distribution from outside due to the fact that the diversity of

ideas and approaches can assist in getting numerous appropriate solutions for any issue or

concept. More than this, 43% of the respondents partially agreed with this. The further data is

illustrated below:

Agree Partially Agree Neutral Partially disagree

Disagree05

1015202530354045

Innovation in Distribution from outside(%)

The above data illustrated that only few respondents partially disagreed and completely

disagreed with the statement. While, some remained neutral as well. Therefore, the significance

of outside innovation in distribution is evident enough.

There are many organizations that develop internal consultants group to drive internal

alignment and foster innovation. Some of the dominant organizations, for example, Dell,

American Express, and Wyeth have a team of internal consultants for the instant launch of

initiatives and stay in front of their competitors. Numerous smaller firms do without internal

consulting groups basically as they are not in a need for them or there are some budget related

26

27

issues as well. More than this, the internal consultants are regularly far less costly than external

consultants. Originating from an outside perspective, it permits the consultants to have a

significant objective, a deep view of the organization and the business all in all. Rather than

turning out to be excessively fascinated inside of a particular organization, the professional

consultants ought to be on top of the business all in all. They have an expansive point of view,

and that have numerous experiences working with different organizations in the same industry

and that confronted comparable difficulties. In this way, they can apply encounter from the past

into their present engagements and projects. Another point of preference of not being as

coordinated into the environment of work project is the capacity to be viewed not as a peer but as

a consultant. Internal consultants can be seen simply as the one to roll out improvements within

the organizations. Rather, external consultants are employed for the sole motivation behind their

aptitude and capacity to make change for a particular business issue. This conveys more clarity

and consideration to the role, and helps focus endeavors on the project, and regularly, and along

with this, also facilitates the ensuring of the buy in of the client. The data for the company opting

for external consultants for innovation is illustrated below:

Agree Partially Agree Neutral Partially disagree

Disagree0

5

10

15

20

25

30

35

17

31

1714

21

External Consultants for Innovation (%)

27

28

There are mixed responses for this particular statement. 17% of the respondents

agree but 21% of them disagree with this statement. More than this, 31% of the

respondents have partially agreed with this. This could be mainly due to the fact that they

give preference to internal consultants as well. The principle advantage that the leaders of

the industry refer to when the preference for an internal consultant is concerned, it entails

that that an internal consultant has a great organizational understanding, its strategies,

culture and other political aspects of the organization. On the other hand, external

consultants have a limited knowledge about the corporate society and that an internal

consultant can explore quickly about the organization. More than this, an internal

recommendation originates from a foundation of over seeing the issues that happen

within the organization all the time.

It could be that the internal consultants likewise have the chance to work from

the recommendations and suggestions through the project implementation. As compared

to this, the external consultants ordinarily remain focused on the project until they

illustrate their decisions.The internal consultants can support and observe the

implementation of the proposals, assist in exploring the change, and make changes

wherever needed. This considers more conceivable outcomes for the organizational

success over the long term. An effective internal consultant is constantly ready to

proactively develop a plan before the issue can really happen, rather than finding

solutions after the issue has really occurred or happened.

Innovation is one part of the culture within an organization that will dependably

be in a condition of consistent change for any particular industry. Those organizations

that neglect to stay aware of the most recent "new" things are regularly at a greater 28

29

chance of being quite less intensive in accordance with the competitive rivalry. More than

this, organizations today need to find out about the most recent and most noteworthy new

best practices so they can adjust the strategies in an appropriate manner.

In any case, there are some of the organizations which don't understand that a

best practice turns into the standard norm quite rapidly. Along these lines, for an

organization, the real competitive differentiator is creativity and innovation — the

capacity for the organization to make its own new best practices. However, each and

every organization has a general governing society, it likewise has a few cultural

subgroups. The quantity of cultural subgroups and how they're exhibited is reliant on how

the company or corporation gets structured. Cultural subgroups can be departmental,

functional and geographic. Within such subgroups, the organizations can develop and

also be capable enough to manage creativity and innovation.

Almost 17% of the respondents agree with the fact that the company has a culture of

innovation while 38% partially agree with this.The data for this particular scenario is

illustrated below:

Agree Partially agree Neutral Partially disagree

Disagree05

10152025303540

Innovative Culture (%)

29

30

Over and over again, organizations get their business characterized in accordance with

the products they manufacture and sell. This reasoning constrains their capacity to maintain a

strategic distance from commoditization, intensely face the competitive threat and even

effectively enter new markets. In accordance with the accomplishing of transformational

development regularly means changing how one attracts the clients. The innovative business

model speaks the truth generally reexamining the business around a reasonable but not generally

associated with the customer always, then realigning the processes, resources and profit formula

in accordance with the new value proposition. It is difficult and can take the makers of decision

away from the safe and secure zones. Be that as it may, there could be dramatic outcomes as well.

Innovative business model would allow the organizations to tap in to an opportunity to find out

new clients with an enhanced new innovative business model that would further modify the

competitive position of the company. It would assist the company to generate new and valuable

ideas to interact with the customer emulated by the designing of transformed or new models

which would fulfill the customer jobs that would need to be completed more efficiently,

profitably and effectively. It would further assist the company to successfully make an entrance to

the evolving markets which would assist them to reconceive the business models that would

further recognize the customer needs within the market quite efficiently and profitably. It would

also help in the creation of new rules, systems, and metrics which would allow the company to

make an implementation of the new business successfully. From the above data, it can be said

that 32% of the respondents agree with this due to the importance of innovation and innovative

model within an organization while 29% partially agreed with this.

The data for certain innovation model is illustrated below:

30

31

Agree Partially Agree Neutral Partially Disagree

Disagree0

5

10

15

20

25

30

35 3229

16

9

14

Certain Model for Innovation

There are several definitions of innovation and it is implementing new things or

enhancing existing things that include more prominent value which is a great thing to initialize

with for everybody in the organization to effectively search out their potential commitments. On

the off chance that people feel that their commitment is valued this turns into an intense

inspiration to turn up for work, as well as to take part in new profitable work. It turns into a more

dynamic environment, not static to work inside and simply endeavor to relate to.

Hypothesis Testing

Following are the hypotheses that would be tested accordingly.

Hypothesis I: Innovation in distribution channels is likely to bring positive effects on company

growth.

31

32

For this hypothesis, the dependent variables are as below:

Dependent Variable I: Your Company had significant revenue from innovative products in the

last 5 years.

Dependent Variable II: Your Company expands on new markets.

Dependent Variable III: Your Company improved its distribution.

Dependent Variable IV: Your Company attracts new talents

The independent variables are as below:

Independent Variable I: Your Company is innovating in Physical distribution

Independent Variable II: Your Company is innovating in distribution channels.

In accordance with the above hypothesis, the following results are obtained:

Statistics

Innovation,

implementation

and reflection to

your company

[Your company

innovating in

distribution

channels]

Results of

innovations Your

company expand

on new markets

Results of

innovations Your

company attract

new talents.

Results of

innovations Your

company had

significant cost

savings from

innovations in last

5 y.

NValid 57 57 57 57

Missing 0 0 0 0

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Mean 3.7544 4.3684 3.8947 3.9298

Median 4.0000 5.0000 4.0000 4.0000

Mode 4.00 5.00 5.00 5.00

Std. Deviation 1.19942 1.04594 1.24906 1.20800

Sum 214.00 249.00 222.00 224.00

Innovation, implementation and reflection to your company [Your company is innovating in

distribution channels]

Frequency Percent Valid Percent Cumulative

Percent

Valid

Disagree 5 8.8 8.8 8.8

Partially disagree 5 8.8 8.8 17.5

Neutral 4 7.0 7.0 24.6

Partially agree 28 49.1 49.1 73.7

Agree 15 26.3 26.3 100.0

Total 57 100.0 100.0

The importance of innovation within the distirbution channels is already mentioned

earlier. It is a true fact that innovation is found to be a procedure for the translation of an 33

34

intervention or an idea into a service or good which would create value or for which the

customers would definitely pay. The distribution channel is basically found to be a lower

end of the value and that innovation in this lower end can be beneficial for the company.

Therefore, there could be an effective transportation coordination. That is the reason that

almost 28 respondents have partially agreed with this while 15 have strongly agreed with

this. We have filtered out the other respondents in order to prove the hypothesis more

effectively. The total number of respondents are assumed to be 57.

Results of innovations Your company expand on new markets


Percent

Valid

Disagree 2 3.5 3.5 3.5


Neutral 6 10.5 10.5 17.5


Agree 37 64.9 64.9 100.0

Total 57 100.0 100.0

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35

From the above table, with the result of innovation in the distribution channel, the

subsequent result due to this is that the company can have the possibility to expand on

new markets. And, that is the reason as to why many of the respondents have agreed with

this statement.

Results of innovations Your company attract new talents.


Percent

Valid

Disagree 5 8.8 8.8 8.8


Neutral 5 8.8 8.8 24.6


Agree 22 38.6 38.6 100.0

Total 57 100.0 100.0

In accordance with the innovation in distribution channels and physical distribution, the

company can attract new talents due to the fact that with the increase in innovation, it

gives rise to digitalization. More multi channel strategies will be established due to which

the company can attract new talents. That is the reason as to why 22 respondents have

strongly agreed while 21 of them have partially agreed.

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36

Results of innovations Your company had significant cost savings from innovations in last 5 y.


Percent

Valid

Disagree 4 7.0 7.0 7.0


Neutral 7 12.3 12.3 26.3


Agree 23 40.4 40.4 100.0

Total 57 100.0 100.0

Innovation in distribution channels can definitely result in cost savings due to the fact that it

would integrate the operations system and certain processes related to distribution to enhance the

performance of the distribution network.

This is further illustrated below:

36

37

37

38

38

39

39

40

In order to prove the fact that innovation in distribution channels can improve the

company’s revenues, the following test is conducted:

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41

TEST BETWEEN SEVERAL DIFFERENT VARIABLE

Tests of Between-Subjects Effects

Dependent Variable: Results of innovations Your company had significant revenue from innovative

products in last 5 y.

Source Type III Sum of

Squares

df Mean Square F Sig.

Corrected Model 12.845a 4 3.211 3.434 .015

Intercept 492.154 1 492.154 526.275 .000

Innovation In Distribution

Channels12.845 4 3.211 3.434 .015

Error 48.629 52 .935

Total 1072.000 57

Corrected Total 61.474 56

a. R Squared = .209 (Adjusted R Squared = .148)

In the above table, the dependent variable is the significant increase in revenue and the

independent variable is found to be the innovation factor in distribution channels. From

the above table, the significance level p is less than 0.05 which indicates that there is a

statistical significant relationship between the innovations in distribution channels and

company’s revenue and that is why, this can be an evidence that the hypothesis 1 is

acceptable. This can be illustrated in a better manner through estimated marginal means

graph which is as below:

41

42

In the above graph, the line for two options partially agree and agree slopes

upwards. This would mean that with the result of innovation, the company enhances its

revenue and therefore, the hypothesis 1 can be acceptable.

If more variables are to be discussed in order to proceed with the hypothesis testing of the

same scenario, then the following results are obtained:

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43


Dependent Variable: Results of innovations Your company expand on new markets


Squares



Intercept 599.237 1 599.237 579.907 .000

Innovation in

distribution channels7.530 4 1.882 1.822 .139

Error 53.733 52 1.033

Total 1149.000 57



In the above table, the p value is somehow higher than significance level i.e. 0.05.

But in accordance with the answers of the questions, the frequency to agree with this statement is

37 respondents which turns in favor of the hypothesis. Therefore, the innovation in distribution

channels results in the company expanding to new markets. This can be further illustrated below

through estimated marginal means graph.

43

44

Another dependent variable i.e. the company attracts new talents due to innovation in distribution

channels can also prove to be quite strong due to the fact that more and more talent is needed to

serve the business and its distribution channels in accordance with multiple distribution strategies

more effectively.

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45


Dependent Variable: Results of innovations Your company attract new talents.


Squares



Intercept 445.454 1 445.454 345.836 .000

Innovating in Distribution

Channels20.390 4 5.097 3.958 .007

Error 66.979 52 1.288

Total 952.000 57



The significance level p is less than 0.05 which indicates that the innovation in distribution

channels and new talents have a statistically significant relationship and that have already been

discussed earlier. This can be made more comprehensive through estimated marginal means

graph which is as below:

45

46

The line slopes upward when it comes to the last option i.e. strongly agree which indicates that

the company attracts new talents since new markets are served and businesses expand themselves

which would result in new recruitments so that business processes can be served effectively and

efficiently.

Therefore, the hypothesis I is acceptable based on the above evidence.

In order to prove the hypothesis more effectively, some other tests are also conducted to test the

validity for accepting the hypothesis. Following tests and outsputs are generated as illustrated

below:

Paired Samples Test

Paired Differences t df Sig. (2-tailed)

Mean Std.

Deviation

Std. Error

Mean

95% Confidence Interval of the

Difference

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47

Lower Upper

Pair 1

SignificantRevenue -

InnovatinginPhysicalDist

ribution

.61682 1.36427 .13189 .35534 .87830 4.677 106 .000

Pair 2

NewMarket -


ribution

.68224 1.42483 .13774 .40915 .95533 4.953 106 .000

Pair 3

ImprovedDistribution -


ribution

.80374 1.20094 .11610 .57356 1.03392 6.923 106 .000

Pair 4

SignificantRevenue -

Innovatingindistributionc

hannels

.28302 1.35755 .13186 .02157 .54447 2.146 105 .034

Pair 5

NewTalent -


ribution

.28037 1.28705 .12442 .03369 .52706 2.253 106 .026

In accordance with the above table, it can be said that with the innovating in physical distribution,

it has a significant influence on the significant revenue of the company, and this is proved

through the Sig. (2-tailed) value since p is less than 0.05 which indicates that there is a statistical

significant relationship between the two and hence, we can reject the null hypothesis that

innovation in distribution channels cannot bring positive effect on the company’s growth. In the

same manner, innovating in physical distributions also has a significant influence on the company

obtaining new markets and resulting in the improved distribution. The same applies for

innovating in distribution channels as well.

The second hypothesis is as below:

H2: Innovation plays a significant role in the large international retail chains.

For this hypothesis, the dependent variables are as below:47

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Dependent Variable I: Local Retail chains are not affected.

The independent variables are as below:

Independent Variable I: Your Company is innovating in distribution channels.

Following results are obtained in order test the validity of the hypothesis.

Descriptive Statistics

Dependent Variable: How innovation and new trends from international retail

chains affect the local/regional retail chains? [Locals retail chains are not

affected]

Innovation, implementation and

reflection to your company

[Your company innovating in

distribution channels]

Mean Std. Deviation N

Disagree 1.7500 1.13818 12

Partially disagree 1.8462 1.06819 13

Neutral 1.7000 1.05935 10

Partially agree 2.5000 1.51911 40

Agree 2.1563 1.46154 32

Total 2.1589 1.38829 107

In the above table, the mean average was quite higher for the option partially agree and strongly

agree as well when contrasted with the other options that were against this statement.


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49

Dependent Variable: How innovation and new trends from international retail chains affect the local/regional retail

chains? [Locals retail chains are not affected]

Source Type III

Sum of

Squares

df Mean

Square

F Sig. Partial Eta

Squared

Noncent.

Parameter

Observed

Powerb

Corrected

Model10.038a 4 2.510 1.318 .268 .049 5.271 .399

Intercept 312.949 1 312.949 164.319 .000 .617 164.319 1.000

Innovatingdistribut

ion channels10.038 4 2.510 1.318 .268 .049 5.271 .399

Error 194.261 102 1.905

Total 703.000 107

Corrected

Total204.299 106


b. Computed using alpha = .05

The above table proves the fact that local retail chains are definitely influenced by innovation in

the distribution channels since the p value is greater than 0.05 i.e. 0.268 which means that there is

no statistical significant relationship between the two and due to this, we can reject the null

hypothesis that innovation in distribution channels does not play a significant role in the large

international retail chains. Henceforth, the hypothesis is acceptable based on the above evidence.

This can further be proved by an estimated marginal means graph which is illustrated below:

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50

The line for the option ‘agree’ slopes downward because the respondents are not in favor of this

statement due to which there is a downward slope for this option. This would mean that local

retail chains that are innovative have an increased efficiency, speedier processes, boosted

productivity and reduction in the investment. Therefore, that is the main reason as to why the line

for option agree has sloped upward.

In order to effectively prove the relevance of this hypothesis, one other test can be conducted

which has the following results as below:

Paired Samples Test

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51

Paired Differences t df Sig. (2-tailed)

Mean Std. Deviation Std. Error Mean 95% Confidence Interval of the

Difference

Lower Upper

Pair 1

Innovatingindistributionchann

els -

localretailchainsnotaffected

1.50943 1.73614 .16863 1.17507 1.84379 8.951 105

In the above table, the p value is less than 0.05 which indicates that we can easily reject the null

hypothesis that innovation in the distribution channels cannot influence the large international

retail chains. This would mean that innovation in the retail chains would foster customer loyalty

and attain growth and sales volume. Therefore, the retail chains have a significant influence

through innovation.

The 3rd hypothesis is as below:

Hypothesis III: Contemporary trends in the FMCG industry require consolidation of local

distributors / wholesalers in order to effectively use innovations successfully applied on major

markets

For this hypothesis, the dependent and independent variable are as below:

Dependent Variable: Local Retail Chains are forced to collaborate/consolidate.

Independent variable: Your Company is innovating in distribution channels.

For proving the validity of this hypothesis, the following results are obtained:


Dependent Variable: How innovation and new trends from international retail chains affect the

local/regional retail chains? [Local retail chains are forced to collaborate/ consolidate]

51

52


Squares



Intercept 924.370 1 924.370 735.641 .000

Innovatingin


Error 128.168 102 1.257

Total 1416.000 107



In the above table, it can be said that the p value is greater than 0.05 i.e. 0.163 which means we

do not reject the null hypothesis i.e. the contemporary trends in the FMCG industry does not

require consolidation of local distributors in order to use innovations effectively and successfully

applied on the major markets. This shows that the in order to sustain the competitiveness and

viability, local retail chains see their own entrepreneurial opportunities and companies

experiment with new ways of doing business. Therefore, it is their choice to collabore or

consolidate and they are not forced as they can perform innovative distribution activities by

themselves as well.

This is further proved through estimated marginal means graph as illustrated below:

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53

The above graph illustrates the fact that many respondents have agreed to the statement that the

local retail chains are forced to cosolidate and coollaborate to use innovation as a single retail

chain. But the fact is that it is a marginal mean which is also combined with the fact that the

company innovates in the distribution channel. However, with the above mentioned explanation,

it can be said that company prefer to practice innovation within their distribution channel and

hence, the local retail chains are not forced to consolidate but if they consolidate then too many

practices can be collaborated which can act as a betterment for the distribution channels as the

markets can be served in one of the best manners.

The 4th hypothesis is as below:

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Hypothesis IV: Innovation and investment in distribution channels in the FMCG industry is one

of the main reasons behind the rapid growth of this industry

For this the dependent variable is as below:

Dependent Variable: Your Company expands on new markets

Dependent Variable: Your Company improved its distribution

The independen variables are as below:

Independent Variable I: Your company always search for new and innvoative distribution

Independent Variable II: In your Company exists team which search for innovations that can be

utilized in the FMCG distribution networks?

Independent Variable III: Your Company is innovating in physical distribution

Independent Variable IV: Your Company is innovating in distribution channels

For this particular hypothesis, the following results are gathered.

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Dependent Variable: Results of innovations Your company expand on new markets


Squares



Intercept 1129.962 1 1129.962 669.933 .000

Innovatingin


Error 172.041 102 1.687

Total 1906.000 107



In the above table, the sig tailed p value is less than 0.05 i.e. 0.015. This indicates that we can

reject the null hypothesis and accept the alternate hypothesis that Innovation and investment in

distribution channels in the FMCG industry is one of the main reasons behind the rapid growth of

this industry. This is quite true since the importance of innovation and the focus of this aspect

within the distribution channels is evolving in FMCG industry already. This has already been

discussed earlier. This can further be made more comprehsive through estimated marginal means

graph. This is illustrated below:

55

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From the above graph, it can be said that the line for the options partially agree and agree slopes

upward which means that with the innovation in the distribution in channels, the company

expands on new markets. This is due to the fact that innovation in severa functions of the

distribution channels like transport coordination and assortment will enhance the effectiveness of

distribution channels and hence, the company can have the capacity to get attracted to new

markets and implement business expansion. The innovation in distribution channels is quite

imperative for improving the performance of the distribution channel and its effectiveness which

would immediately enhance the firm performance. That is the reason, many respondents have

affirmed to this statement and the line for the option agree slopes upward than others. In order to

test some other dependent variables for this hypothesis, one other test is conducted where the

results are demonstrated below:

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Dependent Variable: Results of innovations Your company improved it's distribution


Squares



Intercept 1139.000 1 1139.000 1249.415 .000

Innovating distribution

channels48.435 4 12.109 13.282 .000

Error 92.986 102 .912

Total 1959.000 107



It is a true fact that with the innovation in distribution channels, the company will subsequently

improve its distribution as it will become a key driver for better competitiveness of the firms.

This is because innovation is connected with the performance of firms and this can be enhanced

effectively when the firms will improve its distribution. This is also illustrated from the above

table since the P value is less than 0.05 i.e. 0.000. Therefore, through this, the hypothesis can still

be accepted. This is further illustrated through estimated marginal means which is demonstrated

below:

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The estimated marginal means for the options partially agree and agree are quite higher than the

other options. This clearly defines the importance of innovation as with the innovation in

distribution channels, the companies have improves their distribution which has resulted in a

competitive advantage and effective distribution of the finished products.

The 5th Hypothesis for this research is as below:

Hypothesis V: Today innovation has become the vital component of any international

FMCG producer

For this the dependent and Indpendent variables are as below:

Dependent Variable I: Your Company develop and implement innovations from inside

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Independent Variable I: Your Company is a FMCG manufacturer.

In order to test this hypothesis, the following results are obtained.


Dependent Variable: Innovation, implementation and reflection to your company [Your company

develop and implement innovations from inside (by its self)]


Squares



Intercept 188.350 1 188.350 136.660 .000

FMCG manufacturer 24.336 4 T6.084 4.414 .002

Error 140.580 102 1.378

Total 1901.000 107



It is a true fact that within the FMCG sector, they are always on the verge for the great

innovation. This is due to the fact that technology continues to advance and the modern

life accelerates. Therefore, people expect the products to be advanced like this. The

smarrt working and innovative thinking has resulted in the success for FMCGs. This is

also proved from the above table when the p value is less than 0.05 and hence, it would

mean that if the company is a FMCG manufacturer, then the company would develop and

implement innovations from inside by itself. Therefore, there is a statistical significant

relationship between the two. This is further illustrated through the estimated marginal

means graph as illustrated below:

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However, the line for the option agree slopes downward but is still higher than the other

options on an average which means that if the company is a FMCG manufacturer, then

the company can make an implementation of the innovation from itself. This has already

been mentioned earlier for the FMCG sector.

The 6th hypothesis for this research is as below:

Hypothesis VI: Growing innovation and international FMCG producers pose enhanced

threat to local distributor companies and (small) local FMCG producers in south-east

Europe.

The dependent and indepent variables for this hypothesis are as below:

Dependent Variable I: Local FMCG manufacturers posed as a threat for the independent

existence60

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Independent Variable I: Your Company is an FMCG manufacturer.

Independent Variable II: Your Company develop and implement innovations from inside

(by its self)

For this hypothesis testing, the following outputs are obtained.


Dependent Variable: How Innovation and new trends from large multinational manufacturers affect the

local/regional FMCG producers? [Local FMCG manufacturers posed as a threat for it's independent

existence]


Squares



Intercept 174.422 1 174.422 145.875 .000

Innovation by itself (1) 9.771 4 2.443 2.043 .095

FMCG (2) 7.978 4 1.994 1.668 .164

1* 2 6.173 7 .882 .738 .641

Error 108.808 91 1.196

Total 1384.000 107



From the above table, it can be said that it doesn’t matter if the company is an FMCG

manufaturer or the company develops and implements innovation from itself, the local

FMCG manufacturers would never pose as a threat for its independent existence. As the p

value for all of them are greater than 0.05 i.e. 0.095 and 0.164 respectively. However, 61

62

when both of the factors are combined, then still the p value is lesser than 0.05 which

proves this fact. Therefore, the investment in innovation is of a practical value for the

companies since innovation has a several numerous benefits like the companies that

invest in innovation, go towards the product development and that their capability allows

them to effeciently set them apart from the other companies which permits them to

develop new products in an effective manner. This is illustrated below through estimated

marginal means graph.

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The estimated marginal means somehow contradicts with the above explanations but on an

average the line for the option partially agree and agree slopes upward and that is due to the

combined response in accordance with the statement that the company develops and implements

innovations from inside by itself. For the other dependent variable, the graph is illustrated below:

Just because the company is an FMCG manufacturer, it does not mean that it would pose as a

threat for its independent existence. This is because the companies that make innovation their

significant purpose can definitely position themselves to make profits hugely and then stand out

in the crowd dominantly and obtain competitive advantage. Therefore, the hypothesis will be

rejected.

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References

Barge-Gil, A. (2013). Open Strategies and Innovation Performance. Industry & Innovation, 20(7),

585-610. http://dx.doi.org/10.1080/13662716.2013.849455

Eklund, M., & Waluszewski, A. (2015). The diversity of systemic innovation thinking. IMP

Journal,9(1), 26-45. http://dx.doi.org/10.1108/imp-02-2015-0006

Training delivers for distribution company. (2010). Industrial And Commercial Training, 42(3).

http://dx.doi.org/10.1108/ict.2010.03742cab.003

Vaile, R. (2010). Productivity in Distribution. Journal Of Marketing, 13(3), 385.

http://dx.doi.org/10.2307/1248130

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