R&D, Innovation and Marketing

GROUP R2 SARVESH GAURAV RAMAN GUPTA VIPIN VINOD RASHMI RAI JAY SAINI

A Model for studying R & D Marketing interface in the product innovation process
AUTHORS Ashok K Gupta Asst Professor of Marketing Ohio University S P Raj Associate Professor School of Management Syracuse University David Wilemon Professor - School of Management Syracuse University JOURNAL, ISSUE, PAGE NUMBER JOURNAL OF MARKETING Apr 1986, 50, 2; ABI/ INFORM GLOBAL; pg 7

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OBJECTIVE of RESEARCH
Prime Objective Conceptual framework for study of R & D Marketing integration in innovation process. To Provide an Understanding of 3 Main Questions 1. How Much integration is required? Do some firms require greater integration? What factors affect degree of integration between marketing and R &D? 2. How Much integration is achieved? What factors affect the degree of integration achieved ? How senior management influence these variables to achieve a desired level of integration. 3. How does integration affect innovation success? To what level does R&D marketing contribute to innovation success?

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EXPLANATION
PERCEIVED ORGANIZATIONAL ENVIRONMENTAL STRATEGIES UNCERTAINTY PROSPECTOR ANALYZER DEFENDER REACTOR COMPETITION CONSUMER REQUIREMENTS TECHNOLOGICAL CHANGES REGULATORY CONSTRAINTS ORGANIZATIONAL FACTORS STRUCTURAL Formalization Centralization Participative Organizing new product activities SENIOR MANAGEMENT Values integration Encourages risk taking Reward systems Tolerates failure R&D MARKETING Operating characteristic
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INDIVIDUAL FACTORS SOCIOCULTURAL Difference b/w R&D and Marketing Manager Professional/bur eaucratic orientation Tolerance of ambiguity Time orientation Types of products/projects preferred.

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DETRIMINENTS FOR HOW MUCH INTEGRATION IS REQUIRED

PROSPECTORS
First with new products & technologies Not all efforts prove to be profitable Responds rapidly to early signal concerning areas of opportunity

ANALYZERS
Carefully monitors competitors Comes up with more innovative , more cost efficient product

DEFENDERS
Maintain a secure niche in relatively stable product Protects its domain by offering higher quality, superior services, lower quality etc.

NEED for R&D Marketing Integration

REACTORS
Not aggressive Responds under environmental pressure.
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PROSPECTORS
First with new products and Technologies
Garnier Fructis Shampoo + Oil MNC adopting to Indian Market Plays on the traditional habit of Indians oiling their hair. PROBLEM

Indians traditionally oil their hair before shampooing it.

SOLUTION A Product that combines both.

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PROSPECTORS
First with new products and Technologies
Goodknight advance Activ Plus Targeted at the tendency of a customer to increase level of repellant release for effective action. PROBLEM

Release of repellent not sufficient to combat mosquitoes

SOLUTION A gadget that allows consumers to increase the level of repellent release.

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PROSPECTORS
First with new products and Technologies
Dabur Oxylife Bleach A prospective patented formula which claims to release oxygen into the skin ; target : 20,000 beauty parlors across the country PROBLEM Skin loses glow after bleaching SOLUTION A bleach that releases oxygen and restores glow.

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PROSPECTORS
First with new products and Technologies
Zydus Cadilla A first time venture by the company into FMCG arena PERFETTI VAN MELLE A first time venture by the company into the salty snacks category

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ANALYZERS
Carefully monitors competitors
HUL & Loreal Copied Emami for launching a new fairness cream exclusively for men

HUL Vaseline- men fairness cream

Emami Men fairness cream

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LOREAL- Garnier Men fairness cream

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ANALYZERS
Carefully monitors competitors
Coca Cola & Parle Copied Pepsi lemon drink Nimbooz Geetu Verma Executive Director Innovation at Pepsico India You cant say its easier for an MNC to innovate. An MNC has to develop lot of local innovations

LMN The Emergency Lemon Refresher

PEPSI Nimbooz Ekdum Asli Indian

Coke Nimbu Fresh Bilkul Ghar Jaisa

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DETRIMINENTS FOR HOW MUCH INTEGRATION IS REQUIRED

Lower degree of formalization Lower concentration of power

Greater Employee Participation

More Senior Mgmt encourages risk taking & Innovation More R & D & Marketing jointly rewarded Greater Degree of integration b/w R&D Marketing

Formal need for R & D Market Integration

More Harmonious R & D Market Integration Similarity b/w R&D and Market Mgrs wrt their professional bureaucratic orientation

Similarity regarding perspectives on time

Similarity regarding types of project preferred

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Organizational Factor - SENIOR MANAGEMENT Encourages Innovation

Nadia Chauhan Joint Managing Director Parle Agro No one in my company says lets do this because X is doing it

Hippo : wheat based salty snack that is unlike any branded snack seen in India

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Organizational Factor - SENIOR MANAGEMENT Values Integration

Dabur Flavored Chyawanprash Orange and Mango flavor

Praveen Jaipuriar AGM Marketing -Dabur Launch of flavored Chyawanprash helped us bring back young adults on our consumption chart

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Organizational Factor Integration R&D and Marketing

GLAXOSMITHKLINE CONSUMER HEALTHCARE Launch of Horlicks for women Junior Horlicks biscuits
Increase of market share 25 % contribution by Horlicks for women to the Rs 1600 crore Horlicks brand

Subhajit Sen MD GSKCH

We are coming out with product innovations which will be healthy choices backed by scientific research

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ORGANISATIONAL FACTORS ACQUISITION

Companies acquire to create balance between formalization and centralization.
Reckitt Benckiser India known for its innovations and new products acquired Paras Pharmaceuticals best known for its pain reliever Moov for Rs 3260 crore.

Chander Mohan Sethi Chairman Reckitt Benckiser India Reckitts Innovations can build on the success Paras Enjoys
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PERCEIVED ENVIRONMENTAL UNCERTAINTY

CONSUMER REQUIREMENTS + R & D + MARKETING = INTEGRATION Maricos Parachute Hot Oil Borne in a focus group meeting b/w R&D and Marketing Consumers faced the problem of oil congealing in winters

PROBLEM Coconut hair oil congeals in winter and cannot be extracted from the bottle.
SOLUTION Unique mix of oil that does not congeal and has warming properties.

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SENIOR MANAGEMENT ABILITY TO TAKE RISK

Not every product succeed Maricos Debut at a salty snack Saffola Zest had to be withdrawn within a year of its launch . Quick Entry and Quick Exit Companys should recall their product lines and variants that do not perform quickly. Banoja Acharaya V P BASES India Market Research firm Contribution of innovation to companys top line ranges b/w 0.1 to 20 %.

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CONCLUSION

Firms Strategy and its perceived Environmental uncertainty will influence the extent of R&D Marketing integration the company will ideally require. Framework developed in the research article has implications for organizational design. Framework highlights the actor involved in new product development namely
Senior Management R&D Marketing
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Thank You

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