Integrating Marketing and R&D: Barriers and Opportunities
New product development is critical to long-term profitability in many industries today. Yet in large corporations R&D and marketing activities are typically isolated from one another, with the result that knowledge of customers and competitors is rarely combined with knowledge of technologies. The firm's ability to develop and produce successful new products suffers.
Propelled by intense competitive pressures, many firms are now trying to foster greater cooperation and communication between marketing and R&D. While research suggests that bringing the two functions closer together improves new product success, the barriers to such integration are formidable. In this commentary we explore the challenges of integrating marketing and R&D, with the purpose of advancing both research and practice. Our objectives are to better understand how cross-functional integration affects product development, to help firms understand how integration is best achieved, and to propose a framework for future research.
Directions for Future Study and Decision Making
We first look at studies showing that cross-functional cooperation enhances new product success and then examine the interpersonal, physical, and organizational barriers that hinder needed cooperation. As our discussion shows, research to date has emphasized integration at the firm or division level. But integration begins with the interactions that take place between marketers and engineers on individual projects; thus we propose a framework for organizing future study of marketing and R&D relationships at the project level.
Our framework describes different techniques that managers are now using to achieve better integration: relocation and physical facilities design; personnel movement between functions; informal cross-functional networks; new organizational structures, such as coordinating groups, matrix organizations, and project teams; incentive and reward systems; and formal management processes, such as phase review, Stage Gate, PACE, and Quality Function Deployment. For each technique we summarize research to date and propose hypotheses for future research.
In addition to opening up new avenues for research, this discussion has important implications for management practice. Not all integration techniques are equally effective across situations. We describe how the different techniques work, which barriers they overcome, and what they can and cannot accomplish. Managers can use this information to help them choose the options that are best for their organizations, given their particular corporate culture, strategies, and goals.
Abbie Griffin is Associate Professor of Marketing and Production Management, University of Chicago. John R. Hauser is Kirin Professor of Marketing, Sloan School of Management, Massachusetts Institute of Technology.
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