Sales, Marketing, and Research-and-Development Cooperation Across New Product Development Stages: Implications for Success
Author: Ernst, Holger; Hoyer, Wayne D.; Rübsaamen, Carsten
Title: Sales, Marketing, and Research-and-Development Cooperation Across New Product Development Stages: Implications for Success
Year of Publication: 2010
Journal: Journal of Marketing
Prior research has identified the integration of marketing with research and development (R&D) as a key success factor for new product development (NPD). However, prior work has not distinguished the sales and marketing functions, even though they are distinctive departments within an organization. Therefore, the authors extend prior research and examine the effect of cross-functional cooperation among sales, marketing, and R&D on NPD performance across multiple stages of the NPD process. The authors use multiple-informant data from 424 sales, marketing, and R&D managers as well as project leaders of 106 NPD projects to test several hypotheses. The results show that the cooperation between sales and R&D and between sales and marketing has a significant, positive effect on overall NPD project performance beyond marketing–R&D cooperation. The authors also find that the effect of cross-functional cooperation among sales, marketing, and R&D on overall NPD project performance varies across stages of the NPD process. More specifically, the authors find that sales–R&D cooperation in the concept and product development stages is critical for greater new product success. Sales–marketing cooperation is important in the concept development stage but has surprisingly less impact in the implementation stage.
As organizations grow they change their organizational structure. Although companies like Apple brag they are still run as a startup, the fragmentation of such big organization, in smaller functional units, is inevitable.
With this fragmentation much knowledge gets lost between floors, units or departments. For instance, when a sales operator gets some feedback from a client regarding the product specifications, it's not normal to pass that information to the Research & Development (R&D) department, because this departments are thought to be totally independent.
The authors of this article look deep into the Sales, Marketing and R&D departments, and suggest that cooperation between these departments can be highly successful. They defend that by fostering cooperation between these departments every single idea, bright or not, can be captured and considered in the product cycle.
The sales department has close contact to costumer, much feedback regarding the product is given by clients in this department activities. Close cooperation with the marketing department can be beneficial because these department knows what moves the clients to the stores, what makes them buy the product and what the product needs to have differently from the competitors. Finalizing, the R&D is responsible for the product development and can greatly benefit from feedback, both from the marketing and sales department.
Although they focus only on the new product development cycle this implications can be transposed to virtually almost any process inside of a company that affects more than one department.