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Junk your linear R&D
3 PROD INNOV lQ90;1:7c88
WAG
4. The “least dependent person” has more power than hislher counterpart and usually prevails in the brand request. Whichever party (man-
ufacturer or distributor) is least dependent on the other will win the branding battle. The weaker party has to add the distributor’s brand to gain more market power. 5. The number of a manufacturer’s brands in a sings?emarket is a function of the degree of market heterogeneity wi,tk% the country. Some coun-
tries have great heterogeneity and others very little. Some countries also have laws that rq@re multiple brands, for example, Spain, with 2: law against comparative advertising. 6. Standardized international branding offers more market eficiency than localized branding does. It does if there are global economies of
scale; sometimes there are not. 7. The applicability of standardized
international branding is moderated by legai consideratiorx. Sometimes local countries tax intema-
tional brands, other times the language bans certain words and still other times there are pricing restrictions. 8. The suitability of local branding is a function of the degree of market and consumer heterogeneity across markets. The greater the similarity of
countries in the buying and using of the products in a given category, the more international branding there will be. The article concludes with a discussion of the international legal aspects of branding. Much international lavv is based on US law, but there are differences marketers must note. Junk Your Linear R&D, Donald N. Frey, Research Technology Management (May-June 1989), pp. 7-8 This author, formerly CEO of Bell & Howell, feels that a new concept of R&D is needed. Acquiring proprietary research findings as a base for growth is no longer valid. There will be exceptions in some industries, but for most teshnolo-
ABsrRAcrs
gies have matured to the point that R&D departments cannot comer markets. “Not invented here” must die, and most firms will be working out of technology pools rather than their own controlled inventories of technology. Inventions will more and more be market driven. Unfortunately, many managements weaken their own R&D capability by how they respond to threats of take-over, global restructuring, etc. They reorient their R&D to the short term. Consequently, another force leading to market-driven product innovation is the increasing inability of corporations to develop longerterm technological breakthroughs. This trend to market-driven innovation shows up in the demise of many corporate research labs. The author claims that after Bell & Howell did this, their next decade of successful innovations was “a number” rather than the zero of the previous decade. Central R&D is too far from the marketplace. R&D shows several distinct trends at the moment. One is the popular simultaneous and parallel development approach. The author calls it multifunctional (not multidisciplinary, as used in multiple sciences). The old linear model is far too slow and fraught with organizational barriers. Marketing must be in the act from the very beginning. The second characteristic of the moment is for ad hoc or changing R&D organization forms. There should be teams for specific innovations. This leaves central R&D facilities to serve as technical resources responding to team needs. They are reactive, not proactive. The author also sees a restructuring of the very concept of R&D stemming from the services sector. There, the traditional manufacturing concept of R&D is not appropriate, yet there are major technological issues. They relate to information generation, processing, transmission and storage. Again, the nature of these businesses is such that the R&D work must be fully integrated i going operations, not isolated or centralized.
WAG
4. The “least dependent person” has more power than hislher counterpart and usually prevails in the brand request. Whichever party (man-
ufacturer or distributor) is least dependent on the other will win the branding battle. The weaker party has to add the distributor’s brand to gain more market power. 5. The number of a manufacturer’s brands in a sings?emarket is a function of the degree of market heterogeneity wi,tk% the country. Some coun-
tries have great heterogeneity and others very little. Some countries also have laws that rq@re multiple brands, for example, Spain, with 2: law against comparative advertising. 6. Standardized international branding offers more market eficiency than localized branding does. It does if there are global economies of
scale; sometimes there are not. 7. The applicability of standardized
international branding is moderated by legai consideratiorx. Sometimes local countries tax intema-
tional brands, other times the language bans certain words and still other times there are pricing restrictions. 8. The suitability of local branding is a function of the degree of market and consumer heterogeneity across markets. The greater the similarity of
countries in the buying and using of the products in a given category, the more international branding there will be. The article concludes with a discussion of the international legal aspects of branding. Much international lavv is based on US law, but there are differences marketers must note. Junk Your Linear R&D, Donald N. Frey, Research Technology Management (May-June 1989), pp. 7-8 This author, formerly CEO of Bell & Howell, feels that a new concept of R&D is needed. Acquiring proprietary research findings as a base for growth is no longer valid. There will be exceptions in some industries, but for most teshnolo-
ABsrRAcrs
gies have matured to the point that R&D departments cannot comer markets. “Not invented here” must die, and most firms will be working out of technology pools rather than their own controlled inventories of technology. Inventions will more and more be market driven. Unfortunately, many managements weaken their own R&D capability by how they respond to threats of take-over, global restructuring, etc. They reorient their R&D to the short term. Consequently, another force leading to market-driven product innovation is the increasing inability of corporations to develop longerterm technological breakthroughs. This trend to market-driven innovation shows up in the demise of many corporate research labs. The author claims that after Bell & Howell did this, their next decade of successful innovations was “a number” rather than the zero of the previous decade. Central R&D is too far from the marketplace. R&D shows several distinct trends at the moment. One is the popular simultaneous and parallel development approach. The author calls it multifunctional (not multidisciplinary, as used in multiple sciences). The old linear model is far too slow and fraught with organizational barriers. Marketing must be in the act from the very beginning. The second characteristic of the moment is for ad hoc or changing R&D organization forms. There should be teams for specific innovations. This leaves central R&D facilities to serve as technical resources responding to team needs. They are reactive, not proactive. The author also sees a restructuring of the very concept of R&D stemming from the services sector. There, the traditional manufacturing concept of R&D is not appropriate, yet there are major technological issues. They relate to information generation, processing, transmission and storage. Again, the nature of these businesses is such that the R&D work must be fully integrated i going operations, not isolated or centralized.