Interdepartmental Seminar

The Impact of Marketing Innovation on Firm Performance: A Cross-Functional Perspective

 

About Rabikar Chatterjee:
Profile
Rabikar Chatterjee joined the Katz faculty in 1996, after serving on the faculties of the University Of Michigan Business School and Purdue University's Krannert Graduate School of Management. He has also been a visiting professor at the Australian Graduate School of Management in Sydney, Australia, the Indian School of Business, Hyderabad, and the Korea University Business School, Seoul. Prior to his career in academia, he had eight years of industry experience in engineering, project management, sales management, marketing, and strategic planning positions.
Chatterjee's teaching, research, and consulting interests are in the area of customer-focused development and management of products and services, particularly those with a technology orientation. More specifically, his research has focused on models of market response to new products, with applications in forecasting, product design, and pricing. He is also interested in methods for measuring and representing customers' perceptions of and preferences for competing products (particularly in situations where the customers may be uncertain about the alternatives). His articles have appeared in Management Science, the Journal of Marketing Research, Psychometrika, and several other journals. He is a member of the Editorial Board of Marketing Science and was (until 2008) an associate editor in the marketing department of Management Science. He has also served on numerous PhD dissertation committees, several as committee chair.
Chatterjee is a member of the American Marketing Association and the Institute for Operations Research and Management Sciences (INFORMS). In addition to undergraduate and graduate classes, he has taught in a variety of executive programs. He was the faculty director for the Marketing in Emerging Economies course designed by the William Davidson Institute at the University of Michigan for Whirlpool Corporation. He has also served as faculty on the Business Program for the Vietnam National Coal Corporation in Hanoi. At the Katz School, he has taught in the Executive MBA program (in Pittsburgh; Bratislava, Slovakia; and Sao Paulo, Brazil) and in various non-degree programs. In addition, he has consulted with companies on product development and management issues, and also conducted in-company workshops on product development and management. He has also consulted with and offered custom executive training sessions to various companies including DBT, Fiserve, PNC Bank, and US West (now Qwest), and Westinghouse, primarily on product development and management issues.
Abstract
 
This research (currently in progress) focuses on identifying innovative marketing effort and then analyzing its impact (along with R&D and other key variables) on the firm’s innovation and financial performance. We define innovative marketing as the implementation of a new marketing method which the firm has not used before, involving significant changes in product design or packaging, product placement, product promotion, and/or pricing, and which must be part of a new marketing concept or strategy.
 
Our conceptual model assumes that firms make the decision to allocate available resources to activities that lead directly to or support the development and commercialization of innovative products and services. Successful innovation then leads to superior financial performance, which in turn generates resources that can be reinvested in activities supporting innovation. While we focus primarily on R&D and innovative marketing effort, we also consider the operations (process innovation) and tradition marketing as supporting product innovation. Our research employs a unique data set based on the Community Innovation Surveys (CIS) administered within the European Union across member states. The survey, administered first in 1992 and periodically thereafter, has undergone substantial pre-testing and piloting for interpretability, reliability, and validity. The data for this study are drawn from the Mannheim Innovation Panel, which is the German contribution to CIS.
We develop our empirical model as a system of equations representing the resource allocation (investment) decisions and the performance models, estimated simultaneously using three stage least squares. We discuss our estimation of a reduced model that examines the relationship between R&D and innovative marketing effort (and other variables including traditional marketing and process innovation) on innovation performance, operationalized by two separate measures. The first considers sales of new-to-the-market (major) innovation; the second considers sales of new-to-the-firm (but not to the market) products and services (both as a fraction of total sales). While the results are preliminary and illustrative at this stage, we find that the interaction between R&D and innovative marketing effort has a negative impact on performance, for both types of innovations. This suggests that a balanced approach that emphasizes both R&D and innovative marketing may not be appropriate for most firms.
 
The empirical analysis is currently being expanded to include measures of long-and short-term financial performance as the final outcomes of interest, with innovation performance serving as a means to an end.
 
 

Tuesday, Feb. 15, 2011 from 9:30 a.m. to 11 a.m.
Peter B. Lewis Building, Rm 258
11119 Bellflower Road
Cleveland, OH 44106-7235
United States
Speaker(s): Prof. Rabikar Chatterjee - Univ of Pittsburgh - Katz Graduate School of Business

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