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Marketing Activities to Support ‘Moderately Novel’ Product Innovation:

Insights from the Chemical Industry

Armand Smits, Geert Vissers, Ben Dankbaar

Journal of Creativity and Innovation Management 2015 (forthcoming)

Scholars often follow a contingency approach to study which marketing activities are suitable for a

particular type of product innovation project, thereby making a distinction between incremental and

radical innovation only. ‘Moderately novel’ projects, which have intermediate levels of newness, have

therefore not been given due attention. This paper focuses on market intelligence generation and the

creation of cross-functional linkages as marketing activities that are important in the context of moderately

novel product innovation. In addition, the organizational position of the marketers involved in these

activities is dealt with. Based on the analysis of four successful projects in the chemical industry, we

argue, firstly, that moderately novel innovation projects have their own particular sets of marketing

practices and, secondly, that differences exist between projects aiming at a new market segment and

projects in which novelty is not related to market segment but to other market dimensions. These

differences are especially salient in early project phases. These findings are pertinent to research on the

role of marketers in product innovation, and to the study of organizational ambidexterity.

Introduction

Product innovation is a core business process that benefits from good marketers and well executed

marketing activities (Rust & Moorman, 1999; Ramaswami, Srivastava & Bhargava, 2009). Good

marketers have the specialized skills and capabilities to represent the ‘voice of the customer’ (Verhoef &

Leeflang, 2009) and foster a market orientation in product innovation (Rust & Moorman, 1999). Such a

market orientation, in turn, enhances innovation performance (Kirca, Jayachandran & Bearden, 2005).

Many studies of the role of marketing in innovation projects almost routinely make a distinction between

incremental and radical innovation, under the assumption that different kinds of innovation require

different organizational environments, different managerial capabilities and different marketing activities

(see, e.g., Olson, Walker & Ruekert 1995; O’Connor, 1998; Slater, Mohr & Sengupta, 2014).

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However, juxtaposing radical and incremental innovation means that innovation projects with

intermediate levels of newness are readily ignored. In such projects, which are quite common, knowledge

that is available within the firm is used to expand the product range and enter new territory. They can be

considered a valuable route to innovation because they have greater renewal potential than incremental

projects and entail less risk than radical projects. We will refer to such projects as ‘moderately novel’.

Although we acknowledge the increase in scholarly attention for the management of moderately novel

new product development (NPD) projects (Markham & Lee, 2013), we still know little about the role of

marketers in these projects. This lack of knowledge motivated our study. We explore what marketers

actually do in moderately novel projects, and we compare our results with marketing activities as already

described in the innovation literature. We adopt a multiple case study approach (Eisenhardt, 1989) and

apply qualitative research procedures, which are appropriate for pattern identification and theory

development in nascent areas of inquiry (Edmondson & McManus, 2007). Specifically, we study four

projects in different chemical firms. All projects are situated in-between incremental and radical

innovation, but they differ in terms of novelty of the market to the firm. For each project we have

characterized marketing practices by looking at two categories of marketing activities and at the position

of marketers in the organization.

This paper mainly contributes to the literature on the role of marketers in product innovation which is still

understudied (Griffin et al., 2013). It brings together prior literature on marketing activities from different

strands of research and extends this literature to a project category that thus far has not been given due

attention. We find that moderately novel innovation projects have their own particular sets of marketing

practices. We also report noteworthy differences between moderately novel projects aiming at a new

market segment and projects in which novelty was not related to market segment but to other market

dimensions, especially for the early project phases. In the following sections we provide a theoretical

background, detail our methods and report our findings. We discuss the implications of our work in the

concluding section.

Theoretical Background

Innovation projects benefit from the presence of marketing specialists. When R&D staff assume a

marketing role, they tend to overemphasize product functions and pay relatively little attention to the size

of the market and the profit potential of the new product (Dougherty, 1992; Veryzer, 2005). Specialized

marketers infuse a market orientation in the NPD process by generating market intelligence and promoting

its dissemination and use through the creation of cross-functional linkages (Ramaswami, Srivastava &

Bhargava, 2009; Griffin et al., 2013). Marketing practices in ‘moderately novel’ innovation projects will

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be discussed in terms of these two activities. To these we add the organizational position of marketers:

detached from the main organization (and able to spend all their effort on the innovation project) or

integrated in the main organization (and having to divide attention between different tasks). This addition

is significant because the organizational position of NPD project members determines, at least partly, the

way innovation activities are performed, and NPD outcomes (Tushman et al., 2010).

Studies of marketing activities in product innovation often rely on a dichotomous distinction between

radical and incremental innovation projects. Incremental projects involve ‘exploitative’ activities and

focus on the improvement of existing products for existing markets, while radical projects entail

‘exploratory’ activities, move beyond prevailing product/market combinations and focus on new

organizational knowledge. Following a ‘contingency approach’, various authors (Leifer et al., 2000;

Tushman et al., 2010) have argued that these two types of innovation projects require different

organizational contexts and activities. We will follow this approach, focusing on the two sub-activities

described above and the organizational position of marketers.

Generating Market Intelligence

Different types of innovation projects rely on different types of market intelligence, which implies the use

of different market research techniques (O’Connor, 1998). For incremental innovation, a firm’s

understanding of the market must be updated, and information has to be collected about changes in

familiar needs of familiar customers. As reference products exist, customers are able to express their needs

and make suggestions, which can be tapped through traditional techniques such as focus groups, customer

interviews and surveys (Slater & Narver, 1998). Radical innovation requires other marketing techniques

because future needs are often latent (Leonard, 1995). Customers find it difficult to see what solutions a

new technology might offer, and uncovering future needs requires experiential methods such as the lead

user approach (von Hippel, 1986; Faullant et al., 2012), ethnographic market research (Goffin et al., 2012)

and prototype testing along the innovation trajectory (Sandmeier, Morisson & Gassmann, 2010).

Creating Cross-Functional Linkages

Different mechanisms are available to create collaborative cross-functional linkages. Organization theory

traditionally positions these mechanisms along a continuum that ranges from mechanistic approaches,

characterized by cross-functional integration by senior managers, to participative or organic approaches,

characterized by cross-functional teams and joint decision-making (e.g., Galbraith, 1973). A recurrent

finding is that the use of organic integration mechanisms is more appropriate for radical innovation

(Olson, Walker & Ruekert, 1995; De Visser et al., 2010). An important reason is uncertainty. When a firm

and its potential customers are unfamiliar with each other and customers have little experience with a new

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product concept, the functional tasks involved in product innovation are more uncertain than in the case of

modification of existing products. As the uncertainty of product development increases, so does the

interdependence of different functional specialists involved in the project, making organic integration

approaches more effective than mechanistic ones. In contrast, incremental product innovation, in which

there is less cross-functional interdependence, benefits from the use of mechanistic integration

approaches, which increase efficiency without losing effectiveness.

Position in the Organization

The position of marketers in the organization may vary. While some are involved in a range of business

processes, others can focus all their attention on a single NPD project. Having marketing generalists may

hold marketing costs down (Olson, Slater & Hult, 2005) and may lead to co-ordination benefits because of

interdependencies between different marketing-related business processes (Ramaswami, Srivastava &

Bhargava, 2009). On the other hand, when different tasks have different time-frames and routines, and

require different sets of incentives, competences and culture, it may be difficult for marketers to combine

them (Ramaswami, Srivastava & Bhargava, 2009; Kaupilla, Rajala & Iyrämä, 2010). Here again, the

difference between incremental and radical product innovation is relevant.

Marketing activities for incremental product innovation are often more similar to marketing tasks in other

firm processes, such as supply chain management, than marketing tasks for radical product innovation,

and therefore easier to combine. Combining routine and non-routine marketing activities, in contrast, is

very difficult because it requires marketers to work in different ‘thought worlds’ (Dougherty, 1992). To

cope with this challenge, the ambidexterity literature has advocated organizational designs that support a

combination of contrasting tasks in a single organization (Van Looy, Martens & Debackere, 2005;

Tushman et al., 2010). Within these organizations marketing tasks for incremental innovation, which are

routine, are performed by marketers who often are generalists and highly integrated in the main

organization. Marketing tasks for radical product innovation, in contrast, are performed by marketers who

are structurally separated from the main organization, working in small multidisciplinary subunits or

projects that are decentralized, flexible, and focused on creativity and innovation (Ben Mahmoud-Jouini &

Charue-Duboc, 2008).

‘Moderately Novel’ Innovation Projects

While most work on marketing activities in NPD relies on a dichotomous classification of innovation,

some studies show that many innovation projects are in-between incremental and radical innovation.

Barczak et al. (2009) find that ‘additions to existing product lines’, which fall in-between incremental and

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radical innovation, are a large part of firms’ innovation portfolios. Garcia and Calantone (2002) point out

that a third category is necessary to cover innovation projects in-between incremental and radical ones.

For our study of moderately novel innovation projects, a definition of newness is needed that replaces the

general term ‘market’ with more detailed dimensions. With regard to industrial markets, the innovation

literature offers ‘market segment’, ‘application’ and ‘customer’ as possible dimensions (Abernathy &

Clark, 1985). Market segment refers to customers with some common characteristic relevant in explaining

their response to a particular new product (Wind & Cardozo, 1974). Application denotes the new

product’s use (how, where, when) and the customer need that is fulfilled.

Customer refers to the particular customer, or the decision-making unit that is targeted with a

‘customized’ product adapted to this customer’s requirements. Comparable dimensions have been

proposed in the market orientation literature (Kohli & Jaworski, 1990), which distinguishes ‘industry’

information from ‘needs and wants’ information and ‘customer’ information as necessary market

information in NPD (Zahay, Griffin & Fredericks, 2004; Veldhuizen, Hultink & Griffin, 2006). Thus,

moderately novel innovation projects combine newness and familiarity regarding the market segment,

application and customer dimensions. Such projects may target new applications in familiar market

segments, but they may also focus on new applications in newly defined market segments that include

existing customers.

Firms’ innovation programs often contain projects with different levels of novelty. The management of

moderately novel innovation projects has begun to be explored (Markham & Lee, 2013) but knowledge

about such projects remains to be incorporated in the study of marketing activities. This study explores the

range of marketing activities and their interplay in moderately novel innovation projects with different

combinations of newness and familiarity in the dimensions market segment, application and customer.

Method

We follow a multiple case study strategy, investigating four projects in the chemical industry using

qualitative methods. Our number of cases falls within the range that Eisenhardt (1989) suggests for theory

building. Qualitative research facilitates the study of complex social processes and may show how these

processes unfold over time (Langley, 1999), and fits our purpose of extending theory (Edmondson &

McManus, 2007). The choice of a single industry limits empirical generalization of results but reduces

problems that may arise from industrial heterogeneity. The chemical industry is a fitting domain of study

because in recent years many chemical firms shifted from high volume production towards high added

value applications, which increased the need for product innovation and marketing. The firms in this study

have made such a shift. Each has a significant presence in the Netherlands, Belgium or Germany, and each

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is a member of the Dutch Polymer Institute (DPI), a public-private partnership for research and

innovation. We take business units of these firms as relevant organizational context because most

marketing and product innovation activities are at the business unit level (Workman, Homburg & Gruner,

1998)

Using DPI as a channel to establish first contacts, we selected moderately novel innovation projects in

consultation with senior management, using the distinction between incremental and radical innovation as

a starting point. At the time of selection, projects had to be close to market introduction, or recently (less

than a year ago) introduced to the market, to increase the prospects of contacting respondents who had

been involved in the project. Moreover, market introduction is considered an indicator of project success

(Seidel, 2007).

The four projects we report on in this paper all focused on a new application, but they differed with regard

to familiarity and newness on the other two market dimensions, ‘market segment’ and ‘customer’. Table 1

offers a brief description of the projects. Interviews were the main source of data, supplemented with

archival data (product proposals, announcements, presentations, business press articles) for triangulation

purposes (Jick, 1979). The interviews were conducted by the first author, who had several site visits over a

period of more than a year, which allowed for tracking developments over time. Respondents were project

members and other organizational actors linked to the projects without being part of them. Respondents

included marketing specialists, other functional specialists and senior managers. The initial selection of

respondents was suggested by general management, later also by other respondents.

Table 1: Overview of marketing activities in innovation projects from prior literature

Category Main activities

incremental innovation

projects

Main activities

radical innovation

projects

References

Generating market

intelligence

Analysis of threats by

competitors;

Traditional market

research techniques (e.g.

focus groups with

customers)

Doing desk research;

Establishing experiential

interaction (e.g. testing

prototypes)

Atuahene-Gima, 2005; Leonard,

1995; Slater & Narver 1998; Von

Hippel, 1986; Lynn, Morone &

Paulson, 1996; O’Connor, 1998);

Goffin et al., 2012

Establishing cross-

functional linkages

Mechanistic integration

mechanisms

Organic integration

mechanisms

Olson, Walker & Ruekert, 1995;

Swink, 2000; Griffin, 1997

Combining different

marketing tasks

Combining innovation

activities with routine

marketing tasks

Focus on innovation

activities

Tushman & O’Reilly, 1996;

Christensen, 1997;

Kaupilla, Rajala & Iyrämä, 2010;

Tushman et al., 2010

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In total 25 interviews with 25 different respondents were conducted between September 2007 and

February 2009. The interviews lasted between 50 minutes and 2.5 hours. Most interviews were on-site;

three were by telephone because respondents were located at a large geographical distance. All interviews

were taped and transcribed verbatim and they were followed up by e-mail or telephone calls when

clarification was needed.

In most interviews, a single question (Could you please describe how the project developed over time?)

was enough to trigger the main innovation process story. Follow-up questions focused on specific dates,

working practices, responsibilities, milestones, events and outcomes. Data collection stopped when

additional interviews yielded little additional information (Lee, 1999). Interview data were analyzed using

techniques suggested by Eisenhardt (1989) and Miles and Huberman (1994). As a first step,

comprehensive case narratives were made, based on a chronology of events. These narratives were

validated with several respondents. With the theoretical framework as starting point, marketing activities

and related aspects were coded. This was followed by the identification of themes which were aggregated

into higher order dimensions. Figure 1 present our data structure. In a next step we focused on similarities

and differences between cases. Findings were compared with existing literature, and interpretations were

validated by several respondents. In the next section we describe our findings.

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Findings

Overall we find that moderately novel innovation projects comprise marketing activities associated with

either incremental or radical innovation projects, but also include less noticed activities such as visiting

conferences and trade fairs and relying on external expertise.

Another finding is that the moderately novel category is not homogeneous. Projects in this category are

diverse in terms of marketing practices (generating intelligence, creating cross-functional linkages) and

marketing’s position in the organization. The largest difference was found between projects aiming at

familiar and those aiming at new market segments, especially for the early project phases. We therefore

propose a distinction between two types of moderately novel innovation projects, based on the presence or

absence of a focus on a new market segment. In the following sections we detail these findings and

conclude with a model that integrates the findings.

First order categories Second-order themes Aggregate dimensions

• Interviewing customers• Visiting conferences and trade-fairs• Prototyping• Doing desk research• Hiring new employees/contracting

external expertise

• Application intelligence generation• Customer intelligence generation• Market segment intelligence

generation

• Using intra-organizational network• Having recurrent cross-functional

meetings

• Cross-functional linking initiated by marketing or R&D

• Cross-functional linking managed bymarketing or R&D

• Marketers have a variety of tasks• Marketers focus on project tasks• Some marketers have a variety of

tasks, others focus on project tasks

• High or low level of specialization of individual marketers in project

Generation practices

Type(s) of market intelligence generated

Linking practices

Initiation

Management

Tasks

Specialization in project

Market intelligence generation

Establishing cross-

functional linkages

Position in the organization

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Market Intelligence Generation

In each of the four projects, marketing specialists were focused on generating intelligence pertaining to

market dimensions that were new to the firm. For familiar market dimensions, no focused market

intelligence generation was considered necessary because deep market intelligence was already available

in the organization both in explicit form and in the minds of the marketers.

Anti-resist and Diffuse both stayed within the context of a market segment as defined by their business

units before the projects were initiated (Type 1 projects). Anti-resist focused on a new application for

existing customers, while for Diffuse both the application and the customer were new. Marketers’

intelligence generation practices in these two projects were quite similar. Interviewing (potential)

customers was heavily relied on. However, in the two projects the interviews were conducted for different

reasons. Marketers in Anti-resist interviewed existing Alpha customers during regular visits to scan for

future customer needs that could trigger ideas for new applications.

Marketers in Diffuse, in contrast, used customer interviews mainly to learn about the innovation strategy

of a potential customer. In particular they wanted to know if the product envisaged by the potential

customer – a new license plate system – had high priority, and who were responsible for procurement

decisions, as the OEM involved was not a customer at the start of the project. [Marketers] visited them

several times talking with the people who were working on this licence plate system. At some point early

in the process this resulted in the information that [traffic management OEM] was seriously aiming at

introducing their system into the market. (Business development manager)

Another important intelligence generation practice in the early phases of both Type 1 projects was visiting

familiar conferences and trade fairs. An important aim of these visits was to discover unmet needs and

wants which could lead to new applications: ‘We started looking [for unmet needs and wants] in the tyre

industry because we know the tyre industry and it is easy to look there (. . .) We visited tyre conferences

which give us valuable input’ (Business manager).

Later on, in the implementation phase, prototypes could be tested with potential customers. Marketers in

both projects used these tests for experiential interaction to refine intelligence on the application which

was necessary to commercialize the new product.

In Dye and Foam (Type 2 projects), marketers did not take a previously defined market segment as a

starting point and potential customers were largely unknown at the start. Thus it was not possible to

interview customers and visit market-related conferences and trade fairs. As a consequence, marketers had

to rely on desk research, hiring new employees and contracting external expertise. In Foam, desk research

was used in the initiation phase to get a first idea of potential applications and to generate intelligence to

construct a market segment: ‘For developing the [Foam] business case we studied [general] market reports

(. . .) to get familiar with potential applications’ (Project marketer).

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Marketers first identified several applications for the new product, and then they began to construct a

market segment by aggregating potentially viable applications and adding more market segment

information, for example about stakeholder behaviur. New employees with extensive knowledge of the

high performance foam market were recruited to speed up this market segment construction process.

Similar activities could be observed in Dye, but here fewer resources were invested in hiring new

employees. Instead, a consultant was contracted with expertise in the area of anti-counterfeiting solutions.

In the implementation phase, when the new market segment had been agreed upon, marketers in both

projects shifted to prototype testing to refine application-specific intelligence. In both projects marketers

explicitly made use of existing customers for this purpose to reduce risk and leverage existing customer

knowledge. Thus, market intelligence generation in Type 2 projects resembled Type 1 projects but only

after Type 2 project members had constructed a new market segment. Table 2 summarizes market

intelligence generation activities in the four projects.

Table 2: Overview cases studied

Anti-resist

(in BU Alpha)

Diffuse

(in BU Beta)

Foam

(in BU Theta)

Dye

(in BU Sigma)

Objective1 Bringing a new

type of fiber to the

market

Applying a familiar

plastic in new

applications

Bringing a new type

of foam to the market

Bringing a new type

of resin to the market

Project starting

year / duration2

2004 / 3 years 2003 / 3 years 2005 / 3 years 2003 / 5 years

Key project

marketers

Business manager

Sales managers

Business

development

manager

Product manager

Project marketers

Sales manager

Project marketer

Sales managers

Ma

rket d

imen

sion

s

Market

segment

Tires (f) 3 Signage (f) High performance

foam (n)

Anti-counterfeiting

solutions (n)

Application Reducing rolling

resistance of

tires (n) 4

License plate system

(n)

Aircraft interior

components (n)

Spirits anti-

counterfeiting (n)

Main

Customer(s)

Tire manufacturers

(f)

Traffic management

OEM (n)

Tier 1 aircraft

suppliers (f)

Caps and closures

manufacturer (f)

Exemplary

quote

“[Anti-resist] is a

new application in

a familiar market

segment. We

already sell yarn for

reinforcing tires but

now we are

“We are already

selling this product in

this market space

(…) and the license

plate system was a

totally new specialty

application for us.”

“In [Foam] we focus

on a new market

space and new

applications (…)we

already sell resin to

tier 1 aircraft

suppliers, but these

“’Anti-counterfeiting

solutions’ is a totally

new domain for us,

with new

applications such as

spirits and electronics

(…) We went to one

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entering the

business of

modifying our

product and mixing

it with rubber.”

Business manager

Business

development

manager

are used in other

applications and

markets.” Project

marketer

of our existing

customers and found

out there was an

interest from their

side.” Project

marketer 1 From the perspective of the firm,

2 Approximately,

3 f = familiar to the firm,

4 n = new to the firm

Creating Cross-Functional Linkages

All four projects started with a ‘fuzzy’ initiation stage (Khurana & Rosenthal, 1997), in which employees

from different departments came together to discuss ideas and concepts. These discussions happened prior

to official project status and senior management involvement was limited. Participants were mostly

employees acting on lower hierarchical levels.

The discussions depended largely on these employees’ personal networks in the organization, and cross-

functional links were created as marketers approached, or were approached by, others with

complementary knowledge. Although linking practices in the initiation phase were similar across projects,

they were initiated in different ways. In Type 1 projects marketers were the initiators because they felt the

need for technical knowledge and expertise to adequately respond to a potential market opportunity. In

Anti-resist, marketers had noticed the need for reducing rolling resistance in the tyre industry and they

informed Alpha’s R&D department to discuss possible solutions based on Alpha’s existing product: ‘The

starting point of this project has been [Sales manager] approaching [Research manager] to look into

modifying our fiber’ (Researcher). In Diffuse, marketers wanted internal tests to find out whether Beta’s

material could be used in an application that emerged in a discussion with a potential customer. Thus,

Type 1 projects were largely demand driven. Marketers perceived a market opportunity and brought

together various competences in order to respond. In Type 2 projects, which were more technology driven,

it was R&D that initiated cross-functional linking. Technologists approached marketers to find a business

opportunity for their work. This was evident in Dye, where researchers had developed a dye that had a

specific glow under UV light and blended well with plastic resin. They contacted marketers, which

marked the start of the project. Foam shows a similar pattern, though here research efforts were shaped by

cues from the market. Aware that foams have higher margins than resins, Theta researchers developed

technologies to turn resin into foam, and then they contacted marketers to match these technologies with

opportunities in the market: ‘Foam was always on our mind (. . .) we knew it was a value added process,

and Application Technology was looking for opportunities’ (Project marketer).

Later in the innovation trajectory, all projects received an official status, and in the implementation phase

cross-functional linking had become formalized. Recurrent cross-functional team meetings enabled

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marketers to discuss project matters with other functional specialists such as researchers and

manufacturing employees, thereby emphasizing a market orientation. In all projects but Foam, marketers

were in charge of these meetings, mainly because of their central position in the flow of activities during

implementation.

Foam was an exception. This project was led by an R&D manager as it required significant and costly

changes to the manufacturing process. In Dye, the other Type 2 project, the new technology was much

more easily incorporated into the existing manufacturing process, as noted by a researcher: ‘For us it was

just blending the resin with additives, which is really not much more complicated than a standard color

match.’ In short, cross-functional linkages were created in all projects and the practices in use and their

management were quite comparable.

A main difference between Type 1 and Type 2 projects, though, was the way these linkages were initiated.

Table 3 summarizes these findings.

Table 3: Overview of market intelligence generation with exemplary quotes

Anti-resist Diffuse Dye Foam

Main

generation

practices in

use

Interviewing

customers (in1)

Visiting

conferences and

trade-fairs (in)

Prototyping (im2)

“We interviewed

three of our

[existing]

customers in

2004, which are

the biggest three

in the [tires]

market (…) and

asked them what

their future needs

were.” (Business

manager on

‘interviewing

customers)

Interviewing

customer (in)

Visiting

conferences and

trade-fairs (in)

Prototyping (im)

“When we would

attend trade-fairs

people would

approach us and

ask questions on

ultra-slim

displays.”

(Product manager

on ‘visiting

conferences and

trade-fairs’)

Doing desk

research (in)

Hiring/contacting

external expertise

(in)

Prototyping (im)

“When I started to

work on this (…) I

did a lot of

background

research. A lot of

internet, statistics,

and looking at

custom studies

(…) trying to

understand the

segment.”

(Marketing

manager on

‘doing desk

research’)

Doing desk

research (in)

Hiring/contracting

external expertise

(in)

Prototyping (im)

“[Project

marketer] was

hired when we

had initial

prototype

products. This

boosted our

learning curve

with regard to the

high performance

foam market.”

(Project Manager

on

‘hiring/contracting

external

expertise’)

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Main type(s)

of

intelligence

generated

Application (in +

im)

“It occurred to us

that rubber

compounds are

complex (…) it is

not one product

that is mixed with

our [new] product,

and then there is

also the way of

mixing that can

cause differences

in test results.”

(Project manager)

Application

(in + im)

Customer (in)

“[Early in the

project] We

learned that

developing the

light transparent

license plate was

difficult (…)

[customer] needed

our product in

very specific

shapes for which

we used laser-

cutting.”

(Business

development

manager on

‘application’)

Market segment

(in)

Application (im)

“[I was] just

trying to

understand this

big thing, this

counterfeiting,

Where there

market spaces

where people use

plastics and have

these problems

(…) [it appeared]

a lot of them have,

it is amazing.”

(Marketing

manager on

‘Market segment’)

Market segment

(in)

Application (im)

“With the

individual

validation partners

I moved from a

market segment

level to an

application level

(…) I gathered the

customer needs

and kept

customers

informed and

involved

throughout the

program.” (Project

marketer on

‘application’) 1 = Initiation;

2 = Implementation

Position in the Organization

Type 1 and Type 2 projects differed in two distinct aspects of ‘position in the organization’: the

organizational tasks executed by the marketers and their level of specialization in the project. Type 1

projects were fully embedded in the main organization (the business unit), and project members (including

marketers) had various tasks in and outside the project in both phases of the innovation process. Marketers

in Anti-resist, for instance, belonged to a department that focused on the tyres segment, and they had to

take care of customer relations for selling the existing product (used as reinforcement material in tyres)

next to Anti-resist:

‘At the start of [Anti-resist] I was account manager, which is a technical sales function for the tyres

segment worldwide (. . .) so I sell yarn but I was also involved in [Anti-resist] for which I do the

marketing and commercial part’ (Business manager). In addition we found that within Type 1 projects

there was a low level of ‘specialization’ with regard to project work. Between the marketers in the projects

there was no clear division of labor; they all worked in the same unit which eased mutual adjustment, and

they all saw market intelligence generation for Type 1 projects as part of their day-to-day activities.

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In Type 2 projects there was a difference between project phases with regard to ‘tasks’. In the initiation

phase, all marketers were fully dedicated to the innovation project and worked outside of the main

organization. As explained by a project marketer from Dye, dedicated marketers were required because

‘The marketing role in this project could not easily be done from a product line because it was vague [. . .].

It crossed a lot of traditional industries and several production sites. So we decided to put a special

resource behind it, being me, to look at it. I operated outside of the traditional organization.’

But in the implementation phase other marketers joined the project who also had non-project tasks.

Dedicated marketers identified interesting new applications in the initiation phase, while the

implementation phase also saw non-dedicated marketers from the main organization who maintained

existing customer contacts. These contacts were needed because in the implementation phase existing

customers were to be involved in prototype testing. The level of specialization in Type 2 projects was

rather high, unlike Type 1 projects.

Dedicated marketers in Type 2 projects were responsible for market intelligence generation and cross-

disciplinary coordination, while non-dedicated marketers from the main organization provided

connections with customers as well as customer intelligence. Because both types of marketers mostly

operated in different organizational contexts, and the non-dedicated marketers joined the project later on,

co-ordination between marketers in the project was sometimes challenging, as was explained by a Foam

project marketer: Co-ordination of who communicates what to whom was not always perfect. [Dedicated

marketer] was directly communicating with the validation partners and sometimes we did not

communicate all information to [non-dedicated marketers]. So when [nondedicated marketers] started

more intensive communication with the validation partners they found out they did not have all the

information.

Table 4 gives an overview of the findings. Figure 2 presents a model that integrates our findings. It

provides an overview of the marketing activities and the types of marketers that suit moderately novel

innovation projects, illustrates process dynamics and details similarities and differences between the two

types of moderately novel innovation projects.

Table 4: Overview of cross-functional linking with exemplary quotes

Anti-resist Diffuse Dye Foam

Main linking

practices in

use

Using intra-

organizational

network (in1)

Having recurrent

c.f.2 meetings

(im3)

Using intra-

organizational

network (in)

Having recurrent

c.f. meetings (im)

Using intra-

organizational

network (in)

Having recurrent

c.f. meetings (im)

Using intra-

organizational

network (in)

Having recurrent

c.f. meetings (im)

15

“We had what we

call project

meetings every six

weeks to keep

everyone of the

same page. We

have

manufacturing,

research,

marketing, and

project

coordination.”

(Business

manager on ‘c.f.

meeting’)

“We had meetings

with production

(…) and some

quality people

concerning

specifications.”

(Product manager

on ‘c.f. meetings’)

“I have a 12 year

history in this

company so I

know people

[from other

functions] (…) I

called them and

basically had to

convince them

[with regard to the

opportunity].”

(Marketing

manager on ‘intra-

firm network’)

“Globally we have

monthly core team

[application

technology,

marketing and

sales] meetings.”

(Project manager)

Initiated

by

Marketing

“The starting

point of this

project has been

[Sales manager]

approaching

[Research

manager] to look

into modifying

our fiber.”

(Researcher)

Marketing

“[Early on] I had

meetings with the

lab (…) I made

the contact.”

(Business

development

manager)

R&D

“It started at our

corporate research

lab (…) they were

woring on [dye]

and asked [Theta]

if we were

interested. We

said yes and made

funding

available.”

(Marketing

manager)

R&D

“Foam was

always in our

mind (…) we

knew it was a

value added

process, and

application

technology was

looking for

opportunities”

(Project marketer)

Manage

d by

Marketing

“We have an

overall project

leader, which is

more an

administrative job,

and me leading

the project from

the beginning (…)

[We] are part of

the market facing

unit.” (Business

manager)

Marketing

“I was

responsible, the

project stayed

with me.”

(Business

development

manager)

Marketing

“This project is

managed by

[Marketing

manager], she has

to report every

three months and

explain what she

needs to move

ahead.” (Sales

manager)

R&D

“I am project

manager on this

project (…), I am

with application

technology (...)

We develop

technologies to

better convert our

plastic pellets.”

(Project manager)

1 = Initiation;

2 = Cross-functional;

3 = Implementation

16

Figure 2: Sets of marketing activities and positions in the organization of marketers for two types of

moderately novel NPD projects

Conclusions

We examined marketing activities in four moderately novel projects in the chemical industry and found

that they have their own sets of marketing practices. Some of these practices have been discussed in prior

research on traditional NPD project categories, while others have received less attention. We also found

that ‘moderately novel projects’ is not a homogeneous category. Projects addressing familiar market

segments (Type 1) are clearly different from projects focusing on a new market segment (Type 2).

Project activities and position in the organization of marketers

Project activities and position in the organization of marketers

•MIG: Interviewing customers and visiting conferences and trade-fairs; Application (and customer) knowledge•CFL: Using the intra-organizational network; Marketing takes the initiative•P: Variety of tasks; Low level of

specialization in project

•MIG: Prototyping; Application knowledge•CFL: Having recurrent cross-functional

meetings; Often managed by marketing

•P: Variety of tasks; Lowlevel of specialization in project

•P: Variety of tasks and project tasks; Highlevel of specialization in project

•MIG: Desk research and hiring/ contracting external expertise; Segment knowledge•CFL: Using the intra-organizationalnetwork; R&D takes the initiative•P: Project tasks; High level of specialization

in project

Initiatio

n

ph

aseIm

ple

me

n-

Initiatio

n p

hase

Market oriented non-newmarket segment project(Type 1 project)

Market oriented newmarket

segment project(Type 2 project)

tation

ph

ase

Ch

ange

s to

Co

ntin

ue

s to b

eC

han

ges to

Ch

ange

s to

supports

supports

MIG = Market intelligence generation; CFL = Cross-functional linking; P = Position in the organization

17

Type 1 projects started when marketers, as part of their daily work, identified new applications within the

context of a given market segment and discussed their ideas with others in the organization.

Since the scope of these projects was limited to previously defined market segments, there was no need

for dedicated marketers during project initiation and implementation. Type 2 projects started from a new

technology and scarce ideas about possible applications. Here, dedicated marketers were charged with the

task of creating a new and potentially fruitful market segment. Later on, existing customers were involved

to validate the new product and reduce risk, which brought non-dedicated marketers to the project.

Although the execution of Type 2 projects enabled the organizations to go beyond existing market

segments, they brought co-ordination challenges between dedicated project marketers and the main

organization. Thus, while marketers are mainly ‘initiators’ in the early phases of Type 1 projects, they

could better be described as ‘market segment constructors’ in Type 2 projects.

Interpreted in terms of traditional innovation categories, Type 1 projects appear more like incremental

innovation projects and Type 2 projects are closer to radical ones. It seems that market segment change is

more far-reaching for an innovating firm (and thus more radical) than change of other market dimensions.

The reason, presumably, is that market segments are organization-specific and abstract (Diaz Ruiz &

Kowalkowski, 2014), and therefore tightly coupled to organizational structures and routines, and deeply

embedded in the minds of employees. This does not mean, however, that Type 1 projects can be treated as

a form of incremental innovation and Type 2 projects as a form of radical innovation.

The fact that some aspects of the project are very familiar to the organization while others are not, sets

them apart as a separate category of projects with their own management challenges.

Our research contributes to several theoretical discussions. We address the role of marketers in product

innovation which is understudied (Griffin et al., 2013). We bring together different marketing activities

and the position in the organization of marketers, which are mostly treated separately in prior literature

(e.g., Olson, Walker & Ruekert, 1995; O’Connor, 1998; Tushman et al., 2010). We focus on an

understudied innovation category and record changes in sets of practices in the course of market-oriented

innovation trajectories. We find evidence of differences between two types of moderately novel

innovation projects.

Furthermore, we extend prior research that focused on tools and techniques for market intelligence

generation in NPD. We demonstrate that marketers operating in industrial markets use several practices

that have received less attention in this literature, such as attending trade fairs and relying on external

expertise. These practices have been discussed in the context of innovation (e.g., Canato & Giangreco,

2011; Kalafsky & Gress, 2013), but not specifically as tools for market intelligence generation.

Another implication relates to the literature on organizational ambidexterity and innovation. Research in

this field tends to emphasize solutions to balance exploration and exploitation at the firm or business unit

18

level (see, e.g., Van Looy, Martens & Debackere, 2005). Raisch and Birkinshaw (2008) argue that

exploration and exploitation requirements may vary by innovation project and therefore multiple

organizational architectures may be necessary in a single organization. Our findings add to this literature

by detailing two equally effective project level architectures for balancing exploration and exploitation in

the market domain. In Type 1 projects, marketers were simultaneously engaged in both exploration and

exploitation throughout the project. Type 2 projects started with marketers who operated outside the main

organization and focused on exploration and, later on, collaborated with colleagues from the main

organization who focused on exploitation.

Limitations

A limitation of this study is that all projects were in the chemical industry. Our findings may apply to

other industries as well, but we claim only analytical generalizability (Polit & Beck, 2010). Another

limitation is that we collected most of our data after the project outcomes were known. Such a

retrospective approach has the advantage of knowing the ‘big picture’, how things developed, and what

they brought about, but prior knowledge of project outcomes may also lead to cognitive bias and

impression management (Huber & Power, 1985). We took measures to avoid such bias (such as

comparing interviews to other interviews and to written materials), but real time studies are needed to

establish the usefulness of these measures. Further research along these lines may refine the findings

presented in this paper. We are confident that it will also confirm the relevance of studying marketing

activities in moderately novel innovation projects.

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