The Role of Sales and Marketing in Innovation Implementation: An Empirical Analysis in Six South American Countries

The management of innovation is a strategic contributing factor for firms to achieve competitive advantage (Elenkov and Manev 2005) and superior performance (Zahra et al. 2000). However, little has been written about new product development processes within the fast moving consumer goods (FMCG) industry (Francis et al. 2008). Firms’ performance is not only driven by appropriate innovation initiatives, but also by how these are implemented (Repenning 2002) and this is an aspect that has been neglected in current research (Keupp et al. 2012). This study considers the innovation implementation process based on the effectiveness of sales and marketing, cross-functional relationships during new product deployment projects in six subsidiaries of a multinational FMCG company. Sales and marketing managers are responsible for the implementation of new products launch in FMCG companies, through the interaction with clients and consumers. Extant research has proven that the effectiveness of sales and marketing relationship is correlated to positive outcomes such as superior customer value creation and business performance (Biemans et al. 2010; Guenzi and Troilo 2006, 2007; Le Meunier-FitzHugh and Piercy 2009; Malshe and Sohi 2009). The rationale for this research lies in the importance of marketing and sales cross-function effectiveness to manage the implementation of innovation as a critical factor for business success (Le Meunier-FitzHugh et al. 2011).
Whilst numerous studies have researched the drivers of innovation process, this paper makes three important contributions. It expands theoretical boundaries of marketing and sales interface literature providing evidence from South America subsidiaries and how they manage the innovation process in a post-crisis, turbulent and highly competitive environment. It also provides ‘best practice’ of innovation implementation in FMCG companies and empirical evidence on the impact of sales and marketing relationships on the management of innovation implementation to augment firm growth and performance (Keupp et al. 2012). Findings indicated that joint planning strongly influences the perceived effectiveness of marketing/sales interface and consequently the implementation of innovation. Conversely, this study found that formalization had a non-significant (negative) effect on sales and marketing relationships, indicating that value creation is not just a result of the formalized gate-stage process, but needs to be nurtured over time to promote joint planning in a collaborative mindset and behavior. The evidence provided by this research could help managers from multinational companies expanding into new markets, to achieve successful innovation outcomes in a context of economic uncertainty, more demanding consumers and market turbulence.