Product marketing and development should be close enough to account management and corporate marketing to provide support.
But far enough that their ability to develop new products is not compromised. It is most critical that they be kept distant from Account Management because they will inevitably be sucked into solving customer problems. As they get more involved in fighting customer fires, development of next generation products will lag, and ultimately new competition will enter to fill the void. This happened with both GCA and Perkin-Elmer in the lithography market. Selling was so important that their best researchers found themselves completely tied up with customer application issues. They were not ready when the market moved and so, today they are history.
It is important that most Product M&D be done in the divisions where the results will be manufactured and sold. But some resources need to be held in reserve for support and entry into new market areas. It is inevitable that when a new product is developed that Product M&D needs to be closely involved with the introduction and early customer applications. If not, a ‘throw-it-over-the-wall’ attitude will emerge and new products will waste away soon after their birth. This became a critical problem for Applied Materials when it reentered the ion implant market in the mid-eighties. The distance between the U.K. implanter group and account management in Santa Clara, CA compounded it. Adding a parallel applications development group in Santa Clara solved it.
When product development cycles overlap, one of the best ways to strike a balance between being too close versus too far, is to rotate development teams so that each individual team can be directly involved from product concept through market acceptance. Japan’s DRAM giants of the seventies and eighties were masters of this. The problems with this approach are that it is very expensive and results will be dependent on the quality of each team. A better way to solve the problem is to force development cycles to be short enough to fit well within the product life cycles dictated by the market.
Product M&D is more important to Corporate Marketing than it is to Account Management, because Corporate Marketing can only project power. If Corporate Marketing’s projection does not match the direction of Product M&D, them both will fall flat.