Timely Resource Allocation Between R&D And Marketing: A System Dynamics View
Trade-off between marketing and research and development (R&D) has always been a dilemma in management science for many years. Allocating the budget to departments and estimating the future profits and customer base as a result of this action has remained a "challenging task." Developing products faster, better, and cheaper than competitors has become critical to success in many markets. This may require huge initial investments in underlying processes resulting in over-investment in marketing and/or R&D in spite of insufficient purchasing power and market saturation for new products.Using a system dynamics (SD) model, this paper aims to understand the dynamics of a complex market where demand fluctuates annually. The problem contains severe difficulties in terms of planning and strategy for marketing and R&D. The budgets to be shared by R&D and marketing vary every period. The market includes feedback and dynamic issues to consider. This brings in the problem of understanding and controlling complexity in the market structure by understanding the cyclical causal relationships.The paper indicates that SD modeling is very useful in investigating and finding sustainable allocation trends in marketing and R&D, so that a firm can keep a sustainable level of customers. While searching for these trends, special attention is paid to the timing of these decisions to synchronize two activities. The paper shows an understanding of the management of a complex problem via policy design and analysis using SD modeling.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 09 (2012)
Issue (Month): 02 ()
|Contact details of provider:|| Web page: http://www.worldscinet.com/ijitm/ijitm.shtml|
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:wsi:ijitmx:v:09:y:2012:i:02:p:1250012-1-1250012-38. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tai Tone Lim)
If references are entirely missing, you can add them using this form.