Centralised and decentralised marketing research: How to find the "optimal balance" in a multinational pharmaceutical company

Date of publication: June 15, 1988

Author: Bernd E. Grobe

Abstract:

Since 1986 the International Marketing Research Department at the Sandoz Headquarters (HQ) has become increasingly involved in multi-country studies, forming one of the cornerstones for the "international core” of New Product Development, Group Product Policies, and Marketing activities for established brands on an international level. As the demand for reliable market data has grown over and above the funds and personnel capacity available at the HQ, during 1988 a major "strategic assessment" was initiated in order to determine the "optimal” allocation of tasks to HQ and subsidiaries (ACs). The paper shows in detail: - the procedure formulated in order to overcome possible conflicting interests in a manner as rational and co-operative as possible and acceptable to all. - the different tools developed: 1. A novel communication approach to inform the affiliates of the HQ's plans in advance and consider their feedback (in order to achieve a rational project prioritisation at an international level) 2. An international project selection mechanism 3. different options for key strategic issues (centralization vs. decentralization, and various ''blends" of the two), identification of the benefits and problems of the extreme approaches, and how to make the most optimum choice for a given problem in "planning meetings" and "project execution meetings" 4. Qualitative assessment of possible benefits and problems for the subsidiaries in case of more decentralization, based on evaluations of concrete research projects. All of the above tools have been developed and already tested within the Sandoz corporation. Based on the feedback from our subsidiaries it appears that the approach chosen is suitable to promote a constructive discussion as to which research activities in the future will be executed via central (ie. HQ) or local (ie. AC) Marketing Research, and how the allocation of tasks and responsibilities will be handled.

Bernd E. Grobe

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