The biggest consumer goods companies shell out more than $1 billion a year for R&D but lately have seen no appreciable impact on their sales. That's troubling for companies whose growth has plateaued in recent years. In contrast, some smaller competitors that spend less on R&D - but do so more shrewdly - have seen a significant boost in sales. In this sector, innovators needn't bet big to reap returns.

Most companies assume that the easiest way to grow is by investing overseas and that the developing world offers the best opportunities for boosting revenues and profits today. However, success abroad varies widely, and research shows that it's often tough to increase profits by investing abroad. A new study of the grocery retail industry reveals that with a few exceptions globalization's benefits have not accrued to retailers. Local retailers dominate most countries, and international players are absent from the largest retail markets. Moreover, every retailer that has ventured overseas has failed as often as it has succeeded. On average, the extent of internationalization doesn't have a significant effect on either retailers' revenue growth rates or profit margins. Rather, it's the home market's growth that is the primary driver of profit margins and sales growth. A few retailers have succeeded in going global by developing strategies that apply four retail-specific rules for globalization. Rule 1: The home market is the linchpin. Retailers can generate the resources they need to go global by applying innovative growth strategies at home. Rule 2: Always bring something new to market. Without an element of novelty, it will be difficult for retailers to overtake entrenched rivals. Rule 3: Differentiation is more important than synergies. Leveraging synergies globally and allowing each country unit to adjust to local needs is a critical balancing act. Rule 4: Timing is critical. Retailers would do well to stop planting flags and focus instead on a limited set of opportunities where they can establish operations of scale.

Companies selling multiple products in multiple territories face the difficult question of how to allocate marketing resources. But comparing the profit potential of, say, razors in Germany with batteries in the United Kingdom is a difficult analytical task that demands reams of data. Finding the optimal answer is only half the battle. The rest involves the political and organizational challenge of shifting the money around. One company, Samsung, overcame these challenges by using hard data, not intuition, to allocate its marketing dollars. Marketing executives undertook an intensive 18-month project to gather diverse and detailed information about more than 400 possible product-category and country combinations. It collected all that data in a single, easy-to-access site and used the software's analytical power to predict the impact of different allocation scenarios. Such what-if testing enables management to find the budget allocation that will yield the highest total marketing ROI. Samsung also worked to anticipate and defuse organizational resistance to change.

Tom Rose was about to listen to his marketing head, Cassie Martin, make a major presentation on the biggest strategic initiative in Rose Partyware's history: the launch of a branded line of party ware. Rose had manufactured paper goods for parties and other social events for many years. But Tom had recently spotted an opportunity to break out of the pack: a new printing technology that would improve quality and reduce costs. When Rose test-marketed the new line, consumers loved it, and retailers pledged their support. Tom felt that the new technology would give Rose the edge it needed to establish its own brand, which would, in turn, allow the company to stay ahead of its rivals. In her presentation, Cassie reported that customers loved the brand concept. However, it was going to be more expensive than she had originally thought. And Hank Lewis, Rose's national accounts manager, further complicated matters when he told Tom that one of Rose's biggest customers, Party!, had just decided to offer customers a complete line of party goods under its own name and wanted Rose to manufacture it. The management team is split on whether Rose should launch its own line. Tom needs to decide: What's the best marketing strategy for Rose Partyware? In R0303A and R0303Z, commentators Frank Weise III, Cott CEO; Micky Pant, Reebok chief marketing officer; Stephen J. Hoch, a marketing professor at Wharton; Judith Corstjens, head of Cubiculum Consultancy; and Marcel Corstjens, a marketing professor at Insead, offer advice in this fictional case study.

Tom Rose was about to listen to his marketing head, Cassie Martin, make a major presentation on the biggest strategic initiative in Rose Partyware's history: the launch of a branded line of party ware. Rose had manufactured paper goods for parties and other social events for many years. But Tom had recently spotted an opportunity to break out of the pack: a new printing technology that would improve quality and reduce costs. When Rose test-marketed the new line, consumers loved it, and retailers pledged their support. Tom felt that the new technology would give Rose the edge it needed to establish its own brand, which would, in turn, allow the company to stay ahead of its rivals. In her presentation, Cassie reported that customers loved the brand concept. However, it was going to be more expensive than she had originally thought. And Hank Lewis, Rose's national accounts manager, further complicated matters when he told Tom that one of Rose's biggest customers, Party!, had just decided to offer customers a complete line of party goods under its own name and wanted Rose to manufacture it. The management team is split on whether Rose should launch its own line. Tom needs to decide: What's the best marketing strategy for Rose Partyware? In R0303A and R0303Z, commentators Frank Weise III, Cott CEO; Micky Pant, Reebok chief marketing officer; Stephen J. Hoch, a marketing professor at Wharton; Judith Corstjens, head of Cubiculum Consultancy; and Marcel Corstjens, a marketing professor at Insead, offer advice on this fictional case study.

Data show that the top-selling drugs today are not the products of breakthrough science. That's why drug companies need to learn the lessons of marketing that consumer-goods manufacturers know so well.