Rethinking Marketing Knowledge Protection: Hidden Costs and Uncertain Benefits

Abstract

Knowledge is a key resource in marketing, and an assumption across literatures is that a firm must prevent valuable knowledge from leaking to competitors. This research develops a theoretical framework that calls for rethinking this view by offering a fresh perspective on when and how a firm should protect marketing knowledge to minimize the likelihood of harm to the firm. This framework integrates research across disciplines and interviews with executives to provide a more accurate analysis of the payoffs of knowledge protection. This is accomplished, first, by introducing a set of unintended hidden costs of the most commonly used knowledge-protection strategy—leakage prevention—that harm a firm's competitive advantage. Firm and industry moderators that influence the magnitude and consequences of these hidden costs are outlined. Second, the framework suggests that the benefits of knowledge protection may be more limited than previously recognized. It does so by delineating the knowledge “leakage-to-harm” process and identifying competitor and industry moderators that can impede the process. Third, the framework offers a typology of alternative protection strategies firms can use to preserve their knowledge-based competitive advantage. Across these contributions, the framework calls for substantial rethinking of marketing knowledge protection with important implications for marketing practice and future research.