R&D and NPD

Research and development Research and development (R&D) is the scientific research and the technical development involved in developing new products or processes

Process of R&D Idea generation Idea screening & concept testing Product design brief prepared Prototypes made & tested (may be discarded, adapted or adopted) Test marketing Full scale production Launch (supported by promotion)

Benefits of R&D Developing unique products (USP) Provides competitive advantage Provides long term income Identifies new opportunities Improves efficiency of production processes Enhances reputation

Challenges and costs of R&D High financial costs Long timescales Uncertain outcomes Conditions may change during the R&D process Reactions of rival companies Possibility of failure and the associated impact on reputation

New product development (NPD)

Reasons for new product development New product development (NPD) is the process which identifies, develops & tests new product opportunities NPD is carried out for a number of reasons: To replace declining products To add to the current portfolio To fill a gap in the market To maintain competitive advantage To compete with rival products To attract new customers

Invention & innovation New products may be developed as a result of invention or innovation. Invention – the formulation of new ideas for products or processes Innovation – the practical application of new inventions into marketable products or services

Market & product orientation Where do the product ideas come from? Market orientation – new products are developed based on customer wants which are found through market research Product orientation – ideas are developed from scientific investigation and technical research within the company