Tuesday 12th November 2013 Mr Nicholls Year 11 Business Tuesday 12th November 2013 Mr Nicholls

Objectives To consider the role of design and research and development in meeting customer needs.

To start with…

Solution

Today… Meeting Customer Needs – specifically thinking about Design and Research and Development – We need to… Understand the role and importance of design in differentiation. Understand how scientific principles can be applied to research to help in the development of new products.

Differentiation through design… Think about it… The same products different design.

Your turn… In your books – write down 2 paragraphs: 1). What do we mean by the term “differentiation by design” in relation to products. 2). What specific products can you think of that are differentiated by their design? You have 3 minutes to complete this, then we’ll share what we’ve come up with.

Customer Needs Customers are people who buy products and services from other people (usually companies of one sort or another). What customers think, and feel about a company and/or its products is a key aspect of business success. Attitudes are shaped by experience of the product, the opinions of friends, direct dealings with the company, and the advertising and other representations of the company.

Customer Needs… Marketers need to understand the needs of their customers. In doing so they can develop goods or services which meet their needs more precisely than their competitors. The supermarket industry provides a good example of the way in which different groups of customers will have different expectations. Some customers just want to buy standard products at the lowest possible prices. They will therefore shop from supermarkets that offer the lowest prices and provide a reasonable range of goods. In contrast, some supermarket shoppers are seeking such aspects as variety and quality. They will therefore choose to buy from an up-market supermarket. Additionally some customers will have special tastes such as wanting to buy FAIRTRADE products or organic fruit and vegetables. It is clear therefore that to be successful a business has to have a clear understanding of their target customers and the expectations of this group.

Research and Development R&D can be very expensive and the chances of success can be slim, with a relatively low rate of commercially successful ideas. However, in many industries, a committed programme of R&D is absolutely essential in order for firms to maintain their competitiveness. Industries with an especially high level of R&D would include: Pharmaceuticals Aerospace Consumer electronics Computers Communications In your books answer the simple question – WHY?

Research and Development… What do we mean by this term? Why did we say it was important for a business? What sorts of industries might spend the most on it? Why?

R&D Most people associate the research and development (R&D) function of a company with the invention of new products. Whilst this is very important, the development of existing products is of equal significance because consumer preferences are continually changing. The task of product research and development is to come up with the goods and services that meet the needs of tomorrow's customers

So… A company might be reluctant to change an earlier design, particularly if it provides status (e.g. a designer label on a tracksuit or baseball cap). Conversely, small ('cosmetic') changes may be made to products to bring them up-to-date e.g. the logos of leading companies to give them a more modern feel. With a new product however, the business will need to consider design/image carefully.

Think about it… How might a business update a product without changing it too much? For what reasons might a business want to update their products or product image? What examples can you think of?

Your Turn… Choose a business/product that has evolved over the course of time (e.g. Playstation). Firstly – list what features the 1st version had. Secondly – the second… Thirdly – the third… So on so forth. Underneath – explain HOW that company has used R&D to develop their products.