1. R&D and NPD

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

3. 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)

4. 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

5. 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

6. New product development (NPD)

7. 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

8. 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

9. 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