Research and Development (R&D)
It is the process in which a business can develop new products, materials, improve existing products and production processes. Scientific research and technological development of new products and processes, it R&D is the first stage of the product life cycle. As it involves heavy investment, businesses want to know exactly when the product is going to be launched, and make sure the product has been fully researched, tested and developed.
The Process of R&D
The main processes are as followed
· Idea Generation, identifying a wide range of new ideas.
· Idea Screening, considers the practical nature of the idea, and shortlists the best ideas.
· Concept Testing, when a limited number of the new product is tested on consumers to see their reaction.
Development Of Ideas
· Business analysis, this is after a product has been shortlisted, and then is judged whether it is profitable.
· Product development, once an idea has been agreed upon, a prototype of the product is made so it can be tested.
· Test marketing, when the product is launched to a small target market, so that fine adjustments can be made to the product.
Innovation – The launch of a new product or process, an invention, onto the market for a commercial gain.
· This is what creates a USP and gives a competitive advantage to a business.
· It is an ongoing process.
· Allows business to charge premium prices.
· Business reputation could be better, as business is seen as innovative.
· Can be very expensive and time consuming.
· Money is flowing in one direction, outwards.
· Competitors actions.
· Company image could be affected if the product fails.
- Could lose focus on companies main core objectives