Research and Development

What is research and development?

The process of creating new knowledge to develop new products, services, or processes, or to improve existing ones

What are the main stages of research and development?

• Marketing research – find out what customers want, who they are, and where the gaps are in the marketplace

• Product development and testing – make prototypes; experiment by allowing a sample of potential customers to trial the product before it is launched

• Distribution of product to outlets – the product cannot be sold unless it is in a position for customers to buy it – books will need to be in the bookshops and hammers in the hardware stores

• Promotional launch to inform customers of features of new product – this might be done locally, nationally or internationally – the customers need to know that the product is ready and available and that it might be the sort of thing they want to buy

  • Needs all the elements of the mix to be in place to be successful.

What are the benefits of research development?

• Competitive advantage: R&D can help a business stand out from its competitors by creating unique products or services, or by improving existing ones. 

• Increased profits: R&D can lead to new or improved income streams, which can increase a business's profitability. 

• Improved processes: R&D can help a business improve its processes, which can increase efficiency and competitiveness. 

• Customer loyalty: R&D can help a business build customer loyalty by developing products and services that meet customer needs. 

• New markets: R&D can help a business open new markets, both in the UK and overseas.

What are the disadvantages of research and development?

• Cost: R&D can be expensive, especially upfront, and it's a long-term process that may not produce results. 

• Artificial scarcity: R&D projects related to non-renewable resources like oil and gas can increase demand for those resources. This can lead to higher prices and shortages. 

• Market risks: R&D may face market risks, such as low market acceptance or high price sensitivity. 

• Organisational risks: R&D may face organisational risks, such as insufficient funding or skills. 

What is the risk involved?

• R&D can be risky because it's not guaranteed to produce results. Some risks include:

  • The product or service may be more difficult or costly to develop than expected.

  • The product or service may not be commercially successful.

  • The product may turn out to be unworkable.

What is the summary of research and development?

In the first two stages (marketing research and product development/testing) many products are rejected because the findings of research show that it will not be successful, or they cannot make a satisfactory prototype. Product testing might show that customers react badly to the product