Markstrat Report

Research and Development

Research and Development (R&D) is generically a process of study and creation to potentially improve an existing product or produce a product that can added to a company’s product portfolio. In the MARKSTRAT world, R&D is used to introduce a new product (Sonite or Vodite) to the market or to reposition a product in relation to certain market demands such as price or performance. R&D can also be used to remove a product from the market when it is determined that the product has outlived its usefulness. Implementing R&D can occur in the following ways:

Suggestion: Perform R&D to develop products that meet consumer perceptions reported in semantic scaling.

Support: Semantic scaling reports display a consumer’s willingness to purchase a product with certain attributes. These attributes can include pricing, power and performance and can vary in relation to one another as product-consumer relationships change when things such as competing pricing pressure and shifting market segmentation occur. As these focus points for consumer attention shift, a product must shift to meet them to be successful. R&D can successfully shift a product’s position to more closely align with a consumer’s focus. Meeting this focus, the consumer’s perception, can result in higher revenues and profits.

Suggestion: Reduce product cost and sales price through R&D.

Support: As technology improves, capabilities tend to improve with it. R&D is a deliberate way to make technological advances and improvements in specific products areas. Specific product improvements can be made and as the sophistication increases, price can drop. While desirable for consumers, costs incurred to make these advancement can be large. This give and take requires further analysis to determine the best mix. R&D conducted over time can generally lower a product’s price as well as experience returns efficiency paybacks. Price can, at a cost, be...