Design, Research & Development

Design, Research & Development

What is design?

Design is the mix of factors which are intended to allow a product to meet customer

needs and wants

Things that go into the design mix

• Appearance• Functionality• Style• Packaging

The link with product differentiation

Differentiation is the distinctiveness of the

product being offered as perceived by customers in

the market

Some examples of differentiation

Design can give a product a unique look

Functionality can add a lot of value

Apple uses design to gain advantage over competitors

…as does Dyson

Using style to differentiate a product

Over 500 diamonds. The “Home” buttonhas interchangeable pink and white diamonds. These two diamonds alone are worth £4m. It will cost you £5m to buy.271 grams of 22-carat gold and

136 diamonds. The gold iphone will cost you £1.92 million.

Stuart Hughes makes his moneyBy designing exclusive eliteGadgets.

The link with branding & product differentiation

• Branding is creating a unique name and image for a product

• The wrong design can damage a brand• How to differentiate a product

– Distinctive design– e.g. Dyson; Apple iPod– Branding - e.g. Nike, Reebok– Performance - e.g. Mercedes, BMW

Coca-Cola

Coca-Cola wouldn’t be Coca-Cola without the iconic Coke bottle

Other Brand Names

Changing your logo can be a mistake ….

Gap spent over £1m changing the design of its logo. But it was scrapped in less than a week. There were so many complaints, mainly on Facebook, that the new logo was cheap and tacky, that Gap decided to return to its original design.

Changing your logo can be a mistake ….

In 2000, BP launched its new “greener” logo. It cost £4.5m to design and launch. They were criticised for spending so much on a logo rather than developing renewable energy.

In 2010, the Gulf of Mexico oil spill crisis resulted in many people criticising BP again and corrupting the logo online.

Research and development

• Many firms spend large amounts on researching & developing their products

• Every business needs to consider how to:– Do things better– Make better things– Outperform the competition

What is innovation?

Innovation is about putting a new idea or approach into

action.Innovation is commonly

described as 'the commercially successful exploitation of ideas'

Innovation is about putting a new idea or approach into

action.Innovation is commonly

described as 'the commercially successful exploitation of ideas'

Invention or innovation?

Formulation of new ideas for products or processes

Invention

Practical application of new inventions into marketable

products or services

Innovation

Invention v Innovation - example

Invention Innovation

Business requirements for innovation

• Challenge the status quo in a market• Have a deep understanding of

customer needs • Develop imaginative and novel

solutions to how those needs might be met

Types of innovation

• Product innovation– Launching new or improved products (or

services) on to the market

• Process innovation– Finding better or more efficient ways of

delivering existing services

Product innovation - advantages

‘First mover advantage’ – which can include some of the following;

• Higher prices and profitability • Opportunity to build early customer

loyalty • Enhanced reputation as an

innovative company • Increased market share

Process innovation - advantages

• Improved quality of service

• More responsive customer service

• Higher profits

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TaskDesign a new Subway

Sandwich for Yorkshire

Produce a presentation and supporting materials to explain

how you would create and market a nutritious new 6” Sub that is a celebration of your region and

appeals to young people.

Task

1. Research your market – ask your customers what their preferences are

2. Design a new Sub sandwich based on your research

3. Differentiate your product – make it different to those on sale at present

4. Use the Subway brand – you must also use their ingredients

Your Presentation1. Product: Explanation of the new Sub and a

picture

2. Price: How much will it cost to make; how much will you sell it for

3. Summary: Where your new Sub fits within the existing Subway product range. Sum up why you have the winning Sub and any Unique Selling Point (USP) you have

Product• Use the ingredients sheet. Ask 10 people to say which

are their preferred ingredients

On A4 paper:

• Design your new Sub sandwich - draw a picture of what the sandwich will look like

• Think of a name for your new 6” Sub

• List the content of your new Sub sandwich

Price

• List the nutritional content of your Sub sandwich

• List the cost of each ingredient

• State the price you will charge customers and what the profit margin will be on each sale

Summary

• Details of any nutritious or healthy messages you want to communicate

• Explain the USP (unique selling point) that will make your Sub stand out

• Explain why your new Sub will appeal to young people in Yorkshire

Unique Selling Points (USP)

The Design Mix

• Function: what does the product do and will customers be happy with the performance?

• Cost: what will be the cost of production and will customers pay the price?

• Appearance: what does the product look like and will it appeal to its customers?

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The Old Routemaster London Bus

The Routemaster was replaced by a “bendy bus”

Boris Johnson ran a competition to create a new Routemaster

The new Routemaster London Bus