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Design, Research & Development
Design, Research & Development
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What is design?
Design is the mix of factors which are intended to allow a product to meet customer
needs and wants
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Things that go into the design mix
• Appearance• Functionality• Style• Packaging
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The link with product differentiation
Differentiation is the distinctiveness of the
product being offered as perceived by customers in
the market
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Some examples of differentiation
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Design can give a product a unique look
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Functionality can add a lot of value
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Apple uses design to gain advantage over competitors
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…as does Dyson
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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.
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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
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Coca-Cola
Coca-Cola wouldn’t be Coca-Cola without the iconic Coke bottle
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Other Brand Names
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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.
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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.
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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
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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'
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Invention or innovation?
Formulation of new ideas for products or processes
Invention
Practical application of new inventions into marketable
products or services
Innovation
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Invention v Innovation - example
Invention Innovation
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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
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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
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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
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Process innovation - advantages
• Improved quality of service
• More responsive customer service
• Higher profits
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Keep up-to-date with business stories, resources, quizzes and worksheets for your business
course. Click the logo!
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TaskDesign a new Subway
Sandwich for Yorkshire
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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.
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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
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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
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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
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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
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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
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Unique Selling Points (USP)
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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
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The Routemaster was replaced by a “bendy bus”
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Boris Johnson ran a competition to create a new Routemaster
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The new Routemaster London Bus