Product research (MR, unit 5)

market oriented research & development
examines the product & customer's reactions to it

PROCESS OF PRODUCT RESEARCH

Screening new ideas for:

• low profit potential/insufficient market potential
• high cost & high risk
• do not conform to organisational objectives
• require too many resources to produce & distribute

If passes screening, test market in selected areas but beware of leaks to competitors.

Reviewing the product range (VPS)

• Variety reduction - insufficient sales or need to reduce costs
• Product diversification - introduce new items & wide range of products (good for image)
• Segmentation - secure new customer class for an existing range