Product Orientation & R&D

Question 1

What is Product Orientation?

Answer 1

Involves focusing on the product instead of wants and needs

Question 2

What’s the benefit of Product Orientation? (8)

Answer 2

1. Focuses on Developing the Product
2. Focuses on lots on investment into R&D
3. Improved Innovation
4. Differentiates from competitors
5. Customers are willing to pay higher prices
6. More Price Inelastic
   7.Increase Price without fall in demand
   8.Increased Revenue and Profits to reinvest into R&D

Question 3

What is the drawback of Product Orientation? (6)

Answer 3

1. It is Expensive due to the investment into R&D
2. Increased Fixed Costs due to paying researchers for wages
3. Reduced Operating Profit
4. Reduced retain profit to reinvest into R&D
5. Therefore can’t differentiate effectively
6. Unable to Pursue Porter Differentiation focus/leadership strategy

Question 4

What is a prototype?

Answer 4

A first version of a product that will have development over time

Question 5

What is the Process of R&D? (3)

Answer 5

1. Create a prototype
2. Test and Adapt the Prototyple
3. Release the final product