The Research and Development (R&D) Department oversees invention and redesign. It develops the innovations needed to keep the company ahead of the competition. R&D is responsible for the “product” portion of the 4 P’s of Marketing (“product, price, place and promotion”). This makes R&D an essential part of any marketing process.

Your R&D Department invents new products and changes specifications for existing products. Changing size and/or performance repositions a product on the Perceptual Map. Improving performance and shrinking size moves the product towards the lower right on the map (see “2.1.4 Positioning”).

Your R&D decisions are fundamental to your Marketing and Production plans. In Marketing, R&D addresses:

• The positioning of each product inside a market segment on the Perceptual Map
• The number of products in each segment
• The age of your products
• The reliability (MTBF rating) of each product

In Production, R&D affects or is affected by:

• The cost of material
• The purchase of new facilities to build new products
• Automation levels (The higher the automation level, the longer it takes to complete an R&D project.)

All R&D projects begin on January 1. If a product does not have a project already under way, you can launch a new project for that product. However, if a project begun in a previous year has not finished by December 31 of last year, you will not be able to launch a new project for that product (the decision entry cells in the R&D area of the Capstone Web Application will be locked).