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How to Design R&D Projects

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How to Design R&D Projects

Information Related to R&D Projects

Specifying a Sonite R&D Project

Specifying a Vodite R&D Project

CompanyReport

Newsletter

Benchmarking

Semantic Scales

MDS

Conjoint Analysis

- Listing of available R&D projects as well as on-going ones.
- New brands can be launched or existing ones can be upgraded with available projects.
- The brand will have the physical characteristics specified in the project.
- The current base cost is the transfer cost of the units produced, for the first production batch of 100,000 units.
- If the cumulative production level is lower, the unit transfer cost will be higher.
- If the cumulative production level is higher, the unit transfer cost will be lower.

- The minimum base cost is the minimum cost that can be specified in a cost-reduction R&D project with the same physical characteristics.

Unit transfer cost = $158

Why ??

CompanyReport

Newsletter

Benchmarking

Semantic Scales

MDS

Conjoint Analysis

CompanyReport

Newsletter

Benchmarking

Semantic Scales

MDS

Conjoint Analysis

- Useful to determine when first Vodite brands will be launched.

CompanyReport

Newsletter

Benchmarking

Semantic Scales

MDS

Conjoint Analysis

Segment ideal points

Six dimensions : 5 physical characteristics plus price

Brand perceptions

- The lifetime of an R&D project is several years long.
- Design R&D projects that will be attractive in a few years time.

?

Need to improve Design

Good fit in Max Freq and Power

- Compare brand perceptions with segment expectations. R&D will let you fill in the gap

- Do graphical interpolations on these charts to calculate the characteristic in Kg, Dm3, KHz, W, … that corresponds to a given value on the 1-7 scale

Singles’ Ideal Max Freq in 2 years : 4.50

Singles’ Ideal Max Freq in 2 years : 30 KHz

CompanyReport

Newsletter

Benchmarking

Semantic Scales

MDS

Conjoint Analysis

Three dimensions : Economy, Performance and Convenience

Segment ideal points

Brand perceptions

- Brand physical characteristics and prices have an influence on MDS dimensions.
- For instance, Performance is strongly linked with Power and Max Freq.

- The lifetime of an R&D project is several years long.
- Design R&D projects that will be attractive in a few years time.

?

Need to improve Convenience

- Compare brand perceptions with segment expectations. R&D will let you fill in the gap

- Do graphical interpolations on these charts to calculate the characteristic in Kg, Dm3, KHz, W, … that corresponds to a given value on the -20 to +20 scale

Pros Ideal Performance in 2 years : 10

Irrelevant if the MDS dimension and the characteristic are not strongly linked

Pros Ideal Power in 2 years : 75 W

CompanyReport

Newsletter

Benchmarking

Semantic Scales

MDS

Conjoint Analysis

- Higher utilities mean higher customer satisfaction levels
- Beware, the four levels are arbitrarily set. Maximum utility may be achieved for a fifth level.

- In the Sonite market, Price is the most important dimension, followed by Power.
- For instance, almost 80% of the decision is driven by Price for Singles.

Source of Information Related to R&D Projects

Specifying a Sonite R&D Project

Specifying a Vodite R&D Project

- 1. Decide on which segment to target using the MDS maps .
- 2. Determine what characteristics are important to that segment using the Semantic Scales or Conjoint Analysis.
- 3. Identify the dimensions where the gap between “Ideal” levels and your brand “Perceived” levels are the largest ones, using the Semantic Scales or MDS.
- 4. Decide on which brand characteristics you should modify. Small gaps and/or non-important characteristics can be ignored.
- 5. Calculate the “ideal” level in each characteristic you want to upgrade, using graphical interpolations. Remember to take the evolution of needs into account.
- 6. Estimate the future price of the brand when it is repositioned and decide on a “Base Cost” that will give you an acceptable profitability ratio.Or develop the project at the minimum possible base cost (R&D budget will be higher)
- 7. Launch an R&D project with the new characteristics and the new base cost, using the current base project as a starting point.

- SIBI : Based on PSIBI
- Weight = 19 Kg - Design = 8 - Volume = 60 dm3
- Max Freq = 15 KHz - Power = 20 W
- Base cost= $99 (current cost = $79)

- Target Segment : Singles
- Most important characteristics : Power, Max Freq, Design
- Ideal Power in two years = 4.80 = 65 W
- Ideal Max Freq in two years = 4.70 = 30 KHz
- Ideal Design in two years = 5.20 = 7

- R&D project PSIN1
- Weight = 19 Kg - Design = 7 - Volume = 60 dm3
- Max Freq = 30 KHz - Power = 65 W
- Develop project at minimum cost

Source of Information Related to R&D Projects

Specifying a Sonite R&D Project

Specifying a Vodite R&D Project

- The only available data are the “Semantic Scales - Ideal Values” and the importance of characteristics.
- Eg:
- Most important characteristic : “Max Freq”
- Ideal level for Innovators : 4.90 on the 1 to 7 scale
- Ideal “Max Freq” in KHz for this segment ???

7.0

4.9

1.0

5

15

20

- When no brands are marketed, estimating ideal characteristics through graphical interpolation is not possible.
- One has to assume that
- 1 on the semantic scales corresponds to the minimum feasible characteristic, e.g.: 5 KHz
- 7 on the semantic scales corresponds to the maximum feasible characteristic, e.g.: 20 KHz
- Variations are linear in between

Respect the deadline

Good luck!