From rohanbaker@rabbit.com.au Thu Jul 15 02:56:05 2004
Subject:The rights or wrongs of recovering R&D costs. Was: Musings on the XK-3 brouhaha....

From: "g_e_marshall"
Subject: Re: Musings on the XK-3 brouhaha / lack of posts

>>And as stated by others, the cost of development is rolled in (right or wrong) and also, the target niche is indeed churches.<<

Any company that doesn't roll in the development costs into the final costs of their is a company that won't last long in the corporate world.

I work for a small specialty chemical company that manufactures timber preservatives and oil based timber finishes. The company has a substantial R&D budget (new products and process improvements) for its scope and size (2-3% of annual revenue). Hence the company quite rightly rolls 100% of this budget back into the price of the end product. To do otherwise would be fiscal suicide and the 20 odd staff members and their families that draw an income from the company, are going to be cold and hungry, including yours truly.

Would it be fair to expect my fellow workmates to take a significant cut in pay, to satisfy a few customers that complain that the latest innovative timber treatment product is too expensive due to R&D costs?

Why should any clone manufacturer that has spent similar proportions of income revenue in R&D for it's latest and greatest product, cut it's own throat by not pricing their products to recover all such costs? I can't believe that manufacturer "X" does it while manufacturer "Y" and "Z" doesn't.

I don't want to start a flame war (I was not trying to offend), so I'm heading back to lurking and playing my clone.

Rohan
The sometime R&D Lab Tech, Engineer and Jack of a few other trades for:
www.preschem.com

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