| Summary: | M.B.A. === This study is an investigation on the return of investment for mass produced South African consumer products. It resulted from trying to address an issue that industrial designers in South Africa struggle to justify substantial fees, as their services are essentially intangible. Their clients, who are generally the management of manufacturing companies, have a choice of service consultants that provide some form of tangible benefit based on empirical evidence, in return for fees. Thus, the need arose for an empirical study on the return on investment of a consumer product, which is the tangible output of industrial design. This is a pilot case study. Its objective was to establish a base-case model for the return on investment gathered from empirical evidence in a single case study of a consumer product developed in South Africa. In addition, this model had to replicate the cash flow diagram of the investment and sales lifecycle of the product. Therefore, this study had to underpin the concepts of ‘return on investment’ and the ‘development of a consumer product’ with theory. The theory essentially confirms that the concept of profits from a shareholder perspective, regards maximising shareholder wealth because they provide the investment. However, the time value of money diminishes this wealth, thereby necessitating the use of discounted cash flow techniques. The investment decision based on these appraisal techniques follows a prescribed, sequential process. Unfortunately, the new product development process does not follow this process. Therefore, the innovative aspect of this research was to match the point of decision between the processes, as this has a direct effect on sunk costs and an implication on the research questionnaire. Thereafter, the questionnaire had to consider the system of innovation in order to determine the activities that have an incremental effect on cash flow. The research methodology for a case study design was used. A set of protocols was established to replicate this study in future studies. A focussed interview was conducted with industrial designers to confirm the issues, who in turn facilitated a meeting with their clients. A client with a consumer product from the security sector was selected. The research questionnaire was completed by the client and analysed by the researcher using Net Present Value, Internal Rate of Return, Modified Internal rate of Return and the Discounted Payback techniques. The solutions showed a significant increase in shareholder wealth as a result of implementing the product. In addition, this information was translated into diagrams to make it simpler for management to understand. Thereafter, a report was submitted to the client. In conclusion, this study achieved its objectives within limitations. However, if the limitations were addressed, there is potential to replicate this as a multi-study and provide a substantial empirical case for industrial design in South Africa.
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