Product development has been a major activity in the food industry for over 40 years, but only gradually has it developed as a strategic business area and also as an advanced technology. For a long time it was essentially a craft, loosely related to the research and engineering areas in the company. The pressures for product development came very strongly from the needs of the growing supermarkets for a constantly changing, extensive mix of products and for continuous price promotions. So there was the drive for product difference, including minor product changes sufficient to distinguish products on the shelves, and for cost reductions. There were also underlying social and technological changes which caused major product development; for example the increasing number of working women which sparked the need for convenience foods and eating out, and the development of spray and freeze drying which was the basis for instant foods. When one looks at overall success and failure in the food industry during past years, socially there has been success in providing sufficient cheap food in developed countries, but failure through developing such a poor reputation that the food industry became highly regulated; commercially there has been success in developing large multinational companies, but failure with continuously reducing margins on food products. Can the failures be related to narrowly focused business strategies, to lack of innovation strategies and organisation or to lack of knowledge? There are now compelling social and technological pressures on the whole food system to change rapidly, such as the pressures from the growth of information technology in the more affluent countries, and from the growing economic strength in some of the developing countries. Can the food industry meet this challenge? Has the food industry the knowledge and the people?
Introduction
Food products – the basis of innovation
Food products are materials consumed by humans to meet physiological and psychological needs While companies define food products by their basic functional attributes, packaging, branding, and advertising, consumers perceive them as a bundle of benefits that align with their needs and desires For instance, a basic food product like flour may have a straightforward description, but the perception of more complex food items involves a deeper connection to consumer behavior and preferences.
The success or failure of a new product resembles the complexity and emotional experience of dining at a restaurant A new product is defined by its distinct functional and aesthetic features, yet consumers assess it against existing products and competitors If they perceive a difference, they recognize it as a new product (Schaffner et al., 1998) Effective product development hinges on balancing these consumer perceptions with the company’s innovations.
There are many thousands of food products and they can be grouped together into product categories according to:
• processing technology used to manufacture them;
• basic common characteristics such as nutrition and health;
Grouping products is an effective strategy for generating innovative product ideas through techniques like product platforms, product morphology, and gap analysis This approach helps identify opportunities for new developments, enhances product improvement, and fosters innovation in response to evolving food systems and technological advancements.
1.1.1 Food products and the food system
Products play a crucial role throughout the entire food system, impacting everything from primary production to consumer use For instance, a new high-protein cereal can be processed into specialized protein products for bakers, transformed into high-protein breakfast cereals by food manufacturers, serve as a meat alternative in vegetarian fast-food outlets, or be sold as an ingredient for home-prepared muesli in supermarkets Additionally, it can be directly purchased by consumers for use in home breadmakers The introduction of a new product in one segment of the food system can lead to the development of innovative products in other areas.
There is a need to distinguish the three groups of products:
1 Primary products from sea and the land.
2 Industrial ingredients from food processors.
3 Consumer products from food manufacturers and food service.
They basically have the same product development process, but there are activities and techniques specific to each area.
Recognizing the total product is essential, encompassing both the formal product and its associations, such as service, know-how, and brand image, as highlighted by Crawford (1997) For instance, a McDonald’s hamburger, while appearing simple, offers significant benefits like convenience, affordability, quick service, and hygiene, along with a compelling appeal related to the positive aspects of American culture, particularly among youth Additionally, food service products, along with industrial and primary products, increasingly incorporate a substantial service component.
Upstream industries play a crucial role in driving innovation within the food manufacturing sector Ingredient and equipment suppliers significantly contribute to advancements in the industry Additionally, agricultural and marine farming serve as vital sources of innovation, providing both fresh products and materials for processing, thereby expanding the scope of innovation in the food sector.
1.1.2 Food products and the markets
Effective product development hinges on understanding the needs of both buyers and users, guiding the design process to fulfill these requirements Recognizing distinct market segments is crucial for categorizing products effectively There are five primary market segments to consider.
2 Retailers: branded products, ingredient mixes.
3 Food service: partially prepared meals, meal ingredients.
4 Industrial processors and manufacturers: differentiated ingredients.
5 Primary processors: commodities, undifferentiated raw materials.
Recognizing the significant differences in product development across various market segments is crucial for companies Transitioning from providing specialized ingredients to food manufacturers to creating consumer products for retail requires acquiring new knowledge and resources Additionally, each of the five primary segments can be further subdivided, with five common categories for consumer market segmentation.
Statistical census data typically categorizes populations by regions, social classes, ethnic groups, households, age, sex, and income However, for more precise consumer targeting, psychographic segments based on lifestyle, behavior, personality, and attitudes are essential Additionally, segmenting user behavior by usage rates, brand loyalty, purchase occasions, and desired benefits enhances product development targeting In industrial segmentation, this process occurs in two stages.
The food system can be categorized in two primary ways: by grouping companies based on their location, size, and type of processing, and by considering company-specific factors like technical expertise and product/service needs Recognizing both product and service requirements is crucial for effective industrial product development Within the food service sector, there are two main categories: commercial and institutional, each containing significant internal segments such as large chain fast-food outlets, fine dining restaurants, and family-style eateries.
The segmentation strategy is crucial to a company's overall business and marketing approach, ensuring that market segments are clearly identified for effective product strategy development.
1.1.3 Food products and processing technology
Food products have traditionally been categorized based on their preservation methods, such as frozen, canned, chilled, dried, and ambient foods For instance, milk products are classified as fresh, UHT, canned, or dried, while fruits fall into categories like fresh, canned, dried, or frozen This classification stems from the dominance of preservation methods in processing and distribution, making changes resource-intensive Thermal processes, including freezing, canning, and chilling, primarily regulate food quality through temperature and time, whereas non-thermal methods, such as irradiation and high pressure, focus on controlling water activity and atmospheric conditions, gaining popularity for their potential to maintain food quality Additionally, products can be organized by processing technologies like baking and fermentation or by their physical forms, such as liquids and powders, which helps leverage a company’s expertise in specific areas, facilitating the development of new products from existing knowledge Common groupings include categories like bread, biscuits, confectionery, and sauces.
Innovative process technologies can pave the way for multiple product families, as demonstrated by extrusion technology, which has inspired a diverse range of snack products, including flavored puffed snacks and muesli bars Understanding both product characteristics and processing methods is crucial in product development, as it fosters significant innovations and the creation of 'new-to-the-world' products.
The evolution of the food industry has transitioned from a primary focus on calorie provision to a growing emphasis on nutrient-rich options, including protein sources like legumes, dairy, meat, and fish While calorie-dense foods were staples in the early 20th century, modern supermarkets now offer low-calorie alternatives Despite advancements, many individuals, even in developed nations, still lack adequate protein intake, highlighting the need for affordable protein sources Additionally, the importance of micronutrients such as calcium, iodine, and iron has resurfaced, prompting the creation of fortified foods Recently, the spotlight has shifted towards functional foods or nutraceuticals, which are designed to prevent disease and promote health These products have moved from niche health stores to mainstream supermarkets, yet their definitions remain broad and varied For functional foods to thrive, they must be grounded in scientific research rather than emotional appeal.
Organizing food products through product platforms is an effective strategy that groups items with common architectures or morphologies Product morphology breaks down products into identifiable characteristics, allowing for the creation of a product platform—a collection of linked yet distinctive products, such as fresh fruit juices or nutritional breads Defined as a set of subsystems and interfaces, a product platform enables efficient development and production of derivative products This approach aids companies in formulating product strategies and generating new ideas As new platforms emerge, derivative products evolve through generations, exemplified by the development of a new product platform in the apple industry over 15 years.
Measures of product success and failure
To develop a successful product mix and strategy, a company must analyze its own historical and current performance, as well as that of the industry and other sectors The food industry, in particular, can gain valuable insights from the successes and failures of different industries, using key performance metrics to assess outcomes effectively.
• individual new products (financial, market, production, consumer accept- ability, targets);
• product development projects (efficiency and effectiveness);
• overall product development programme (success rate, sales and profits from new products, innovation level).
The measures are detailed in Table 1.2.
Measuring individual product success encompasses various dimensions, including financial, consumer, market, and production metrics Financial success is often assessed through profits and return on investment (ROI), but these figures can be misleading due to complexities in measurement Key questions arise, such as the timeframe for ROI assessment—whether it spans one, five, or ten years—and whether it accounts for foundational research that influences multiple products Additionally, the method of discounting returns over an extended period adds another layer of complexity While there is extensive literature on predicting financial success prior to product launch, there is a noticeable gap in post-launch financial evaluation (Crawford, 1997) Ultimately, the annual balance sheet serves as a critical indicator of financial performance for shareholders at the company level.
1 ‘Innovation is a predictable process.’ Do you agree or disagree with this statement? How can a company organise to give 70–80% predictability to product development but allow 20–30% for the unknown?
2 Take one product family in your company, and identify the generations in the product platforms, and then the derivative products on each platform What have you used as the basis for the family and for each platform – preservation method, other technology, nutrition and health, place in the food system or some other general family characteristic? If you have not used nutrition and health, try building up the platforms on this basis.
3 Identify the market segments that your company targets for this family of products, and relate them to the different platforms and if necessary particular products.
4 What building blocks has the company used to form these platforms? the company is judged But how does this relate specifically to the product development? If it has a product family financial analysis, showing different product families as percentages of the profits, then how the product changes are affecting profitability can be analysed If the investments in the various product families are recorded then the return on investment in various product families can be determined But it is seldom possible to track individual products from the annual balance sheet In product development, a financial benchmark is set which takes into consideration not only the company’s own financial needs from a product family but also the financial standards being set by other companies All the individual products in a product family are often set, for simplicity, the same financial targets, but this may be a false assumption as specific products may have different aims.
Table 1.2 Measures for product development success and failure
Sales volumes and revenues Market share Profits Financial performance
Product qualities Customer acceptance Competitive position against other companies’ products
Extending or completing a product line Aiding a promotional effort General company benefits
Efficiency in time and cost Effectiveness in achieving product success
Overall product development programme measures
Comparison between old and new products
Number of new products in the last five years Number of improved products in the last five years Growth of market due to new product introductions
Proportion of sales related to new and improved products
Profitability of new products compared to old products
Contribution to net margins of new products
The effect on company innovation level
Newness of production technology compared with the industry norm
Newness of marketing technology compared with the industry norm
Newness of markets for the company’s products Innovative advance of company’s new products on competing products
Customers’ view of the company as innovativeSource: After Earle and Earle, 2000.
Market success, defined by target sales volumes and revenues, serves as a key indicator of a company's overall performance, product families, and individual products While sales figures are typically straightforward to assess, they are influenced by various factors such as time, marketing efforts, and market conditions A single year's sales data may not accurately reflect product quality or development success; thus, it is essential to analyze sales trends over time, compare them with competing products, and evaluate performance across different market segments In the industrial marketing sector, particularly for food manufacturers and service companies, both ingredient sales and the sales of consumer products are tracked to determine market share within a growing or stable market Additionally, the effectiveness of marketing strategies, including distribution, advertising, and promotion costs, should be measured against the sales generated to evaluate product success comprehensively.
Production success is evaluated through key metrics such as quantity, quality, and costs, ensuring that product specifications are met consistently while maintaining safety standards Achieving the correct production volume and timing is essential, alongside managing basic production costs within budget constraints for both investment and working capital A critical measure of efficiency is production yield, which assesses the ratio of output to raw material input Additionally, monitoring distribution losses and returns from retailers is crucial, particularly in the food industry.
Measuring product and consumer success involves assessing customer acceptance and positioning against competitors Key indicators of total product success include purchase speed, frequency, and volume, alongside a detailed analysis of performance against design specifications Success is not solely based on consumer ratings; it also hinges on the product's ability to meet identified consumer needs, achieve uniqueness, and deliver value Additionally, specific quantitative measures of product characteristics must align with the company's specifications to evaluate benefits for both consumers and manufacturers effectively.
Success in industrial products hinges on their performance throughout the buyer's process and their impact on the quality of the final consumer product For food manufacturers and large food service companies, strict product specifications are often enforced, requiring that product quality remains within a defined range.
Evaluating the success of a product development project involves analyzing both its efficiency and effectiveness Efficiency is measured in terms of time, cost, and resource utilization, while effectiveness focuses on the product's ability to meet quality standards and consumer needs Companies must assess how well the new product aligns with desired characteristics and market demands To enhance future product development processes, organizations should conduct thorough evaluations at the conclusion of each project, learning from both successes and failures to improve outcomes.
Long-term success in a company is closely tied to its product mix, including the balance between old and new products, market growth, and market share These factors significantly influence company value through aspects like goodwill, product range depth, brand strength, and overall market impact Additionally, product success directly affects the company's innovation levels and technological standards relative to competitors Insufficient product development can lead to outdated production facilities and conservative marketing strategies, resulting in a decline in company knowledge over time Without active product development, a company may fall behind in innovation compared to both industry leaders and direct competitors.
A study involving nearly 400 American companies evaluated the financial and market success of their product development programs using four key criteria: product success rate, financial success rate, sales from new products, and profits from new products The findings, illustrated in Figure 1.4, reveal that the top 85 firms outperformed 298 other companies, demonstrating a higher percentage of successful new products, along with greater sales and profits derived from these innovations.
A survey of 800 companies across 26 industry sectors in seven countries revealed that the food and drink industry generated only 21% of its turnover from new products and services, significantly lower than the technology sector, which achieved 69% Furthermore, the study indicated that a 10% rise in turnover from new offerings correlated with a 2.5% annual increase in revenue growth.
1.2.4 Selecting success measures for product development
The selected measures should align with the company's business strategy and reflect the organization's knowledge and skills It is essential for the company to clearly define these measures, preferably opting for quantitative metrics (Beaumont, 1996; Hultink and Robben, 1996) Measures can vary in specificity, from precise metrics like product design time to broader indicators such as the percentage of sales from new products Regardless of the level of detail, the measures must be appropriate, well-considered, clearly specified, and mutually agreed upon Establishing these measures is crucial for effective assessment and improvement.
Fig 1.4 Long-term success of a product development programme.
Success rate: % of products categorised as successes in the last five years.
Financial success rate: % of products categorised as financial successes in the last five years.
% Sales from new products: $ sales of products commercialised in the last five years as % of total sales.
% Profits from new products: $ profits of products commercialised in the last five years as % of total profits.
Establishing benchmarks and targets prior to initiating a product development program and individual projects is crucial for ensuring that all participants understand the criteria for success and failure According to Zangwill (1993), setting these benchmarks in advance helps minimize the impact of specific events and circumstances on the evaluation process This proactive approach fosters clarity and alignment among team members, ultimately guiding the product development towards its intended goals.
Performance measures!Benchmarking!Targets against performance measures
To ensure a high success rate in product development, it is essential to establish clear measures and benchmarks while also evaluating past performance against set targets Effective communication of these targets to all stakeholders involved in the project is crucial At the project's conclusion, comprehensive data analysis should be conducted to identify areas for improvement, prompting a review and adjustment of measures for future projects (Beaumont, 1996) This ongoing process aims to enhance the overall effectiveness of the product development program.
Key factors in product success
Over the past three decades, extensive research has been conducted on the factors influencing success and failure in product development, with notable reviews by Ali (1994), Balachandra and Friar (1997), and Cooper (1996a) A significant finding from Balachandra and Friar's 1997 review highlights critical insights into R&D and new product development studies.
• there were many different factors identified;
• the magnitude of the effect and even sometimes the direction varied in different studies;
• the meaning of similar factors in different studies varied.
They did state there were three common contextual variables, which need to be considered when identifying important factors for product success:
The significance of market, technology, and organizational factors varies based on whether a product represents incremental or radical innovation, the level of technology involved, and whether the market is new or existing Market factors play a more crucial role in incremental innovations compared to radical ones, while high-technology products rely heavily on technology factors In contrast, organizational factors are more pertinent for low-technology products in both existing and new markets, as well as for high-technology products in new markets Balachandra and Friar emphasized in 1997 that these insights provide a solid foundation for analyzing product success and failure within a company Notably, many factors influencing success or distinguishing it from failure are within the company's control, highlighting key overall factors in the product development program.
Completely Neutral Completely disagree agree
Are the scores similar? If not, what has caused the difference?
3 Now studying the individual products in each family, calculate the percentage of: (a) financial, market, production, product/consumer successes in each family for the past 5 years,
(b) the sales, and the profits, from new products in each family for the past year.
4 What are your conclusions on these two product families? How would you develop measures to guide the future product development in each product family?
• product development integrated with a clear business strategy;
• relating the product to the consumer and the marketing;
• knowledge and skills of people;
Successful product development must align with a company's business strategy and be detailed in its innovation and product strategies to avoid a lack of direction Over the past few decades, a standardized product development process has emerged, although specific activities may differ among companies Recognizing that products are designed for specific consumers or industrial customers is crucial, as building strong consumer relationships can lead to success Research indicates that product quality is vital, with a demand for superior products that offer unique benefits Additionally, leveraging the company's internal strengths, such as marketing expertise, technology, and the training and commitment of project staff, is essential The product development program consists of various integrated projects that require regular evaluation to ensure both product success and operational efficiency.
There are also important factors for successful products in the successive stages of the PD Process:
Table 1.3 Important factors for different levels of innovation, technology, market
Low Existing Very important Less important Very important
Low New Very important Less important Very important
High Existing Very important Very important Important
High New Important Very important Important
Low Existing Important Important Important
Low New Less important Important Important
High Existing Important Very important Important
High New Less important Very important Very important
Source: After Balachandra and Friar, 1997.
• Stage 1: Product strategy development – integration of the product development programme with the business strategy, clear description of the market and consumers, identification of market and consumer needs.
• Stage 2: Product design and process development – quantitative design specifications, multidiscipline integration, use of new techniques, feasibility analysis.
• Stage 3: Product commercialisation – multifunctional integration, planning and scheduling, market testing, business analysis.
• Stage 4: Product launch and evaluation – organisation and control, fast problem solving, evaluation of launch, production, distribution and market- ing, evaluation of outcomes.
Effective product development (PD) requires clear direction at each stage, particularly at the onset of Stage 2: Product Design and Process Development This stage involves establishing product design specifications that outline the consumer's product concept, quantitative targets for product quality, processing parameters, and marketing requirements Additionally, integrating diverse skills and knowledge from various departments is crucial Continuous evaluation through feasibility studies, business analysis, and post-launch assessments is essential for ensuring project success.
Fundamental factors in the planning and organisation of the product development project are:
• clear aims, objectives and constraints;
• quality assurance of the development;
• final evaluation of the project.
For a project to succeed, it is essential for all team members to understand the objectives and the contributions of others, fostering a unified approach By evaluating the project's execution quality and final outcomes, the likelihood of future success is significantly enhanced.
Successful product development hinges on various company-controllable factors, which can differ in significance from one project to another Key factors, as outlined in Table 1.4, are prevalent across multiple projects While company capability factors play a crucial role in product success, they must be integrated with environmental variables, such as market characteristics, during the product selection process (Cooper and Kleinschmidt, 1987) It is essential to consider the interplay between product development and environmental influences like society, consumer behavior, and technology not only during project selection but also throughout the project lifecycle and especially prior to product launch Environmental factors hold greater importance for pioneering innovations compared to incremental developments, as the surrounding environment is often less understood (Ali, 1994).
Table 1.4 Company-controllable factors in product success and failure
Closeness to the customer/consumer in product development
The product designed for the consumer’s needs, wants and value
The product superior to competitors
The product has different, unique benefits
Multistage, multifunctional disciplined process with clear decision points
Integration of product, marketing, production, testing and evaluation
Product strategy related to business and market strategies
Clear and early product definition
More predevelopment work before product design
Product evaluation and screening to give sharper project selection decisions
Stage 2 Product design and process development
Integration of product design and process development
Consumer/customer involvement in design
The new product marketed by the design team to the production and marketing personnel Integration of production, distribution and marketing planning
Stage 4 Product launching and evaluation
A well-conceived, properly executed launch with a solid marketing plan
Evaluation measures set before launch
Post-launch evaluation and follow-on.
Good technical/manufacturing/marketing interfaces
The right organisational structure and environment
Project evaluation and decision-making procedures
Completeness, consistency and quality of execution of project
Good project leaders and a core group
Time and cost control; continuous evaluation of project and process
Product development in business strategy
Resources in place – time, money, people
Top management in major decision making
PD project synergy with company’s resources/skills/knowledge
Technological synergy and market synergy with company resources/skills
Product development process: the basis for success
The Product Development (PD) Process is crucial in the food industry, necessitating a well-defined, multidisciplinary framework for project planning (Rosenau, 1996) A survey indicated that 60% of American firms employed formal stages with inter-stage reviews, often utilizing flexible structures like the Stage-Gate TM process (Griffin, 1997; Cooper, 1990, 1996b) Earle and Earle (1999) proposed a streamlined four-stage approach encompassing product strategy development, product design and process development, product commercialization, and product launch and evaluation, clearly outlining the essential skills and knowledge areas involved.
Identifying decisions between stages is crucial, followed by determining the necessary knowledge outcomes for these decisions Next, the activities within each stage are outlined, and appropriate techniques for these activities are selected This structured approach provides a solid foundation for effective project planning.
Decisions!Outcomes!Activities!Techniques which will give the sequence leading to the critical analysis and decision making:
To ensure a successful project outcome, begin by clearly defining the project's direction and objectives Assess the available resources, including personnel, equipment, time, and budget Finally, develop a strategic plan to navigate towards the desired results while implementing an efficient Product Development (PD) process.
1.4.1 Stages in the PD Process
Product development (PD) processes differ based on factors such as the degree of product innovation, the organization's knowledge and resources, time limitations, and the company's willingness to take risks However, essential activities are present at every stage of the PD process.
In recent years, there has been significant attention on clarifying concepts within the industry, emphasizing the importance of eliminating ambiguity Establishing a clear business and product definition is crucial during the initial phases of development (Kmetovicz, 1992) This clarity aids in aligning product activities with market needs and technological advancements.
The fundamental PD Process is crucial for successful product development, with key outcomes including the product concept, design specifications, and a feasibility report Early definition of the product's benefits, characteristics, uses, safety, and value is essential, as it aligns with consumer expectations This product concept evolves into quantitative descriptions by linking it to measurable product metrics and relevant processing, production, and marketing methods The resulting product design specifications provide clear guidance for designers, highlighting the interaction between developing the product concept and initial design specifications.
Stage 2: Product design and process development
The uniqueness of a product is crucial for successful product development, often defined as a significant change rather than an entirely new creation According to Griffin's (1997) insights from the Product Development and Management Association (PDMA) survey, even minor modifications can represent newness in the food industry, where numerous products are launched annually Examples of such changes include variations in flavor, packaging design, or slice thickness, highlighting the importance of recognizing different degrees of product uniqueness.
Box 1.1 Efforts target product improvements
Over the past 13 years, companies have slightly shifted their focus towards projects that enhance the performance of existing products, rather than merely repositioning or extending product lines, although these changes are not statistically significant Currently, over half of all new product development (NPD) projects are significant efforts aimed at improving performance capabilities However, the proportion of new-to-the-world projects remains steady at 10%, and new-to-the-firm projects at 20% This persistent low percentage of groundbreaking projects may indicate the challenges in identifying and delivering innovative solutions for unmet needs, or a general aversion to high-risk initiatives among firms.
The article discusses the significance of evaluating the impact of food design innovations and determining whether costly product launches justify the minimal changes made.
A unique, superior product is essential for success, yet the methods to achieve this are often unclear Industrial design is evolving from the notion of individual creativity to a collaborative design team approach, with designers increasingly venturing into food design, where aesthetic considerations play a significant role Food designers, or food developers, are leading the way in integrating consumer needs into the design process, utilizing computer-based experimental designs to enhance the relationship between product design and process development Successful product design requires a blend of multidisciplinary skills, consumer involvement, creativity, and collaboration with marketing and production In the food industry, this process is typically referred to as food product development, highlighting the growing importance of design principles as industrial designers engage more deeply in this field The union of design and food is transformative, as evidenced by innovative concepts like 'Snackitecture,' which features playful products such as Trix wildberry corn puffs and Heinz Barbie Pasta Shapes, recognized in design journals.
Product design is a crucial aspect of product development that requires the integration of various influencing factors into the design process It relies on the implicit knowledge of designers while also incorporating insights from multiple disciplines and functional areas Ultimately, product design is a harmonious combination of creativity, research, and testing.
Successful product development hinges on effective business analysis and strategic marketing, as highlighted by Cooper (1993) and Crawford (1997) Despite its importance, many companies neglect business analysis, risking substantial financial investments in commercialization and product launches Effective communication between design teams and functional groups is crucial for successful technology integration It's essential to recognize that commercialization remains a design process, and the integration of various functional areas is vital for achieving product success.
• maintain the product qualities at the same standard as in the design through the process and the distribution;
• produce and distribute at the quantities needed;
• develop a total product concept for marketing that agrees with the consumer needs and wants and creates unique value for the chosen target market;
• organise a distribution channel which ensures quality, quantity and costs;
• reduce uncertainty and risk in the launching;
• reach the predicted sales and profits.
In product commercialisation, the product prototype and the preliminary product specifications and marketing strategy have to be developed into a commercial product and production and marketing plans.
Stage 4: Product launch and evaluation
The launch phase of product development is the most costly and high-risk segment, where a swift and efficient launch can yield significant incremental profits, potentially matching or exceeding the benefits gained from shortening earlier stages of the process (Ottum, 1996; Stryker, 1996) It is essential to establish clear targets for the launch to ensure success.
In food product development, establishing clear evaluation metrics is crucial for determining the success or failure of a launch Companies should define specific goals, such as targeted revenues, market share growth, or long-term profitability, while also considering the competitive landscape and potential social, political, or economic changes A well-structured operational plan is essential for a successful launch, requiring sensitivity to both situational and operational conditions Additionally, effective communication and collaboration with distributors and stakeholders can significantly influence the launch's trajectory, helping to swiftly address any challenges that may arise.
In industrial product development, it is crucial for various departments within the purchasing company to be informed and engaged with the product Similarly, in consumer product development, both retailers and consumers should feel motivated and excited about the product, rather than apprehensive or disinterested Continuous evaluation allows for swift improvements, and key factors for a successful launch are illustrated in Fig 1.7.
Fig 1.7 Key factors for launch
1 ‘The launch is designed for the end user, but considers also the company personnel, the distributors and the society.’ Discuss how these people may have
1.4.2 Product development processes for different products
Managing for product success
There are two very important management inputs for product development success (Cooper, 1993; Crawford, 1997):
1 Company management’s involvement in product development.
2 Direct management of the product development programme and project.
Effective general management is essential for guiding business strategy, resource allocation, and key decision-making for both programs and individual projects Meanwhile, product development management must focus on creating a comprehensive plan, fostering multidisciplinary collaboration, and ensuring quality assurance throughout the product development process to achieve successful outcomes and streamline procedures.
Numerous textbooks have explored product development (PD) management, with significant contributions from authors such as Twiss, Cooper, and Zangwill, among others, as noted in the PDMA Handbook of Product Development Key elements identified by various authors highlight essential aspects of PD management Research, including Griffin's 1997 summary of the PDMA survey on American companies, underscores fundamental needs in product development that are relevant across industries, including the food sector Critical among these needs are the active involvement of general management and effective oversight of product development programs and projects.
1.5.1 Company management and product development
Top management leads product development by defining the focus, setting up a system and organisation, ensuring resources and making the critical decisions It
Box 1.2 Some key elements in product development management
Lack of strategic control Enhancing strategic control
Vague innovation objectives Clear innovation objectives
Competence conflicts between Cooperation between disciplines disciplines
Defective decision making Effective decision making
Company culture: survival of Company culture: consensus about the fittest objectives
Weak role of marketing Initiating role of marketing
Expertise and technological foundations, cultural foundations, managerial foundations, planning foundation and risk management
Eradicate fumbles, place customers first
Develop a business strategy, design the product, improve continuously
Make new product development a controlled process
Keep an eye on the world
Involve all relevant people from the start
Have a representative object of the end product in view
Learn how to make decisions quickly
Work with competitive tools and methods
Entrust execution to competent people
In the event of problems, adjust only the affected areas
To sustain a vibrant 'can do' mentality within the organization, it is essential to integrate both innovation and product strategies into the overall business strategy Additionally, identifying and addressing any shortcomings in the innovation culture, knowledge, management, and resources is crucial for fostering a robust environment for growth and creativity.
Effective company planning and business strategy development require forecasting changes that drive innovation, focusing on technological, social, political, and economic shifts as the foundation for an innovation strategy An analytical checklist aids in assessing the company and industry, guiding necessary adjustments to the product mix and services This dual analysis of innovation and products forms the cornerstone of the product development strategy, which must align with the company's capabilities, including market position, supply chain, and financial resources Consequently, a well-structured product development strategy integrates the company's innovation, product, and technology strategies, providing comprehensive direction for the entire product development program.
A product development program is established based on the overall strategy, with top management responsible for allocating the necessary budget and resources Determining this budget is crucial, as it can be influenced by historical sales and profits, projected sales and profits from successful product development, or anticipated costs Striking the right balance is essential; a budget that is too restrictive may hinder the project and limit potential enhancements, while an overly generous budget could lead to inefficiencies.
Table 1.5 Product analysis in developing the product development programme
Demand for products and services
Long-run growth or decline Stability of demand for products Stage in product life cycle
Supply of products and services by the industry
Capacity of the industry Availability of processing technology Availability of raw materials Food regulations and other industry constraints Social constraints
Competitive conditions of the industry
Structure of the industry Market shares
Understanding the probabilities of sales volume and revenue is crucial for the success of product development budgets Key factors influencing this success can sometimes result in a scattered approach, leading to excessive research that prioritizes inquiry over actual product development.
Top management plays a crucial role in establishing an organization for product development, which is a multifaceted process involving general management, production, marketing, and finance, alongside the product and process development team Recognized today as an integrated multifunctional process, effective product development requires coordination across all departments To ensure efficiency and effectiveness, companies often assign incremental improvement projects to functional areas or strategic business units, while major innovation projects are typically managed by joint committees or separate venture groups Additionally, top management is responsible for implementing integrated procedures, setting clear aims and attitudes, and making informed decisions at designated times based on the necessary knowledge for those decisions.
Product development management encompasses two key areas: the overall program and individual projects A well-defined product development strategy leads to clearer project definitions within the program, reducing the need for extensive initial research to eliminate unsuccessful projects This strategic focus enhances the interaction between products, optimizing the development process.
Effective management in product development involves a strategic approach that incorporates thorough analysis of the product, market, and production This comprehensive evaluation helps to identify and eliminate projects that do not align with the product development program before they are integrated, ensuring a more streamlined and successful development process.
Effective management of product development programs requires the strategic allocation of skills, knowledge, and resources across various projects Timely execution is crucial for resource efficiency and for launching the product at the ideal moment Planning and controlling costs within the program budget can be challenging due to the unpredictable nature of multiple projects However, the primary focus of program management should be on ensuring the quality of development, encompassing the overall success in product, production, marketing, and finance.
Effective individual project management involves hands-on supervision of daily activities, techniques, and quality outcomes, which are crucial for project success The project manager is responsible for organizing the team and ensuring high-quality results while balancing costs and timelines Personnel management is essential, as it fosters collaboration between creative designers and pragmatic functional groups While a formal project manager typically leads the team, a project champion may also take on this role in a less formal capacity.
In summary, management must address critical questions when organizing the product development program and initiating major projects, as outlined in Table 1.6.
1 ‘Product development is a top management responsibility.’ Discuss this statement and delineate top management’s areas of responsibility and how it can coordinate this responsibility with other people in the company.
2 In your company, identify the management roles in product development and the various people in these roles – their positions in the company, their expertise and knowledge.
3 Draw a diagram to show how these people interact in the overall product development programme and in the individual product development projects, to ensure project coordination and staff coordination.
4 What methods do top management, product development programme managers and product development project managers use to ensure the quality of the out- comes from product development and the efficiency of the product development?
Relating to consumers and markets: the key to
In the food industry, understanding the consumer's perception of a product and its alignment with their needs and behaviors is crucial for success (Saguy and Moskowitz, 1999) Early identification of clear target market segments is essential, as is recognizing the consumer's interaction with the product throughout the development process Continuous evaluation post-launch contributes to a knowledge base that informs future product iterations For significant innovations, extensive research on the consumer-product relationship and ongoing consumer testing are vital from the project's inception.
Relationships between the manufacturer/supplier/user vary a great deal between industrial selling of ingredients, the food service selling of meals and
Table 1.6 Key questions in product development management
Business strategy: does it focus on product strategy and innovation strategy?
A product strategy involves the ongoing evolution of the product mix, highlighting both enhancements and significant innovations that form the foundation of the product development program.
Product development programme: is it based on the business strategy and on predicted social and technological changes? Does it specify outcomes needed, time and costs? Are there clear objectives?
Product development organisation: is there a multifunctional, integrated organisation uniting teams and functional groups? Are there identified organisations for incremental product improvements and for major innovations?
Effective top management control is crucial for project success, ensuring that top management has approved both the overall program and individual projects Additionally, it is essential for top management to establish the decisions they will make during the project and specify the information required to support those decisions.
Has top management identified the resources needed for the programme?
Knowledge: is there the level of product, processing and marketing technologies for the planned product development? Is there product design knowledge and creative abilities to create unique products?
Consumer/product relationship: does the company recognise this relationship as a major factor in product development success? Are the consumers integrated into the product development process?
Systematic product development process: has the company recognised the important stages in its planned product development and designed a suitable basic PD Process, and identified variations for different products?
Effective product design and process development hinge on clear definitions of product concepts and specifications, as well as the integration of these elements In sectors like snacks and retail, the interplay between products and services varies, necessitating a combined approach for successful industrial and food service product development Personal involvement between suppliers and users is crucial, particularly in marketing meals and ingredients, while food manufacturers often have limited direct consumer interaction Thus, the product-consumer relationship is vital in product development, with the degree of manufacturer-user engagement influenced by the balance of product quality and services within the overall offering.
Research by Grunert et al (1996) highlights the importance of a strong marketing orientation for successful product development in the European food industry Their subsequent studies (1997) revealed that while innovation can stem from either process or product development, a consistent marketing focus is essential across all cases.
Knowledge of society, industry and technology
Product development operates within a dynamic and complex environment that is continually evolving Practitioners in this field must stay informed about societal shifts, technological advancements, market trends, and internal company changes to effectively navigate the product development landscape.
1.7.1 Knowledge of societies and their changes
Societal social and political systems, along with economic and environmental needs, significantly influence consumer behaviors and attitudes, necessitating their integration into product development Ignoring these factors can result in product failure and provoke adverse societal reactions Therefore, innovation must align with societal changes to ensure successful product outcomes.
• change in economic status of the society so that there is first increased calorie and then increased protein consumption;
• decrease in the size of households causing a shift from bulk foods and jumbo packs to specialised foods and small packs;
• change in knowledge of the consumers causing change in the nutritional and aesthetic qualities of foods (Earle and Earle, 2000).
Recognizing shifts in economic status and societal behaviors is crucial for designing products that align with evolving consumer attitudes (Earle and Earle, 2000) These attitudes can quickly transform into political actions, potentially leading to new regulations or outright bans on products A pertinent example is illustrated in Box 1.3, which details the British efforts to prohibit the introduction of spreadable butter from New Zealand, highlighting the impact of political barriers on new product development.
1.7.2 Knowledge of industry and technology
Understanding the food system, industry, and markets, along with their technologies and organization, is essential for successful product development A crucial aspect of this process is how the new product and its development project integrate into the entire food system, from producer to consumer It is important to consider what the project aims to achieve within the system and what it contributes back For instance, a minor product enhancement, like a flavor change, minimally impacts the company's position in the system, requiring only new flavor sourcing and slight process adjustments However, launching a new line of frozen fish snacks presents significant supply chain challenges that must be addressed.
• How to find the right species in the right quantity.
• How to have controlled temperature distribution to supply the factory and then for the distribution to the retailer.
• How to organise freezer space with the retailer.
• Has the target consumer suitable freezer space?
The entire process from producer to consumer is integral to product development, particularly when it involves live crayfish Today's food system operates as a complex, international network, with raw materials and ingredients sourced from multiple countries A single formulated product can contain components from at least five or six different nations, often with each ingredient, aside from the primary raw material, originating from a distinct country This globalization significantly complicates product development, as it requires careful coordination of diverse materials.
Box 1.3 Political effects on product development
The New Zealand dairy industry successfully developed a spreadable butter after extensive technical development and consumer testing in the UK, leading to strong market uptake and repeat purchases However, the product faced a sudden ban from UK Customs due to regulatory non-compliance, resulting in a lengthy court battle and loss of market share before the ban was overturned This situation highlights the varying food regulations across countries, necessitating tailored product development strategies for international marketing The structure of the food industry, often transitioning from monopolistic to oligopolistic markets dominated by large multinationals, impacts innovation types Smaller companies may need to innovate for niche markets or enter late, while larger firms possess resources for product development but may lag in speed, often acquiring smaller firms to enhance innovation.
The infrastructure of suppliers and distributors significantly impacts product development, as the availability and quality of raw materials can either restrict or promote innovation Additionally, the purchasing power and product range offered by supermarkets and food service providers play a crucial role in shaping product development strategies.
The food industry, characterized by non-durable products, tends to focus on incremental product development rather than pioneering innovations seen in sectors like communications and electronics While improvements in technology are relatively straightforward, they can be easily replicated, making the pursuit of new technologies risky due to their close connection with consumer preferences Even well-resourced large food manufacturers often opt for simple product differentiation instead of groundbreaking innovations Additionally, many small companies remain at a craft level of development, lacking the knowledge required for significant advancements Although technological changes have been gradual in the past, future developments in genetically modified ingredients and information technology may alter this landscape.
In product development, acknowledging the internal company environment is crucial, as it influences the development atmosphere through management practices, available resources, organizational philosophy, shared beliefs, skills, knowledge, and behavior Ignoring these factors can jeopardize the success of the product development process.
1.7.3 Creating knowledge for product development
Knowledge is essential for a company's success and plays a critical role in product development While often confused with information, knowledge is distinct; information consists of a flow of messages, whereas knowledge is derived from processed information Within a company, there are two types of knowledge: tacit knowledge, which resides in individuals, and explicit knowledge, which is formally documented Recognizing knowledge as a significant component of capital structure is crucial for the success of modern companies.
Knowledge is increasingly valued in the food industry, fostering new synergies with emerging technologies and markets To harness this potential, companies must prioritize internal collaboration and innovation.
• synergy between the knowledge in the differing functions, such as marketing, R&D and production;
• synergy between the functional knowledge and the knowledge needed for the product development.
In recent years, there has been increasing recognition that knowledge creation and management is important in product development (Clarke, 1998).
Nonaka et al (1996) proposed that knowledge exists both as individual insights and as collective company knowledge, which can be enhanced and formalized by organizations This reservoir of tacit knowledge, often unrecorded and residing within individuals, serves as a crucial foundation for innovation In the product development process, this collective knowledge, along with various information sources, fuels idea generation Companies possess varying levels of knowledge derived from general education, specific technological experience, and industry-related exposure, which directly influences their capacity for product development (Court, 1997) The significance of tacit knowledge in product development is underscored by the fact that much project experience remains undocumented, highlighting the value of seasoned personnel in project teams and management decision-making.
The success of a product hinges on understanding the consumer, making their needs and preferences crucial for any company's strategy Identifying successful projects that prioritize a strong product-consumer relationship highlights the importance of aligning offerings with customer expectations Conversely, examining projects that neglected consumer insights reveals the potential pitfalls of disregarding consumer behavior, emphasizing that a consumer-centric approach is essential for sustained success in the market.
2 Take two PD projects that you would identify as failures and two as successes.Place the four projects on the following scales:
Product development management in the food industry
The food industry has its own specific problems in managing product development:
• Complex interactions in the food system.
• Interrelationship of processing conditions and product qualities.
• Direct relationship between the product and the nutrition of the consumers.
• Complex relationships between products and health for different groups of people.
• Continuous supply and buying of food products.
Designing new fresh fruit and vegetable products presents challenges due to the lengthy development process, which may render them obsolete by the time they reach consumers As consumer preferences evolve and food retailing changes, long-term predictions become essential Additionally, with only one or two growing seasons available, product development and testing can be complex However, the markets for fresh fruits, vegetables, whole chilled fish, and live fish are expanding, highlighting the importance of studying effective product development management for these fresh offerings.
Marketing orientation Product/consumer relationship Knowledge in company Information sources Marketing capabilities Production capabilities Product differentiation
Product development management General management
3 What are the differences between the successful products and the failed products? Can you identify places that the product development could be improved?
4 What is the level of tacit knowledge (knowledge within the individuals in the company) in your company of product, production, marketing technologies and of markets and consumers or customers? How does this restrict or widen what your company can do in product development?
In the food industry, product design and process development are intricately linked due to the unique interaction between products and processing methods Unlike other sectors where these activities occur separately, food product development requires a simultaneous approach A crucial aspect of this development is understanding the nutritional and health impacts on consumers, especially as future products aim for specific health benefits rather than general nutrition This shift introduces ethical responsibilities akin to those in the pharmaceutical industry, necessitating rigorous ethical testing Additionally, research on distribution is essential, as factors like shelf-life and quality changes during transport significantly influence product success Many products have failed due to hasty market launches without adequate shelf-life testing, highlighting the importance of thorough evaluation over the costs of product recalls.
The ongoing demand for food drives the introduction of new products in the market, necessitating a continuous product development program This process promotes proactive product planning and a dynamic product mix, which require efficient and effective planning and control in product development.
Basis and structure of the book
Effective innovation management is essential for senior management in food companies that develop new raw materials, ingredients, or consumer products, as ongoing product introduction is crucial for growth and survival The success of new products hinges on various factors, including product quality, company resources, market dynamics, and marketing expertise, alongside a structured product development process Understanding consumer behavior and needs is vital, as is possessing the technological knowledge and organizational skills necessary for successful market entry This book explores these critical aspects of product development and presents unique management strategies that set it apart from other literature in the field.
• different approaches to product development at different stages in the food system;
• supply of biological raw materials that affects food product development;
• central place of the consumer in all aspects of food product development because of the close, daily relationships between the consumer and food;
• very fast turnover of food products;
• the political effects on food products and their marketing.
Food product development aims to develop:
• understanding of the place of product development in the company’s business strategy and how this is related to the technological, political, societal and economic changes occurring in the environment;
• ability to analyse the complex food system as the basis of delivering food products to the final consumer;
• understanding of the customers’ needs for food commodities and for industrial ingredients as a basis for production research and for product development of ingredients;
• understanding of the food consumer’s needs (nutrition, safety, sensory, social and psychological) in different cultures and societies as a basis for consumer product design;
• knowledge of the product development process and the ability to select decisions and outcomes for the various stages;
• knowledge of the activities in product development and the techniques related to these activities;
• ability to plan and manage a product development programme and specific product development projects;
• ability to evaluate the outcomes of product development projects and design improvements to the PD process so as to raise the level of success.
The material in the book is divided into three sections:
• Part II Key requirements for successful product development
• Part III Managing and improving product development
Part II explores four basic aspects of product development – developing an innovation strategy, the product development process, the knowledge base for product development, the consumer in product development Part III studies the management of product development in general and in different parts of the food system and in different types of food companies It also discusses the evaluation of the launch of a new product and also the outcomes of a complete product development programme and how changes can be implemented to improve the outcomes and the efficiency of product development in the company.
References
ALI, A (1994) Pioneering versus incremental innovation: review and research propositions Journal of Product Innovation Management, 11, 46–61.
ALLDRICK, A.J (1997) Functional foods: assuring quality, in Functional foods: the Consumers, the Products and the Evidence, Sadler, M.J & Saltmarsh,
M (Eds) (Cambridge: Royal Society of Chemistry).
ANON.(2000) Innovate or die, industry warned Chemistry & Industry (1) 3.
BALACHANDRA, R & FRIAR, J (1997) Factors for success in R&D and new product innovation: a contextual framework IEEE Transactions on Engineering Management 44(3), 276–287.
BEAUMONT, L.R.(1996) Metrics: a practical example, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley & Sons).
CAMPBELL, H (1999) Knowledge Creation in New Zealand Manufacturing. Masterate Thesis, Massey University, Palmerston North, New Zealand.
CLARKE, P.(1998) Implementing a knowledge strategy for your firm Industrial Research Institute, July/August, 28–31.
COOPER, R.G (1990) Stage-Gate System: a new tool for managing products. Business Horizons, 44–54 (May–June).
COOPER, R.G.(1993) Winning at New Products (Reading, MA: Addison-Wesley).
COOPER, R.G.(1996a) New products: what separates the winners from the losers, in The PDMA Handbook of New Product Development, Rosenau, M.D. (Ed.) (New York: John Wiley & Sons).
COOPER, R.G (1996b) Overhauling the new product process Industrial Market- ing Management, 25, 465–482.
COOPER, R.G.&KLEINSCHMIDT, E.G.(1987) What separates winners and losers?, Journal of Product Innovation Management, 4, 169–184.
COURT, A.W (1997) The relationship between information and personal knowledge in new product development International Journal of Information Management, 17(2), 123–138.
CRAWFORD, C.M.(1994) New Products Management 4th Edn (Burr Ridge, IL: Irwin).
CRAWFORD, C.M (1997) New Products Management 5th Edn (Burr Ridge, IL: Irwin/McGraw-Hill).
DEUTSCH, R.M.(1977) The New Nuts Amongst the Berries (Palo Alto, CA: Bull Pub Co.).
EARLE, M.D.&EARLE, R.L.(1999) Creating New Foods: The Product Developer’s Guide (London: Chadwick House Group).
EARLE, M.D & EARLE, R.L (2000) Building the Future on New Products (Leatherhead: Leatherhead Food RA).
FULLER, G.W (1994) New Food Product Development: From Concept to Marketplace (Boca Raton: CRC).
GALIZZI, G and VENTURINI, L (1996) Product innovation in the food industry: nature characteristics and determinants, in Economics of Innovation: the Case of the Food Industry, Galizzi, G & Venturini, L (Eds) (Heidelberg: Physica-Verlag).
GRIFFIN, A.(1997) Drivers of NPD Success: The 1997 PDMA Report (Chicago: Product Development & Management Association).
GRUNERT, K.G., LARSEN, H.H., MADSEN, T.K & BAADSGAARD, A (1996) Market Orientation in Food and Agriculture (Boston: Kluwer).
GRUNERT, K.G., HARMSEN, H., MEULENBERG, M.&TRAILL, B.(1997) Innovation in the food sector: a revised framework, in Product and Process Develop- ment in the Food Industry, Traill, B & Grunert, K.G (Eds) (London:Blackie Academic & Professional).
HAAS, R.W (1995) Business Marketing: A Managerial Approach (Cincinnati, OH: South Western College Publications).
HULTINK, E.J.&ROBBEN, H.S.(1996) A framework defining success and failure, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley & Sons).
JACKSON, H.K & FRIGON, N.L (1996) Achieving the Competitive Edge (New York: John Wiley & Sons).
JOHNE, A & STOREY, C (1998) New service development: a review of the literature and annotated bibliography European Journal of Marketing, 32(3/4), 184–251.
KALMAN, T.(1998) Snackitecture International Design Magazine, 45(6), 60–63.
KMETOVICZ, R.E.(1992) New Product Development: Design and Analysis (New York: Wiley).
KNORR, D (1999) Process assessment of high-pressure processing of foods: an overview, in Processing Foods: Quality Optimization and Process Assess- ment, Oliveira, F.A.R & Oliveira, J.G (Eds) (Boca Raton: CRC Press).
MEYER, M.H & LEHNERD, A.P (1997) The Power of Product Platforms (New York: The Free Press).
NONAKA, I., TAKEUCHI, H & UMEMOTO, K (1996) A theory of organisational knowledge creation International Journal of Technology Management. Special Publication on Unlearning and Learning, 11(7/8), 833–845.
OTTUM, B.D.(1996) Launching a new consumer product, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley
PEARLMAN, C.(1998) Food for thought International Design Magazine, 45(6), 47.
PLATZMAN, A (1999) Functional foods: figuring out the facts Food Product Design, 9(8), 32–62.
RAMA, R.(1996) Empirical study on sources of innovation in international food and beverage industry Agribusiness, 12(2), 123–134.
ROSENAU, M.D.(1996) Choosing a development process that is right for you, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley & Sons).
SAGUY, I.S & MOSKOWITZ, H.R (1999) Integrating the consumer into new product development Food Technology, 53(8), 68–73.
SCHAFFNER, D.J., SHRODER, W.R & EARLE, M.D (1998) Food Marketing: An International Perspective (New York: WCB McGraw-Hill).
SHEKAR, A &EARLE, M.D.(1997) Challenges facing consumer research in new service development ANZMEC Conference Proceedings Volume II, Melbourne, 1–3 December.
SLOAN, A.E (1999) The new market: foods for the not-so-healthy Food Technology, 53(2), 54–60.
STINSON, W.S (1996) Consumer packaged goods (branded food products), inPDMA Handbook of New Product Development, Rosenau, M.D (Ed.)(New York: John Wiley & Sons).
STRYKER, J.D.(1996) Launching a new business-to-business product, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley & Sons).
TERRELL, C.A & MIDDLEBROOKS, A.G (1996) Service development, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley & Sons).
TWISS, B.C (1986) Managing Technological Innovation, 3rd Edn (New York: Longman).
URBAN, G &HAUSER, J.R.(1993) Design and Marketing of New Products, 2nd Edn (Englewood Cliffs, NJ: Prentice-Hall).
VRAKKING, W.J &COZIJNSEN, A.J.(1997) Monitoring the quality of innovation processes and innovation successes, in The Innovation Challenge, Hussey, D.E (Ed.) (Chichester: Wiley).
ZANGWILL, W.I (1993) Managerial foundations: competitive benchmarking, inLightning Strategies for Innovation (New York: Lexington Books).
Product development is essential for future business strategy, as it identifies necessary changes for a company's survival and growth By focusing on delivering new products through efficient and low-risk processes, product development plays a crucial role in advancing the enterprise It must align with existing company activities and be fully integrated into the overall business strategy, requiring strong support and collaboration from top management and all departments within the organization.
Product development systematically utilizes business resources while adhering to constraints, advancing through four essential stages to achieve market satisfaction The product development process serves as a framework that integrates activities across these stages, with its efficient and effective organization being a critical factor for success in product development.
Effective product development relies heavily on comprehensive knowledge of the product, market, production, distribution, consumers, and society A thorough understanding increases the likelihood of successfully aligning a new product with business goals and market needs Therefore, it is crucial to explore existing knowledge early in the product development process This foundational knowledge can be enhanced by external information and the generation of new insights within the company.
Consumers play a crucial role in product development, even within industrial marketing, where the direct customer may be food manufacturers or service outlets Products are designed based on consumer needs and preferences, as well as their buying and usage behaviors.
Key requirements for successful product development
Understanding product development involves four key aspects: its role in business strategy, the product development process, the necessary knowledge for effective development, and the relationship between consumers and products By focusing on these elements, new products can be tailored to align seamlessly with both the business objectives and the needs of the customers.
Product development is an integral part of a company's philosophy and strategy, encompassing multifunctional activities that align with overall business goals Recent trends highlight the importance of an innovation strategy that integrates product, process, marketing, and organizational innovations, reflecting the company's social, economic, and technological context This innovation strategy is closely tied to the company's future product strategy, forming the foundation for a comprehensive product development strategy By combining innovation and product strategies with technology, companies can create a robust product development program that addresses both long-term and immediate goals.
An effective innovation strategy is integral to the overall business strategy, emerging from a careful alignment with product, marketing, and technology strategies This innovation strategy informs the product development strategy, which is further enhanced by considerations of product mix and marketing plans Ultimately, the product development program is crafted from the new product portfolio and the product development strategy, ensuring that it aligns seamlessly with the company's strategic objectives, technical and marketing strengths, and the needs of its target customers.
Key requirements for successful product development 43
Possibilities for innovation
Innovation is an integral part of society, and therefore an integral part of an industry and a company There are three basic principles of innovation:
1 An innovation is an idea perceived as new by the individual (Rogers, 1962).
2 An innovation causes change, which can be technological or sociological but is probably a combination of both (Earle, 1997).
3 An innovation involves a wide range of people, in the company, the company’s environment and the society (Earle, 1997).
Innovation is regarded as a mindset within a company, evolving beyond traditional definitions of product and process development to encompass a broader spectrum of changes, including philosophy, technology, methods, organization, market dynamics, and human resources It is crucial for companies to understand that these changes not only impact their operations but also influence other organizations in the food system, consumers, and society at large External innovations can drive internal transformations; for instance, advancements in supermarket technology have reshaped food manufacturing and marketing, while the increasing participation of women in the workforce has led to a rise in demand for convenience foods Thus, innovation is intricately linked to the overall organizational climate.
The product development strategy generator highlights the significance of understanding both internal and external changes within the food system and society It is crucial for companies to monitor these changes and anticipate future trends to ensure survival and growth A key challenge lies in distinguishing between genuine, long-term shifts and fleeting trends, as misjudgments can negatively impact the organization Ultimately, a company's innovation rate is closely tied to its capacity to navigate these dynamics effectively.
• to sense possibilities and to perceive and assess the likely outcomes of feasible changes;
• to evaluate and rank such outcomes strategically and operationally, in relation to company objectives;
• to make decisions on the basis of such information and prepare appropriate strategies;
• to implement plans and changes in managerial and technical terms (Frater et al., 1995).
These steps are shown in Fig 2.3.
2.1.1 Sensing the possibilities for innovations
To identify potential company initiatives, it is crucial to analyze significant societal, technological, and marketplace changes, as well as evolving consumer behaviors Social and political dynamics significantly influence the food industry, sometimes hindering innovation Given that eating is a universal activity, the food sector is deeply intertwined with the social and political fabric of every nation, reflecting various societal transformations.
Political systems significantly influence the food industry, adapting to societal changes over time Throdahl (1982) emphasized that reducing regulatory burdens is crucial for fostering innovation in this sector, but it must not come at the expense of social objectives This ongoing dilemma—balancing innovation with social responsibility—has persisted for over a century Additionally, the political landscape can either promote or hinder innovation through mechanisms like trade barriers and subsidies, which can favor local production while limiting imports Consequently, national policies shaped by societal needs and concerns play a vital role in creating a responsive environment for the food industry.
Table 2.1 Changes in society leading to food innovations
Major long-term living patterns: urbanisation, suburban and in-city living
Working patterns: increase in office workers and decrease in blue collar workers Sex roles: women working, women in former male-dominated positions, women in senior positions
Economic status: increasing incomes, more equal distribution or more unequal distribution of incomes
Educational status: knowledge growth from education and the media
Age structure: increasing percentage of old people in Europe and of young people in South America
Fig 2.4 Human values and the food industry (Source: From Earle and Earle, Building the Future on New Products,òLFRA Ltd,
To drive innovation in the food industry, companies must stay attuned to evolving societal attitudes and their impact on political and food-related changes Historical trends indicate that social and political shifts have spurred food innovation, a pattern likely to persist Therefore, it is crucial for food businesses to implement strategies for monitoring these social changes and anticipating future developments Additionally, integrating human values into innovation strategies is essential for sustainable growth and relevance in the market.
Technological innovation encompasses various domains, including advancements in agriculture, aquaculture, refining, preservation, manufacturing, distribution, retailing, and food preparation methods It also involves improvements in related industries, such as pharmaceuticals, chemicals, home appliances, and information technology Future innovations may stem from emerging scientific knowledge Many large food companies focus on a specific technology, such as emulsion technology, which applies to a wide range of products like margarine, mayonnaise, ice cream, and sausages Leveraging deep expertise in a single technology can foster successful innovation, while transitioning to new technologies requires rapid knowledge acquisition, often through learning or acquiring existing companies Selecting a foundational technology that supports diverse product development is crucial for addressing various market needs.
1 Identify important social and political changes occurring in your company’s external environment.
2 What changes could be made in the company to relate to these changes so that the company not only survives but also grows?
1 What would you identify as major technological developments in the processing and distribution of food products in your company’s present technological system?
2 What new technological developments in other parts of the food industry or in other industries at the present time might cause changes in your company’s technology?
Changes in the food system structure significantly influence innovation opportunities, shifting the focus of innovation across various sectors such as production, ingredient processing, food manufacturing, retail, and food service Recently, there has been a surge in new product development within the ingredients industry, impacting both producers and food manufacturers Over the past 50 years, both vertical and horizontal integration have driven major innovations; for instance, vertical integration in the chicken industry established chicken as a primary meat source and spurred the creation of numerous new products, while horizontal integration has led to innovative developments in the baking sector.
A change in one part of the food system leads to new products in other parts.
Innovations in primary producing industries lead to the creation of new ingredients that enhance consumer products For example, low erucic acid canola seeds have been utilized to produce oil rich in polyunsaturated and low in saturated fatty acids, resulting in more nutritionally appealing oil-based consumer products However, changes in the food system occur gradually, with the past century witnessing mostly incremental shifts, occasional significant transformations, and radical changes that are infrequent.
• maturity of the industry – compared with the innovative industries such as electronics, it is more difficult to invent new products;
Many consumers approach new foods with caution and skepticism, often changing their preferences slowly They tend to embrace new products only when they clearly recognize significant benefits Unlike other sectors, such as information technology, designing these new benefits in the food industry can be particularly challenging.
Fig 2.5 Technological areas for innovation.
The development of biological products, including new plants, animals, and fish, as well as safe processes, is a time-consuming endeavor that is essential for driving radical changes in the industry Historically, the high costs associated with these developments have primarily been covered by government funding, which has contributed to the slow pace of progress in this field.
• marginal returns on new food products – compared with other industries, for example the pharmaceutical industry, the profits on new food products are small.
The current innovation strategy has primarily focused on incremental product improvements, with occasional major and radical changes However, given the rapid technological advancements in various industries today, we may witness a shift in the pace of innovation moving forward.
The rapid growth of technology in the food system is reshaping industry practices, influencing new products, processes, and manufacturing systems, while also altering consumer and societal attitudes towards food For widespread consumer acceptance, it is crucial that individuals perceive clear benefits, which necessitates transparent and comprehensive information A notable challenge in this context is illustrated by the introduction of genetically engineered foods Today, consumers view food innovations not just as products but as experiences that they expect to be safe and enjoyable The evolution within the food industry can be summarized as a transition from commodities to products, then services, and ultimately to experiences.
Innovation occurs today at all these levels in the various parts of the food system.
When searching the food system for innovations, some leading questions are:
• What are the changes in the relative importance of the various sections in the food system?
• How is the capacity of the industry changing?
• What are the changes in the ownership structure?
• Are there predicted take-overs in the industry?
• Are there predicted take-overs from outside? Hostile? Friendly?
• Are there predicted investment changes?
• Are there new companies entering the industry?
• Who are the innovators in the industry?
1 Try to answer these questions.
Marketplace changes present abundant opportunities for innovation (Earle, R.L and Earle, M.D., 1999) It is essential to explore long-term possibilities while also employing tactical thinking for immediate marketing strategies When seeking long-term marketing opportunities, consider focusing on four key areas.
When examining global markets, it's crucial to assess various regions, as while the U.S and European markets may be stagnant, Asian markets are experiencing rapid growth Companies can either focus on increasing market share or enhancing product value domestically, or they can introduce established products to new markets Successful examples like McDonald’s and Coca-Cola demonstrate that relaunching in new markets can yield long-term benefits, but maintaining a strong home market is essential for supporting these ventures Additionally, insights gained from overseas markets can inspire new product developments at home.
Shifting the balance between products and services is a key indicator of innovation in the food industry While product development once dominated consumer marketing, the significance of services has grown substantially Food manufacturing companies are increasingly exploring how far they can extend their services to consumers, while ingredient suppliers are assessing their role in supporting food manufacturers For instance, by supplying both ingredients and recipes, food service providers can create numerous new offerings for small restaurants Additionally, the introduction of ready-to-heat chilled meals in supermarkets opens up a variety of new product possibilities.
Incorporating innovation into the business strategy
Innovation strategies are integral to the overall business strategy, working in conjunction with product, technology, and marketing strategies This formulation process is iterative, aligning various strategies towards business objectives while leveraging forecasts and outcome analyses, all grounded in an understanding of the company's capabilities.
Top management creates an innovation blueprint that outlines the future significance of innovation in achieving the company's long-term goals This blueprint is grounded in understanding the impact of innovation on key stakeholders, including consumers, employees, and shareholders, as well as its connection to the company's capital value, share price, and brand value Ultimately, this framework serves as the criterion for integrating innovation opportunities into the overall business strategy.
The top innovation possibilities are combined with the blueprint to develop an innovation summary, which is built up with the product, marketing and technology strategies into an innovation strategy.
2.2.1 Combining strategies – product and innovation
A robust product strategy establishes a balanced and adaptable program for the product mix over the next five years, while also outlining future developments This forward-looking approach is influenced by the company's culture, size, market volatility, and technological advancements In larger companies operating in stable markets with slow technological changes, planning can extend beyond ten years Conversely, smaller companies with limited resources typically focus on a one to two-year planning horizon.
Effective product mix planning involves understanding both current and future market leaders, assessing the product life cycle stages, and evaluating competitive positions This process helps identify opportunities for product enhancements, line extensions, repositioning, and the introduction of innovative products A continuous interaction between innovation summaries and product mix development is essential to create a robust product development strategy that guides future initiatives.
Predicting the impact of innovations, such as new processing lines or company restructuring, on product strategy is crucial for future financial outcomes These changes are often analyzed in isolation, particularly company reorganizations, without considering their effects on product planning While they may offer immediate cost savings, they can lead to significant adverse consequences for new product development and long-term profitability.
2.2.2 Combining strategies – technology and innovation
The company's technology strategy is closely linked to its innovation strategy, necessitating an assessment of current technological competencies and the capacity for new technology development A systematic comparison of the company's technological skills against competitors provides a more accurate evaluation than subjective internal assessments Engaging a combined project team of company staff and external consultants, utilizing quantitative analysis, is essential for a comprehensive evaluation of technological competence across various areas, including raw materials, processing, distribution, marketing, and products.
• base technologies that are necessary for the chosen product–market mix;
• key technologies which provide competitive advantage;
• new technologies, which could become tomorrow’s key technologies.
To prepare for the future, it is essential to develop a comprehensive technology mix that integrates selected innovation possibilities, product offerings, and technological capabilities This technology strategy is closely linked to the innovation summary and reflects the company's ability to leverage its technological strengths, as illustrated in Fig 2.7.
• new base or core technology that may lead to a range of new products;
• base or core technology that is needed for an original new product;
• key technology change that will be a unique competitive chance for the company;
• improved technology that will lead to higher product quality, more varieties of products or cost reductions.
In developing a technology strategy, it is important to relate it to the products, consumers and markets Sometimes a new processing or production technology
1 What are the basic product areas in your company’s product mix? In the product mix, identify today’s breadwinners – the products providing the main part of the sales revenue, and tomorrow’s breadwinners What is the place of the other products in the product mix?
2 From your study of the product mix, what types of product innovation do you predict for the next few years? may appear an attractive advance but may give product changes that are not recognised by the consumers or may even be unattractive to the consumer. Irradiation is a long-time technological innovation that has not come to be used because of consumer resistance to it Genetically engineered crops are another instance today It is also important to study the technological need, possession and lack of technology in the company and outside sources of technology, in developing the technology strategy:
In looking at new raw materials, some factors to study are shown in Table 2.4 Raw materials are an important technological area for innovation in the food
Fig 2.7 Building the technology strategy.
Table 2.4 Factors in raw material innovation
New agricultural and marine resources/materials
New processed raw materials, ingredients
Social constraints on raw materials changing
Availability/costs of raw materials changing
Government controls on raw materials changing
Effects of economic/political changes on materials
In response to evolving company standards in the materials industry, there is a growing need for transparency in sourcing due to consumer and political pressures The complexity of raw material pathways in international trade can no longer be an excuse; instead, it may lead to increased joint ventures focused on innovations in raw materials.
In the food industry, it is critical to combine the necessary production, processing and marketing technologies in technology innovation to ensure a successful innovation.
2.2.3 Combining strategies – market and innovation
Identifying the target market segment is a crucial first step in market innovation (Schaffner et al., 1998) Companies should categorize consumers, industrial clients, retailers, or food service organizations into coherent groups based on shared behaviors, attitudes, needs, and wants, allowing for a unified marketing approach Once the target market is established, valuable information can be gathered to develop the market innovation strategy This strategy may focus on the current target market, expand into similar segments, or explore new national or international markets, potentially leading to the creation of an entirely new market.
A successful marketing orientation in business strategy relies on understanding and interpreting consumer needs and wants, which is then reflected in the marketing strategy This strategy focuses on shaping consumers' perceptions of the company and its various product offerings As consumer behavior and preferences evolve, businesses must adapt by developing an innovation strategy that aligns with these changes Flexibility is crucial, as companies must adjust their relationships with consumers accordingly Ultimately, the innovation strategy hinges on both the company-consumer relationship and the product-consumer relationship.
In the case of the tangible product in the supermarket, the consumer is relating to the brand, the company and the product.
1 What are the basic technologies in raw materials, processing, distribution, marketing in your company?
2 What are the key technologies in each area?
3 What new technologies do you see developing in each area in the future?
4 Does your company have the competencies for these new technologies?
5 If not how could the company acquire them?
In the case of the food service, there is also the service relationship where seller, buyer and product interact:
Consumers in take-away restaurants or institutions evaluate both the service and the food, while in industrial marketing, customers assess the seller alongside the products and services offered.
In developing an innovation strategy in marketing, the company can be changing the consumers’ concept of the company, the brand, the products and the services.
The marketing strategy is closely linked to the product strategy and is significantly influenced by the product life cycle stage It encompasses various market innovations, such as launching a new product in an untapped market, introducing an existing product to a new market, enhancing a current product, or relaunching a product in its existing market Additionally, it may involve phasing out a product, which, while seen as a form of innovation, aims for discontinuation rather than growth.
Developing market innovation hinges on understanding competition and the company's competitive position It's crucial to determine whether the innovation is a response to competitors or a proactive strategy that anticipates their moves Effective product positioning relative to competitors plays a vital role in market development Even within the same market segment, innovative positioning can differentiate a product For instance, while baked beans are typically seen as a commodity, repositioning them as a high-protein food targeting the nutritional market could represent a significant shift.
Building up the innovation strategy
Numerous innovations have successfully passed initial evaluations aligned with the company's goals and have undergone assessments related to product, marketing, and technology strategies These innovations must be integrated into a cohesive final innovation strategy Regardless of the chosen direction for its innovation strategy, a company must possess the necessary knowledge, techniques, resources, and implementation skills to effectively develop and realize the innovation While various innovation strategies exist and can be combined in multiple ways, it is crucial to analyze their anticipated outcomes before integrating them into the company.
Building an effective innovation strategy requires a comprehensive analysis of the entire system and the company's current position within it This process involves anticipating potential changes in the system and defining the ideal future state for the company When formulating innovation strategies, food companies must take into account their unique circumstances and objectives.
Fig 2.8 Building the final innovation strategy. raw materials, technology, markets, targeted consumers and their wants and needs, but need also to set out clearly:
• the company’s place in the food system;
• the company’s means of achieving the innovation aims;
• the company’s organisation and resources for innovation.
2.3.1 The company’s place in the food system
The food industry is primarily divided into two channels: fresh products and processed products Recently, the fresh products channel has gained significant importance, driven by advancements in distribution technology and consumer demand for freshness, with expectations for continued growth In contrast, processed products remain vital due to their longer shelf life and product variety Key decisions in the food system involve choosing between stages such as production, ingredient processing, manufacturing, distribution, and retail The production sector is witnessing increased innovation, including diverse fruits, vegetables, fish farming, organic practices, and genetic engineering aimed at enhancing farming methods Ingredient processing has also seen substantial advancements, becoming a powerful segment of the food industry While food manufacturing has focused mainly on incremental improvements, some innovations like UHT processing and extrusion have emerged Retail continues to evolve with innovations in supermarkets, organic offerings, and the rise of food outlets at petrol stations, alongside the growth of takeaways and restaurants.
Vertical integration has historically been a key innovation strategy, particularly in the chicken industry and among large multinationals that combine ingredient processing with food manufacturing Recently, however, some companies have begun to divest their ingredient processing divisions, opting to contract farmers instead of owning farms for production, processing, and marketing Retailers are becoming more integrated into the food system, often without ownership, and are increasingly involved in driving innovation Consequently, food manufacturers are now influenced by both ingredient processors and retailers in their innovation efforts This raises questions about how food manufacturers will adapt their innovation strategies in the future; the current strong influence of retailers and ingredient suppliers could either render them redundant in the innovation process or push them toward new avenues of development.
2.3.2 The company’s means of achieving the innovation aims
In developing an innovation strategy, a company must determine the most effective approach to achieve its goals, whether through growing its own technology, pursuing acquisitions, engaging in mergers, or utilizing licensing The choice of method is crucial for successfully bringing innovations to market and depends on various factors specific to the company's objectives and resources.
Box 2.2 Some possible innovation strategies for the various stages in the food system
Food service – Fast foods is an area which will develop further in the global scene, with international foods from fusion of meals and snacks from different countries.
In some countries, particularly the USA, the fast food companies could develop more fresh take-home meals or part meals.
Retailers in the USA are poised for new developments to adapt to evolving consumer demands Innovations are expected to reshape the retail landscape, moving away from traditional supermarket dominance towards a variety of store formats, including fresh food markets, convenience stores, and take-home meal outlets Additionally, the growing reliance on the Internet for retailing is set to further transform the shopping experience.
Manufacturers aiming for comprehensive food technology can explore innovations in the retail sector by creating new retail outlets, either independently or through joint ventures with other manufacturers or retailers Two potential innovations include:
• marketing a specialised group of nutritionally designed products through nutrition boutiques;
• cooperation with fast food outlets to develop a new combined manufacturing and retail system to provide fresh meals or part meals for taking home.
The ingredients processing sector is rapidly evolving, with a growing emphasis on industrial marketing strategies that foster collaborative programs with food manufacturers and service providers This innovative approach increasingly incorporates partnerships with farmers and fishers, enhancing the overall supply chain.
Farmers and fishers can enhance the 'fresh' food supply chain, connecting their products directly from farms and seas to supermarkets and food service outlets By fostering closer collaborations with food processors, they can innovate new ingredients through improved animal, plant, and fish breeding practices This ownership of the production process ensures that the development of new varieties and sustainable methods aligns directly with consumer demands.
Source: After Earle, 1997. resources in the company, time available, costs, risks involved and the probability of success.
When deciding to develop innovation internally, management must determine whether the change will be incremental or discontinuous This involves assessing whether to build upon the existing foundation or to pursue a completely new direction, such as establishing a new plant, entering a new market, or launching a new product platform Companies must evaluate their strategic positioning—whether they are strengthening, altering, or exiting their current market stance—and consider the organizational changes required, whether gradual or complete Additionally, it's crucial to specify the associated risks, categorizing them as high, moderate, or low.
A company's innovation philosophy plays a crucial role in defining its approach to different types of innovation across various strategic business units While some units may focus on high-risk, disruptive changes and developing proprietary technology, others may prioritize low-risk, incremental innovations and acquisitions Typically, a single overarching philosophy governs the company, although certain venture divisions may adopt a distinct approach The risk associated with an innovation strategy can differ significantly between companies, as two firms may pursue the same product in the same market, yet experience varying levels of risk in their respective strategies.
1987) Two companies developing frozen bread dough and two developing low- fat beef are compared in Table 2.5.
Table 2.5 Innovation strategies and their risks in different companies
The innovation is frozen bread dough as a consumer product in supermarkets
A local bakery is exploring an innovative marketing strategy to introduce frozen bread doughs to supermarkets across the nation This ambitious initiative involves significant risks due to the unfamiliarity of both the technology and the market for the company.
A prominent baking company, known for its cakes, biscuits, and frozen pastries, is exploring the introduction of bread doughs to supermarkets This strategic move is considered low-risk due to the company's existing technology and established market presence, offering an opportunity to diversify and expand its product range.
The innovation is a production method for growing beef cattle to produce low-fat beef
A collective of farmers is establishing a processing and marketing cooperative aimed at promoting gourmet beef products for upscale restaurants in the local market This innovative venture involves significant capital investment for the processing plant; however, it presents a low risk since the farmers are already familiar with and successfully selling beef in this niche market The primary concern lies in whether the market size will be sufficient to justify the capital expenditures.
A meat company specializing in beef for hamburger processors is planning to establish a marketing system in an overseas market through meat importers and restaurant distributors This venture poses significant risks due to the company's unfamiliarity with the local marketing dynamics for beef and the specific consumer demand for low-fat, grass-fed options While there are no capital costs for equipment, the investment required for setting up the marketing system remains a financial consideration.
2.3.3 The company’s organisation and resources for innovation
Getting the innovation strategy right
In its annual business planning, the company may either refine its existing innovation strategy or create a new one, potentially leading to the establishment of a new company or strategic business unit if significant changes necessitate new technology and marketing approaches Conversely, advancing the current innovation strategy represents a more incremental evolution.
Adopting a new innovation strategy can lead to significant transformations within a company, often requiring substantial investments in resources, including personnel, time, and finances This high cost is a key reason many organizations hesitate to explore innovative approaches, resulting in a conservative and stagnant mindset Regardless of whether the change is gradual or a complete overhaul of the innovation strategy, it is essential for companies to embrace this necessity annually to remain competitive and dynamic.
• to determine if the focus of the innovation strategy needs to change;
• to study the balance of innovation areas in the strategy;
• to analyse the innovation areas both operationally and strategically;
• to determine the company’s capabilities and organisation for the innovation areas.
The innovation strategy for the company is a portfolio of strategies that needs to continue achieving the overall aims of the company in the changing business strategy.
2.4.1 Analysis of mix of innovation projects
Analyzing the mix of new product innovations is essential to ensure alignment with the existing product portfolio and the company's innovation strategy According to Cooper (1998), there are four distinct types of companies in the development of innovation strategies.
3 Defenders – the holders of secure positions.
4 Reactors – the responders to competitive pressures.
His analysis of their project types is shown in Table 2.6.
Companies vary in their approach to innovation, with some aiming for transformative changes while others focus on enhancing their current operations Souder (1987) categorized these as promotive and restrictive organizations Promotive organizations prioritize growth and innovation, viewing product diversification as a key strategy, whereas restrictive organizations often emphasize market share, profit maximization, and stock price over growth Understanding the alignment of innovation projects with a company's strategic identity—whether as a prospector, analyzer, defender, or reactor—is crucial for effective innovation management.
2.4.2 The company’s capabilities and organisation
The structure of a company significantly impacts its innovation strategy, determining whether it operates as a centralized, rigid entity or a more fluid organization that empowers lower-level managers in decision-making This organizational type influences the suitability of innovations for the company Additionally, the availability of knowledge and resources is crucial; without the ability to gather and analyze information, innovation strategies may be limited A long-term commitment to technology and technological expertise is essential for developing robust innovative strategies Furthermore, insufficient discretionary capital can hinder funding for new ventures, posing challenges to pursuing innovative initiatives.
Table 2.6 Project types by business strategies
Project type Prospector Analyser Defender Reactor
Additions to existing 22 42 40 48 product line (%)
Source: From Product Leadership: Creating and Launching Superior New Products by Robert Cooper Copyright ò 1998 by Robert G Cooper Reprinted by permission of Perseus Book Publishers, a member of Perseus Books, LLC.
1 Where would you place your company – prospectors, analysers, defenders or reactors?
2 Does analysis of your new products in the last five years agree with this? strategies Souder (1987) summarised some of the qualities of an innovative organisation:
• Willingness to accept change, altered behaviour and disruption.
• Long-term commitment to technology.
• Patience in permitting ideas to gestate, and decisiveness in allocating resources to these ideas having the greatest commercial prospects.
• Willingness to confront uncertainties and accept balanced risks.
• Alertness in sensing environmental threats/opportunities, and promptness in responding to them.
• Openness of internal, cross-departmental communications; diversity of internal talents and cultures; existence of many external contacts and information sources.
• A climate that fosters the natural confrontation and resolution of interdepartmental rivalries and conflicts, and the development of reciprocal role-persons.
This checklist for assessing a company's innovation traits remains unmatched over the years and is essential for evaluating the company's innovative capabilities.
Bringing together key individuals involved in projects with those shaping the business and innovation strategies is crucial for fostering successful innovation within a company This collaborative process combines creativity and analytical thinking, allowing designers and developers to harness their creative talents effectively.
To effectively implement an innovation strategy, companies must engage in a collaborative, multidisciplinary approach that involves various departments and stakeholders This ensures that all participants are well-informed and actively prioritize the sub-innovation strategies While external consultants may provide valuable insights, the process should primarily be an internal, creative endeavor that fosters a sense of ownership among employees Involvement from Board members is crucial to align the innovation strategies with the company's future goals and capabilities While smaller companies may naturally integrate these discussions into their daily routines, formalizing this process at least annually is essential Larger organizations can leverage interactive computer systems to facilitate ongoing discussions, minimizing the need for extensive meetings.
Identifying and ranking innovation possibilities for major strategy changes is a time-consuming yet creative process that involves repeated analytical steps It is crucial for all stakeholders to share a common understanding of the proposed innovation strategy and its expected outcomes Various techniques, such as simple scoring and the Delphi method, can aid in the ranking process, necessitating discussions to address score discrepancies and achieve consensus through re-scoring Key factors for consideration during these discussions are illustrated in Fig 2.9.
It is important to identify innovations that:
• cannot be accommodated in the company;
• will need an effort beyond the resources of the company;
• will take too long to complete or have an indeterminate end point;
• will cause a problem because there is not the necessary integration of design, production, marketing.
It is also important to identify innovations where the technology is uncertain, or where the transfer from basic or strategic research to development needs advanced and difficult technological research.
Predicting the outcomes of an innovation strategy, particularly its success, can often be subjective and intuitive at this stage However, it is essential to identify various levels of success to inform project decisions Both available resources and environmental changes can significantly impact the innovation's outcomes, potentially transforming expected success into actual failure Therefore, key success targets for the company must be established, along with an analysis of external and internal environments Group members then make predictions regarding the outcomes for each success measure, which may include subjective assessments.
Complete dud Doubtful Should be OK Probable success Out-of-this-world
The Q sort method involves distributing cards representing individual strategies to each group member, who then categorizes them into five levels of success or simply as a success or failure (Green et al., 1988) After participants rate the strategies, it's crucial to share the scores and repeat the scoring process If significant discrepancies arise and consensus is lacking, further discussions are necessary It is essential to evaluate individual measures rather than just an overall success or failure to identify specific areas of divergence.
Subjective measures in project evaluation can lead to the premature dismissal of potentially successful innovations and the continuation of less promising ones At the initial stages, it is advisable to give projects the benefit of the doubt and allow them to progress further Additionally, even if all projects appear mediocre, there may be a tendency to select the top five based solely on rankings It is crucial to adopt a critical approach and prioritize recycling ideas rather than advancing flawed strategies to more costly phases Collaborating with others can also foster more creative and valuable insights, enhancing the overall project development process.
2.4.4 Quantitative analysis of most suitable strategies
After identifying successful innovation strategies, it is essential to conduct a detailed financial analysis to predict outcomes and inputs This involves estimating a range of sales revenues and associated development and launch costs, allowing for the evaluation of key metrics such as break-even times, return on investment (ROI), and present values over a 3–5 year period or the innovation's lifespan The relationship between costs, probabilities of success, and project timing is crucial, as illustrated in Fig 2.10 Notably, increasing project investment can potentially shorten timelines and enhance sales revenues, underscoring the importance of accurately predicting these inter-relationships.
To ensure a consistent flow of innovations in the coming years, it is crucial to accurately predict the timing and necessary resources, including raw materials, equipment, and distribution systems Equally important is forecasting human resource needs, specifically the skills and knowledge required for each innovation and assessing their availability within the company The lack of attention to this aspect in recent years has led to a significant loss of knowledge and skills, making it increasingly challenging to find suitable replacements Historically, there was a strategy to retain experienced personnel while integrating new talent, allowing for a gradual transfer of essential knowledge and skills.
Choose two recent products developed by your company, and score them for chances of success:
• as if this prediction had been done at the outset of the development; and
• after the development was concluded, with the benefit of hindsight.
To effectively score various factors and predict success, it's essential to employ three distinct scoring methods For instance, a salt manufacturing company transitioned from traditional open salt pans to advanced triple-effect evaporators while simultaneously maintaining both production methods This approach ensured that existing operators and customers were retained as new systems were implemented However, a significant challenge arose when the marketing team promoted the new free-flow salt to West African stall holders, who preferred the traditional sticky salt due to its convenience in packaging Consequently, further research was necessary to adapt the new salt into a sticky form to meet market demands.
To sum up, it is important that the innovation portfolio:
• is balanced in levels of innovation, in timing of development,
• is readily acceptable to the markets,
• blends with the societal and political needs and attitudes, and that:
• resources are available, in particular knowledge and skills,
• company personnel and organisation can make the innovations happen.
Focusing the product development programme
With the key areas for innovation established and integrated into the overarching business strategy, it is essential to focus on the product development aspect of innovation This development can arise from significant market shifts or the introduction of new processing techniques.
1 Define innovation summary, innovation strategy, innovation portfolio, innovation management.
2 How could all of these be combined in your company into total innovation management?
3 Do you think this is a useful method for organising innovation in your company? development or a new raw material or even a reorganisation of the company into different units or subsidiaries; as well as specific product innovations identified as needed by the company It is important to recognise that the product development comes from different innovation areas Also the product development needs to be associated with the present product mix and its predicted future development This is the start of creative activity in the product area Given the innovation strategy direction, what can we do in product development?
2.5.1 Relating to the core competencies
Integrating the product development strategy with technology and marketing is crucial for a successful overall innovation strategy This approach ensures that product development aligns with the company's existing core competencies while also focusing on cultivating emerging core competencies for future growth.
Identifying core competencies within the food system is crucial, particularly among retailers, food service providers, manufacturing companies, ingredient processors, and market research entities The innovation strategy for product development should focus on creating unique and superior products that meet both known and unknown consumer needs Key products and their underlying technologies have been highlighted by Katz, emphasizing the importance of understanding consumer demands in driving innovation.
The examples primarily feature large American companies, alongside some European multinationals and Japanese firms, which may not represent the global food industry Katz has pinpointed essential technologies that underpin product development within these organizations, highlighting the significance of rheology as a prevalent core technology Additionally, these core technologies can be categorized into science-based and engineering-based innovations.
The author demonstrates varying clarity in identifying core competencies, reflecting a common trend among companies; while some can pinpoint their strengths, others remain uncertain Notably, marketing and consumer competencies, which are equally crucial as organizational capabilities in product and processing technologies, were overlooked entirely.
2.5.2 Relating to the product mix
The product portfolio encompasses the range of items produced by marine and agricultural farmers, processed by food ingredient manufacturers, and marketed by retail food companies In large food industry firms, products are organized into various product areas, which are further divided into specific product lines A product line consists of related products that serve similar purposes or share common characteristics.
Box 2.3 How major core competencies affect development of hot new products
Low-fat meat products undergo particle size analysis to enhance protein–fat interactions, as demonstrated by companies like Swift-Eckrich and Kraft Foods The actual fat reduction in tissues is a key focus for brands such as Nestlé and their Lean & Free products Additionally, flavor improvement is achieved through advancements in carbohydrate chemistry, as highlighted by National Starch and Chemical.
Fruit and vegetable Physical structure, Kagome Kabushiki Kaisha, products biochemical changes in Tropicana Products, ripening, flavour chemistry, Ocean Spray Cranberries breeding, biotechnology, enzymes, antioxidants
Coffee products Structure and biotechnology Nestle´, Procter & Gamble, of coffee beans, Kraft Foods co-spray drying, glass transition technology, particle size management, caffeine effects, compaction
Tea Antioxidants, phytochemistry, Lipton, Nestle´, flavours, colour development, Procter & Gamble, oxidation and antioxidants, Mitsui Norin Co., enzymes, Sky Food Co., cloud emulsions Coca-Cola
Chocolate Phytochemistry, Nestle´, Hershey Foods, cold extrusion, viscosity, FMC Corp., low-calorie fats, rheology, M&M Mars flavours
Dairy products Texture, flavour, Kraft Foods, Schreiber Cheese, nutrition, foaming, P&G, Nestle´, heat denaturation, Calpis Food Industry, particle size, Danone, protein stabilisation, GalaGen ultrafiltration, mineral separation, microbiology
The product mix within the grain industry is dynamic and continuously evolving, ensuring ongoing profitability for companies like Nestlé, Kellogg, General Mills, and Pillsbury While not every product in this mix is individually profitable, they serve various strategic purposes, such as complementing other offerings, providing variety to product lines, and fulfilling market gaps Understanding the rheology of grain products, the impact of refrigeration, and processes like extrusion and retrogradation is essential for optimizing product performance and nutrition, as well as enhancing flavors in refrigerated doughs.
The product mix encompasses a diverse array of products positioned at various stages of the product life cycle, ranging from innovative new offerings to those nearing the end of their lifecycle.
The diverse age range of products contributes to the dynamic nature of the product mix, which exhibits variations in sales revenue and profitability Certain products serve as primary revenue generators, while others are key profit contributors Additionally, products can be categorized based on raw materials and processing methods, such as cereal versus meat products or frozen versus canned goods.
2.5.3 Analysis of the product portfolio
When analyzing the product mix to integrate innovation and product strategies for development, it's crucial to understand the long-term impacts of changes Impulsive decisions based solely on innovation strategies can disrupt the entire product mix, leading to imbalances and diminished market potential and profitability Key factors to consider include the overall coherence of the product range and the potential effects on existing products.
• possible changes of product portfolio with time;
• market change and technology change from the innovation strategy;
• target revenues and profits from business strategy.
Possible changes in product strategy can be categorized into incremental and discontinuous changes Key considerations include identifying products that require new packaging, flavor extensions, relaunches, cost reductions, or a refreshed brand image It's essential to determine how these changes align with the innovation strategy—whether it focuses on enhancing existing product platforms with improvements and variety or shifting the product portfolio toward new markets Ultimately, the goal is to balance the product mix effectively to meet evolving consumer demands.
Table 2.7 Characteristics of the product mix
Types of product Types of market Sales revenues
Product platforms Market segments Profits
Product lines Consumers Market potential
Product images Food service customers
Product attributes Competing products changes with the innovation strategy and also with the long-term balance of the product mix.
Understanding a company's business strategy is crucial, as it determines whether the approach will be reactive or proactive A reactive product strategy focuses on addressing issues as they occur, while a proactive strategy involves planning in advance to capitalize on potential opportunities.
Reactive product strategy Proactive product strategy
Solving problems Market Looking for opportunities
Me-too products, customer complaints, change New product line, new product platform, second on the market, packaging change superior products, new consumer need
Companies often utilize a blend of proactive and reactive strategies, allocating most resources to proactive initiatives while reserving some for reactive projects to address unforeseen challenges, such as emerging competition The effectiveness of each strategy depends on its alignment with the overall business objectives rather than a right or wrong classification Defensive strategies may involve imitating competitors' products, allowing them to enter the market first, and then launching improved versions Additionally, many companies adopt a defensive approach by responding to consumer feedback, tailoring their products to address customer complaints.
Developing the product development strategy
The initial step in crafting a product development strategy involves creating detailed product descriptions and organizing their development within the defined resources and constraints outlined in the innovation strategy by top management The product development team identifies individual projects, clarifying their objectives, expected outcomes, and limitations, which must ultimately receive management's approval It is crucial for the team to ensure that these projects align with the overall innovation management program while also assessing the likelihood of success or failure as more information about the project is gathered.
2.6.1 Identifying the PD Process, outcomes and activities
To develop this knowledge, the product development team or product development management needs:
• to outline the development needed;
• to determine the outcomes of the different stages of the project;
• to identify the activities needed in each stage of the project;
• to study the present knowledge and resources;
• to identify the knowledge and resources needed;
• to identify problems in design, commercialisation and launching;
• to time the project overall and for different stages.
The team will outline the necessary development by examining the four key stages of the product development process: product strategy development, product design and process development, product commercialization, and product launch It is essential to recognize the overall outcomes required and those specific to each stage This allows the team to pinpoint major activities within each stage Additionally, the team may already have a framework for managing projects across various innovation levels, enabling them to align current projects accordingly Identifying potential problem areas and risks of failure in both the product and the project is also crucial for successful product development.
The team can assess the required knowledge and resources for each project while comparing them to the current available assets Identifying any gaps is crucial, and the team must explore potential sources to address these deficiencies.
3 Are they different or is there a typical pattern?
4 Do you think this pattern might change in the future? knowledge, if it is not in the company and there is not information outside, the team will need to identify how this knowledge can be created and when it is needed The team can also start to time the overall project and the stages in the project.
2.6.2 Prediction of success of products
Identifying potential major failures is crucial at this stage of the innovation strategy The management must determine the desired outcomes, product mix development requirements, and past success measures to inform the team’s development of relevant metrics These metrics can be quantitative, including sales revenue, profit margins, product and project costs, and development timelines, or qualitative, focusing on creating a unique product, ensuring high-quality execution in technology, production, and marketing, and enhancing market attractiveness.
For high-level innovation it is important at this time to study the synergy between:
• technical needs of the project and the company’s development, engineering and production resources and skills;
• marketing needs of the project and the company’s marketing skills and resources.
At this stage, predicting success involves a broad spectrum of probabilities and is largely subjective It's crucial that questionable projects are referred back to the initial decision-makers rather than advancing to later phases However, these projects should not be entirely dismissed, as decisions can often be made based on inadequate or even incorrect information.
2.6.3 Types of new product development strategies
Cooper (1998) defines the new product development strategy as a comprehensive plan that directs a business’s product development efforts, emphasizing its strategic nature, cohesive binding of projects, and alignment with overall company objectives This strategy serves as a roadmap that outlines goals, projects, resources, and constraints, ensuring that all stakeholders are informed about the company’s current product development policies By integrating functional areas and fostering creativity and efficiency, the product development strategy plays a crucial role in achieving successful outcomes in new product initiatives.
Companies in the food industry employ various product development strategies, as illustrated in Table 2.9, with many claiming success Historically, a low-budget conservative approach has prevailed, aligning well with market dominance According to Cooper (1998), this strategy delivers moderate results, characterized by a low failure rate and profitability, yet raises concerns about the adequacy of success standards It typically results in a limited percentage of new products within the overall mix, reflecting a "steady as you go" approach with minimal dramatic changes.
When developing a product strategy, it is essential to integrate consumer and market demands with technological advancements (R.L Earle and Earle, 1999) According to Balachandra and Friar (1997), a valuable approach begins with identifying the context of the new product.
Table 2.9 Some product development strategies
Differentiated strategy Technologically sophisticated Premium priced
Strong market orientation Unique features and benefits High degree of product fit Competitive advantage
Low-budget Low R&D spending Me-too conservative Highly synergistic with Undifferentiated present production and Lower price marketing
Technology push Technology oriented Innovative
Lacks strong market Technology oriented orientation May not fit consumer needs Lacks market synergy
Not-in-the-game Simple, mature technologies Low technology
Ill-defined market needs Me-too
High-budget diverse Heavy spending on R&D Innovative products
No direction, focus High-risk products
No synergy May not fit consumer needs
Identifying key factors in product development involves analyzing the mix of innovation types—incremental or radical—and market conditions, whether existing or new, alongside varying technology levels Balachandra and Friar's framework provides a valuable approach to understanding these dynamics, while Ali (1994) highlights the importance of aligning company activities with specific product types Additionally, a thorough analysis of environmental and situational factors, including firm, project, and market characteristics, is essential for effective new product development planning.
2.6.4 The overall product development strategy
The product development strategy serves as a crucial link between the new product portfolio and the product development program, highlighting their interconnectedness and the cyclical nature of the process As the final product development management plan emerges, specific product development projects are identified from the portfolio, leading to a gradual enhancement of the PD Processes and their management This process is both creative and controlled, facilitating the development of innovative ideas for products and projects.
The aims of the new product development strategy can be specific:
• the structure of the product mix;
• increase the percentage of sales from new products to 30% in five years;
• returns on investment from new products;
• specific products to be launched in each year;
• returns from specific products or sales in a new market.
While brand images can be subjective, reflecting the perception of a health-oriented company or high-quality products, they can also be organizational in nature This includes optimizing production efficiency, creating innovative distribution systems, and establishing new subsidiaries.
Table 2.10 Relative importance of PD factors in different contexts
Contextual variables Level of importance
Innovation Technology Market Market Technology Organisation factors factors factors
1 Incremental Low Existing Very Low Very
2 Incremental Low New Very Low Very
3 Incremental High Existing Very Very Moderate
4 Incremental High New Moderate Very Moderate
5 Radical Low Existing Moderate Moderate Moderate
6 Radical Low New Low Moderate Moderate
7 Radical High Existing Moderate Very Moderate
8 Radical High New Low Very Very
Effective product development organization can lead to a more systematic approach, distinguishing between incremental and innovative development This strategy ultimately reduces the time to market, enhancing overall efficiency and competitiveness.
The individual projects are beginning to take shape, with their aims, objectives, and constraints being outlined, although detailed development will follow in the product development program The project aim, which represents the desired outcome from top management, must be clear, straightforward, and universally understood by both current management and those involved in product commercialization in the coming months This aim serves as a crucial guide for product development planning and decision-making throughout the project It should be established within the product development strategy, with the potential for further refinement as the program evolves Additionally, it should clearly define the product type, target market, and technology involved.
Fig 2.14 Developing the product development programme.
When considering processing and distribution methods, it's essential to evaluate the available plant types, marketing strategies, and market size requirements Ongoing research into various processing techniques and marketing approaches, as well as exploration of diverse market opportunities, remains crucial for informed decision-making.
Planning the product development programme
The product development programme serves as a strategic framework for new product planning over the coming years, acting as a guiding and controlling document for development projects It enables the formulation of a rolling programme that specifies timelines and outcomes for the next two years while remaining more general for subsequent years Efficient resource utilization, particularly regarding personnel and equipment, is crucial, and recent trends emphasize the integration of projects to enhance efficiency and product quality Although innovative projects may face challenges due to uncertainties in knowledge creation and commercialization timelines, incremental changes can be successfully integrated An effective integration plan must consider time, resources, and the necessary knowledge at various project stages, recognizing that much product development knowledge is tacit and resides within individuals or is shared interactively within the company, particularly in larger organizations.
When an outsider is brought in due to a team's knowledge gap, they often question why internal experts aren't being consulted It's crucial to consider the personnel's knowledge and skills when developing a program, particularly their proficiency in the multidisciplinary skills required for product development However, during interviews for product development roles, companies rarely assess candidates' creativity, focusing instead on academic credentials and experience In contrast, professionals in other industries, such as product design, typically present portfolios showcasing their creativity during interviews Food product designers might benefit from adopting a similar practice.
The product development program outlines the projects, their integration, timing, resource allocation, and personnel involved It is essential to establish how top management will make decisions at critical project junctures and to implement effective cost control measures These critical points typically occur between the main stages of the project.
In large projects, critical points, such as the conclusion of product development and process design, play a vital role in decision-making After laboratory or small-scale trials, determining the optimal product and process is crucial due to the high costs associated with scaling up Senior management must decide whether to proceed, slow down, or terminate the project based on the outcomes of previous developments For instance, the end of product concept development yields essential deliverables, including product design specifications, mock-ups, and a comprehensive product report This report assesses technical feasibility, marketing suitability, consumer acceptance, projected costs, sales revenue, profits, risks, and the likelihood of success for both the product and the project The specifics of this report can vary depending on the company and project type For incremental changes, management may only require product design specifications, consumer acceptance data, product costs, and predicted pricing Therefore, it is crucial to clearly identify the necessary outcomes at each critical point within the product development program and secure agreement from top management to facilitate informed decision-making.
Defining project constraints is essential, encompassing company and environmental needs, particularly societal and political factors Restrictions may arise from raw material usage, political regulations influencing product properties, and cost limitations dictated by market prices and the company's pricing structure Identifying these constraints is crucial as they establish the framework for product development Additionally, the product development program must outline success measures for individual projects and the overall program, including standards for evaluating market success in terms of sales revenue, profits, and growth timelines established prior to product launch Furthermore, project organization standards should be defined, addressing timing, expected quality, multifunctional integration, and acceptable cost overruns.
Developing a product development program is a complex task that applies to both large enterprises and smaller companies Regardless of size, the same principles are crucial for success Comprehensive and careful consideration of these principles is essential to identify potential failures and problems early on, preventing significant costs from escalating during project execution.
1 The product development programme includes a number of projects that have to run in parallel, and some that run in series What problems do you see in planning the product programme to cope with all the projects?
2 How can you set up a system to control the programme, so that it runs efficiently with project stages and the overall projects completed at the right time?
3 How can the knowledge resources, that is the people with the correct knowledge and skills, be encouraged to work creatively so the quality of the project is optimum?
References
ALI, A (1994) Pioneering versus incremental innovation: review and research propositions Journal of Product Innovation Management, 11, 46–61.
ATUAHENE-GIMA, K (1996) Differential potency of factors affecting innovation performance in manufacturing and service firms in Australia Journal of Product Innovation Management, 13, 35–52.
BALACHANDRA, R.&FRIAR, J.H.(1997) Factors for success in R & D projects and new product innovation: a contextual framework IEEE Transactions on Engineering Management, 44, 276–287.
CAMPBELL, H (1999) Knowledge Creation in New Zealand Manufacturing. Masterate Thesis, Massey University, Palmerston North, New Zealand.
CLARK, K.B.&WHEELWRIGHT, S.C.(1993) Managing New Product and Process Development (New York: Free Press).
COOPER, R.G (1998) Product Leadership – Creating and Launching Superior New Products (Reading: Perseus).
EARLE, M.D.(1997) Innovation in the food industry Trends in Food Science and Technology, 8, 166–175.
EARLE, M.D &EARLE, R.L (1997) Food industry research and development, in Perspectives on Food Industry/Government Linkages, Wallace, L.T and Schroder, W.R (Eds) (Norwell: Kluwer Academic).
EARLE, M.D & EARLE, R.L (1999) Creating New Foods – The Product Developer’s Guide (London: Chadwick House Group).
EARLE, M.D & EARLE, R.L (2000) Building the Future on New Products (Leatherhead: Leatherhead Food RA Publishing).
EARLE, R.L & EARLE, M.D (1999) Innovation in the food industry Food Technology in New Zealand, 34(6) 11–12, 22.
FRATER, P., STUART, G., ROSE, D & ANDREWS, G (1995) The New Zealand Innovation Environment (Wellington: Business and Economic Research Ltd).
GREEN, P.E., TULL, D.S.&ALBAUM, G.(1988) Research for Marketing Decisions, 5th Edn (Englewood Cliffs, NJ: Prentice-Hall).
HEDGES, A (1969) Innovation in food marketing & research Food Processing and Marketing, Feb., 64–66.
KATZ, F (1998) Major core competencies affect development of hot new products Food Technology, 52(12), 46–52.
KUCZMARSKI, T.D.(1996) Innovation–Leadership Strategies for the Competitive Edge (Chicago: NTC).
LORD, J.B.(1999) Product policy and goals, in Developing New Food Products for a Changing Market Place, Brody, A.L and Lord, J.B (Eds) (Lancaster, PA: Technomic).
PINE, B.J.&GILMORE, J.H.(1998) Welcome to the experience economy Harvard Business Review, July–Aug., 97–105.
RIZVI, S.H., SINGH, R.K., HOTCHKISS, J.H., HELDMAN, D.R & LEUNG, H.K (1993)Research needs in food engineering, processing and packaging Food
ROGERS, E.M.(1962) The Diffusion of Innovation (London: Free Press of Glencoe – Collier-Macmillan).
SCHAFFNER, D.J., SCHRODER, W.R &EARLE, M.D (1998) Food Marketing – An International Perspective (Boston: McGraw-Hill).
SOUDER, W.E.(1987) Managing New Product Innovations (Lexington: Lexington Books).
THRODHAL, M.C (1982) National and multinational opportunities for the encouragement of innovation Food Technology, 36(1), 101–102.
VOSS, C.A.(1994) Significant issues for the future of product innovation Journal of Product Innovation Management, 11, 460–463.
The PD Process is a coordinated system that integrates research activities such as product design, process development, engineering, and marketing strategy to effectively develop new products tailored for consumers, food manufacturing companies, or food service organizations It emphasizes the equal importance of understanding consumer needs and leveraging modern scientific and technological advancements The process consists of four main stages—product strategy, product design and process development, product commercialization, and product launch and evaluation—each of which may be further divided into 7-9 sub-stages Critical evaluations, known as stage gates or critical points, are essential for informed decision-making throughout the process, requiring specific research outcomes to build the necessary knowledge The project teams employ various techniques to navigate these stages, highlighting the interrelationships among them.
Critical decisions$Outcomes$Activities$Techniques
The Critical PD Process focuses on essential decision-making and involves a thorough analysis of activities, techniques, and outcomes throughout the project.
Product strategy
Stage 1: product strategy, starts with the finalising of the product development strategy and product development programme Then the aims of the individual product development projects can be set The project starts with the generation of new product ideas and the outlining of the product design strategy, and ends with the product concept and product design specifications There is real dichotomy in the decisions and activities; there is on the one hand, the need for freedom to be creative, and on the other, the need to set boundaries in the product design strategy Before top management can make the critical decision to fund the further stages of the project, or to stop it, or to return it to the team for more knowledge, there are three critical decisions:
1 Is the product concept a unique product satisfying the needs and wants of the target consumer/customer?
2 Will the product concept and the project deliver the financial and other aims set in the business and product development strategies?
3 Does the product concept harmonise with the company’s business and environment?
Top management must possess comprehensive knowledge of processing, production, distribution, and marketing technologies to make informed decisions about product development This knowledge is often incomplete, particularly regarding financial forecasts such as sales revenue, gross profits, and return on investment Each project also has specific requirements, including health enhancements, environmental impacts, food regulations, and trade barriers However, the most crucial information lies in the product concept and design specifications The project team is responsible for accumulating this knowledge throughout various stages, with the identified knowledge guiding critical activities in the product development process Decisions are typically made by product development management at the end of each stage, although top management may intervene for significant innovations that require substantial investment.
The substages in Stage 1: product strategy for the individual project are:
• identification of processes, distribution and marketing;
• development of product design specifications;
• predictions of project costs and financial outcomes.
This comprehensive technology research encompasses product, processing, and market analysis alongside consumer and societal studies At this initial phase, the focus is on generalizing knowledge, with the goal of expanding it in both breadth and depth as the project progresses This foundational stage is crucial in guiding the product development process and is widely recognized in research as a key determinant of the project's ultimate success.
The product development program has outlined its aims, outcomes, and constraints, which have been communicated to the project team However, additional desk research is often necessary to verify these elements and provide a comprehensive project definition that effectively guides and manages the project (Rosenau, 2000) This phase also involves selecting an appropriate approach for the project.
PD Process for the project and to set out an outline project plan.
The initial research phase of the project focuses on four key aspects: product ideas, consumers, technology, and market potential This comprehensive research encompasses all elements of the Product Development (PD) Process, as the team explores new product concepts while assessing their feasibility in terms of market demand, technological capabilities, and production viability Critical questions arise during discussions, such as the nature of the products, their manufacturability, marketability, and consumer needs This phase primarily involves 'desk research' utilizing both internal company data and external resources, including published literature The team leverages tacit knowledge and benefits from advancements in information technology, which enhance the storage and application of knowledge in product development, particularly through the use of product models that integrate raw materials, ingredients, packaging, and production methods (Jonsdottir et al., 1998).
In a project, the aim was changed from:
Export a nutritional product to Thailand with a market size of $5 million. to:
To successfully export a protein product with a minimum of 20% protein content to the urban middle-class market in Thailand, it should be marketed through gyms and supermarkets The product must be processed in either a spray drying plant or a UHT plant, allowing for distribution at ambient temperatures Achieving sales exceeding $4 million is essential for profitability and market impact.
The second aim offers two distinct processing methods, while other aims may involve multiple target markets or marketing strategies, as the optimal direction may not yet be determined Although aims can be modified throughout the project, any adjustments must be supported by agreed-upon justifications.
The outcomes of the Product Development (PD) Process are shaped by the project's goals, the company's established PD Process, and the strategic decisions made by top management throughout the project's timeline These decisions, which include both product and project-specific choices, are illustrated in Fig 3.2, where product outcomes are represented as ovals While many projects share common general decisions, each project also requires unique outcomes tailored to its specific needs It is crucial to identify who is responsible for making these decisions and to gather the necessary knowledge to achieve the desired outcomes, often referred to as objectives, at each stage of the PD Process, particularly in larger projects.
1 Study the aims and discuss how the first aim has been improved in the second aim as a focus for the project.
2 How would you improve the second aim to make it clearer for all people in the project?
In project management, it is essential to identify critical decisions that arise frequently throughout the project lifecycle Recognizing these pivotal moments allows for the clear definition of desired outcomes, ensuring that project activities align with overall objectives while navigating any constraints effectively.
Selecting outcomes requires balancing the need for knowledge with the resources and time available for the activities that produce those outcomes As product development increasingly prioritizes speed without compromising quality, the selection of outcomes has garnered greater attention.
Fig 3.2 Identifying the outcomes necessary for the decisions (After Earle amd Earle,
The success of project activities hinges on the level of risk a company is willing to accept While teams often strive for comprehensive knowledge to gain a complete understanding, this approach can be costly, time-consuming, and may even lead to failure Historical examples show that some companies have sought excessive information in test markets, allowing competitors to surpass them It is crucial to identify key outcomes at the project's outset and prioritize those that align with the company's goals and available resources, ensuring the project remains efficient and effective.
Constraints are factors that define a project's scope, including financial resources and launch timelines specified in the product development program It's crucial to identify constraints related to the product, processing, marketing, and those imposed by the company and the socio-political environment before beginning product design For instance, food regulations and societal attitudes towards production, processing, food additives, and safety must be considered Additionally, constraints may arise from the availability of personnel and equipment A checklist for analyzing these constraints is provided in Table 3.1.
Recognizing constraints in product design is crucial, but overly strict limitations can hinder creativity For instance, mandating a protein level of exactly 20% to meet perceived consumer needs, rather than regulatory requirements, can restrict other desirable product features In contrast, allowing a protein range of 20–30% can meet consumer expectations while providing greater design flexibility It's essential to evaluate these constraints critically—are they necessary, or are they too restrictive? If a company's constraints are impeding progress, it's vital to discuss potential adjustments with management.
The aims, outcomes, and constraints of a project play a crucial role in guiding and regulating its direction These elements serve as essential criteria for assessing and filtering product ideas and concepts, as well as for evaluating various prototype products.
Table 3.1 Project constraints: a checklist for product development projects
Product Processing Marketing Financial Company Environment
To enhance the efficiency of the food industry, it is essential to focus on quality equipment and effective channels for distribution Fixed capital investment and strategic collaboration with local and national governments can bolster infrastructure and support farmers' agreements Ensuring proper nutrition through the use of raw materials and effective packaging is crucial for maintaining shelf life and minimizing waste Additionally, understanding market prices and competitors, alongside managing cash flows and working capital, will strengthen the overall economic status of the industry Expertise in project finance and energy management is vital for sustainable growth and promotion of industry agreements.
Use Water Size Profits Innovation Business cycle
Safety Personnel Product mix Returns Size Social restrictions
Product design and process development
Stage 2 of product design and process development emphasizes integration, creativity, systematic planning, and monitoring Food product development is inherently process-intensive, with the product's characteristics significantly influenced by its processing methods As a result, product and process development occur simultaneously, a practice known as concurrent or simultaneous engineering, which is increasingly vital due to the pressures of time and cost in bringing products to market According to Jonsdottir et al (1998), the primary objectives of concurrent engineering in seafood companies include ensuring quality, managing costs, adhering to schedules, meeting user requirements, and minimizing time to market They highlighted the importance of information technology in product modeling, particularly regarding the knowledge of a product's functional and structural traits, and the creation of a system model that facilitates knowledge integration and reuse throughout the product development stages Furthermore, concurrent design also aligns closely with marketing and production processes.
In incremental development, as illustrated in Fig 3.7, the production plant is typically established beforehand, necessitating that the product design aligns with the existing plant capabilities, allowing for only limited variations in the process.
A company's identity is shaped by the integration of product design, communication design, and environment design, as highlighted by Blaich and Blaich (1993) Effective communication design enhances product visibility in the marketplace through branding, packaging, advertising, and promotion, necessitating a close alignment with product design Additionally, environment design plays a crucial role in influencing both product and communication design, ultimately affecting how new products are perceived To foster the desired perception of quality, innovation, and excitement, companies must consider the entire context surrounding their products, including internal and external environments This cohesive approach ensures that the company image resonates with both employees and customers, reinforcing the perceived value of new products Thus, integrating product design with communication and environment design is essential throughout the design process.
3.2.1 Stages in product design and process development
The stages of the product design and process development are shown in Fig 3.8; the activities are in the boxes, the outcomes in the ovals.
In Stage 2, the focus shifts to product design, integrating process development into the design phase As the project advances and the product's scope becomes clearer, analyzing process variables becomes crucial for optimizing the final product This analysis encompasses both input and output variables, ensuring a well-defined and efficient design process.
• Input variables: raw materials (type, quality, quantity) and processing
(types of processing, processing conditions).
• Output variables: product qualities and product yields.
The two main areas for research are formulation and processing; the first studying the type and quantities of raw materials and the second studying the
Fig 3.7 Integration in product development.
Product design and process development involve a continuous examination of the interplay between input variables and product qualities to achieve an optimal final product It is crucial to study processing conditions in conjunction with product design, as they are highly interactive Prototypes must be tested against specific design criteria, necessitating an organized approach to product testing alongside processing experiments Regular consumer testing of these prototypes is essential to ensure that the product aligns with the intended characteristics of the product concept and does not exhibit any undesirable traits for consumers.
Product design and process development rarely follow a linear path, often requiring backtracking due to issues such as consumer dissatisfaction, cost overruns, or inadequate production capabilities It is crucial to conduct technical, consumer, and cost testing throughout these stages Initially, companies identify raw material costs, formulation limits, and general manufacturing expenses During experimentation, they can determine product, packaging, and processing costs, and after scaling up production and predicting marketing costs, a comprehensive assessment of total costs can be made.
3.2.2 Important factors in product design and process development
In food product design, there are some important points to consider:
In today's manufacturing landscape, particularly within the food industry, there is a growing acknowledgment of the crucial role suppliers play in product development Unlike the traditional approach where manufacturers solely analyzed raw materials and created specifications independently, modern practices emphasize collaboration with suppliers from the onset of product design This cooperative method, often referred to as the 'black box approach,' enables suppliers to contribute to problem-solving, ultimately streamlining the project timeline and enhancing product innovation.
In 1998, it was noted that ingredient processors can simultaneously develop ingredients while manufacturers create consumer products, highlighting the importance of a strong supplier-manufacturer relationship for successful co-development Food ingredient suppliers have advanced this process by not only developing the ingredients and manufacturing processes but also creating the final consumer products to provide to manufacturers This trend may be attributed to the superior expertise in product development found within food ingredient companies.
Quantitative techniques to integrate product and processing
Over the past two decades, the integration of experimental designs and statistical analysis in food design and process development has significantly increased Advanced software now facilitates the selection of suitable experimental designs and the analysis of results While techniques like linear programming have long been applied in animal feed and pet food formulation, their adoption in human food has been slower due to challenges such as diverse product characteristics, vague definitions, and non-linear relationships between processing variables and product quality Despite the complexity of food product design, growing insights into processing reactions and the development of new software tools are paving the way for more widespread use of quantitative techniques However, this shift necessitates a higher level of expertise among product designers and process developers Hegenbart (1997) highlighted the importance of utilizing spreadsheets for cost calculations, electronic resources for ingredient supplier information, and software for predicting microbial growth and conducting sensory testing in product formulation and testing.
Aesthetic skills in product design
The integration of sensory science in food design has significantly shaped consumer preferences, yet industrial designers have traditionally played a limited role in crafting the visual aspects like appearance, color, and shape Recent interest has emerged in this field, particularly in haute cuisine and products such as extruded shapes and packaging Industrial designers often influence package design, reflecting contemporary artistic trends, which also extend to the aesthetics of airline and restaurant meals influenced by movements like art nouveau and post-modernism As many food products today are artificially created from processed ingredients, the potential for aesthetic design to enhance food presentation is substantial The challenge lies in motivating industrial designers to engage with food design or encouraging food designers to incorporate industrial design principles.
Values of the product characteristics
Designing product features that matter to consumers is crucial, as engineers may prioritize technical aspects that hold little significance for users Value analysis or value engineering helps assess the cost-effectiveness of product characteristics, focusing on those that deliver the greatest value It's essential to identify the primary goal of the product, such as longevity, and determine relevant characteristics like low water activity and controlled atmosphere, while also considering their associated costs Additionally, features like convenience and appealing flavors should be included, but their costs must be justified against consumer value Ultimately, the design should prioritize the highest valued characteristics to ensure consumer satisfaction and product success.
A neglected area in some food design, particularly in packaging, is ergonomics, the relationship of the physical product to the person (Ulrich and Eppinger,
Poor ergonomics can be illustrated by an aerosol can designed for dispensing dairy cream on desserts, which is often difficult for women and children to use with one hand The design of food packaging and utensils must consider the physical interactions between the product and its users throughout the entire process of opening, cooking, serving, and eating.
The primary challenge in technology transfer lies in transitioning products from the laboratory to large-scale production facilities This issue arises from several factors, including insufficient processing knowledge among food designers, alterations in processing conditions during equipment scaling, discrepancies in process control between experimental and production environments, and the complexities of transporting materials through pumps and lines For instance, products that are easily handled in small-scale settings, like buckets or jacketed pans, may fail when pumped in a factory However, many of these challenges can be effectively addressed in a semi-production plant, allowing for cost-efficient experimentation with materials and processes Additionally, when new products are developed through incremental changes, utilizing a semi-production plant over several years can help recover capital costs.
In recent years, companies have shifted from solely building internal expertise to also contracting external specialists While it's crucial to maintain strategic activities within the organization to ensure project direction, there are times when external expertise is necessary to seize opportunities The ideal approach is to have an internal product development process guided by company personnel while outsourcing specific tasks as needed This strategy allows companies to define their decisions, outcomes, and activities in the product development process while leveraging external knowledge and skills when required.
Review and control of design process
The design process aims to deliver the optimal product within anticipated timeframes and budgets, though this can be overly idealistic due to its inherently creative and uncertain nature Regular testing is essential, starting with the design team and progressing to consumer feedback as prototypes evolve, to ensure the product meets expectations Additionally, a comprehensive time and resource plan should be established and periodically reviewed through peer evaluations to assess the project's effectiveness and efficiency It is crucial to anticipate challenges and implement a recognized problem-solving method to address issues swiftly, preventing project failure.
3.2.3 Conclusions to product design and process development
Product commercialisation
Stage 3: product commercialisation, is full scale-up of both production and marketing These two developments need to be integrated throughout product commercialisation Also design continues for the product, the production and the marketing, leading into the operational production and marketing There is a need for integration, between the design and the operations Product commer- cialisation ends with full integration of the product, production and marketplace.
Integration is a crucial factor in commercialization, along with considerations of costs and time At this stage, expenses can escalate significantly due to the need for designing, constructing, and commissioning facilities such as manufacturing plants, fast-food outlets, or distribution centers, all of which require substantial capital investment Consequently, the potential for high financial losses also increases.
There are four important stages in product commercialisation:
2 Design of marketing, production and distribution.
3 Testing of marketing, production and distribution.
4 Final integration of marketing, production and finance.
The initial steps in product commercialization involve establishing clear goals, allocating resources, and defining the product-consumer relationship through an integrated project plan It is essential to finalize both the market and product details, ensuring that all stakeholders, including product designers, participate in discussions This collaboration fosters technology integration between design and commercialization efforts.
During the product development process, it is crucial to revisit the business strategy to ensure alignment with the product's objectives As knowledge in product design increases, aims and outcomes become more specific, necessitating a collaborative discussion on the goals, constraints, and commercialisation outcomes This prevents disparate directions among teams, such as marketing and production targeting different sales volumes or pricing strategies A unified agreement on objectives leads to the identification and integration of necessary activities in the project plan Additionally, new constraints may arise due to competitive actions, raw material availability, or changes in capital investment, making it essential to reassess critical constraints Finally, determining the timing and costs of various activities will enhance the efficiency and effectiveness of the overall commercialisation plan.
When establishing product commercialization, it's crucial to finalize the product and align it with the target market According to Earle and Earle (2000), the total product concept should be developed through market insights and product design, encompassing the core product, the complete company offering, the consumer's perception, and the societal viewpoint Additional product design may be necessary to enhance the overall product concept effectively.
In product commercialization, there are four key design types: marketing, product qualities, physical distribution, and production plant This phase encourages a variety of creative activities, which can lead to diverse outcomes A significant risk arises when product qualities do not align with the marketing image; for instance, if product designers focus on high-vitamin dog food while the marketing emphasizes a high-protein image, it can create confusion and misrepresentation.
Effective product commercialization requires close integration between design and operational planning to avoid discrepancies between the final product and initial advertising concepts Ensuring that designers and marketing teams collaborate throughout the design process is crucial to achieving a cohesive vision and preventing misunderstandings that could arise when advertising materials are finalized.
These are the general areas of activities but the choice of specific activities and techniques depends on (Earle and Earle, 2000):
• the type of product (incremental, innovation);
• the type of marketing (consumer, industrial, food service);
• the amount of learning needed by the company, the distributors, the consumers (high learning, low learning);
• scale of entry (local, national, international);
• the time (long, short) and timing (wide range, crucial).
Timing is critical for product launches, influenced by competition and seasonal factors However, delays in design can lead to rushed commercialization, often resulting in the omission of key activities like test marketing and business analysis In any project, time is a costly factor during commercialization, with even an additional two weeks potentially causing budgets to exceed expectations Therefore, careful time management is essential.
Creating knowledge is essential in marketing and production design, serving as a significant area of industrial research For incremental new products, companies can leverage existing production and marketing insights, focusing on refining these to enhance production and implement competitive marketing strategies In contrast, product innovation requires a comprehensive learning experience for staff, distributors, and consumers, necessitating the identification of the new product's diffusion path across various functional groups, including management, sales, storage, transport, retailers, and end users It is crucial to integrate the learning experiences of all participants into the final plan, while also closely monitoring costs, revenues, and profits to ensure the financial plan meets top management's approval for a successful product launch.
The final product testing includes many aspects of the product:
• technical product qualities – core product qualities, packaged product qualities, agreement with regulations, services with the product;
• consumers’ product concept – acceptance, competitive difference, unique- ness, aesthetic worth, brand attitude, product worth;
• marketing’s product – product image, product position, promoted product, product price, retailers’ product image;
• company’s product – market share, sales revenue/profits, product effective- ness in business strategy, product problems, company fit;
• society’s product – reliability, truthfulness of claims, protection from defects, value for money, social responsibility, environmental responsibility.
Product testing encompasses production, distribution, and marketing evaluations, as illustrated in Fig 3.12 Consumers assess the complete company product, including packaging, advertising, and public relations materials If budget and time permit, a comprehensive study of the total product and marketing strategies can be conducted in a test market, which may serve as an initial phase in a broader marketing rollout In the food industry, distribution testing is crucial as it examines product changes during transport and storage, as well as retailer reactions Food products naturally deteriorate over time—some within days and others over a year—making it essential to predict the impact of temperature, humidity, and atmospheric conditions during transport and storage prior to sale, which is reflected in food labeling with 'best by' dates.
Ethical product testing is becoming increasingly vital in the nutraceutical industry, as consumers seek trust in the food sector People expect the food industry to prioritize their health and avoid fraudulent practices Companies launching new food products must possess comprehensive knowledge of their offerings, including benefits, defects, and the authenticity of advertising claims It is essential that this knowledge exceeds general societal understanding and that companies are transparent in sharing this information, ensuring they do not mislead consumers.
Fig 3.12 Testing in product commercialisation. the benefits or the defects or the problems associated with the product (Legge, 1999).
The final step in product commercialization involves integrating design and testing knowledge to assess product feasibility and determine an effective market launch strategy This integration is crucial for an efficient launch, as highlighted by Andreasen and Hein (1987) Effective decision-making by top management relies on the insights provided by this integrated knowledge At this stage, it is also important to establish a problem-solving method that can be communicated to all team members prior to the launch, as challenges are common during this phase Having a structured approach to addressing issues can significantly reduce the likelihood of failure and expedite problem resolution.
Product launch and evaluation
‘Effective product launch is a key driver of top performance, and launch is often the single costliest step in new product development Despite its importance,
Fig 3.13 Integration of product commercialisation.
1 For your product designed in the last Think break, identify the aims, constraints and outcomes for the product commercialisation.
2 According to your expertise and knowledge, design the production, distribution or marketing Ask some colleagues with different expertise to design the areas outside your knowledge.
3 Integrate the three design areas to give the total product/production/distribution/ marketing of the product commercialisation.
4 Evaluate the integrated design for its effectiveness in achieving the project aims and for obeying the constraints on the project. costs and risks, product launch has been relatively under-researched in the product literature’ (Di Benedetto, 1999) How true this is Much of the research has emphasised the ‘fuzzy’ front-end activities and there is little on the critical back-end activities; in fact many PD Process models show seven or nine steps but only one for product launch!
The launch of a new product involves three critical components: strategy, activities, and demand outcomes (Guiltinan, 1999) The desired demand outcomes shape the strategy and activities, while the effectiveness of these elements ultimately influences sales results This interconnectedness is essential for effective launch planning Additionally, it is crucial to implement an evaluation and control plan, as unforeseen circumstances can arise despite thorough predictions for the launch.
3.4.1 Demand outcomes from the launch
Demand outcomes in consumer behavior include trial and repurchase, customer migration, and innovation adoption and diffusion, each influenced by the consumer's relationship with the new product Trial and repurchase typically occur with incremental food products, where the perceived risk is low, and consumers view the product as related to familiar items Customer migration happens when a new product offers significant improvements over competitors, attracting their customers due to its superior value Innovation adoption and diffusion are relevant for entirely new products, aligning with the traditional innovation curve Specific scenarios for selecting these demand outcomes can be found in Table 3.4.
Table 3.4 Demand outcomes for product launch
Demand outcome Product development project
Trial and repurchase New product in existing market
Line addition in existing market
Innovation adoption and diffusion New-to-the-world product
Emphasis on primary demand, adoption and diffusion
The diffusion curve of a product's sales can exhibit significant variation, influenced by the relationship between the product and consumers, as well as marketing tactics Initial sales may start slowly, followed by a sharp increase, or there may be a rapid initial rise followed by a plateau Innovators often purchase first, but influentials and followers may delay their buying, leading to a temporary stagnation in sales Effective promotion and advertising can accelerate consumer awareness and boost sales growth, while strategies like providing free samples in supermarkets allow consumers to try the product risk-free, potentially increasing their likelihood of purchase Understanding consumer reactions and the impact of launch strategies is crucial for successful product introduction.
A successful launch strategy encompasses marketing, production, and distribution decisions essential for introducing a product to the market and driving sales Key components of this strategy include targeting, timing, and the level of product innovation, which is influenced by the target market and competing products Companies must decide whether to pursue a mass market or a niche market based on their size and resources Initially, new products may focus on specific market segments that are likely to embrace them, with the potential for later expansion Additionally, mass customization allows for product modifications tailored to specific consumer groups, necessitating a clear strategy for effectively reaching these target market segments.
A key launching strategy involves choosing to lead or follow competitors, which is crucial for timing Being a pioneer in innovation often incurs significant costs, and if sales growth is sluggish, it can take considerable time to recoup these expenses.
Fig 3.14 The product diffusion cycle.
Rapid sales growth can enable a product to capture a significant market share over an extended period For incremental products, it is crucial to maintain this growth with each successive release to either sustain or expand market share To boost market share, companies often implement product changes, ensuring that the new offerings provide desired benefits while employing effective marketing strategies to motivate consumers to switch Hultink and Robben (1999) categorized launch strategy decisions to streamline this process.
• strategic product/market decisions – relative product innovativeness, targeting, introduction objectives and product newness;
• timing-related decisions – timing of market entry, speed to market.
Successful product launches depend on aligning decisions with the company's capabilities, technological landscape, market dynamics, and societal context Research indicates that superior skills in marketing research, sales, distribution, promotion, R&D, and engineering contribute to successful outcomes Additionally, involving cross-functional teams in key marketing and manufacturing decisions, along with early logistics planning, are strategic activities that significantly enhance launch success.
There are two important decision areas for activities:
1 Marketing-mix decisions – relative distribution and promotion expendi- tures, relative breadth of product assortment, distribution channels used, marketing communications channels used, branding and pricing.
2 Production and distribution decisions – raw materials quality and quantity, production outputs, product quality, inventories, logistical times and quantities for delivery.
Choosing and integrating activities for a successful product launch involves careful consideration of marketing, production, and logistics While marketing tactics often receive significant attention, the effectiveness of production and distribution strategies can greatly influence the outcome of the launch (Guiltinan, 1999) The launch strategy must align all activities towards achieving desired demand outcomes, with common pricing tactics including market skimming and market penetration It's crucial for marketing, production, and distribution teams to collaborate on demand forecasts, production capabilities, and inventory costs Effective launch management, characterized by control over activities, timing, and costs, is essential for success Timely execution is critical, and while it may necessitate shortening some activities, it typically leads to a successful launch if managed properly.
Effective logistics are crucial for a successful product launch, ensuring that shelves are adequately stocked without over-saturation Traditionally, manufacturers filled the supply chain based on anticipated sales, resulting in high inventory costs and inflexibility in response to varying product demand Adopting a lean launch strategy can mitigate these issues, allowing for a more efficient introduction of new product lines.
Table 3.5 Activities in product launch and evaluation
Finalise promotion Design, build, commission plant
Media advertising contracted Quality assurance finalised
In-store material prepared Raw materials contracts
Sales presentation to staff Physical distribution contracts
First introduction to retailers Production finalised
Market channel/physical distribution organisation
Launch targets finalised Complete selling to retailer Produce the product
In-store material distributed Distribute the product
Merchandising in supermarket Check product quality in supermarket Release advertising Check product safety
Advertising Reducing product quality variation
Sales recording Checking product in distribution
Buyers’ surveys Checking product in retailers
Competition study Improving distribution efficiency
Marketing costing Production and distribution costing
Financial analysis of costs, revenues Analysis of production, distribution, marketing Comparison of actual results with targets
Adoption of product into the company
New phase of advertising Standardising production
New phase of in-store promotion Total quality management in place
Pricing revamping Raw material procurement revised
Buyers’ studies Retailers’ handling optimised
Future developments of product, production, marketing Financial analysis of investment, costs, revenues and profits
A logistics and supply chain collaboration strategy can significantly lower costs and risks associated with product launches The lean launch strategy emphasizes response-based logistics, utilizing a flexible system that quickly adapts to real-time data from point-of-sale transactions through electronic data interchange (EDI) and Internet communications This approach aims to optimize inventory management by maintaining lean stock levels, enhancing product success rates, minimizing failures, and catering to niche markets Consequently, this strategy improves management of start-up costs, enabling faster sales that help balance expenses and achieve profitability sooner.
3.4.4 Evaluating and controlling the product launch
Effectively evaluating and managing a product launch is essential for success, as it involves collaboration across various departments within the company A well-structured organizational plan facilitates coordinated activities and enables swift responses to issues such as product quality concerns, competitor actions, and unexpected consumer behavior Additionally, adjustments to activities or their timing can be implemented during the launch to address any emerging challenges.
Companies often establish a 'launch' structure for repeated product introductions, particularly evident in the food industry, where traditional strategies involved extensive TV campaigns, in-store promotions, and broad supermarket distribution However, with evolving dynamics in the food system, organizations must adapt their methods while maintaining a consistent operational framework This adaptability from the earlier phases of the product development process is crucial during the launch stage, which is the most costly and demands extensive knowledge derived from previous experiences Additionally, each launch generates valuable insights that should be documented for future initiatives.
For a successful product launch, specific short-term targets for sales volumes, revenue, and market share are established, alongside long-term goals for profit, return on investment, and cost recovery timelines A quantitative recording and analysis system is implemented to continuously monitor sales and enhance forecasting accuracy As the launch progresses, accumulating data will refine evaluations, allowing for more precise predictions of future cash flows Essential data for this evaluation includes production costs, pricing, unit sales, revenue, marketing expenses, and overall company costs, serving not only as a tracking mechanism but also as a foundation for strategic actions during the launch.
Making the decision to change activities and timing can be challenging, as reacting impulsively to out-of-target results may disrupt the entire system, while delaying decisions could result in missed opportunities for success It is crucial to base decisions on trends rather than spot data, ensuring that raw materials and direct processing costs are consistently monitored for improvement and alignment with targets Additionally, tracking distribution costs, delivery times, and product losses during distribution is essential, as these factors significantly impact overall costs Systematic monitoring of costs, finance, and market conditions during product launches is necessary for effective management.
Service in product development
The previous sections discussed new product development in general, but sometimes new services have to be developed as well as the physical product In
Table 3.7 Monitoring of production, distribution and marketing
Raw material quality Delivery times
Raw material availability Delivery quantities
Yields Quality of product on delivery
Waste – processing material, Quality of product on sale product, packaging Inventory in company stores
Quality of product Inventory in customers’ stores
Equipment breakdowns Breakdowns in delivery
Reaction to delivery times Consumer awareness Price range
Product returns Consumer reaction Specials prices
Shelf space Consumer buying Price/demand relationship
Using the knowledge from your product commercialisation in the last Think break:
1 Outline the demand outcomes wanted from the launch of your product.
2 Develop for your product launching
(a) relative product innovation level strategy,
3 Outline the critical monitoring points in the launch and describe the information you would collect at these points.
4 Discuss how you would analyse this information and use it to make decisions on the launch. these cases, a product and a related service are developed together In developing new industrial products, the new product benefits and the service to the customer need to be developed in tandem to give the optimum integrated product In food service, the service component is of major importance; for example in a high-class restaurant, the service of individual attention, and in a take-away chain, the service of fast convenience, is all-important The basic four-stage PD Process is the same for new product and service development, but the activities and the organisation can be different An integrated process including product and service needs to be used where product and service are developed together.
Services are intangible experiences that are produced and delivered simultaneously, making them distinct from tangible products Unlike tangible goods, which remain constant for all customers, services are adaptable and can change based on individual customer needs Customers seek personalized experiences that provide strategic benefits, emphasizing the importance of the interaction between the customer and company employees in defining the service Consequently, service quality can vary significantly, yet it is crucial since customer reactions are immediate (Terrell and Middlebrooks, 1996).
The customer's perception of service encompasses both the company's service system and its expertise Key attributes of a service, as identified by Walton (1992), are crucial from the customers' perspective.
• speed and convenience of service;
• quality of the tangibles that accompany the service;
• unique skills that constitute the service offering.
From a company's perspective, a service comprises three key components: the core service, the augmented service—which includes the firm's reputation and the quality of interactions with its systems and staff—and the marketing support that enhances the overall customer experience.
1998) The total service is shown in Fig 3.15 In developing a new service, the three layers of the product have to be integrated so that the total optimum product is achieved.
In the 1980s and 1990s, the expansion of service industries and the demand for innovative offerings spurred interest in new service development methodologies The foundational model established by Booz, Allen and Hamilton in 1982 outlined a systematic approach that included business strategy formulation, new service strategy development, idea generation, concept evaluation, business analysis, service development, market testing, and commercialization As the field evolved, more specialized service development processes emerged, such as the four-stage framework proposed by Scheuing and Johnson in 1989, which included direction, design, testing, and introduction, along with a detailed 15-step sequence of activities.
• Direction (or service strategy): formulation of new service objectives and strategy, idea generation, idea screening.
• Design: concept development, concept testing, business analysis, project authorisation, service design and testing, process and system design and testing, marketing programme design and testing, personnel training.
• Testing: service testing and pilot run, test marketing.
• Introduction: full-scale launch, post-launch review.
The model highlights the crucial relationship between design and testing in new service development, emphasizing the importance of involving operations personnel and users during the design phase Customer participation is vital, as it ensures that the service meets their needs Additionally, engaging front-line employees is essential, as they are closely connected to customers and can identify their needs and challenges When both employees and customers are involved in the development process, they are more likely to deliver the service knowledgeably and willingly, enhancing the overall design of the service.
The augmented service product involves three key groups: the designer, the customer, and the service employee, as illustrated in Fig 3.15 These groups are not represented by individual roles but rather consist of the customer’s group, the company’s development team, and the marketing organization Understanding the dynamics between these groups is essential for effective service delivery and product development.
New service development is a complex and iterative process that fits into a service development framework, as highlighted by Edvardsson et al (1995), who identified four overlapping stages: idea generation, project formation, design, and implementation This non-linear approach emphasizes the importance of customer and employee involvement, which disrupts a rigid sequential structure Edgett (1994) stresses that a well-coordinated launch plan, complete with targeted communication and adequate resources, is essential for successful service innovation Key stages in this process include establishing a clear service strategy and effective service design to ensure alignment and responsiveness throughout development.
Service strategy is the direction for development based on the business strategy Some of the service innovation strategies include positioning, process, new service, employee/customer relationship and communication (Stinson,
1996) Examples in the food industry are:
• commodity meat suppliers repositioning to ingredient meat suppliers with products tailored to high class hotels and restaurants;
• restaurant changing from table service to self-serve;
• frozen food company introducing a new home delivery of frozen meals, nutritionally balanced for different age groups;
• starch ingredient supplier developing a buyer contact group with recognised product development skills;
• soy products company opening an on-line data base so that their clients can formulate new products.
Service design encompasses the service concept, service system, and service process (Edvardsson and Olsson, 1996) The service concept outlines customer needs and how these needs are met through the service's structure and content.
In service development, understanding customer expectations is crucial, as these are shaped by their needs, wants, and the company's reputation For instance, diners in upscale restaurants or children in fast-food chains like McDonald's exhibit distinct expectations influenced by prior experiences and marketing efforts The service system encompasses not just front-line staff but the entire customer relations chain, integrating technical resources, administrative procedures, and finance, which dictates pricing and investment limits Effective service design requires consideration of these interconnected elements, including the role of marketing in educating and empowering customers to engage in the service experience Additionally, technical teams are essential in creating the hardware and software that support the service delivery.
The service process is crucial in generating customer outcomes, with the customer actively participating and influencing results (Edvardsson and Olsson, 1996) The design of this process is shaped by the nature of customer contact, whether it be through mail, telephone, or face-to-face interactions, and can vary based on the relationship's duration and formality Companies must consider individualized customer experiences, deciding whether to engage closely or maintain distance Additionally, customer behavior plays a significant role in shaping the service process, which should encompass a comprehensive framework of activities from initial customer interaction to the final service outcome.
The service process within a company is influenced by various factors, including the staff, customers, physical environment, and organizational structure It relies on the resources available, such as people, knowledge, and skills, and their organization Additionally, customers bring their own knowledge and procedures that must be considered in the service design While the service process provides a general framework, it is adaptable and varies for each customer, creating a unique experience for every individual.
The development of a new service involves continuous interaction among the service concept, system, and process, alongside testing various combinations with both customers and employees This iterative approach evolves as more customers are engaged, leading to stages such as pilot testing, test marketing, and ultimately, the final launch of the service.
3.5.3 Industrial food products and services
In industrial business-to-business relationships, two primary groups exist: industrial buyers, such as food processors or manufacturers who utilize raw materials and food ingredients, and industrial suppliers, including farmers and ingredient processors This dynamic encompasses a diverse range of buyers, suppliers, and products, from branded coffee for small coffee bars to specialized ingredients for large multinational food manufacturers When developing new industrial products, it is essential to consider several general factors that influence product development (Schaffner et al., 1998).
These could be raw materials from farm and sea, specialised commodities, bulk industrial products, partially processed materials, processed products, processed speciality products.
The industrial food-product characteristics
Industrial products can be categorized into three main components: tangible products, their uses, and the associated services marketed alongside them Key characteristics of industrial food products are illustrated in Figure 3.18.
Where is the product development process going?
The Critical PD Process is a structured approach to project development, characterized by essential reviews at each stage that allow for thorough progress evaluation Successful reviews enable progression to the next stage, while unsuccessful ones may result in project abandonment or recycling Typically, the process comprises four main stages, although additional substages may be required for significant innovations that demand extended development time The effectiveness of activities and their order within these stages is influenced by factors such as the degree of innovation, available resources, project timing, the company's risk tolerance, and its expertise.
The degree of novelty in product development, which varies from simple product improvements to significant innovations, plays a crucial role in determining the standard product development process This process can be streamlined by reducing the number of activities for each project, ensuring efficiency while maintaining focus on the desired outcomes.
• more or less continuous modification of an existing product line with fairly minor changes to produce variations on products;
• processes, equipment and markets are substantially unaltered; and
• no major shift in structure and organisation of the company’s product development.
A robust data recording and storage system for product development can significantly enhance a company's understanding of consumers, markets, and production processes This knowledge can streamline initial research phases and facilitate smoother product commercialization Additionally, it allows for a standardized approach to product launches, making incremental changes more efficient and effective.
The Product Development (PD) Process undergoes continuous enhancement through thorough analysis and evaluation following each project By consistently refining this process, the efficiency and effectiveness of product development can be significantly improved over time.
In the initial phase of the Product Development (PD) Process for significant discontinuous changes, extensive exploratory activities are essential due to high costs and resource demands, necessitating thorough project and business analysis Major decisions require substantial knowledge, often generated within the project itself While a logical framework is important, it must remain flexible to accommodate the project's uncertainties, making the process more exploratory and less focused on customer input compared to traditional incremental development This stage emphasizes the integration of emerging technologies into new products, leading to early prototype designs before conducting opportunity analysis, market attractiveness assessments, market research, and financial evaluations (Veryzer, 1998) Technological research is crucial for determining feasibility prior to consumer engagement in product idea exploration and concept development In subsequent stages, critical design work for production facilities and market strategies is necessary, which involves generating, evaluating, and applying design concepts.
Figure 3.22 illustrates that new product placement is closely linked to three key components: aesthetics, technicalities, and service This approach provides more valuable insights for selecting, planning, and executing product development activities than merely categorizing products into industrial, consumer, and food service segments, due to its comprehensive nature.
Strength of relationships: weak;moderate;strong
In the product development (PD) process, the selection of activities is significantly influenced by various factors, including product variations Effective placement of these activities not only facilitates the selection process but also enhances the likelihood of a smooth and successful product development journey.
The market significantly influences consumer behavior, with aesthetic factors often playing a crucial role in attracting customers to new products, leading to brand acceptance and loyalty with minimal ongoing effort In contrast, industrial products undergo rigorous technical scrutiny, where specifications, pricing, and long-term contracts dominate decision-making, leaving little room for emotional appeal Additionally, while the food service industry prioritizes the technical details of ingredients, aesthetics also play a vital role in dish development, alongside the essential factors of consistency, reliability, and service.
References
ANDREASEN, M.M & HEIN, L (1987) Integrated Product Development (Berlin: Springer).
BETZ, F.(1998) Managing Technological Innovation (New York: Wiley).
BLAICH, R &BLAICH, J.(1993) Product Design and Corporate Strategy (New York: McGraw-Hill).
BOOZ, ALLEN &HAMILTON (1982) New Products Management for the 1980’s (New York: Booz, Allen and Hamilton).
BOWERS, M.R.(1989) Developing new services: improving the process makes it better Journal of Services Marketing, 3(1), 15–20.
BOWERSOX, D.J., STANK, T.P.&DAUGHERTY, P.J.(1999) Lean launch: managing product innovation risk through response-based logistics Journal of Product Innovation Management, 16(6), 557–568.
CAPATTI, A.(2000) Food design Domus, 823(Feb.), 68–78.
COOPER, R.G.(1990) Stage-gate system: a new tool for managing new products. Business Horizons, 33, 44-54.
COOPER, R.G.(1996) Overhauling the new product process Industrial Marketing Management, 25, 465–482.
DASGUPTA, S.(1996) Technology and Creativity (New York: Oxford University Press).
DE BRENTANI, U (1995) New industrial service development: scenarios for success and failure Journal of Business Research, 32, 93–103.
DI BENEDETTO, C.A (1999) Identifying the key success factors in new product launch Journal of Product Innovation Management, 16(6), 530–544.
EARLE, M.D.(1971) The Science of Product Development and its Application in the Food Industry (Palmerston North: Massey University).
EARLE, M.D.(1997) Changes in the food product development process Trends in Food Science and Technology, 8, 19–24.
EARLE, M.D.&EARLE, R.L.(1999) Creating New Foods: The Product Developer’s Guide (London: Chadwick House Group).
EARLE, M.D & EARLE, R.L (2000) Building the Future on New Products (Leatherhead: Leatherhead Food R.A Publishing).
EDGETT, S.(1994) The trials of successful new service development Journal of Services Marketing, 8(3), 40–49.
EDVARDSSON, B.&OLSSON, J.(1996) Key concepts for new service development. Service Industries Journal, 16(2), 140–164.
EDVARDSSON, B., HAGLUND, L & MATSON, J (1995) Analysis, planning, improvisation, and control in the development of new services. International Journal of Service Industry Management, 6(2), 24–35.
ERICSON, O.P.(1997) Survey offers full plate of food product ideas Food Product Design, 7(9), 16, 19, 20.
FOX, J (1993) Quality Through Design: the Key to Successful Product Development (London: McGraw-Hill).
GUILTINAN, J.P (1999) Launch strategy, launch tactics and demand outcomes. Product Innovation Management, 16(6), 509–529.
HEGENBART, S.L (1997) Computers: yesterday’s novelty, today’s development partner Food Product Design, 7(4), 81, 82, 84, 85.
HOLLINGSWORTH, P.(1995) The slimmed-down shape of new product marketing. Food Technology, 49(3), 68, 70, 72.
HOOD, L.L., LUNDY, R.J.&JONSON, D.L.(1995) New product development: North American ingredient suppliers’ role British Food Journal, 97(3), 12–17.
HU, R (1999) Food Product Design: A Computer-Aided Statistical Approach (Lancaster, PA: Technomic).
HULTINK, E.J & ROBBEN, H.S.J (1999) Launch strategy and new product performance: an empirical examination in the Netherlands Journal of Product Innovation Management 16(6), 545–556.
JOHNE, A & STOREY, C (1998) New service development: a review of the literature and annotated bibliography European Journal of Marketing, 32, (3/4), 184–251.
JONES, P (1995) Developing new products and services in flight catering Inter- national Journal of Contemporary Hospitality Management, 7(2,3), 24–28.
JONSDOTTIR, S., VESTERAGER, J.&BORRESON, T.(1998) Concurrent engineering and product models in seafood companies Trends in Food Science and Technology, 9(10), 362–367.
KABAT, J.(1998) High flying food International Design, 45(6), 64–65.
KARLSSON, C., NELLORE, R.&DAVIES-COOPER, R.(1998) Black box engineering: redefining the role of product specifications Journal of Product Innovation Management, 15(6), 534–549.
LAI, PAI WAN (1987) Development of a Bakery Snack for Export from NewZealand to Malaysia Thesis, Massey University, Palmerston North, NewZealand.
LEGGE, J.(1999) Product Management: Sharpening the Competitive Edge (South Yarra: Macmillan Education).
MOORE, W.L., LOUVIERE, J.L.&VERMA, R.(1999) Using conjoint analysis to help design product platforms Journal of Product Innovation Management, 16(1), 27–39.
NGARMSAK, T (1983) A System of Meal Planning for Self-improvement of the Diet of Villagers in Northeastern Thailand PhD Thesis Massey University, Palmerston North, New Zealand.
PEARLMAN, C.(1998) Food for thought International Design, 45(6), 47.
PETRIE, R.(1995) Four-legged trends Marketing Week, 18(13), 42–43.
ROBERTS, L.M (1997) A New Beef Product Adoption Model for Hotels and Motels in Greater Melbourne PhD Thesis, Massey University, Palmerston North, New Zealand.
ROSENAU, M.D (2000) Successful Product Development: Speeding from Opportunity to Profit (New York: Wiley).
SCHAFFNER, D.J., SCHRODER, W.R & EARLE, M.D (1998) Food Marketing: An International Perspective (New York: McGraw-Hill).
SCHEUING, E.E & JOHNSON, E.M (1989) A proposed model for new services development Journal of Services Marketing, 3(2), 25–34.
SCHMITZ, B.(2000) Tools of innovation Industry Week, 249(10), 57–66.
STINSON, W.S.(1996) Consumer packaged goods (branded food goods), in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: Wiley).
STOREY, C & EASINGWOOD, C.J (1998) The augmented service offering: a conceptualization and study of its impact on new service success Journal of Product Innovation Management, 15(4), 335–351.
STOY, R (1996) Assembled product development, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: Wiley).
TERRELL, C.A & MIDDLEBROOKS, A.G (1996) Service development, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: Wiley).
ULRICH, K.T & EPPINGER, S.D.(1995) Product Design and Development (New York: McGraw-Hill).
VERYZER, R.W (1998) Discontinuous innovation and the new product development process Journal of Product Innovation Management, 15(4), 304–321.
WALTON, T.(1992) Where’s the design in service design? Design ManagementJournal, 3(1), 6–8.
A company's success in product development hinges on its ability to establish a robust knowledge core and perpetually generate new insights Key areas essential for effective product development include understanding market trends, leveraging customer feedback, fostering cross-functional collaboration, and integrating technological advancements.
• the different cultures of the world, their needs, wants and attitudes, and how they can assimilate and absorb new products;
• basic knowledge and skills of present raw material production and food processing;
• high technological knowledge and problem-solving skills to develop new technologies;
• product development systems and organisation.
The total technology concept in food product development emphasizes the integration of societal influences, company resources, and organizational knowledge Effective management is crucial for selecting and fostering this knowledge, creating an environment conducive to innovation A robust communication system is essential for the dissemination and growth of knowledge within the company It's important to understand that knowledge is dynamic and extends beyond mere information or databases; it encompasses the active development of current and new systems Ultimately, knowledge resides within individuals, shaped by their problem-solving abilities and their understanding of interactions among technology, society, consumers, and production processes.
The knowledge base for product development
Knowledge drives change, with information serving as its foundation In today's world, there is a growing focus on the concept of a 'knowledge society,' though knowledge itself is not new Throughout history, knowledge has experienced periods of growth and decline, such as during the Dark Ages What distinguishes the early 21st century is the ease of communication among individuals, which enhances knowledge when information is effectively absorbed and utilized This increased exchange of information has significant implications for the food industry.
Technology, knowledge and the food system
Technology transforms knowledge into products, processes, and services that meet human needs and desires Central to this process is the ability to identify these needs and innovate solutions economically Once a prototype is developed, it must be scaled and adapted to fulfill market demands, ensuring safety, cost-effectiveness, and customer acceptance This transition from prototype to market-ready product is complex and requires not only existing knowledge but also the generation of new insights throughout development.
The development process integrates various types of knowledge, including technological, commercial, and organizational aspects Following this development, it not only translates knowledge into practical applications but also enhances its own knowledge base through the insights gained during the process.
Two types of knowledge are recognised – disembodied (before and during development) and embodied (after development) The disembodied knowledge goes eventually to the embodied product in product development:
Disembodied knowledge!Disembodied innovative activities!Embodied product
Tacit knowledge in people’s heads + Explicit (codified) knowledge in records
!Knowledge creation in PD Process!New product
Four key areas of knowledge—disembodied and embodied—play a crucial role in product development: technology, technological change, innovative activities, and technological indicators (Evangelista, 1999) Companies possess a reservoir of technological knowledge and continuously generate additional insights through innovative activities, leading to the creation of productive assets such as products, facilities, and marketing systems.
In product development and engineering, the reliance on tacit or embedded knowledge—derived from individuals' education and experiences—is crucial Additionally, explicit or codified knowledge, found in reports, textbooks, and journals, plays a significant role in the process.
4.1.1 Knowledge in the food system
In a study of the Italian industry, Evangelista (1999) placed the food and drink industries in the investment intensive sector The other sectors were:
• R&D (research and development) and D&E (design and engineering) innovators;
In investment-intensive sectors, investment activities are crucial, while research, development, design, and engineering play secondary roles Process innovations are prevalent, with innovation performance closely linked to investments in new technology and equipment Industries such as chemicals, sugar, and pharmaceuticals show a higher engagement in research and development activities Notably, the pharmaceutical sector exhibits significant R&D and design expenditures, coupled with substantial investments in machinery, focusing primarily on product innovations This trend is evident when comparing companies across Europe.
Disembodied technology: stock of technological knowledge both embodied in people and expressed in a codified form.
Disembodied technological change: process of advancing technological knowledge. Disembodied innovative activities: activities carried out at the firm level to generate or develop new technological knowledge.
Disembodied technological indicators: R&D expenditures and personnel, design and engineering activities, patent and licence counts, technology flows measured by the technological balance of payments and bibliometric data.
Embodied technology: stock of technological productive assets consisting of machinery, equipment, plant and operating systems (both tangible and intangible).
Embodied technological change: accumulation of new technical assets (machinery, equipment, plant and operating systems).
Embodied innovative activities: innovative activities consisting of the use or adoption of new productive assets with enhanced technical and technological performances compared with those used before.
Embodied technological and innovative indicators: investment in new machinery, equipment and plant incorporating new (or not yet used) technologies; indicators measuring the adoption and diffusion of embodied technologies.
Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar PublishingLtd. on process innovation in the food industry was clearly shown (Evangelista, 1999).
Food manufacturing is primarily a supplier-dominated industry, relying on ingredients from the chemical sector and equipment from mechanical and electrical manufacturers Knowledge acquisition from suppliers is common among food manufacturers, often resulting in less knowledge creation compared to the supplier industries (Hood et al., 1995) This dynamic of knowledge generation and transfer is highlighted at food congresses, where numerous suppliers not only showcase their products and equipment but also contribute to or sponsor many presentations A recent case study by Martinez and Burns illustrates the challenges of product development when heavily depending on external technology sources.
In 1999, research on the Spanish food and drink industry revealed that product technology was mainly developed in-house, while process technology relied on a combination of internal and external sources, primarily equipment suppliers This dependence on external technological advancements resulted in low levels of technological independence, particularly in process technology The findings underscore the critical role of in-house technological capabilities in fostering product and process innovation, highlighting the challenges faced by companies that overly rely on external sources To enhance the technological sophistication of consumer food products, it may be time for the food manufacturing sector to increase its focus on research and development (R&D) and development and engineering (D&E) Although the industry may not evolve into a high-tech sector, a more balanced approach between R&D, D&E, and capital investment is essential for improving company performance, as suggested by Wallace and Schroder (1997).
Table 4.2 Product and process innovations in European companies
Product Process Product and process innovation innovation innovation
Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar PublishingLtd.
Research and development in the food industry often exemplifies market failure, where private costs and benefits diverge significantly from social costs and benefits This discrepancy leads to under-investment in R&D by private firms, highlighting the need for government support Addressing this dilemma requires innovative solutions, especially as the landscape is increasingly shaped by a surge of scientific and technical information amid rapid legal, political, and social changes.
Organizations can be categorized into functional, process-based, and societal knowledge-based structures This classification highlights that companies may operate through distinct functional departments like marketing and production, as integrated technological entities, or as technological entities deeply embedded in society The food industry, traditionally functional, appears to be transitioning towards an integrated technological model that emphasizes management rooted in societal knowledge If this shift is occurring, the demand for knowledge within the industry will need to grow significantly.
4.1.2 Creation and movement of knowledge in the food system
The interconnectedness of knowledge transfer between suppliers and food manufacturers highlights the integral role of each segment within the food industry Historically, government funding has significantly influenced knowledge creation in primary production, with agriculture and fishing being vital for food supply and seen as a social responsibility by governments While today both public and private sectors contribute to agricultural research, entities like the US Department of Agriculture and various international organizations continue to play crucial roles In contrast, research funding for the fishing industry remains limited, raising concerns about sustainability amidst declining fish stocks Distribution research has also received government attention due to the necessity of food storage and transport However, sectors such as food ingredient processing and consumer product manufacturing lag in R&D investment, possibly due to their recent establishment as science-based industries and challenges in intellectual property management Much of the knowledge generated in food manufacturing occurs through incremental product development, often undocumented, leading to a lack of explicit knowledge for future innovations Additionally, proprietary knowledge tends to reside within large multinational companies, limiting its availability for educational purposes in food science and technology.
Companies can enhance their product development by leveraging external knowledge sources beyond their R&D departments It's crucial to recognize both direct and indirect pathways to access this knowledge, as illustrated in Fig 4.1 Numerous government agencies offer valuable information through reports, databases, and published papers, which can be transformed into actionable insights This information is often stored in libraries, various information facilities, and online platforms Additionally, companies can collaborate directly with government research agencies, consultants, suppliers of ingredients and equipment, and consumer research firms to cultivate tailored knowledge that meets their specific needs.
Fig 4.1 Information and knowledge in the food company from outside R&D.
Recognizing the significance of science and technology information tracks is crucial for addressing challenges in product development In the industry, research primarily aims to enhance technology to meet evolving consumer demands, while universities and research institutes focus on advancing scientific knowledge or generic technological advancements.
In the science track, knowledge is disseminated through peer-reviewed journals and textbooks, though much research is now directly funded and shared with sponsors Researchers in engineering and technology build upon foundational knowledge to advance their fields, which is then shared with future engineers and industry counterparts through conferences and journals Initially, companies rely on knowledge gained during industrial development, but over time, they accumulate technological insights that inform subsequent projects This comprehensive understanding of the food system, shaped by R&D and experiences in marketing, production, distribution, and engineering, serves as a foundation for future product development.
The company actively analyzes its competitors' actions, products, and production processes to gain insights In many industries, a significant portion of knowledge—around 80%—is commonly shared, but the critical 10–20% of unique knowledge is what provides a competitive advantage To leverage this, the company must also effectively utilize the foundational knowledge available in the market.
The company is generating knowledge throughout the entire process, from initial research and development (R&D) to the final market outcomes (Quinn, 1992), as illustrated in Fig 4.2 This knowledge is continuously developed and expanded in subsequent stages.
Knowledge management or knowledge navigation?
Technological capabilities in product development encompass the essential resources required to harness technological opportunities and navigate technical changes This includes a combination of skills, knowledge, experience, and the necessary institutional structures and connections Among these elements, technological knowledge often plays a pivotal role.
A significant portion of technological expertise in product development is tacit, embedded in the skills and competencies of individuals and organizations This type of knowledge is typically not documented and is often specific to particular companies or regions, making its transfer to explicit knowledge challenging Learning plays a crucial role in sharing and cultivating tacit knowledge within product development teams.
The increasing complexity of food product development necessitates a comprehensive approach to managing explicit knowledge, encompassing consumer trends and technological advancements It is crucial to establish efficient pathways for accessing and evaluating relevant knowledge both internally and externally Rather than merely managing knowledge, organizations should focus on knowledge navigation, which integrates strategic direction with knowledge systems A vital responsibility of top management is to foster a culture that promotes knowledge capture and sharing, guiding the company towards effective knowledge strategies.
Consider your company and its sources of knowledge for product development:
1 Identify a new product that has come from an invention inside the company What knowledge did the company need to bring this invention to a commercial product?
2 Choose a product that is being developed at the present time Identify the tacit knowledge that was used in the first stage of the product development process, and the people who supplied this tacit knowledge.
3 Choose a product that has been launched Identify the explicit (codified) knowledge that was used in the final stages of this product commercialisation and launching.
4 Describe how in your company the knowledge created in the product development project is saved as tacit and explicit knowledge for use in future projects Discuss how the saving of this knowledge might be improved in the future.
Management plays a crucial role in ensuring the technological expertise and capabilities necessary to support the company's innovation strategy and product development initiatives Understanding the company's historical context, current position, and future direction is vital The 1990s witnessed a rejection of historical knowledge, often leading to significant consequences.
In today's fast-paced work environment, the need to codify knowledge is essential due to high staff turnover and the loss of tacit knowledge Total quality management has emphasized the importance of recording production and product quality data, while advanced information systems now facilitate the storage and retrieval of formulation and processing knowledge Efforts have been made to create recording systems for product formulation, utilizing case-based systems that archive both successful and unsuccessful formulations as valuable knowledge sources This repository of explicit knowledge not only enhances product development but also contributes to a deeper understanding of the company's specific expertise, effectively transforming experiential tacit knowledge into accessible explicit knowledge.
Effective product development requires management to balance investment in human knowledge and information technology Determining the appropriate allocation of resources across different stages of the product development process is crucial Research by Cooper and Kleinschmidt (1988) indicates that while expenditures rise as a project approaches commercialization, the majority of man-days are concentrated in the product design and testing phases Interestingly, significant capital investments in later stages do not correspond to a proportional increase in knowledge gained Therefore, management must analyze the knowledge creation patterns within product development to ensure they are optimal and promote sufficient communication to leverage existing knowledge within the organization.
Identifying necessary knowledge for both short-term and long-term goals is essential in product development In incremental innovation, this involves creating a knowledge bank for future projects However, when pursuing more disruptive innovations, such as new product platforms or processing technologies, a new knowledge base is required This task can be challenging, especially if management has not engaged in proactive planning Often, companies may find it impossible to innovate based on their current knowledge, leading them to invest in capital by purchasing equipment and expertise from manufacturers.
To enhance company performance, management must establish a strategic knowledge policy that identifies key knowledge areas and promotes knowledge sharing across departments, ensuring accessibility for the product development team This integration highlights the importance of collaboration among functional areas Central to this strategy is the recognition that skilled individuals drive knowledge creation; thus, management must ensure that the product development team comprises talented personnel who can generate and communicate knowledge effectively for current and future projects Furthermore, it is essential for management to relay these needs to the human resources department, prioritizing the recruitment and reward of individuals with the necessary expertise As Tissen (1999) suggests, these innovative talents should be valued similarly to elite athletes, warranting competitive compensation Additionally, management must implement an information system designed to select, collect, integrate, and analyze data, providing a seamless interface for product developers to access critical information efficiently.
In today's food industry, implementing an information system is crucial for enhancing product development efficiency and effectiveness Companies should prioritize this integration to optimize their processes and improve overall performance.
Management must carefully consider the strategic direction of the company's knowledge, as it evolves from existing expertise This foundation can sometimes lead to biased pathways in developing future knowledge For instance, the company's trajectory can be influenced by various factors.
• craftsmen and rely on tacit craft knowledge, knowledge which is based on doing and remembering;
• accountants and rely on financial knowledge;
• engineers and rely on scientifically analysed practical knowledge;
• marketers and rely on social/personal interactions in a marketing situation;
• scientists and rely on scientific logic and method.
There are always several forms of knowledge in the company, but the dominant knowledge gives the direction to the company, and the other knowledge follows it
Box 4.1 Formation of a product strategy
1 Develop sophisticated scenarios for the competitive environment of today and the future.
2 For each of the scenarios, describe the ideal successful companies within the scenario and their attributes, in particular the advantaged and base knowledge incorporated in their products/services and throughout their value chains (advantaged knowledge – knowledge that does or can provide competitive advantage; base knowledge – knowledge internal to a business that may provide short-term advantage, e.g best practices). Also decide on the depth of each knowledge that is needed.
3 Determine who are the current and potential future knowledge leaders in developing and applying the advantaged and base knowledge elements identified For your company, identify the specific internal individuals who possess the knowledge Outside the company, it is best to specify institutions/companies and even individuals who possess the knowledge.
4 Decide where the ideal company should source its knowledge, both internal and external to the company Decide on the depth of a particular knowledge that should be inside the company and the source for the extra knowledge needed.
Necessary knowledge for product development
Transforming a product idea into a new product requires a comprehensive understanding of various interconnected factors, including raw materials, processing techniques, product qualities, consumer reactions, marketing strategies, and the broader environment For instance, the choice of processing methods, such as low-temperature drying, directly impacts the control of raw material quality to ensure product safety It is essential to integrate knowledge across these areas rather than focusing on them in isolation Additionally, while consumers may prefer liquid products in bottles, processing limitations may necessitate the use of cartons, highlighting the need to assess consumer acceptance of alternative packaging options.
1 Cognitive understanding (knowledge), learned skills and deeply held beliefs of individuals are identified as important for success in product development For each of the four stages of the product development process, identify what you think are the most important cognitive understandings, learned skills and deeply held beliefs.
2 Knowledge sharing is important for growing knowledge in a company Identify areas in product development where knowledge is shared in your company and areas where it is not shared How could you extend knowledge sharing in your company?
To successfully convert a product concept into a new product, it is essential to translate consumer perceptions into quantitative measures of product qualities This requires a deep understanding of consumer needs and wants regarding product attributes, as well as effective methods for measuring these attributes The process is primarily focused on the interplay between consumer insights and technology, while also considering the broader environmental context For a comprehensive understanding of consumer behavior, further details can be found in Chapter 5.
The general knowledge areas important in technology are (Gawith, 1999):
• knowledge of science, mathematics, social sciences;
• knowledge of techniques, testing, modelling, interviewing, manipulating tools, materials and data;
• knowledge of procedures and processes;
• knowledge of generic concepts and ways of thinking.
Product development encompasses various elements, including products, raw materials, processing, packaging, distribution, and marketing This diverse range of components highlights the extensive knowledge required to transform a concept into a tangible product.
When developing a high-protein food product, it is essential to define specific parameters such as the desired protein percentage, color measurement, and texture standards For instance, achieving a protein content of 15% requires precise knowledge of the raw materials' protein levels, while color specifications necessitate the identification and measurement of pigments Additionally, the type and quantity of protein, along with amino acid composition, must be carefully selected, especially in applications like breadmaking and sausage production where specific protein types are critical for structure and moisture retention Processing conditions can affect protein integrity, so limits must be established to ensure the product retains its nutritional properties Packaging plays a crucial role in preventing moisture absorption, and storage conditions must be controlled to maintain quality Ultimately, consumers need clear information on how to handle the product to achieve the desired nutritional benefits.
Integrating knowledge from various disciplines is crucial in product development When multiple specialists are involved, the challenge lies in effectively combining their expertise throughout the project Conversely, in smaller companies with fewer team members, the focus shifts to addressing knowledge gaps to ensure successful outcomes.
Table 4.3 Types of technological knowledge in product development
Properties: appearance, size, shape, sensory; nutritional, compositional
Use: safety, ergonomics, preparation and serving, eating
Properties: type, production method, chemical composition, traces of pesticides and herbicides, toxicity, nutritional composition, sensory and physical properties, micro- biological counts
Price: price range, relationship of price to quality
Raw material limits are influenced by various factors, including processing requirements, product structure, and other essential properties The availability of these materials dictates the minimum and maximum quantities needed for production Additionally, the processing methods employed can impact the quality and effectiveness of the raw materials Legal regulations also play a crucial role in determining the permissible limits for raw material usage in manufacturing processes.
Unit operations: heating, pasteurisation, sterilisation, freezing, chilling, drying, mixing, tumbling, pumping, conveying, packing
Unit processes: gelatinisation, hydrolysis, browning, denaturation, oxidation, death of microorganisms, growth of microorganisms, vitamin destruction
Processing variables: temperature, water activity, atmosphere, time
Costs: raw materials, processing, factory, distribution, marketing and administration Processing limits: temperature range, rate of increase/decrease in temperature, viscosity range, mixing speed range, basic equipment design
Packaging materials: film, cardboard, metal, glass
Packaging type: bottle, carton, pottle, can, sachet
Packaging method: hand, continuous, automatic, aseptic
Packaging limits: shelf life, protection
Transport: roads, rail, sea, air
Transport conditions: time, temperature, humidity, vibration, handling, costs
Storage: ambient, chilled, frozen, atmosphere controlled
Storage conditions: time, temperature, humidity, atmosphere, handling, costs
Distribution limits: shelf life; protection from contamination, breakage, deterioration; available transport and storage; timing of transport; costs
Market channel: product flow through market channel, people and organisations (retail outlets, wholesalers, agents, ingredient suppliers)
Market channel requirements: size, weight, availability, price, display and information Promotion: media advertising, public relations, in-store promotions, free samples, competitions
Promotion needs: create awareness, encourage to buy, education, creating a product image
When determining pricing strategies, businesses must consider the perceived value of their products to customers, associated costs, competitive pricing, and potential discounts Additionally, marketing efforts are influenced by the availability and control of distribution channels, competitive actions, promotional costs, and the evolving needs and attitudes of customers, all while adhering to legal regulations governing marketing practices.
Understanding the social, cultural, physical, economic, and political environments is crucial for successful product development, a task that can be overwhelming even for large companies with dedicated teams Fortunately, many social and cultural shifts occur gradually, allowing time for predictions about their direction In contrast, political changes can happen rapidly, especially during revolutions Information sources include people, media, magazines, reports, journals, and the Internet, and the challenge lies in transforming this information into actionable knowledge for product development.
Information in many of these environmental changes does spread around the world quickly because of modern communication, but often it is in the
Media often favors 'communication bites' that can misrepresent the full narrative, leading to distorted information Major corporations strategically position their staff near parliaments and politicians to influence the communication process effectively.
1 For the product design and process development of peanut butter slices in a vacuum pack, similar to cheese slices, decide on the knowledge needed for product qualities, raw materials, processing and packaging How much of this knowledge is already available, and what would need to be created in the product development project?
2 Three different varieties of mangoes have been selected for export to Japan from Thailand (see Section 7.2) What knowledge would be needed for packaging, distributing and marketing in Japan? How would you conduct the development to either find or create this knowledge?
3 Packaging is an area where there has to be close collaboration of food manufacturer and packaging company It is recognised that for the food manufacturer (Belcher, 1999):
(a) purchasing wants easily exchangeable packaging that can be quickly delivered by several companies,
(b) marketing wants a package that is a communication vehicle and that can convey an image,
(c) legal department wants a package that definitely protects the product from contamination, and is deemed a safe product for the consumer so as not to incur any liability on the company,
(d) the food technologist is interested in the package for what it can do to protect the product quality, safety and can enhance the new technologies that are being employed.
Packaging companies play a crucial role in bridging the knowledge gap with manufacturers, fostering the creation of new insights While some teams actively seek information to influence industry trends, discrepancies can arise within the same organization For instance, product developers in Europe may focus on creating natural and organic offerings, contrasting with lobbying efforts aimed at promoting genetic engineering Global economic and climatic reports indicate shifts in consumer preferences, such as a move from hot soups to ice cream due to climate change As economic transformations unfold in markets like China, food companies can anticipate evolving consumer choices and adapt their product development strategies accordingly, despite the uncertainties surrounding the timing of climate predictions.
Understanding environmental changes is crucial for integrating knowledge into product development These changes inform business, innovation, and product development strategies, guiding the overall planning process It's essential to recognize the specific impacts on product development projects to make informed decisions at every stage Teams should include individuals who are externally focused and attuned to environmental trends, ensuring that relevant insights are effectively incorporated into the product development program.
In product development, there is a continuous development of knowledge: past knowledge!present knowledge!future knowledge
Tacit knowledge in product development
Tacit knowledge, distinct from explicit knowledge that can be easily articulated and shared, is inherently personal and communicated through interpersonal interactions (Madhaven and Grover, 1998; Nonaka et al., 1996) In product development teams, this type of knowledge is amplified through individual contributions and collaboration, referred to as embedded knowledge (Madhaven and Grover, 1998) The integration of tacit and explicit knowledge within a group creates what Evangelista (1999) calls disembodied technology, which ultimately leads to embodied knowledge manifested in the final product and its associated outcomes As knowledge is acquired and generated throughout the project, it transforms into new products, production specifications, marketing strategies, and financial forecasts, with the potential to be preserved for future endeavors either as tacit knowledge or as a structured explicit knowledge base However, tacit knowledge is often context-specific; for instance, product developers may possess deep insights into consumer behavior and product processes, yet lack familiarity with testing techniques, necessitating reliance on explicit resources like manuals.
1 List the information sources used by your company in product development. Which sources give you vital information, useful information, interesting information, useless information? Would you drop some of these information sources? Do you need to include other information sources?
2 Because of the increasing volume of information, companies have set up systems based on information technology to receive, store and distribute information to the various functional departments, R&D, engineering and product development (Graef, 1998) Describe the important knowledge areas to be included in an information system for product development What are the important factors to be considered in building an information system as a basis for effective and efficient product development? knowledge is the understanding of the defining company situation: where the company is, what it wants to achieve and what are its restrictions/limits on product development, and how does it want to achieve product success.
4.4.1 Individual knowledge in product development
In product development projects, teams leverage both tacit and explicit knowledge to drive success, often beginning with the tacit knowledge of team members and generating further insights throughout the process This is particularly common in smaller companies with limited information sources, though larger organizations may also adopt this approach to expedite development The success of a product heavily relies on the tacit knowledge and creativity of individuals, as well as the dynamics of their professional networks, which include connections with industry groups, customers, and suppliers.
Individuals actively exchange and build their knowledge base during product development, with only 10-20% of this knowledge being truly novel (Senker, 1998) Companies with strict secrecy often hinder their access to general knowledge, complicating the knowledge creation process Employees with strong external connections serve as valuable information gatekeepers, gathering relevant and current insights By understanding internal needs and communication systems, these gatekeepers can effectively translate external information into useful organizational knowledge (MacDonald and William, 1993) Their role is crucial in product development, facilitating information transfer between groups and converting data into actionable knowledge for projects.
Supporting creative individuals and fostering an environment for knowledge creation is crucial for companies Managing creative talent can be challenging within traditional hierarchical structures In contrast, Scandinavian cultures prioritize and empower creativity by providing resources for collaboration This leads to a stark difference in communication dynamics, as Scandinavians often find it perplexing that American and Canadian research highlights communication barriers in product development, given their constant engagement in dialogue.
Every individual in a company plays a vital role in contributing tacit knowledge to product development, which can significantly reshape the organization Involving all staff and customers in this process fosters diverse perspectives and innovation To enhance creativity and access to new knowledge, it is crucial to adopt an open-minded approach in recruitment, avoiding limitations such as hiring exclusively from specific universities, which can lead to a homogenous mindset.
A diverse set of knowledge, skills, and motivations, combined with experience, is essential for organizational success It's important to integrate individuals who have developed their expertise within the company alongside those with external experience in the food industry or other sectors Employees with tacit knowledge from different companies can introduce fresh insights and revitalise existing tacit knowledge within the organization.
4.4.2 Using tacit and explicit knowledge in product development
Tacit knowledge, often seen as experiential and difficult to articulate, plays a nuanced role in product development, which fundamentally revolves around problem-solving While many aspects of product development can be documented as explicit knowledge, the choice of activities and techniques often relies on tacit understanding Skills related to these techniques are typically taught and recorded, yet they may not always stem from a comprehensive grasp of underlying scientific principles, leading to a blend of tacit and explicit knowledge In the food industry, this interplay is evident; for instance, a craftsman's instinct about bread dough fermentation contrasts with a technician's empirical testing methods While explicit knowledge about bread-making may lack a robust scientific foundation, market researchers leverage explicit consumer insights derived from social science methodologies The critical issue for the future lies in transitioning from tacit to explicit knowledge to enhance product development capabilities.
Problem-solving heavily relies on tacit knowledge, which is often underdeveloped in academic settings due to limited time and resources for guided learning This gap is evident as projects related to process design and product development are frequently overlooked in food technology courses In industry, acquiring tacit knowledge is crucial for fostering innovation, particularly through the design, testing of prototypes, and pilot plants Overcoming barriers to innovation often involves intermediate steps like prototyping, which helps establish the necessary knowledge for successful implementation As companies repeat this process, they generate new tacit knowledge that can streamline future innovations Technological advancements are largely driven by tacit knowledge, especially for incremental changes where practical experimentation often yields better results than theoretical research While significant innovations may rely on scientific knowledge, successful product development hinges on effectively integrating this knowledge with tacit insights regarding production and consumer needs In emerging fields like biotechnology and advanced engineering, the combination of formal education and in-house tacit knowledge is vital for driving innovation.
The food system integrates knowledge across various stages of product development, beginning with the cultivation and harvesting of animals, fish, and plants, while considering their physiology, nutritional value, and sensory properties This initial phase is succeeded by processes such as preservation, cleaning, extraction, treatment, and packaging Subsequently, the food industry branches into two segments: food processors that create food ingredients, focusing on scale-intensive operations that generate a significant portion of their own processes.
Fig 4.8 Experience (tacit knowledge) building.
Technological knowledge in food production is heavily influenced by ingredient suppliers, as highlighted by Senker (1998) Food manufacturing companies rely on tacit knowledge and skills to navigate the complexities of food systems while utilizing available scientific and technological expertise Although food processors have developed scientific and engineering skills in process engineering, enabling them to leverage more explicit knowledge, they still depend on tacit knowledge for effective product development analysis and planning This interplay of knowledge types is illustrated in Fig 4.9, showcasing the diverse skills present within the food system.
In his 1997 study on engineering designers' knowledge and memory in new product development, Court found that locally stored information was the most frequently accessed source Designers heavily relied on their personal experience and memory, often recalling information instead of searching for it, with memory usage accounting for one-third of information accesses and even higher for some individuals This highlights the critical role that memory-based knowledge plays in the work of engineering designers.
Effective product development requires team members to possess not only specialized skills but also the ability to integrate consumer and production needs into their roles A comprehensive understanding of the entire product development process is essential, including decision-making and desired outcomes Teams must cultivate a shared understanding of the project and its challenges, utilizing a common language and organizational memory to address current issues While long-term collaboration can enhance team effectiveness, it may also lead to a conservative approach to problem-solving, hindering innovation Striking a balance between stability and adaptability is crucial; teams should remain together long enough to build collective knowledge without becoming stagnant.
Shared models of the Product Development (PD) Process offer significant advantages across all projects, emphasizing the importance of team composition and organization based on the product's innovation level Radical innovations require heightened creativity and specialized skills, while also necessitating a broad understanding of various product development activities It is crucial to maintain a focus on both effectiveness and efficiency throughout the process.
• Effectiveness in a product development team relates to the degree to which the product meets the targeted need of the customer.
• Efficiency is defined as a measure of the resources (including time) used for a given output, often compared with some target or ideal (Madhaven and Grover, 1998).
4.4.3 Changing tacit knowledge into explicit knowledge
Creating knowledge in product development
Knowledge creation is essential in product development, as both individual and collective capabilities significantly contribute to the effectiveness and efficiency of the process.
In changing tacit knowledge to explicit knowledge, two important storage systems for knowledge and information in the company are the company library and the computerised information technology system.
1 Compare the two systems, listing the advantages and disadvantages of libraries and information technology systems for storing knowledge collected during product development projects.
2 Is it more useful for future projects to have a project’s knowledge on a CD in the library than in the information technology system?
3 One of the problems in knowledge/information storage is the age of the material. For how many years should project material be stored? Should resources be made to collect together the information/knowledge from several projects before this time limit?
4 Design a knowledge/information system that will suit your company’s need for internal knowledge/information in product development projects.
4.5.1 Creating knowledge in the company
Nonaka et al (1996) proposed that organizations generate knowledge through a process that enhances individual contributions and integrates them into the organization's knowledge system This process aims to prevent knowledge from becoming stagnant and instead promotes a dynamic system that embraces broader multidisciplinary insights and detailed explicit knowledge of current technologies Knowledge creation occurs within product development teams, across the organization, and through interactions with the external environment among individuals and groups These interactions facilitate the conversion between tacit and explicit knowledge, as illustrated in Table 4.8.
The entire process of transforming product descriptions into detailed design specifications involves converting the implicit knowledge held by consumers, market researchers, and designers into explicit knowledge by the development team.
Knowledge conversion Place in product development People, group
Tacit to tacit Brainstorming, focus groups, Consumer/designer discussion, concepts comparison Consumer/market researcher Designer/market researcher/process developer
Tacit to explicit Product concept creation, Consumer/designer product design specifications, Designer/process modelling, developer feasibility reports, Development team/ evaluation reports, functional depts/ production plan, management market strategy
Explicit to explicit Business strategy/product Management/ development strategy, product developers unit operations/new Engineers/ process, developers measures/testing techniques Quality assurance/ designer/developer
The transition from explicit to tacit knowledge in product development involves various stages, including raw material specifications, supplier interactions, and the integration of basic science and technology Researchers and developers leverage their experiences to address new challenges, while project reports document the evolution of products for future organizational use The design and development processes convert often tacit descriptions into explicit product and process frameworks, utilizing models that can be verbal, physical, computer-based, or mathematical Explicit knowledge is communicated through manuals, reports, and expert systems, ensuring that business strategies and project goals are clearly documented for effective product development Marketing teams can also utilize point-of-sales data to inform their launch strategies The progression from prototype to production specifications highlights the importance of maintaining explicit knowledge in a format that can be transformed back into tacit knowledge for future projects, enabling safe and confident exploration of new areas.
Organisational knowledge creation is a dynamic process that involves the continuous interaction between tacit and explicit knowledge, as well as between individuals, groups, and the organization as a whole In product development, strategies evolve from the overarching business strategy, transitioning tacit knowledge into explicit product strategies This process requires effective communication of tacit knowledge within the product development team The creation of a product strategy relies on a collaborative community of individuals with diverse skills and knowledge, who build upon explicit business strategy knowledge through group discussions Developing a new product strategy necessitates not only traditional analysis and experience but also strategic imagination to generate innovative and effective scenarios To foster this creativity, it is essential for board members, key executives, and selected product developers to engage in regular strategic discussions at least once a year.
In product strategy development, the interaction of tacit and explicit knowledge is crucial, as teams engage in what Ellis refers to as serious play to generate strategic ideas Management must then create comprehensive project plans and development strategies, ensuring that team members are well-versed in fundamental principles and continuously updated on the organization's market position, technologies, production processes, suppliers, and competitors (Clark and Wheelwright, 1993) This knowledge-building process is iterative, involving discussions that include consumers alongside product development, marketing, and technical teams, leading to the formulation of product concepts and design specifications Product development teams experience alternating phases of steady knowledge creation and sudden breakthroughs, fostering an environment where individual and group knowledge is shared and combined, ultimately transforming into the organization's collective knowledge for future endeavors (Nonaka et al., 1996).
Key factors in leveraging knowledge for innovation at 3M include effective communication and empowering employees to utilize their expertise A critical aspect is acknowledging that product development is a specialized discipline with its own knowledge foundation A vital capability for successful product development lies in comprehensively understanding the market, which involves acquiring, sharing, and applying market information However, many companies face obstacles in achieving a deep understanding of new markets.
Box 4.3 Important factors in innovation
• Vision for product development which is understood and accepted by management and the product development team, and is also related to the customer.
• Foresight which predicts the customers’ articulated and unarticulated needs.
• Stretched goals, setting targets which cause the company to make a quantum leap.
• Empowerment, selecting the right people and then trust them enough to let them have the initiative to work on their own.
• Communications, the free exchange of information, staff understanding that combining and transferring knowledge is as important as the initial innovation.
• Recognition of the importance of innovation as a discipline in all parts of the company.
In market information acquisition, individuals tend to concentrate on either technology design or business aspects, often overlooking the importance of product concept development with consumers and the identification of target markets and their needs This oversight arises from the perceived ambiguity in these areas Additionally, the dissemination of market information is impeded by a focus on personal or departmental goals rather than project objectives To effectively incorporate market information into product design and marketing strategies, cross-functional approaches that promote interactive communication are essential Overcoming the barriers of compartmentalized thinking is crucial for fostering collaboration and innovation in product development.
• developing common goals that are specific to the product, not to separate departments;
• clarifying each person’s role in the product innovation activity so that each knows their part in the larger whole and can help one another;
• learning to appreciate both the contributions from, and the constraints, in the various departments.
To effectively utilize knowledge, organizations must overcome the inertia of change, as individuals often cling to the status quo instead of adapting to market insights This is particularly evident with incremental products, where assumptions about existing offerings can lead to minimal market research or the dismissal of valuable findings that contradict established beliefs Managers play a crucial role in empowering teams to gather and analyze market data, while also fostering an environment of trust and encouraging the adoption of innovative practices Product developers can enhance their relationship with management by sharing relevant information about their products and the market landscape, facilitating better understanding and collaboration.
‘Useful’ means that the managers could use the information to follow the development effort and evaluate the product’s potential.
Connectivity is a crucial element in product development teams, especially as remote collaboration becomes more common Unlike the past, where team members shared knowledge easily within close-knit departments, modern teams often face challenges in maintaining contact across large buildings and international borders Many team members may never meet in person, relying solely on email communication, which can hinder trust and cooperation Trust is vital for effective teamwork, encompassing faith in each other's intentions and competence to tackle complex problems To build this trust, it is essential for team members to engage in face-to-face interactions, not just brief meetings, but extended collaboration to address challenges together Management must recognize the costs associated with running international teams and invest in operational networks and joint working times Creating an environment that encourages knowledge sharing while ensuring appropriate recognition fosters intellectual capital within the organization.
To foster a thriving knowledge-sharing environment, companies must encourage individuals to cultivate and expand their knowledge while facilitating informal interactions for sharing insights It is essential to promote risk-taking and collaborative knowledge-seeking to mitigate uncertainties Relationships within teams should be dynamic, resembling a kaleidoscope that forms new patterns and groupings, while still retaining core members Although some team members may transition out of product development, a well-managed team will retain those with the highest expertise and knowledge creation capabilities.
In the management of product development Madhaven and Grover (1998) recommended the following:
Selecting team members who possess specialized knowledge and skills, along with a broad understanding of various aspects of product development, is crucial Their educational background and experience should align with a shared vision of the product development process, although identifying such individuals can be challenging.
• Selection of the product development manager with multidisciplinary knowledge from education and experience.
Implementing a standardized product development process is essential for ensuring consistency across similar projects, while allowing for variations tailored to different levels of innovation and product types Each stage of the process involves specific decisions and outcomes that guide the overall project toward successful completion.
• Ensuring that the members of the team are familiar with their intended activities, both through experienced team members and well-organised information sources.
• Education of team members on knowledge creation and storage Also on how to share knowledge and create knowledge by team knowledge sharing and cross-functional development.
Investing in the development of people, values, and culture within a product development team is crucial for success This includes enhancing knowledge and skills in areas such as technology, marketing, consumer research, and financial analysis By hiring the right talent and providing ongoing education for existing employees, organizations can foster a disciplined approach to product development As noted by Rouse (1992), these investments are essential for achieving optimal results.
References
ADAMS, M.E., DAY, G.S & DOUGHERTY, D (1998) Enhancing new product development performance: an organisational learning perspective J. Product Innovation Management, 15, 403–422.
ALSTON, J.M., PARDEY, P.G.&WALLACE, T.L.(1997) Research policy challenges, in Government and the Food Industry: Economic and Political Effects of Conflict and Co-operation, Wallace, L.T and Schroder, W.R (Eds) (Boston: Kluwer Academic Publishers).
APFELL-MARGLIN, F (1996) Introduction: rationality and the world, in Decolonizing Knowledge: From Development to Dialogue, Apfell- Marglin, F and Marglin, S.A (Eds) (Oxford: Clarendon Press).
BELCHER, J.(1999) Role of packaging in new product development IFT Product Development Newsletter, 5.1, 4.
BETZ, F (1998) Managing Technological Innovation: Competitive Advantage from Change (New York: John Wiley & Sons).
CAMPBELL, H.C (1999) Knowledge Creation in New Zealand Manufacturing. M.Tech Thesis, Massey University, Palmerston North, New Zealand.
CARDWELL, D (1994) The Fontana History of Technology (London: Fontana Press).
CLARK, K.B.&WHEELWRIGHT, S.C.(1993) Managing New Product and Process Development (New York: The Free Press).
CLARKE, P.(1998) Implementing a knowledge strategy for your firm Research – Technology Management, March–April 1998, 28–31.
COOPER, R.G & KLEINSCHMIDT, E.J (1988) Resource allocation in the new product process Industrial Marketing Management, 17, 249–262.
COURT, A.W (1997) The relationship between information and personal knowledge in new product development International Journal of Information Management, 17(2), 123–138.
DRUCKER, P.F.(1985) Innovation and Entrepreneurship: Principles and Practice (London: Heinemann).
EARLE, M.D &EARLE, R.L (1997) Food industry research and development, in
Government and the Food Industry: Economic and Political Effects of
Conflict and Co-operation, Wallace, L.T and Schroder, W.R (Eds) (Boston: Kluwer Academic Publishers).
ELLIS, J.(1999) Doing Business in the Knowledge Based Economy (Amsterdam: Pearson Education/Addison Wesley Longman).
EVANGELISTA, R.(1999) Knowledge and Investment: The Sources of Innovation in Industry (Cheltenham: Edward Elgar Publishing).
FLECK, J (1998) Expertise: knowledge, power and tradeability, in Exploring Expertise: Issues and Perspectives, Williams, R., Faulkner, W and Fleck,
J (Eds) (London: Macmillan Press Ltd).
GAWITH, J.(1999) Total Technology Practice: Preliminary Study for Application in New Zealand Schools M.Phil Thesis, Massey University, PalmerstonNorth, New Zealand.
GRAEF, J.L.(1998) Getting the most from R & D information services Industrial Research Technology Management, July–August 1998, 44–47.
HOOD, L.H., LUNDY, R.J.&JOHNSON, D.C.(1995) New product development: North American ingredient supplier’s role British Food Journal, 97(3), 12–17.
LENZNER, R & JOHNSON, S.S (1997) Seeing things as they really are Forbes, March 10, 122–128.
MACDONALD, S & WILLIAM, C (1993) Beyond the boundary: an information perspective on the role of the gatekeeper in the organisation Journal of Product Innovation Management, 10, 417–427.
MADHAVEN, R &GROVER, R (1998) From embedded knowledge to embodied knowledge: new product development as knowledge management. Journal of Marketing, 62 (October), 1–12.
MARGLIN, S.A (1996) Farmers, seedsmen and scientists: systems of agriculture and systems of knowledge, in Decolonizing Knowledge: From Develop- ment to Dialogue, Apfell-Marglin, F & Marglin S.A (Eds) (Oxford: Clarendon Press).
MARTINEZ, M.G.&BURNS, J.(1999) Sources of technological development in the Spanish food and drink industry A ‘supplier-dominated’ industry? Agribusiness, 15(4), 431–448.
MITCHAM, C.(1994) Thinking Through Technology (Chicago: The University of Chicago Press).
NONAKA, I., TAKEUCHI, H & UMEMOTO, K (1996) A theory of organizational knowledge creation International Journal for Technology Management, Special Publication on Unlearning and Learning, 11 (7/8), 833–845.
QUINN, J.B (1992) Intelligent Enterprise: A Knowledge and Service Based Paradigm for Industry (New York: The Free Press).
ROUSE, W.B (1992) Strategies for Innovation: Creating Successful Products, Systems and Organisations (New York: John Wiley).
ROWE, R.(2000) The right formula Chemistry & Industry, No.14, 465–467.
SENKER, J (1998) The contribution of tacit knowledge to innovation, in Exploring Expertise: Issues and Perspectives, Williams, R., Faulkner, W. and Fleck, J (Eds) (London: Macmillan Press Ltd).
SOUDER, W.E (1987) Managing New Product Innovations (Lexington, MA: Lexington Books).
TISSEN, R.(1999) Sharing knowledge does not mean giving away power: it offers a road to success, in Doing Business in the Knowledge Based Economy, Ellis, J (Ed.) (Amsterdam: Addison Wesley Longman).
WALLACE, L.T.&SCHRODER, W.R.(1997) in Government and the Food Industry:Economic and Political Effects of Conflict and Co-operation, Wallace,L.T and Schroder, W.R (Eds) (Boston: Kluwer Academic Publishers),107.
In the food industry, consumers play a pivotal role in product development, influencing both consumer and commodity products While industrial product development focuses on immediate customer needs, it is crucial to consider how the final product will be received by consumers Understanding consumer behavior and food choices, as well as the relationship between individual products and consumers, is essential (Earle, 1997) Variations among consumers and their environments significantly impact their buying, preparing, and eating behaviors, leading to differences in food choices and acceptance levels Ultimately, a consumer's perception of food is shaped by their unique characteristics and the context in which they purchase and consume it.
Consumers are the ultimate decision-makers in food product acceptance, making their involvement essential throughout the entire product development process It is crucial to engage consumers not only in the evaluation stages but also in the creative processes, as relying solely on the insights of product designers, process developers, and marketers can lead to misalignment with consumer needs and preferences By identifying themselves and contributing to product creation, consumers ensure that new offerings align with their lifestyles and aspirations While historically seen as an expensive and time-consuming endeavor, modern consumer research techniques have streamlined the integration of consumer insights into product development, making it a more feasible and valuable practice for companies.
The consumer in product development concepts and attributes, test product prototypes; and with the use of information technology to set up consumer databases and analyse consumer data.
Understanding consumer behaviour
Consumer behavior encompasses the activities involved in acquiring, using, and disposing of products and services, alongside the decision-making processes that influence these actions (Engel et al., 1995) Various environmental factors, including ethnicity, culture, social groups, regional preferences, food availability, and household technology, significantly impact this behavior Individual differences such as age, gender, education, standard of living, and psychological and physiological traits also play a crucial role Personal food choices often take precedence over cultural or religious preferences Over the past three decades, interdisciplinary research in social sciences has enhanced our understanding of food consumer behavior and the factors influencing food choices.
Consumer behavior unfolds in a series of sequential stages, where knowledge plays a crucial role in decision-making According to Engel et al (1995), there are six primary action stages, culminating in a divestment phase where consumers decide on the disposal or recycling of food product waste and packaging Alongside these stages, consumers engage in information processing, beginning with the recognition of a need, followed by an internal search of their memory and an external search through supermarket shelves, menus, and various media sources They may also encounter influences such as TV advertising or enticing aromas from food being prepared in retail spaces Engel et al outlined five key steps in how consumers utilize information to build knowledge throughout this process.
1 Exposure to information, communication, the product.
2 Attention given to the information.
3 Comprehension of the information, as it is analysed against the knowledge and the attitudes stored in the memory.
4 Acceptance or rejection of the incoming information.
5 Retention of the new information in the memory as knowledge.
Fig 5.1 General consumer behaviour in buying and consumption (Source: After Engel et al., 1995).
Consumers utilize their knowledge to evaluate and compare various products and brands, establishing criteria that significantly influence product development After experiencing a product—through preparation, serving, and consumption—they assess their satisfaction level, which ultimately affects their decision to continue using that brand or explore alternatives Given that nutritional needs are ongoing, consumers face choices that require careful consideration.
Individuals are deeply influenced by their societal context, including culture, social norms, and group affiliations such as family, work, and leisure circles Even solitary eating habits are shaped by social influences and the availability of certain foods Different cultures and social groups possess unique values that must be considered when designing products for diverse markets This adaptability may explain why American products often gain international acceptance, as the U.S is a melting pot of nationalities, leading to food products that appeal to a broad audience.
The core American values have been identified in two textbooks as:
(Engel et al., 1995) (Peter and Olson, 1999)
Material well being Achievement and success
Work more important than play Efficiency and practicality
Effort and success are related Material comfort
Humanitarianism Youthfulness Fitness and health
1 Study these two versions of American core values, and identify the values that are similar and those that are different From this develop what you think are your core values Are your core values different from these lists?
2 Choose two major markets for your company and identify the core values of the consumers in these markets.
3 Compare the core values for the two markets and identify the similarities and differences.
Consumers prefer a quick and simple decision-making process when purchasing food, as they typically eat two to three times a day and may shop daily Detailed consideration is usually reserved for special occasions or meals Food designers must recognize that consumers engage in critical thinking at specific moments Information from media, advertising, and word-of-mouth gradually influences consumer knowledge and behavior regarding food choices For instance, increased awareness of saturated fats can lead to a shift towards low-fat options Additionally, significant events, such as food poisoning scares, can trigger lasting changes in eating habits, like reduced meat consumption due to concerns over BSE or complete avoidance of shellfish following related illnesses.
Over the past decade, food brands in essential categories have become increasingly similar, primarily competing on price, which has led to the commoditization of products and a lack of brand distinction In New Zealand, for instance, the market features around 157 breakfast cereal options, making it challenging for consumers to differentiate between them, even with consumer magazine guidance As a result, many shoppers opt for convenience, purchasing based on price promotions or sticking with familiar choices Additionally, impulse buying plays a role in food selection, as consumers often seek new snacks or takeaways to combat food boredom or indulge in treats; if a new product meets their expectations, it may become a staple in their diet.
Food designers must stay attuned to evolving consumer behaviors regarding food and eating, recognizing both gradual shifts and sudden changes driven by new information or innovative products that enhance safety, nutrition, convenience, or appeal Companies that cultivate long-term relationships with their target audience gain invaluable insights into behavioral trends, which are essential for effective product development.
Food consumer behavior primarily revolves around sourcing food from supermarkets, restaurants, or takeaways, especially in urban areas As we look to the future, this trend may evolve, potentially leading to more remote methods of obtaining food.
4 For each of these markets set up a core value checklist to be used throughout future product development projects.
5 Discuss how the differences in the core values could lead to different strategies for future product development in the two markets. ordered through the Internet Food companies must realise that although their food behaviour often starts with the selection of food at the retailer, consumers have an interest in how food is produced and they have their concerns about production and processing Stages in the consumers’ buying sequence and the related consumer thought processes are shown in Fig 5.2 Recognition of the stimuli that start the buying sequence, the product judging criteria that are used in comparing products during the buying decision, and the level of consumer involvement with the product throughout the purchase and post-purchase sequence, are important in product design.
5.1.1 Stimuli to buy and eat
Various stimuli drive purchasing and eating behaviors, including family demands, personal hunger, supermarket product selections, menu offerings, and even weather conditions Notably, family members, especially children, significantly influence cereal purchasing decisions, as illustrated in Table 5.1, highlighting their impact on the choice of type and brand—an essential consideration for breakfast cereal marketing strategies.
Stimuli influencing purchasing decisions can arise both before and after entering a supermarket or restaurant For instance, the enticing aroma of freshly baked bread often draws consumers to buy, alongside its familiar and appealing flavor While shoppers may also consider attributes like ease of cutting, calorie content, and the absence of additives, these factors may not necessarily motivate a purchase.
Consumer food purchase patterns reveal that individuals are often bombarded with numerous stimuli but tend to respond to only a select few on a conscious level Typically, consumers rely on a basic set of criteria for each product category, as their daily shopping habits prioritize simplicity and efficiency The decision to buy or not buy food products is influenced by various stimuli, but in-depth comparisons among options are generally minimal due to the desire for a quick and straightforward shopping experience.
• strong ‘not buy’ factors such as the smell of deteriorating fish, bruising of fruit, unusual colour of bacon;
• strong ‘buy’ factors such as value for money, sensory attractiveness;
Table 5.1 Breakfast cereals: family-member influence on buying
Stages in buying Initiation Search and evaluation Final decision
Each score represents the average of the husband’s, wife’s and child’s perception of family member influence, on a scale where 1 no input and 6 all of the input.
Source: After Lawson et al., 1996.
Table 5.2 Consumer actions after buying the food product
Action Sub-actions Decisions for and against
Preparation Transport, store, prepare, Easy/difficult cook, serve Quick/time-consuming
Eating See, feel, smell, bite, Enjoy/neutral/dislike savour, swallow Easy/difficult
Clean/messy Quick/takes time
Post-eating Digest, general feeling, Comfortable/indigestion feeling in stomach Well/sick
Dispose of waste None/large, clean/messy
Compare with other foods Like/dislike
• important ‘buy’ factors such as the size of a loaf and the thickness of the slices may not stimulate buying because they accept quite a wide variation in them;
• weak ‘buy’ factors which do not stimulate such as the nutritional value and the ingredients list on the label.
When developing a product concept, it is crucial to identify key stimuli that influence purchasing decisions, including strong buy or not buy indicators, acceptable variations in important factors, and the significance of low-importance factors.
Consumer behavior following food purchases—encompassing preparation, consumption, and post-eating activities—plays a crucial role in shaping long-term attitudes and behaviors The choices made during these stages can significantly influence the level of acceptance or aversion towards the food.
Understanding food choice
Recent research on food choice highlights the importance of integrating these findings into product development The decision-making process regarding food is influenced by the interaction between individuals and their buying or eating environments, with both personal preferences and environmental factors playing significant roles (Bell and Meiselman, 1995) For instance, purchasing fish and chips in a high-end restaurant versus a casual fish and chip shop alters the consumer's experience and perception of the product The complexity of consumer food choice involves various interrelated variables, as illustrated in Fig 5.4.
Fig 5.4 Interaction of the individual and the environment in food choice
(Source: After Bell and Meiselman, 1995).
Food choices are influenced by various factors, including purchasing patterns, the underlying needs and desires, psychological attitudes, and societal and cultural effects Key considerations for individual consumers include personal preferences, social influences, cultural background, and emotional connections to food.
• perception of ethnicity and social group;
• food stereotypes, expectations, likes/dislikes.
5.2.1 Perceptions of ethnicity and social group
Individuals' perceptions of ethnicity and social groups significantly influence their food choices, a concept referred to as 'situational ethnicity,' which highlights the adaptability of food preferences based on environmental contexts For instance, changes in food consumption patterns in China demonstrate how environmental factors can alter food choices, particularly through variations in ingredient proportions, spicing, sauces, and ethnic labeling This adaptability is crucial for developing food products suitable for both domestic and export markets A study by Nantachai et al (1992) involving Thai and Australian consumers examined 36 meat products to identify acceptable options for both markets The findings revealed that both Australians and Thais shared a common perception of meat products in the context of 'social occasions,' with fermented sausages like Australian salami and Thai nam, as well as emulsified sausages such as Australian cabanossi and Thai frankfurter, appealing to both cultures.
Consumer involvement significantly influences food choices, with some individuals opting for basic options like inexpensive tea for warmth, while others prioritize flavor and brand While some consumers are content with their current food selections, only occasionally trying new items, others actively seek variety Historically, food product development in the 20th century focused on the assumption that variety is essential; however, certain products have remained popular for over 80 years There is a pressing need for further research to better understand consumer involvement levels across different food products and the demand for variety in all categories.
Habitual behavior significantly influences food purchasing, as consumers tend to frequent the same supermarkets and restaurants, often sticking to familiar brands and shopping patterns, such as buying only on sale or at specific times Over the years, food buying trends evolve due to the introduction of new products and shifts in lifestyle For instance, in the UK, the sales of frozen foods have seen a notable transformation over the past 15 years, with a decline in traditional frozen items like peas and beans, while convenience foods and potato products have gained popularity These trends highlight the dynamic nature of consumer habits, which change gradually in response to factors like product availability and lifestyle changes.
Box 5.1 Culture and fast food in the People’s Republic of China (PRC)
Chinese cuisine boasts a rich history and global popularity, characterized by its time-intensive preparation, even with short cooking times Traditionally, many work units (danwei) provided three affordable, lower-quality meals daily However, economic reforms and improved living standards have led to a growing demand for diverse, high-quality food options among average consumers in the PRC Similar to trends seen in Hong Kong and Singapore, the need for time-saving services is rising faster than income levels Additionally, the concept of 'face' (mianzi), which signifies reputation and success, influences Chinese consumers to be more risk-averse and slower to adopt new products, resulting in stronger brand loyalty once a brand image is established.
Cultural influences significantly shape food choices among consumers, with the Chinese diet emphasizing rice, noodles, chicken, and vegetables, while the American diet features bread, beef, and dairy This preference leads to a higher popularity of chicken and beef noodle fast-food restaurants in China compared to pizza and burger outlets In traditional Chinese medicine, beef is viewed as nutritious but scarce, making it a less common choice among older consumers who find it harder to adapt to new diets Younger consumers, however, are more adventurous, often visiting fast-food chains like McDonald's weekly for novelty and social experiences While Chinese teens may not favor pizza, they frequent Pizza Hut for social status, and older individuals prefer low-fat options, yet all generations enjoy the ambiance and companionship offered by fast-food establishments.
Over time, consumer preferences in food purchasing have evolved, as seen in the shift from fresh potatoes to frozen potato products in Western countries like the USA, Australia, and New Zealand Understanding the factors driving these changes—such as dissatisfaction with existing products, consumer boredom, the introduction of new foods that align better with consumer needs, or the influence of new information—is crucial for effective new product development.
Food stereotypes and consumer expectations play a crucial role in food choices, particularly in contexts like air travel, where the typical perception is that food is often unappealing and overly processed To differentiate a product, it’s essential to challenge these stereotypes, as demonstrated by British Airways with its healthy menu Consumers' expectations significantly influence their experiences; if a product meets their expectations—like a refreshing drink—they are likely to have a positive impression, reinforcing future preferences Conversely, if a product is overly sweet and goes against their tastes, it can lead to increased dislike Branding also affects expectations, as seen in sensory testing where identified brands yield different consumer scores compared to unbranded products Therefore, understanding consumer preferences and expectations is vital in product development, guiding the creation of appealing food products that align with target market desires.
Table 5.3 Frozen food consumption in the UK 1974–1989
1974 1979 1984 1989 ounce per person per week*
Source: From Consumer Behaviour in the Food Industry by J Bareham, 1995 Reprinted by permission of Butterworth Heinemann.
Consumers’ avoidance and acceptance of new products
Food neophobia, the tendency to avoid new foods, influences consumer behavior and marketing strategies, such as offering free samples and in-store tastings A Swedish study found that fathers and children are generally more hesitant to try new foods than mothers and older children This reluctance is tied to consumer classifications, such as adopters versus non-adopters, and their level of innovativeness, which reflects their willingness to take risks with new products Factors like perceived risks, product attributes, and prior experiences also play a significant role in food adoption, with some consumers eagerly seeking out new products while others prefer to wait for feedback Understanding these diverse consumer types is crucial in product development to effectively address their risk perceptions and encourage acceptance of new foods.
A dairy company has developed a line of new nutriceutical products, a range of biologically active dairy-based drinks, and wishes to market through supermarkets, where it is already selling dairy products.
1 Discuss the consumer needs and problems that could be met by these new products.
2 Discuss what prior experience and previous practice would lead to easy acceptance of the new products.
3 What are the types of socio-economic conditions and also social norms that would help the consumers to accept these products?
4 From the knowledge that you have found in 1, 2 and 3, describe the consumers for these products – their food expectations and liking/disliking Also discuss the food stereotypes that they could have for yoghurts and how the new products relate to these stereotypes.
5 Discuss how you would design the packaging and the in-store promotion to give a total product concept for the new products so that the consumers have the knowledge to trial the products.
6 Where would you position the new products in the supermarket and display them to make the consumers aware of the products?
Understanding consumers' prior conditions is crucial for effectively introducing new products to the target market By recognizing the diverse types of consumers and their motivations, companies can strategically plan product launches to maximize market diffusion The adoption process consists of five key stages: awareness, interest, evaluation, trial, and adoption or rejection (Schiffman and Kanuk, 2000) Additionally, a comprehensive innovation-decision process is illustrated in Fig 5.5 (Rogers, 1983).
The total product concept can be designed to give controlled diffusion by understanding the diffusion variables (Engel et al., 1995; Schiffman and Kanuk, 2000):
• Innovation type: continuous innovation, dynamically continuous innovation, discontinuous innovation; related to the increasing level of disruption of the consumers’ behaviour patterns.
• Characteristics of the total product concept to the consumer: relative advantage, compatibility, complexity, trialability, observability.
Relative advantage refers to how a product is perceived as superior to existing alternatives, while compatibility highlights its alignment with current needs, values, and practices Complexity addresses the challenges users may face in understanding and utilizing the product, and trialability indicates the extent to which the product can be tested on a limited basis before full adoption.
(e) Observability is the ease that the product and its benefits can be observed, imagined or described.
• Communication: from marketer to consumer through media, public relations, opinion leaders, sales promotion, shows, Internet; and from consumer to consumer by word of mouth.
• Time for adoption: the time for problem recognition, knowledge, persuasion, implementation (buy and use), confirmation and re-buy.
• Social system: ethnic, social, education, literacy, upward social mobility, commercial, size of units, technological level.
Rogers' model of the innovation-decision process outlines the stages individuals go through when adopting new innovations This model emphasizes the importance of understanding how innovations spread and the factors influencing their acceptance By examining the decision-making process, we can gain insights into the dynamics of diffusion and the role of communication in promoting new ideas Understanding this framework is essential for effectively introducing and managing innovations in various fields.
Integrating consumer needs and wants in product development 209
Consumer food product preferences are influenced by various needs and wants, with four key areas critical for product development: functional, cultural, sensory, and aesthetic Historically, consumer research and sensory evaluation were distinct fields; however, they are now integrated to provide a comprehensive understanding of consumer preferences in product development (Meiselman, 1994).
Consumer needs Sensory research Cultural Food product and wants $ Aesthetic design $ Sensory ! preference
Understanding consumer behavior and food choices is essential for effective product development Research in this area aims to pinpoint and assess specific needs, desires, sensory characteristics, cultural and social values, and aesthetic preferences This analysis helps identify key product attributes that inform the product concept and guide the design process.
5.4.1 Identifying consumer needs and wants
Various factors influence individuals' eating and purchasing behaviors, ranging from basic hunger to the desire for prestige and health These factors can be illustrated through a modified version of Maslow’s hierarchy of needs, highlighting the distinction between physical needs and psychological wants While basic physiological, safety, and convenience needs must be met first, the interpretation of needs and wants varies among individuals For example, some mothers may feel compelled to prepare rich foods as a sign of care, while others may prioritize energy-giving foods for their children, depending on their lifestyles Understanding these nuanced needs and wants is crucial in developing product concepts, as both belonging and esteem are equally significant in food choices Ultimately, the highest need revolves around knowledge acquisition, allowing individuals to make informed decisions about their eating patterns and food selections, a trend that is increasingly relevant as nutritional awareness grows.
• food choices (health, weight control, pleasure, ideological reasons);
• personal strivings (understanding the world, ecological welfare, slimness, appearance);
• magical beliefs (lay concepts on food contamination and other everyday food problems);
• appearance and weight dissatisfaction, and symptoms of eating disorders.
The study identifies six distinct consumer groups based on their food choices: gourmets, health fosterers, ideological eaters, health dieters, distressed dieters, and indifferents While health concerns play a moderate role for gourmets and indifferents, the other four groups prioritize health significantly in their food selection Ideological motivations are particularly strong among ideological eaters, health fosterers, and distressed dieters, with vegetarianism being a key predictor of these motives, alongside beliefs about the magical properties of food and health, and personal aspirations for self-improvement.
Consumer preferences in food are increasingly shaped by a blend of pleasure and health consciousness, particularly among health fosterers and gourmets Research by Tepper et al (1997) indicates that dietary restraint significantly predicts food choices, with high restraint individuals avoiding high-fat dairy, eggs, beef, and fast foods While nutrition and food beliefs have a modest impact, the evolving landscape of consumer concerns about food and health reflects both enduring trends and fleeting media-driven fashions Understanding these dynamics is crucial for anticipating future consumer behavior in the food industry.
Asian consumers prioritize three key needs: affiliation, admiration, and status Social needs often take precedence over personal desires, leading to greater satisfaction derived from how others perceive them rather than self-directed actions Affiliation involves being accepted as part of a group, admiration is achieved through actions that earn respect, and status is determined by societal esteem (Schu¨tte and Ciarante, 1998).
Table 5.4 presents a comprehensive overview of the various reasons individuals choose not to consume meat, highlighting all levels of needs and wants This insightful list encapsulates nearly every common rationale behind dietary restrictions related to specific foods.
In product development, the meat industry has attempted to reduce these reasons for not eating meat by dealing with the following problems:
• Animal welfare – change from caged to free-range chickens.
• Environment – reduction in forests cleared for animal rearing.
• Health – fat-trimmed lean meat; organic meat.
• Social priorities – barbecue steak, frozen turkeys.
• Displeasure – absorbent pads in meat trays, plastic wrapped trays, meat tenderisation.
• Metaphysical – halal killing for Muslims, small pigs for Samoan celebrations.
• Expense – reducing costs of chicken production and therefore price.
• Inconvenience – easy-to-cook products such as stir-fry chicken, minced pork.
Consumer needs significantly impact the total product concept, with food choices influenced by a complex interplay of factors According to Furst et al (1996), key elements shaping food selection include ideals, personal factors, resources, social contexts, and the food context itself These influences contribute to the creation of personalized systems for making food choices, incorporating value negotiations and behavioral strategies Essential considerations in these negotiations include sensory perception, price, health and nutrition, convenience, social factors, and quality, all aimed at simplifying the decision-making process A retail study in Britain by Beharrell and Denison (1991) highlighted the varying importance of these attributes across different product types.
• Preserves: brand and quality; price; variety and size.
• Bakery products: health; freshness, brand and price; variety.
• Dairy products: health; brand and quality; price; variety.
• Cereals: health and brand; price, size and variety.
• Soups: brand; variety; price; health.
• Fresh meat: quality; presentation, variety, health and price.
Health considerations are crucial for bakery, dairy, and cereal products, while they are minimal for soups and negligible for preserves Fresh meat stands out, as quality is paramount, though other factors play a minor role in consumer decisions However, external influences on meat purchasing, not covered in retail studies, also exist Introducing new foods can be challenging; Buisson (1995) noted that consumers often lack understanding of functional foods and require careful guidance to appreciate their benefits without overwhelming emphasis on medical claims The consumer's limited awareness of the diet-health connection poses a significant barrier to the development of functional foods, necessitating a cautious approach in consumer engagement during such innovations This caution applies to all significant technological advancements in the food industry.
Table 5.4 Reasons for reduced meat consumption during the 1980s and 1990s
Animal welfare Moral reasons associated with the view that modern animal production is ethically unacceptable.
Environment Moral concern that certain features of animal production harm the environment and have undesirable ecological consequences.
Health Concern about one’s own health (1) avoiding natural compounds: cholesterol and saturated fats, (2) avoiding added compounds: hormones, antibiotics, pathogens, (3) avoiding specific health problems: cancer, hypertension.
Social priorities Conform or adapt to the life style or standards of friends, relations or other influential people One’s own body image is an important example.
Displeasure Rejection from sensory qualities: sight of meat and associated blood or blood-like drip; sticky texture of meat; taste and elastic mouth-feel of meat when eaten.
Metaphysical For spiritual, religious, doctrinal or ethnic reasons.
Expense Abstain because of cost.
Inconvenience or Do not fit into ‘light’ informal meals, difficult or slow to cook at inappropriate home, inappropriate for takeaway trade. presentation
Source: After Gregory, 1997. industry; the new products based on it need to be developed so that the consumer sees a major health benefit without any major worry about safety.
These various studies show some of the complexity of identifying the consumer needs and wants as a basis for product development.
5.4.2 Cultural needs and wants in foods
Consumer characteristics such as nationality, religion, race, age, sex, education, and socioeconomic status significantly influence attitudes, motivations, and behaviors towards food While some traits, like religious dietary restrictions, evolve slowly—such as Hindus avoiding meat and Jews refraining from pork—other food preferences can shift rapidly, exemplified by young Southeast Asians opting for fried potato chips over rice The globalization of the food industry necessitates a thorough examination of these dynamics when introducing new products Successful international items like instant coffee, Coca-Cola, Kentucky Fried Chicken, and McDonald’s hamburgers have thrived by leveraging effective marketing strategies and understanding local market systems Innovative distribution methods, including direct delivery to retailers and the establishment of new retail formats, have transformed local food markets Additionally, collaborations between food manufacturers and the development of supermarkets and convenience stores have facilitated the introduction of new products, highlighting the importance of adapting to consumer needs.
Many Western diets, particularly in the USA, are characterized by excessive fat consumption Over the past two decades, product development has focused on lowering dietary fat through the creation of low-fat products and the use of fat replacements.
1 Compare the needs and wants of the consumer when buying and using butter and low-fat margarine What attributes in low-fat margarine could cause the consumer to change or not change their food choice from butter?
2 Butter is often used as flavouring in foods, for example vegetables and sauces. Discuss why it is a popular flavouring, and what attributes a new flavouring would need to replace butter.
3 Some meat is being replaced with tofu in a hamburger to reduce the fat content and the meat content for consumers who are decreasing their meat consumption Identify the needs and wants of the consumers and relate these to the attributes of the new style of hamburger. new product is not just a food but the total product and must be regarded as this in product development.
To achieve market acceptance, leveraging a well-established local brand name is beneficial; however, product modifications are often necessary to align with the preferences and habits of new consumers This includes adjustments to flavors, packaging, and branding For instance, introducing smaller pet food packs in Japan caters to the compact living spaces of both pets and owners, while also addressing price sensitivity by offering affordable pack sizes Additionally, new products must consider the economic status of the target audience, as cultural factors significantly influence acceptable raw materials and processing methods.
Cultural resistance can significantly hinder new product development in the food industry, as cultural norms and habits dictate food choices According to Nestle et al (1998), individuals rely on their cultural and ethnic backgrounds to determine acceptable foods, including their combinations and ideal types For instance, the slow adoption of ready-to-eat cereals in Thailand was primarily due to their misalignment with traditional breakfast habits, where steamed rice, fried rice, and rice porridge are preferred, often accompanied by pork or eggs However, cold cereals found a niche as snacks for children, highlighting the importance of understanding consumer behavior in food preferences.
Sensory needs and wants in food product development
The sensory properties of food, including appearance, color, and aroma, play a significant role in consumer acceptance and purchasing decisions While taste is essential during consumption, it is not always the primary factor influencing buying behavior, often ranking lower in priority compared to visual appeal and smell Understanding these elements is crucial for food marketers aiming to enhance product appeal and drive sales.
1995) Therefore, it is important not only to recognise the sensory properties but also the interaction between them and other product attributes.
Food can be defined through its sensory properties, which are recognized by an individual's sensory system and shaped by learning and memory into perceived attributes For instance, taste and aroma merge to create an overall flavor, such as the combination of an acidic taste and citrus aroma to form an orange flavor Similarly, mouthfeel and texture are perceived through the experience of biting and chewing, exemplified by sticky and hard toffees Consumers evaluate these sensory attributes on a hedonic scale, ranging from strong dislike to strong liking, influencing their acceptance or rejection of the product Ultimately, the interaction of sensory properties, alongside the product's physical and chemical characteristics, leads to distinct consumer perceptions and reactions.
Identifying sensory product attributes is crucial before conducting measurement and hedonic testing This classification becomes complex when moving beyond basic characteristics such as shapes, sizes, and fundamental tastes like sweet, salty, bitter, and sour, as well as color standards of lightness, hue, and chroma Texture encompasses both finger feel—firmness, softness, and juiciness—and mouth feel, which includes chewing mechanics like hardness, cohesiveness, viscosity, and elasticity, as well as geometrical characteristics such as particle size, shape, and orientation These attributes interact simultaneously or sequentially during consumption, culminating in the overall experience upon swallowing For instance, in a study on the texture of black beans, trained panels utilized specific descriptions to assess biting and chewing attributes, including their magnitudes and the duration of chewing.
Developing terminology for flavors and aromas is a complex process that involves selecting representative commercial samples or prototypes and utilizing a sensory panel to identify and categorize flavor characteristics This method, as outlined by Civille and Lyon (1996), includes organizing descriptions into distinct flavor types and establishing a reference list for future sensory evaluations Each flavor category is associated with a reference substance, typically a chemical compound, which aids sensory panels in their assessments Standardized flavor terms have been developed, such as defining "burn" as a chemical sensation linked to irritants and "heat" as a burning feeling in the mouth and throat, with vodka serving as the reference for burn and red pepper for heat.
Fig 5.8 Building sensory attributes for consumer acceptance.
Table 5.5 Measuring the texture of black beans
Hardness: bite down once with the molar teeth on the sample of two beans and evaluate the force required to penetrate the sample.
To assess particle size, chew two beans two to three times between the molars, then rub the cotyledon against the tongue and palate to evaluate the most noticeable particle sizes.
To assess seedcoat toughness, bite two beans between your molars and rub the cotyledon against your tongue and palate to separate them Next, evaluate the force needed to bite through the seedcoat using your front teeth For chewiness, place two beans in your mouth and chew at a steady pace of one chew per second, counting how many chews it takes until the beans are ready to swallow.
Source: From Watts, Ylimaki, Jeffrey and Elias, 1989, by permission of IDRC, Ottawa, Canada.
Temperature, pain, and sound are key sensory characteristics that influence consumer perception of food products For instance, ice cream not only has a specific temperature effect but also impacts flavor and aroma sensitivity Consumers have expectations regarding the serving temperature of foods; while canned stew is safe to eat directly from the can, innovative packaging has been developed for quick heating to enhance its appeal Certain pains, like those from very hot curries or hard nuts, are anticipated, but others are deemed unacceptable Additionally, sound plays a crucial role in product acceptance, with the crisp snap of celery or the crack of a biscuit signaling freshness Overall, the sensory experience of a product is shaped by the order, magnitude, and duration of its attributes.
5.5.2 Interactions of sensory product attributes
Defining the sensory properties desired by consumers can be challenging due to the complex interactions that influence their acceptance of food Consumers often struggle to distinguish between the sensory attributes that affect their preferences, as even basic tastes like acidity and sweetness can interact in intricate ways For instance, a study conducted by a trained Canadian sensory panel demonstrated that the perceived intensity of sourness in lemonade diminished as the levels of sucrose increased.
Table 5.6 Descriptions of flavours of vegetables
Corn Cucumber Eggplant (aubergine) Red peppers Parsley
Cardboardy Astringent Bitter Bitter Barny/barnyard
Grassy Bitter Cooked Burn Bitter
Legumy Cucumber Heat Heat Fishy
Metallic Green Metallic Pungent Grassy
Salty Sour Mouth numbing Raw Green
Starchy Sweet Raw Sweet Hay
Source: From Civille and Lyon, 1996, copyright ASTM, reprinted with permission.
Table 5.7 Sourness of lemonade with increasing sucrose
Source: After Poste et al., 1991.
Consumer perceptions can significantly impact sensory testing outcomes, as individuals may hold preconceived notions about a product that conflict with its sensory attributes For instance, those on a diet may undervalue creaminess when evaluating a new ice cream Additionally, distinct national preferences for sensory characteristics exist, even among seemingly similar populations, such as Australians and New Zealanders Research by Cooper and Brown (1990) revealed that Australian snacks, like potato chips and canned soups, tend to be saltier, while New Zealand products, such as chocolate biscuits and fruit juices, are generally sweeter These findings highlight the importance of understanding consumers' established norms, which greatly influence product acceptance A prime example is the 'tropical' flavor, favored in New Zealand due to its early introduction in 1981, featuring a blend of pineapple, passionfruit, and orange In contrast, Australians prefer juice flavors that are more sour and less sweet, demonstrating the need for tailored product development based on regional taste preferences.
Sensory acceptance significantly influences overall product acceptance, which cannot be accurately assessed through simple sensory panels alone; it requires a deeper understanding of consumer needs, desires, and behaviors (Cardello, 1996) The total product experience—encompassing advertising, information provided, appearance, and aroma—shapes consumer expectations regarding sensory qualities If the sensory attributes meet or exceed positive expectations, acceptance is likely to be high; conversely, if they surpass negative expectations, consumers may rate them even more favorably.
Table 5.8 presents the consumer scores in Germany for a sample of Dutch tomatoes with varying labels, highlighting the influence of labeling and information on consumers' quality assessments (Vesseur, 1990).
Another important factor is the amount of a food product eaten and how often it is eaten Consumers may become tired of a product and stop buying it – they
Table 5.8 Taste of one sample of Dutch tomatoes with different labels
* Based on a scale 1 very good, 6 inadequate.
A study conducted by Köster in 1990 involved 200 families over four weeks, comparing two types of tomatoes, referred to as product A and product B Initially, product B received a higher liking score than product A; however, insights from the families' diaries revealed that some individuals found the sensory experience of consuming large quantities of tomatoes either boring or overwhelming.
• More of Product A was used than Product B.
• More of Product B was thrown away than Product A.
• More outside tomatoes were bought when they had Product B than when they had Product A.
When developing a new product, it is crucial to conduct multiple consumer tests, focusing on the typical quantities they consume Encouraging participants to maintain diaries during home testing can provide valuable insights into their usage patterns.
Consumers' preferences for sensory properties are influenced by a complex interplay of product stereotypes, expectations, past experiences, and various attributes that shape their acceptance of a product.
In product development, it is crucial to connect future consumer and market needs with relevant technologies in product creation, production, processing, and marketing This relationship must be maintained throughout every stage of the product development process To achieve this, consumer involvement is essential, whether directly or through documented preferences The focus of product development should be on consumers, as well as on customers in the context of industrial and food service products.
Consumers in Stage 1: Product strategy development
In developing the product strategy, there are seven steps (Linnemann et al., 1999):
Contrast the sensory product attributes when consumers buy, serve and eat
1 List the sensory product attributes that you identify from buying to after eating.
2 What sensory attributes interact in buying, eating and serving?
3 Identify all the sensory attributes that affect your sensory liking/disliking.
4 What other product attributes would you include in determining your acceptance of the two products?
5 Are there any interactions between these and the sensory attributes?
1 Analysis of socioeconomic development in the target markets.
2 Translation of consumer preferences and perceptions into consumer categories.
3 Translation of consumer categories into product assortments.
4 Grouping of product assortments in product groups in different stages of the food supply chain.
5 Identification of processing technologies relevant for specific product groups.
6 Analysis of the state of the art in relevant processing technologies.
7 Matching the state of the art of specified processing technologies with future needs.
This study introduces a consumer-centered product strategy, emphasizing the importance of understanding evolving consumer trends, lifestyle changes, and economic factors that influence food purchasing behaviors By analyzing category appraisal, consumers assess both the company's and competitors' products to gauge acceptance and positioning within the market Engaging consumers in the product development process is crucial, as their insights help identify new product opportunities and refine product concepts Key activities include generating and screening product ideas, conducting consumer surveys, developing product concepts, predicting acceptance, and establishing design specifications This collaborative approach ensures that consumer needs and preferences are integral to the product design, ultimately enhancing the success of the product development project.
5.6.1 Product idea generation and screening
For over 50 years, consumers have actively participated in product idea generation, starting with in-depth interviews conducted by psychologists to understand purchasing motivations This evolved into the use of consumer discussion groups, which foster greater creativity through group synergy These small panels, typically consisting of 6–10 participants, represent target market segments and can employ various techniques such as brainstorming or structured nominal group sessions By repeating discussions with multiple groups, insights can be gathered from a larger pool of 60 or more consumers, enhancing the product development process.
Fig 5.9 Some consumer activities in Stage 1: Developing the product strategy.
Table 5.9 Observation form for making choux paste in the home
No in family Day Quantity of choux paste per mix Time to start Quantity of choux paste per month Observer
Selection: please state type or brand of ingredients used
Flour Eggs: fresh frozen pulp chilled pulp dried other Fat: butter margarine branded fat other
Flour: sifted not sifted other
Order of adding ingredients: 1 st 2 nd 3 rd 4 th 5 th
Equipment used: hand whisk electrical whisk cake mixer
Mixture heated Mixture not heated
Equipment used: steamer bowl over pan bainmarie other Method of heating
Any other comments Second mixing as above, note any other ingredients added
Second heating as above, note any other ingredients added
Third mixing as above, note any other ingredients added
Third heating as above, note any other ingredients added
Type of oven: electric gas other
Complete time for making the choux paste
Consumer group discussions offer a faster, more cost-effective, and flexible alternative to individual interviews, bridging the gap between companies and consumers They are particularly useful for generating ideas in unfamiliar product areas and understanding consumer trade-offs The key advantage of these discussions is that they provide readily usable insights for developing product concepts and design However, criticisms include the small size of the groups, which may not statistically represent the target market, and the potential influence of group dynamics on individual opinions At this stage of the project, gathering a substantial amount of information is crucial for refining ideas and shaping the product concept.
Observing consumer behavior from purchase to waste disposal can inspire new product ideas For instance, an observation form for home bakers making choux paste can help develop a comprehensive baking mix While observation is a valuable technique for studying consumer behavior, it requires careful application, as unexpected events can influence behavior Understanding how consumers prepare, serve, and consume products offers authentic insights into their habits Although observation typically captures public behavior, consumers can also document their actions when direct observation isn't feasible.
Consumer groups play a crucial role in screening new product ideas alongside technical and company evaluations According to Roberts (1997), the initial stages of idea generation and screening for new food service products involve collaboration among three key groups: suppliers, menu planners, and consumers As illustrated in Table 5.10, interactions occur between meat processors, chefs in motels and hotels, and the customers they serve To effectively develop product descriptions, it is essential to integrate the needs and desires of consumers with insights from technical staff and company objectives.
1 Making choux paste can be a long and difficult procedure, not always successful for the new baker Can you suggest new products that could make this process quicker and easier and would guarantee success for the household baker?
2 Using a focus group develop ideas for new products to solve the following problems for consumers:
(a) improve the nutritional value of ice cream,
(b) increase the safety of oysters.
5.6.2 Consumer survey in the early stages of product development
To gather essential quantitative data for identifying the target market and forecasting sales, conducting a consumer survey with a randomly selected sample is crucial Typically, these surveys involve personal interviews utilizing a structured questionnaire; however, in cases where information is limited, qualitative unstructured interviews may also be employed.
Table 5.10 Multistage idea generation and screening for a meat product for hotels and motels in Melbourne, Australia
Preliminary idea generation Food technologists, Nominal group technique caterers Brainstorming
Synectics Preliminary screening Researcher Qualitative: fulfil consumer requirements, offer benefits for menu planner, value for money, competitive advantage
Outcome: 30 product ideas in categories
Development of ideas Menu planners Focus group on list of product ideas Consumers Focus group on a list of product (beef eating) ideas
Outcome: 30 ideas with benefits, attributes needed by consumers and menu planners
Technical feasibility screening 2 meat technology Interview on technical feasibility, experts technology availability, competition, demand volume Outcome: 32 technically feasible products
Checklist screening 4 food technologists Individual scoring on marketing and technical factors Outcome: 14 product ideas in 5 categories
Development of Menu planners Focus group product descriptions Consumers Focus group
Suppliers’ company Managers Individual scoring specific screening Food technologists Individual scoring
Outcome: 5 Agreed product descriptions for development
Raw beef product untreated – tender beef in thin slices.
Raw beef product treated – flavoured pickled beef.
Prepared ready-to-cook product – fricadelle (new beef burger), coated beef product. Pre-cooked beef product – precooked meat loaf.
Source: From Roberts, 1997. about the new product Methods of organising a consumer survey in product development projects are described in West and Earle (1987).
A consumer survey typically evaluates three to four new product concepts, gathering insights on past and intended behaviors, as well as general opinions regarding eating attributes, nutritional value, safety, and cooking or serving needs It also examines packaging sizes, associated costs, and demographic information, including socioeconomic characteristics and knowledge levels.
Analyzing current product usage patterns and consumer attitudes is essential for understanding market dynamics This involves gathering insights on consumer preferences, purchasing methods, and product frequency, which can help determine market share across various classifications Researchers can identify market segments and forecast potential growth by evaluating consumer feedback and identifying product needs and shortcomings in existing offerings.
Consumer surveys play a crucial role in evolving product descriptions into well-defined concepts by outlining essential attributes such as size, storage life, function, price range, ingredients, desired eating characteristics, and cooking methods Identifying target market segments allows for the selection of representative consumers to develop the product idea and design While initial focus group participants may reflect the target segment perceived by researchers, it is essential to validate these findings through broader surveys Target consumers can be distinguished not only by demographic factors like age and education but also by their product usage, lifestyle, personality, and social groups, which are more closely aligned with the product's appeal.
5.6.3 Product concept definition and optimisation
The product concept development progresses through several stages: identifying and screening attributes, measuring attributes, creating a complete product concept, and evaluating that concept According to Saguy and Moskowitz (1999), "Innovative products possess spatial and temporal limits," which means that defining these limits and assigning quantitative values in product design specifications is crucial Figure 5.10 illustrates the relationship between product concept development and product design specifications, highlighting the importance of consumer insights in the process.
After accepting a new product description, consumers identify key attributes that are important to them Product designers collaborate with consumers and analytical technologists to develop quantitative metrics for these attributes, forming the foundation of product design specifications This process is often iterative, with continuous feedback loops between consumers, designers, and food technologists, as consumer-identified product characteristics evolve into physical and chemical testing conducted by food technologists.
Involving consumers in the development of product concepts is crucial, particularly for category users or potential users of innovative products Consumer focus groups, typically consisting of 30 to 60 participants and occasionally up to 200, engage in discussions within small groups of six to eight people These discussions allow consumers to express their attitudes and behaviors regarding the products, helping to identify their needs Participants often reference the company’s existing products, competing offerings, and early prototypes during these conversations, providing valuable insights for product development.
Identifying product attributes is crucial for developing a product concept, as it involves gathering insights from consumers about their perceptions Consumers tend to consolidate similar attributes into single categories, leading to the creation of descriptions for these attributes They categorize these attributes into core values, functional attributes, and less significant ones Core values reflect the feelings or achievements consumers seek when purchasing or consuming a product, such as health, happiness, or satisfaction Functional attributes pertain to the necessary qualities for the product's use Additionally, consumers recognize essential attributes, which include the benefits that differentiate products and the perceived risks associated with them This encompasses various types of attributes, including basic product features, packaging, usability, and psychological, social, cultural, and environmental factors.
A simple product description given to a focus group of women with children was:
Introducing a new fruit salad topping made entirely from real fruit, free of synthetic flavors and colors This innovative topping is designed to complement ice cream and various desserts, offering a fresh and natural enhancement to your favorite treats.
The focus group identified some important product attributes:
• Target consumers: bought by families, used by children.
• Functional: packed in 300 ml ‘squeeze’, plastic container, same viscosity as present toppings on market, used on ice cream, pancakes, etc.
• Values: natural, real fruit, low calories.
Consumers in Stage 2: Product design and process
In the initial phases of product prototype development, consumer testing may not occur; however, as prototypes align more closely with established design specifications, consumer needs become integral to the testing process.
5.7.1 Including the consumer in product design and process development
It is important that the experimental techniques and objective tests related to the consumer attribute standards are used to connect the study of the different levels
Develop an optimum product profile for your new product ideas in the following product categories:
1 Write a description of the new product.
2 Identify the product attributes for the new product.
3 Develop scales for each attribute.
4 Score two competing products on the scales.
5 Score your ideal product on the scales.
6 Compare your optimum product profiles for the three products. of the processing conditions, or different proportions of raw materials, with the rating of the product attributes by the consumer (Saguy and Moskowitz, 1999). Sometimes, it is not possible to identify objective measurements for the consumers’ ideals and it is necessary to have the consumers test the experimental products As consumers may have problems remembering their ideals, they can score on how near the new product prototypes are to their ideal; this consumer testing during design may also identify any unknown factors that may be affecting their acceptance of the product.
Consumer involvement plays a crucial role in packaging design, particularly in understanding the relationship between product prototypes and food behavior through 'use' tests During the optimization phase, multiple product prototypes undergo testing with a larger group of consumers in central location tests This process leads to the refinement of the product and the development of a final prototype, which is subsequently evaluated for acceptance through a large random consumer test The progression of consumer testing in product design and process development is illustrated in Earle and Earle (1999), emphasizing the various techniques applicable at each stage.
Table 5.13 Consumer testing in product design and process development
‘Getting the feel’ Ideal profiles Profile tests
Consumer panels Descriptive sensory analysis
‘Screening prototypes’ Product comparison Difference testing
‘Ball park studies’ Acceptability of attributes Attribute scoring to ideal Consumer panels Acceptability of products Preference panel
‘Optimisation’ Product improvement Acceptance testing
Central location test Competitive comparison Hedonic comparison Consumer panels Food behaviour study In-home use tests
‘Scale-up’ Buying predictions Acceptance testing
Consumer panels Commercial product concept In-depth interviews
Source: After Earle and Earle, 1999.
As development progresses, the number of participating consumers typically increases, starting with around 30 during the mock-up phase and growing to 200 or more during the final scale-up At this stage, samples can be produced in a pilot or semi-production plant, providing products for extensive consumer testing It is crucial to gather consumer insights throughout the design process, ensuring that large-scale testing serves as a confirmation rather than an unknown Additionally, measuring the design's impact on consumer perceptions allows for optimization of the product-consumer relationship as the design evolves.
As product attributes are integrated into the design, consumer reactions reveal perceptions that may significantly differ from those of the designers (Veryzer, 1997).
Identifying the critical attributes of food that resonate with consumers is a significant challenge in product development To effectively address this issue, it is essential to measure these attributes during the design process Key questions to consider include: What attributes are most valued by consumers? How can these attributes be quantified? And what methods can be employed to integrate these insights into product design?
1 Is there a difference between two food samples? Used when trying to duplicate a product or to see if there is a difference between product prototypes. Difference tests such as triangle tests, paired comparisons can be used.
2 Is the product acceptable? How acceptable? Used for the optimum prototype products when testing by large consumer groups or smaller, representative panels.
3 What are the characteristics of the products? How strong are they? Used when building up the product concept and also in designing the product prototypes This can be called descriptive analysis or product profiling The profile method is designed to give a profile of the overall sensory properties by describing and determining the relative magnitudes of the attributes.
The sensory attributes of a product are meticulously designed to achieve both the ideal magnitude for each individual attribute, known as the 'bliss point,' and the optimal combination of these attributes for enhanced hedonic acceptance (Moskowitz, 1994) After optimizing these sensory characteristics, acceptance testing is conducted to ensure the overall product concept meets consumer expectations While traditional product development relied heavily on hedonic tests with consumers, modern analytical sensory techniques allow for detailed product design specifications, enabling extensive testing through physical, chemical, and thermal methods, as well as analytical sensory evaluations Consumer perception tests, such as ideal product profile assessments, are carried out at specific stages of product design, followed by comprehensive product testing as consumer attributes approach their optimal levels With significant advancements in sensory science over the past 30 years, numerous tested and recognized methodologies are now available for effective attribute testing (Meilgaard et al.).
Descriptive analysis techniques play a crucial role in product development by quantitatively measuring various attributes of a product and assessing their magnitude The outcomes from trained panels are replicable, allowing for statistical analysis through linear relationships to optimize product prototypes Utilizing an ideal profile helps in evaluating whether the optimal product prototype is achieved, while 'just right' scales indicate proximity to this optimum Additionally, careful selection of stimuli, respondents, and measurement procedures is essential for ensuring the validity of sensory results.
A product developer is testing five prototypes of a new tomato pork sausage with a panel of 30 teenage consumers The sausages feature two varying levels of salt and two levels of pepper to assess preferences among the target audience.
In a controlled experimental design, five products were evaluated: Product A (low salt, low pepper), Product B (low salt, high pepper), Product C (high salt, low pepper), Product D (high salt, high pepper), and Product E (medium salt, medium pepper) Panelists assessed the flavor intensity, dominance of specific flavors, and salt levels in each product.
Table 5.14 Attribute evaluation in product development
• Product description • Unidentified final product
• Product concept • Identified final product
• Product design specifications • Commercial product
• Expert judges • Randomly selected consumers
• Attribute selection • Total product acceptance
• Quantitative measurement of attributes • Buy/use intention
Source: From Moskowitz, Benzaquen and Ritacco, 1981, by permission of BusinessNews Publishing, West Chester, PA.
In numerous studies, it is crucial to connect the characteristics of raw materials to the qualities of the final product, allowing for adjustments in formulations to achieve optimal results The sensory properties of raw materials significantly influence the sensory qualities of the final products, directly impacting consumer acceptance Identifying the sensory attributes of available raw materials, along with their competitive and compensatory interactions, can be achieved through existing data or experimental research By employing a linear function within a linear programming model, it is possible to select combinations of raw materials that, when processed, yield attributes that meet consumer preferences.
In 1977, research demonstrated the significance of ingredient analysis in product development, while Moskowitz (1994) highlighted the optimization of products through understanding how various ingredients influence the acceptance of product prototypes This underscores the critical relationship between formula components and consumer preferences.
They identified the dominant flavours in each product as:
Product A – meatiness, Product B – spiciness, pepperiness, Product C – salt, Product D – salt, pepperiness, Product E – spiciness.
Analyzing the results reveals a complex interaction between salt and pepper levels in sausage formulation To optimize the recipe, careful consideration of specific salt and pepper concentrations is essential Further experimentation with the sausages should focus on varying these levels systematically to understand their impact on sensory attributes, as the non-linear relationships indicate that adjustments may yield unexpected results.
Consumers in Stage 3: Product commercialisation
Consumers play a crucial role in two key aspects of product commercialization: the commercial design and marketing of the product, as well as the comprehensive testing of the final commercial offering (Earle and Earle, 2000) This involvement is illustrated in Figure 5.14, which highlights the specific stages of commercial design and testing where consumer participation is essential.
The final design of a commercial product is closely linked to its marketing strategy, encompassing market channels, promotions, advertising, sales methods, and pricing Consumer involvement is crucial in shaping these designs, often through focus groups and advertising panels that gather valuable insights.
The product prototype is developed to align with the complete product concept that resonates with consumers and society In earlier stages, the core product, including its attributes and packaging, has been refined Now, the focus shifts to finalizing the product's aesthetics, packaging design, branding, naming, pricing, and advertising strategies to ensure market acceptance and success.
A company is developing a new liquid breakfast for adult consumers between 20 and
Consumers aged 40 and above prioritize specific product attributes, including high nutritional value with low levels of fat, sugar, and salt, as well as essential nutrients like calcium, folate, iron, and vitamins They seek health-conscious options that are sustainable without contributing to weight gain, while also valuing affordability Additionally, they prefer products that are easy to pour, come in convenient 250 ml portions, and feature a mild roasted cereal flavor without being sticky or overly sweet.
1 Outline the steps in designing the product.
2 How would you organise the testing of the product prototypes at the different steps of the ball park experiments, optimisation and scale-up so that the consumer needs and wants are evaluated at each step?
3 How would you test the various attributes identified by the consumers during the design steps?
4 How would you test the final product prototype for commercialisation? promotion are added to give the commercial company product In other words the marketing attributes of the product are added to give the final product image. The raw materials from the primary production, the ingredients from the primary processing, and the processing during manufacturing of the consumer products, are included, as these are important areas of concern for the consumers and the society In building the final consumer concept, it is important to include the consumers’ environment, what is happening and predicted to happen The consumer’s product concept is influenced by:
• social, political, economic, physical environments;
• consumers’ own behaviour towards the product.
Fig 5.14 Steps involving consumers and their needs in product commercialisation
(Source: After Earle and Earle, 2000).
The consumer product concept aims to meet the eating needs and nutritional requirements of consumers while ensuring reliability, safety, aesthetic appeal, affordability, and psychological acceptability It must be positioned within the consumers' environment and align with the appropriate target audience Products are assessed against competitors to determine their market standing as leaders, equals, or laggards Additionally, the relationship between price and perceived quality is crucial, as consumers may associate higher prices with better quality or prefer lower prices for convenience, often balancing their views on quality and cost.
5.8.2 Consumers in marketing and production design
Consumer involvement in production enhances product quality according to specific production standards while also influencing marketing design (Earle and Earle, 2000) This dual engagement underscores the importance of integrating consumer feedback into both product development and marketing strategies.
• market information – market research and analysis, particularly the targets to be set for the launch and post-launch and the methods to monitor these;
• market channels and distribution – choice, control and development of market channels, transportation, storage;
• pricing – price range, relation of price to demand, margins, discounts, specialling;
• promotion – retailer and consumer promotion, advertising, public relations;
• sales – methods of selling, terms of sale, sales reporting, analysis and forecasting.
Consumers play a vital role in marketing decisions, including participating in surveys that help predict product purchases and sales targets Effective market channels ensure that products are available to consumers at the right place, time, price, and quality, necessitating research on consumer buying habits, storage practices, and frequency of purchases Involvement in retail surveys and shelf-life trials is crucial, as inadequate shelf-life testing can lead to product deterioration in home refrigerators Typically, trained sensory panels conduct shelf-life testing through descriptive sensory analysis, measuring critical product attributes over time while assessing changes during retail and home storage Consumer acceptance levels for stored products establish tolerance limits that guide the sensory panel's evaluations.
Often consumers are involved in promotional design, particularly in development of the visual material for sales promotion and the video/film for
TV advertising involves engaging focus groups or promotional consumers to shape the product's image, slogans, and educational content Testing promotional materials with consumers helps compare different designs based on awareness and persuasion metrics, while also assessing the clarity of the product information.
Consumer testing for final products and marketing designs varies based on the type of new product and prior consumer research Incrementally improved products often require minimal testing due to existing market knowledge, allowing for direct launch In contrast, major innovations necessitate comprehensive consumer studies, large-scale tests, and final test markets Balancing the risk of failure against the costs of time and resources is crucial, as delays can lead to missed opportunities and competitive disadvantages Additionally, insufficient understanding of consumer perceptions may result in an unfavorable product image Key questions that guide the testing process are essential for determining the appropriate testing methods.
To gather comprehensive insights about a product and its consumer relationship, a thorough consumer use-test is essential This involves conducting in-depth interviews with consumers to explore their reactions to the product and to gauge their predictions regarding future purchasing behavior.
Table 5.16 Questions in commercial product testing
• What will be the consumers’ purchasing/repurchasing behaviour?
• What will be the consumers’ reactions to the prices, the promotions?
• What are the predicted pessimistic, most likely and optimistic sales units and revenue over the next months, years?
• What are the predicted competitive reactions?
• What are the predicted market shares?
• Is the product what the consumers want?
• Does the product have the benefits wanted by the consumer?
• Does it have the desired attributes wanted by the consumer?
• What are the consumers’ concerns about the product?
• Is the package acceptable, right size?
• Are the product and packaging attractive at point-of-sale?
• Are the product and pack ethical, legal?
• Do the brand and the product image relate to the product?
Understanding the total consumer concept of a product involves conducting consumer tests with a statistically representative sample from the target market These tests typically utilize a monadic approach, where the complete commercial product is evaluated alongside relevant sales promotion and public relations materials Products can be delivered through mail or hand delivery, and data is ideally gathered through personal or telephone interviews, though self-administered questionnaires may also be employed However, using consumer tests to forecast buying behavior can be unreliable, as consumers often struggle to accurately predict their future purchasing decisions.
To understand the impact of marketing methods on consumer buying behavior, companies can conduct test markets in supermarkets, restaurants, or other retail outlets This allows consumers to purchase the product while utilizing in-store promotions or media advertising Interviews with both buyers and non-buyers help gauge product acceptance, competitive differences, uniqueness, brand attitude, and perceived value Additionally, it is crucial to assess consumer reactions and behaviors through discussions about their purchasing habits and opinions on the new product Sales data from retailers' computer records can then be analyzed to forecast national sales During the test market phase, companies can also experiment with various pricing strategies and display options.
In today's market, ethical product testing is crucial, as it aligns product development and marketing with societal values Trust is essential; consumers expect companies to avoid harm and deceit (Earle and Earle, 2000) This is particularly vital in the food industry, where product safety directly impacts health To ensure a mutually beneficial future, companies must conduct comprehensive and honest product testing, which in turn fosters a positive reputation when introducing new products.
Consumers in Stage 4: Product launch and evaluation
The involvement of the consumer can be divided into the consumer launch and the consumer evaluation after the launch.
The success of a product launch hinges on various factors, including the product type, innovation level, budget, and organizational structure within the company Achieving market penetration aligns with defined launch targets, as products differ in their novelty and the education required to communicate their benefits to consumers Consumers perceive risks and costs associated with trying new products, necessitating effective reassurances While line extensions and improved products are generally well-received, entirely new offerings may face challenges due to consumer unfamiliarity A comprehensive launch plan must address consumer adoption needs and the time required for acceptance Products are categorized as high-learning or low-learning, with high-learning products requiring sustained marketing efforts, focused on sales, distribution, and consumer feedback Effective advertising and public relations are crucial for raising awareness, while product trials must ensure proper storage conditions, such as regulated gas atmospheres for chilled fish The goal is to transport salmon by sea over 60 days, but preliminary market testing will be conducted with air shipments to Europe before finalizing packaging and containers.
1 Discuss the problems in test marketing this chilled product which is to be sold in supermarkets.
2 Describe how a test market could be set up in one supermarket Which country and which type of supermarket could be used?
3 How long would a test market need to run to give a reliable prediction of sales?
4 Outline how consumers buying the product could be surveyed and what information would be asked from them.
5 How would you relate the product to the competing products?
6 If the test market is successful, what problems do you identify in organising a product launch? encouraged by free samples and tasting of the product Low-learning products are usually improvements on competitors’ products and the introduction there is emphasis on the competitive advantage There is less time needed for education and it is mostly just awareness by the consumer of the product and encouragement to buy through the extra benefits of the product.
A key aspect to consider in a rapidly growing market is the identification and targeting of consumers who are eager to adopt new products By effectively marketing to these consumers and demonstrating the value and benefits of the company's latest offerings, businesses can foster customer loyalty and secure an expanding market share.
The timing of a product launch is crucial for consumer acceptance, influenced by seasonal availability, monthly budgeting, and competitor fatigue Understanding the target market's receptiveness is essential; if consumers are open to new products, aggressive marketing can be employed, whereas a cautious audience may require a more gradual approach focused on education and trial.
5.9.2 Consumer evaluation of the launch
When a product is launched, analyzing consumer buying behavior is essential, focusing on first-time and repeat buyers, purchase quantities, and intervals between purchases Utilizing buyer diaries allows consumers to log their purchases, including both new and existing food items within the category This data helps companies identify customer demographics, re-buying trends, purchase timing, and amounts Additionally, it reveals which brands are attracting new customers and which ones are losing them, providing valuable insights for marketing strategies.
When a new product is introduced to the market, it triggers a gradual change in consumer perceptions of both the product category and its competitors Consumer decision-making factors may evolve, leading to shifts in market positioning Consequently, marketers must regularly assess the entire product category and monitor any changes in the positioning of competing products, especially when the new product represents a significant improvement or innovation.
Understanding consumer perceptions of new products is essential, encompassing their values and attributes throughout the entire food behavior sequence, from purchase to consumption and disposal It’s crucial to evaluate whether consumers recognize the intended product attributes and discover any new factors that may affect their acceptance Engaging consumers shortly after purchase and again post-consumption, either through telephone or face-to-face interviews, can provide valuable insights This feedback not only highlights potential product improvements but also assesses the effectiveness of the marketing mix Key discussion points should include nutrition, safety, and environmental reactions related to the product.
Monitoring product quality is essential, as consumer feedback helps identify any variations or defects Returned products must undergo thorough examination, especially if raw materials change post-launch, necessitating reformulation or processing adjustments for efficiency Consumer testing is crucial to ensure these modifications do not compromise product acceptability Techniques like triangle, duo-trio, or paired comparison tests can assess significant differences, and if discrepancies arise, acceptance tests are required For instance, an instant drink mix faced market rejection due to solubility issues caused by temperature control problems during production Quality audits should be conducted throughout the distribution chain, often by trained panellists, while consumer acceptance tests are vital for setting standards Sensory analysis and instrumental testing can identify issues like off-flavours, which may have legal implications Ultimately, despite extensive investment in product development and marketing, understanding customer needs remains paramount Advances in consumer research have proven beneficial for the food industry, allowing businesses to minimize potential losses from unsuccessful products This chapter highlights the importance of precise consumer understanding to enhance market predictability.
1 Review the consumer research methods available and discuss their use in product development if your company is:
(a) a specialised ingredient supplier to the baking industry,
References
ANDERSON, A.M (1974) A quantitative model for the design of nutritious and acceptable foods PhD Thesis, Massey University, Palmerston North, New Zealand.
Anderson, P and He, X (1999) explore the influence of culture on the fast-food marketing mix in both the People's Republic of China and the USA, highlighting important implications for research and marketing strategies This study is featured in "Consumer Behaviour in Asia: Issues and Marketing," edited by T.S Chan and published by International Business Press in New York.
BAREHAM, J (1995) Consumer Behaviour in the Food Industry: A European Perspective (Oxford: Butterworth-Heinemann).
BEHARRELL, B.&DENISON, T.(1991) Food choice in a retail environment British Food Journal, 93(7), 24–30.
BELL, R & MEISELMAN, H.L (1995) Food retailing and the food consumer, in Food Choice and the Consumer, Marshall, D.W (Ed.) (London: Blackie Academic and Professional).
BOOTH, D.A.(1990) Designing products for individual customers, in Psycholo- gical Basis of Sensory Evaluation, McBride, R.L and MacFie, H.J.H. (Eds) (London: Elsevier Applied Science).
BUISSON, D.H (1995) Developing new products for the consumer, in Food Choice and the Consumer, Marshall, D.W (Ed.) (London: Blackie Academic and Professional).
CARDELLO, A.V.(1996) The role of the human senses in food acceptance, in Food Choice, Acceptance and Consumption, Meiselman, H.L and MacFie, H.J.H (Eds) (London: Blackie Academic and Professional).
CHITTAPORN, P.(1977) A quantitative model for the design of a processed infant food product for Thailand PhD Thesis, Massey University, Palmerston North, New Zealand.
CIVILLE, G.V & LYON, B.G (1996) Aroma and Flavour Lexicon for Sensory Evaluation, ASTM Data Series DS66 (West Conshohocken: American Society for Testing and Materials).
COOPER, H.R., EARLE, M.D.andTRIGGS, C.M.(1989) Ratio of ideals, a new twist on an old idea, in Product Testing with Consumers for Research Guidance, STP 1035 (West Conshohocken: American Society for Testing and
(b) a manufacturer of dried soups in small consumer packs for convenience stores,
(c) a large-scale sugar refiner marketing individual packs of sugar to coffee shops,
(d) a manufacturer of consumer margarine products for supermarkets.
2 Consider your company’s consumer research budget in relation to that for advertising and promotion, and set out your view of their relative significance on overall profitability.
COOPER, H.R & BROWN, S (1990) Trans-Tasman differences in consumer perceptions Food Australia, 42(10), 494–497.
EARLE, M.D.(1997) Changes in the food product development process Trends in Food Science and Technology, 8, 19–24.
EARLE, M.D.&EARLE, R.L.(1999) Creating New Food: The Product Developer’s Guide (London: Chadwick House Group).
EARLE, M.D & EARLE, R.L (2000) Building the Future on New Products (Leatherhead: Leatherhead Food R.A Publishing).
ENGEL, J.F., BLACKWELL, R.D.&MINIARD, P.W (1995) Consumer Behaviour, 8th Edn (Fort Worth: Dryden Press).
FURST, T., CONNORS, M., BISOGNI, C.A., SOBAL, J.&WINTER-FALK, L.(1996) Food choice: a conceptual model of the process Appetite, 26(3), 247–266.
GACULA, M.C.(1997) Descriptive Sensory Analysis in Practice (Trumbull: Food and Nutrition Press).
GREEN, P.E., TULL, D.S.&ALBAUM, G.(1988) Research For Marketing Decisions, 5th Edn (Englewood Cliffs, NJ: Prentice-Hall).
GREGORY, N.G.(1997) Meat, Meat Eating and Vegetarianism: A Review of the Facts MAF Policy Technical Paper 97/16 (Palmerston North, New Zealand, Ministry of Agriculture and Fisheries).
HISRICH, R.D.&PETERS, M.P.(1991) Marketing Decisions for New and Mature Products, 2nd Edn (New York: Macmillan).
HOLLINGSWORTH, P (2000) Culinary’s expanded role in cooking up product success Food Technology, 54(7), 38, 40, 42, 44.
KOIVISTO-HURSTI, V.L.&SJODEN, P.O.(1997) Food and general neophobia and their relationship with self-reported food choice: familial resemblance in Swedish families with children of ages 7–17 years Appetite, 29(1), 89–103.
KORSMEYER, C.(1999) Making Sense of Taste (Ithaca: Cornell University Press).
In the 1990 workshop on measuring consumer perceptions of internal product quality, Koster discusses the significance of sensory analysis in consumer research, highlighting its role in understanding how consumers evaluate product quality This work is featured in Acta Horticulturae Technical Communication 259, edited by J.L Jordan, and published by the International Society for Horticultural Science in Wageningen.
LAURENT, G.&KAPFERER, J-N.(1985) Measuring consumer involvement profiles. Journal of Marketing Research, 22(Feb), 41–53.
LAWSON, R., TIDWELL, P., RAINBIRD, P., LOUDON, D & DELLA BITTA, A (1996) Consumer Behaviour in Australia and New Zealand (Sydney: McGraw-Hill).
LINDEMAN, M &STARK, K.(1999) Pleasure, pursuit of health or negotiation of identity? Personality correlates of food choice motives among young and middle-aged women Appetite, 33(1), 141–161.
LINNEMANN, H.R., MEERDINK, C.H., MEULENBERG, M.T.G.&JONGEN, W.M.F.(1999) Consumer-oriented technology development Trends in Food Science and Technology, 9, 409–414.
MCBRIDE, R.L (1990) Three generations of sensory evaluation, in PsychologicalBasis of Sensory Evaluation, McBride, R.L and MacFie, H.J.H (Eds)(London: Elsevier Applied Science).
MARTENS, H., WOLD, S.&MARTENS, M.(1983) A layman’s guide to multivariate data analysis, in Food Research and Data Analysis, Martens, H and Russwurm, H (Eds) (London: Applied Science).
MEILGAARD, M., CIVILLE, B.S & CARR, B.T (1999) Sensory Evaluation Techniques, 3rd Edn (Boca Raton, FL: CRC Press).
MEISELMAN, H.L (1994) Bridging the gap between sensory evaluation and market research Trends in Food Science and Technology, 5(12), 396–398.
MELA, D.J.(1996) Implications for fat replacement for food choice and energy balance Chemistry and Industry, 329–332.
MOSKOWITZ, H.R (1994) Food Concepts and Products: Just-In-Time Develop- ment (Trumbull: Food and Nutrition Press).
MOSKOWITZ, H.R.(1997) Experts versus consumers: a comparison, in Descriptive Sensory Analysis in Practice, Gacula, M.C (Ed.) (Trumbull: Food and Nutrition Press).
MOSKOWITZ, H.R., BENZAQUEN, I.&RITACCO, G.(1981) What do consumers really think about your product? Food Engineering, Sept., 80–82.
MUN ˜ OZ, A.M (1997) Relating Consumer Acceptance and Laboratory Data. PCN28-030097-36 (West Conshohocken: American Society for Testing and Materials).
NANTACHAI, K., PETTY, M.F.&SCRIVEN, F.M.(1992) An application of contextual evaluation to allow simultaneous food product development for domestic and export markets Food Quality and Preference, 3(1), 13–22.
NESTLE, N., WING, R., BIRCH, L., DISOGRA, L., DRENOWSKI, A., MIDDLETON, S., SIGMAN-GRANT, M., SOBAL, J., WINSTON, M & ECONOMOS, C (1998) Behavioural and social influences on food choice Nutrition Reviews, 56(5), S50–S74.
PETER, J.P.& OLSON, J.C (1999) Consumer Behaviour and Marketing Strategy (Boston: Irwin, McGraw-Hill).
POSTE, L.M., MACKIE, D.A., BUTLER, G.&LARMOND, E.(1991) Laboratory Methods for the Sensory Analysis of Food, Publication 1864E (Ottawa: Research Branch, Agriculture Canada).
RAATS, M., DAILLANT-SPINNLER, B., DELIZA, R.&MACFIE, H.(1995) Are sensory properties relevant to food choice? in Food Choice and the Consumer, Marshall, D.W (Ed.) (London: Blackie Academic and Professional).
ROBERTS, L.M (1997) A new beef production adoption model for hotels and motels in Greater Melbourne PhD Thesis, Massey University, Palmerston North, New Zealand.
ROGERS, E.M.(1983) Diffusion of Innovation, 3rd Edn (New York: The Free Press).
RUFF, J.(1995) Consumer expectation in the food industry: a vision for the 21 st Century Food Science and Technology Today, 9(4), 195–205.
SAGUY, I.S & MOSKOWITZ, H.R (1999) Integrating the consumer into new product development Food Technology, 53(8), 68–73.
SCHAFFNER, D.J., SCHRODER, W.R & EARLE, M.D (1998) Marketing: An International Perspective (New York: McGraw-Hill).
SCHIFFMAN, L.G & KANUK, L.L (2000) Consumer Behaviour (Upper Saddle
SCHU ¨ TTE, H.&CIARANTE, D.(1998) Consumer Behaviour in Asia (Basingstoke: Macmillan Business).
SCHUTZ, H.G (1988) Multivariate analysis and the measurement of consumer attitudes and perceptions Food Technology, 42(11), 141–4, 156.
SCHUTZ, H.G (1993) Measuring consumer acceptance of flavours, in Flavor Measurement, Ho, C.-H and Manley, C.H (Eds) (New York: Marcel Dekker).
SHOCKER, A.D & SRINVASAN, V (1979) Multivariate approaches for product concept evaluation and generation: a critical review Journal of Marketing Research, 16 (May), 159–160.
SINTHAVALAI, S.(1986) Development of nutritionally-balanced snack product for urban school-age Thais PhD Thesis, Massey University, Palmerston North, New Zealand.
TEPPER, B.J., YOUNG SUK CHOI&NAYGA, R.M.(1997) Understanding food choice in adult men: influence of nutrition knowledge, food beliefs and dietary restraint Food Quality and Preference, 8(4), 307–317.
VERYZER, R.W (1997) Measuring consumer perceptions in the product development process Design Management Journal, Spring, 66–70.
In the study by Vesseur (1990), titled "Tomato Tasting Test and Consumer Attitude," published in Acta Horticulturae Technical Communication 259, the research explores consumer perceptions of internal product quality through a tomato tasting test This workshop, edited by J.L Jordan and conducted by the International Society for Horticultural Science, highlights the importance of understanding consumer attitudes towards tomatoes to enhance product quality and satisfaction.
WATTS, B.M., YLMAKI, G.L., JEFFREY, L.E & ELIAS, L.G (1989) Basic Sensory Methods for Food Evaluation (Ottawa: International Development Research Centre).
WEST, S.J & EARLE, M.D (1987) Market Research Methods, IDRC MR151e (Ottawa: International Development Research Centre).
WILKINSON, B.H.P (1985) Attitudes and Behaviour of Consumers to Meat in Palmerston North, New Zealand 1979–85 PhD Thesis, Massey Uni- versity, Palmerston North, New Zealand.
WILTON, V & GREENHOFF, K (1988) Integration of sensory techniques into market research Food Quality and Preference, 1(1), 33–35.
ZELANEK, M.J (1999) Consumer Economics: The Consumer in Our Society.(Scottsdale: Holcomb Hathaway).
The success of product development in a company hinges on the individuals involved, from directors to project managers This effectiveness is influenced by their foundational philosophy and understanding, their skill sets, and a clear acknowledgment of their respective roles.
Product development relies on the collaboration of individuals with diverse knowledge and skills across various company sectors, including R&D, marketing, production, and finance, making effective management crucial for success The complexity of product development often leads to challenges in determining the optimal placement of its management within the organization, resulting in frequent reorganization Despite these challenges, adapting to evolving technologies and consumer demands is essential, while maintaining a core knowledge base that fosters growth through ongoing product development projects.
Product development management involves various interconnected layers that interact with and sometimes overlap with the management of functional departments The primary focus lies in two critical areas that influence the effectiveness of this process.
1 Management needs in the vertical responsibility from directors to project managers.
2 Interaction between these management people and the functional departments.
Managing and improving product development
Product development in large companies is often intricate, unlike in smaller firms where roles may overlap, with one person assuming multiple responsibilities such as director and project leader Regardless of company size, it is crucial to clearly define the product development strategy, program, and processes to ensure that all team members understand their roles, the expected outcomes, and the decision-making framework.
Effective management hinges on the interconnection between product development and key functional areas such as R&D, marketing, production, distribution, and finance The success of product development relies heavily on the collaboration and support of these departments Both the resources required for product development and the results generated are closely tied to these functional areas, which play a crucial role in the creation and marketing of contemporary products.
In 1985, effective business operations relied on various inputs, including product mix strategy and sales forecasting from marketing, product trials and quality assurance from production, and predicted returns on investment from finance These inputs culminated in essential outputs, such as the market plan from marketing, the production schedule from production, and net profit forecasts from finance.
Chapter 6 emphasizes the essential requirements for effective product development management, highlighting the roles of individuals responsible for delivering optimal products on schedule and within budget It focuses on designing the Product Development (PD) Process, identifying key decision points and decision-makers, as well as establishing desired outcomes, budgets, and constraints The chapter concludes with insights on managing and organizing product development within the company and the importance of collaboration with external agencies.
Chapter 7 illustrates product development at different points in the food system in four case studies Management of product development is different among primary production, processing of food ingredients, manufacturing and food service, because of the different scientific and technological bases, the different needs of the target markets and the time for development It is important to understand that there is a common product development framework but the activities can be different.
Chapter 8 studies the searching for best practice in product development and in particular the improvement of R&D management by benchmarking The changes that are occurring in food product development and what may happen in the future are discussed.
STOCKWELL, D.(1985) Managing product development as a business activity, an address to the ASEAN Food Conference, Manila, Philippines.
Product development management in the food industry is a complex, long-term, and capital-intensive process that involves comprehensive company management across all functions Major innovations may lead to the establishment of new ventures or divisions, particularly in a landscape where information technology and biotechnology spur the creation of new companies Currently, large multinational food corporations dominate product development, serving as the primary drivers of innovation in the sector, although many small food companies also engage in product development on a smaller scale The management approaches can range from informal discussions in small companies to structured processes in large corporations with extensive R&D facilities While the fundamental principles of product development management remain consistent across company sizes, their application can be more challenging in larger organizations due to rigid hierarchies.
The framework for management in the food industry is the PD Process, and the recognition of management at the different stages.
Managing the product development process
Managing and improving product development
Principles of product development management
Key principles of product development management have been established, demonstrating their enduring relevance despite shifts in relative importance (Souder, 1987; Ganguly, 1999) These principles serve as a solid foundation for effective product development and can be categorized into four main areas: basic philosophy, understanding, abilities, and organizational structure of the company, as illustrated in Fig 6.1.
• Belief in product development as a major business strategy.
• Understanding emerging worldwide technologies, in-depth knowledge of technologies.
• Understanding the transformation of technologies into want-satisfying products, intimate understanding of changing consumer needs.
• Developing a creative climate, creating spontaneous teamwork.
• Patience, realising that innovations take time, going through cycles of success and failure, and that management has to aid and direct them to the end of product success.
• Recognising the need for skills in systematic decision making and risk- taking.
Effective product development relies on a deep understanding of technology and consumer needs, alongside their optimal relationship If top management does not prioritize this knowledge, the process is likely to falter Additionally, fostering a creative environment and allowing sufficient time are crucial for achieving product success Ultimately, the quality and timeliness of decision-making by management play a significant role in the success of product development (Lord, 2000).
Fig 6.1 Basic principles of product development management.
Effective project selection involves a systematic approach that leverages information sharing and group decision-making By fostering idea generation and evaluation among all stakeholders in product development, organizations can enhance collaboration and creativity Establishing decision processes aligned with product development goals ensures that the best projects are prioritized for success.
A thorough assessment of both the customer's sophistication and the product designer's technical expertise is essential Establishing collaborative roles between product design and consumer research can significantly enhance product development This approach involves educating product designers about consumer needs and preferences while also informing marketing teams about technical capabilities and challenges.
Effective product development requires careful coordination of resources and knowledge, along with an ongoing upgrade of skills to leverage new technologies It's essential to nurture innovative methods and select technologies that align with current or future company objectives Additionally, accurately predicting the costs associated with adopting new technologies is crucial for financial planning and organizational structure.
• Elimination of disharmony between R&D and marketing groups, making open communication an explicit responsibility of every employee, using joint R&D/marketing task forces.
• Reducing complexity and problems, breaking large projects into manageable stages, identifying and eliminating mild problems before they become major.
Effective project management requires the ability to recognize project trajectories and coordinate knowledge, resources, and personnel for successful outcomes Product development is inherently a multifaceted process that thrives on collaboration among individuals with diverse skills and expertise, transcending traditional functional boundaries like marketing and production Management must grasp the significance of company-wide collaboration and implement multifaceted product development initiatives that leverage this teamwork.
Effective product development organizations are designed to establish a positive tone and foster supportive attitudes towards innovation By aligning the structure with the needs of both members and customers, these organizations promote accountability and encourage open, multidirectional communication This approach not only enhances collaboration but also ensures that the development process is responsive to the evolving demands of the market.
Effective project management requires a cost-effective approach tailored to specific challenges For instance, incremental innovation can be best managed through commercial line management, while technical innovations benefit from dedicated technical management Major innovations often necessitate the use of separate project management structures or the establishment of a new product committee to ensure focused oversight and successful implementation.
Effective flow management in project development is crucial for ensuring the timely transfer of product prototypes and knowledge By fostering skills and expertise in evolving technologies, teams can maintain engagement at varying levels throughout the project This approach not only streamlines processes but also enhances collaboration among team members.
Effective product development budgeting techniques are essential for navigating the fluctuating cost and time ratios inherent in various projects By conducting thorough financial analyses at each stage of the product development process, organizations can identify costs and pinpoint opportunities for improvement Implementing robust financial controls tailored to the specific cost and time dynamics of each project ensures better resource allocation and enhances overall project efficiency.
Effective management is essential for designing an organization that supports product development, encompassing both the overall new product program and individual projects Coordination among projects is crucial to optimize the use of personnel and resources, while careful planning and control ensure that each project progresses smoothly toward its final launch It's important to recognize that radical innovations often involve non-linear progressions, requiring management to handle iterations and recycling, particularly in the early stages of development.
People in product development management
Understanding the various layers of management is crucial, as they encompass distinct roles such as directors, chief executives, product development managers, and project leaders, which may vary in title across different companies Directors operate at the business strategy level, while chief executives focus on product and innovation strategies Product development managers oversee new product programs, and project leaders are responsible for managing individual projects.
1 What is the basic philosophy of product development management?
2 Describe the understanding of technology changes and consumer needs changes.
3 How are these changes affecting product development?
4 Has your company the abilities to develop new products related to these changes?
5 If not, what new abilities need to be found? How could this be done?
6 What are the organisational methods used by your company?
7 Do they ensure effective and efficient product development?
8 If not, what changes need to be made in the organisational methods? project as shown in Fig 6.2 All of these different levels have their own basic philosophy and understanding, abilities and responsibilities, but they need to be coordinated into the whole product development management.
In product development, responsibilities are often interwoven, with individuals holding both personal and shared responsibilities across various management levels The collaborative nature of this process blurs the lines of accountability, making it essential for teams to work together effectively to achieve common goals.
The Board of Directors plays a crucial role in shaping the company's future growth through a strong commitment to product development They must possess the skills to integrate innovation into the business strategy, make informed decisions, and take intelligent risks Additionally, selecting a chief executive with the expertise to execute the innovation strategy is essential A deep understanding of the technological and marketing landscapes, competitors' strategies, and the company’s structural and cultural context is vital for success The Board is responsible for setting the overall innovation strategy, allocating resources effectively, and making key decisions in product development, ensuring that initiatives align with the company's vision from the top down.
Fig 6.2 Levels of PD management.
Chief executives play a crucial role in product development by committing to understanding its significance within the organization They must recognize the specific needs and essential skills required for effective product development, as well as comprehend the product development process in relation to their company These abilities are vital for driving innovation and ensuring the success of their products in the market.
• to develop the structure in which product development operates;
• to organise a management system for product development;
• to integrate all the functional areas taking part in product development;
• to develop a clear product strategy and a product development programme;
• to indicate the decisions to be made at different parts of the product development processes, and make decisions with careful analysis.
Effective long-term company development strategies require leaders to assess the strategic significance of new initiatives in relation to existing core capabilities Executives must manage portfolios by making informed strategic choices regarding markets, products, and technologies for investment A positive organizational environment is essential, with the chief executive actively supporting and directing continuous product development while fostering integrated communication among marketing, production, R&D, and finance It is crucial that product development remains versatile and does not become confined to a single discipline.
Product development managers play a crucial role in the company's product development process, emphasizing the integration of skills and knowledge essential for success They must possess a deep understanding of customer needs and desires, stay informed about current and emerging technologies, and be aware of both the company's internal dynamics and the external market environment Additionally, they need to demonstrate strong abilities in these areas to drive effective product development.
• identify the outcomes necessary for each stage of the PD Process for the chief executive’s and Board’s decision making;
• identify the time and other constraints on the project;
• identify and find the resources for the product development;
• encourage the creative and technical achievements of the people involved in product development;
• analyse and make the decisions.
Product development managers play a crucial role in securing top management support for new initiatives and defining the company's strategies They collaborate closely with project leaders to outline projects and integrate various initiatives into a cohesive product development program Additionally, they work with project managers to establish timelines for each stage of the product development process.
Effectively managing resources is crucial for ensuring they are available at the right time and quality during product development It is essential to analyze development results and make informed decisions for subsequent stages Companies require a dedicated individual responsible for new product initiatives, possessing both product development and management expertise Striking a balance between innovation and management is vital, as excessive oversight can hinder creativity, while lack of control may result in unsuitable products and project inefficiencies, ultimately leading to commercial failure.
Project leaders must possess a deep understanding of consumer needs, market dynamics, the product development process, and the product itself They should encourage and cultivate innovative and creative problem-solving skills while effectively integrating diverse teams with varying expertise and philosophies Essential abilities for project leaders include strong communication, adaptability, and the capacity to drive collaboration among team members.
• drive the project to a successful conclusion;
• identify the outcomes for each stage of the PD Process and important sections in the individual stages;
• relate the outcomes to the activities in the project;
• choose the techniques for the activities that relate to the knowledge and skills of the team, and the resources available.
The project manager plays a crucial role in developing the business strategy for a new product, overseeing technical and marketing development, and establishing the organizational structure needed for success Leading a diverse team with expertise in consumer research, marketing, product design, processing development, production, and finance, the project manager must possess a foundational understanding of each discipline and recognize their interconnections Responsible for ensuring the project stays on track, meets objectives, and remains within budget, the project manager also ensures the availability of necessary resources and serves as the primary communication link between the project team, senior management, and external organizations.
6.2.5 Important factors in management levels
Effective product development management hinges on three key factors: strategic championing at the top management level, organizational championing by product development managers, and product championing led by project leaders Decision-making must be decentralized and clearly defined across all management levels to avoid bottlenecks, as relying solely on top management can hinder progress through excessive reporting Collaboration is essential, transcending mere cross-functional integration to involve active cooperation among diverse disciplines and management levels, all working towards shared product development goals.
Cross-functional collaboration is essential in product development, as it fosters shared responsibility and a willingness to understand diverse perspectives, ultimately enhancing collective knowledge This synergy in thought and action allows outcomes to surpass the capabilities of individual contributors (Jassawalla and Sashittal, 1998) However, achieving collaboration can be challenging in radical innovation due to uncertainty, leading to tensions among different functional groups who may blame each other for delays, quality issues, and increased costs In contrast, incremental product development facilitates easier collaboration, as the risks of failure are lower and processes become routine Focusing on stage-specific collaboration is more effective for achieving new product success than attempting to integrate all functions throughout every stage of the product development process.
Fig 6.3 Comparison of integration and collaboration in product development
(Source: After Jassawalla and Sashittal, 1998).
Process, with the three functions – R&D, manufacturing and marketing – playing the central role in turns (Song et al., 1998).
Designing the PD Process
The PD Process serves as a structured framework for managing product development projects and programs The choice of activities within this process is influenced by the company's internal knowledge and skills, readily available external information, potential risks associated with knowledge gaps, the significance of product development for the company's future, and, crucially, the degree of innovation involved.
6.3.1 The effects of knowledge and skills on the PD Process
The knowledge and skills within a company, along with its product development philosophy, significantly influence the choice of activities and the structure of the Product Development (PD) Process Companies lacking consumer research capabilities may resort to personal research through retailers or their networks If formulation expertise is absent, they often rely on formulas from ingredient suppliers, while those without process engineering skills might invest in turnkey processing lines from equipment suppliers In cases where innovation skills are lacking, companies may choose to acquire other firms Additionally, managerial attitudes towards risk—ranging from conservative to adventurous—affect the PD Process Some companies prioritize rapid market entry, often skipping essential steps like business analysis and test marketing, while others meticulously include all necessary activities to mitigate the risk of failure.
Are you a manager? If yes, answer the questions directly If no, answer the questions as related to your manager.
1 For what area of product development are you (or the manager) responsible?
3 How do these relate to the responsibilities of the manager above you?
4 How do these responsibilities relate to your abilities? Do you need more abilities or improved abilities? How could you attain these?
5 How do you relate to other areas of product development, other people in product development?
6 Would these relations improve with a top management decision to have collaboration as a basic company philosophy? reduce their risk of failure in the market So the PD Process is specific to the company and its knowledge, skills, and philosophy.
6.3.2 Level of innovation and the PD Process
Table 6.1 illustrates the differences in the Product Development (PD) Processes for radical versus incremental changes Incremental changes typically follow a linear sequence, while radical innovations often involve a recycling of activities Incremental product modifications can be developed and marketed using a standard PD Process, with significant input from functional departments like marketing and production In contrast, radical innovation requires a more generalized approach.
Table 6.1 Differences in the PD Process for platform and derivative products
(new platform products) (derivative products)
Probing problems with consumers Consumers setting attributes
Focused project objectives Clear schedules and time goals Developed product concept General product concept
New product design specifications Standard product design specification New market probing studies Market surveys
Stage 2: Product design and process development
Building product attribute measures Refining product attribute measures Product/process interrelationship studies Product formulation
Pilot plant studies Process improvement
Frequent product testing Strategic product testing
Design of new production method Adaptation of production
Design of new quality assurance Adaptation of quality assurance Commissioning of new plant Minor plant changes
New marketing strategy Improvement of marketing strategy Detailed business and market analysis Setting market and financial targets
Stage 4: Launching and post-launch evaluation
Rolling launch or pre-launch test market National launch
Continuous market analysis Assessing if market targets met Continuous financial analysis Assessing if financial targets met
Project milestones to control High importance of speed
Long-term capital commitment is essential for sustainable growth, while short-term capital commitment allows for flexibility in financial planning Similarly, long-term human resource commitment fosters stability and expertise, whereas short-term human resource engagement can adapt quickly to changing project demands These dynamics highlight the importance of balancing both long-term and short-term strategies in project management, particularly in creative industries where unpredictability is common.
Radical innovation requires the development of both technical and market knowledge during the initial stages of the product development process Additionally, incorporating product/market testing and business analysis is crucial in the commercialization stage to ensure successful market entry.
• product concepts are developed with the consumers;
• product designers make some models or simple prototypes of possible products and ask the consumers to evaluate them;
• further product concepts are developed; and
• evaluated by marketing and processing technologists to see if any are possible for commercialisation.
In the later stages of the Product Development (PD) Process, initial versions of products are rapidly launched on a limited scale to gather user feedback and implement necessary modifications prior to a broader market rollout For radical innovations, resource commitments by the company are typically made at various points throughout the PD Process, unlike incremental products, which secure resources at the project's outset (Mullins and Sutherland, 1998).
In incremental product projects, existing knowledge within the company reduces the need for extensive new research, allowing marketers and product designers to collaboratively develop the product concept This concept is then evaluated by consumers to ensure accuracy before formal specifications are documented Typically, a national launch aims at the entire market Major product changes, which fall between radical and incremental innovations, may require distinct product development (PD) processes If significant alterations involve product, market, or production aspects, they may resemble the PD process for radical innovations Conversely, if the changes are marketing-focused, like repositioning, the PD process aligns more with incremental innovation, emphasizing marketing adjustments; whereas production-related changes, such as new processes, follow an incremental PD process with a focus on technical development.
6.3.3 Other factors in designing the PD Process
When designing the Product Development (PD) Process framework for a company, several factors must be considered, including the company's role in the food system, environmental impacts, technology, marketing strategies, and available resources Different stages of food product development—primary production, industrial, and consumer—have distinct PD Processes, as detailed in Chapter 7 Societal and political constraints, such as food regulations and religious requirements, must be factored into the PD Process to avoid wasting time and resources Additionally, the influence of technology in processing, distribution, and marketing is critical, particularly for large multinational companies that require rapid processing and large-scale equipment This necessitates that product design and process development begin simultaneously with consumer research The concept of concurrent engineering, prevalent in other industries, underscores the importance of integrating product design and process development from the outset in the food industry Smaller companies can benefit from conducting product design using 'kitchen' size equipment before scaling up their processes.
6.3.4 Using and changing the PD Process
The company identifies crucial activities for its industry through experience, often relying on competitor actions or current trends rather than thorough analysis post-product development It is essential to choose both the activities and their intensity based on what is necessary to meet target objectives, rather than adhering to traditional methods or industry norms This careful selection process is vital for achieving desired outcomes.
• controls for measurement of progress (Gruenwald, 1988).
The PD Process is a dynamic framework that requires regular evaluation and updates to incorporate new knowledge, skills, and strategies aligned with a company's evolving environment Innovative activities within the PD Process can provide a competitive advantage, while a foundational framework, built on experience, remains relatively stable Top management plays a crucial role in initiating new strategies and PD Processes for product development, necessitating exceptional entrepreneurial skills, commitment, and a willingness to embrace risk Without drastic changes, management can effectively signal the need for evaluation and adaptation of the PD Process, fostering communication among team members and ensuring the organization remains agile in response to changes The management of the PD Process varies across companies; some utilize internal communication networks for staff consultation, while others impose a more rigid structure.
PD Process with the activities and often the techniques identified as to what is to be done in all projects.
Establishing key decision points and the decision makers
Effective product development involves decision-making at all levels, from top management and the Board of Directors to process workers and salespeople Each decision is interconnected, often influenced by prior choices made within the organization However, this interrelationship is frequently overlooked, leading to critical decisions being unrecognized Top management typically bases their decisions on reports generated by middle management or product approval committees, which may not encompass the full scope of information The choices made by top management shape the project direction, while project leaders organize the execution based on these decisions Ultimately, the quality of decisions and the accuracy of the knowledge behind them are crucial; poor decisions can result in product failures, whereas informed decision-making fosters product success.
Top management and often the directors on the company Board handle the critical decisions between the stages Basically there are two decisions:
• Do we go on or stop the product development?
• What resources does the company put into further development?
Does your company have a PD Process framework?
1 Discuss how the PD Process framework:
(a) recognises the company’s philosophy, knowledge and skills,
(b) adapts to innovation level, type of technology, marketing, environment, food regulations,
(c) identifies the activities for each of the four stages of the PD Process, (d) puts these activities into parallel or sequential positions,
(e) shows the necessary collaboration between people and departments.
2 What changes could be made to your company’s PD Process framework that would make product development more effective and efficient in your company?(If your company does not have a PD Process framework, design one using the above criteria.)
During Stage 1: Developing the product strategy, there are another three critical acceptance decisions – does the company accept the product strategy, the innovation strategy and the product development programme?
In the initial phases of product development, Urban et al (1987) highlighted key top management decisions, including committing the company to new products, approving the product development process and budgets, and establishing the product portfolio and market strategy Prior to product design, a review of the market entry strategy was conducted, followed by a commitment to testing after the design phase, leading to a go/no-go decision and a review of the launch plan Post-launch, critical decisions involved approving one- and five-year plans, as well as a strategy for maximizing product profitability.
Top management faces critical decision points during the rejuvenation process, particularly highlighted in Fig 6.4, which includes additional considerations for radical innovations in Stages 2, 3, and 4 Due to uncertainties associated with radical and significant product changes, modifications may occur in the product concept during the design phase, necessitating the design and construction of new equipment for processing Furthermore, adjustments in storage conditions can impact distribution methods, while shifts in the target market may require alterations in both product features and marketing strategies.
Recognizing uncertainties at the outset is crucial for directors and top management in the product development process In the case of incremental new products, management typically engages in decision-making only when significant issues arise, such as those that may conflict with company ethics or lead to time and cost overruns.
Senior management must access the right information promptly to make timely decisions, ensuring projects do not face delays If a project advances to the prototype or commercialization stage without top management's input, it may become too late to halt it, even if further development and resources are required However, management should avoid direct involvement in resolving issues with delayed products, as most critical decisions have already been made by others, and their influence at this stage is limited The responsibility for addressing significant problems falls to the project leader, who must assess the situation and propose solutions for top management's review, ultimately deciding whether to proceed or terminate the project Key aspects for effective top management reviews include ensuring timely access to information and maintaining focus on strategic oversight.
• to provide a clear and consistent process for making major decisions on new products and improvements;
• to empower project teams to execute a project plan;
• to provide the link for applying product strategy to product development;
• to provide measurable checkpoints to monitor progress;
• to establish milestones that emphasise a sense of urgency.
Effective decision-making by directors and senior management relies on knowledge derived from the outcomes of different stages in the Product Development (PD) Process By clearly identifying critical decisions and the necessary information at the outset of each project, top management can guide the product development team on what data to generate and how to present it Additionally, establishing a warning system is essential to address potential resource or time overruns and to identify challenges that may hinder project progress.
The product development manager plays a crucial role in overseeing the product development program, making key decisions regarding its administrative framework This includes determining activities, schedules, and budgets while ensuring effective integration of various product development projects running concurrently.
The product development manager plays a crucial role in determining workload forecasts, setting performance standards for the team and individuals, and defining expected efficiency in the product development process (Gruenwald, 1988) They must strategically decide when to engage various functional groups and how to align consumer needs with the product being developed By facilitating coordination between consumers and the development team, the manager supports project leaders in integrating both technical and business perspectives Additionally, they are responsible for fostering new skills and knowledge within the team and may bring in external consultants to enhance expertise (Burgelman and Maidique, 1988) Key decisions made by the product development manager during Stage 1 include the development of the product strategy.
• aim, outcomes and constraints for the individual projects;
• depth of activity in developing the product concept and the product design specifications;
• accuracy needed in the market predictions;
• amount of product design and other technical development;
• time schedule for the activities;
• resources available for each of the activities;
• involvement of the functional departments in developing and evaluating the product concept and the product design specifications, and in predicting the market and technical success;
• communication methods with the team members and among them;
• recognition of lack of skills and knowledge for the later stages and planning of involvement of outside knowledge sources and of education of team members.
The product development manager must focus on achieving the outcomes for Stage 1 while also preparing for future stages, as decisions made now set the foundation for later complexities As development costs rise and the risk of significant failure increases, timely decision-making by top management and project leaders becomes crucial to maintain project urgency and avoid delays in time to market When facing challenges in technical and marketing decisions, it is essential for the product development manager to efficiently organize resources to address issues promptly.
The project leader is responsible for making critical decisions to meet the objectives set by senior management while adhering to the budget and timeline established by the product development manager This involves collaborating with senior management to define the project's goals, outcomes, and constraints The project leader selects appropriate techniques for the identified activities, ensuring they align with the team's capabilities and produce a product that meets consumer quality standards Balancing effectiveness and efficiency is crucial, as the project leader must navigate the complexities of resource allocation and scheduling Support from senior management is essential, particularly when unrealistic expectations are set without adequate resources or when facing challenging projects The cornerstone of the project leader's organizational strategy is the product development project plan, which outlines activities, resources, timelines, and communication protocols This plan serves as a foundation for making decisions regarding time and resource overruns Due to the unpredictable nature of most product development projects, the project leader must continuously adapt and make decisions throughout the process.
• product and the consumer needs;
Effective decision-making in product development involves collaboration between the core team, functional departments, and external organizations Recognizing these decisions early is crucial for maintaining the quality of research and preventing confusion and disorganization as the project progresses.
1 For product development in your company, outline the PD Process for each of the following:
To enhance your company's product development, establish clear PD processes by identifying key individuals or teams responsible for product strategy and development programs Ensure that these stakeholders are involved in making crucial go/no-go decisions at the conclusion of Stage 1.
2, 3 and 4 in the PD Process.
Establishing outcomes, budgets and constraints
Effective decision-making is crucial for successful product development, as it provides the essential framework, while knowledge enhances this framework to bring projects to life Knowledge is both integrated into and generated within this framework, enabling informed decision-making However, acquiring knowledge incurs costs, making the careful balance of knowledge and expenses vital in product development Ultimately, this balance involves weighing the costs of potential product failures against the overall project costs.
In product development, it is essential to establish clear outcomes and budget considerations at the project's outset Additionally, these elements should be reassessed at the end of each of the four stages and during other critical milestones in the product development process As project conditions evolve, top management must evaluate the outcomes and budgets concurrently with granting approval for progression to the next stage.
At the end of each stage of the PD Process, the top management requires for its two outcomes:
• product form to that stage of development;
• report on which to base its decisions.
The product development process progresses from a concept to design specifications, prototypes, and ultimately a commercially launched product Reports can range from extensive documents to concise executive summaries, depending on the information needs of top management Key areas of knowledge in product development, as outlined in Table 6.2, are crucial for informed decision-making; however, top management may prefer minimal details, particularly in low-risk incremental product developments Often, critical decisions are made by middle management prior to reaching the executive level.
2 Select a recent project, which was a radical product innovation, and identify the critical decisions, where they occurred in the project and who were the decision makers Identify decisions and decision makers in:
(a) the go/no-go decisions,
(b) decisions that led to final product qualities, product image, product features and uses,
(c) decisions that led to production method, distribution method, marketing strategy, costs and pricing,
(d) decisions on the project efficiency, in achieving timing and costs.
Table 6.2 Outcomes (knowledge needs) for decision making
Product/innovation strategies Strategies acceptance
Product development programme Programme acceptance
Project aim, objectives and constraints Project acceptance
Product design specifications Product idea acceptance
(or product concept) Resources for product design, process
• technical feasibility Timing of programme
• marketing suitability Harmony with business
Stage 2: Product design and process development
Final prototype product Acceptance as new company product
Feasibility report Resources for commercialisation
• target consumers Total company involvement
• product qualities Harmony with business
Commercial product Acceptance as new product into product mix
• distribution plan Acceptance into company organisation
Stage 4: Product launch and evaluation
Marketed product Long-term acceptance into product mix
Final evaluation report Feedback to future business strategy
• product quality and position Future product development
• production and distribution efficiency Resources for future product development
In the context of product development, middle management plays a crucial role in summarizing knowledge and guiding decision-making for top executives While the Board establishes an overall budget for the product development program, it is middle management that decides on the acceptance of product concepts and allocates resources for individual projects.
Top management plays a crucial role in setting product and innovation strategies, but the involvement of middle managers and project leaders is essential for identifying the necessary knowledge for successful outcomes Their expertise allows them to discern what knowledge is required and what can be developed through the company's capabilities and external resources While final decisions rest with top management, collaboration within the product development team forms the foundation of this knowledge (Jassawalla and Sashittal, 1998) Strategic planning and selection for new products are vital aspects of product development management (Scott, 2000), necessitating alignment between business and technology strategies This alignment can be challenging due to the differing timeframes, with technology strategies often extending up to ten years, while business strategies typically span five years Consequently, strategic knowledge outcomes are dynamic, requiring annual review and adaptation to effectively anticipate and respond to changes in the market.
Effective linking of anticipation and reaction across all management levels is crucial during the initial phases of the Product Development (PD) Process, including project planning, product conceptualization, and the establishment of product and process specifications Acknowledging these elements, as highlighted by Verganti (1999), is essential for successful product design and process design decisions.
• anticipation capabilities – the capabilities to anticipate information into the early phase of product development;
• reaction capabilities – the capabilities to introduce changes late in the PD Process at low cost and time, to cope with unexpected constraints and opportunities.
Early decisions and their desired outcomes in the product development (PD) process are crucial for the project's success Recent trends emphasize allocating more resources to the 'fuzzy' front end to enhance future project development and increase the likelihood of product success However, particularly in innovative and long-term projects, complete anticipation of future events is often unattainable To achieve integrated product development performance—characterized by the shortest time to market and optimal product quality—Verganti (1999) discovered that companies employ varying combinations of anticipation and reaction strategies.
In the initial stages, companies focus on minimizing uncertainty regarding downstream constraints and opportunities, dedicating significant efforts to this process They aim to anticipate future developments while keeping their reactions to a minimum.
• Postponing approach In this fully reactive approach, companies simply start the implementation of product development without anticipating knowledge about downstream opportunities and constraints.
Companies focus on minimizing the likelihood of encountering serious unforeseen events by strategically anticipating critical areas and developing reactive capabilities for efficient late corrections The balance between anticipation and reaction largely reflects the company's risk-taking philosophy and the innovation level of the project.
To effectively manage the Product Development (PD) Process, it is essential to integrate the anticipation of decisions and outcomes with strategic planning for responding to new insights This proactive approach allows for necessary adjustments to be made later in the PD Process with minimal resource and time expenditure Since implementing changes at advanced stages can significantly increase costs, maintaining a balance between anticipation and reaction during early decision-making is crucial.
Flexibility in product development encompasses two key components: structural flexibility and planned flexibility Structural flexibility arises from long-term experience across multiple projects, while planned flexibility is developed through early-phase decisions specific to each project Additionally, anticipation capability involves the ability to identify critical project elements early on and implement proactive measures to address them effectively.
Fig 6.5 Anticipation and reaction capabilities in product development
In the early stages of the product development process, it is crucial to balance the anticipation of predicted outcomes with the establishment of potential responses to uncertain results that may arise later in the project This equilibrium between anticipation and reaction is closely linked to the innovation level of the project, as well as the company's available capabilities and resources.
Top management establishes general strategic outcomes, which are then refined into specific goals by product development managers and project leaders Designers receive product design specifications, serving as blueprints for creating prototypes, while process development engineers use these specifications to design processes that ensure desired product qualities Production engineers, in turn, develop a production system based on the specifications provided by process engineers These outcomes may be developed sequentially or in parallel; for instance, marketing strategy and production development both commence from the product prototype and its qualities, culminating simultaneously in the production and marketing plans This synchronization of outcome timelines is crucial to eliminate delays in the project.
Prioritizing tangible outcomes, such as technical product design, over intangible outcomes, like consumer preferences, can lead to significant issues in product development Companies often invest substantial time and resources into creating a product that ultimately does not align with what consumers truly desire While the technical aspects of a product are measurable, the ideal product envisioned by consumers remains an intangible concept, which is, in reality, the key to successful outcomes.
Organising the PD Process
The PD Process encompasses decision-making, outcomes, budget considerations, and project constraints, all of which lead to the initiation of product creation Successful product development activities involve two key dimensions that guide the overall process.
• functional/technical knowledge and skills (expertise).
Companies exhibit varying levels of functional excellence and technical expertise; however, the ability to effectively organize, execute, maintain, and enhance the intricate product development process is crucial McGrath et al (1992) proposed a grading system for companies based on their product development capabilities, emphasizing both technological superiority and business process efficiency While many companies concentrate on one aspect, world-class organizations strive to enhance their competencies in both areas.
6.6.1 Identifying activities, knowledge and skills
The selection of activities is influenced by the required knowledge, available resources, and time constraints The activity description outlines the expected outcomes, timelines, and usable resources (Earle and Earle, 1999) Figure 6.7 illustrates the inputs and outputs of the activity, including human and physical inputs that lead to necessary outcomes and decisions Each activity employs specific techniques to achieve its desired results.
Product development requires a cohesive integration of various activities, including product, consumer, technical, marketing, and finance In Stage 2, which focuses on product design and process development, it is essential to unify these elements to ensure a successful outcome.
• First main activity: initial prototype development.
Specific sub-activities: modelling, product formulation, ball park processing experiments, protective packaging design, consumer panels.
Fig 6.7 The activity and its inputs and outputs.
• Second main activity: developing the final prototype.
Specific sub-activities: technical development, marketing strategy develop- ment, in-home consumer testing, production testing, market predicting, costing, finance analysis.
Figure 6.8 outlines the key activities involved in developing product prototypes and the final prototype These activities can be categorized into development and testing, as illustrated in Figure 6.9 The design and process development are interconnected with technical, consumer, and financial testing and analysis While sub-activities may differ across projects, those depicted in Figure 6.9 are commonly utilized It is crucial to identify the necessary activities for a project and select appropriate techniques that align with the company's capabilities Although project teams may prefer familiar techniques for convenience, this approach may not yield optimal results, potentially leading to excessive or insufficient knowledge Therefore, while activities may remain consistent, a careful selection of techniques is essential.
Fig 6.8 Main activities in Stage 2: Product design and process development.
1 In the initial activities of Fig 6.9 – ‘getting the feel’, screening, ball park studies – the product design and the process development are conducted at the same time, and the techniques in the development are experimental designs Study two recent product development projects in your company, and identify the activities and techniques used in developing the acceptable product prototypes and compare with the outline steps.
2 For future projects, would you change the activities in developing the acceptable product prototypes? What new techniques could be introduced in future projects?
Fig 6.9 Development and testing in product design and process development
(Source: After Earle and Earle, 1999).
Identifying the necessary knowledge and skills for activities and outcomes is crucial for effective product development This includes both specialist skills, like organizing focus groups and linear programming, and generalist skills such as product design and project control Companies possess basic technical and marketing knowledge, which can be tacit or explicit, and can be further enhanced through external information sources like literature, databases, and the Internet However, transforming this information into actionable knowledge is often the most challenging aspect, requiring time and resources The effectiveness of information bases depends on their presentation, accuracy, and relevance to users, which can significantly impact the innovation process Information technology plays a vital role in collating and refining information, serving as a foundation for ongoing innovation and relevant insights.
Employing new graduates or experienced professionals from other companies and academic institutions can introduce valuable knowledge and skills into the organization Additionally, retraining current staff to acquire essential skills is crucial Effective forward planning, aligned with future product development, is necessary to ensure these strategies are successful.
3 In the two company projects you are studying, how were the design and development integrated with the product testing? When was formal testing started?
4 In testing the product prototypes, what techniques were used? How accurate were the techniques in assessing the product qualities? Are there any new techniques that might improve the accuracy of selecting the acceptable product prototypes? development programme It is not something that can be done when the project has come to a halt because of lack of specific knowledge or the ability to create new knowledge for the company.
Cooper (1999) identified seven ‘blockers’ to product development:
3 Faulty or misapplied new product process.
5 Lack of discipline, no leadership.
7 Too many projects and not enough resources.
The challenges in project development often stem from a lack of knowledge and skills, time and resources, and project discipline Insufficient knowledge can hinder the identification of necessary activities and suitable techniques, particularly in incremental product development where processes are well-defined Staying updated with the latest techniques is crucial, as adopting new software without understanding the underlying material changes can lead to ineffective results For instance, users may utilize experimental design tools without grasping the chemical reactions affecting product attributes like color, texture, and flavor In contrast, radical innovation presents more uncertainty, requiring extensive experimentation to establish product design specifications and project pathways However, possessing skilled knowledge in organizing product development can prevent projects from veering off course in these unfamiliar territories.
1 Identify the tacit consumer knowledge that is in your company and the people who hold this knowledge What are the codified sources of consumer knowledge and information available within the company and from sources outside? How does your company create consumer knowledge during the product development project?
2 Is the ‘bank’ of consumer knowledge within the company adequate for the company’s incremental projects? If not, how could it be improved?
3 Identify people in your company who have knowledge in more than two areas of product development What are their areas of knowledge and how do they integrate these? What are their positions in the company? When and how do they take part in the PD Process in your company?
6.6.2 Responsibilities, resources and timing for activities
Successful product development hinges on effective execution, not just planning It requires all team members to take responsibility, rather than placing it solely on project leaders To achieve desired outcomes, team members must be provided with adequate resources and time to complete their critical tasks Identifying and nurturing these key activities is essential for delivering the right product on schedule and within budget.
Effective product development management hinges on clearly defined responsibilities, spanning from top management's critical decision-making to the specific tasks of individual project team members Each aspect of the product development process plays a vital role in determining the overall success and effectiveness of the product.
• poor optimisation of the flavour may cause an unattractive product to the consumer;
• selection of a variable raw material can cause production problems;
• low resources given by top management may cause lack of knowledge for controlling distribution;
• pressure on timing by marketing can lead to product failure in the marketplace.
So responsibility needs to be identified early in the PD Process as shown in Fig. 6.2 and expanded in Table 6.3, and adhered to throughout the project.
In product development, individual responsibilities are crucial alongside management duties Designers play a vital role, not only in creating products but also in fostering collaboration with other staff and consumers throughout the design process Their responsibilities extend beyond the prototype stage, encompassing integration into marketing and production efforts Effective communication with other team members is essential to ensure that the design aligns with ongoing developments, particularly in process improvement Additionally, production line supervisors must ensure that products meet specifications while also managing yields and costs effectively.
Managing the PD Process
Effective management of the PD Process in a project begins with identifying the internal project management team and integrating external agencies Throughout the four stages of the project, management continuously audits outcomes and efficiency, ensuring the project stays on track The key procedure involves establishing a solid foundation for the project to prevent delays caused by uneven tracks and to avoid derailment.
Effective product development relies on a motivated and engaged team, as the success of this process is fundamentally people-driven Activating and sustaining the momentum of the product development team is crucial, as it serves as the driving force behind innovation By enhancing management strategies and fostering motivation among team members, organizations can significantly boost their product development performance.
The product development team plays a vital role in enhancing project effectiveness and efficiency (Kuczmarski, 1996; Smith and Fowley, 2000) A balanced composition of team members is essential to provide the necessary knowledge and organizational capability, enabling the integration of activities to achieve desired outcomes.
2 How could your company employ or educate its own personnel to take the place of the outside agencies? Would this improve the effectiveness and efficiency of product development in the company? How would you show top management the cost effectiveness of doing this?
3 The philosophy and practice of scientific research in universities during the last
Over the past century, individualism has flourished, granting people the freedom to choose; however, the philosophy guiding science and technology in industry emphasizes the formation of inter- and intra-disciplinary teams with a strategic focus (Ganguly, 1999) To effectively merge the distinct philosophies of academic institutions and commercial enterprises, it is essential to establish robust networks that satisfy all stakeholders and promote the continuous advancement of research and development.
4 In small companies, there are only a few people in product development and they have only certain areas of knowledge Examples are:
A small company specializing in a co-extruder for dough and thick paste faces challenges due to limited marketing skills To enhance its market presence, the company should focus on building an external network by collaborating with industry influencers, attending trade shows, and leveraging social media platforms Establishing partnerships with complementary businesses can also help in reaching a broader audience Additionally, investing in targeted online advertising and content marketing strategies can effectively showcase the innovative technology and attract potential customers.
A small company identified a market demand for a high-protein drink tailored for endurance athletes but lacks technical expertise in product development To address this gap, the company can establish an external network by forming cross-functional teams, which consist of members with diverse skills and experiences relevant to the project These interdisciplinary project teams, engaged from the project's inception, can significantly enhance development efficiency and increase the likelihood of success By leveraging a variety of perspectives and expertise, the company can effectively navigate its technical challenges and accelerate its product innovation.
The composition of a project team varies by company and project specifics, typically featuring a core team that actively conducts activities while continuously interacting with supporting groups As the project evolves, team members may transition roles; for instance, a marketing expert may initially serve as an adviser but become integral during the product commercialization phase Identifying and incorporating essential knowledge and skills from the outset is crucial to ensure that the right expertise is available throughout the project's lifecycle.
A successful multifaceted team requires all members to share a common commitment, perspectives, and values towards the project, as illustrated in Fig 6.12 Team membership should be viewed as a responsibility assigned by management Members must possess a combination of creativity and analytical problem-solving skills, grounded in knowledge and experience While individualistic tendencies may arise due to strong ideas on product development, effective teamwork necessitates strong interpersonal skills Balancing these elements can be challenging, but it is often attainable through experience and strong leadership.
Project leaders must possess strong team-building and conflict resolution skills, along with creativity and effective problem-solving abilities They should be adept product developers and organizers, as organization plays a crucial role in incremental product development However, as projects advance towards more radical innovations, these skills become even more essential for successful outcomes.
Fig 6.12 The core product development team. innovation, it is the innovative thinker who can bring the team to effective product development It is the role of the project leader:
• to ensure that the project progresses smoothly, meeting all interim objectives and targets on time and within budget;
• to make sure that the necessary resources are available when and where they are required;
• to act as the primary channel of communication between the project teams, senior management and any external organisations involved (Jones, 1997).
There are several issues to consider in the coordination and management of new product development teams (Holahan and Markham, 1996; Scott, 2000):
• Team structure, team size, membership composition of teams.
• Team leader selection, team management, team control and evaluation.
• Team operations, inter- and intra-team coordination, communication systems, team member access to project databases.
• Team reward structures, team motivation.
• Team training in teamwork and conflict resolution.
The project leader's approach to team management significantly influences the team's perception of the working environment, learning opportunities, and overall organizational culture, as illustrated in Table 6.4.
Table 6.4 Project leader’s team management
• Identify the activities in the project with the team and set up a coordinated project plan.
• Aid the team members in ensuring the appropriateness, accuracy and efficiency of the techniques they choose for the activities.
• Set up a time and resources schedule for the plan.
• Combine the knowledge and skills of the individuals into a combined group knowledge and skills.
• Lead the creativity and problem solving in the group.
• Ensure communication within the group.
• Organise resources for the project.
• Plan and keep the project on the time schedule by cooperating with the team.
• Continuously monitor the quality of the outcomes to ensure the project’s effectiveness.
• Communicate well with the functional departments.
• Relate the group’s aims and the outcomes from the group’s activities with senior management.
• Track overall time and achievement lines.
To enhance the effectiveness of the Professional Development (PD) Process, it is crucial for leaders to adopt a strong group sponsorship role Leadership that is employee-centered and relationship-oriented fosters a positive work environment and promotes a better learning atmosphere within projects, in contrast to production-centered or change-centered approaches Supporting innovative learning necessitates leaders' willingness to share responsibilities, encourage joint experimentation, and prioritize team objectives.
Assembling a work group and assigning tasks alone does not guarantee synergetic effects; it is essential for the team to cultivate a climate that is supportive, trusting, and challenging (Norrgren and Schaller, 1999).
The core team is united by a common goal and a strategic plan, emphasizing the importance of teamwork through shared values and knowledge Effective collaboration is fostered by continuous, open communication, which is essential for a productive team dynamic Regular meetings facilitate updates on individual activities, result analysis, idea generation, and project alignment Constructive criticism is encouraged to enhance creativity and outcomes Additionally, the core team must maintain close relationships with functional departments, consumers, suppliers, and distribution chain partners, as well as external agencies like consultants and research institutions Successful product development requires effective communication beyond the internal team while ensuring that new knowledge remains confidential.
There are three important factors to consider in managing the team:
1 Education and training of the team.
2 Over-confidence of the team.
3 Cultural and societal background of the team.
Effective education and training for the team are crucial for understanding the Product Development (PD) Process, as many members may lack the necessary knowledge of its decisions, outcomes, and activities (Cooper, 1999) Simply having access to a PD Process document on the internal network is insufficient; a structured training course that includes examples from past projects is essential Additionally, project leaders should undergo advanced training to enhance the effectiveness and efficiency of the PD Process The required knowledge varies significantly among team members, from a young PhD scientist to an experienced process worker, necessitating tailored educational approaches If the team lacks expertise in specific areas like market, technical, or consumer research, further education for team members or external resources may be required.
Company organisation for product development
Organisation and organisational changes were a significant part of food company management in the 1980s and 1990s; this management structuring and restructuring affected product development Companies bought or amalgamated
1 What are the major problems that your company has encountered during commercialisation and launching of a radical new product? What outside agencies has the company used to solve these problems?
2 How do you judge outside agencies providing marketing research, engineering consulting, packaging design and advertising design during commercialisation?
3 How are the distribution/wholesaling operations of marketing to the food service industry similar to and different from those of the food retailing industry? If you had been marketing to retailers, and had a line of new products designed for small family restaurants and takeaways, how would you design the distribution for these products?
4 What are some of the problems involved in exporting a new product into an overseas market? What investigations would you make to identify any import controls and also internal food regulations for the food product? What outside agencies could you use? with other companies to obtain new brands and new products, and either brought together the product development and R&D groups in the two companies and then reduced the size, or dropped the product development group in one company Then it was found that the various technologies in the conglomerate companies did not match, so they divested themselves of some areas and went back to their ‘knitting’ or core group Other companies decided that they were only in marketing and sold off their processing plants and technologies; some decided that cost-cutting was the name of the game and divested or at least reduced their R&D departments In all of this reorganising, the processing and marketing technologies were certainly split apart and in many cases were reduced, and product development was absorbed into one or the other Today there is a need for a more dynamic management system that can grasp the idea of total technology and also be aware of changes occurring both technologically and in society.
There is no right or wrong structure for product development management. The place of product development will be determined for individual companies on the basis of:
• personnel involved; and dare we say, the prevailing fashion in management!
Product development is often misunderstood and undervalued, leading to its relegation as a secondary function in strategic planning This perception causes it to fall under the purview of marketing or technical teams, as senior management may not fully grasp its potential Successful product development requires commitment from top management and a dedicated product champion, though its effectiveness varies across organizations Marketing typically focuses on incremental changes, production emphasizes cost reductions, and R&D drives radical innovations.
In large multifunctional food companies, product development typically resides within the Research and Development (R&D) sector, which serves as the foundation for new scientific and technological advancements This is particularly relevant in primary production, where the lengthy process of breeding new plants and animals occurs A key consideration in product development is whether to structure it within individual scientific disciplines or to establish distinct product development teams, effectively separating research from development.
In 1987, it was noted that scientific disciplines often struggle with a lack of multidisciplinary research, making it challenging to adhere to strict timelines Project groups frequently have limited interaction with foundational research and little to no engagement with consumers or production processes To address this, large multinationals may pursue incremental product development across individual companies or sectors while focusing on radical innovations within their R&D departments This ongoing issue is evident as large companies repeatedly navigate these challenges over the years.
Engineering plays a crucial role in companies focused on process development, particularly within the food processing equipment sector European food companies excel in this area, leveraging it for significant innovations Typically, processes and equipment are marketed to food manufacturers, reducing the necessity for consumer input in product development In smaller firms, product development may occur in laboratories or production settings, where laboratories focus on quality assurance and incremental improvements, while production-driven development aims at cost reduction, yield enhancement, and quality improvement Although these categories are broad, individual companies with passionate teams can foster radical innovations from their laboratories.
‘Marketing’ is also often the home for product development, especially in a strongly marketing-oriented company There may be a product manager who is
In a product development organization, responsibilities may be divided between product managers for established products and a product development manager for new offerings The product development manager plays a crucial role in coordinating market and consumer research, managing the complete marketing mix, and collaborating with technical and production teams to ensure successful product development and production Additionally, challenges in organizing product development are illustrated in a fictional case study of 'Rainbow Products,' highlighting the complexities involved in establishing an effective product development framework.
Fig 6.15 Rainbow Products product development organisations.
The advantages of the product manager system are:
• familiarity with the product area;
• good connections with outside agencies such as advertising agencies, market researchers and retailers;
• real commitment to expanding the product area;
• involvement in all aspects of development;
• direct concern with day-to-day marketing.
Disadvantages of the product manager system for new products are:
• working under great pressure to produce short-term results for all products;
• difficulty in handling complex new products;
• little or no understanding of technological developments;
• difficulty in motivating people in other functional areas.
Product managers frequently struggle to grasp the complexities of radical innovation and its connection to consumer needs and desires As a result, they often focus on creating minor product variations and line extensions This challenge is similarly faced by other marketing department members involved in product development.
Rainbow Products, a well-established company specializing in packaged consumer goods like flours, dried peas, and spices, has undergone significant transformation over the past 20 years Under the leadership of a new general manager, the company expanded its product range to include cake mixes, fruit drink powders, dried soups, and health drinks Recently, it has ventured into UHT soups and drinks, addressing various product development challenges along the way by reorganizing its development processes to ensure continued growth and innovation.
The Chief Executive of Rainbow Products, who initiated product development during their tenure as general manager, has been instrumental in guiding the team In a recent inquiry, you posed several questions to him and his staff regarding their product development processes, aiming to gain deeper insights into their strategies and innovations.
The new product committee, chaired by the marketing manager and comprising the new product marketing manager, product planning manager, and market researcher, plays a crucial role in product planning and go/no-go decisions Occasionally, the Chief Executive participates in these discussions to provide additional insights and guidance.
The Product Development (PD) Process involves several key stages: generating, screening, and evaluating new product ideas; conducting feasibility and concept testing; developing the product and performing consumer tests; creating a comprehensive marketing plan; pre-testing aspects such as product name, packaging, pricing, advertising, and promotion; executing test marketing; and finally, launching the product nationally Throughout this process, there is a strong emphasis on testing at every stage to ensure the product's success in the market.
The product manager highlighted that any product modification is classified as a 'new product' by the new product group After two years of development, an instant chocolate sponge was ultimately discontinued due to a lack of market demand.
Product development is significantly shaped by individuals, including their knowledge, attitudes, beliefs, and cultural backgrounds Acknowledging these factors is crucial for effective management in the product development process.
A new product department can effectively integrate and coordinate a company's capabilities while taking responsibility for product innovation, particularly when there is strong collaboration among functional departments However, it may struggle if competition exists among these departments This approach enhances product development by combining product, processing, and consumer research in the initial stages, yet it often lacks the size to manage marketing and production development during commercialization and launch phases.
References
BOSTON, O.P., COURT, A.W., CULLEY, S.J & MCMAHON, C.A (1998) Design information issues, in The Design Productivity Debate, Duffy, A.H.B.
BURGELMAN, R.A & MAIDIQUE, M.A (1988) Strategic Management of Technology and Innovation (Homewood, Ill: Irwin).
COOPER, R.G (1998) Product Leadership (Reading, MA: Perseus Books).
COOPER, R.G (1999) From experience: the invisible success factors in product innovation Journal of Product Innovation Management, 16, 115–133.
COOPER, R.G., EDGETT, S.J & KLEINSCHMIDT, E.J.(1999) New product portfolio management: practices and performance Journal of Product Innovation Management, 16, 333–351.
DUFFY, A.H.B (1998) Design productivity, in The Design Productivity Debate, Duffy, A.H.B (Ed.) (London: Springer-Verlag).
EARLE, M.&EARLE, R.(1999) Creating New Foods (London: Chadwick House Group).
EARLE, M & EARLE, R (2000) Building the Future on New Products (Leatherhead: Leatherhead Food R A Publishing).
GANGULY, A (1999) Business-driven Research and Development (Basingstoke: Macmillan Press).
GEVIRTZ, C.(1994) Developing New Products with TQM (New York: McGraw- Hill).
GRUENWALD, G (1988) New Product Development (Lincolnwood, IL: NTC Business Books).
HARRIS, J.R & McKAY, J.C (1996) Optimizing product development through pipeline management, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley & Sons).
HOLAHAN, P.J &MARKHAM, S.K.(1996) Factors affecting multifunctional team effectiveness, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley & Sons).
HOLT, K (1983) Product Innovation Management, 2nd Edn (London: Butter- worth).
JASSAWALLA, A.R.&SASHITTAL, H.C.(1998) An examination of collaboration in high-technology new product development processes Journal of Product Innovation Management, 15(3), 237–254.
JONES, T (1997) New Product Development: An Introduction to a Multi- functional Process (Oxford: Butterworth-Heinemann).
KUCZMARSKI, T.D.(1996) Innovation: Leadership Strategies for the Competitive Edge (Lincolnwood, IL: NTC Business Books).
LORD, J.B (2000) Product policy and goals, in New Food Products for a Changing Marketplace, Brody, A.L and Lord, J.B (Eds) (Lancaster, PA: Technomic).
McGRATH, M.E., ANTHONY, M.T & SHAPIRO, A.R (1992) Product Development: Success Through Product and Cycle-time Effectiveness (Newton, MA: Butterworth-Heinemann).
MELTZER, R.J.(1996) Accelerating product development, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley
MILLMAN, J.(1996) Mexican tortilla firms stage U.S bake-off The Wall Street Journal, 10 May, A6.
MULLINS, J.W.&SUTHERLAND, D.J.(1998) New product development in rapidly changing markets: an exploratory study Journal of Product Innovation Management, 15, 224–236.
NORRGREN, F & SCHALLER, J (1999) Leadership style: its impact on cross- functional product development Journal of Product Innovation Manage- ment, 16, 377–384.
O’CONNOR, P.J.(1996) Implementing a product development process, in PDMA Handbook of New Product Development, Rosenau, M.D (Ed.) (New York: John Wiley & Sons).
SCOTT, G.M (2000) Critical technology management issues of new product development in high-tech companies Journal of Product Innovation Management, 17, 57–77.
SMITH, R.E &FOWLEY, J.W.(2000) New product organisations: high-performance team management for a changing environment, in New Food Products for a Changing Marketplace, Brody, A.L and Lord, J.B (Eds) (Lancaster, PA: Technomic).
SONG, X.M., THIEME, R.J & XIE, J (1998) The impact of cross-functional joint involvement across product development stages: an exploratory study. Journal of Product Innovation Management, 15, 289–303.
SOUDER, W.E (1987) Managing New Product Innovations (Lexington, MA: Lexington Books).
SOUDER, W.E & JENSSEN, S.A (1999) Management practices influencing new product success and failure in the United States and Scandinavia: a cross- cultural comparative study Journal of Product Innovation Management, 16(2), 183–203.
SOUDER, W.E.& SONG, X.M.(1998) Analyses of US and Japanese management processes associated with new product success and failure in high and low familiarity markets Journal of Product Innovation Management, 15(3), 208–223.
TAYLOR, P.&LOWE, J.(1997) Are functional assets or knowledge assets the basis of new product development performance? Technology Analysis and Strategic Management, 9(4), 473–488.
TIGHE, G (1998) From experience: securing sponsors and funding for new product development projects – the human side of enterprise Journal of Product Innovation Management, 15, 75–81.
TOMIYAMA, T (1998) Concurrent engineering: a successful example for engineering design research, in The Design Productivity Debate, Duffy, A.H.B (Ed.) (London: Springer-Verlag).
URBAN, G.L., HAUSER, J.R & DHOLAKIA, N (1987) Essentials of New Product Management (Englewood Cliffs, NJ: Prentice-Hall).
VERGANTI, R (1999) Planned flexibility: linking anticipation and reaction in product development projects Journal of Product Innovation Manage- ment, 16(4), 363–376.
The four fundamental stages of the Product Development (PD) Process are consistent across all food product development However, there are notable variations in the activities, techniques, and timelines involved in new product development within the primary production, industrial food processing, and food manufacturing sectors.
Primary production in agriculture involves developing new plant and animal varieties through breeding cultivated species or sourcing new ones from the wild This process is time-intensive, influenced by growth and harvesting cycles, and requires a clear understanding of consumer demands and technical expertise to identify potential parent varieties The first case study highlights the development of a new apple variety within a cooperative fruit processing enterprise and a national horticultural research institution The second case study focuses on mangoes, emphasizing consumer preferences through statistical analysis to evaluate existing varieties and guide improvements This initiative operates within a collaborative framework of government and university research, national growers’ organizations, and private exporters and marketers.
Industrial food processing focuses heavily on processing-based product development, impacting both ingredient suppliers and purchasing companies The food manufacturing sector aims to offer a diverse range of products that consistently evolve to meet consumer demands Significant differences exist between the product development processes for industrial and consumer goods.
Case studies: product development in the food system
The development of industrial food ingredients typically involves collaboration between ingredient manufacturers and processors who will utilize these ingredients in their products These companies often provide specific product design requirements and necessary qualities, leading to a product development (PD) process focused on process development, with customers conducting field-testing A notable example is the case study on whey protein isolate, which highlights the intricate processing and marketing involved This development is supported by an industry-wide research institute in partnership with a university and a large dairy cooperative, emphasizing the collaborative nature of ingredient innovation.
The fourth case study focuses on the creation of a new line of consumer sauces developed by a multinational food manufacturing company This initiative aimed to establish a diverse product platform within a large factory unit, initially targeting local sales before expanding to major international markets The entire product development process was driven by private enterprise.
In studying these case studies, differences in activities in the four stages of the PD Process can be seen, caused by:
Fig 7.1 PD activities for consumer and industrial products (From Earle and Earle, Building the Future on New Products,òLFRA Ltd, 2000, by permission of Leatherhead
• markets for which the products are designed;
• time taken for product development;
• priorities set by the various parts of the food system.
The Case Studies cannot be taken as typical of PD Processes because each has its own special features, but they do illustrate generic features.
Primary production: creating a new apple variety
Consumers choose apples over other fruits like pears or plums for various reasons, including their bright appearance, freshness, affordability, and familiarity from past experiences The appeal of novelty also plays a role in attracting buyers If the taste, flavor, and crispness of the apple meet expectations, consumers are likely to retain a favorable impression and continue purchasing that variety, especially if it stands out Thus, introducing a desirable new apple variety presents significant opportunities for gaining market share.
7.1.1 Product development for a new apple
The area for product development was first identified and then the possible parents chosen In the next generation, there were many variations, screened on technical analysis of:
• product qualities such as sensory characteristics, nutritional value, composi- tion, use, safety;
• production qualities such as production difficulties/ease, disease resistance, yields;
• handling qualities such as deterioration after harvesting and on storage.
The first generation of cultivars underwent screening to identify the most suitable varieties for the next growing season In the subsequent generation, both technical assessments and evaluations by production and marketing experts were conducted to ensure suitability for the market This iterative process spanned several years, ultimately narrowing down selections based on market conditions Final decisions were made by senior company personnel, with input from consumers and distribution/retail customers who assessed the new fresh products Following this, production commenced, collaborating with commercial growers and farmers, leading to the initial small-scale test marketing of the crop.
Developing a new and successful horticultural variety requires an extensive exploration of genetic possibilities, inheritance, disease resistance, and quality retention, often involving trade-offs between various attributes This process spans many generations of seedlings, ultimately narrowing down selections that must grow into trees capable of bearing fruit The goal is to align consumer preferences for their ideal apple with the possibilities offered by nature and the expertise of plant breeders This endeavor typically takes around 15 years, making it a long-term and costly investment, as the financial risks and expenditures may not yield returns for many years While unique challenges arise, the fundamental routines necessary for any new product development remain essential.
For many years, New Zealand operated a 'single desk' system for exporting and marketing bulk apples, allowing apple growers to work collaboratively The Horticulture and Food Research Institute of New Zealand Ltd conducted variety development and granted ENZA the rights to market these apple varieties.
Box 7.1 Horticulture and Food Research Institute
HortResearch specializes in creating innovative plant varieties, leveraging expert breeding techniques across various fruiting, ornamental, and agroforestry crops Our dedicated plant breeders collaborate with industry partners to develop new varieties and rootstocks that offer cultural and market advantages for growers This work is supported by our robust in-house scientific expertise in sensory science, genetics, and plant physiology, enabling us to make informed selections that cater to diverse environments, end uses, and the preferences of different cultural groups, both in New Zealand and globally.
The fruit breeding programmes aim for variety, flavour, texture, storage life, appearance, productivity, pest and disease resistance and climatic adaptation.
HortResearch is a world leader in apple cultivar development Examples of our success are the Pacific apple series (‘Pacific Rose’, ‘Pacific Beauty’, and
ENZAFRUIT has introduced the new apple variety 'Pacific Queen,' which is backed by comprehensive technical support in orchard production, integrated pest management, postharvest handling, and related expertise from HortResearch.
Source: Adapted from a publicity letter from Dr Ian Warrington, CEO, HortResearch.
Table 7.1 outlines the stages and approximate timing for the development of Pacific Rose, highlighting the lengthy time scale required for each generation's seedlings to mature before their fruit can be assessed.
Plant breeders often discuss development cycles, which are loosely associated with the PD Process Due to the complexities involved in apple development, there isn't a fixed launch date; instead, the market experiences a gradual rollout as the fruit becomes available.
Management recognized that the current apple varieties had become stale in the market, prompting the need for a new variety to maintain a competitive edge This ongoing search for innovation intensified as competitors introduced their own unique offerings Plant breeders reflected on their extensive experience with apple varieties, aiming to identify key characteristics that would differentiate the new variety and attract consumers.
Table 7.1 Timetable for the development of Pacific Rose apples
Discussion from ‘Pacific’ markets of need for blush apples
Grown in open ground 8000 seedlings
Selected on resistance to ‘blackspot’ and
2nd cycle (product design and process development)
Grown in fruit selection orchards 5000 seedlings
Grown on two sites 100–200 seedlings
Selected by plant breeders, pomologists,
2 years on fruit and growing characteristics
Judged for market suitability 10 seedlings
3rd cycle (product commercialisation and product launch)
1993 Seedlings distributed to growers 1000 cartons
1994 Pomology developed, storage trials 5000 cartons
1995 Multiplied by commercial breeders/growers 22,000 cartons
In 1996, the commercial production of 104,000 cartons highlighted the potential for developing a new apple variety, driven by market insights revealing gaps in current offerings and sales trends Although the exact consumer preferences were unclear, a set of desirable attributes was established, focusing on qualities derived from trial seedlings of specific cultivars A key factor in the purchasing decision was the apple's appearance, leading to the choice of a 'blush' apple characterized by a harmonious blend of red and yellow hues Targets were set for sweetness, acidity, flavor, fruit shape, texture, and crispness, while also addressing essential grower concerns like disease resistance, yield consistency, and storage qualities This ambitious project required a long-term commitment of 10 to 15 years to successfully introduce the new variety to the commercial market.
7.1.3 Stage 2: Product design and process development
The initial selection cycle involved a swift screening process, where approximately 20,000 seedlings were evaluated in glasshouses over six months This process narrowed the selection down to 8,000 seedlings in an open ground nursery, focusing on identifying those resistant to blackspot disease over an 18-month period.
In the second cycle, approximately 5,000 apple cultivars were planted in fruit selection orchards after being selected for resistance to powdery mildew About 2% of these cultivars were chosen based on their fruit characteristics and advanced to the next cycle A selection index was created, employing a scoring system where various desirable attributes were rated by the team on a scale from one to ten, as demonstrated in Table 7.2 Cultivars that received an overall quality rating of less than seven were discarded.
The designation evolved from a concept to a tree number, ultimately resulting in the name Pacific Rose, originally known as Sciros Throughout the generations, specific and desirable characteristics were prioritized, though some had to be compromised as selections progressed To address these challenges, value hierarchies were established to guide the selection process and were periodically reviewed.
In addition to consumer and grower characteristics, it is essential to consider important genetic factors, including the heritability of key traits like mildew resistance, which will play a significant role in future crop development.
Colour intensity Light | 2 _| Heavy Lenticel: Inconspicuous | _3 | Very
Flesh firmness Soft | _7 | Hard Flesh crispness None | _7 | Very Flesh grittiness Soft |0 _| Hard
Aroma Delicate | _5 | Rich Astringency Nil |0 _| High Bitterness Nil |0 _| High
Skin thickness Thin | _5 | Thick Skin greasiness Dry | 2 _| Greasy Skin texture Non-chewy | 4 _| Chewy Skin flavour Not significant
The assessment of seedlings, conducted by a diverse group beyond just plant breeders, is crucial for successful selection and propagation Initially, a laboratory team performed the scoring, but as the process progressed, a broader group was involved Despite the monotonous and repetitive nature of the work limiting team size, a standardized scoring system effectively narrowed down the candidates to approximately one hundred for further establishment and growth in orchards.
Development of Thai mango products and their
competitive advantage in export markets
Mangoes are a significant traditional fruit in Thailand, with numerous local varieties and some international ones cultivated The country has developed a substantial export market for mangoes, which plays a vital role in its economy Recognizing the need for a more systematic approach, efforts are being made to analyze and identify the mango varieties that appeal most to international consumers This initiative aims to enhance overseas sales and improve marketing strategies through targeted product development and consumer preference analysis.
The development planning was a collaborative effort involving the Thai Departments of Agriculture and Agriculture Extension, along with researchers from Khon Kaen and Kasetsart Universities, and prominent mango growers and exporters Through discussions, the primary objectives for the study were established.
• select the most suitable ripe and fresh varieties for export to three markets, Japan, China, and the Middle East;
• find the best potential distribution channels; and
• develop suitable brand names for the selected varieties.
The study aimed to analyze consumer preferences for Thai mangoes by examining chemical properties like aroma and volatility, as well as physical characteristics such as shape and stone size By correlating these measurable attributes with customer preferences, the research will yield valuable insights for growers, plant selectors, breeders, exporters, and marketers, ultimately enhancing the Thai mango export industry.
To effectively manage the extensive project, it was divided into ten distinct activities, each assigned to specific research groups, with some members participating in multiple teams These groups operated in suitable locations, laboratories, and departments, all under the supervision of the Mango Project Leader The detailed activities can be found in Table 7.4.
The study examined five major varieties of commercially grown Thai mangoes, along with two introduced varieties, analyzing their chemical and physical properties, aroma volatiles, and consumer preferences This research aimed to correlate these factors with the measured properties to provide a comprehensive case study Additionally, a separate analysis focused on identifying the best brand names and attribute descriptions for effective commercial and marketing strategies The consumer base for this study included participants from Thailand, Japan, China, Hong Kong, and the Middle East.
Due to practical considerations such as the availability of suitable subjects and materials, the number of consumers involved in the tests varied across different sections The study consistently accounted for its statistical foundation and requirements, ensuring that the results were statistically evaluated to support the conclusions drawn.
A research team conducted a comprehensive study on mango varieties produced both in Thailand and internationally, focusing on their usage, production methods, transportation and storage durability, and taste characteristics They reviewed existing literature and consulted with mango growers and industry stakeholders to gather essential information This process aimed to identify the most promising mango varieties that could support a viable and expanding industry for further detailed investigation.
Physical properties of the fruit
A study examined various physical properties of fruits, including fruit weight, size, seed size, seed weight, and thickness Additionally, it assessed the skin and flesh weight and thickness, along with their respective colors and textures.
Another group looked at chemical contents and measured moisture, total soluble solids, acidity, sugar, beta-carotene (vitamin A) Also the sugar/acid ratios were noted.
Flavour constituents were measured including sugars, acids and aroma volatiles. For example, they showed the extent, as the fruit ripened, of the decline in the
Table 7.4 Mango product development study workgroups
1 Mango variety and industry survey
2 Physical properties – size/shape/colour
4 Chemical properties – analysis and flavour
5 Quantitative descriptive analysis – relationships of sensory attributes
6 Consumer preferences – shape/colour/texture/flavour
7 Consumer preferences – correlation with sensory/analytical
8 Consumer preferences – national likes/dislikes
9 Commercial – target markets/channels/distribution
10 Marketing descriptions – brand names/slogans/labelling sucrose content and the increase in fructose and glucose Succinic acid was the most prominent acid, while malic and citric acids were also important; individual contents of these acids varied and could be used as indicators of varieties Aroma volatiles were measured by gas chromatography Detailed contents were explored, and the total volatile contents were found to vary with varieties.
A central location test was conducted to assess consumer preferences for various Thai mango varieties using a nine-point hedonic scale, involving Chinese, Hong Kong, Japanese, Middle Eastern, and Thai consumers residing in Thailand The study aimed to identify the best Thai mango for export based on sensory characteristics favored by the target market, focusing on attributes such as skin color, fruit size, flesh texture, and overall liking Results indicated that fruit shape, aroma, and skin appearance had a stronger correlation with overall liking compared to other characteristics Ultimately, one mango variety emerged as the preferred choice, although preferences varied based on specific attributes.
A study involving approximately 600 Chinese and 400 Japanese tourists in Thailand examined their preferences for the sensory characteristics of two mango varieties Key attributes analyzed included skin appearance, fruit color, size and shape, flesh color and flavor, aroma, and overall liking, utilizing hedonic scales The findings revealed distinct attribute profiles for each mango variety, with one variety being favored by both tourist groups.
A systematic comparative technique known as quantitative descriptive analysis (QDA) was used to evaluate six mango varieties and establish links between their sensory attributes The findings revealed that fully ripe mangoes significantly differed in perceived fruit size, weight, thickness, and aroma strength Notably, the preferred variety was identified as the smoothest, juiciest, and most tender, despite not being the largest, heaviest, or thickest, nor having the strongest aroma.
The experimental results indicated that the Num Dok Mai See Thong mango was the most preferred variety among consumers across different countries, followed by Rad and Ma Ha Cha Nok This preference was backed by detailed sensory evaluations and substantial information regarding the fruit's attributes The study provided clear statistical signals for growers regarding plant selection and cultivation, for the trade concerning handling and storage, and for plant breeders on which characteristics to focus for future experimentation.
A strong brand name and image significantly impact commercial success, prompting a dedicated group to conduct consumer research aimed at effectively creating these elements for target markets They gathered brand names and concepts related to fresh fruits through literature reviews, expert interviews, market observations, and brainstorming sessions This information informed the development of questionnaires for field surveys Experts then designed logos, brand stickers, and packaging labels incorporating the selected brand names The survey revealed that key consumer attitudes included health, nutritional value, color, convenience, texture, ease of preparation, and price Sensory characteristics of the fruit were deemed most significant, followed by consumer concerns like nutrition, price, and prestige Ultimately, the preferred brand name identified was ThaiMango, accompanied by the slogans "Your Fresh Taste" and "The Fresh Taste."
Another group investigated distribution channels Their interest took in the target markets:
• patterns of marketing of mangoes;
• volumes and values of these products; and
• potential market channels and the role of fresh mangoes.
The study analyzed various distribution and delivery methods, including land, sea, and air transport, while exploring sales channels to agents, trading companies, institutions, retailers like supermarkets and convenience stores, and domestic consumers It also identified management and financing options, such as joint ventures, which vary significantly between countries Additionally, government regulations played a crucial role, encompassing inspection, treatment, certification measures, and fiscal rules like entry taxes and tariffs, all of which are specific to each nation.
Industrial products: PD Process and management for
The New Zealand dairy industry operates primarily as a farmers' cooperative, featuring dairy companies that process milk and are represented on the NZ Dairy Board, which markets dairy products globally Key subsidiaries include New Zealand Milk Ltd and Whey Products New Zealand Ltd, with the latter focusing on marketing industrial milk proteins Industrial milk proteins, such as caseins and whey proteins, are further categorized based on their properties and applications.
1 Many product development programmes are conducted, sometimes with successful outcomes, using little or no consumer research They rely instead on historical data and expertise and experts, to provide market predictions Review the case for and against this approach.
2 One of the problems in consumer research for the food industry is to secure a true ‘population’ sample In this case some use was made of expatriates and tourists rather than home residents for the sampling To what extent might this make the results skewed in some way and less valid?
3 Producers of raw materials, and in particular agricultural raw materials, have some special difficulties with new product development To what extent do you feel that their needs can be fitted by a standardised PD Process, and to what extent might it be better for them either to have a standard process of their own, or to set up ad hoc processes with each particular situation?
4 This and many other consumer surveys reveal cultural differences, which should be taken into account in the PD Process as they may influence the success of the outcomes Reflect on whether cultural differences should, or need to,influence the management of product development, and if so in what aspects?
Whey is the liquid byproduct of cheese production, rich in lactose, a small amount of fat, and whey proteins, along with a significant water content During the production of whey powder, lactose and water are separated from the proteins, which can also be further fractionated due to their diverse nature.
Specific protein fractions exhibit unique characteristics, which can be defined by their physical, chemical, functional, and nutritional properties These distinct fractions hold the potential to inspire the development of innovative food products (Huffman, 1996).
Product development involves designing processing methods for protein fraction separation and identifying viable markets The product concept is defined by its technological characteristics and processing capabilities Research highlights the nutritional importance of whey proteins in the human diet, emphasizing the need for large-scale production of these proteins with specific functionalities Consequently, the product development process must tailor these protein products to meet the identified market demands.
The New Zealand Dairy Research Institute in Palmerston North, along with its international laboratories, including one in California, plays a crucial role in the research and development efforts of the NZ Dairy Board To enhance their technical capabilities, they collaborated with Massey University’s Food Technology Research Centre on product evaluation and model testing, as well as with the Chemistry Department on ion exchange resins Their partnerships extended to regional NZ Dairy Board companies in the USA, Europe, and Japan for market assessments, and with Kiwi Dairies Ltd for processing aspects Effective coordination, managed by Whey Products New Zealand Ltd, was essential due to the lengthy development timeline and the involvement of multiple groups The development sequence and activities of these groups are illustrated in Fig 7.2.
In the pre-design and development phase it was necessary to assemble knowledge, tacit and written, from a variety of sources within the various parties This included:
(a) heat behaviour of whey proteins,
(b) properties and potentialities of ion exchange resins, which could separate even more tightly defined protein constituents,
(c) expected functional properties of various fractions that might be prepared, and
(d) existing or achievable manufacturing processes which might be challenged or improved by new ingredients.
• On the marketing/commercial side –
(a) selected market, its demands, characteristics and expected growth, (b) available raw material, whey, its increasing supply and competing uses, (c) expected financial returns and their stability,
(d) security of the process against competitive inroads if the project proved successful,
(e) anticipated profitability of the venture.
The product's originality and potential market impact were assessed alongside its critical formulation, highlighting its technical advantages and alignment with market demands Leveraging the NZ Dairy Board's international marketing network and its vertically integrated structure provided access to extensive expertise, enabling effective engagement with existing and prospective customers to identify their needs and preferences.
The application of ion-exchange resins in the global production of whey protein has been minimal, making its expansion a crucial aspect of the project, necessitating a thorough analysis of associated costs Initial research led to the development of a clear product concept.
• unique, competitively robust, acid beverage component powder;
• high-protein, low-lactose/cholesterol/fat;
• made from a wholly natural product, whey.
The project aims to cater to the growing sports market in the USA, Europe, and Japan It will utilize a production process based on predictable and accessible data, ensuring that the required technical advancements are feasible and that raw materials are readily available The initiative is expected to be profitable.
7.3.2 Stage 2: Product design and process development
The development of a high-quality whey protein powder necessitated a thorough investigation of its critical product qualities, particularly aiming for a protein content of 90% while minimizing fat and lactose Previous formulations fell short of these specifications, prompting the need for advanced membrane separation techniques to eliminate larger fat globules, although this posed a risk of protein loss To enhance yield, preliminary modifications in fat globule flocculation were essential before microfiltration Additionally, lactose, which could pass through the membranes, was targeted for breakdown into simpler sugars using enzymes The process also involved ion exchange methods, where altering acidity allowed for the binding and subsequent release of protein from the liquid whey using ion-exchange resin Each of these steps required meticulous exploration to ensure they could be effectively scaled for industrial production while meeting stringent specifications.
The functional properties of a product, alongside its chemical composition, are crucial for its specification, as they determine its unique suitability for intended applications and its competitive advantage Key properties include:
• very high solubility in acid solution, so that a clear, high-protein liquid with an acidic taste would result on dissolving the powder;
• sufficiently bland flavour of its own so that added flavouring can determine the taste of the drink; and
• demonstrated nutritive value because it is this that convinces athletes of performance-enhancing potential.
To effectively produce large quantities of whey protein isolate from fresh milk, it is essential to develop a process that can adapt to the natural variations in milk composition throughout the dairying season, while ensuring compliance with stringent specifications for the final product.
Consumer products: new products and a new platform
For large food manufacturers like Wattie Industries, a consistent introduction of new products is essential for growth and long-term success Established over 30 years, Wattie Industries became New Zealand's largest food processing company, boasting a diverse range of canned and frozen products and a significant market share However, its success attracted various reorganizations, culminating in its acquisition by the international company H.J Heinz Now operating as Heinz Wattie’s Limited, it plays a crucial role in Heinz's global production, with a strong focus on expanding its market presence in Australia and Japan.
Hastings, New Zealand, is home to a major food production facility employing approximately 1,800 people and producing around 200,000 tonnes of canned goods annually, including 40,000 tonnes of soups, baked beans, and spaghetti for Heinz, Australia The plant features the world's largest hydrostatic cooker, with a production capacity of nearly half a billion canned units each year Recent investments of NZ$100 million over the past five years have enhanced sorting, handling, and processing capabilities, driven by a growing demand in the Japanese market Additionally, the facility boasts a dedicated product development team of over 40 professionals, focused on creating innovative food products for selected international markets.
The new product chosen was a line of speciality, variety sauces, and an outline of the PD Process that was used is shown in Table 7.5.
In mid-1997, the company sought to modernize its brand by introducing a new sauce product, moving beyond its established tomato-based sauces and canned hot meal options The goal was to create a premium, quirky, and fun sauce that would enhance culinary experiences and stand out in a fragmented market of 300 products from 31 brands in New Zealand Following a brainstorming session, the team developed a concept that led to the creation of six innovative flavors, marking a significant departure from the company's traditional, dependable offerings This venture not only challenged existing formulation and packaging norms but also required a distinctive brand name to match its unique positioning in the market.
The brief was assigned to a product manager from the marketing group, and presented to a product development team on 7 July 1997 The required time scale was very short, four months.
7.4.2 Stage 2: Product design and process development
Major innovative issues arose in formulation, including product characterisation and scaling up from batches of a few litres at the laboratory stage, through about
The pilot plant operates at 500 litres, while the production plant scales up to thousands of litres Achieving the desired flavour balance from initial recipes to final formulations required extensive experimentation Maintaining the final acidity post-processing was crucial for quality assurance, particularly with certain sauces, presenting significant challenges.
Table 7.5 Activities in sauce PD Process
Product strategy – inception of initial concept – preliminary product development work and planning – formulation of product development brief and project plan.
Decision: Acceptance to proceed as a Project by Product Manager
Product design: 9 July 1997 to 1 October 1997
Product design and process development involve conducting preliminary surveys and estimating costs, followed by recipe formulation, assessment, and refinement This process includes laboratory evaluations, ingredient assessments, and engineering experimentation Additionally, preliminary packaging and label information are developed, alongside cooking procedures Finally, quality assessment and control measures are established to create a comprehensive product and process specification.
Decision: Assessment and approval of plant related expenditures and project continua- tion.
On September 25, 1997, factory trials were conducted, followed by a finished product assessment on September 29, 1997 This process involved product commercialization, gathering feedback to address shortcomings, preparing and checking trial samples, and planning for factory operations Additionally, marketing strategies were developed, sales forecasts were created, and final costings were established to ensure a successful launch.
Decision: Acceptance of formal specifications and Approval to proceed to launch, by Senior Management.
Production: Started 22, 23, 24 October 1997 Launch approval: 22 October 1997 Launch: November 1997
Product launch and evaluation – factory production – presentation to sales and trade – marketing of products.
The article discusses the importance of gathering feedback from sales, marketing, and retailers to review product lines, withdraw less successful items, and plan new additions to the platform It emphasizes the need for further development and launches while addressing technical aspects like sauce viscosities and the behavior of starches and thickeners Additionally, it highlights the significance of managing ingredient quality by collaborating with suppliers to ensure low mold counts, ultimately aiming for adequate product shelf lives The solutions to these challenges require extensive laboratory and pilot plant work.
Intensive efforts began on August 5 to develop six distinct and appealing sauces, culminating in finalized product specifications by September 12 The packaging design faced challenges due to time constraints, necessitating the use of available long fat-necked soft drink bottles To accommodate hot filling with visible ingredient pieces, label designs and deep anti-tamper sleeves were created, the latter cleverly masking any variations in fill levels caused by differing sauce densities This inconsistency inadvertently provided heavier sauces with a competitive edge, prompting the need for a more precise filling system in the future Following a product demonstration, the decision was made to alter the bottle tray configuration from 43 to 5.
2, so as to improve display, and this required a last minute reorganisation and redesign of the corrugated board trays and cartons and their assembling lines So packaging was a busy scene.
The project involved three key teams: the product manager's team in Auckland and the product technology and packaging technology teams in Hastings Effective coordination and collaboration among all team members, utilizing their diverse expertise, were crucial This excellent cooperation across various skills significantly contributed to both the project's successful outcome and the rapid timeline in which it was achieved.
Product factory trials commenced on 25 August, involving the development team and available local staff, highlighting the need for innovation to transition from a largely manual process to a more automated system Challenges arose with certain ingredients, particularly plum pulp, in achieving the desired consistency for a premium product Extensive testing was conducted to refine procedures and formulations, ensuring the final product met the expected texture, appearance, and flavor Adaptations to quality assessment and statistical process control were made to fit the unique characteristics of the new products Significant focus was placed on packaging, particularly the hot-filling of sauce with particulates into challenging necked glass bottles and the application of deep plastic wrapping around screw caps This required skill and equipment upgrades, with meticulous attention to the glass capper and in-line labeller By 29 August, the assessment of the finished product was successfully completed.
Significant marketing activity surrounded the launch of the new product platform for sauces, culminating in the controversial choice of the name "A Bit on the Side," suggested by design consultants This title marked a shift from traditional descriptive naming, aiming to appeal to a younger, adventurous demographic The selected name, along with creatively spicy individual sauce names and minimalist descriptions on eye-catching labels, was designed to maintain interest and distinction among the six sauces in the lineup.
7.4.4 Stage 4: Product launch and post-launch evaluation
The product launch in New Zealand prominently featured the platform name through strategic advertising, particularly with eye-catching billboards in Auckland This clever marketing approach aimed to attract a wide array of enthusiastic candidates leading up to and during the launch event.
The promotion titled 'Bit on the Side' cleverly generated curiosity by initially omitting any mention of a sauce, later enhanced by showcasing a labeled bottle image, as shown in Fig 7.3 This strategic approach effectively captivated the audience's attention.
Heinz Wattie’s introduced the ‘Bit on the Side’ sauce to differentiate itself from everyday sauces, targeting consumers seeking ‘experiential’ eating With strategic TV advertising during prime time and engaging cookery clips, the campaign aimed to encourage repeat purchases and establish new eating habits Within three months, the new products rapidly became the brand leader in New Zealand, successfully filling a previously identified market gap with appealing offerings.
Heinz Wattie’s withdrew two of its sauces that closely resembled existing, popular, and cost-effective options, likely due to insufficient differentiation To enhance their product line, they introduced additional new flavors, expanding their range Following two successful years in New Zealand, the 'Bit on the Side' sauce, featuring four products, was launched in Australia The recipes were adjusted based on consumer research to align with local preferences However, the Australian sauce market was more advanced and competitive, leading to a less significant market impact compared to New Zealand Factors contributing to this included a crowded sauce market, inadequate initial awareness from the promotional campaign, and a limited product range available on store shelves.
Business category manager, Rose France, says the market was ready for the new range with cheeky perceptions.
Some brief comments on the case studies
This article presents selected case studies that exemplify the Product Development (PD) Process within various common scenarios in the food industry While each case is unique, they collectively highlight the practical application of the concepts discussed in this book and illustrate how real product development challenges have been effectively addressed.
The first case study looked at a fruit, fresh apples, that is quite a major commodity, moving from New Zealand to world markets with relatively little
Table 7.6 Heinz Wattie’s ‘Bit on the Side’ sauce range
New Zealand: Launched 1997 – Sweet Chilli, Java Satay, Oriental Plum, Spicy Tomato, Gourmet BBQ (later deleted), Ketchup later deleted
Added, 1999 – Sweet Mustard, Spiced Apricot, Cracker Cranberry
Added 2000 – Cool Mint, Absolutely Apple, Salsa (four varieties)
Australia: Launched 2000 – Sweet Chilli, Oriental Plum, Java Satay, Gourmet BBQ Added 2000 – Del Gourmet BBQ
1 Heinz Wattie’s put the four new salsa products on to the existing product platform Would it have been more effective to have started another product platform?
2 How do you see that further innovations could be built from this on to a new product platform?
3 This was an extremely fast, major product development, from brief to launch. What do you consider the essential elements allowing this to be achieved? What, if any, additional activities might have been able to improve the outcome?
4 If you were asked to launch a similar product on your home market, how would you go about it? processing For fresh fruits, product development into new varieties can be a powerful tool in gaining and retaining market share, and the aim of the project was to develop a new type of apple which could lead to a number of varieties A great deal of expertise had been built up and this substantially guided the project, though it was appreciated that this has vulnerabilities and increasingly inputs from the consumers are being sought Modern technology has opened up possibilities for more organised and sophisticated technical developments for the growing processes, but this type of product development has special features of its own and in particular a long time scale which many food companies would find very hard to contemplate.
The second case study focused on enhancing returns from a significant export trade of a consumer fruit, utilizing modern statistical techniques in consumer research It achieved two key objectives: first, to inform short-term decision-making by optimizing the use of available fruit and its market organization; and second, to generate valuable insights for guiding future breeding and improvement of fruit varieties.
The third case study highlights an ongoing initiative aimed at creating valuable specialized food ingredients from a primary food raw material This involved sophisticated processing techniques that were essential for both production success and market viability The foundational information was sourced from existing literature and expanded through the efforts of development technologists, who undertook extensive technical work in product development, processing, and technical sales Significant design and commissioning efforts, along with capital investments and marketing strategies, were necessary Ultimately, the goal was to produce a high-grade, precisely specified ingredient that could be exported to meet the stringent acceptance criteria of premium manufactured foods.
The fourth case study highlights a well-established food manufacturer aiming to diversify into a new product platform Despite having a robust in-house product development and marketing team, the company faced several challenges, including designing a unique product and image, managing novel packaging issues, reorganizing the industrial line, and implementing innovative marketing strategies, all within a tight timeline.
Acknowledgements
Grateful acknowledgement is made to the sources of information for these case studies In particular, sincere thanks for their time and trouble to: Dr Ian
Warrington, CEO, and Allan White, Portfolio Manager for Pipfruit New Varieties at HortResearch, alongside Tim Allen, New Product Development Manager at ENZA, and Dr Tipvanna Ngarmsak, Mango Project Director at Khon Kaen University, are key figures in their respective fields Additionally, Drs Allan Anderson, CEO, and Mark Pritchard from The New Zealand Dairy Research Institute, along with Gerry Townsend, Product Development Manager, and Suzanne Weston, Product Development Technologist at Heinz Wattie’s, contribute significantly to product innovation and research in the agricultural sector.
References
EARLE, M & EARLE, R (2000) Building the Future on New Products (Leatherhead: Leatherhead Food R.A Publishing).
HUFFMAN, L.M (1996) Processing whey protein for use as a food ingredient. Food Technology, 50(2), 49–53.
NGARMSAK, T.(2000) Development of Mango Products and Their CompetitiveAdvantage in Export Markets (Bangkok: Thailand Research Fund – translated from Thai).
Best practices in product development are constantly evolving, requiring tailored applications to fit the unique needs of different organizations While eight fundamental principles and four stages are universally applicable, changes in a company's philosophy, knowledge, skills, and resources influence the nature of product innovations and development activities Successful companies view product development as a strategic priority that necessitates ongoing assessment of performance and success rates, integrating these evaluations with their strategic goals to enhance future effectiveness and efficiency Balancing creativity, essential for innovation, with critical evaluation can be challenging, as creativity explores the unknown and embraces mistakes, while evaluation seeks to identify and rectify errors Leading companies effectively blend these two processes to foster both innovative and sound product development.
Product development is inherently tied to a company's history, philosophy, and expertise, with its effectiveness and efficiency serving as indicators of its competitive standing within the industry By assessing these factors, companies can formulate strategic plans to enhance their product development processes As illustrated in Fig 8.1, the simultaneous improvement of product development effectiveness and efficiency is crucial for achieving strategic product success.
Improving the product development process indicated by the company top management Product development effectiveness and efficiency are inextricably linked.
Key messages
Successful product development does not follow a one-size-fits-all approach As highlighted in previous chapters, several fundamental principles are universally applicable to achieving success in product development, as summarized in Table 8.1.
8.1.1 Link to overall business strategy
Effective product development should prioritize 'doing the right things' and align closely with the overall business strategy This alignment ensures that product development both guides and is guided by the broader business objectives The approach taken—whether reactive or proactive—will vary based on the organization's characteristics and its specific goals.
Fig 8.1 Evaluating and improving product development.
Table 8.1 Basic principles of product development
Link to overall business strategy Balanced product development portfolio Clearly defined product development strategy
Appropriate systems and processes for project management
Appropriate human and physical resourcesCommitted and supportive organisational climateUnderstanding the consumer, customer, market and society
The business goals and strategy should define the key criteria to be used in preparing the product development portfolio These include:
• degree of novelty or newness;
Preparing a balanced portfolio of new product development, consistent with business aims, is a critical part of product development management.
8.1.3 Clearly defined product development strategy
The product development strategy should provide:
• total clarity about the relationship between the portfolio of product development projects and the overall business strategy;
• clear definition of the portfolio of new product development projects relative to business selection criteria;
• indication of the costs and timeframes involved to achieve the desired outcomes of the portfolio;
• indication of the resources required to achieve the desired outcomes – what resources are required internally and what should be out-sourced.
An effective product development strategy serves as the foundation for the tactical strategy that structures the product development program and its individual projects However, many companies experience a communication gap between these strategies, which can hinder the coordination among designers, engineers, marketers, and production teams This disconnect ultimately diminishes both the effectiveness and efficiency of the product development process.
8.1.4 Appropriate systems and processes for project management
To ensure successful project execution, it is essential to establish effective systems and processes that support each initiative The Product Development (PD) Process consists of four key stages: product strategy development, product design and process development, product commercialization, and product launch and evaluation While each project may involve unique activities, decisions, and outcomes, many share common elements that significantly influence their success.
The PD Process is crucial for completing projects on time and within budget, but it should not be standardized for all projects, as it varies based on the company's unique needs, innovation levels, and technological expertise Companies can tailor PD Processes for different types of projects, such as product improvements versus major innovations, and adapt them for consumer versus industrial products The potential costs of product failure influence the extent of market and business analysis conducted; lower costs may lead to shortcuts, while a higher risk tolerance could result in fewer activities Conversely, a company cautious of product failures is likely to engage in more thorough analysis to enhance its understanding of technology and market dynamics A platform-based approach can be employed in developing both new products and services, directly linking to the design of systems and PD Processes.
8.1.5 Appropriate human and physical resources
Effective product development hinges on having the right resources, particularly skilled and dedicated people Their knowledge of technology, market trends, and product development processes is crucial for success Teams that can collaborate across functions are essential in leveraging systems and processes to their advantage It is vital to acknowledge the tacit knowledge held by individuals and teams, as well as the external knowledge available Ultimately, the capacity to generate new insights and knowledge throughout the project is what drives successful outcomes.
8.1.6 Committed and supportive organisational climate
The organisational climate plays a crucial role in successful product development, often overlooked in existing literature despite its significant influence on outcomes This climate encompasses various factors that can substantially affect the effectiveness and efficiency of the product development process.
Effective decision-making by top management is crucial at the onset and throughout the project lifecycle It should be timely and informed, providing the project management team with clear and consistent directions Any changes to these directions must be based on thorough knowledge and discussion to ensure project stability and success.
8.1.7 Understanding the consumer, customer, market and society
Understanding the needs, wants, attitudes, and behaviors of the target market is crucial for successful product development; failure to do so can lead to product failure in both the short and long term The food industry has faced skepticism from consumers regarding new innovations, often prompting regulatory measures to ensure safety and trust Therefore, it is essential to integrate immediate customers, whether industrial users or retailers, into the product development process from the initial concept stage through to post-launch evaluation Ultimately, the final consumer, who purchases and consumes the food, plays a vital role in the development of new food products.
Evaluating product development
Conducting a post-development review of a product development project and regularly assessing the product development program is essential for identifying strengths and weaknesses in a company's product development process This involves comparing the initial product strategy with the final market product, aligning product characteristics with consumer needs, and evaluating the efficiency of the development project against the launch implementation Key measures for the product development program include analyzing these comparisons to enhance future projects and ensure alignment with market demands.
• ratio of major innovations to incremental products;
• key differentiating factors in products and services;
• number of new products in a time period;
The authors have summarised what they identify as the basic principles of product development from the preceding seven chapters.
1 Do you agree with their list? Have you identified any other basic principles? Would you drop some of their basic principles?
2 Compare with other principles in the literature, e.g Cooper and Kleinschmidt’s
(1995) factors found to drive new product success.
3 For your own company, list the basic principles for product development at the present time.
4 How have these principles changed in the past and how do you predict they will change in the future?
5 List the basic principles for product development for your company for the next decade.
• programme complexity – the size of the programme and the interrelationships between projects;
• commercial constraints on the programme;
• company pressures on the programme.
In recent years, there has been a growing focus on evaluating product development methods Barclay et al (2001) introduced the assessment tool and methodology (ATM) to measure product complexities and newness, linking them to product development activities and processes Clark and Wheelwright (1993) created a project auditing method, while Cooper and Kleinschmidt (1995) developed a tool to identify critical success factors in product development, utilizing measures for programme profitability and its impact on the company These measures allowed for the classification of companies based on their performance in product development.
• high-impact technical winners with highest product success rate and % sales from new products, but not so high profitability
• dogs with poorest performance on all measures
• solid performers with highest profitability and second highest product success rate, lower % sales from new products than high-impact technical winners
• low-impact performers with mediocre product success rates and low impact of new products on company sales.
There have been the general industry comparisons described in Chapter 1, for example Griffin (1997), which have useful measures and results to compare with your company’s results.
Benchmarking involves comparing a company's product development effectiveness and efficiency with industry standards and competitors This practice is crucial for effective product development management, as it aligns current practices with the latest research and insights from other organizations By applying best practices tailored to specific contexts and continuously measuring performance, companies can establish a framework for ongoing improvement.
Benchmarking is a continuous evaluation process that helps companies gain a competitive edge by measuring their products, services, and practices against industry leaders It can focus on specific areas, such as comparing new product concepts or technology innovations, and encompasses various measures throughout different stages of product development Short-term benchmarking emphasizes metrics like speed-to-market and development costs, while long-term benchmarking looks at customer acceptance and financial performance Key factors for success include customer satisfaction, adherence to quality guidelines, and product performance Effective benchmarking should lead to actionable improvements, as it is essential to connect it with continuous improvement efforts Ultimately, benchmarking fosters a culture of innovation and commitment by inspiring organizations through the best practices of model companies.
In recent years, benchmarking has gained popularity among organizations, prompting a critical examination of the rigor and objectivity behind these exercises and the value they provide Rather than being a mere tool, benchmarking serves as a method to enhance the knowledge and skills of everyone involved in product development, from top management to junior team members, ultimately leading to more effective and efficient product development processes.
8.2.2 Basic steps for benchmarking product development
There are some basic steps in benchmarking, shown in Fig 8.2, which need to be followed to maximise the return on any investment in benchmarking (Zairi, 1998; Czarnecki, 1999; Barclay et al., 2001).
Clearly define the benchmarking objectives
Before initiating a benchmarking study, an organization must define the subject, desired outcomes, target audience for the results, and the intended use of the findings to ensure future benefits Engaging in extensive data collection without a clear focus can lead to unhelpful information that fails to meet the organization's specific needs.
Determine the sources of benchmarking data
Benchmarking can be categorized as internal, utilizing internal data sources, or external, typically involving comparisons with companies within the same industry or across various industries Key sources for benchmarking include industry reports, competitor analysis, and performance metrics.
Published materials such as case studies, industry surveys, and research on R&D management methodologies offer valuable primary data These resources are also instrumental in identifying potential benchmarking partners.
Databases, such as those compiled by the Industrial Research Institute (IRI) in the USA, serve as valuable resources for insights into R&D spending, the workforce involved in research and development, and the number of patents granted Comprehensive summaries of this data are frequently published in the Journal of Research – Technology Management.
Fig 8.2 Basic steps in benchmarking.
Identify companies and individuals that can act as benchmarking partners
A successful partnership involves varying levels of communication, from occasional sharing of general information to regular meetings focused on enhancing operational practices It’s crucial to seek partners beyond similar companies, aiming to adopt best practices from industry leaders known for their world-class operations and techniques This approach fosters mutual improvement and innovation among partners.
While an individual can perform a benchmarking study, a collaborative team approach often yields superior results Engaging a diverse group of individuals with various skills and organizational roles enhances information gathering and fosters greater acceptance, leading to quicker integration of best practices within the organization.
Determine, design and execute the data collection process
Collecting benchmarking information can be achieved through various methods such as telephone interviews, postal surveys, face-to-face meetings, and desk research The choice of methodology depends on the specific information needed, the desired level of detail, and the budget constraints A recommended starting point is to conduct desk research, as it helps establish foundational knowledge and refine the critical information necessary for subsequent surveys or in-person meetings.
Analyse and implement the findings
To maximize the value of study findings, it's crucial to prioritize and implement a select few initiatives effectively Gaining commitment and support from senior management serves as a vital foundation for success Additionally, it's essential to demonstrate that these initiatives are recognized as best practices and provide tangible benefits to all stakeholders involved in the implementation process.
It is important in setting up a benchmarking or assessment system that it should be (Barclay et al., 2001):
• relevant to the users’ needs;
• capable of a variety of approaches;
• both educational and action-oriented;
• capable of being used in total or selectively;
• able to ‘force’ the development and implementation of action plans.
Establish a streamlined system that provides essential knowledge for enhancing product development without overwhelming users with excessive information An example of effective benchmarking methods can be found in the New Zealand Dairy Board, as illustrated in Box 8.1, highlighting strategies for comprehensive performance evaluation.
Box 8.1 The New Zealand Dairy Board (NZDB) experience
In 1993, the Boston Consulting Group (BCG) conducted a comprehensive audit of the New Zealand Dairy Board (NZDB) for statutory compliance, examining all aspects of the organization Key recommendations for research and development emphasized enhancing the product development process to accelerate time-to-market and increase success rates.
1994 Development of a phase-gate process for product development and implementation across all parts of the organisation.
1995 Consolidation of PD Processes with increased emphasis on ‘doing things right’.
1996 Recognition that future gains in R&D effectiveness would most likely come from ‘doing the right things’ in addition to ‘doing things right’.
1997 A small cross-functional benchmarking team was formed initiating a three-pronged approach:
• Decision practices An internal survey of the performance and areas for improvement against key decision practices required for
Innovation metrics
As organizations increasingly face the need to justify their innovation expenditures, questions arise regarding their effectiveness, alignment with objectives, and return on investment While it is essential to evaluate innovation spending like any other organizational expense, many existing measures focus solely on past performance This limited perspective hinders our understanding of the factors contributing to that performance, impedes the enhancement of innovation practices, and restricts our ability to forecast the future value of ongoing innovation initiatives.
In 1999, a benchmarking study initiated with Arthur D Little aimed to enhance metrics for tracking R&D performance, ultimately expanding to encompass the entire innovation process A comprehensive suite of metrics was created, incorporating lagging, real-time, leading, and learning indicators, which were subsequently implemented across the business units of NZDB.
The NZ Dairy Board is a large company and is able to employ a range of consultants.
If you were a small or medium-sized company:
1 Discuss the ways you could measure product development effectiveness and efficiency.
2 How would you select and use suitable methods of benchmarking product development for your company?
3 How could you identify the essential product development activities, outcomes and decisions for the successful business performance of new products?
4 How could you design suitable product development processes for your company?
Firstly, what do we mean by measures and metrics? Measurement applies to anything that has a quantifiable characteristic; a metric is a quantifiable characteristic, which one can measure against (Dimancescu and Dwenger,
In 1996, key metrics like the 'new sales ratio,' 'R&D intensity,' and 'number of patents granted' offered insights into an organization's historical innovation performance However, to enhance understanding, it is crucial to utilize a diverse set of metrics that encompass both retrospective and prospective data While static metrics provide information only after events have transpired, dynamic metrics deliver real-time feedback aligned with specific goals, enabling more effective innovation assessments.
Barclay et al (2001) proposed a set of process metrics to enhance internal efficiency and emphasized the importance of business and customer metrics for assessing external effectiveness Additionally, Arthur D Little highlighted the need for a metric suite that prioritizes the timing of information and specific focus areas, advocating for metrics to be developed within a framework that considers both temporal aspects and a holistic perspective.
Metrics can be assessed at various stages throughout a product development project or program They may derive from historical data of past projects, current project information, or forecasts regarding future product development performance, as illustrated in Table 8.2.
Fig 8.3 Product development project and programme metrics.
Table 8.2 The time of using metrics in product development
Lagging metrics provide information on past performance.
Real time metrics provide information on the current performance.
Leading metrics provide information on the likely future performance.
Learning metrics provide information on the rate at which an organisation is improving its performance.
Learning metrics, or motivational metrics, are essential for translating business objectives into actionable and inspiring measures for teams By identifying specific performance gaps, organizations can set goals to gradually reduce these gaps over time For instance, in the initial production runs of a new product, rejection rates typically range from 10% to 20%, with a target to lower this to the standard production level of 1% Similarly, the time to market for new products may start at 24 months, with an aim to decrease it to 15 months Establishing a reasonable timeframe for these improvements is crucial (Dimancescu and Dwenger, 1996) Ultimately, metrics are designed to foster continuous improvement in product development performance, relying on ongoing measurements throughout the project lifecycle, rather than solely on historical data.
Metrics can be applied to all areas of the product development programme and the project:
• Strategy Is innovation aligned with business objectives, strategy and vision?
• Process Do the innovation processes support successful execution and outcomes?
• Resources Are the desired level of resources being applied to innovation?
• Culture and organisation To what extent does the culture, climate and organisational structure support innovation?
Examples of metrics within the Arthur D Little framework for analysing the product development programme are shown in Table 8.3.
Table 8.3 Examples of innovation metrics in the product development programme
Lagging Real time Leading Learning
Strategy Contribution from new products/services
% of growth targets met through innovation
Increase in revenues from new products
Process Number of patents per year
Changing demand for specific capabilities
Change in critical climate dimensions
When selecting innovation metrics, organizations should choose measures that are economical to collect, easily understandable, focused on learning and external factors, actionable, broad in scope, and aligned with their objectives (Czarnecki, 1999) It is essential to regularly review and update these metrics to reflect changes in the organization's direction and priorities Key criteria for selecting effective metrics include their relevance and adaptability to the organization's evolving needs.
• use a matrix approach, selecting a few metrics from throughout (as shown in Table 8.3);
• support the weakest link in the current innovation systems;
• emphasise real time or leading measures where possible;
• select metrics for which results point directly to actions;
• focus on simple and obvious measures that clearly support business imperatives;
• select those that are easily measured consistently over an extended period.
When selecting metrics, it's crucial to avoid common pitfalls such as an overemphasis on short-term financial, efficiency, economy, and functional measures Metrics should not only be chosen for their accessibility and the benchmarking team's capabilities but must also be relevant to the desired improvements This ensures that the metrics align with the organization's long-term goals and facilitate meaningful progress.
8.3.4 Integrating innovation metrics into the business
For innovation metrics to be effectively implemented, they must be embraced and genuinely owned by the business or business unit It is crucial that every member of the management team recognizes the advantages these metrics offer, both personally and for their specific unit Successful integration involves four key steps.
1 For benchmarking product development programmes, what differences in the final analysis would you expect from using the metrics in Fig 8.3 and the lagging metrics in Table 8.3?
2 In what product development situations would it be more useful to use lagging, real time, leading and learning metrics for product development programme benchmarking?
3 A number of metrics have been suggested for product development projects.What do you think would be the more useful metrics for your company ± for improved products, for major changes and for radical innovations? identifying the growth gap, defining the innovation programme to meet the growth gap, defining an appropriate set of metrics for each project, measuring and tracking performance over time.
Step 1: Identify the growth gap
The first, and most important, step in the application of innovation metrics is at the strategic level where the required contribution from innovation is defined against future business targets:
• What is the total business growth aspiration?
• How much of this growth will come from organic growth?
• How much can be expected from mergers and acquisitions?
• What is the value of the innovations currently in the pipeline?
• What is the growth gap that must be filled by new innovation?
This is illustrated in Fig 8.4.
Step 2: Define the innovation programme to meet the growth gap
To effectively address the growth gap, it is essential to evaluate the value and timing of the current innovation portfolio, which is defined by the cumulative contributions of all ongoing innovation projects.
• What innovation projects are planned?
• What is the time of delivery of these projects?
• What is their predicted revenue and earnings before interest and tax (EBIT)?
• What is the total predicted value of the current innovation portfolio?
• Does this value meet the growth gap aspirations? If not, what further innovations are required?
Fig 8.4 Identifying the growth gap.
If satisfied with the current innovation portfolio value, use this value and the schedule of realisation of the value as a leading metric.
Step 3: Define an appropriate set of metrics for each project
A set of leading and real time metrics should be defined and used to measure the progress of individual projects.
• Define the individual contribution of each project to the total This becomes a key target for a leading metric for the project.
• Define a set of real time metrics and targets for each project These might include milestones on time, expenditure against budget, etc.
Step 4: Measure and track performance over time
Lagging metrics are essential for assessing past performance and should be evaluated against the predicted outcomes outlined in leading metric targets When the overall innovation portfolio aligns with these targets, it indicates that the innovation is effectively contributing to closing the growth gap.
• Use lagging metrics such as current return from products developed over the last five years to measure past performance.
• Compare this performance to the targeted performance required to meet the growth gap.
To enhance overall innovation practices, it is essential to analyze the reasons behind the discrepancies between achieved outcomes and set targets By reflecting on past mistakes and successes, organizations can apply valuable insights to foster continuous improvement.
In recent years, there has been a substantial focus on enhancing new product development (NPD) management, evidenced by a growing body of research literature Additionally, many companies are placing significant emphasis on managing research and development activities as a crucial function of senior management.
1 Step 1 Identify the growth gap.
2 Step 2 Define the innovation programme to meet the growth gap.
3 Step 3 Define an appropriate set of metrics for a project for an incremental product, and for an innovation.
4 Step 4 How would you measure and track performance over time?
Striving for continuous improvement
To achieve success in product development, companies must establish a fully integrated New Product Development (NPD) function that aligns with business goals and employs top-notch practices and processes This integration connects the overall business strategy to the product development program and individual projects, allowing for effective benchmarking to inform strategic adjustments Continuous improvement, driven by benchmarking, is an interactive process that influences decision-making and outcomes across different management levels Emphasizing market impact, teamwork, and company-wide collaboration is essential for effective product development.
The information and knowledge gathered during the benchmarking exercise have to be converted into efforts that will result in improved product
Fig 8.5 A fully integrated NPD function. development performance Four important steps are (Codling, 1996):
2 Adjust goals and develop corrective improvement plan.
3 Implement the corrective improvement plan.
Effective communication is crucial for fostering cooperation and commitment to proposed changes among individuals, teams, and management It is essential to relate benchmark results to future changes in product strategy and development, creating a clear vision for the company's product development Opportunities for self-assessment and discussions among all participants in product development are necessary to formulate an improvement plan collaboratively This plan should not be a directive from top management or external consultants, but rather a joint effort between management and key individuals in product development to drive meaningful change Additionally, it is important to clearly communicate the timeline for these changes and how individuals will be involved in the process.
Goals for product development strategies and individual projects are often adjusted through benchmarking It is essential for both top management and project managers to identify new decisions and outcomes at various stages of the product development process These outcomes will serve as the objectives for project activities and influence the selection of techniques used Additionally, the efficiency benchmarks in product development and the resources allocated by top management will lead to changes in activities and techniques According to Barclay et al (2001), performance can be improved in two ways.
• Refinement change: product development is treated as a business process and is continuously reviewed and refined.
• Radical change: a major shift in PD activities and process usually prompted by poor results or a shift in strategy and/or market.
If the refinement change is followed continuously and wisely, the radical change which is costly in resources, people and time, can be avoided.
Implementing an action plan is a complex process that requires detailed descriptions of proposed actions, timelines for implementation, available resources, and potential impacts on product development and functional departments It is crucial to establish performance metrics and anticipated outcomes (Coughlan and Brady, 1995) Additionally, identifying key stakeholders and fostering their collaboration in both the development and execution of the action plan is essential Management must acknowledge the comprehensive plan, determine staffing needs, and provide guidance for the changes to be effectively implemented.
Regularly reviewing progress is crucial, as it allows for assessments at established intervals rather than solely at the conclusion of a project Identifying obstacles such as team resistance, resource shortages, knowledge gaps, or insufficient collaboration between product development and functional departments is essential Additionally, if changes are implemented too rapidly, it may hinder understanding of objectives and methods Benchmarks for measuring progress should be realistic and aligned with available time and resources, recognizing that different projects have unique challenges Common benchmarks, like reducing timelines, may be feasible in incremental projects but unrealistic in major innovations It is vital to adjust the action plan if short-term goals are not being met, as product development is inherently creative and unpredictable.
The product development process will benefit from insights gained through a benchmark study, enhancing decision-making and outcomes Setting and monitoring project milestones is crucial to evaluate progress, allowing for adjustments in targets based on new insights Benchmark metrics will be integrated and refined throughout the project, addressing issues such as product quality linked to packaging and storage Effective implementation of these improvements relies on the commitment and collaboration of a multifunctional team, emphasizing shared project ownership and strong leadership, supported by resources and management backing Self-assessment among team members is vital for continuous improvement, enabling comparisons within the company and with external firms However, challenges arise in selecting appropriate companies for comparison and accessing detailed information to inform product development strategies.
To enhance the overall product development program, it is essential to create a new innovation and product strategy, along with a comprehensive plan for implementation This represents a significant transformation in the company's approach to product development.
Box 8.2 Self-assessment and benchmarking product development in five Irish firms
The main objectives of the study were:
• establish benchmarks of current practice in the management of the product development process in five manufacturing firms drawn from differing industries in Ireland;
• increase awareness of areas of choice in the management of product development among manufacturing firms in Ireland with a view to improving their management of the product development process.
Each company evaluated two recent product development projects, showcasing diverse situations and approaches The selected projects varied in the extent of product and manufacturing process changes, with six out of ten categorized as incremental or derivative In contrast, four projects were identified as platform or next-generation developments.
The self-assessment and benchmarking process involved three key phases: gathering data and conducting an initial self-assessment, sharing insights internally and externally among firms, and creating and discussing actionable plans Each phase necessitated the active involvement of up to ten staff members from the relevant product development projects in each firm.
Arising out of the research each firm identified a range of performance limiting practices in its development process, which had caused schedule delay or cycle time extension through:
• insufficient up-front technology planning and development,
• reacting to short-term resource shortages,
• inadequate product and product line planning,
• reliance on major versus incremental changes.
The issues were concentrated in the areas of market focus, teamworking, transfer of manufacturing, leadership, resourcing and performance evalua- tion.
Setting achievable goals is crucial for both the company and its individuals, ensuring they can meet targets within a reasonable timeframe using available resources Goals should remain flexible to accommodate adjustments as the program evolves and in response to any internal or external changes While programs typically span 3 to 5 years, it's essential to consider projections up to 10 years Continuous monitoring of program benchmarks is necessary, allowing for timely modifications The product development program must be dynamic, enabling controlled changes, while a corrective improvement plan should assess the impact of these changes on outcomes and key success factors in product development.
Incorporating benchmark data from projects into the product development program is crucial for continuous improvement in efficiency and effectiveness However, companies often rush into new projects without evaluating past experiences for potential enhancements It is essential to integrate this knowledge into the organization, ensuring that both individual and organizational learning are derived from benchmarking efforts Retaining and applying the insights gained from product development projects is a challenging yet vital task for any company.
Program improvement aims to enhance the design of new products and processes while continuously refining the company's procedures, leadership skills, and techniques This focus on efficiency and quality is essential for faster execution and superior outcomes Additionally, developing capabilities within the organization is a crucial objective for sustained growth and innovation.
8.4.4 Product development and business strategies
Top management must enhance its understanding of product development choices and performance-limiting practices within the company It is essential to adapt business and product strategies in response to market changes while proactively diagnosing the need for technological or consumer shifts Management should assess the company's product development performance, identify key personnel, and recognize existing knowledge gaps along with necessary financial and resource allocations If drastic changes and consultants are required, it indicates previous mismanagement in product development By fostering a culture of continuous improvement across the organization, management can avert such issues.
A company, and indeed an industry, can choose its own improving standard of development through the four levels of PD practice (Coughlan and Brady, 1995):
Lowest level: Product development is not managed and encouraged.
Basic procedures, management and motivation are in place.
# Product development is managed and encouraged as a key objective for the firm.
Highest level: ‘World-class’ development performance is the norm.
References
BARCLAY, I., DANN, Z & HOLROYD, P (2001) New Product Development: A Practical Workbook for Improving Performance (London: Butterworth- Heinemann).
CLARK, K.B.&WHEELWRIGHT, S.C.(1993) Managing New Product and Process Development (New York: The Free Press).
CODLING, S.(1996) Best Practices in Benchmarking (Houston: Gulf Publishing Co.).
COOPER, R.G & KLEINSCHMIDT, E.J (1995) Benchmarking the firm’s critical success factors in new product development Journal of Product Innova- tion Management, 12, 374–391.
COUGHLAN, P &BRADY, E (1995) Self-assessment and benchmarking product development in five Irish firms Journal of Managerial Psychology, 10(6), 41–47.
You have now read eight chapters on product development.
1 What are the most important factors that you have identified to improve product development effectiveness in your company?
2 What are the factors that you have identified to improve product development efficiency in your company?
3 If your company does not conduct benchmarking of individual development projects, do you know why it does not? How might your company overcome hindrances and stumbling blocks to make project benchmarking a standard tool?
4 How does your company create and store technical knowledge from previous projects, to make it available for present and future projects?
5 How does your company create and store customer/consumer knowledge from previous projects to make it available for present and future projects?
6 How does your company improve product development? Can the method of doing this be changed to bring product development to a higher level?
7 What is the overall standard of product development in your company?
8 How can the standard be raised?
CZARNECKI, M.T (1999) Managing by Measuring: How to Improve Your Organization’s Performance through Effective Benchmarking (New York: Amacom).
DE BRENTANI, U (2001) Innovative versus incremental new business services: different keys for achieving success Journal of Product Innovation Management, 18, 169–187.
DIMANCESCU, D.&DWENGER, K.(1996) World-class New Product Development: Benchmarking Best Practices of Agile Manufacturers (New York: Amacom).
GRIFFIN, A.(1997) Drivers of NPD Success: The 1997 PDMA Report (Chicago: Product Development & Management Association).
HULTINK, E.J.&ROBBEN, H.S.(1995) Measuring product success: the difference that time perspective makes Journal of Product Innovation Management,
McDONOUGH, E.F (2000) Investigation of factors contributing to the success of cross-functional teams Journal of Product Innovation Management, 17, 221–235.
MATHESON, D.&MATHESON, J.(1998) The Smart Organisation: Creating Value Through Strategic R&D (Boston, MA: Harvard Business School Press).
MEYER, M.H & DETORE, A (2001) Perspective: creating a platform-based approach for developing new services Journal of Product Innovation Management, 18, 188–204.
RUDOLPH, M.J.(2000) The food product development process, in New Products for a Changing Marketplace, Brody, A.L and Lord, J.B (Eds) (Lancaster, PA: Technomic).
ZAIRI, M (1998) Effective Management of Benchmarking Projects (Oxford:Butterworth-Heinemann). abilities for PD management 261 activities 20, 95, 144–6 commercialisation 119–23, 322–4,
112–14, 322, 336–7, 341–2 description 101 launch 126–8, 324–6, 338–9, 342–5 organisation of product development process 287–8, 289 product development strategy 85–6 product strategy 96–111, 321–2, 333–6,
340–1 timing of 294–5 aesthetics 145–6 consumer needs and wants 216–18 product design 115 agricultural research 153 new apple variety 317, 319–22, 323 see also primary production aims defining the project 97–101 product development strategy 88–90 see also goals/objectives
The article discusses various analytical frameworks and methodologies, including benchmarking and business analysis, highlighting their significance in product development and strategic planning Key components include anticipation capabilities and attribute evaluation, with a focus on continuous improvement and innovation metrics It also examines the application of these concepts in different contexts, such as the NZ Dairy Board and comparisons among Irish firms, while emphasizing the importance of data sources and team collaboration in achieving effective outcomes.
‘Bit on the Side’ sauce 318, 340–5, 346 branding 330, 331 developing a brand name 331 effect on sensory scores 244, 245 budget 28–9 budget (continued) control in launch 129 setting 280–2 business analysis 22–3, 123 business strategy 28 incorporating innovation strategy into
45, 46, 59–64 product development and 349, 368 buyers, consumers 5, 31, 195–6 buyers, food service 25–6, 131, 134 buyers, industrial 136–8 buying behaviour 195–207 calories 6–7 capabilities 70–1, 170–1 anticipation and reaction capabilities
278–9 and innovation possibilities 54–6 internal and external 116 category appraisal 224 central location tests 242–3 championing 265–6 chief executives 27–9, 59, 67–8, 71,
76–8, 262–3, 264 choice, food 203–7 climate, organisational 54–6, 351 cognitive understanding 162–5 collaboration 266–7 commercial knowledge 190 commercial product testing 248–50 commercialisation see product commercialisation communication 365 design 112 networks 297, 301–2 company capabilities see capabilities climate 54–6, 351 controllable factors for success 16–18,
The article discusses various aspects of innovation and consumer behavior in product development, highlighting the importance of understanding consumer needs and preferences Key topics include the characteristics of innovation, management objectives, and the role of resources in fostering innovation It emphasizes the significance of concept development and screening, alongside concurrent engineering practices Consumer research methods, such as discussion groups and surveys, are essential for identifying consumer wants, including aesthetics, nutrition, and safety The relationship between consumers and food products is explored, focusing on product commercialization and design strategies Finally, the article underscores the necessity of continuous improvement and aligning product development with business strategies to ensure success in the market.
366–8 product development project 366 steps in 364–6 control
PD project 283–5, 292–5, 300–2 design process 117 product launch 128–30 core competencies 79, 80 core values 230 corporate structures 313–14 costs 111, 118, 122, 128–9, 158, 159,
280–2 creating knowledge 34–5, 183–191 creativity 96–8, 102–6, 224–5 critical points 91, 95, 271–5 croissants as symbols 216 cross-functional organisation 29, 41, 266,
303–4 consumer needs and wants 213–15 product development team environment
303–4 culture and fast food in China 204, 205 dairy foods 298 whey protein isolates 318, 332–9, 346 data collection 356 databases 171, 355 decisions 20, 91–2, 95 innovation strategy 76 key decision points and decision makers 271–5 product development management 266,
271–5 top management 263–4, 271–3 defenders 69, 70 demand outcomes 124–5 derivative products 7–8, 268–9 descriptive analysis techniques 239 design design triangle 132–3, 134 designing product development process
267–70 industrial design 22, 103 product commercialisation 119–21 product concept 101–7 product design and company image 112 product design specification 103–4,
Service design plays a crucial role in service development, influencing product design and process development Desk research and difference testing are essential for establishing a differentiated product development strategy, which aids in the diffusion of products Understanding disembodied and embodied knowledge is vital for effective distribution and launch strategies Dynamic organizations must prioritize education and evaluate innovation possibilities to enhance effectiveness and efficiency Ethical testing and the consideration of ethnicity are important in product evaluation, while explicit knowledge conversion is necessary for successful product development The food industry faces challenges such as food neophobia and the need for innovation in food products, which are influenced by nutrition, health, and processing technology Government regulations and funding impact research and development within the food system, while understanding consumer behavior, including habitual choices, is essential for addressing growth potential and achieving financial success.
Heinz Wattie’s 340–5 high-budget diverse strategy 87 horizontal integration 50
Horticulture and Food Research Institute
(HortResearch) 320 humanisation of petfood 107 idea generation and screening 224–8 implementation 365 improvement of PD 364–8 in-flight catering 140, 141 in-use tests 237, 242–3, 247–8 incremental innovation 16, 17, 87–8,
268–9 individual knowledge 177–8 industrial food products 25, 135–9,
The article discusses key aspects of product commercialization, including the needs and wants of buyers, product design, and the development process It highlights the importance of understanding consumer behavior and the role of information in shaping product strategies Additionally, it examines the factors influencing innovation, such as timing, ingredient sourcing, and the integration of science and technology The significance of innovation management, including metrics and portfolio analysis, is emphasized to ensure product success Furthermore, it outlines the necessity of combining marketing strategies with innovation to create a cohesive approach to product launch and development.
62–3 combining product strategy with 59–60 combining technology strategy with
70–1 decisions 76 developing product development strategy 85–90 focusing product development programme 78–84 getting the strategy right 69–78 incorporating into business strategy 45,
The food system requires strategic planning and product development to foster innovation, supported by quantitative and operational analysis Total innovation management is essential for understanding consumer innovativeness and their instrumental values Effective integration and commercialization of innovation metrics into the business can enhance collaboration and drive growth.
Knowledge systems play a crucial role in product design and process development, influencing the work of project teams and external agencies Effective internal project management is essential for navigating the complexities of invention in investment-intensive sectors Consumer involvement significantly impacts food choice, while understanding sensory attributes is vital for product success The conversion between tacit and explicit knowledge enhances decision-making in a changing environment, where both knowledge and information are key components for innovation and effective judgement.
Effective product development requires a comprehensive understanding of both explicit and tacit knowledge, particularly in the context of industry and technology Managers must navigate the interaction between these knowledge types to foster innovation and strategic directions Key decision points and layers of management play a crucial role in the development process, necessitating a focus on necessary skills and knowledge creation The logistics of product launch and evaluation, supported by lean launch strategies and effective marketing, are vital for achieving market success and maintaining a competitive position Additionally, understanding market segments and adapting to changing markets is essential for aligning product development strategies with consumer needs.
352 matrix organisation 313 meat consumption 211–12 menu planning 140–4 metrics innovation 358–63 innovation indices 55–6 product design specification 109–10 monitoring of the launch 128–30 morphology, product 7, 104 multi-attribute approach 231–3 multidimensional scaling (MDS) 105,
106, 231–3 multivariate analysis 231, 232 national preferences 329 needs and wants consumers 201–3, 209–18 industrial buyers 137–8 neophobia 207 networks 296–7 new product department 312 new product mix 21 new products categories 9, 84 innovation indices 55–6 platforms 7–9, 268–9 portfolio 83–4 radical and incremental innovation
Pacific Rose apples 319–26 whey protein isolates 332–9
New Zealand Dairy Board (NZDB) 332,
New Zealand Milk Products focuses on non-thermal preservation methods and nutraceutical foods to meet consumer needs and health objectives The company emphasizes continuous improvement and operational analysis to enhance its product development process By observing consumer behavior and optimizing product design, New Zealand Milk Products aims to create a dynamic organization that fosters innovation The operational plan includes defining project outcomes and outlining project strategies to avoid over-confidence in execution This comprehensive approach ensures the alignment of company goals with consumer demands and industry benchmarks.
The article discusses various aspects of product development, particularly focusing on Pacific Rose apples and their packaging design It highlights the importance of benchmarking among five Irish firms and emphasizes the role of personnel development in organizing the product development process, which is crucial for individual and project success Key measures for evaluating product development, including innovation indices and planned flexibility, are also outlined Additionally, the article touches on the significance of political changes and their effects on product positioning and commercialization, particularly in the context of primary production and processors.
330–1 product design and process development 322 product development for a new apple
Principal components analysis plays a crucial role in understanding product attributes and consumer needs, which are essential for developing a proactive product strategy Effective problem-solving and process innovation are vital in product design and development, ensuring that processed products meet market demands Evaluating product benefits and characteristics is key to successful product commercialization, while sensory profiles enhance consumer engagement Additionally, value analysis helps align product offerings with consumer expectations, ultimately driving successful market outcomes.
The article discusses various aspects of commercial design, highlighting the importance of consumer involvement in product development, which spans from concept definition and optimization to testing and integration Key elements include the development environment, management processes, and the organization of product development, emphasizing the necessity of collaboration with outside agencies and the significance of key decision points It also outlines the stages of product design specification and the impact of constraints and budget setting on the overall process Additionally, it provides case studies and insights into product development in specific industries, underscoring the philosophy and principles guiding effective product development management.
140–2, 317–18 future changes 144–6 identifying outcomes, activities and
144–6 information sources 174 level of innovation 268 organising 287–98 product success and failure 17–18,
Product development encompasses various stages, including service integration and continuous improvement Key aspects involve planning, management, and defining measures of success Effective product development strategies focus on creating knowledge and utilizing resources efficiently Emphasizing the importance of timing and leadership, organizations can enhance their product development programs to achieve better outcomes.
85–90, 368 clearly defined 350 link to overall business strategy 349 overall product development strategy
88–90 types of 86–8 product development team 180, 187,
188–90, 299–304 product diffusion 124–5, 208 product feasibility 110–11 product formulation 158 product idea generation 224–8 product improvement 9, 50–1, 67, 70 product innovation 151, 152 product judging criteria 200 product launch and evaluation 123–30 case studies 324–6, 331–2, 338–9,
Consumer involvement plays a crucial role in determining demand outcomes and the success of product launches, necessitating effective evaluation and control of launch activities and strategies Product managers must focus on problem-solving and product morphology to enhance product lines and platforms, ensuring a well-categorized and planned product portfolio Key factors influencing product success include a thorough understanding of product specifications, screening processes, and strategic development that aligns with innovation goals The product development process involves defining projects, developing product concepts, and conducting rigorous testing to ensure quality assurance and feasibility Ultimately, managing for success requires a deep knowledge of societal, industrial, and technological trends, as well as effective monitoring and control throughout the product lifecycle to achieve optimal production yields and profitability.
300–2 see also PD managment project management 30 appropriate systems and processes
350–1 internal 299–304 project plan 110–11 outline 101, 334, 335 promotive companies 69–70 prospectors 69, 70 proteins 7, 166, 333, 336–8 published materials 355
Q sort technique 72 quality, product 12, 13, 252 quality audits 252 quantitative analysis of strategies 74–5 quantitative descriptive analysis (QDA)
This article explores various quantitative techniques and their role in driving radical change and innovation within the food system It highlights the importance of raw materials and reaction capabilities in developing effective product strategies Real-time metrics are emphasized for refining processes and ensuring compliance with food regulations Additionally, it discusses the significance of research and development in organizing product development to enhance success The responsibilities of retailers and the impact of restrictive companies on innovation are examined, along with the necessity of setting budgets and achieving sales targets Finally, it addresses the importance of return on investment reviews and managing risk in the context of sauce product development.