Presentation on theme: "Food Product Development Geoff Walker tes/mscnotes/"— Presentation transcript:
Food Product Development Geoff Walker tes/mscnotes/
New Product Development Why NPD? Types of NPD The NPD cycle
The need for new product development Product Life Cycles Remain competitive Consumer/Customer Needs New Technology Government Regulation
Product development Essential to the survival of a company Thousands of “new” food products are launched every year Most new products are “line extensions” Only a few hundred will survive for a year
Product development adds value in several ways PRODUCT DEVELOPMENT GROWTH PRODUCTIVITY IMPROVEMENT BRAND MAINTENANCE QUALTITY Line Extensions New Products New Packages Reduce Cost Formulas Packages Manufacturing Procedures Quality of Design Competitive Advantage Conformance Special Situations Regulatory Environmental Specifications
Product Development Complex - generally market driven Requires the integration of marketing, R&D, processing and legal functions of a company Success only comes with careful planning and execution Teamwork absolutely essential
To avoid chaos, a hierarchy must exist to guide product development Company Mission Company Objective Company Strategy Company Plans Why Do We Exist? Where We Want to Go? How Will We Get There? What Do We Do Now? >Programmes >Product Development >Projects Tasks
To ensure success, you need good strategic management and good product development execution PRODUCT DEVELOPMENT EXECUTION STRATEGIC MANAGEMENT SDG 8/18/95
Companies Need to Address Strategic Planning on Several Levels Mission Objectives Mission Objectives PRODUCT STRATEGY Technical Competencies Strategic Principles Organization Alliances Project Mix Milestones Resource Levels PRODUCT PORTFOLIO STRATEGY Resource Allocations Technical Approaches Timing Deliverables PRODUCT DEVELOPMENT STRATEGY Business Units Categories Brands Projects Identity Company Strategy Business Strategy Portfolio Strategy Project Strategy
Product Development Cycle The idea Technical and commercial feasibility Product formulation and testing Costing Production requirements Commercial launch
The idea Ideas generation brainstorming, focus groups the MD wants it, Types of new product uniquely innovative, Line extensions, repositioned products.
Technical & Commercial feasibility Commercial feasibility What is the market? Regional/national preferences. Market size vs. consumer preference Personal likes/dislikes New trends Technical feasibility Can we produce the product? Will it need significant investment? How does it compare with existing products?
Product formulation and testing Recipe development Sensory & consumer acceptance testing Product specification Pricing & preliminary costing Nutritional value
Production requirements Process flow, Equipment types, Risk assessment, Shelf life, Product quality, Packaging, storage & distribution
Costing Fixed costs Variable costs Break even point Profitability
Commercial launch How and where to launch? Local acceptability trials publicity & advertising
What can go wrong? New products can fail at every stage of the development cycle Inadequate consumer research Lack of management support Poor communications Inadequate documentation Inadequate training Technical reasons Legal reasons Insufficient financial return Costs too high Price too low
Critical success factors The success or otherwise of a new product can be due to a number of factors, but ultimately it comes down to PEOPLE and their understanding of all aspects of the product, process and package requirements Product failure can occur at any step in the development and final product stage Communications and vigilance and management support are key factors in ensuring success
Acknowledgement A number of slides in the presentation have been based on material produced by Prof W. James Harper of Ohio State University.