Professional Documents
Culture Documents
Course outline...
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SUGGESTED READINGS...
http://www.nzifst.org.nz/creatingnewfoods/
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INTRODUCTION…
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• Product:
“is a good, service, or idea
consisting of a bundle of
tangible and intangible attributes
that satisfies consumers”
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- Competition
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Sales and
Profits ($)
Sales
Profits
Time
Product Introduction Growth Maturity Decline
Develop-
ment
Losses/
Investments ($)
- Competition
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- Competition
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- Competition
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aaaaa
aaaaa
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- Competition
- Rules to be followed
Codex
GAQP FAO
GMP/GHP GAP
TCVN BIOTERRORISM
TQM
HACCP ACT 2002
SSOP
TCN SCM DIOXIN
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Bioterrorism Act:
- Competition
- Rules to be followed
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It is significant !!!
"Innovate or die ? “
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Significances of NPD
1. To stimulate growth
Growth conveys an image of success to
the investors and the financial community.
2. To respond to competition
Necessary to protect the firm’s
competitive position.
3. To reduce cost
- Enfa of Mead Johnson doubled capacity from 900g to
1.8 kg cheaper unit price,
- 20g packs of Nutifood affordable for ordinary use
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6. Creativity management
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• It is estimated that a
new product is
launched every 20
mins.
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- Creativity
- Knowledge transfer
- Design engineering
- Production skills
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Organization’s commitment…
• Consumer assessment
Understand consumer mindset, attitudes,
lifestyle and demographic needs.
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In 1991, Business Week chronicled the millions McDonald's was pouring into
experiments for new products for the US market. In 1998, they listed the flops:
Carrot Sticks: still available as an optional item in some US restaurants.
Fried chicken: This was no McNuggets. Though available in much of Asia, it's off the
menu in the US along with the corn-on-the-cob that came with it.
Pasta: McDonald's tried the old favourites, spaghetti and lasagna, with garlic bread.
Neither is available anymore in the US.
Fajitas: The McDonald's version of this popular Mexican dish never took off, though
it's still available in a few US restaurants.
Pizza: The company devoted an entire annual franchise meeting to talking up this
fast-food favourite. Pizza survives in Canada, but it is no longer in the US.
McLean Deluxe: This low fat sandwich debuted in 1991 to woo health conscious
customers. It was erased from the menu in 1996.
Last successful product: Chicken McNugget in 1983.
The company has now emphasized that the heart of the company's menu will
remain the same - the burger. 'We will extend our line, rather than going in more radical,
Think Break
Product strategies: new products from McDonald's
In the 21st century, McDonald’s have continued to introduce new products and
indeed new part menus, such as breakfast, in the USA.
Suggest the reasons that the company might have in introducing these
products – the consumers and their needs, company strategies, changing
environment.
You will see that there is nutrition information provided on this web site for
consumers. Discuss the main aims of this information as regards product
and menu selection.
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Product strategy
Product commercialization
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1. Product strategy
Starts with…
1. Generation of new product ideas
2. Outlining of the product design
strategy
It ends with…
1. The product concept
2. Product design specifications
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Desk research
Market data study Technical information search
Product ideas search
Target consumers’ study Marketing info search
Societal, political environment Company environment
Desk analysis
How big is the market? What is the raw material
What are the possible products?
Outcomes
Clearly defined project aim
with target market, product, marketing, processing
Required outcomes from each stage
Constraints from environment and company
SWOT analysis
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SWOT analysis
SWOT analysis
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Product Design
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Think Break
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Project plan
• List all the major activities
Think Break
Product commercialization: coordination of resources and project
timing
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Think Break
Product launch: PD methods for large and small numbers of
new products launched per annum
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What is a product?
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What is a product?
– Customers
– Product designer
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What is a product?
What is a product?
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Support service
component
Packaging
component
Core component
(Ingredients)
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Repositioning
- Identity -
• Lucozade brand drink has been in the market for
over fifty years and not doing well. Products
being repositioned as a “glucose energy drink
with orange barley and lemon barley flavor in
a new packaging and in a diet variety”. It
became very successful.
Brand stretching
- same brand name, different product category -
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Modification
• Involves altering one or more features of an
existing product.
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Differentiation
• Is when both the old and new models are
offered simultaneously for sale. It expands
existing product lines by offering
additional versions of the basic product
concept.
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Diversification
Diversification
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Market Extension
• Example:
– More target groups
– Exporting
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maturity
shakeout
decline
growth
introduction
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Tendency to personalize
Globalization trends
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New technologies
Reading more…
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Recall:
Branding is Important
A brand is a name, term, sign, symbol, design, or a
combination of these.
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What is a Brand?
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When Do Consumers
Choose Brand?
• Before entering store:
need advertising to get them;
• After already in store:
packaging, in-store sales promotion,
merchandising to get them;
• Many consumers do both
for same product at different times.
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Pricing issues
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growth
downward pressure
introduction
on prices
Recognition Process
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Repetition Tactics
repetition - exposure over and over
(without necessarily gaining conscious attention)
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Sales Promotion
mainly short-term;
temporary incentive to buy,
immediate information and/or reward.
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In-Store Objectives
• in-store promo triggers recognition;
• differentiates brand
if no brand already chosen.
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Discount Promotions
H
most consumers perceive
quality some relationship;
high discounts more likely
L to make people consider
L price H p / q relationship
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4. No real benefit
5. Poor positioning or
misunderstanding of consumer
needs
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Elaboration Suggested
Safeguards
Product fails to generate Assessment of trade
expected channel response in pretest
support market phase
7. Forecasting error
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8. Competitive response
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Tendency to personalize
Globalization trends
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New technologies
- Competition
- New technology
- Rules to be followed
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Advanced
Test marketing COMMERCIALISATION Development
Product strategy
Product commercialization
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Starts with…
1. Generation of new product ideas
2. Outlining of the product design
strategy
It ends with…
1. The product concept
2. Product design specifications
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• Stage 3: Commercialization
– Launch the product,
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• Idea generation
• Concept development Stage 1
• Product planning
• Product/process engineering
Stage 2
• Pilot production/scaling-up
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Correlation matrix
Assessment
2. Customer
Competitive
(Relationship Matrix)
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House of quality
Importance
Correlation matrix
HOWs
Product Requirements Customer ratings
WHATs Customer 5
Customer Relationship Matrix Competitive
Requirements Assessment 1
5
Organization
Engineering difficulty
1 Competitive Assessment
Important
controls
IMPORTANCE
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House of quality
CORRELATION
MATRIX
HOW
COMPETITIVE
RATING
CUSTOMER
WHAT
RELATIONSHIP
RATING
MATRIX
1
5 1 5
HOW MUCH
1
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Speed
+ Flour
density
Oven
Cake
Density
Metering
Cake
equip
.5g/cc
not
heavy
.5g/cc
350F/.5h
Medium
1 cup
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KETCHUP
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KETCHUP
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