Food Product Development: Maximizing Success

388 Pages·2001·3.611 MB·English

by  Richard Earle, Allan Anderson

Food product development
Mary Earle, Richard Earle and Allan Anderson
Published byWoodhead Publishing Limited
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Part I
Introduction
Product development has been a major activity in the foodindustry for over 40
years,butonlygraduallyhasitdevelopedasastrategicbusinessareaandalsoas
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.
Whenonelooksatoverallsuccessandfailureinthefoodindustryduringpast
years, socially there has been success in providing sufficient cheap food in
developed countries, but failure through developing such a poor reputation that
thefoodindustrybecamehighlyregulated;commerciallytherehasbeensuccess
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
meetthischallenge? Hasthefoodindustrytheknowledgeandthepeople? How
2 Food product development
can itrespond?Theaim ofPartIofthebookistolookatthecausesofproduct
success and failure in the past, and to identify the key issues for successful
product development in the future.
Preface
Managing innovation is a necessary skill for senior management of all food
companies producing new raw materials, new ingredients or new consumer
products. Company growth and even survival depends on the introduction of
successful new products into old and new markets. The dividing line between
productsuccessandfailuredependsonmanyfactors,butthemostimportantare
new product qualities, skills and resources of the company, market and
marketingproficiency,andan organisedproductdevelopment process.There is
aneedtounderstandconsumers’behaviourandattitudesandtobeabletodesign
a product to meet the users’ needs. But it is also necessary to have the
technological knowledge andthe skills, andtheorganisational abilitytobring a
product to a successful commercial conclusion in the marketplace. This book
studies some of these key issues in product development and outlines the
methods of managing them.
The book started on a day in 1956 when Mary Earle joined the product
development team at Unilever Limited, Colworth House, Sharnbrook, Bed-
fordshire. Jack Savage, the leader of this team, was a pioneer of product
development in the food industry. It was his understanding of product
development as a coordination of technology and marketing, always aimed at
the final consumer, that laid the basis for Mary’s work in product development
during the next 40 years. She tried to put these ideas into practice in the food
industry in Britain and the meat industry in New Zealand, and quickly realised
that there was a real need for education in product development for all people
enteringthefoodindustryparticularlytechnologists,engineersandmarketers.In
1965, at Massey University, New Zealand, she introduced courses in product
development and foodmarketinginthe Bachelor ofTechnology degreein food
technology.Thesecoursescombinedtheoryandprojects,sothatthestudentsnot
x Preface
only could learn basic techniques in product development but also the
philosophy and the practical application in industry. Gradually product
development (PD) was developed as an academic discipline and Bachelor and
Masterate degree programmes in product development were introduced for all
industries at Massey University. Allan Anderson was involved in much of this
development over the years. Dick Earle’s expertise is in process development,
particularly in the New Zealand meat industry, and he developed the
combination of product design and process development in a new venture
producing pharmaceutical industrial products.
Atthesametime,particularlyinthelast20years,therehasbeenagreatdeal
of research in other industries on product development, and today it is
recognisedasaparticularindustrialresearchdiscipline.Thebookhasbeenbuilt
on this research and also the research at Massey University and with the food
industries in New Zealand, Thailand, Malaysia, Singapore, Canada and
Australia. We need to thank the hundreds of undergraduate students for their
work in their product development projects with industrial companies, the
postgraduate students in their research on the activities and techniques in
product development, and in particular the people in the companies who
collaboratedintheseprojects.Examplesfromsomeoftheseprojectsareusedin
thechapters.ThestaffatMasseyUniversityinvolvedinproductdevelopmentin
the Food Technology Department, Food Technology Research Centre and the
Department of Consumer Technology, built up the multidisciplinary, consumer
directed, systematic PD Process used throughout the book.
Part I starts by looking at the different categories of new food products. It
thenidentifiespastreasonsforproductsuccessandproductfailure,andasksthe
reader to identify some of the specific reasons for product success and product
failure in their company. This is to stimulate thoughts on PD in particular
companiesandtolaythebasisforstudyingthecoreelementsinPDandrelating
thesetotheproblemsofPDmanagement.Itendsbyidentifyingspecificaspects
of product development in the food industry.
Part II in four chapters studies the core elements of product development:
1. Developing an innovation strategy
2. PD Process(es)
3. Knowledge base for product development
4. Consumer in product development.
Product development at both the programme and the project levels needs to be
based on the business strategy. It is the responsibility of top management and
they need to set the strategies for the product development programme for the
present and future years, and also the aims for the individual projects. Top
management needs to ensure that there are systematic PD Processes for the
differentlevelsofinnovationandtypesofproducts.Havingsetthestrategyand
the PD Process, they need to ensure that there is the necessary product,
processing, distribution and marketing knowledge in the company, and also the
abilitytocreate newknowledgeindesign,developmentandcommercialisation.
Preface xi
Finally there needs to be an understanding and consideration of the final
consumer – their needs, wants, behaviour and attitudes – as well as the other
customers in the food system between the producer and the consumer. Part II
studies these core areas, so that the reader develops a basic understanding of
product development.
PartIIIstudiesPDingeneralandtheninthefoodsystem.Managingproduct
development in the food industry varies with the types of markets (industrial,
food service and consumer) and with the place of the company in the food
system (primary producer, food processor, food manufacturer, retailer). Top
management needs to recognise these variations and also identify their level of
risk and the company’s resources in skills and knowledge. From this, they can
build an organisation for product development and also identify the decisions
that they have to make in the programme building and during the individual
projects.Theycanthenspecifyforthemiddlemanagement thecriticalpointsin
the PD Process and the knowledge that must be available for their decisions at
the critical points. From this, the middle management, called product
development manager, product manager, R&D manager, can identify the aims,
activities and outcomes for the individual stages in projects, and also the
coordinated plan for the product development programme. The project leader
can identify the techniques to be used in the project, the resources needed and
thetimeschedule.Forsuccessfulproductdevelopmentmanagement,thesethree
layersofmanagementneedtobecoordinatedandaimingforthesameoutcomes
from the product launch. Four case studies illustrate management at different
stages of the food system, including fresh products, industrial products and
manufactured consumer products. The book ends with a chapter on evaluating
and improving product development. Product development management must
includethecollectionofknowledgefromtheproject,analysisofthisknowledge
and setting improvements for future projects. Product development is
continuously changing and its management needs to change; without change,
not only the products but also the whole system become archaic and lost in the
past.
This book is intended for people entering or in product development
management, at all levels from the project leader to top management.
Throughout the book, readers are asked to apply the knowledge in the chapter
totheircompany,sothattheycandeveloptheirownphilosophyandmethodsfor
productdevelopment.Thisisnotabookontechniquesofproductdevelopment;
it is a book to raise the awareness of different aspects of product development
and to apply the new or revived knowledge in the practical situation of
managing product development in a food company.
Mary Earle
Richard Earle
Allan Anderson
Contents
Preface ix
Part I Introduction ................................................. 1
1 Keys to new product success and failure ......................... 3
1.1 Food products – the basis of innovation ..................... 3
1.2 Measures of product success and failure ..................... 10
1.3 Key factors in product success ............................... 16
1.4 Product development process: the basis for success .......... 20
1.5 Managing for product success ............................... 26
1.6 Relating to consumers and markets: the key to
product success .............................................. 31
1.7 Knowledge of society, industry and technology .............. 32
1.8 Product development management in the food industry ...... 36
1.9 Basis and structure of the book .............................. 37
1.10 References ................................................... 38
Part II Key requirements for successful product development 43
2 Developing an innovation strategy ................................ 45
2.1 Possibilities for innovation ................................... 46
2.2 Incorporating innovation into the business strategy .......... 59
2.3 Building up the innovation strategy .......................... 64
2.4 Getting the innovation strategy right ......................... 69
2.5 Focusing the product development programme .............. 78
2.6 Developing the product development strategy ............... 85
vi Contents
2.7 Planning the product development programme .............. 91
2.8 References ................................................... 93
3 The product development process ................................ 95
3.1 Product strategy ............................................. 96
3.2 Product design and process development .................... 111
3.3 Product commercialisation ................................... 118
3.4 Product launch and evaluation ............................... 123
3.5 Service in product development ............................. 130
3.6 Where is the product development process going? .......... 144
3.7 References ................................................... 146
4 The knowledge base for product development ................... 149
4.1 Technology, knowledge and the food system ................ 150
4.2 Knowledge management or knowledge navigation? ......... 157
4.3 Necessary knowledge for product development .............. 165
4.4 Tacit knowledge in product development .................... 176
4.5 Creating knowledge in product development ................ 183
4.6 References ................................................... 192
5 The consumer in product development .......................... 194
5.1 Understanding consumer behaviour .......................... 195
5.2 Understanding food choice .................................. 203
5.3 Consumers’ avoidance and acceptance of new products ..... 207
5.4 Integrating consumer needs and wants in product development 209
5.5 Sensory needs and wants in food product development ...... 219
5.6 Consumers in Stage 1: Product strategy development ....... 223
5.7 Consumers in Stage 2: Product design and process
development ................................................. 236
5.8 Consumers in Stage 3: Product commercialisation ........... 245
5.9 Consumers in Stage 4: Product launch and evaluation ....... 250
5.10 References ................................................... 253
Part III Managing and improving product development ....... 257
6 Managing the product development process ..................... 259
6.1 Principles of product development management ............. 260
6.2 People in product development management ................ 262
6.3 Designing the PD Process ................................... 267
6.4 Establishing key decision points and the decision makers ... 271
6.5 Establishing outcomes, budgets and constraints .............. 276
6.6 Organising the PD Process .................................. 287
6.7 Managing the PD Process ................................... 299
6.8 Company organisation for product development ............. 307
6.9 References ................................................... 314