The product development Process (2)

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The product development Process (2)

  1. 1. The Product Development Process Cosmetics, Toiletries, Insecticides, Household Cleaning Products Lecture II
  2. 2. The Product Development Process <ul><li>The great reality in the product </li></ul><ul><li>development process is that </li></ul><ul><li>novelty and inventiveness is not </li></ul><ul><li>important. It is the ability of the </li></ul><ul><li>new product to satisfy identified </li></ul><ul><li>wants of targeted consumer groups. </li></ul>
  3. 3. The Product Development Process <ul><li>Thus, The product development </li></ul><ul><li>process in most cases is really about </li></ul><ul><li>creating new story-lines to excite </li></ul><ul><li>consumers into making particular </li></ul><ul><li>choices. </li></ul>
  4. 8. Steps in The Product Development Process <ul><li>Ideation </li></ul><ul><li>Developing Product Specifications </li></ul><ul><li>Market and Product Planning </li></ul><ul><li>Concept and Prototype Generation </li></ul><ul><li>Product Registration </li></ul><ul><li>Packaging Design </li></ul><ul><li>Further Formulation Development </li></ul>
  5. 9. Steps in the Product Development Process (Cont.) <ul><li>Manufacturing System Design </li></ul><ul><li>Review Packaging and Formulation </li></ul><ul><li>Marketing Review </li></ul><ul><li>Test Market (Optional) </li></ul><ul><li>Refining of Product Before Major Launch </li></ul><ul><li>Major Launch </li></ul>
  6. 10. Dispelling The Myths of New Product Development <ul><li>Less than 5% of new products launched on the market are successful </li></ul><ul><li>Out of 100 new ideas, less than 2 become a commercial reality </li></ul><ul><li>Most companies are followers and not innovators (even the Body Shop) </li></ul><ul><li>Very few really novel innovations are ever launched commercially </li></ul><ul><li>Most new products are incremental steps in enhancement, rather than something completely new (similar to the automobile industry) </li></ul>
  7. 17. Attributes of a Good Cosmetic Chemist <ul><li>Has initiative to conceptualise new product systems </li></ul><ul><li>Is well read and conversed with raw materials </li></ul><ul><li>Understands strengths and limitations of various raw materials </li></ul><ul><li>Continually surveys market, environment and industry for new developments </li></ul><ul><li>Willing to undertake laborious lab work </li></ul><ul><li>Able to take a market orientation when developing products </li></ul><ul><li>Able to communicate effectively to others within the organisation </li></ul><ul><li>Is well versed in manufacturing processes </li></ul><ul><li>Understands product costing and able to formulate accordingly </li></ul>
  8. 18. Why do Companies Need New Product development? <ul><li>Regulations change forcing product changes </li></ul><ul><li>Lifestyles are continually changing </li></ul><ul><li>To improve their market positioning and market-share </li></ul><ul><li>New Technologies </li></ul>
  9. 19. <ul><li>What is the definition of the ideation </li></ul><ul><li>process? </li></ul>
  10. 20. <ul><li>The process of conceptualizing a </li></ul><ul><li>new idea for manifestation into a </li></ul><ul><li>new product </li></ul>
  11. 21. <ul><li>Name some Corporate sources of </li></ul><ul><li>ideation? </li></ul>
  12. 22. <ul><li>Observation of products in the </li></ul><ul><li>domestic market </li></ul><ul><li>Observation of products in overseas </li></ul><ul><li>markets </li></ul><ul><li>Trade Magazines </li></ul><ul><li>Supplier Submissions </li></ul><ul><li>Internet </li></ul><ul><li>Trade shows and conferences </li></ul><ul><li>Lateral Thinking </li></ul><ul><li>New Government regulation in regards to product registrations, toxicity, occupational health and safety </li></ul>
  13. 23. <ul><li>What is lateral thinking? </li></ul>
  14. 24. <ul><li>What is the objective of developing </li></ul><ul><li>product specifications? </li></ul>
  15. 25. <ul><li>To develop an idea into a list of criteria </li></ul><ul><li>that can be developed into a tangible </li></ul><ul><li>product </li></ul>
  16. 26. <ul><li>What are functional and what are </li></ul><ul><li>ascetic ingredients? </li></ul>
  17. 27. <ul><li>What is the systems approach in developing product specifications? </li></ul>
  18. 28. <ul><li>look at the new product as a system and define individually each required function of the product </li></ul>
  19. 29. The Product System Profile <ul><li>Shampoo System Profile </li></ul><ul><li>Function Potential Material </li></ul><ul><li>Primary surfactant ALS, ALES, TLS, SLES, NaDOBS </li></ul><ul><li>Secondary surfactant/ Coconut MEA, </li></ul><ul><li>Foam Stabiliser Cocamide MEA, Cocamidopropyl Betaine or </li></ul><ul><li>amine </li></ul><ul><li>Pacifier/Pearliser Ethylene Glycol Distearate, Glycol Stearate </li></ul><ul><li>Viscosity Control Sodium chloride </li></ul><ul><li>Preservatives Potassium Sorbate, Diazolidonyl urea, </li></ul><ul><li>Methyl and Propyl Parabens </li></ul><ul><li>Functional Additives GuarHydroxypropyl Trimmonium Chloride </li></ul><ul><li>Panthenol, Dimethicone, Hydrolysed Keratin </li></ul><ul><li>Protein </li></ul><ul><li>Fragrance Yes </li></ul><ul><li>Ascetic Ingredients Aloe Vera, Green Tea Extract, Panthenol </li></ul><ul><li>Dyes Yes </li></ul>
  20. 30. <ul><li>What is the role of the product </li></ul><ul><li>Manager? </li></ul>
  21. 31. <ul><li>A Product Manager will be appointed to oversee the project development. </li></ul><ul><li>Responsibilities: </li></ul><ul><li>a) Branding (image) </li></ul><ul><li>b) Packaging </li></ul><ul><li>c) Product </li></ul><ul><li>d) Budget projections </li></ul><ul><li>advertising, promotion, sales </li></ul><ul><li>e) Source of Production </li></ul>
  22. 32. <ul><li>Explain the concept </li></ul><ul><li>“ Compatibility with Branding” </li></ul>
  23. 33. <ul><li>to ensure the finished product formulation </li></ul><ul><li>reinforces the brand image the company </li></ul><ul><li>wishes to market to consumers </li></ul><ul><li>- colour, odour, softness, efficacy, </li></ul><ul><li>appearance, use of particular material </li></ul>
  24. 34. <ul><li>What are the logistic considerations </li></ul><ul><li>that must be made when developing </li></ul><ul><li>a product? </li></ul>
  25. 35. <ul><li>Many retail outlets are open and suffer </li></ul><ul><li>very harsh temperature variations, </li></ul><ul><li>which may not be very kind to many </li></ul><ul><li>different types of products, especially </li></ul><ul><li>emulsions </li></ul>
  26. 36. <ul><li>What are the major issues in </li></ul><ul><li>manufacturing system design? </li></ul>
  27. 37. <ul><li>Is the proposed manufacturing process compatible with the formulation? </li></ul><ul><li>Will a new process need to be engineered and developed? </li></ul><ul><li>What modifications to the product formula will have to be made, if any? </li></ul><ul><li>What type of filling equipment is needed? </li></ul>
  28. 38. <ul><li>What are the attributes of a good </li></ul><ul><li>cosmetic chemist? </li></ul>
  29. 39. <ul><li>Why do companies need New Product </li></ul><ul><li>Development? </li></ul>
  30. 40. Trends in New Product Development <ul><li>R&D budgets for product formulation development are getting smaller </li></ul><ul><li>- concentration of the international industry </li></ul><ul><li>- out-sourcing of development cheaper </li></ul><ul><li>- MNC’s see themselves as brand managers, </li></ul><ul><li>rather than product developers </li></ul>
  31. 41. Trends in New Product Development <ul><li>Much higher reliance on outside development work </li></ul><ul><li>- cost efficient </li></ul>
  32. 42. Trends in New Product Development <ul><li>Product development is becoming more centralised </li></ul>
  33. 43. Trends in New Product Development <ul><li>Risk taking is becoming minimal within the industry </li></ul><ul><li>- high costs of new product launches </li></ul><ul><li>- more difficult to test market (market </li></ul><ul><li>concentration and costs) </li></ul>
  34. 44. Trends in New Product Development <ul><li>A higher impacting regulatory environment may slow down new product development in the future </li></ul><ul><li>- cost of product registrations </li></ul><ul><li>- time of registrations </li></ul><ul><li>- higher degree of information required for </li></ul><ul><li>product registrations </li></ul>
  35. 45. Trends in New Product Development <ul><li>Due to industry concentration, there is less room for entrepreneurial type product launches </li></ul><ul><li>- small one product companies are being </li></ul><ul><li>purchased by MNC’s </li></ul><ul><li>- Concentration and increase in launch costs </li></ul><ul><li>through retail chains </li></ul><ul><li>- Cost and requirements of product registration is </li></ul><ul><li>becoming a barrier to entry for small players </li></ul>
  36. 46. Knowledge Required to Undertake new product Development <ul><li>1. Product Formulation </li></ul><ul><li>Different types of products require different types of knowledge </li></ul>
  37. 47. Product Formulation Examples <ul><li>Shampoo </li></ul><ul><li>- surfactant </li></ul><ul><li>- emulsion </li></ul><ul><li>- irritancy </li></ul><ul><li>- herbs & fragrance </li></ul><ul><li>- dyes </li></ul>
  38. 48. Product Formulation Examples <ul><li>Insecticides </li></ul><ul><li>- pesticide actives </li></ul><ul><li>- irritancy and toxicity </li></ul><ul><li>- aerosol formulating </li></ul><ul><li>- resins (mosquito coils) </li></ul><ul><li>- various others for different vehicles </li></ul>
  39. 49. Product Formulation Examples <ul><li>Air Fresheners </li></ul><ul><li>- fragrance </li></ul><ul><li>- aerosols </li></ul><ul><li>- gum and polymer technology </li></ul><ul><li>- capillary & diffusion concepts </li></ul>
  40. 50. Knowledge Required to Undertake new product Development <ul><li>2. Packaging </li></ul>
  41. 51. Knowledge Required to Undertake new product Development <ul><li>3. Manufacturing Methods </li></ul>
  42. 52. Knowledge Required to Undertake new product Development <ul><li>4. Efficacy Testing </li></ul>
  43. 53. Knowledge Required to Undertake new product Development <ul><li>5. Marketing and market Development </li></ul><ul><li>a) competitors </li></ul><ul><li>b) Market growth & Decline </li></ul><ul><li>c) product lifecycles </li></ul><ul><li>d) Consumer psychology and determinants of </li></ul><ul><li>demand </li></ul><ul><li>e) The marketing mix </li></ul><ul><li>f) channels of distribution </li></ul><ul><li>g) promotion strategy </li></ul><ul><li>h) retailer strategy </li></ul>
  44. 54. Knowledge Required to Undertake new product Development <ul><li>6. Knowledge of regulatory system </li></ul><ul><li>- GMP </li></ul><ul><li>- Pesticides Regulations </li></ul><ul><li>- Therapeutic Goods Acts </li></ul><ul><li>- Packaging & Labeling requirements </li></ul><ul><li>- Regulations about making claims (in both </li></ul><ul><li>consumer and product legislation) </li></ul><ul><li>- How to register a product </li></ul>
  45. 55. Market Differentiation for new product Development <ul><li>How and what form of a product that will be </li></ul><ul><li>developed will be governed by the market it is </li></ul><ul><li>being developed for. </li></ul>
  46. 56. International Markets <ul><li>Will effect types of </li></ul><ul><li>- formulation </li></ul><ul><li>- packaging </li></ul><ul><li>- fragrance </li></ul><ul><li>- language </li></ul><ul><li>- colour schemes (product & packaging) </li></ul><ul><li>- pack sizes </li></ul><ul><li>- shipping cartons </li></ul><ul><li>- brand names and promotional strategies </li></ul>
  47. 57. Selected Distribution Channels <ul><li>Upper Trade (hyper and supermarkets) </li></ul><ul><li>Lower trade (convenience and sundry stores) </li></ul><ul><li>Pharmacy </li></ul><ul><li>Discount Trade </li></ul><ul><li>Department Stores </li></ul><ul><li>Direct Marketing </li></ul>
  48. 58. Market Segment <ul><li>Generic or housebrand market </li></ul><ul><li>Discount store brands </li></ul><ul><li>Lower market end </li></ul><ul><li>Middle Market segment </li></ul><ul><li>Brand leader segment </li></ul><ul><li>Pharmacy segment </li></ul><ul><li>Direct Marketing brands </li></ul>
  49. 59. Shampoos formulated for Different Market Segments <ul><li>Attributes Generics Discount Lower Middle Leader Pharmacy </li></ul><ul><li>Solids </li></ul><ul><li>Level 5-15% 5-25% 10-30% 10-35% 25-40% 25-40% </li></ul><ul><li>Primary SLS SLS/ALS ALS/ ALS/ DEA LS DEA LS </li></ul><ul><li>Surfactant SLES SLES MEA LS MEA LS TEA LS TEA LS </li></ul><ul><li>Secondary Alkanolamides Alkyl (amido) Betaines & Amine Oxides </li></ul><ul><li>Surfactant </li></ul><ul><li>Pacifier/Visc. Sodium Chloride Glycol Stearates </li></ul><ul><li>Control Ethylene Glycols </li></ul><ul><li>Functional Maybe in ascetic quantities Number of choices </li></ul><ul><li>Ingredients </li></ul><ul><li>Fragrance Low cost selections Higher cost selections </li></ul><ul><li>Preservatives Formalin Sodium Benzoate Number of choices </li></ul>
  50. 69. Examples of New product Development <ul><li>1. Incistern Blue Block </li></ul><ul><li>A block that is dispensed into the toilet </li></ul><ul><li>cistern that will dissipate blue dye into </li></ul><ul><li>the toilet bowl each flush </li></ul>
  51. 70. Incistern Blue Block <ul><li>Claimed Functions </li></ul><ul><li>Surfactants clean side of bowl </li></ul><ul><li>Blue’s bowl water </li></ul><ul><li>Kills germs (disinfects) </li></ul><ul><li>Fragrance (some claim) </li></ul>
  52. 71. Incistern Blue Block <ul><li>Target Market </li></ul><ul><li>Generic market in Australia & </li></ul><ul><li>New Zealand </li></ul><ul><li>Contract manufacturing supermarket </li></ul><ul><li>own brands </li></ul>
  53. 72. Incistern Blue Block <ul><li>Development Criteria </li></ul><ul><li>(Developing Product Specifications) </li></ul><ul><li>Must perform same as market leader </li></ul><ul><li>and be 25% cheaper </li></ul><ul><li>Thus evaluate existing products in the </li></ul><ul><li>Market </li></ul>
  54. 73. Incistern Blue Block <ul><li>Evaluation of Existing Products </li></ul><ul><li>Which product is market leader (ie, product most consumers prefer) </li></ul><ul><li>How does the market leader perform? </li></ul><ul><li>- efficacy - colour, surfactant cleaning, </li></ul><ul><li>product longevity </li></ul>
  55. 74. Incistern Blue Block <ul><li>Which is the most important criteria to the </li></ul><ul><li>customer? </li></ul><ul><li>- In this case product longevity </li></ul>
  56. 75. Incistern Blue Block <ul><li>Product Specification </li></ul><ul><li>An incistern blue block that can last for 400 </li></ul><ul><li>Flushes </li></ul>
  57. 76. Incistern Blue Block <ul><li>Evaluation of product formula </li></ul><ul><li>In this case product formula and production </li></ul><ul><li>process cannot be separated. </li></ul><ul><li>Two products on the market, both produced </li></ul><ul><li>and formulated differently </li></ul>
  58. 77. Incistern Blue Block <ul><li>Thus the important question in the case of this </li></ul><ul><li>product is how is each product in the market </li></ul><ul><li>manufactured? </li></ul>
  59. 78. Incistern Blue Block <ul><li>Evaluate Each Product to determine </li></ul><ul><li>production process </li></ul>
  60. 81. Probable Harpic Process <ul><li>Solid ingredients melted and mixed </li></ul><ul><li>Heating pot needs to reach 90 degrees C. </li></ul><ul><li>Filling lines need to be heated </li></ul><ul><li>Volume or weight filling </li></ul><ul><li>Packaging PVC blister becomes mould during the process </li></ul>
  61. 84. Probable Jeyes Bloo Process <ul><li>Primarily a powder formulation </li></ul><ul><li>Will require high pressure extrusion 3500psi </li></ul><ul><li>Requires pre-measured cut for accurate block size </li></ul>
  62. 85. Anticipated problems with each production process <ul><li>Harpic System Jeyes Bloo System </li></ul><ul><li>Dusty Dusty </li></ul><ul><li>Cross Contamination Cross Contamination </li></ul><ul><li>Probable to clog Hydroscopic ingredients </li></ul><ul><li>along pipes may jam ribbon blender </li></ul><ul><li>Limitation in types Limitations in liquid </li></ul><ul><li>Of ingredients ingredients </li></ul><ul><li>Batch Process Excess pressure can </li></ul><ul><li>cause problems in plodder </li></ul>
  63. 86. Probable Harpic Formulation System <ul><li>Major Surfactant ethoxylated alcohol C16C18 </li></ul><ul><li>Dissipation Control Tallow fatty Alcohol C16C18 </li></ul><ul><li>Coconut monoethanolamine </li></ul><ul><li>Xanthan Gum </li></ul><ul><li>Builder Sodium Tripolyphosphate </li></ul><ul><li>Dye System Acid Blue Dye no.9 liquid 50% </li></ul>
  64. 87. Selection of Ingredients <ul><li>Surfactants: literature, supplier information </li></ul><ul><li>Dissipation controllers: literature, supplier information </li></ul><ul><li>Gums: Texts </li></ul><ul><li>Builders: Laundry technology </li></ul><ul><li>Dyes: literature, supplier information </li></ul>
  65. 88. Formulation Issues <ul><li>Ratio of surfactants to dissipation controllers </li></ul><ul><li>STP must be a fine powder grade to prevent clogging </li></ul><ul><li>Xanthan gum (how is it going to be dissipated into batch?) </li></ul><ul><li>How to prevent dye oxidization? </li></ul><ul><li>How to maintain a free flow during filling? </li></ul>
  66. 89. Probable Jeyes Bloo Formulation <ul><li>Major Surfactant: Sodium Dodecyl Sulphate </li></ul><ul><li>Secondary Surfactants: nil </li></ul><ul><li>Dissipation controllers: guar or xanthan gum </li></ul><ul><li>Dye: Acid blue no. 9 powder </li></ul>
  67. 90. Formulation Issues <ul><li>Dust control </li></ul><ul><li>Clogging of ribbon blender </li></ul><ul><li>Jamming of plodder </li></ul><ul><li>Thus small amount of moisture must be added </li></ul><ul><li>to formulation </li></ul>
  68. 91. System Comparison <ul><li>Both formulation systems have similar unit production costs </li></ul><ul><li>Extrusion system more costly because of PVA wrapping system </li></ul><ul><li>Harpic system is a batching system, whereas Jeyes Bloo system is continuous </li></ul><ul><li>Performance of extrusion block, slightly better than blended block </li></ul>
  69. 92. Packaging Decisions <ul><li>Limited by the nature of the product and process </li></ul><ul><li>Only modifications where ascetic changes, such as shape </li></ul>
  70. 93. Prototype Generation <ul><li>Took 6 months; </li></ul><ul><li>trialing different materials </li></ul><ul><li>surfactant ratios </li></ul><ul><li>gum selection </li></ul><ul><li>builder trialing </li></ul><ul><li>correct dye dosage </li></ul>
  71. 94. Product Registration <ul><li>Not required for a household product </li></ul><ul><li>Any claims must be able to be substantiated for Trade Practices legislation </li></ul><ul><li>Product must meet weights and measures requirements </li></ul><ul><li>Product must meet biodegrability requirements </li></ul><ul><li>Materials Safety Data Sheets must be prepared in accordance with occupational health and safety requirements </li></ul>
  72. 95. Packaging Design and Testing <ul><li>PVC blisters were tested to ensure they didn’t melt or become deformed during the manufacturing process </li></ul><ul><li>Tested for compatibility with product materials </li></ul><ul><li>Thicknesses corrected for best ascetic appearance </li></ul><ul><li>Tolerances negotiated with supplier </li></ul><ul><li>Blister seals tested for time stability </li></ul>
  73. 96. Manufacturing System Design <ul><li>Most difficult issue was to design a filler that would not clog up </li></ul><ul><li>Had to handle logistics of blister movement </li></ul><ul><li>Took numerous adjustments and two total redesigns of filling head to get it correct </li></ul><ul><li>Slight adjustments made to formula to achieve better flow </li></ul>
  74. 98. Launch <ul><li>No test market </li></ul><ul><li>Sales achieved almost 3,000,000 units per annum </li></ul><ul><li>Sold in Australia, New Zealand, New Guinea, Singapore, Fiji, Hong Kong and Taiwan </li></ul><ul><li>Still in market after 16 years </li></ul>
  75. 99. Examples of New product Development <ul><li>2. Roach Attack </li></ul>
  76. 100. Ideation <ul><li>Had problem of keeping wardrobes free of insects during long period of travel away from home </li></ul><ul><li>Wanted a non-poisonous continuous action method of solving this problem </li></ul><ul><li>Wanted a small space wardrobe air freshener </li></ul>
  77. 101. Product Specifications <ul><li>Safe </li></ul><ul><li>Long lasting (up to 3 months) </li></ul><ul><li>Natural active ingredient </li></ul><ul><li>Fragrant </li></ul>
  78. 103. Market & Product Planning <ul><li>The objective of this project was to develop an insect repellent that could be marketed as a small space air freshener </li></ul><ul><li>- market for small space air fresheners is many times larger than insect repellents for wardrobes </li></ul>
  79. 104. Concept and Prototype Generation <ul><li>System </li></ul><ul><li>Carrier: Wax. Powder or gel </li></ul><ul><li>Active ingredient: an essential oil </li></ul>
  80. 105. Efficacy Testing <ul><li>With many products we have to design special efficacy tests, where methodology will be accepted by regulatory bodies </li></ul>
  81. 107. Product Registration <ul><li>As an air freshener the product does not require registration </li></ul><ul><li>Recent changes in regulation requires the product to be registered as an insect repellent </li></ul><ul><li>Criteria: claims made </li></ul>
  82. 110. Manufacturing System Design
  83. 111. Manufacturing System Design
  84. 113. Launch <ul><li>Malaysia: Carrefour, 7Eleven, Giant, Cosway </li></ul><ul><li>Singapore: Mustaffa, Cold Storage, NTUC </li></ul><ul><li>Australia: Woolworths, Coles, Discount Stores </li></ul><ul><li>New Zealand: Foodstuffs </li></ul>
  85. 114. Conclusions <ul><li>Different projects will require emphasis on different disciplines, i.e., </li></ul><ul><li>- formulation development </li></ul><ul><li>- manufacturing process development </li></ul><ul><li>- ascetic changes </li></ul><ul><li>- product registration </li></ul><ul><li>- marketing </li></ul>

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