Management of food innovation

1. +
Management of Food
Innovation

2. + 2
New Product Failures
n Why?
n Poor planning
n Poor management
n Poor concept
n Poor execution

3. + 3
New Product Failures
n Poor Planning
n Product does not fit company’s strategies,
competencies, or distribution strength
n Failure to properly analyze market in
order to understand opportunities present
or specific unsolved consumer needs

4. + 4
n Poor Planning (cont.)
n Failure to understand cost to enter and
sustain position in product category
n Failure to perform due diligence in
discovering patent and copyright issues
New Product Failures

5. + 5
n Poor Management
n Organizational culture
n Support and resources for new product
process
n Management’s expectations and focus
n Process used to develop products and
determine budget
New Product Failures

6. + 6
n Poor management behaviors:
n No entrepreneur behavior
n Discourage or penalize risks
n Inadequate investment capital
n No cross-functional teams
n Demand immediate returns
n Firms that do not invest in innovation won’t
experience any innovation
New Product Failures

7. + 7
n Poor Product Concept
n Lacks a compelling benefit
n A me-too item with no real and relevant
difference with existing products
n Does not have a defined market target
with adequate sales potential
n Introduced at the wrong time
New Product Failures

8. + 8
n Poor Product Concept
n Incorrectly positioned product, such as:
n Benefits of a product that are irrelevant
to the consumer
n Consumer is unable to perceive a
meaningful difference between brands
n Thus, consumer sees no need to buy the
product
New Product Failures

9. + 9
n Poor Product Concept
n Can add to shelf clutter and consumer
confusion
n Fragmented product line, which increases
costs in production, distribution, and
inventory control
New Product Failures

10. + 10
n Poor Execution
n Products that do not deliver as promise
n Lack taste and texture
n Packages that are difficult to open
n Deteriorates before expiry date
n Extends to all areas of marketing plan
n Insufficient advertising, poorly scheduled
launch, fails to reach targeted consumer,
fails to communicate product’s name,
benefit, and availability
New Product Failures

11. + 11
n Poor Execution
n Introduced too late
n Introduced too early
n Campbell’s Intelligent Cuisine
New Product Failures

12. + 12
New Product Success
4 Basic Consumer Truths
n Product needs to deliver on the concept
promised
n Advertising quantity and quality matters
n Distribution drives sales
n Long-term support for new brands are
needed

13. + 13
Other “truths”
n New items adds incremental dollars and
profit to both category and brand
n Enhances manufacturer’s and retailer’s
position
n Launches are carried out with minimum
disruption
New Product Success

14. + 14
Other “truths” (cont.)
n Accompanied by product service plan and
consumer target plan
n Identification of activity-level costs
New Product Success

15. + 15
5 most important factors in distinguishing
between a product winner and a loser:
1. Understanding of user’s needs
2. Attention to marketing and launch
publicity
3. Efficiency of development
4. Effectiveness use of outside technology
and external scientific communication
5. Seniority and authority of responsible
managers
New Product Success

16. + 16
n The development of a new product is the
development of every aspect of the
business that the product needs to be
successful
n Consistently successful new products need
every aspect of the business working in
harmony
New Product Success

17. + 17
New Product Success
12 Requirements that are needed for a
product to be successful:
1. Appropriate organizational environment and top
management support
2. A disciplined new product development process
3. Dedicated development teams plus the
willingness and ability to partner and outsource

18. + 18
New Product Success (12 reqs.)
4. Product development activities that start
with and flow from business unit strategy
5. Understanding the external environment
and identifying market opportunities that
fit core competencies
6. Identification and specification of what is
driving the consumer and what the
consumer wants

19. + 19
New Product Success (12 reqs.)
7. Processes and techniques for keeping
the pipeline filled with a wide variety of
product ideas
8. Clear and focused product definition
early in the process before development
work begins
9. A superior and differentiated product
and package

20. + 20
New Product Success (12 reqs.)
10. Use of research to measure reaction to the
product and all elements of the program
throughout the development process
11. A well-executed launch
12. Ability to adapt, grow, and improve as market
and competitive condition evolve

21. + 21
1. An appropriate organizational
environment and top management
support
n Nurturing of innovative thinking
n Support risk taking
n Ability to sustain losses from first to third year
n Committed to putting right team together with
adequate resources
n http://www.youtube.com/watch?
v=GIgukZKB4uU

22. + 22
n Need for completeness, consistency, and
proficiency
n Realistic but disciplined timetables
n Proper up-front planning is critical
2. Use of a disciplined new product
development process

23. + 23
3. Dedicated development teams plus
the willingness and ability to partner
and outsource
n Use of cross-functional teams
n Enhances speed to market
n Facilitates implementation of projects
n Food processors are using suppliers expertise and
resources
n Manufactures are partnering with each other and
with suppliers

24. + 24
4. Product development activities that
start with and flow from business unit
strategy
n Product development must be a part of
overall business unit strategy, stemming
from clearly articulated objectives for
business growth
n Financial and human resources must be
available

25. + 25
5. Understanding the external
environment and identifying market
opportunities that fit core competencies
n Identifying “gaps” that are created by
changing consumer tastes that are driven
by changes in the marketing environment
n Demographic, socioeconomic, and
lifestyle changes
n Advances in technology

26. + 26
6. Identification and specification of
what is driving the consumer and what
the consumer wants
n Unsatisfied consumer needs represents
potential new product opportunities
n Understanding customers needs, wants,
and preferences
n E.g. Pre-cut salads

27. + 27
7. Processes and techniques for
keeping the pipeline filled with a wide
variety of product ideas
n Consistently identify and screen a large multitude of
new ideas through a systematic process and set of
techniques
n E.g. Kraft Foods (
http://www.youtube.com/watch?v=qiyhd21WpjQ)
n Ideation requires encouragement and reward for
creativity and excellent market intelligence

28. + 28
8. Clear and focused product
definition early in the process before
development work begins
n Need to identify target market, product
concept and positioning, and consumer
benefit to be delivered first

29. + 29
9. A superior and differentiated
product and package
n A superior product must be:
n innovative, possessing unique features,
meeting customer’s needs better,
delivering higher relative product quality
and solving the customer costs.
n E.g. Frito-Lay’s Baked Lays

30. + 30
10. Use of research to measure
reaction to the product and all
elements of the program throughout
the development process
n Continuous market studies
n Continuous refinement and evaluation of
product
n Thorough testing of product

31. + 31
11. A well executed launch
n Defined as:
n setting specific goals and targets for
market performance
n running initial production, distribution
and selling it to the trade
n implementing the advertising and
promotional programs
n tracking all of these activities relative to
goals and targets

32. + 32
11. A well executed launch (cont.)
n Launch must be tracked to determine
success

33. + 33
12. Ability to adapt, grow, and
improve as market and competitive
condition evolve
n Firms plan to ensure market success via
contingency planning and to continuously
improve the product bundle
n Establishing scenarios of market and
competitive reaction
n Monitor reaction
n Having alternative strategies available