Product Design and Development Packaging of Products Dr D. Hill Format • Introduction • Product development process • • • • • • • • Idea generation Idea screening Concept development and testing Marketing strategy development Business analysis Product development Test marketing Commercialisation • Packaging and issues for consideration • • • • • • Types of packaging Legality Safety/allergy policies Food waste Travel/transport Logistics Product Development Process • • Given the rapid changes in consumer tastes, technology and competition, companies must develop a steady stream of new products A retailer can obtain new products in one of three ways (1) buying a whole company, a patent or a licence to product someone else’s product (2) within the company’s own Research and Development (R& D) department (3) Approaching suppliers and asking them to come up with several new concepts Product Development Process • Launching product in today’s tough economic climate is difficult • Research suggests that more than 90 per cent of all new consumer products fail within two years • In terms of food, beverage and beauty products are launched each year only 2 per cent of them are considered successful Product Development Process • To create successful new products, a company must understand its consumers, markets, and competitors • They then need to develop products that deliver superior value to consumers • The company needs to carry out very detailed new-product planning • It also needs set up a systematic new-product development process shown in figure one Idea Generation • New product development starts with idea generation - the systematic search for new-product ideas • A company generally has to generate many ideas before they find a few good ones • Major sources of new-product ideas include internal and external sources such as consumers, competitors, distributors and suppliers • In some organisations they have a section dedicated to searching for new ideas e.g. food trends studio Idea Screening • The purpose of idea screening is to spot good ideas and drop poor ones as soon as possible • This ensures that money is saved at an early stage and money is not wasted in later stages • The ideas are written up on a standardised form and include information such as product, the target market and the competition • It can then be evaluated against set criteria Concept Development and Testing • An attractive idea must be developed into a product concept • A company’s task is to develop the new-product into alternative product concepts, find out how attractive each concept is to consumers and choose the best one • It may be to develop a number of product concepts e.g. chocolate bar product (see handout) Concept Development and Testing • The concepts may be presented to consumers symbolically or physically • The concept can also be presented in words (see handout) • The problem with this is that it can be very detailed and also very complex • On the other hand the product could be shown in its physical form with the information presented in a table Concept Development and Testing Figure one: Picture and table concept Weight 45 gms Selling price 50p Energy 450 Kcal Carbohydrate 55 gms Sugars 46.3 gms Total fat 30.2 gms Saturated fat 7.6 gms Marketing Strategy Development • The next stage is introducing the product to the market • The marketing strategy statement consists of three parts – target market, the planned product positioning, and the sales, market share and profit goals for the first few years – the product’s planned price, distribution and marketing budget for the first year – the planned long-term sales, profits goals and marketing mix strategy Business Analysis • The company needs to evaluate the business attractiveness of the proposal • They will review projected sales, costs and profit margins for a new product to determine the most viable • It estimate sales it may look at the history of sales of a similar product(s) Product Development • At this stage R & D develops the product concept into a physical product • Within the food industry kitchen trials will take place • At this stage small amounts are cooked e.g. three or four portions • The next stage would be factory scale where about 100 portions are produced • If acceptable production runs would be carried out which would be approximately 1,000 portions Test Marketing • If the product passes functional and consumer tests, the next step is test marketing • At the stage the product and marketing programme are introduced into more realistic market settings • For example, Mars used N. Ireland as a test market for their ice-cream bars • Test marketing gives the marketer experience with marketing the product before going into full production of the product Test Marketing • Test marketing by consumer-goods companies has been declining in recent years • Companies often do not test-market line extensions e.g. variations of the same product • On the other hand some companies have come up with novel ways of test marketing their product • See the ‘case study’ on Innocent smoothies Commercialisation • Commercialisation is the introducing the new product to the market • If the company goes ahead it will face high costs • In the case of a new consumer-packaged good in the first year it could spend between £5 million and £100 million for advertising, sales promotion and other marketing efforts • The company launching the new product must first decide on introduction timing Packaging • Packaging will depend on the sandwich being produced • For example, wraps could be packaged in cardboard and barrier film • Whilst wedge sandwiches are placed in the classic clear plastic triangle packaging • This enables the consumer to see the sandwich without the need to read the label as they can see the filling Packaging continued • The packaging needs to be made from a type of material which is opened by all types of consumer from the very young to the elderly • Thus it needs to be made from a material that is easily opened • There is currently the trend of ‘peel and reseal’ which allows consumers to eat it at different times • If the sandwich is redesigned or re-packaged it must be done gradually so as consumers still recognise it Other types of packaging • See table two for the main types of packaging and the popularity of their use – Paper and paper based products – Metals – Plastics – Glass Paper and Board Materials • These can be produced in many grades and converted into many forms • It can be combined with other materials to form a coated or laminated product see examples • An example of where paper is used in its thinnest form to make packaging is the ‘new’ packaging for smarties sweets Paper and Board Materials continued • Where heavier board material are required it can be used as a sleeve to place around a plastic or aluminium tray • The sleeve can have shoulder incorporated or left without – see examples • In addition, cardboard can be used for a lid for example on the top of Sainsbury’s Shepherd’s pie • A ‘window’ can also be place in the sleeve • Another method of allowing the consumer to view the product is to use a partial sleeve Metals • Aluminium can be used as a packaging material • It benefits include, that it is lightweight, that it does not allow light, moisture or odours to penetrate • It tends to be used for fizzy drinks such as Coke • It can be moulded into trays and food products placed inside such as lasagna • The current trend is for the food to be cooked in the foil tray Metals continued • As bread crumbed products may stick to the tray a rippled effect on the bottom is now used • This minimises the contact with the food product and therefore reduces the opportunity for burning • Metal can be laminated with a plastic coating to protect delicate items for example, strawberries and rice pudding • Steel can also be coated with tin which makes it suitable for the packaging of high acid foods • Steel can be thermally processed for high risk products Metals continued • When metal is used as packaging for a product such as biscuits the plastic coated information can be used and the tin reused • This would usually happened with biscuits packaged for Christmas • The metal may be shaped into a decorative feature so that it becomes part of the product for example Champagne Chocolate Truffles Metals continued • When metal is used as packaging for a product such as biscuits the plastic coated information can be used and the tin reused • This would usually happened with biscuits packaged for Christmas • The metal may be shaped into a decorative feature so that it becomes part of the product for example Champagne Chocolate Truffles Glass • If the sandwich is produced in a factory where there are lots of other products, then the manufacturer needs to examine the type of products that are being produced • If it is made in a factory where glass is used it must be produced in a separate section • It is therefore preferable to exclude glass from the production process and substitute it with another suitable product e.g. aluminium Glass continued • Where it is part of the packaging an alternative could be sought for example, toughened glass • For example, Northern Foods repackaged their Tiramisu in toughened plastic sundae shaped ‘glasses’ rather than glass ramekin dishes • Glass would have been previously used for salad cream, tomato ketchup and fizzy drinks, but has been replaced by plastic • Glass now tends to be used for bottles e.g. alcohol and sauces and jams Plastics • No two plastics are identical in their properties • Most are light weight and do not allow moisture or gas to pass through • They are resistant to bacteria and provide food insulation • They can be of several grades and thickness and van be shaped and moulded Plastics continued • Foods which could be placed in a metal tray can generally be placed in a a plastic tray • They can be made in a variety of colours depending on the current trend • The current trend is black trays whereas, before it would have been white or cream • Where the consumer needs to see the product it can be placed in a clear plastic tray and a clear outer plastic used for example, crispy potato slices Plastics continued • Plastic trays can be moulded so that they can hold a plastic pouch • For example, steaks with a plastic pouch of pepper sauce • The advantage of the pouch is that it is transparent • In addition, a thinner plastic can be used to cover the plastic tray in which the food is placed • A moisture mat can be added to absorb liquids so as to prevent the deterioration in the product Plastics continued • Thin plastics are also used to cover product where it is the only protective covering for example, biscuits e.g. Digestives • The advantage is that all the product information can be printed on to the plastic • It offers little protection, however, and the biscuits can get broken and you cannot see the product Plastics continued • Premium priced biscuits are placed in a heaver plastic container for each biscuit and then covered in a thinner plastic • This is then placed in a cardboard box for example, Milk chocolate toffee covered biscuits • The current trend is for foil wrap to seal in the freshness or to place them in a tub – see example Legality • Before producing any product it is necessary to ensure you have a recognisable brand name, logo and slogan • You must ensure that any proposed name is not already registered • There are a number of specialist agencies who can ascertain if the name is already registered • You also must comply with the Trade Marks Act (1994) to ensure your product and packaging is different enough from a competing brand Legality continued • By law you need to ensure the ‘big four’ are included on the label • Some companies include the full eight • If you are going to enter the low fat market you need to conform to the Food Standards Agency (FSA) regulations in terms of ‘Low fat’ • If you are going to enter the organic market you may wish to have your product endorsed by The Soil Association Legality continued • Your product may not need a new brand name as it may be a sub-brand or be launched under an existing brand name • In terms of legality you must ensure that the ingredients list incorporated on the packaging is correct • The ingredients should be listed from the one that is in greatest proportion to the least Safety/Allergy policies continued • The packaging needs to be tamper proof from production to final sale • This is to ensure that ‘foreign objects’ cannot be placed in the sandwich thereby creating a food scare • This would result in food having to be recalled • Retailers now provide ‘products’ such as toys which appeal to children, also must be safe • If it is produced in a factory where nuts are present the sandwiches need to be labelled ‘may contain traces of nuts’ Food waste • Food waste analysis needs to be carried out at various stages of the process • A food producer needs to determine if it is more cost effective to buy in products pre-prepared • During the manufacturing, food waste will be collected at various stages of production • If this is excessive management need to determine how this can be minimised or automated Food waste continued • Customers can add to food wastage • They can try to view a sandwich to see how well it is filled, thus damaging the packaging • Therefore the product has to be discarded • Many retailers operate a ‘chill chain’ • This ensures all high risk products such as sandwiches must not be out of chilled conditions for more than 30 minutes allowing the temperature to rise above 5oC Travel/Transport • Transporting food from where it is produced to where it is sold can also generate food waste • Food needs to be handled at various stages of transportation • It needs to be loaded onto lorries, transported on ferries, off loaded at distribution centres reloaded onto smaller van(s) to be distributed to various outlets Travel/Transport • The food needs to be placed on the shelf for sale to the consumer • If the food is damaged in any way customers will not purchase it • Travel/drop test also need to be carried out to test how much maltreatment a product can withstand during transport Logistics • The logistics of route to market need to be examined • In the case of the video, the order was received on day one, produced on day two and dispatched on day three • Figure two shows a Gantt chart for sandwich preparation and dispatch based on this principle Logistics continued • This is a simple forward-front approach of production to sale • If it was for a special occasion or a particular time of the year it needs to take a back-the-front approach • For example, Marks and Spencer adopt this for products such as party food for Christmas and the New Year • They identify the date of launch and then work back through delivery time to how long it will take to produce, which determines when production has to commence