CHRM 2390
Research and
Development of Food
Products
1
Why go into new food product
development?
For profitable and to survive.
2
Forces Driving New Food Product
Development
Life cycles
Long range goals
Marketplace
New technology and knowledge
Changes in government legislation,
policies, and programs
3
The Product Life Cycles
1.
2.
3.
4.
5.
Introduction period
Growth period
Decline in sales
No-growth period
Decline in volume
4
Corporate Reasons for New
Product Development
To achieve growth and be profitable
Growth by




Expansion to new markets or market
segments-Expensive and hazardous
Market penetration -selling more in existing
market-Expensive
New products for current marketcontinuous growth and profitability
Diversification-new product for new
markets
5
Marketplace Reasons for New
Product Development
New food purveying method
Changing habits of consumer
Competition
6
Technological Reasons for New
Product Development
Information technology-accessible
Packaging technology
Increased knowledge of:

Food science
 preservative and processing
 new ingredients

Health and nutrition
7
Governmental Influences on New
Product Development
Purpose:




to ensure safe and contaminant-free food
to develop standards for food composition
and labeling
to maintain fair-trade and competition
to protect employees and the environment
Affect:


technical development of new food products
marketing personnel
8
Governmental Influences on New
Product Development...
Other regulatory aspects:

International Regulatory Agencies:
 Examples: WTO, EEC, ISO

Quasi-governmental agencies:
 Marketing boards: supply, import, price

Professional and trade associations
 Wages and rules of conduct
9
New Product Development
Could be defined as:


the development and introduction of a
product not previously manufactured by a
company into the marketplace, or
the presentation of an old product into a
new market not previously explored by a
company
10
New Product Classifications
Line Extension
Established products in a new niche
New form of existing products
Reformulation of existing products
New packaging on an old product
Innovative or added-value products
Never-before-seen products
11
Line Extensions
A new variant of an established line of
food products
Examples:



A new flavor
A new varieties
A new texture
12
Advantages of Line Extensions
Little time or effort for development,
manufacturing, production systems and
storage
Few change in marketing strategy
No new purchasing skills (commodity
trading) or raw material sources
No new storage or handling techniques
for either the raw ingredients or the
final product.
13
Problems with Line Extensions
developmental problems if extension
requires processing changes
manufacturing and other support
systems change if extension is complex
marketing techniques
14
Repositioning a Product
Discovery of a new use for an existing
product

Baking soda, oatmeal
Manufacturing unaffected
Minimal development time
New marketing strategy needed
15
New Forms of Existing Product
Often the downfall of new product
ventures
New product must have a perceived
advantage over old
Extensive development time
Major equipment purchases
Different warehousing and distribution
systems
16
Reformulation of existing product..
”new, improved”
High probability of technical success
Relatively inexpensive and short
development time
The result of:


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Unavailable ingredients
Lower costs
Meet the challenge of competitors
Consumer driven
17
New Packaging of Existing Products
Packaging of bulk products into unit
packages
Utilize new technologies such as MAP,
CAP
Branding
May require an overhaul of packaging
operation
18
Innovative Products
Making changes to an existing product
Some paths may be easy but some are
more risk and costly
The more innovation in a product, the
longer the development time and the
higher the research and development
costs
19
Creative Products
Rare, never-before-seen product
Difficult to define, e.g. surimi, reformed meat
products
Can be characterized by:



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Extensive development time
High research and development time
Expensive marketing strategies
Expensive sapital costs for equipment
Risky
If successful, imitators will flood market
20
Conclusion
Economics, consumer and competition
necessitate new product development
New products should be consistent with
goals and strategies of a business
Success of new products depend on the
availability of inputs, and the
management of cost and quality
21