To remain in business and retain a
competitive position, companies need to
produce new products, maintain or
expand their market share and know
what their competitors are producing.
Aim is to supply consumers at a profit.
Must be
economically and
technically viable
Financial, technical
and sales forecasting
will be undertaken
for new products to
estimate the
potential of the area
Meeting user needs
Recipe modification
Reducing cost
Scaling up
Enhancement (to presentation and taste)
Key areas:
Providing products with altered nutritional content
Increasing the variety of products avalible
Producing 'economy' lines
Appealing to the 'luxury' market
Maintaining and improving product quality
Producing 'convenience' foods
Failures
Why?
No difference between new and old product
Tough competition
Unsatisfactory distribution
Rising cost of ingredients, production and packaging
Low profits
Poor unattractive packaging
Food scares
Politics
Environmental concerns
Bad timing
Poor positioning on shelf
Too innovative
Ineffective advertising
Many products will not make it through to the final launch.
For every 100 ideas approximately 10 products are launched,
giving a 90% failure rate
A year later only one of these
products will be on sale. In order to
spread the financial risk a company
is likely to have many products
under development at the same
time.
Product life cycle
The life of a product includes its
time in development and the time it
is in the market. Usually consists of:
development; introduction; growth;
maturity; saturation; decline.
To prevent a decline in sales, companies
usually employ marketing tactics to boost
sales such as: money off vouchers, limited
edition varieties, new pack sizes, 'new' and
'improved' varieties. By doing this, sales of
particular products can remain level for long
periods of time.