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Development

From Concept

to Marketplace THIRD EDITION

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Preface xv

Acknowledgments xvii

Author xix

1 What Is New Food Product Development? 1

1.1 Introduction 1

1.2 Defining.and.Characterizing.New.Food.Products 2

1.2.1 New.Products 2

1.2.1.1 Line.Extensions 3

1.2.1.2 Repositioned.Products 6

1.2.1.3 New.Form.of.Existing.Products 7

1.2.1.4 Reformulation.of.Existing.Products 7

1.2.1.5 New.Packaging.of.Existing.Products 8

1.2.1.6 Innovative.Products 10

1.2.1.7 Creative.Products 11

1.2.1.8 Genetically.Modified.Products 11

1.2.2 Customers.and.Consumers 12

1.2.3 Added.Value 13

1.2.4 Markets.and.Marketplaces 14

1.3 Marketing.Characteristics.of.New.Products 15

1.3.1 Product.Life.Cycles 18

1.3.2 Profit.Picture 19

1.4 Why.Undertake.New.Food.Product.Development? 20

1.4.1 The.“Why”.of.“Why.Undertake.New.Product Development?” 25

1.4.1.1 Corporate.Avenues.for.Growth.and.Profitability 25

1.4.1.2 Opportunities.in.the.Marketplace.for.New Product.Development 27

1.4.1.3 Technological.Advances.Driving.New Product.Development 29

1.4.1.4 Government’s.Hand.in.Influencing.New Product.Development 30

2 The New Product Development Team: Company Organization and Its Influence on New Product Development 35

2.1 Structure.of.Organizations 35

2.1.1 Types.of.Organizations 35

2.1.1.1 Committee.Politics 36

2.1.1.2 Hierarchical.Politics 37

2.1.1.3 Court.Politics 38

2.2 Organizing.for.Product.Development 38

2.2.1 Organizing.for.“the.What”:.The.Physical.Plant 40

2.2.2 Organizing.for.Whom:.The.Human.Side 41

2.2.3 Organization.and.Management 42

2.2.4 Creativity:.Thinking.Differently 43

2.3 Research.for.Creativity:.What.Is.It? 45

2.3.1 Characterizing.Research 45

2.3.2 Organizing.for.Creative.Research 47

2.3.2.1 The.“Unhabitual”.as.a.Tool.in.Creativity 48

2.3.2.2 Cross-Functionality.in.Product.Development 49

2.3.2.3 Fluidity.as.an.Organizational.Tool in Creativity 50

2.4 Constraints.to.Innovation 51

2.4.1 The.Corporate.Entity 52

2.4.1.1 Risk.Capital 52

2.4.1.2 Company.Ego 52

2.4.2 Communication 54

2.4.2.1 Multiplant.Communication 54

2.4.2.2 Technology:.Its.Management.and.Transfer 56

2.4.2.3 Personnel.Issues 56

2.5 The.New.Product.Development.Team 58

2.6 Phases.in.New.Product.Development 60

3 What Are the Sources for New Product Ideas? 67

3.1 Getting.Ideas 67

3.1.1 General.Guidelines.for.Ideas 68

3.1.2 Sources.of.Product.Ideas 69

3.1.2.1 The.Many.Marketplaces 70

3.1.3 Getting.to.Know.Them:.General.Techniques 72

3.1.3.1 Census.and.Economic.Data 72

3.1.3.2 The.Fallacy.of.Privacy 77

3.1.3.3 Data.Mining 78

3.1.3.4 The.Internet:.Social.Networking,.Blogging, Tweeting,.and.All.That.Buzz 80

3.1.3.5 Just.Looking.and.Being.There 82

3.1.3.6 Using.Acquired.Knowledge.to.Source.Ideas 90

3.1.3.7 Using.Retailer/Distributor/Manufacturer Interfaces.for.Ideas 102

3.1.3.8 Other.Environments.as.Sources.of.Ideas 104

3.1.3.9 Internal.Sources.of.Ideas.for.Development 111

3.2 Criteria.for.Screening.Ideas 116

3.2.1 Environment.in.which.Criteria.Are.Applied 117

3.2.1.1 Conflict.between.Marketing.and.Research and.Development 118

3.2.1.2 Conflict.between.Production.and.Marketing 119

3.2.2 Applying.the.Criteria 120

3.2.2.1 Reality.of.New.Product.Development.Ideas 121

3.2.2.2 Caution.about.Copy-Cat.Products 122

4 Strategy and the Strategists 125

4.1 Strategy 125

4.1.1 Defining.the.Company 126

4.2 The.Strategists 127

4.2.1 An.Involved.Senior.Management 128

4.2.2 Shaping.the.Company’s.Objectives 131

4.2.2.1 Company.Objectives.That.Shape.Product Development 132

4.2.2.2 Sanctioned.Espionage.or.Competitive Intelligence? 133

4.2.2.3 Benchmarking 138

4.3 Finance.Department:.The.Cautionary.Hand.in.Development 138

4.3.1 Finance’s.Not.So.Passive.Role.in.Development 138

4.3.2 Financial.Realities.of.Product.Development 140

4.3.2.1 Slotting.Fees 141

4.3.2.2 Financial.Criteria 142

4.3.3 Financial.Tools 144

4.3.3.1 Comparing.Costs.with.Anticipated Revenues 144

4.3.3.2 Probability.Index 146

4.3.3.3 Other.Tools 147

4.4 Strategy:.Marketing’s.Perspective 147

4.4.1 Marketing’s.Functions 148

4.4.2 Market.Research 149

4.4.3 Time:.A.Critical.Element.in.Marketing.Planning and Development 151

4.4.4 Nature.of.Market.Information 153

4.4.5 Qualitative.and.Quantitative.Market.Research Information 155

4.4.5.1 Focus.Groups 156

4.4.5.2 Beyond.Focus.Groups:.Neuromarketing— Invading.the.Consumer’s.Inner.Space 157

4.4.6 Marketing’s.War.Room 160

4.4.7 Marketing.and.Sales.Departments 162

4.4.8 Marketability.and.Marketing.Skills 163

4.4.9 Summary 163

5 The Tacticians: Their Influence in Product Development 165

5.1 Science.and.Technology.in.Action 165

5.1.1 Research.and.Development:.Meeting.the.Challenges 166

5.1.1.1 Recipe.Development.and.Recipe.Scale-Up:.

Meeting.the.Challenge 166

5.1.2 Spoilage.and.Public.Health.Concerns 169

5.1.2.1 Food.Spoilage.Concerns 169

5.1.2.2 Microbial.Spoilage 174

5.1.2.3 Naturalness:.Minimal.Processing 176

5.1.3 Maintaining.Safety.and.Product.Integrity 177

5.1.3.1 General.Methods.and.Constraints.to Their Use 177

5.1.4 Summary.and.a.Caution 200

5.2 Role.of.Engineering.in.the.Development.Process 201

5.2.1 Engineers 201

5.2.1.1 Process.Design 202

5.2.1.2 Scale-Up 202

5.2.1.3 In-Process.Specifications 204

5.3 Manufacturing.Plant:.A.Stumbling.Block.or.an.Asset in Development? 205

5.3.1 The.Plant 205

5.3.1.1 Concerns:.Space,.Facilities,.Labor, and Disruptions 205

5.3.1.2 Co-Packers.and.Partnerships 206

5.3.2 Roles.of.the.Purchasing.and.Warehousing Departments 207

5.3.2.1 Purchasing.Department’s.Activities 207

5.3.2.2 Activities.in.Warehousing and.Distribution 209

5.3.3 IT.Department’s.Contribution 210

5.3.3.1 Information.Management.and.Retrieval 211

5.3.3.2 Number.Crunching 211

5.3.3.3 Graphics 213

5.4 Commercial.Feasibility 214

5.4.1 The.Loop:.The.Interconnectivity.of Questions with Indefinite.Answers 214

5.4.1.1 The.Art.of.Guesstimating 216

5.5 Summary 218

6 The Legal Department: Protecting the Company—Its Name, Goodwill, and Image 221

6.1 Introduction 221

6.2 .The.Law.and.Product.Development 222

6.2.1 Nongovernmental.Organizations 223

6.2.2 .Advocacy.Groups 225

6.2.3 Geopolitical.Groups 226

6.2.4 .Expert.Panels 226

6.2.5 .Industrial.Sector 227

6.2.6 .Summary 228

6.3 .Food.Regulation.and.the.Development.Process 228

6.3.1 .Legislation,.Regulations,.and.Safety:.A.Dilemma 228

6.3.2 .Role.of.Lawyers 231

6.3.3 .Legislating.Quality.and.Safety 232

6.4 .Environmental.Standards 233

6.5 .Summary 234

7 Quality Control: Protecting the Consumer, the Product, and the Company 237

7.1 .Introduction 237

7.2 .The.Ever-Present.Watchdog 237

7.2.1 .Sensory.Analysis.in.Product.Development 238

7.2.1.1 .Sensory.Techniques 238

7.2.1.2 .Objective.Sensory.Testing 240

7.2.1.3 .Subjective.or.Preference.Testing 241

7.2.1.4 .Panelists 242

7.2.1.5 .Other.Considerations.in.Sensory.Analysis 244

7.2.1.6 .To.Test.Blind.or.Not? 244

7.2.1.7 .Can.All.Tasters.Discriminate? 246

7.2.1.8 .Using.Children 247

7.2.2 .Using.Electronics:.The.Perfect.Nose? 247

7.2.3 .Shelf.Life.Testing 248

7.2.3.1 .Selecting.Criteria.to.Assess.Shelf.Life 248

7.2.3.2 .Selecting.Conditions.for.the.Test 250

7.2.3.3 .Types.of.Tests 252

7.2.3.4 .Guidelines.to.Determining.Shelf.Life 255

7.2.3.5 .Advances.in.Shelf.Life.Determination 258

7.3 .Designing.for.Product.Integrity 262

7.3.1 .Safety.Concerns 264

7.3.2 .Concerns.in.Designing.for.Food.Safety 264

7.3.3 .New.Concepts.of.Safety 265

7.3.4 Costs.of.Quality.and.Safety.Design 267

7.3.5 .Hazard.Analysis.Critical.Control.Point.Programs 270

7.3.6 .Standards.Necessary.for.Safety 270

7.3.7 .International.Standards 271

7.4 .Summary 272

8 Going to Market: Success or Failure? 275

8.1 Final.Screening 275

8.1.1 Test.Market:.What.It.Is 275

8.1.1.1 Examples 276

8.1.2 Test.Market:.Its.Goals 277

8.1.2.1 Some.Cautions 279

8.1.2.2 Costs:.A.Deterrent 279

8.1.3 Considerations.for.a.Successful.Traditional.Test.Market 280

8.1.3.1 Where.to.Introduce 280

8.1.3.2 When.to.Introduce 282

8.1.3.3 Length.of.the.Test.Market.Period 283

8.1.3.4 Disruptive.and.Unexpected.Elements in Test.Markets 283

8.1.3.5 How.to.Introduce 284

8.1.3.6 What.Product.to.Market 285

8.1.4 Evaluating.the.Results 285

8.1.4.1 The.Market:.Misinterpreted and Misunderstood 286

8.1.5 Judgment.Day:.The.Evaluation 291

8.1.6 Failures.in.the.Marketplace 292

8.1.6.1 Causes.of.Failure 295

9 Why Farm Out New Product Development? 301

9.1 Introduction 301

9.1.1 A.Rose.Is.a.Rose.Is.a.Rose 302

9.1.1.1 Outsourcing 302

9.1.1.2 Outsourcing,.Consulting,.Partnering, and Joint.Venturing 304

9.1.1.3 A.Classification.of.Consultants 307

9.2 Going.Outside.for.Product.Development 311

9.2.1 The.Need 312

9.2.2 Finding.and.Selecting.the.Appropriate.Consultant 313

9.2.3 Some.Caveats.in.Selecting.and.Working with Consultants 316

9.2.3.1 Exposure 316

9.2.3.2 Loss.of.a.Collective.Learning.Opportunity 317

9.2.3.3 Employee.Growth 318

9.2.3.4 Dissension 318

9.2.3.5 Other.Obligations:.Problems.in.Academe 318

9.2.4 Advantages.and.Disadvantages 319

9.2.4.1 Utilization.of.Resources 319

9.2.4.2 The.Need.to.Monitor 321

9.2.4.3 Does.the.Client.Understand Consultantspeak?.Communication 321

9.3 Summary 323

10 New Food Product Development in the Food Service Industry 325

10.1 .Understanding.the.Food.Service.Industry 325

10.1.1 Food.Service.Marketplaces 325

10.1.2 Customers.and.Consumers.in.the.Food.Service Industry 328

10.2 .Characteristics.of.the.Food.Service.Market 329

10.2.1 .Clientele 330

10.2.2 .Food.Preparation.and.Storage.Facilities 331

10.2.2.1 .Equipment 331

10.2.2.2 .Storage.Facilities 332

10.2.2.3 .Labor 333

10.2.3 Price,.Quality,.Consistency,.Safety,.and.Sometimes Nutrition 335

10.2.3.1 .Standards 339

10.2.3.2 Health.Care.Sector.of.the.Institutional Market 341

10.2.3.3 .Military.Sector.of.the.Institutional.Market 342

10.3 .Developing.Products.for.the.Food.Service.Sector 343

10.3.1 .Physical.Facilities.of.the.Customer 343

10.3.2 .Energy.Requirements 345

10.3.3 .Labor 346

10.3.4 .Waste.Handling 347

10.3.5 .Customers.and.Consumers 347

10.3.5.1 .Consumer.and.Nutrition:.An.Oxymoron 348

10.4 .Quality.in.the.Food.Service.Market 349

10.4.1 .Safety 349

10.5 .Development.of.Products.for.the.Food.Service.Market 350

10.6 .Criteria.for.Evaluating.a.Test.Market 352

11 Product Development in the Food Additive and Food Ingredient Industries 355

11.1 .Additive.and.Ingredient.Market.Environment 355

11.1.1 Characteristics.of.the.Food.Ingredient.Industry 356

11.1.1.1 Chain.of.Customers.and.Consumers: A Welter.of.Identities.and.Needs 356

11.1.1.2 Similarities.and.Dissimilarities.to.the.Food Service.Industry 357

11.1.1.3 .The.Ever-Present.Government 358

11.1.1.4 Proliferation.of.New.Ingredients 359

11.1.2 Focusing.on.the.Customer.Who.Is.Also the Consumer 360

11.1.2.1 .Customer.Research 361

11.1.2.2 “Consumer”.Research:.“Yes”.and.“No” Possibilities 362

11.1.3 .Development.Process 364

11.1.3.1 Development.Process.and.Food.Legislation 365

11.1.3.2 .What.Are.the.Criteria.for.Screening? 365

11.1.4 Looking.to.the.Future.for.Developments.in.Food Ingredients 368

11.1.5 .Meeting.the.Challenge:.New.Ingredients 370

11.1.5.1 Marketing’s.Impact.on.the.Direction of Research.and.Development 370

11.2 .Ingredients.and.the.New.Nutrition 380

11.2.1 .Opportunities.Provided.by.the.New.Nutrition 381

11.2.1.1 .Biologically.Active.Nonnutrients 381

11.2.1.2 Other.Ingredients:.Some.with.and.Some without.Nutritive.Properties 388

11.2.2 .Challenges.for.the.New.Nutrition 392

11.2.2.1 .Problems.Presented.by.Enriched.Foods 392

11.2.3 .A.Cautionary.Summary 393

12 Dancing but Uncertain of the Music 397

12.1 Introduction 397

12.2 Looking.Forward.and.Backward 398

12.2.1 The.Changed.and.Changing.Scene 398

12.2.1.1 The.Past 398

12.2.1.2 Recent.Times.and.the.Present 399

12.2.1.3 The.Future 400

12.2.2 Being.Sure.of.the.Concept 404

12.2.2.1 Value.of.the.Earlier.Literature 406

12.2.2.2 What.Customers.and.Consumers.Want or What.Purveyors.Want? 408

12.3 What.Food.Science.and.Technology.Have.Wrought 409

12.3.1 Impact.of.Food.Science.and.Technology 409

12.3.1.1 How.Food.Savvy.Are.People? 409

12.3.1.2 Impact.of.Technology 412

12.3.1.3 Trends.as.Social.History 418

12.3.2 Factors.Shaping.Future.Product.and.Process Development 429

12.3.2.1 Influences:.Known.and.Unknown 429

12.4 What.I.Have.Learned.So.Far.about.Product.Development 438

12.4.1 My.Mentors 438

12.4.1.1 New.Food.Products.of.the.Future 438

References 443

Index 473

The.book.took.form.after.I.began.my.consulting.firm.and.the.lecture.notes.became embellished with experiences at Imasco Foods and its several.companies.as.well.as.experiences.gained.as.a.consultant.working.with.com-panies.whose.products.failed.somewhere.in.the.process I.was.called.in.to.correct.errors.but.first.had.to.find.where.errors.might.have.been.made In.the.course.of.these.adventures,.I.met.many.of.my.ex-students.at.trade.shows.and.food.fairs.who.encouraged.me.to.put.everything.together.in.a.book—thus,.this.book.

In.this.edition,.contents.have.been.reorganized.and.much.new.material.added, especially on marketing and electronic communication and their.combined effect on market research Where possible, I tried to use peer-reviewed marketing journals, but seldom do companies announce their.activities.in.these.publications;.thus,.resorting.to.business,.marketing,.and.trade.newspapers.was.necessary.for.references Any.material.used.had.to.make.a.substantial.intellectual.or.technical.contribution.to.an.understand-ing.of.new.food.product.development.or.illustrate.a.novel.and.innovative.approach to the new product development process The material had to.describe.the.“real-world”.environment.of.product.development,.and.hence,.more.resort.to.business.newspapers.was.necessary

opment,.as.some.reviewers.suggested.I.include—this.is.a.style.of.presenta-tion.developed.by.many.business.schools True.examples.are.more.blatant.in.illustrating.the.elements.contributing.to.the.success.or.failure.of.a.particular.product situation Real.life.is.ever.so.much.more.educational I.have.kept.the.confidences.of.my.clients.in.the.experiences.I.relate,.but,.as.stated.in.an.earlier.edition,.if.my.clients.do.see.themselves,.they.should.be.ashamed The.anecdotes, mostly errors in the development process, illustrate particular.misadventures.in.new.product.work

I.studiously.avoided.“worked.fictional.examples”.of.new.product.devel-The.age.of.some.of.my.references.has.been.criticized,.but.where.nothing.new.has.been.added.to.that.provided.by.the.older.literature,.I.see.no.reason.to.use.later.works.simply.because.they.bear.a.later.date Besides,.the.older.literature.is.often.written.more.clearly.so.that.principles.are.easily.grasped For.those.who.may.disagree,.I.suggest.they.read.some.older.marketing.literature.and.the.later.literature There.is.a.further.defense.of.my.literature.choices.in.Chapter.12

I am deeply.indebted.to.my.wife,.Joan,.for.reading.the text and.making.many.helpful.suggestions;.to.my.son,.Grahame,.senior.technical.writer.for.Autodesk.Canada.Co.,.Montreal,.Quebec,.Canada,.for.preparing.many.of.the.figures,.for.many.interesting.and.stimulating.discussions.regarding.the.text,.and.also.for.correcting.and.emending.my.notes.on.computers,.com-munication.technology,.and.the.Internet;.and.to.my.son-in-law,.Dr David.Gabriel,.professor.in.the.Department.of.Physical.Education.and.Kinesiology

at Brock University, St.  Catharines, Ontario, Canada, for his suggestions.for, and assistance with, figures I am especially grateful to Christine.Coombes,.U.S Public.Relations.Coordinator.of.Mintel.International,.for.the.data.on.new.product.introductions Chapters 10.and.11.benefited.largely.from helpful.discussions.with.Timothy.Beltran—who,.at.the.time.of.our.discussions,.was.executive.chef.of.the.J P Morgan-Chase.dining.room.on.Wall Street, New York City, and has now.formed his own catering.com-pany, Culantro Caterers, in New.Jersey, and.with Henry B Heath,.MBE,.BPharm.(London),.MFC,.FRPharmS.,.FIFST.(United.Kingdom),.and.retired.president of Bush Boake Allen Corporation, Dorval, Quebec To both of.these.gentlemen,.my.heartfelt.thanks Much.is.owed.to.James.W Baldwin.for.many.interesting.discussions.on.marketing.and.with.whom.I.worked.on.the.communications.course.at.Concordia.University,.Montreal,.Quebec,.Canada,.and.travelled.extensively.in.Europe.looking.for.new.product.ideas.for.Imasco.Foods;.to.Dr Charles.Beck,.a.good.friend.and.colleague.with.whom.I.exchanged.many.ideas;.to.Dr Sylvan.Eisenberg.of.MicroTracers,.Inc.,.San.Francisco,.California,.for.his.thoughtful.advice;.and.to.the.library.staff.at.the.University.of.Guelph,.Guelph,.Ontario,.Canada,.especially.Judy.Wanner.and.Michael.Ridley,.chief.information.officer.and.chief.librarian,.respectively To.all,.my.sincere.thanks

he has used successfully in his consulting practice for over 30 years He.received.his.BA.and.MA.in.food.chemistry.from.the.University.of.Toronto,.Toronto,.Ontario,.Canada,.in.1954.and.1956,.respectively He.also.received.his.PhD.in.food.technology.from.the.University.of.Massachusetts,.Amherst,.Massachusetts,.in.1962

His.work.experience.includes.stints.as.a.research.chemist.with.the.Food.and.Drug.Directorate.in.Ottawa,.Canada,.and.as.a.research.food.technolo-gist.working.on.chocolate.products.for.the.Nestlé.Co in.Fulton,.New.York

He conducted research on tomato.flavors and products at the H J Heinz.Fellowship at the Mellon Institute for Industrial Research, Pittsburgh,.Pennsylvania.for.two.years

Dr Fuller served as associate professor in the Department of Poultry.Science at the University of Guelph, Guelph, Ontario, Canada, where, in.addition.to.teaching.and.research.responsibilities.into.added.value.meat.and.egg.products,.he.carried.out.extension.work.for.food.processors.in.south-ern Ontario He also held a fellowship at the Food Research Association,.Leatherhead, England, where he worked on water binding and reducing.water.losses.in.meat.products

Prior.to.forming.his.own.consulting.company,.Dr Fuller.was,.for.eight.years, vice president of technical services, Imasco Foods Ltd., Montreal,.Quebec,.Canada,.where.he.was.responsible.for.corporate.research.and.prod-uct.development.programs.at.the.company’s.subsidiaries.in.both.Canada.and.the.United.States His.consulting.practice.has.taken.him.to.the.United.States,.South.America,.Europe,.and.China He.has.lectured.on.the.topics.of.agricultural.economics.and.food.technology.in.North.and.South.America,.England,.Germany,.the.Netherlands,.and.China As.an.outside.lecturer,.he.presented courses at McGill University, Montreal, Quebec, Canada, and.was a guest lecturer.at Concordia University, Montreal, Quebec, Canada,.for.many.years

Dr Fuller is presently semiretired and works mainly with his old ents He.keeps.himself.occupied.growing.different.varieties.of.hot.peppers.and.developing.new.formulations.of.hot.sauces He.now.lives.in.Guelph,.Ontario

What Is New Food Product Development?

…The.production.of.a.new.food.commodity.might.seem.to.be.a.trivial matter.unworthy.of.serious.consideration;.this.is.not.necessarily.so The technological.expertise.upon.which.any.one.item.depends.may.require the.full.depth.of.scientific.understanding.

Magnus Pyke (1971)

1.1 Introduction

To.be.profitable.and.to.survive,.food.companies.seek.new.products These,.if.successful,.give.new.life.to.a.company,.replacing.products.no.longer.sell-ing.well Old.bell-ringer.products.cannot.be.relied.on.year.after.year.to.be.profitable New.product.development.or.finding.new.uses.for.old.products.is.essential.for.continued.growth.of.a.company New.products.are.one.of.a.few.ways.a.company.can.follow.for.increased.profitability

Developing.new.products.requires.talented.personnel,.extensive.research,.suitable.physical.facilities,.and.money Such.human.and.physical.resources.are expensive Nevertheless there is no promise that any new products.developed.through.these.resources.will.be.successful.enough.to.justify.their.expense The.obviousness.of.the.need.for.new.product.is.apparent.to.any.novice food technologist For the novice food technologist entering new.product research and development, what is difficult to appreciate is that.there.is.a.finite.amount.of.money.available.within.any.company.and.an.infi-nite.number.of.demands.to.use.that.money Management.must.see.that.its.money.is.allocated.to.those.areas.in.the.company.where.the.money.is.used.to.best.advantage

cal.territories.with.its.bell-ringer.products It.reasons.that.there.would.be.per-haps.some.language.or.other.label.changes.and.no.developmental.expenses,.and.the.company.would.be.moving.products.with.a.proven.customer.appeal.and sales record and hence the risk would be small The finance depart-ment sees opportunities in various investment instruments that would.contribute.to.the.profitability.of.the.company.without.the.associated.risks.and.costs.of.new.product.development.or.expansion.into.new.market.areas

The.marketing.department.wants.to.expand.markets.into.new.geographi-The.manufacturing.department.would.put.forward.its.argument.that.with.newer, faster equipment, it could lower the cost of established products,.reduce.energy.costs,.and.be.a.better.corporate.citizen.with.a.smaller.carbon.footprint,.and.more.profitability.for.the.company.would.result.

There.are.other.areas.of.critical.activity.in.the.company.that.will.have.their.own.promises.of.how.they.could.use.the.money.available.to.best.advantage:.each.will.argue.their.case.with.senior.management.as.to.why.they.and.they.alone.would.succeed And.the.shareholders.or.partners.in.the.company.also.have.their.ideas.how.best.to.use.the.money

tition.for.money.from.within.and.uncertainty.regarding.the.success.of.any.new.product.that.is.introduced.into.the.marketplaces

This.is.the.world.of.new.product.development,.one.where.there.is.compe-1.2 Defining and Characterizing New Food Products

The new product development process introduces many new terms, and.these.terms.must.be.defined.and.understood.for.complete.understanding.of.the.process

1.2.1  New Products

place.anywhere This.is.a.rare.occurrence

A.new.food.product.is.one.that.has.not.been.presented.before.in.any.market-A.food.product.may.be.new.to.a.company.that.has.not.sold.it.before.but.is.not.necessarily.new.to.a.marketplace:.other.companies.elsewhere.might have sold it or a product conceptually similar to it before Some.characteristics.of.a.food.product.providing.newness.for.a.company are.tabulated.in.Table.1.1

An.old.established.product.manufactured.by.a.company.is.introduced.in.either.a.new package.or.a.new.size.or.a.new.form.

An.old.established.product.manufactured.by.a.company.is.introduced.into.a.new.market niche,.i.e.,.positioned.as.one.with.a.new.function.

Defining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif- 1Defining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.Defining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.ADefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif- productDefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.notDefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.previouslyDefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.manufacturedDefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.byDefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.aDefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.companyDefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif-.andDefining.a.new.product.to.encompass.all.the.characteristics.listed.is.dif- duced.by.that.company.into.its.marketplace.or.into.a.new.market-place,.or

intro- 2intro-.intro-.Theintro- presentationintro- orintro- rebrandingintro- byintro- aintro- companyintro- ofintro- anintro- establishedintro-.product.in.a.new.form,.a.new.package.or.under.a.new.label.into.a.market.not.previously.explored.by.that.company

No-name or store brand products, even those as famous as President’s.Choice®, are hard to pigeonhole by a definition No-name or store brand.products.are.purchased.from.a.food.manufacturer.by.a.retailer.or.by.a.com-pany.that.then.either.leaves.a.No-name.label.on.them.(rare.but.not.unheard.of).or.puts.its.own.branded.label.on.it.and.sells.it.to.a.retailer This.company.may.be.no.more.than.an.office.with.a.telephone A.label.owner.visits.manu-facturers.and.purchases.product.to.the.grade.or.standard.he.or.she.wants.(often.very.high.standards—cf President’s.Choice.or.S.&.W.Fine.Foods™):.he.or.she.has.not.developed,.manufactured,.or.market-researched.the.prod-uct In effect, these products piggyback.on the research and development.work.of.the.original.food.manufacturer

acteristics.of.each.type,.and.provide.some.examples

Tables.1.2.and.1.3.tabulate.new.food.products,.describe.some.general.char-1.2.1.1  Line Extensions

A.line.extension.is.a.variant.of.an.established.line.of.food.products,.i.e.,.one.more.of.the.same Line.extensions.represent.a.logical.extension.of.similarly.positioned.products

Some.care.must.be.given.to.what.are.and.are.not.line.extensions,.for.example:

• Adding.a.canned.three-bean.salad.product.to.a.line.of.canned.bean.products.involves.a.change.in.processing.and.quality.control.tech-nology Developers.have.gone.from.a.high.pH,.low.acid.product.to.an.acidified.product This.is.no.longer.a.line.extension;.a.different.market.niche.is.targeted The.product.now.has.added.value.and.is.a.new.menu.item

• facture.of.corn.chips.or.corn.puffs.or.roasted.peanuts.or.popcorn These.are.not.simple.line.extensions The.new.products.have.in.com-mon.only.the.snack.food.element These.are.distributed.through.the.same.channels.and.displayed.in.the.same.section.of.a.retail.store,.but.purchasing.philosophies,.storage.facilities,.and.manufacturing.technologies.have.changed.extensively.for.the.manufacturer

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 This.means.that.regular.distribution.systems can.be.used.

Repositioned.existing.

Marketing.must.develop.new.strategies.and.promotional.materials to.interpret.and.penetrate.the.newly.created.marketing.niche Sales.tactics.require.reevaluation.to.reach.and.make.sales.within.the new.marketplaces.

New.form.or.size.of.

capabilities Major.equipment.purchases.may.be.required.if manufacturing.to.be.done.in-house.

Marketing.and.sales.resources.will.require.extensive.reprogramming Reformulation.of.

Generally.little.impact.on.physical.facilities.

Generally.little.impact.on.marketing.and.sales.resources.unless reformulation.leads.to.repositioning.of.product.

Repackaging.of.

Slight.impact.on.physical.facilities New.packaging.equipment.will be.required.

Basically.will.require.total.revision.of.marketing.and.sales.forces Creation.of.a.new.company.or.brand.may.be.required.

Risk.of.failure.high.

New.flavors.for.a.snack.product.such.as.potato.chips New.flavored.bread-crumb.coating

A.coarser.or.more.natural.peanut.butter

factors.in.reducing.cholesterol Soy-containing.products.repositioned.as.dietary factors.combating.cancer

Soft.drinks.positioned.as.main.meal.accompaniments

temperatures Prepeeled.fruit.or.sectioned.grapefruit.or.oranges Fast-cooking.products.such.as.rice.or.oats Instant.coffees,.teas,.and.flavored.coffees Dehydrated.spice.blends.for.sauces

Hotter,.spicier,.zestier,.crunchier.(e.g.,.peanut.butter), smoother.products

All-natural.(“greener”).products,.organic.products Lactose-free.milk.products

High-fiber.products

Branded.fruits.and.vegetables Pillow.packs.for.snack.food.items Institutional.sizes.for.warehouse.stores Squeeze.bottles.for.condiment.sauces Pull-top.containers.of.snack.dips Use.of.thin.profile.containers

Canned.snack.food.dips.(see.above) Frozen.dinners

Simulated.seafood.products

Extruded.products Surimi.and.kamaboko-based.products.and.soy.bean curd.(tofu).and.limed.corn.if.these.were.discovered recently

Short-chain.fatty.acid.containing.products

Line.extensions.are.not.to.be.confused.with.brand.extensions A.brand.can.be.likened.to.an.umbrella.that.embraces.products.that.represent.reliability,.confidence,.quality,.and.“motherhood.”.A.brand.might.best.be.described.as.a.concept.embodying.values.and.reliability.(of.a.company) Customers.rec-ognize.a.brand.as.providing.safety,.reliability,.and.quality.at.a.price.they.are.willing.to.pay Many.brands.have.this.cachet:.no.matter.what.they.make,.if.it.has.their.brand,.it’s.got.to.be.good!.Brands.have.been.described.as.having.an.essence;.Barnham.(2009).argues.that.this.is.wrong—brands.need.to.be.thought.of.as.being.the.essence,.a.concept.bringing.greater.value Barnham.presents.an.interesting.discussion.of.the.philosophy.of.brands.and.branding Brand extensions, particularly brand overextensions, can be a death-knell.for.the.products.under.its.protective.umbrella One.need.only.think.of.one’s.favorite.brand.of.food.and.picture.that.brand.name.being.extended.to.carry.a.line.of.women’s.lingerie.or.men’s.underwear.or.hygiene.products It.can.have.disastrous.results Yet.Marks.and.Spencer™,.a.U.K brand.better.known.as.Marks.and.Sparks,.had.the.cachet.of.top.quality.whether.it.was.food.prod-ucts, clothing, or furniture President’s Choice™ has also succeeded with.this.in.some.aspects One.sees.another.aspect.of.brand.as.essence.

Marketing.programs.are.usually.not.greatly.affected.by.line.extensions,.but there can be some.surprises When a confectionery company with.an.established line of children’s confections attempts to introduce a line of.adult-flavored.confections,.some.marketing.difficulties.can.arise,.for.exam-ple,.a.company.with.jujubes.and.jelly.beans.introducing.flip-top.dispensed.mints.or.humbugs Conflict.has.been.introduced:.children.do.not.like.the.new.flavors;.adults.do.not.accept.a.child’s.brand.of.candy.not.knowing.that

it is flavored for them Different promotions, advertisements, and store.placements for the adult products are necessary Conversely, Pez Candy®.started.out.as.a.mint-flavored.candy.directed.to.adults.as.an.aid.in.stopping.smoking Packed.unimaginatively.in.a.tin,.they.were.introduced.into.North.America.in.the.1950s.in.a.cigarette-lighter-like.dispenser Poor.sales.led.to.the.dramatic.change.to.children’s.candy.flavors,.and.the.dispensers.are.now.collectors’ items Promotion, repositioning, and repackaging brought new.life.to.a.losing.product

1.2.1.2  Repositioned Products

A.company.can.be.surprized.to.find.through.their.consumer.intercepts.and.letters.that.consumers.use.their.product.in.ways.that.the.company.has.never.anticipated A.new.market.niche.has.been.created.that.gives.new.life.to.an.existing.product An.example.is.ARM.&.HAMMER®.Baking.Soda.finding.a.new.niche.as.a.body.deodorant,.a.dentifrice,.and.a.deodorant.against.food.odors.in.refrigerators

Repositioning an established product takes a company into new and.unknown markets Each repositioning must be considered individually Rebranding.and.extensive.marketing.promotion.may.be.necessary

1.2.1.3  New Form of Existing Products

A.paste.product.converted.to.a.tablet.(or.vice.versa).a.sauce.transformed.to.a.sprinkle-on.powder.or.to.a.spray-on.product.represents.new.forms.of.exist-ing.products,.but.they.may.be.forms.too.radical.a.departure.from.the.known.product.for.consumers.to.accept Such.changes.in.form.are.costly.processing.changes.for.the.manufacturer

tional.form.to.be.successful Profound.departures.in.form.require.reeducation.to.new.usage.habits A.new.form.of.a.product,.for.example,.prepeeled,.precut.french-fry style potatoes have not become successful in the retail, chilled.food counter but have become remarkably successful in the  food service.market Here,.they.offer.convenience,.i.e.,.added.value

The.modified.product.must.be.seen.as.a.valued.improvement.over.the.tradi-Sampson.(2010).described.how.the.Nestlé.Company.found.that.changing.the shape of.the.traditional squares.found.in.most.chocolate.bars such.as.their.Nestlé.Noir™.bars.caused.better.taste.sensations It.was.found.that.the.chocolate.in.the.form.of.waves.melted.better.and.was.more.“comfortable.in.the.mouth,”.and.the.flavor.lasted.longer

1.2.1.4  Reformulation of Existing Products

The.“new,.improved”.product.is.typical.of.this.category Reformulation.may.be.necessary.for.any.number.of.reasons:

• Some improvement, such as better color, better flavor, more fiber,.less.fat,.greater.stability,.fewer.calories,.is.required.in.a.product.to.meet.competitive.products.or.to.fit.with.perceived.trends

• Raw materials or unique ingredients become unavailable or too.costly Substitutes.must.be.found.to.remain.price.competitive

• Ingredients with superior characteristics become available, or.improved processes allow the manufacture of products of higher.quality.at.a.lower.cost

• Reformulation.is.needed.to.lower.the.costs.of.a.product.to.meet.the.challenge.of.cheaper.imitations.from.competitors This.is.often.the.reason.for.reformulation

• The.safety.of.ingredients,.additives,.or.even.raw.materials.may.be.challenged Their.use.is.no.longer.permitted,.or.their.level.of.usage.may.be.restricted Colorants,.artificial.sweeteners,.and.some.nutra-ceuticals.(for.example,.kavakava.and.St John’s.Wort).have.all.either.had their safety questioned, been restricted in their use, or been.banned.outright

• Reformulation.may.also.be.necessary.to.create.a.new.market.niche.for existing products, for example, one with fewer calories, more.fiber,.or.lower.sodium.content

Reformulation.efforts.vary.from.being.inexpensive.and.accomplished.in.a.short.developmental.time,.for.example,.reducing.salt.in.a.product,.to.being.very costly in research and development time such as the replacement of.sugar.or.fat.to.make.reduced.calorie.products.

A.new,.improved.product.presents.a.marketing.dilemma.for.a.company Customers.and.consumers.wonder.that.if.this.new.version.is.an.improve-ment,.why.was.it.not.offered.in.the.first.instance?

1.2.1.5  New Packaging of Existing Products

ogy.and.change.of.form.(see.Figure.1.1) At.its.simplest,.it.is.the.packaging.of.bulk.produce.into.smaller.packages.that.are.more.convenient.for.consumers

This.product.sector.reflects.an.interesting.mix.of.simple.to.complex.technol-Figure 1.1

Adding.value.to.the.humble.potato.

(1) Field potatoes

(2) Bulk potatoes Cleaning, culling, size grading

(3) Retail packaging

5 and 10 lb units Branded potatoes Varietal potatoes Wrapped units of 4

(4) Institutional market Precooked, foil wrapped Prepeeled, precooked, diced French fry—cut

Mashed Hash browns Potato skins

(5) Added-value marketing Frozen french fries Dehydrated potatoes Canned potatoes Snack foods

a Chips

b Reformulated chips Industrial products

a Modified starches

b Starch derivatives

c Alcohol

and can enter a new market niche, for example, yoghurt or fruit pieces.packed into sizes convenient for school lunches Manufacturing involves.only purchasing, inspection, grading, cleaning with an increased empha-sis.on.sanitation,.trimming,.storage,.weighing,.packaging,.and.distribution Development.costs.vary.from.minimal.to.extensive.

toes complete with dirt and culls were available at.one time.on the retail.market.in.large.100-lb.sacks Next.came.the.cleaning,.culling,.and.size grading.of.potatoes.(box.2) These.were.repackaged.into.smaller.package.sizes.to.suit.smaller.families.and.apartment.dwellers.with.no.desire.or.storage.space.for.100-lb sacks of produce (box 3) In boxes 4 and 5, greater transformations.occur.involving.both.new.packaging.and.new.forms.of.established.products.with more convenience features and serving different markets Each step.requires.more.sophisticated.processing,.quality.control,.sanitation,.packag-ing.and.storage,.and.handling

How.it.becomes.more.complex.is.seen.more.clearly.in.Figure.1.1:.field.pota-ter,.have.followed.a.somewhat.similar.path.but.not.as.elaborate.as.that.for.potatoes.in.Figure.1.1 They,.through.washing,.cutting,.and.trimming.and.abrasion, are now “cocktail”-sized carrots and so-called baby carrots, all.attractively.packed.in.branded.packages A.product,.unsaleable.on.the.retail.produce.counter,.has.been.given.added.value.and.entered.into.a.new.upscale

Field.carrots,.oversized,.misshapen,.and.unsuitable.for.the.produce.coun-market.niche.as.crudités The.abraded.pulp.waste.also.is.used.and.goes.into.

feed.or.fertilizer

pared produce and organically produced vegetables, meats, specially bred.(e.g.,.heritage.breeds),.or.free-range-raised.animals.gave.traditional.products.a.new.life.as.new.products.of.higher.quality.or.convenience.on.which.a.com-pany.is.proud.to.put.its.name.(Gitelman,.1986) Packages.of.“speed.scratch.products,”.i.e.,.mixed,.washed.salad.greens,.prepeeled.fruits.and.vegetables,.and.sliced.mushrooms,.fit.into.this.niche Previously.nameless.or.brand-less.produce.and.meat.cuts.now.bear.display.stickers.of.well-known.brands.of.food.companies.or.naming-the-farm.raised.breeds Raising.heritage.breeds.or.growing.heritage.crops.introduces.another.level.of.complexity.to.this.sector.Success.rests.with.marketing.a.brand,.the.quality.of.which.is.known.and.respected.by.customers.and.consumers For.suppliers.to.food.service.out-lets.and.the.outlets.themselves,.particularly.upscale.restaurants,.the.use.of.heritage.breeds,.organically.raised.animals,.or.local.produce.in.their.menus.provides.added.value.features.for.those.valuing.such.features

A.new.merchandising.concept.arose:.the.brand.labeling.of.packaged.pre-aging.(CAP).have.permitted.the.creation.of.a.number.of.new.fresh.products.with.an.extended.shelf.life.allowing.the.opening.up.of.new.markets.in.a.larger distribution area Both technologies require extensive research for.safety and shelf life stability of the products (see later) Biobased materi-als,.another.packaging.development,.offer.a.marketing.ploy.as.environmen-tally sound.features.(Petersen.et.al., 1999;.Shahidi.et.al.,.1999;.Rojas-Graü

over.from.steel.cans.to.aluminum.cans.or.to.plastic.containers.is.an.expen-sive.makeover.of.a.packaging.line:.it.requires.new.machinery.or.the.use.of.a.co-packer Changeover.from.cylindrical,.conventional.cans.to.thin.profile.containers.(retortable.pouches.and.semirigid.trays).for.thermally.processed.foods requires both reformulation and a new filling and packaging line Such.a.change.improves.quality.and.provides.added.value.for.which.cus-tomers.pay.more,.but.it.does.require.costly.plant.modifications Equipment.is.presently.such.that.line.speeds.are.slow

Changing.from.glass.containers.to.metal.ones,.or.vice.versa,.or.the.change-Another.cost.associated.with.packaging.is.the.cost.that.may.be.involved.in.the.need.for.a.returns.system.whereby.the.used.containers.of.a.product.must

be picked up as customers.return.these What can.be used for.packaging.restricts,.in.many.areas,.it.to.be.recyclable,.reusable,.or.able.to.be.composted

1.2.1.6  Innovative Products

Innovative.products.are.difficult.to.categorize “Innovate”.is.defined.in.both

Webster’s Ninth Collegiate Dictionary as.“make.changes”.and.The Concise Oxford

Dictionary as “make changes.in.” An example of an innovative product is.the.Sony.Walkman®,.whose.inventor,.Akio.Morita,.chair.of.Sony,.claimed.the.Walkman.involved.no.new.invention and no costly.research and.develop-ment In.his.opinion,.companies.place.too.much.emphasis.on.basic.research

to their own detriment Reliance, he claimed, on basic research prevents.companies from being competitive Morita saw opportunities in various.new.developments.and.put.these.together.with.the.perception.of.a.consumer.need The.Walkman.was.simply.the.putting-together.expertly.of.established.inventions.into.a.superbly.marketed.product—its.secret.was.in.new.packag-ing.(i.e.,.putting.together.of.ideas).and.marketing This.is.innovation.(Geake.and.Coghlan,.1992)

An.innovative.product,.then,.is.one.resulting.from.making.changes.to.an.existing.product.or.products Are.any.of.the.foregoing.product.sectors.inno-vations?.Most.would.say.“No.”.Generally,.the.more.innovation.(change).in.a.product,.the.riskier.it.is.to.introduce.and.the.more.costly.the.marketing.strategies.of.that.novelty The.Walkman.was.a.radical,.innovative,.and.con-ceptual.change.in.communication.whose.customers.had.to.be.educated.to.its.added.value

Little research or development and few production line changes are.required.for.a.frozen.food.processor.to.put.a.stew,.some.frozen.vegetables,.and.a.frozen.pastry.on.a.tray.and.call.it.a.frozen.dinner Likewise,.putting.a.can.of.tomato.sauce,.a.package.of.dry.spaghetti.sauce.spices,.and.a.pack-age.of.dry.pasta.together.with.a.package.of.grated.cheese.to.make.a.dinner

kit requires little research.and development effort All items.in.these.two.remarkably successful innovative products are readily sourced, and their.ease.of.combination.has.engendered.many.imitators.

New.ingredients.often.form.the.basis.for.innovative.products Simulated.crab.legs,.lobster.chunks,.shrimp,.and.scallops,.all.based.on.surimi.technol-

ogy,.have.allowed.the.development.of.many.faux.seafood.dishes.(Johnston,.

1989;.Mans,.1992)

The.changing.demographics.of.cities.caused.by.immigration.offer.unique.marketing.opportunities.for.the.putting.together.of.ethnic.dishes Processors.of.chick.peas,.navy.beans,.and.other.lentils.might.satisfy.ethnic.tastes.with.such.added.value.products.as.hot.bean.dips.or.hummus.and.hummus.tahini.and.many.variants.of.these However,.any.venture.into.innovative.products.should.only.be.undertaken.with.a.brand.able.to.carry.such.products A.new.brand.may.be.required

1.2.1.7  Creative Products

A.creative.product.is.one.brought.into.existence.according.to.most.dictionary.sources: the rare, never-before-seen product The development of surimi, a.fish.gel,.several.hundred.years.ago.and.its.development.into.kamaboko-based.products.would.be.considered.a.creative.product,.as.would.tofu.and.limed.corn.meal Today,.one.might.consider.reformed.meat.products.as.a.creative.development, and certainly, extrusion to produce new puffed products is.creative

tive.or.creative.products.is.that.imitators.rapidly.flood.the.market.with.me-too.products Imitators.telescope.the.time.and.effort.(often.measured.in.years).that was required of the developer of the creative product Development.time.may.be.only.as.long.as.it.takes.the.imitator.to.get.new.labels.printed;.marketing.know-how.has.already.been.developed.to.educate.the.public.by.the.originator Market.entry.costs.will.be.minimal

The.great.problem.for.companies.who.have.introduced.successful.innova-1.2.1.8  Genetically Modified Products

ucts.category These.could.be.products.modified.from.their.traditional.shape,.taste,.or.color.by.conventional.means—and.there.are.arguments.about.what.are.conventional.means—or.by.gene.splicing.technology Gardeners.are.del-uged.with.catalogues.picturing.red,.blue,.or.black.potatoes;.yellow.or.green.cauliflower;.carrots.with.pink,.yellow,.or.purple.cores.or.with.round.shapes;.beets.with.purple.or.white.alternating.interior.rings.or.beets.that.are.globes.or.elongated;.tomatoes.that.are.yellow,.pink,.or.deep.red;.and.red.or.yellow.raspberries Only.their.imagination.limits.the.variations.plant.geneticists.can.develop.for.hobby.gardeners Seed.producers.and.gardeners.accept.these.ini-tially.as.novelties.that.they.can.amaze.their.friends.with,.and.eventually,.these

Genetically.modified.products.fit.rather.poorly.into.the.above.creative.prod-gradually get accepted universally Commercial growers hint at increased.phytochemical.content.or.a.vague.healthy.benefit.from.increased.antioxidants.The.development.of.commercial.crops.with.increased.levels.of.beneficial.phytochemicals.in.crops.that.are.staples.in.some.diets.has.been.the.target.of.plant.geneticists;.one.example.is.a.new.rice.variety.with.enhanced.caro-tene.content.to.combat.eye.disease Other.categories.of.genetically.modified.products.are.those.modified.to.have.a.better.shape—e.g.,.straighter.bananas.for.easier.shipping,.square.(or.nearly.so).melons.for.better.packing,.or.firmer.tomatoes.for.less.damage.in.transit Arguments.from.the.anti-GMO.groups.are.that.these.developments.do.not.benefit.the.buying.public.but.benefit.only.the.food.industry.and.are.not.wanted.or.appreciated.by.the.public.especially.if.there.are.flavor.or.usage.changes.

What.still.appears.to.have.a.strong.taboo.is.the.eating.of.cloned.animals At.present,.the.technology.is.extremely.expensive,.and.many.people.have.a.strong.aversion.to.the.use.of.cloned.meat

There.is.a.wealth.of.literature.in.the.public.domain.(see.Voosen,.2009).and  in trade and scientific journals arguing for and against the safety,.public.acceptance,.or.ecological.advisability.of.genetically.modified.crops Many countries have banned the use of genetically modified foods or.ingredients Product.developers.are.forewarned.to.research.what.the.cur-rent.regulations.are

1.2.2  Customers and Consumers

Customer and.consumer.describe.two.different.entities:.the.two.words.should.

not.be.interchanged.unless.the.intended.meaning.is.clear A.customer.is.one.who.buys.in.a.marketplace The.customer.is.attracted.by.point.of.sales.mate-rial,.promotions,.or.tastings.in.the.marketplace.or.at.food.trade.exhibitions Customers.make.choices.(i.e.,.purchases).according.to.their.consumers’.likes.and dislikes, allergies, disposable or budgeted income, or commercial or.industrial.requirements The.customer.is.also.looking.for.reliability.(cf brand.loyalty).of.delivery,.quality,.and.price

Dr Kurt Lewin (reported in Gibson, 1981) described the customer as a

“gatekeeper.”.As.such,.gatekeepers.are

• A.family.member.who.decides.what.is.purchased.for.the.household

• missary for a restaurant chain, an institution, a hospital, and the.like, who buy.or.send out tenders to.suppliers.with specifications.required.by.others.within.their.organizations

The.purchasing.agent.of.a.company,.a.retail.chain,.a.central.com-• Chefs.who.plan.menus.and.decide.what.raw.produce,.ingredients,.or.semifinished.goods.are.purchased.for.the.diners.in.a.restaurant

• Pet.owners.who.determine.what.pet.foods.are.purchased.for.their.animals

Consumers influence customers.on what.is.purchased.or.served,.but.as.noted.by.Fuller.(2001),.“There.is.the.conflict.between.the.consumer’s.hedo-nistic.demand.of.‘I.want’.and.the.customer’s.practical.barrier.of.‘I.need’

or ‘I can.afford.’.”.This.conflict.is.apparent.by.uneaten.food.returned.to.a.cafeteria’s.waste;.prisoners.rioting.over.the.quality.and.variety.of.food.they.are.served;.ingredient.suppliers.losing.contracts.when.their.clients’.specifica-tions.are.not.met;.or.children.refusing.to.eat.their.meals

tions.of.customer.and.consumer.in.the.marketing,.promotion,.and.selling.of.new.products Sales.personnel.are.concerned.with.retailing.and.retailers,.the.purveyors Retailers.are.mostly.interested.in.the.customer.since.the.cus-tomer.buys Marketing.programs.must.attract.both.customer.and.consumer

Marketing.and.sales.personnel.must.distinguish.clearly.between.the.func-1.2.3  added Value

Added.value.is.a.characteristic.many.new.products.are.purported.to.have

The late Mae West had a memorable line in the old film She Done Him

Wrongsumer:.peeled,.ready-to-eat.fruit.possesses.this.characteristic Added.value.describes a change in a product that makes that product more desirable Meltzer.(1991).rather.unhelpfully.defined.“value.added”.processing.(“added.value”.and.“value.added”.are.synonymous.terms).as.“…any.technique.that.effects a physical or chemical change in a food or any activity that adds.value.to.a.product,”.which.is.another.way.of.saying.added.value.is.added.value Whatever.the.value.is,.consumers.want.it De.Chernatony.et.al (2000).did.not.do.much.better.in.trying.to.define.added.value They.interviewed.20.brand.managers.and.as.might.be.expected.got.as.many.different.descrip-tions:.added.value.meant.many.things.to.many.people.and.served.diverse.roles.in.branding—they.found.the.concept.was.“multidimensional.”

:.“Beulah,.peel.me.a.grape!”.Beulah.provided.added.value.for.a.con-Figure.1.1.pictures.the.concept.of.added.value.more.concretely Convenience.was.created.by.breaking.100-lb.sacks.of.field.potatoes.by.cleaning,.culling,.size grading (box 2 in Figure 1.1), and packing into more suitably sized.packaging.in.five.and.ten.pound.units.(box.3,.Figure.1.1) The.100-lb.sacks.of.potatoes.were.not.convenient.for.small.family.units.and.were.far.in.excess.of.the.needs.of.the.increasing.number.of.apartment.dwellers.who.had.nei-ther.cellars.nor.space.nor.desire.for.such.quantity Smaller,.more.convenient.unit packaging (foil- or glassine-packaged potatoes) introduced new mar-ket.niches.by.targeting.“live-alones”.such.as.seniors.and.occasional.potato.users Added.value.was.introduced.by.more.convenient.packaging

Adding.value.continued.to.be.added.with.prepeeling,.dicing,.or.slicing.the.potatoes I.worked.closely.with.a.potato.processing.operation.that.produced

Today, potatoes and several other vegetables and fruits are offered not.only.by.their.brand.or.varietal.name.but.also.with.suggestions.for.the.best.culinary.uses.of.that.particular.variety The.customer.knows.what.variety.to.buy.for.the.purpose.in.mind,.or.the.customer.can.buy.the.variety,.know-how to best prepare it, and have the assurance of quality that the brand.name.confers

Adding.value.requires.skilled.labor,.more.sophisticated.technologies,.and.more.complex.(and.costly).processing.equipment.to.safely.manage.the.more.fragile.products.produced For.example,.peeled,.precut.potatoes.or.peeled.and.abraded.cocktail.carrots.or.segmented.oranges.are.more.sensitive.to.con-tamination.and.spoilage The.developer.needs.not.only.to.prevent.spoilage.but,.more.importantly,.to.prevent.hazards.of.public.health.significance.(see.Pyke’s.statement.opening.this.chapter) Other.needs.associated.with.added.value.are.new.market.research,.the.production.of.new.marketing.material,.and more complex handling and distribution techniques Adding value.equals.added.cost.that.is.only.justified.by.old.and.new.customers.and.con-sumers.alike.accepting.that.more.value.comes.with.this.cost

Meat, poultry, and fish are also sold with more descriptive names, by.brand.names,.and.with.preparation.instructions.or.recipes.describing.how.to.cook.the.particular.cut.of.meat.or.species.of.fish Added.value.for.both.the.consumer.and.the.customer.has.been.introduced

1.2.4  Markets and Marketplaces

Market and.marketplace.are.often.used.synonymously This.is.inaccurate Each.

has.a.unique.meaning A.market.is.conceptual:.it.depicts.a.need.discovered.in.customers.and.consumers.that.marketing.personnel.hope.to.develop.into.a.potential.to.sell.to.customers.who.want.to.buy That.is,.one.can.say.that.there.is.a.market.for.organically.grown.vegetables.or.for.locally.grown.crops.or.for.marinated.(preinfused.with.salt.and.spices).pork.meats.or.self-basting.turkeys.or.that.there.is.a.market.for.low.calorie.foods This.means.that.there.are.customers.in.the.many.different.marketplaces.who.preferentially.pur-chase organically grown products or low calorie foods or premarinated.pork.chops These.undiscovered.needs.(the.Walkman.was.a.fulfillment.of.an.undiscovered.need).must.be.developed.with.skilful.marketing.research.into.wants.and.then.satisfied.with.products

mon parlance of farmers’ markets) Marketplaces are real: they are not.conceptual They.range.from.farmers’.roadside.stands.to.giant.food.stores,.from.beverage.and.snack.bars.in.movie.houses.to.coin-operated.food.vend-ing machines, from mobile canteens visiting work sites to stand-alone

Products.are.sold.in.marketplaces.not.in.markets.(despite.the.use.in.com-restaurants Even electronic food marketplaces operating from Web sites.are.real.marketplaces;.they.are.places.where.products.are.sold.

1.3 Marketing Characteristics of New Products

Figure 1.2 depicts three dimensionally the difficulties accompanying the.marketing.and.selling.of.established.products.or.new.products.in.familiar.and.unfamiliar.marketplaces.and.with.the.movement.of.these.products.into.new.market.niches

The.y-axis.is.a.measure.of.increasing.marketplace.complexity;.the.farther.

from.the.origin,.the.more.complex.the.marketplace Marketplace.complexity.arises.with.any.of.the.following.or.any.combination.of.them:

• A product is moved into marketplaces with increased activity by.competitors

• The product needs more sophisticated warehousing, distribution,.and.retailing.treatment.(e.g.,.a.stale.product.return.program.or.bottle.refund.program)

• New.food.legislation,.changed.local.regulations,.or.cultural.norms.of.a.more.complex.marketplace.(e.g.,.in.foreign.countries).need.to.be.adhered.to

• The general economy of the country or economic developments.unique.to.the.targeted.marketing.area.have.soured

y

Marketplace

complexity

x z

Figure 1.2

Product complexity, place complexity, and consumer elusivity interactions character- istic of new products and their marketing.

market-• pany.cannot.meet.the.challenges.of.the.new.marketplaces.

The.marketing.skills.within.the.company.or.available.to.the.com-• Geography.of.the.market.area.is.such.that.control.over.the.product.is.diminished.with.possible.loss.of.quality.or.safety

• The difficulties of selling novelty or educating consumers to the.value.of.the.product.present.major.problems

The x-axis is an index of increasing technical complexity required for a.

product.with.innovation.or.creativity.and.added.value The.farther.from.the.origin, the more creativity, innovation, or technical complexity there is in.the.product More.research,.development.time,.and.costs.are.involved The.product.is.more.fragile.and.sensitive.to.abuse;.it.requires.care.in.handling.and.distribution.channels.to.maintain.its.high.quality.throughout.retailing.and.in.the.hands.of.the.end.user Therefore,.more.creative.marketing.effort.is.needed.to.educate.the.customer.and.consumer.to.recognize.the.added.value.features

The.z-axis.(into.the.page).is.a.measure.of.the.recalcitrance,.volatility,.com-plexity,.even.fickleness.or.incredulity.of.the.targeted.public,.a.characteristic.I.have.coined.as.elusivity Is.it.the.recalcitrance.of.customers.that.explains.the.growth.in.“healthy”.and.“health”.food.categories.when.there.has.been.“a.dra-matic.increase.in.the.per.capita.consumption.of.high.calorie.desserts,.salted.snack.foods,.and.high.calorie.confections”.noted.as.far.back.as.1986.(Gitelman,.1986).and.continuing.to.this.day?.Obesity.has.been.branded.as.having.an.effect.on.the.immune.system.leading.to.the.susceptibility.to.infections.(Falagas.and.Kompoti,.2006),.and.excess.fat.as.measured.by.body-mass.index.is.an.impor-tant.cause.of.most.cancers.(Larsson.and.Wolk,.2008;.Renehan.et.al.,.2008),.yet.the.average.caloric.intake.by.consumers.is.up.over.what.it.was.20.years.ago,.and.obesity.has.quadrupled.(IFT.e-Newsletter,.October,.2005) Yet.there.is.the.apparently.contradictory.belief.stated.by.many.marketers.that.consumers.are.on.a.wellness.kick—this.is.perversity.of.consumers,.my.elusivity

Today,.obesity.is.considered.to.be.of.epidemic.proportions The.z-axis.rep-resents.the.elusivity.of.the.recalcitrant,.hard-to-find.and.hard-to-understand,.volatile, and changeable customer who is targeted in the marketplace Elusivity.can.be.likened.to.market.segmentation,.the.creation.of.a.new.mar-ket niche If a product designed for the general public (a rare event—no.product.fits.or.satisfies.all.needs).is.redesigned.for.the.teenage.market,.that.consumer has become more elusive and the market is being segmented

If this hypothetical product is redesigned again for teenagers of single.parents, more elusivity is created Marketing purists might cavil at this,

claiming.that.this.elusiveness.is.really.a.variant.of.the.y-axis.or.marketplace.

sented,.but.the.volatility,.fickleness,.stubbornness,.and.disbelief.of.consum-ers.and.customers.within.these.marketplaces

complexity It.is.not:.it.is.not.the.volatility.of.the.marketplace.that.is.repre-Six numbered solids situated in Figure 1.2 represent typical problems.faced.by.developers.as.they.attempt.to.bring.new.products.to.market Cube.1,.at.the.origin,.depicts.the.situation.of.an.established,.hypothetical.product.in.a.market.regarded.as.home.to.a.company.

The.company.moves.the.product.into.a.more.complex.(according.to.any

of the factors described for the y-axis) marketplace (cube 2) The targeted.

customers.and.consumers.have.not.changed There.are.no.new.development.costs.getting.into.a.new.marketplace Only.costs.associated.with.marketing.(labels,.promotional.materials,.and.advertising),.sales.(brokers),.and.distri-bution.increase

Cube.3.is.the.product.but.with.added.value.(increased.product.complexity),.but.the.product.has.stayed.in.the.same.(local).marketplace.and.targeted.its.regular.(known).customers Costs.for.the.added.value.feature.as.well.as.for.marketplace.introduction.of.the.new.product.(new.by.definition).and.for.pro-motional.material.to.educate.the.old.customers.(and.consumers).now.escalate.In.the.situation.represented.by.cube.4,.the.new.product.(with.its.added.value) is introduced in a more complex marketplace The company has.simply.expanded.into.a.new.marketplace.with.its.new.product The.targeted.customers.remain.the.same.but.in.a.new.playing.field Researching.the.new.market.area.brings.increased.costs.because.the.old.marketing.and.promo-tional.strategies.may.not.be.suitable Distribution.costs.increase

nal.product:.it.is.targeted.now.for.an.elusive.consumer.but.in.its.local.(familiar).marketplace.(cube.5) This.repositions.our.product.for.a.new.market Some.examples.are.as.follows:.a.popular.antacid.is.repositioned.as.a.calcium.supple-ment.for.elderly.women;.a.hand.cream.proves.to.be.an.excellent.insect.repel-lent.for.campers;.a.well-known.baking.soda.has.a.purpose.as.a.refrigerator.deodorant Costs.can.again.increase.significantly.to.reach.these.new.targets,.which.are.more.elusive Such.repositioning.can.be.risky A.cosmetics.company.may.not.want.their.mystique.to.be.associated.with.the.sporting.life.and.insect.pests:.a.manufacturer.of.a.habanero.pepper.hot.sauces.with.a.high.content.of.phytochemicals.of.the.capscaicinoid.family.may.not.want.to.enter.the.quasi-medicinal.arena.based.on.their.product’s.content.of.this.nutraceutical

The.company.has.found.a.new.use.(that.is,.a.new.market.niche).for.the.origi-Now.the.company.decides.to.move.its.product.with.its.added.value.and.reposition.it.for.elusive.customers.in.a.market.foreign.to.the.company.(cube.6) This.represents.the.worst.of.all.possible.worlds.as.the.following.depicts;.a.manufacturer of Monterey Jack cheese reformulates it to contain medium.chain.length.fatty.acids.(added.value).for.people.with.digestive.disorders Here,.an.established.product.has.been.repositioned.into.a.healthcare.market.niche Risks.and.development.costs.are.high;.promotion.can.be.difficult.Figures 1.1 and 1.2 have been compared using potatoes but one could.just as easily use cocktail carrots or in-store sushi products or even pre-pare.roasted.chickens Prepared.potato.products.(reformulated.chips,.hash.browns,.stuffed.potato.skins,.etc.).drive.technical.complexity.far.to.the.right

1.3.1  Product life Cycles

Every.product.has.a.life.cycle.as.depicted.in.Figure.1.3a The.horizontal.axis.is.a.measure.of.time The.vertical.axis.is.an.index.of.a.product’s.acceptance.measured.as.either.volume.of.cases.sold.or.sales.dollars Five.distinct.phases.of.the.life.cycle.can.be.discerned:

1 The.introductory.period.is.heavily.supported.by.promotions,.in-store.demonstrations,.advertising,.and.slotting.fees.to.gain.introduction Sales.volume.is.initially.low.as.customers.and.consumers.are.edu-cated.about.the.product

2 A strong growth period ensues when first-time customers begin.repeat buying and more new consumers are attracted There is

Figure 1.3

Characteristics of products,.

their life cycles, and

profit-ability:.(a).Typical.product.life.

cycle, (b) the profit picture,.

and (c) the contribution of.

– $

Time

(1) (2)

positive acceleration of sales growth Growth continues as new.markets.open,.but.continued.promotion.and.expansion.at.the.intro-ductory.pace.are.costly.

3 A.decline.in.sales.begins Growth.accelerates.negatively

nating.market

4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag- 54 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag-.4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag-.The4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag- decline4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag- accelerates4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag-.4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag- Newly4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag- introduced4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag- competitive4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag- products4 Next.comes.a.no-growth.period Sales.are.constant,.a.sign.of.a.stag-.adversely.affect.sales;.customers.and.consumers.become.indifferent.to.the.old.product Promotions.cannot.profitably.maintain.sales.There.are.life.cycle.curves.for.product.categories.as.well.as.specific.products.within.a.category Instant.coffee,.as.a.product.category,.could.be.described.as.being.still.in.the.growth.phase.as.manufacturers.introduce.flavored.instant.coffees,.and.instant.coffees.are.used.as.ingredients—an.activity.referred.to.as.product.maintenance Nevertheless,.the.leading.brands.of.instant.coffee.have changed places as their manufacturers go through different stages

of the cycle at any given time The sale of flour had for years been in a.no-growth.phase.that.was.only.slightly.ruffled.by.the.advent.of.cake.mixes;.now,.it.is.enjoying.a.modest.growth.as.many.households.are.returning.to.the.art.of.home.baking,.and.cook.book.sales.have.become.hot.items.as.has.the.popularity.of.TV.cooking.shows.and.cooking.classes During.the.1970s,.meat.prices.soared.because.of.a.scarcity.of.beef,.the.sale.of.meat.substitutes.and.extenders grew dramatically and then plummeted drastically when meat.became.plentiful.and.prices.fell Meat.extenders.never.reached.a.no-growth.phase.(phase.4);.their.life.cycle.is.best.described.as.a.spike Meat.substitutes.or.retextured.meats.survive.in.the.dried.soup.category.and.the.soup-in-a-cup.products Life.cycle.curves.are.as.varied.as.the.products.they.represent

1.3.2  Profit Picture

More.revealing.of.the.success.of.a.product.than.sales.is.the.profit.brought.in.by.those.sales The.introductory.phases.have.minimal.net.profit.(see.Figure.1.3b,.phases.1.and.2) These.bear.the.costs.of.past.research.and.development,.the.heavy.costs.for.promotion.to.get.market.penetration,.and.the.retailers’.demands.for.slotting.fees.to.obtain.shelf.space Net.profits.outpace.expenses.during the latter part of the growth phase (phase 2, Figure 1.3b) The.improvement.continues.in.phase.3.but.toward.the.end.of.this.phase.profits.begin.to.drop.off.as.customer.and.consumer.demand.drops.due.to.inroads.by.the.competition.and.costs.for.both.market.expansion.and.for.support.of.the.product.against.the.competition During.the.no-growth.phase.(phase.4),.the.company.eventually.sees.the.product.as.unprofitable—it.costs.too.much.to.maintain Manufacture.ceases

To.keep.profits.flowing.and.maintain.viability.of.the.company,.replacement.products must be ready for a launching A sequential launch of two new