Keys to new product success and failure 5 Industrial ingredients processor → Food service Primary production Consumer products manufacturer Consume Consumer Fig. 1.1 The food system The industries upstream from the food manufacturer are important contributors of innovation(Rama, 1996). Both the ingredient suppliers and the equipment suppliers can have a pivotal role in innovation in the food innovaton Agricultural and now marine farming are also major sources of both of fresh products, and of materials designed for processing. So the innovation spectrum broadens and deepens 1.1.2 Food products and the markets The basic principle of product development is to identify the needs of the buyers nd the users, and design the products towards meeting these needs. This means that the market segments for the products are an important basis for grouping products. There are five main market segment 1. Consumers: mainly branded products 2. Retailers: branded products, ingredient mixes 3. Food service: partially prepared meals, meal ingredients 4. Industrial processors and manufacturers: differentiated ingredients 5. Primary processors: commodities, undifferentiated raw materials It is important to recognise that there are major differences in the development of products for these different segments. If a company moves from differentiated ingredients for food manufacturers to consumer products to be sold through retailers, there is a need for new knowledge and new resources in the company Each of these five main segments can be divided into further segments. There are five common consumer market-segmentation categories · Geographic Sociocultural Demographic e User behaviour Regions, social classes, ethnic groups, households, age, sex and income are typical groupings for which statistical census data can be found, but consumer targeting can be more accurate if psychographic segments based on life style, behaviour, personality and attitudes are used. User behaviour segmentation on usage rates, brand loyalty status, purchase occasion and benefits sought are useful for targeting product development. In industrial segmentation, two stagesThe industries upstream from the food manufacturer are important contributors of innovation (Rama, 1996). Both the ingredient suppliers and the equipment suppliers can have a pivotal role in innovation in the food industry. Agricultural and now marine farming are also major sources of innovation both of fresh products, and of materials designed for processing. So the innovation spectrum broadens and deepens. 1.1.2 Food products and the markets The basic principle of product development is to identify the needs of the buyers and the users, and design the products towards meeting these needs. This means that the market segments for the products are an important basis for grouping products. There are five main market segments: 1. Consumers: mainly branded products. 2. Retailers: branded products, ingredient mixes. 3. Food service: partially prepared meals, meal ingredients. 4. Industrial processors and manufacturers: differentiated ingredients. 5. Primary processors: commodities, undifferentiated raw materials. It is important to recognise that there are major differences in the development of products for these different segments. If a company moves from differentiated ingredients for food manufacturers to consumer products to be sold through retailers, there is a need for new knowledge and new resources in the company. Each of these five main segments can be divided into further segments. There are five common consumer market-segmentation categories: • Geographic. • Sociocultural. • Demographic. • Psychographic. • User behaviour. Regions, social classes, ethnic groups, households, age, sex and income are typical groupings for which statistical census data can be found, but consumer targeting can be more accurate if psychographic segments based on life style, behaviour, personality and attitudes are used. User behaviour segmentation on usage rates, brand loyalty status, purchase occasion and benefits sought are useful for targeting product development. In industrial segmentation, two stages Fig. 1.1 The food system. Keys to new product success and failure 5