10 Food product development Think break 1. Innovation is a predictable process. Do you agree or disagree with this statement? How can a company organise to give 70-80% predictability to product development but allow 20-30% for the unknown? 2. Take one product family in your company, and identify the generations in the product platforms, and then the derivative products on each platform. What have you used as the basis for the family and for each platform-preservation method, other technology, nutrition and health, place in the food system or some other general family characteristic If you have not used nutrition and health, try building up the platforms on this basis 3. Identify the market segments that your company targets for this family of products, and relate them to the different platforms and if necessary particular products What building blocks has the company used to form these platforms? 1.2 Measures of product success and failure If a company is to build a successful product mix and product strategy, there is a need to study the companys history and current performance and also the history and current performance of the industry and indeed of other industries The food industry can learn from successes and failures in other industries. The measures for determining success and failure can be for: individual new products(financial, market, production, consumer accept duct development projects(efficiency and effectiveness) overall product development programme(success rate, sales and profits from new products, innovation level) The measures are detailed in Table 1.2 1. 2.1 Individual product success Individual product success can be measured by financial success, consumer and market success, production success, product/consumer(customer)success. Financial measures are usually the profits and return on investment. These pear quantitative but they are often fraught with problems. How is the measurement made? Is it the return on investment over one, five or ten years? Does it include the basic research that preceded the product development and perhaps spreads over several present and future products? What is the method of discounting the returns over the 10-year period? There is a great deal written in the uct development literature about predicting financial success before launching but not a great deal on financial evaluation after the launch( Crawford, 1997) Obviously at the company level, the annual balance sheet for shareholders is where1.2 Measures of product success and failure If a company is to build a successful product mix and product strategy, there is a need to study the company’s history and current performance and also the history and current performance of the industry and indeed of other industries. The food industry can learn from successes and failures in other industries. The measures for determining success and failure can be for: • individual new products (financial, market, production, consumer accept￾ability, targets); • product development projects (efficiency and effectiveness); • overall product development programme (success rate, sales and profits from new products, innovation level). The measures are detailed in Table 1.2. 1.2.1 Individual product success Individual product success can be measured by financial success, consumer and market success, production success, product/consumer (customer) success. Financial measures are usually the profits and return on investment. These appear quantitative but they are often fraught with problems. How is the measurement made? Is it the return on investment over one, five or ten years? Does it include the basic research that preceded the product development and perhaps spreads over several present and future products? What is the method of discounting the returns over the 10-year period? There is a great deal written in the product development literature about predicting financial success before launching but not a great deal on financial evaluation after the launch (Crawford, 1997). Obviously at the company level, the annual balance sheet for shareholders is where Think break 1. ‘Innovation is a predictable process.’ Do you agree or disagree with this statement? How can a company organise to give 70–80% predictability to product development but allow 20–30% for the unknown? 2. Take one product family in your company, and identify the generations in the product platforms, and then the derivative products on each platform. What have you used as the basis for the family and for each platform – preservation method, other technology, nutrition and health, place in the food system or some other general family characteristic? If you have not used nutrition and health, try building up the platforms on this basis. 3. Identify the market segments that your company targets for this family of products, and relate them to the different platforms and if necessary particular products. 4. What building blocks has the company used to form these platforms? 10 Food product development