food product development Flashcards
define external factors
factors that are beyond the control of the industry
list the external factors that impact on food product development
economic environment
political environment
ecological environment
technological environment
explain how the economic environment can impact FPD
the economic environment is frequently fluctuating. These influences on the fluctuations are complex and several factors determine economic growth and stability.
- exchange rates : as the AUD fluctuates, there are variations of appeal of our produce on the global market. When our dollar is strong, promary produce and manufactuered goods may not be competitive, however, when the value of the dollar falls there is a huge demand for our foods.
- inflation/recessions: refers tot eh increase and decrease of cost of living e.g. in recession people less likely to buy more exi items
- unemployment:means increase on gov. reliance
- tax e.g. gst
explain how the political environment can impact FPD
o Government influences/controls (policy and legislation)
Price levels of taxation, competition, trading rules, licensing, subsidies and tariffs
Environment air, water, noise, use of chemicals in food production and food additives
Education food and nutrition education, food standards and food handling and safety
Working conditions awards, trading hours, occupational health and safety
o Community influences and lobby groups
The community is able to lobby politicians to bring about changes in the industry that are in the interest of the community. At times this pressure comes from organised groups with vested interest in changes e.g. dairy farmers or the pressure may result from widespread concern about an issue
explain how the ecological environment can impact FPD
o Nature resource use o Environmentally friendly decisions o Arming procedures o Waste management o Packaging o ‘clean green’ image o Consequences of disregard for environmental issues
define the internal factors
MICRO-ENVIRONMENTAL FACTORS are those internal forces that a company has some control over and which have a direct and measurable impact upon the company’s success.
list the internal factors
personell expertise
production facilites
finicial position
company image
explain how personnel expertise can impact on the FPD
o Different people bring different knowledge and skills to the process each contributing to the end product in their own way.
o These roles may include: marketing personnel, food technologists, technical managers, nutritional experts, microbiologists, engineers, lawyers etc.
o The success of any new product development is highly dependent on the personnel expertise of the whole organisation.
explain how production facilities can impact on the FPD
The need for production facilities will depend on the food product and the volume of production. Factors include:
- Small volume and one-off operations – have limited production facilities and domestic resources can be utilised
- Batch productions – includes larger runs of a particular product ; sometimes variations in production occur as a result of relatively minor changes in the facilities used
- Mass production – uses automation and computerisation to ensure production volumes meet a large target market.
Storage costs are an expense that the food industry must control carefully. To avoid the need for large storage facilities, the most efficient process is ‘just in time’ deliveries and movement of stock,
explain how finanical position can impact FPD
The success of an operation is usually judged by how well it manages expenditure and the margin of profit.
Influences on the finical success of a business include:
- Investment capital
- Resource management
- Quality of the product
- The market share – competition
explain how company image can impact FPD
Corporate image is influence by a number of factors, including:
- Reputation
- Quality
- Marketing strategies
- Packaging
- Price
list the drivers of FPD
market concerns consumer demands societal changes technological developments company profitabilty
explain what dot points come under market concerns
health
dietary considerations
environment
how is health (under market concerns) a driver for FPD
Increasing awareness of health and general wellbeing, along with the perceived risks of particular foods = consumers more conscious about what they eat. Healthy eating is a critically important consumer driver and a trend that should be of concern to food manufacturers.
Consumers who are concerned about their health will read labels and have a willingness to pay premium prices for these healthier foods.
E.G. Pepsi Co’s sun bites snack crackers with quinoa
how is dietary considerations (under market concerns) a driver for FPD
DIETARY CONSIDERATIONS:
For some consumers, easting certain foods can be a debilitating, possibly eve life-threatening, experience.
Individuals with allergies and intolerances need to avoid certain foods.
Allergy incidence has doubled over the last decade.
Food manufacturers have the obligation to not only ensure allergen warnings are clearly evident on packaging but that their food products are not exposed to inadvertent contamination from potential allergens while they are being manufactured, moved, transported or stored.
Products are being developed and improved to ensure they are free from common allergens.
If a consumer feels adequately catered for they are likely to become a loyal customer.
E.G. Peanut, gluten or dairy free allergies
how is the environment (under market concerns) a driver for FPD
THE ENVIRONMENT:
Consumers are concerned about environmental issues and are making choices in their lives to have a positive impact on the environment.
Organic farming has become very popular.
Food manufacturers are required to comply with legislation in relation to clean air, water and noise pollution.
The recommendation of reduce, reuse and recycle has impacted on industry. Less packaging materials are being used, packages have more than one use and much more effective recycling programs are in place.
what dot points come under consumer demands
convience
cost
desire for info
how is convience a driver for FPD
Changing lifestyles have led to increasing demands for quick, easy and economical solutions to food decisions.
Studies show that consumers spend no more than 30 minutes cooking every night.
Consumers demand connivence but are not willing to sacrifice quality, which is why meal start-up kits such as Hello Fresh and Aussie Farmers Direct are available. Provides convenient and easy food options with healthy, ethical and comforting choices.
E.G. Hello Fresh, Aussie farmers direct
how is cost a driver for FDP
COST:
All consumers love bargains and search for value-added products that offer them more for their money.
However, at the other end of the sale consumers are willing to spend more on high quality products that offer specific features such as health benefits or are environmentally sustainable.
Food prices will continue to rise.
how is the desire for more info (under consumer demand) a driver for FPD
DESIRE FOR INFORMATION:
Consumers want more information about products and transparency in the supply chain of food products. Consumers want to know exactly where their food has come from and what is in it.
E.G. Consumers want reassurance in regards to issues animal welfare, sustainable practices.
what dot points come under societal changes
increasing ageing population
single person households
longer working hours
how can ageing pop (under societal changes) be considered a driver for FPD
AGEING POPULATION:
Australians are living longer = ↑ aged people.
The fastest growing demographic in the food industry in Australia are consumers over the age of 65.
Elderly people want products that offer general health benefits that could help ↓ disability and dependency.
Life expectancy ↑ = heart health, diabetes, bone health… ↓ = ↑ health conscious diet
E.G. for elderly people functional foods like yoghurt has added fibre, probiotics, vitamins and minerals
how can single person households (under societal changes) be considered a driver for FPD
Currently 1 in 4 Aus. households is a lone-person household.
Lone person households want to purchase products in single portion sizes
Lone person households = ↑ demand frozen and ready-made meals
E.G. frozen and ready-made meals, single portion meals
how can changing work hours (under societal changes) be considered a driver for FPD
Changes in Aus. workplace such as job sharing, part-time work and more flexible hours are a reflection of the 24/7 economy we now enjoy.
Working 9-5 Monday-Friday is no longer considered standard
↑ flexibility = ↑ work-life balance
E.G. Flexible food options like single portion meals
how can multicultural aus (under societal changes) be considered a driver for FPD
Ethnic and cultural diversity of Aus. is reflected in the food studs available.
Markets, cafes, takeaway options and restaurants have been influenced by many different cultures e.g. Italian, Mexican, Asian….
Cultural diversity is a driver for food product development in Aus. Requiring both adaptation of existing products as well as the development of new ones
E.G Italian restaurant
what are the two main types of technological developments
processing equipment
packaging material
home appliances
explain processing equipment as a technological development
Consumer demand for high quality, minimally processed, fresh food has led to the development of new food-processing techniques. High-pressure processing (HPP) encompasses a range of fruit, vegetable and herb products.
Techniques of blanching, tempering, pasteurisation, sterilisation… is commonly used.
E.G. HPP in fruit and vegetable products
explain packaging material as a technological development
Companies are always on the hunt for materials and technology to improve connivence and lengthen shelf life.
Consumers demand value, novelty and innovation.
Improved product experience Is a key driver influencing technology when develop
Consumers require packages that are easy to open and close, variable pack sizes.
E.G. Single serve packaging, bakeable packs, microwavable packs, self-cooling/heating containers
explain home appliances as a technological development
Home kitchen appliances are becoming smarter, faster and more energy efficient.
These appliances make food preparation and cooking easier and to meet the demands of time poor households.
E.G slow cooker
explain COMPANY PROFITABILITY SUCH AS INCREASING MARKET SHARE
INCREASE MARKET SHARE:
The food product development scene is fiercely competitive, with an ever-increasing number of companies competing for market share across a myriad of food types.
Market share represents the percentage of a product’s total sales earned by a particular company over a specified time period.
↑ customers purchasing a product = ↑ market share for that product
what are line extensions
LINE EXTENSIONS are food products which are changed in some way to increase their market share. E.G. new flavours, package size, or package features.
Line extensions are sometimes used to increase the appeal of the product to health-conscious consumers, such as salt, fat or sugar reduced and complex carbohydrate (fibre) increased.
what are me-toos
ME-TOO’s are copies of existing products. A manufacturer may attempt to duplicate the success of another product by developing a similar item. Ingredients, size or shape may be copied within the limits of industrial opportunity. Of the food products developed, most are me-too’s and likewise most failed products are also me-too’s.
what new to world
NEW TO THE WORLD PRODUCTS are foods which are completely new in concept, unline nay other product in the marketplace.
Rarely are food innovations ‘new to the world’. The innovation may be a food, a package or combination of both. Although few products fit this classification, those that do have the potential to be enormously rewarding for the food manufacturer, such as juice casks, double-up yoghurt and Pringles.
what is the design brief
The design brief is the focal point of a new food product development project. It provides a scaffold to help generate and explore ideas, and a point of reference for ongoing reflection and evaluation.
- Aims: to give precise and clear direction for people working on project by customer wants
Includes: price range, potential market, industry trends, new technology, food legislation etc
explain idea generation and screening
Ideas are originated and are generated from: market research, what the competitors are doing, new trends, recipe books and from personnel.
Idea screening of new product concepts involves assessing the feasibility of developing a specific new product as early as possible in the process. There are a number of factors that can interfere with food product development.
what is market research
Market research is done as it helps the company to further develop its business plan and to find out if their new product will appeal to customers.
what is primary research
Primary Research: usually a company will pay a research company to carry out research on their behalf. Expensive, time consuming, however specific research and will give accurate feedback and results.
what is secondary research
Secondary research: Looking at statistics and information through trade journals and government organisations (ABS). Cheap (free), readily available, not accurate
what is qualitative research
Qualitative research (quality): descriptive research that uses words, perceptions and feelings. Interviews, focus groups and observations
what is quantitative research
Quantitative research (quantity): numerical data and statistics, can gauge the demand for a product, price people are willing to pay, habits of consumers.
what is product specifications
Product Specifications: a detailed & accurate description of the product & all requirements for production, drawn from previous steps information feedback is gathered
what points are included in product specifications
general indo design spec marketing spec consumer services environment costs future directions
whats included in general info. of product specs
Product concept and statement: name, form, function, perishability etc Product type Product image Product qualities Target market
whats included in design spec of product specs
raw materials/ingredients
packaging materials
storage & transport
whats included in marketing spec of product specs
packaging: label and graphics price setting promotion competitors marketing and distribution channels
whats included in consumer services of product specs
nutritional benefits
product differentiation
whats included in environment of product specs
social
cultural
legal
physical
whats included costs of product specs
Production methods
marketing
whats included future directions of product specs
Opportunities for further development e.g. line extensionsc
why carry out a feasibility study
Once a new product survives the screening stage of a feasibility study is done. It will determine whether the company will continue with development of the product.
what type of things would be raised in the operational feasibility
Operational feasibility: will the product be purchased? Human and social issues, internal factors- labour force, external factors – government policy and legislation
what type of things would be raised in the technical feasibility
Technical feasibility: do we have machinery and equipment? Are we adopting new technology? Can we purchase new technology?
what type of things would be raised in the financial feasibility
Financial feasibility: cost of raw materials production costs, packaging cots, labelling, transport, shelf space. Estimate of sales and break-even point.
what type of things would be raised in the scheduling feasibility
Scheduling feasibility: Can we produce in required timeframe? How long will it take to acquire equipment and train staff?
what are prototypes
- Prototypes are tools that allow a business to extend their knowledge, gain clar visualisation and make improvements in their new food product.
- A prototype is used as a way to gather further data about a viable product and verify it ability to perform as orginally expected.
- Prototypes are used extensively for testing before product goes into full production.
- Prototypes must satisfy Australian Food Standards Code
what legislation must prototypes satisfy?
- Prototypes must satisfy Australian Food Standards Code
why are quality tests done
Quality tests are done to ensure that the product keeps its quality from raw material through to finished packaged product.
why are storage tests done?
- Storage trials test the shelf life of new food products to gauge their quality and safety.
- Variables that affect shelf life include:microbial growth, biological changes, moisture and water vapour, vulnerability to temperature
what is shelf life
- Shelf life of a product is the predicted length of time a product retains quality under prescribed storage conditions
what does packaging tests assess?
- Packaging testing is used to apprise:
The overall effectiveness of the package and the packaging materials
Any adverse interactions that may occur between the selected package and the food product.
Tests are to assess the affects of stacking, impact, dropping and tensile moisture levels.
what s a sensory test?
- Sensory evaluation is a simple analytical tool used in product evaluation aimed at quality assurance.
- Scientific disipline is used to evoke, measure, analyse and interpret results of characteristics of food and materials as they are pericieved by the senses of sight, smell, taste, touch and hearing.
Sensory evaluation can be used to:
Maintain quality control
Determine shelf life
Judge whether the product is marketable.
Identify the sensory attributes (flavour, texture, colour & appearance)
Understand drivers of consumer preferences
Identify taining (if the product is affected by storage or packaging)
what is consumer testing
- The opinions and attitudes of consumers will be collected from a group of representatives chosen from the identified target market for the food.
- The type of consumer tests varies according to the type of new product and the amount of market research carried out In previous stages.
- As this is done largely in the 2nd phase making the right decisions is critical and the consequences of a wrond decision become larger.
- As the product reaches its final stages of development more consumers are involved in the trials increasing their reliability.
e.g. of consumer testing
E.G. samples can be distributed to potenial customer door-to-door, in shopping centres, railway stations & sporting venues. consuemrs take these samples home, use them in normal conditions then complete a questionare to provide feedback. – consumers consider the product as a whole – its packaging, marketing, and sensory characteristics. strengths & weaknesses are identified
what is a product lifestyle?
Product lifecycle: graph of product sales over time. the cycle graph helps to determine strategies to give the product the longest & most financially rewarding life (introduction, growth, maturity and decline w features)
list price strategies
penetration pricing meet the comp pricing bundle pricing captive pricing optional pricing premium pricing
what is penetration pricing
penetration pricing: when the price is set lower than those of its competitors to make it more attractive & allow it to penetrate the market – after share achieved raise prices for realistic profit margin
what is meet the comp pricing
Meet-the competition pricing: prices may be set at the same level as the nearest competing product & other means used to attract customer such as packaging or added benefits.
what is bundle pricing
Bundle pricing: a group of products may be bundled together and solf at a reduced price e.g. buy one get one half price
what is captive pricing
Captive pricing: captive amounts are used strategically to maximise profit. Low prices are offered for the main product e.g. the coffee machine whilst higher prices are placed on the pods that go in it e.g. nespresso
what is optional pricing
Optional pricing: a company may add an ‘optional extra item’ within the price to increase a products attractiveness and encourage customers to increase the amount they spend once they start ot buy. E.g. buy a product for qa free cookbook
what is premium pricing
Premium pricing: a high price is set ot establish the product as exclusive and high quality. This approach is used where a substantial competitive advantage exists and the marketer is safe in the knowledge that they can charge a relatively higher price. E.g. luxuries such as premium ice-creams or chocolates
list the types of distrubtion
intensive
selective
exclusive
what is intensive distribution
Intensive: when products are available at every possible outlet
what is selective distribution
Selective: when there is a wide but not intensive distribution.
what is exclusive distribution
Exclusive: when a limited supply of a product is sold in few retailers
what does distribution system and channels refer to
Distribution system and channels: how the product flows from the producer to the consumer (direct vs indirect) e,g. supermarket, department, chain, discount, superstores, online etc
what are the types of transportation include
e.g. water, rail, road
why are promotional programs used
used to increase consumer awareness of the product & encourage changed consumer behaviour to make initial & then repeat purchases (depends on consideration and budget)
what is advertising
advertising: most popular use of media to sell product e.g. magazines, ads, product positioning etc
what does sales promotion do?
sales promotion: gives the buyer an incentive to buy or trial the product e.g. price reductions, free samples, competitions, demonstrations etc
what is publicity and relations ?
publicity/relations: is the unpaid use of the media to broaden recognition of a product e.g. sponsor a sports team or event, donate money to a charity, fund a community project etc.
what is personal selling?
personal selling: sales person who come into direct contact with the buyer to directly promote e.g. sales calls, retail salespeople
