Test 2 Flashcards
Business Case
- Product Defined: Problem, target market, concept, positioning, value prop, high-level spec
- Project Justified: Market, business & financial analysis + risk assessment
- Action Plan
Unit Operation
A basic step in a production process Separation processes Assembly (or combining) processes Conversion processes Preservation processes Transportation
Screening Criteria
- Cost of equipment
- Does equipment capacity match our proposed throughput
- Hygienic design
- Effect on the physico-properties of the resulting food
- Is the equipment capable of producing the desired unit process(es) we desire?
- Versatility – can we make a number of different products with the equipment.
- Ease of cleaning
- Continuous versus batch,
Unit Processes
These are the chemical, biological and microbiological changes occurring to the food as we process it: such as gelatinization, hydrolysis, oxidation, browning, protein denaturation, vitamin destruction, destruction, destruction and growth of microorganisms, fruit ripening and meat tenderisation to name a few.
desirable and undesirable changes are called unit processes
Unit Processes, we need to:
So we need to identify the possible unit processes (both the good and bad ones) that can occur at each unit operation.
Having done this we need to look up the kinetics of each of the reactions (good and bad) as we need these to establish what conditions we will use at each unit operation.
Conditions we select should favour the desirable unit processes and minimise or eradicate the effects of the undesirable unit processes.
Processing Limits
This range in parameter value is called the processing limits (maximum and minimum) for each unit operation.
Plackett and Burman
Plackett & Burman allows us to eliminate non-statistically significant
variables and focus on those that are.
Screening design to identify what matters!
Liking
Preference
Appropriateness
Liking: addressed by acceptance
Preference: Preference test
JAR: Just about right with penalty analysis
Mixture Design
Optimisation of product on the factors that come out as statistically significant from P&B
- The simplex lattice design
- The simplex centroid design, and finally
- Extreme vertices design
Sensory Science
It is a scientific discipline used to evoke, measure, analyse and interpret reactions to th0se characteristics of foods and materials as they perceived by the senses of sight, smell, touch, taste and hearing
Key questions for sensory
Will the target consumers:
like the product?
prefer the product over another product?
find the product acceptable based on its sensory characteristics?
4 types of testing
Preference
Ranking
Acceptance
Attribute diagnostics
Preference Test
Is one product significantly preferred?
- Paired preference test (two samples)
- Ranking test for preference (n>2)
Preference Test: When to use/limitations
When to use: Choice between prototypes Comparing performance against competitors Verifying improvement in formulations Best when one product is already liked
Limitations:
Does not indicate purchase intent
Does not show level of liking
Does not indicate size of difference in liking
Acceptance test
Panellists indicate level of liking on a hedonic scale
Acceptance test: When to use/limitations
When to use: Indication of how much a product is liked Comparing prototypes Competitor comparison Degree of difference between products New product concepts Ingredient/processing changes
Limitation
Assumes that intervals between categories are equal
Labelled Affective Magnitude (LAM) Scale
Is an acceptance test
More accurately spaced intervals (based on ratio scale)
Consumers mark anywhere on the line
More discriminating?
Attribute Diagnostics
Attribute preference: questions about product attributes
Hedonic: Measuring liking of attributes
JAR: Appropriateness of attribute level
Intensity Scales: Measure strength of attributes (where consumers understand)
JAR
Appropriateness of the level of an attribute 5 or 7 point scale
Calculate mean JAR score for each attribute
Optimal level: minimum of 70% responses expected to be JAR
Not optimal level: minimum of 20% in “too weak” or “too strong” categories
Penalty Analysis
A decrease in overall acceptability associated with sensory attributes deviating from optimal levels in product.
Penalty analysis steps
Anything that drops the mean by 1.5 is a serious issue
Top right is the critical corner – anything in this corner has been penalised more than 1.5 and more consumers are talking about that
Divide consumers into three groups (the JAR, too weak and too strong groups) and find percentages of consumers in these groups
Calculate the mean hedonic scores for each of the groups
Subtract the mean of the “too strong” from JAR and likewise the mean of the “too weak” from JAR
Plot the resulting difference in a scatterplot of mean drop against the percentage of consumers in each category
Action Standards
Tell you what to do with information from sensory testing –path forward. Defined by company, based on so many factors
Adding an ‘Action Standard’ ensures the business knows what action it is going to take when the test results come in
Where to hold sensory
Laboratory Central Location Online/Smart phone Home (HUT) Mobile laboratory Simulated Supermarket
Sensory Specification
‘A document (or a key part of a product specification) that clearly identifies important characteristics of a product, and that can act as a basis of agreement between the buyer and seller of that product
Sensory specifications could contain
A description of the sensory attributes of a product that are considered to be typical or characteristic of a product
Acceptable range i.e. slight/ moderate/ strong etc.
Instructions on how to look/smell/taste/handle the product
If a product needs to be reconstituted the methodology for reconstition should be outlined in the specification
An objective reference product
Assests (investments) are funded by
(financing): Debt (liabilities -future sacrifices of economic benefit) and equity (owners contribution -initial or earnings overtime)
Ordinary annuity vs Annuity due
Ordinary: payment at the end of a period (eg loan)
Annuity due: Payment at the beginning of a period eg lease
Cost of capital
Cost of financing assets. What is the return we need to be giving to those providing the funds for investment to maintain the companies value
Minimum level of return you need to be providing the company from a project in order for the company not to slip in terms of overall value
WACC
Determine cost of each source of financing (debt and equity), then calculate the weights
We get told debt but we have to work out cost of equity component. How?
CAPM rf = risk free rate rm = market return Beta = relative risk of the firm rm - rf = market premium
Capital Budgeting
Evaluation of long term investment options.
Directed by companys strategy and goals
Payback period
time (years) to recover the initial investment cost of a project.
Actual payback period
Average payback period
IRR Internal rate of return
Set NPV to 0, and try to work out the rate
In NPV we set rate as WACC, but here we are trying to calculate this rate
Want IRR>WACC -more likely to invest in project
ANPV
Turns NPV into an annuity
Core Marketing Concepts
Needs: basic human requirements
Wants: needs are directed to a specific object to satisfy it -shaped by society
Demand: Wants backed by the ability to pay for it
Marketing channels
Communication channels -deliver and reviewve messages to target buyers
Distribution channels: help display, sell or deliver physical products
Service channels: To carry out transactions with potential buyers
Holistic marketing
Internal marketing
Integrated marketing
performance marketing
Relationship marketing
Relationship marketing
Aims at building mutually satisfying long-term relationships with key constituents in order to earn and retain their business
Integrated marketing
Attempts to meld all aspects of marketing communication and ensures all messaging and communications strategies are consistent across all channels and are centered on the customer
Internal Marketing
Employees come first.
Marketing succeeds only when all departments work together to achieve customer goals
Performance marketing
Want to examine not only sales revenue but also factors such as market share, customer loss rate, customer satisfaction, ethical and environmental implications
Evaluate how effective all these marketin activities are.
Requires financial/nonfinancial measurements to llok at are your activites working
3 basic structures on the mind
superego
ego
Id
Sequence in response to marketing
Exposure – message is in right place for target
Attention – stimuli: gaining, holding & leading
Perception – interpretation of stimuli (sensory – vision, sound, touch, taste & smell).
Learning – remembered in an intended way
Attitude –what we know, how we feel, disposition to act.
Action – convert intention to buy into buying
Post purchase – customer satisfaction
Marketing strategy
a long-term, forward-looking approach to planning with the fundamental goal achieving a sustainable competitive advantage
A businesses overall game plan for reaching people and turning them into customers
Choice architecture
The choices we make are a function of the environment we are in
What supermarkets want to know (commercialisation)
How many units per store per week your product should sell/why
How many stores you want to be in/how you will support them
How your product will bring value to the category
How it will benefit the consumer & why it is good thing for store
The margin you are offering the retailer
Brand Family
Company has multiple brands in the same product category.
Allows companies to create different offering in the same product category for different target markets
Perception
What customers believe a product represents, not what the company owning the brand says -comes from use, reputation, appearance
Brand should have
Unique point of difference
Point of parity
Positioning
How the product is percieved in terms of price and quality
Dissonance
When product positioning doesnt match consumers perception
Marketing is about
identifying and meeting human and social needs -not just about selling. Focuses on needs of the buyer
Marketing core concepts
Needs, Wants, Demands
Marketing strategy contains
companys value proposition
key marketing messages
information of the target customer
Sequence in response to marketing
Exposure – message is in right place for target
Attention – stimuli: gaining, holding & leading
Perception – interpretation of stimuli (sensory – vision, sound, touch, taste & smell).
Learning – remembered in an intended way
Attitude –what we know, how we feel, disposition to act.
Action – convert intention to buy into buying
Post purchase – customer satisfaction
External/internal approach to sensory specs
Consumer and sensory research/Internal team
Target product characteristics
Tolerance limits
