Product Design and Development Packaging of Products Dr D. Hill

1. Product Design and DevelopmentPackaging of ProductsDr D. Hill

2. Format • Introduction • Product development process • Idea generation • Idea screening • Concept development and testing • Marketing strategy development • Business analysis • Product development • Test marketing • Commercialisation • Packaging and issues for consideration • Types of packaging • Legality • Safety/allergy policies • Food waste • Travel/transport • Logistics

3. Product Development Process • Given the rapid changes in consumer tastes, technology and competition, companies must develop a steady stream of new products • A retailer can obtain new products in one of three ways • buying a whole company, a patent or a licence to product someone else’s product • within the company’s own Research and Development (R& D) department • Approaching suppliers and asking them to come up with several new concepts

4. Product Development Process • Launching product in today’s tough economic climate is difficult • Research suggests that more than 90 per cent of all new consumer products fail within two years • In terms of food, beverage and beauty products are launched each year only 2 per cent of them are considered successful

5. Product Development Process • To create successful new products, a company must understand its consumers, markets, and competitors • They then need to develop products that deliver superior value to consumers • The company needs to carry out very detailed new-product planning • It also needs set up a systematic new-product development process shown in figure one

6. Idea Generation • New product development starts with idea generation - the systematic search for new-product ideas • A company generally has to generate many ideas before they find a few good ones • Major sources of new-product ideas include internal and external sources such as consumers, competitors, distributors and suppliers • In some organisations they have a section dedicated to searching for new ideas e.g. food trends studio

7. Idea Screening • The purpose of idea screening is to spot good ideas and drop poor ones as soon as possible • This ensures that money is saved at an early stage and money is not wasted in later stages • The ideas are written up on a standardised form and include information such as product, the target market and the competition • It can then be evaluated against set criteria

8. Concept Development and Testing • An attractive idea must be developed into a product concept • A company’s task is to develop the new-product into alternative product concepts, find out how attractive each concept is to consumers and choose the best one • It may be to develop a number of product concepts e.g. chocolate bar product (see handout)

9. Concept Development and Testing • The concepts may be presented to consumers symbolically or physically • The concept can also be presented in words (see handout) • The problem with this is that it can be very detailed and also very complex • On the other hand the product could be shown in its physical form with the information presented in a table

10. Concept Development and Testing Figure one: Picture and table concept

11. Marketing Strategy Development • The next stage is introducing the product to the market • The marketing strategy statement consists of three parts • target market, the planned product positioning, and the sales, market share and profit goals for the first few years • the product’s planned price, distribution and marketing budget for the first year • the planned long-term sales, profits goals and marketing mix strategy

12. Business Analysis • The company needs to evaluate the business attractiveness of the proposal • They will review projected sales, costs and profit margins for a new product to determine the most viable • It estimate sales it may look at the history of sales of a similar product(s)

13. Product Development • At this stage R & D develops the product concept into a physical product • Within the food industry kitchen trials will take place • At this stage small amounts are cooked e.g. three or four portions • The next stage would be factory scale where about 100 portions are produced • If acceptable production runs would be carried out which would be approximately 1,000 portions

14. Test Marketing • If the product passes functional and consumer tests, the next step is test marketing • At the stage the product and marketing programme are introduced into more realistic market settings • For example, Mars used N. Ireland as a test market for their ice-cream bars • Test marketing gives the marketer experience with marketing the product before going into full production of the product

15. Test Marketing • Test marketing by consumer-goods companies has been declining in recent years • Companies often do not test-market line extensions e.g. variations of the same product • On the other hand some companies have come up with novel ways of test marketing their product • See the ‘case study’ on Innocent smoothies

16. Commercialisation • Commercialisation is the introducing the new product to the market • If the company goes ahead it will face high costs • In the case of a new consumer-packaged good in the first year it could spend between £5 million and £100 million for advertising, sales promotion and other marketing efforts • The company launching the new product must first decide on introduction timing

17. Packaging • Packaging will depend on the sandwich being produced • For example, wraps could be packaged in cardboard and barrier film • Whilst wedge sandwiches are placed in the classic clear plastic triangle packaging • This enables the consumer to see the sandwich without the need to read the label as they can see the filling

18. Packaging continued • The packaging needs to be made from a type of material which is opened by all types of consumer from the very young to the elderly • Thus it needs to be made from a material that is easily opened • There is currently the trend of ‘peel and reseal’ which allows consumers to eat it at different times • If the sandwich is redesigned or re-packaged it must be done gradually so as consumers still recognise it

19. Other types of packaging • See table two for the main types of packaging and the popularity of their use • Paper and paper based products • Metals • Plastics • Glass

20. Paper and Board Materials • These can be produced in many grades and converted into many forms • It can be combined with other materials to form a coated or laminated product see examples • An example of where paper is used in its thinnest form to make packaging is the ‘new’ packaging for smarties sweets

21. Paper and Board Materials continued • Where heavier board material are required it can be used as a sleeve to place around a plastic or aluminium tray • The sleeve can have shoulder incorporated or left without – see examples • In addition, cardboard can be used for a lid for example on the top of Sainsbury’s Shepherd’s pie • A ‘window’ can also be place in the sleeve • Another method of allowing the consumer to view the product is to use a partial sleeve

22. Metals • Aluminium can be used as a packaging material • It benefits include, that it is lightweight, that it does not allow light, moisture or odours to penetrate • It tends to be used for fizzy drinks such as Coke • It can be moulded into trays and food products placed inside such as lasagna • The current trend is for the food to be cooked in the foil tray

23. Metals continued • As bread crumbed products may stick to the tray a rippled effect on the bottom is now used • This minimises the contact with the food product and therefore reduces the opportunity for burning • Metal can be laminated with a plastic coating to protect delicate items for example, strawberries and rice pudding • Steel can also be coated with tin which makes it suitable for the packaging of high acid foods • Steel can be thermally processed for high risk products

24. Metals continued • When metal is used as packaging for a product such as biscuits the plastic coated information can be used and the tin reused • This would usually happened with biscuits packaged for Christmas • The metal may be shaped into a decorative feature so that it becomes part of the product for example Champagne Chocolate Truffles

25. Metals continued When metal is used as packaging for a product such as biscuits the plastic coated information can be used and the tin reused This would usually happened with biscuits packaged for Christmas The metal may be shaped into a decorative feature so that it becomes part of the product for example Champagne Chocolate Truffles

26. Glass • If the sandwich is produced in a factory where there are lots of other products, then the manufacturer needs to examine the type of products that are being produced • If it is made in a factory where glass is used it must be produced in a separate section • It is therefore preferable to exclude glass from the production process and substitute it with another suitable product e.g. aluminium

27. Glass continued Where it is part of the packaging an alternative could be sought for example, toughened glass For example, Northern Foods repackaged their Tiramisu in toughened plastic sundae shaped ‘glasses’ rather than glass ramekin dishes Glass would have been previously used for salad cream, tomato ketchup and fizzy drinks, but has been replaced by plastic Glass now tends to be used for bottles e.g. alcohol and sauces and jams

28. Plastics • No two plastics are identical in their properties • Most are light weight and do not allow moisture or gas to pass through • They are resistant to bacteria and provide food insulation • They can be of several grades and thickness and van be shaped and moulded

29. Plastics continued • Foods which could be placed in a metal tray can generally be placed in a a plastic tray • They can be made in a variety of colours depending on the current trend • The current trend is black trays whereas, before it would have been white or cream • Where the consumer needs to see the product it can be placed in a clear plastic tray and a clear outer plastic used for example, crispy potato slices

30. Plastics continued • Plastic trays can be moulded so that they can hold a plastic pouch • For example, steaks with a plastic pouch of pepper sauce • The advantage of the pouch is that it is transparent • In addition, a thinner plastic can be used to cover the plastic tray in which the food is placed • A moisture mat can be added to absorb liquids so as to prevent the deterioration in the product

31. Plastics continued • Thin plastics are also used to cover product where it is the only protective covering for example, biscuits e.g. Digestives • The advantage is that all the product information can be printed on to the plastic • It offers little protection, however, and the biscuits can get broken and you cannot see the product

32. Plastics continued • Premium priced biscuits are placed in a heaver plastic container for each biscuit and then covered in a thinner plastic • This is then placed in a cardboard box for example, Milk chocolate toffee covered biscuits • The current trend is for foil wrap to seal in the freshness or to place them in a tub – see example

33. Legality Before producing any product it is necessary to ensure you have a recognisable brand name, logo and slogan You must ensure that any proposed name is not already registered There are a number of specialist agencies who can ascertain if the name is already registered You also must comply with the Trade Marks Act (1994) to ensure your product and packaging is different enough from a competing brand

34. Legality continued • By law you need to ensure the ‘big four’ are included on the label • Some companies include the full eight • If you are going to enter the low fat market you need to conform to the Food Standards Agency (FSA) regulations in terms of ‘Low fat’ • If you are going to enter the organic market you may wish to have your product endorsed by The Soil Association

35. Legality continued • Your product may not need a new brand name as it may be a sub-brand or be launched under an existing brand name • In terms of legality you must ensure that the ingredients list incorporated on the packaging is correct • The ingredients should be listed from the one that is in greatest proportion to the least

36. Safety/Allergy policies continued • The packaging needs to be tamper proof from production to final sale • This is to ensure that ‘foreign objects’ cannot be placed in the sandwich thereby creating a food scare • This would result in food having to be recalled • Retailers now provide ‘products’ such as toys which appeal to children, also must be safe • If it is produced in a factory where nuts are present the sandwiches need to be labelled ‘may contain traces of nuts’

37. Food waste • Food waste analysis needs to be carried out at various stages of the process • A food producer needs to determine if it is more cost effective to buy in products pre-prepared • During the manufacturing, food waste will be collected at various stages of production • If this is excessive management need to determine how this can be minimised or automated

38. Food waste continued • Customers can add to food wastage • They can try to view a sandwich to see how well it is filled, thus damaging the packaging • Therefore the product has to be discarded • Many retailers operate a ‘chill chain’ • This ensures all high risk products such as sandwiches must not be out of chilled conditions for more than 30 minutes allowing the temperature to rise above 5oC

39. Travel/Transport • Transporting food from where it is produced to where it is sold can also generate food waste • Food needs to be handled at various stages of transportation • It needs to be loaded onto lorries, transported on ferries, off loaded at distribution centres reloaded onto smaller van(s) to be distributed to various outlets

40. Travel/Transport • The food needs to be placed on the shelf for sale to the consumer • If the food is damaged in any way customers will not purchase it • Travel/drop test also need to be carried out to test how much maltreatment a product can withstand during transport

41. Logistics • The logistics of route to market need to be examined • In the case of the video, the order was received on day one, produced on day two and dispatched on day three • Figure two shows a Gantt chart for sandwich preparation and dispatch based on this principle

42. Logistics continued • This is a simple forward-front approach of production to sale • If it was for a special occasion or a particular time of the year it needs to take a back-the-front approach • For example, Marks and Spencer adopt this for products such as party food for Christmas and the New Year • They identify the date of launch and then work back through delivery time to how long it will take to produce, which determines when production has to commence