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CHRM 2390

CHRM 2390. Research and Development of Food Products. Why go into new food product development?. For profitable and to survive. Forces Driving New Food Product Development. Life cycles Long range goals Marketplace New technology and knowledge

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CHRM 2390

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  1. CHRM 2390 Research and Development of Food Products

  2. Why go into new food product development? • For profitable and to survive.

  3. Forces Driving New Food Product Development • Life cycles • Long range goals • Marketplace • New technology and knowledge • Changes in government legislation, policies, and programs

  4. The Product Life Cycles • Introduction period • Growth period • Decline in sales • No-growth period • Decline in volume

  5. Corporate Reasons for New Product Development • To achieve growth and be profitable • Growth by • Expansion to new markets or market segments-Expensive and hazardous • Market penetration -selling more in existing market-Expensive • New products for current market-continuous growth and profitability • Diversification-new product for new markets

  6. Marketplace Reasons for New Product Development • New food purveying method • Changing habits of consumer • Competition

  7. Technological Reasons for New Product Development • Information technology-accessible • Packaging technology • Increased knowledge of: • Food science • preservative and processing • new ingredients • Health and nutrition

  8. Governmental Influences on New Product Development • Purpose: • to ensure safe and contaminant-free food • to develop standards for food composition and labeling • to maintain fair-trade and competition • to protect employees and the environment • Affect: • technical development of new food products • marketing personnel

  9. Governmental Influences on New Product Development... • Other regulatory aspects: • International Regulatory Agencies: • Examples: WTO, EEC, ISO • Quasi-governmental agencies: • Marketing boards: supply, import, price • Professional and trade associations • Wages and rules of conduct

  10. New Product Development • Could be defined as: • the development and introduction of a product not previously manufactured by a company into the marketplace, or • the presentation of an old product into a new market not previously explored by a company

  11. New Product Classifications • Line Extension • Established products in a new niche • New form of existing products • Reformulation of existing products • New packaging on an old product • Innovative or added-value products • Never-before-seen products

  12. Line Extensions • A new variant of an established line of food products • Examples: • A new flavor • A new varieties • A new texture

  13. Advantages of Line Extensions • Little time or effort for development, manufacturing, production systems and storage • Few change in marketing strategy • No new purchasing skills (commodity trading) or raw material sources • No new storage or handling techniques for either the raw ingredients or the final product.

  14. Problems with Line Extensions • developmental problems if extension requires processing changes • manufacturing and other support systems change if extension is complex • marketing techniques

  15. Repositioning a Product • Discovery of a new use for an existing product • Baking soda, oatmeal • Manufacturing unaffected • Minimal development time • New marketing strategy needed

  16. New Forms of Existing Product • Often the downfall of new product ventures • New product must have a perceived advantage over old • Extensive development time • Major equipment purchases • Different warehousing and distribution systems

  17. Reformulation of existing product..”new, improved” • High probability of technical success • Relatively inexpensive and short development time • The result of: • Unavailable ingredients • Lower costs • Meet the challenge of competitors • Consumer driven

  18. New Packaging of Existing Products • Packaging of bulk products into unit packages • Utilize new technologies such as MAP, CAP • Branding • May require an overhaul of packaging operation

  19. Innovative Products • Making changes to an existing product • Some paths may be easy but some are more risk and costly • The more innovation in a product, the longer the development time and the higher the research and development costs

  20. Creative Products • Rare, never-before-seen product • Difficult to define, e.g. surimi, reformed meat products • Can be characterized by: • Extensive development time • High research and development time • Expensive marketing strategies • Expensive sapital costs for equipment • Risky • If successful, imitators will flood market

  21. Conclusion • Economics, consumer and competition necessitate new product development • New products should be consistent with goals and strategies of a business • Success of new products depend on the availability of inputs, and the management of cost and quality

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