CREATING NEW FOODS
THE PRODUCT DEVELOPER'S GUIDE
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Contents
About the book
About the authors
Preface
1. The product
development project
in the company
2. The organisation of
the product
development project
3. Product strategy
development: idea
generation and
screening
4. Product strategy
development: product
concepts and design
specifications
5. Product design and
process development
6. Product
commercialisation
7. Product launch and
evaluation
8. Summary: bringing
it together
8.10 Textbooks in
product development
Index of Examples &
Problems
Useful links
Feedback (email link)
CHAPTER 6
Product Commercialisation


6.9 THE PRE-LAUNCH TRIAL

The next stage is to integrate the production, market and financial plans in one pre-launch trial. Once the results of this are known, the final overall operational plan for the launch can be organised. With a product which is using the existing production and marketing facilities, there may not be a need for additional test production and marketing and the product will go straight into the launch; or if there is some doubt there can be a 'rolling' launch, with the product introduced into a series of areas. But there is still a need to research the production and the marketing so that it can be improved as the launch proceeds.

Test marketing is not undertaken when:

      time into the market must be as short as possible because the
      product is vulnerable to competitors who can easily copy the product
      and launch their competing product onto the market;
      research is convincing that the product will be successful and it does
      not justify the extra expense;
      the new product is a line-filler or a me-too; the launch costs will not be
      high and so the losses are small in the event of a failure;
      there is confidence that any technical problems will not affect the
      product quality.

Production and market testing brings the product through the production sequence in the production plan and puts the product on the market under the market plan in controlled conditions in a restricted area.

On the production side, the raw material quality and quantity need to be monitored along with, most importantly, the yield and quality of the product. Any equipment problems such as breakdowns and the staff needed also need to be monitored.

Also there is a need to monitor the process variables and to identify any tendency to wander outside the set limits, either intermittent, or in a pattern.

It is very important to monitor not just the sales of the product, but to check how the product is performing in distribution, storage and in the supermarket, the retailers' attitudes to the product and their placement and promotion of the product in the supermarket, and of course the consumers' attitudes and behaviour towards the product. Are they buying again? How much are they buying? What do they like/dislike in the product?

This monitoring usually leads to improvements in product, production and quality assurance and also often signals desirable changes in distribution and marketing methods. The pre-launch trial is a time of constant improvement of the product, of reduction in production costs and of increase in the effectiveness of the marketing methods. In industrial marketing, the general stages are the same but the product is being developed for use by a customer in their process or the chef in food service, so there has to be knowledge of how the ingredient is behaving in the customers' processes and their products. Product testing is preferably undertaken with the customer in their own plant, but because of the customer's needs for secrecy it may have to be undertaken in the supplier's pilot plant.

Other factors to consider are the area of market testing and the length of time the marketing and production testing will last. The test market area needs to be representative of the total market in terms of the consumers, the retailers and the marketing mix. The time for the market test depends on the average repurchase period, the competitive situation and the cost. It is necessary to observe a few repeated purchases of the product to see if the product will be a long-term success. If this period is likely to be very long, then buyer interviews can be used to predict repeat purchasing. Competition may come in very fast and either launch their product or upset the market by pricing specials, forcing the test to be shortened. Production testing is continued until the process stabilises.

The test market can be in one or two market areas, or just in one or two supermarkets. The sales of competitive products are determined before the new product is introduced and during the test both the competitive products and the new product sales are monitored. With two areas, one area can have the product introduction and the other area does not; this gives some idea if the observed effects arise from the product or from some other cause in the whole market. Usually as well as undertaking a retail sales audit, consumer panels or buyers' surveys are conducted to determine consumer reactions.

From the production and market tests, information can be found on production efficiency, product quality variations, costs, market share, and relationship of new product to main competing products in terms of consumer acceptability and sales, and also the predicted sales for the total market. The company will then have a realistic idea of how the product will fare in the national market, and of any minor improvements needed to the production and the marketing.


OVERALL OPERATIONAL PLAN

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