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 1
The Product Development project in the company


1.3 STAGE 1: PRODUCT STRATEGY DEVELOPMENT

This stage ends with decisions on the type of product to develop and the viability of the project for the company; the two main outcomes on which the decisions are based are respectively the product design specifications (the product concept) and the project evaluation (the product report).

The activities therefore form two interlocking groups - one developing product ideas and product concepts, and the other gathering the information and analysing it for the production, marketing, financial, legal, environmental and social evaluations.

Some of the important pathways of activities, outcomes and decisions in the first stage are:
Activities
OUTCOMES
DECISIONS
Business Strategy
Product mix strategy
New product areas
Change prediction
PD possibilities
PD plan
Information search
PD project identified
Project aim
Idea generation
Product concepts
Product concept selected
Concept engineering
Design specifications
Technical acceptance
Market analysis
Sales/profits prediction
Market acceptance

Note that these pathways are often interlinked; for example, the product development possibilities come from the product mix strategy as well as the technological, consumer and social change predictions. The market and technical information search may lead to product ideas as well as to the project aim. The product design specifications come from the product concept through concept engineering.

These paths are more of a thought checklist rather than paths that are taken in every project.

This is a stage of both creativity and evaluation. There is a need to collect information on as many areas as possible, to determine its accuracy and then to build up the whole base for the project from it.

At the end of this stage, there is an assessment by senior management of the probability of success in the market, the time/costs for the remainder of the project and its continuing harmony with the business strategy. Finally there is the decision to go on with this product and provide the resources.

The product development project starts with the selection of the project and then continues to the end of Stage 1 and into Stage 2: product design and process development. There is not a definite demarcation between the two stages - it depends on the company and the type of product. Sometimes the decision to go on is taken after the product concept is completed if design is not technically difficult; at other times it is taken after the product design specifications. It should be realised that both the product concept and the product design specifications continue to develop throughout the design process.

Product strategies change with time as can be seen in Case Study 1 which shows some of the strategies of McDonald's, the hamburger chain, in the USA in the 1990s.
Case Study 1
McDonald's: Can it Regain its Golden Touch?

In 1991, Business Week chronicled the millions McDonald's was pouring into experiments for new products for the US market. In 1998, they listed the flops:

    Carrot Sticks: still available as an optional item in some US restaurants.
    Fried chicken: This was no McNuggets. Though available in much of
    Asia, it's off the menu in the US along with the corn-on-the-cob that came with it.
    Pasta: McDonald's tried the old favourites, spaghetti and lasagna, with garlic bread. Neither
    is available anymore in the US.
    Fajitas: The McDonald's version of this popular Mexican dish never took off, though it's still
    available in a few US restaurants.
    Pizza: The company devoted an entire annual franchise meeting to talking up this fast-food
    favourite. Pizza survives in Canada, but it is no longer in the US.
    McLean Deluxe: This low fat sandwich debuted in 1991 to woo health conscious customers.
    It was erased from the menu in 1996.

Last successful product: Chicken McNugget in 1983.

The company has now emphasised that the heart of the company's menu will remain the same - the burger. 'We will extend our line, rather than going in more radical, different directions.'

They have been opening new stores, rather than launching new products. They are developing a new kitchen production system.

Imagine the possibilities: the company uses its powerful brand to figure out a way to grow in its own backyard. The new kitchen production system allows executives to think more broadly about high-quality menu additions. Domestic earnings no longer drag down international growth but add to it. And overseas markets, upon saturation, have a model for future growth.

(Reprinted from the 9 March 1998 issue of Business Week, by special permission ©1998 by McGraw-Hill Companies.)


Think Break 1.3
Product strategies: new products from McDonald's

In the 21st century, McDonald’s have continued to introduce new products and indeed new part menus, such as breakfast, in the USA.

Look up McDonald’s USA Food News on the web site http://www.mcdonalds.com/usa/eat/features.html

Suggest the reasons that the company might have in introducing these products – the consumers and their needs, company strategies, changing environment.

You will see that there is nutrition information provided on this web site for consumers. Discuss the main aims of this information as regards product and menu selection.

Visit your local McDonalds and compare the products with those available in the USA.


STAGE 2: PRODUCT DESIGN & PROCESS DEVELOPMENT

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Creating New Foods. The Product Developer's Guide. Copyright © Chartered Inst. of Environmental Health.
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