Example 2.1 clearly states type of product, general
target market, method of processing, raw material, type of plant available
and size of the market needed. Sometimes, the processing is not specified
because the aim of the project is to study several different types of
processing, or the target market is not specified because the aim is
to study a few markets and select the most promising. Any general aims
such as ‘to diversify production’ or ‘build up an export
market’ or ‘compete more effectively on the market’ are
focused through the development of the business strategy, the product
strategy and the product development strategy and then tied into the
aim of the specific project.
The aim is a most important step - a mistake in the aim can lead a project into
a completely wrong direction.
Think
Break 2.2
Project aim: building aims for health foods and processed pet foods
Discuss how you would build an aim for the following product development
projects:
 A health food company, which is at present producing and marketing diet
foods, wishes to
 introduce
a diet food for teenagers;
A processed meat company has decided to enter the pet food market by introducing
a new dog
food,
a sausage from beef offal and meat off-cuts. |
2.3.2 Objectives
Objectives are the goals for the different parts of the project, and
are built up from the major outcomes and decisions at the ends of the
four stages, and also from the outcomes and decisions identified within
the stages. Some outcomes already identified in Chapter 1 are product
design specifications, project evaluation, target market definition,
financial outcomes and risk, which are all major objectives identified
by management and are in every project. There are other specific objectives
which are important for a project as can be seen in Example 2.2.
Example
2.2
Specific objectives for a PD project: dried fish for
Nigeria
In developing a dried fish product for the Nigerian consumer
market, four specific objectives were:
comparison of competing dried fish products on the Nigerian market;
process for drying fish in high volumes;
market potential for dried fish in Nigeria in the next five years;
comparison of fish deboning equipment as to yields, costs, quality; |
It is important not to have too many objectives; only those objectives
which are fundamental to the project and whose completion is necessary
for the project are detailed. Sorting out the objectives at the beginning
of the project ensures identification of the objectives that are important
to the company and its environment, and for which company management
is willing to provide money and time.
Think
Break 2.3
Project objective: common objectives for all projects
From Chapter 1, identify objectives which are common to all PD projects,
because they must be achieved as the outcomes are necessary for top management
to make informed go/no-go decisions |
2.3.3 Constraints
Constraints are any factors which define the area of the project, and
usually fall within product, processing, marketing, finance, company
and environment. Some examples are shown in Table 2.1.
Table 2.1 Constraints on the product development project
Product |
Processing
|
Marketing
|
Financial
|
Company
|
Environment |
Eating
quality |
Equipment |
Channels |
Fixed capital |
Strategy |
Local government |
Composition |
Capacity |
Distribution |
Working capital |
Structure |
National
government |
Nutrition |
Raw
materials |
Prices |
Investment |
Expertise, knowledge |
Industry agreements |
Packaging |
Wastes |
Promotion,
advertising |
Project finance |
Location |
Farmers' agreements |
Shelf
life |
Energy |
Competitors |
Cash flows |
Management |
Economic status |
Use |
Water |
Size |
Profits |
Innovation policy |
Business cycle |
Safety |
Personnel |
Product mix |
Returns |
Size |
Social restrictions |
There are also organisational constraints for example, time - there is
a time to launch every product, and therefore a time when the development
process has to be completed. There are often people constraints; for
example, the market researcher may only be available between January
and March.
Example
2.3
Constraints of a PD project: dried fish for Nigeria
Constraints for the dried fish project in Nigeria were:
product
constraints: contains more than 60% fish, have a storage life of
at least 12 months and
contains no preservatives;
processing
constraints: solar drying, capacity 13 tonnes per day, no solid
waste;
marketing
constraints: only ambient storage and transport, retail price
less than 60 cents per 100g
pack;
financial
constraints: $200,000 maximum for project, profit margin more
than 10%;
company
constraints: no bacteriologist, no fishing boats;
environmental
constraints: 10% import duty; 20% inflation in Nigerian currency
in three months. |
It is important to study carefully all the constraints - are they valid? are
they needed?
If the constraints are very tight, then the opportunity for creativity
is reduced; in the example, for instance, having no bacteriologist means that
fermented products would be difficult - but perhaps the company could employ
a bacteriologist if fermented dried fish were an attractive product for the market.
The constraints are used in the product screening and project evaluation, so
they need to be as specific and quantitative as possible; for example, not 'high
in fish' but 'fish over 60%' makes screening much easier.
An example of aims, objectives and constraints is shown in Example
2.4.
Example
2.4
Aims, objectives and constraints: canned abalone exported
to Hong Kong
1. Aim
To develop a canned product incorporating abalone pieces and so extend the product
range of Goodfood Ltd, a small Australian canning company, for the Hong Kong
market.
2. Objectives
2.1 Identify the products and methods of consumption of abalone in Hong Kong.
2.2 Investigate the market potential of canned abalone products in Hong Kong.
2.3 Identify the specific market segment for the product: caterers, large households, working couples.
2.4 Define a suitable product concept for development.
2.5 Formulate a product that will meet the need of the chosen market segment.
2.6 Assemble, specify and test a process to produce the product.
2.7 Assess the consumer acceptance of the product.
2.8 Prepare definitive costs and price range for the product.
2.9 Plan the market strategy for the final product.
3. Constraints
3.1 Product, processing and company constraints
The product must be canned.
The product must be manufactured using the existing processing facilities.
The product shall preferably contain raw materials readily available to the company.
3.2 Marketing constraints
The product shall be distributed through the usual company marketing channels.
The product shall be marketed in Hong Kong as a canned abalone type product.
3.3 Environmental constraints
The product must comply with the Food Regulations of Hong Kong.
3.4 Financial constraints
No capital investment shall be made on any new equipment.
$200,000 working capital will be available to launch the product. |
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