Knowledge is the basis for success in a company and is fundamental to product development. Although knowledge and information are often used interchangeably, there is a clear distinction. Information is a flow of messages, while knowledge is created from information received. There is basic knowledge in the company - both tacit knowledge in people's heads, and explicit or codified knowledge that is transmitted in formal, systematic language. Knowledge can be a major part of the capital structure and is recognised as such in the successful modern company.

Knowledge is becoming more highly regarded in the food industry, and from this can develop new synergy with developing technology and markets both inside and outside the industry. There needs to be inside the company:

     synergy between the knowledge in the differing functions, such
        as marketing, R&D and production;

     synergy between the functional knowledge and the knowledge needed
        for the product development.

In recent years, there has been increasing recognition that knowledge creation and management is important in product development (Clarke, 1998).

Nonaka et al. (1996) developed the theory that there is knowledge stored and knowledge created in individuals; and the organisation can amplify this and then crystallise it as company knowledge. This bank of individual knowledge in the company, often called tacit knowledge because it is within individual minds and not recorded, is the basis for innovation in the company. In product development, this bank of company knowledge, together with sources of information, is used to create the ideas throughout the PD Process. There are different types of knowledge, some from general experience and education, some from experience in a specific area of the company's technology and some from working in the company and the industry's organisation and environment. Therefore companies have different levels of company knowledge and this is directly related to the level of product development that they can undertake (Court, 1997). Tacit knowledge is important in product development because much of the experience in projects is not recorded; so experienced personnel are important in the project teams as well as in the management decision makers.

Think Break 1. 'The consumer is paramount to product success.' Is this statement true     for your company? Can you identify successful projects that were based     on ensuring an optimum product/consumer relationship? Successful     projects that took little consideration of the consumers' needs, wants and     behaviour? 2. Take two PD projects that you would identify as failures and two as     successes. Place the four projects on the following scales:   Weak Strong Marketing orientation ____________________________________ Product/consumer relationship ____________________________________ Knowledge in company ____________________________________ Information sources ____________________________________ Marketing capabilities ____________________________________ Production capabilities ____________________________________ Product differentiation ____________________________________ PD Process ____________________________________ Product development management ____________________________________ General management ____________________________________ 3. What are the differences between the successful products and the failed     products? Can you identify places that the product development could     be improved? 4. What is the level of tacit knowledge (knowledge within the individuals in     the company) in your company of product, production, marketing     technologies and of markets and consumers or customers? How does     this restrict or widen what your company can do in product development?