Cooper (1998) described the new product development strategy as 'a strategic master plan that guides your business's new product war efforts'. This may be a rather dramatic definition for commercial product development, but it does emphasise four very important points: it is strategic, focusing on particular outcomes; it is an overall master strategy binding product development projects together; it is a guide for the complete product development programme; it is part of the company's business.

It is a binding of the product areas into the whole organisation - functional areas, knowledge and skills areas, people. This is why it is important to develop a truly effective product development strategy. The product development strategy sets out in a master plan, the aim or aims, the projects, the resources and the constraints, so that all involved in new product development are aware of the overall company policy for product development at this time. If the management wants integration of functional areas, more creativity in the company or more efficiency in product development, then the product development strategy can incorporate all of these into the overall aims.

Companies do have different overall product development strategies as shown in Table 2.9.


Table 2.9 Some product development strategies

Strategy Description Products Differentiated strategy Technologically sophisticated Strong market orientation High degree of product fit Premium priced Unique features and benefits Competitive advantage Low-budget conservative Low R&D spending Highly synergistic with present production and marketing Me-too Undifferentiated Lower price Technology push Technology oriented Lacks strong market orientation Lacks market synergy Can be costly Innovative Technology oriented May not fit consumer needs Not-in-the-game Simple, mature technologies Ill-defined market needs Low technology Me-too Low risk High-budget diverse Heavy spending on R&D No direction, focus No synergy New markets New technologies Innovative products High-risk products May not fit consumer needs

Source: After Cooper, 1998.


In the food industry, all these strategies can be seen - and companies will say that they are successful for them. Historically there has been a preponderance of the low-budget conservative, which suits a market dominant position. As Cooper (1998) indicated from his studies, this strategy does achieve moderate results; the projects usually have a low failure rate, and the products are profitable - but wonders if the standards of success are high enough. It tends to yield a low percentage of new products in the product mix. It is a 'steady as you go' strategy, which shows no dramatic change.

It is important to consider together the drive from the consumer and the market and the drive from technology change in developing the product strategy (R.L. Earle and Earle, 1999). Balachandra and Friar (1997) suggested that a useful analysis is first to identify the context of the new product - is the innovation incremental or radical, the market existing or new, the technology level low or high? Using this one can identify the important factors in product development for different mixes of these factors as shown in Table 2.10.


Table 2.10 Relative importance of PD factors in different contexts

Contextual variables Level of importance Innovation Technology Market Market factors Technology factors Organisation factors 1. Incremental Low Existing Very Low Very 2. Incremental Low New Very Low Very 3. Incremental High Existing Very Very Moderate 4. Incremental High New Moderate Very Moderate 5. Radical Low Existing Moderate Moderate Moderate 6. Radical Low New Low Moderate Moderate 7. Radical High Existing Moderate Very Moderate 8. Radical High New Low Very Very

Source: After Balachandra and Friar, 1997.


These are suggestions by Balachandra and Friar, but it is a useful way to study the product development factors. Ali (1994) also emphasised that in developing a product, it is useful to know for what types of products the company should undertake particular activities. The analysis of environmental and situational factors (firm, project and market characteristics) is a necessary condition for effective planning of new product development.