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Today’s complex, global business environment demands new product development (NPD) involving less people, more complicated development challenges, and shorter deadlines. Often companies have widely dispersed product development teams, or outsource development to various 3rd parties. At the same time, product innovation has greater urgency today because competitive processes are making it harder for food and beverage companies to increase market share.
At the beginning of any NPD project, it is important to create a detailed critical path, while also allowing for flexibility. Identify key stakeholders and hold them accountable for meeting deadlines. Product objectives, budgets and risks must also be articulated prior to undertaking the project, as well as managed pro-actively throughout the NPD cycle.
Risk to delays in the NPD cycle is particularly high with seasonal products such as ice cream or bottled water, or products which are required to launch before a specified date. Unpredictable or delayed cycle times often result in missed budgets. By identifying and managing risks early and pro-actively, their impact on budgets and timelines is minimized.1
To minimize risk further, test the new product in a small market, and refine it later. Many companies wait to launch a new product until it is “perfect.” Avoid “analysis paralysis” – refine the taste profile by testing, allow stakeholders multiple opportunities to provide input, and then launch before the competition.
To ensure the trade accepts the new product quickly, conduct primary research with customers about the new product concept. If they are excited about the new product, then they will anticipate the product, and quickly embrace it.
If you are developing a private label product, or one for a specific customer, then involve your customer(s) early in the NPD process. Invite them to all the tastings, ask their opinion and how they would like the product altered (taste, packaging, appearance, color, etc.). Do not attempt to develop a new product for a customer without that customer’s sincere involvement.
Success in developing new products depends on six factors:

  • Differentiated, superior products
  • Sharp, early product definition
  • Solid, early research (competitive, market, technical, financial,
  • Marketing actions executed well
  • R & D actions executed well
  • True cross-functional teams2

Cross-functional product development teams are an excellent way to re-organize personnel involved in NPD, facilitate informal communication, share requirements, and identify ideas and constraints early in the product development cycle. This integrated product development approach will result in meeting timelines and budgets. The resulting product will also be lower in cost, higher in quality, and more readily accepted by trade customers.
Do not ignore the past. With workforce turnover high, ensure that previous product launches are reviewed in detail. Verify if other subsidiaries have launched similar products or targeted identical sales channels.
Continually refresh your product line. As you introduce new products, cull slow moving items. There is a cost to maintaining each SKU. The objective is to minimize these costs while maximizing revenues and profits. The fastest moving SKUs usually provide the greatest ROI, and vice versa. Get rid of the dogs.
Cycle time compression is not always in the best interest of the company. For example, some of the costs of faster NPD cycles may be higher expenses, duplicated production costs, higher inventory, or reduction in product features. Therefore, decreasing NPD cycle time should only be applied when the benefits outweigh the costs associated with cycle time reduction.
–Peter M. Guyer
Peter M. Guyer is the Founder and President of ATHENA MARKETING INTERNATIONAL, an international marketing, consulting and business development firm serving food and beverage manufacturers. Tel. (206) 749-9255.
1 Smith, Preston G. and Reinertsen, Donald G., Developing Products in Half the Time, John Wiley & Sons, 1998.
2 Cooper, Robert G., Product Leadership, Reading, MA., Perseus Books, 1998.