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Theaimofthischapteristoidentifytheimportantfactorsinfoodproductdevelopmenttobestudiedindetailinthesucceedingchapters.Firstlythedifferentgroupsoffoodproductsareidentifiedasabasisfororganisingproductstrategy.Thenthepublishedresearchonthefactorsinproductfailureandproductsuccessinalltypesofindustriesisusedtoidentifythekeyfactorsinfoodproductdevelopment.Thisleadsintothemanagementofproductdevelopmentatthreedifferentlevels:1.Businessstrategy.2.Productdevelopmentprogramme.3.Productdevelopmentproject.Finallyspecificaspectsoffoodproductdevelopmentareidentifiedasthebasisofthebook,andthestructureofthebookisoutlined.1.1Foodproducts–thebasisofinnovationWhatarefoodproducts?Whatarenewfoodproducts?Everyoneagreesthatafoodismaterialeventuallyconsumedbyhumanstosatisfyphysiologicalandpsychologicalneeds,butthefoodcompanyandtheconsumercanhavequitedifferentdescriptionsofthefoodproductpresentedforsale.Thecompanydefinesabasicfunctionalproducttowhichithasaddedpackaging,aesthetics,brand,priceandadvertising,togiveatotalcompanyproduct.Theconsumerdescribestheproductasabundleofbenefits,relatingitstangibleandintangibleattributestotheirneeds,wantsandbehaviour.Forabasicfoodproduct,forexampleflour,thedescriptioncanbesimpleandpragmatic,butforproducts1Keystonewproductsuccessandfailuresuchasamealatarestaurant,itcanbecomplexandemotional.Thecompanydefinesanewproductashavingsomedifferenceinthebasicfunctionsandaestheticpresentation;butconsumerscompareitwiththe‘old’productandcompetingproductsandiftheyrecogniseadifferencethenitisanewproducttothem(Schaffneretal.,1998).Productdevelopmentisallaboutreconcilingthesetwopointsofview.Therearemanythousandsoffoodproductsandtheycanbegroupedtogetherintoproductcategoriesaccordingto:•foodsystemposition;•markettheyserve;•processingtechnologyusedtomanufacturethem;•basiccommoncharacteristicssuchasnutritionandhealth;•productplatforms;•levelofinnovation.Groupingproductsisausefulmethodofdevelopingnewproductideasusingtechniquessuchasproductplatforms,productmorphologyandgapanalysis.Onecanidentifyspacesfornewdevelopments,methodsofproductimprove-mentandindeedinnovationrelatedtochangesinfoodsystemortechnology.1.1.1FoodproductsandthefoodsystemProductsinteractwitheverypartofthefoodsystemfromprimaryproductiontotheconsumerasshowninFig.1.1.Thenewcereal,highinprotein,maygototheprocessortoproduceaspecialisedproteinproductforbakers,ortoafoodmanufacturertomakeahigh-proteinbreakfastcereal,ortoavegetarianfast-foodoutletasameatreplacer,ortoasupermarketasaningredientforhome-preparedmuesliordirectlytotheconsumerforuseinahomebreadmaker.Anewproductinonepartofthefoodsystemcancausenewproductsinotherparts.Thereisaneedtodistinguishthethreegroupsofproducts:1.Primaryproductsfromseaandtheland.2.Industrialingredientsfromfoodprocessors.3.Consumerproductsfromfoodmanufacturersandfoodservice.Theybasicallyhavethesameproductdevelopmentprocess,butthereareactivitiesandtechniquesspecifictoeacharea.Thereisaneedtorecognisethetotalproductineachcase.Thereisaformalproductwithitsassociationssuchasservice,know-howandimageasidentifiedbythecompany(Crawford,1997),andthentheproductconceptoftheconsumerorcustomer.AMcDonald’shamburgermayseemasimpleproductbutithasstrongassociatedbenefitssuchasconvenience,price,fastserviceandhygiene,alongwithaverypowerfulallureespeciallyforyoungpeopleofthegoodthingsinAmericanlife.Foodserviceproductsusuallyhaveahighproportionofservices,butsodoindustrialproductsandincreasinglyprimaryproducts.4FoodproductdevelopmentTheindustriesupstreamfromthefoodmanufacturerareimportantcontributorsofinnovation(Rama,1996).Boththeingredientsuppliersandtheequipmentsupplierscanhaveapivotalroleininnovationinthefoodindustry.Agriculturalandnowmarinefarmingarealsomajorsourcesofinnovationbothoffreshproducts,andofmaterialsdesignedforprocessing.Sotheinnovationspectrumbroadensanddeepens.1.1.2FoodproductsandthemarketsThebasicprincipleofproductdevelopmentistoidentifytheneedsofthebuyersandtheusers,anddesigntheproductstowardsmeetingtheseneeds.Thismeansthatthemarketsegmentsfortheproductsareanimportantbasisforgroupingproducts.Therearefivemainmarketsegments:1.Consumers:mainlybrandedproducts.2.Retailers:brandedproducts,ingredientmixes.3.Foodservice:partiallypreparedmeals,mealingredients.4.Industrialprocessorsandmanufacturers:differentiatedingredients.5.Primaryprocessors:commodities,undifferentiatedrawmaterials.Itisimportanttorecognisethattherearemajordifferencesinthedevelopmentofproductsforthesedifferentsegments.Ifacompanymovesfromdifferentiatedingredientsforfoodmanufacturerstoconsumerproductstobesoldthroughretailers,thereisaneedfornewknowledgeandnewresourcesinthecompany.Eachofthesefivemainsegmentscanbedividedintofurthersegments.Therearefivecommonconsumermarket-segmentationcategories:•Geographic.•Sociocultural.•Demographic.•Psychographic.•Userbehaviour.Regions,socialclasses,ethnicgroups,households,age,sexandincomearetypicalgroupingsforwhichstatisticalcensusdatacanbefound,butconsumertargetingcanbemoreaccurateifpsychographicsegmentsbasedonlifestyle,behaviour,personalityandattitude