1(a) Develop a case for a new product, service or process built upon recent research.

New product development :

The process of designing and launching into the market, products that are original, improved modified or new brands by means of research and development activities.

Importance of new product development :

    Is necessary for growth of enterprises.
    All products decline with time i.e. life cycle.
    The market is dynamic.
    Technical innovation is permanent.

Idea generation :

    Systematic searches of idea.
    Brainstorming.
    55% of ideas are generated internally.
    28% comes from consumers.
    30% are obtained analyzing the competition.
    Remaining ideas come from distribution system.

Idea screening :

  • Ideas are taken to a standard format (product,competition, market,market size,price and profitability).

  • These are evaluated with predetermined criteria (real benefits,enterprise fit,know how).

  • Several screening cycles.

Concept development and testing :

  • Product area.

  • Product concept: detailed version of the idea defined in terms that have a meaning for clients or consumers.

  • Product image: the way in which the client perceives the product.

  • Concept test: with text or drawing.

1. If you have a core range of products, you may want to grow your business by developing new products to add to the range. These new products may simply be modifications to existing products or a completely new product for a new market.

2. You may have seen a gap in the market and are trying to target it. If this is the case,ensure that you have done your exploratory research before embarking on a potentially costly product development programme. Make sure that you have looked at relevant market data and,have then, undertaken sound market research to find out if there is a demand for your new product.

3. One of your customers may have approached you and asked you to develop a new product. If this is the case, the need for market research is less important as you are, generally, meeting a real market demand.


Critical path :

Once the business has decided that a new product needs to be developed, the first thing for you to do is devise a critical path. This summarises all key tasks involved in the process, relevant timings and, most importantly, who is responsible for completing each one. The critical path should include the following key functions :

    � Development
    � Technical
    � Purchasing
    � Engineering
    � Sales
    � Marketing
    � Planning
    � Production
    � Finance

Attached is an example of a simple critical path format. It is often useful to get the people who have responsibilities in the process together for an initial start-up meeting. At this you can brief the team on the background to the project, what it is aiming to achieve and why it is important to the business.

This session should act as a means of creating a common understanding and team approach to the project. A particularly complex, or long, development process may also require team status sessions as it progresses.


The brief :

The next step is to produce a brief for the development team. The brief should contain information under the following headings:

Detailed description of the product, container and packaging.

Who the product is for? How they may use it? Where they will buy/consume it?

The market you are targeting e.g. competing products/companies, key trade customers, price brands, etc.

The volumes required - at least indicative at this stage.

Initial costings i.e. price and margin benchmarks.

The product brief should be signed off by someone of authority in the company who can ensure that it meets the company's aims and objectives.


The development team :

Larger, established food and drink companies will probably have a Product Development Manager or,even, an entire New Product Development Team. However, this is not necessary. What is important is that you have people focussed on developing your new product and their roles and responsibilities areclearly defined. .To best ensure new product development success, ensure buy-in from all aspects of the company (production, technical, sales & marketing, etc.).


Concept samples :

At this stage you will have a concept sample of the product which you should test on your internal team to get to the ideal product to take to the customer or consumer (if you are doing research). If you receive positive feedback you will be able to progress to the next stage taking into consideration any customer and/or consumer suggestions or recommendations.. However if there were significant negatives with the product at the concept stage it would be unwise to take the development any further.


Manufacturing specification :

Putting a manufacturing specification together is the next logical step. This will ensure that you know where and how you are going to make the product and that everyone involved in the manufacturing process is aware of these details. Basic information in this specification will include the name of the product, the production process, the list of raw ingredients and the quantities, temperatures for cooking and net weight of the product.At this stage you should give consideration to HACCP (Hazardous and Critical Control Points) and put together a process flow chart with easy to follow steps. Your product development system should meet stringent safety procedures and quality control procedures. If you have clearly laid-out procedures you will minimise any problems and ensure that everyone is working to the same specification.


Analysis :

Your product will have to undergo a variety of checks. Depending on the product, this could include shelf-life analysis, microbiological testing, heat penetration tests, etc. These tests will probably be out-sourced to laboratories or food analysts.


Legislation&Technical :

Make sure that you have checked all the necessary legislation required for your product. For example if you are producing a kosher or organic product, have you got the necessary approval or accreditation from the relevant bodies?Packaging guidelines need to be followed in terms of nutritional information and formats, product description, quantitative ingredient declaration, warnings for food intolerance e.g. contains nuts.Ingredient specifications and accredited supplier assurances will verify these and others such as GMstatus, natural or artificial, etc. The Technical Manager, or whoever is responsible for technical issues within your company, will manage all these elements and should be included in the packaging approval process to ensure compliance.


Financial analysis :

Review sales, cost and profit projections.

Include marketing, R&D, Production, accounting and financial costs.

Throughout the process, costings will be refined until a final costing is ready to be signed off by senior management as part of the approval process. The final costing will include recipe costs; labour,packaging and distribution costs; sales margin; and, an allowance for marketing support.


Sales and marketing :

Your Sales and Marketing Manager/team need to secure the product distribution; agree the customer selling price and margin; and, ensure compliance with their systems. They will tend to manage any customer interface throughout the process.

Sales and Marketing also need to ensure the product has a sound market and consumer rationale,develop the visual packaging and any effective support programme for launch and beyond.Sales and marketing should work together to develop the volume forecasts for the product. These will be agreed with production planning and the factory will produce to these levels. Forecasting can be difficult with new products but regular reviews should be undertaken in the initial weeks and months to keep refining their accuracy.


Product life style strategies :

Plc is the course followed bysales and profits during the products life time.

Plc have five stages.

    � Product development.
    � Introduction.
    � Growth.
    � Maturity.
    � Decline.

b) Review current theoretical debate that supports this business case.

UNILEVER'S BUSINESSES AND BRAND PORTFOLIO.

The foods division, known as Unilever Best- foods following the 2000 acquisition and integration of Best foods, was organized around six product categories: spreads, culinary, and cooking products; savoury (soups and sauces) and dressings; beverages; health and wellness; frozen foods; and ice cream. The foods division, which had consistently generated 50�52 percent of Unilever's corporate-wide revenues from 1992 to 2000, accounted for 55 percent of revenues in 2001 and 56 percent in 2002�chiefly because of the Best foods acquisition. The Home and Personal Care (H PC) division consisted of eight categories: deodorants, hair care, household care, laundry, mass skin care, oral care, personal wash, and fragrances and cosmetics. HPC generated about 43 percent of Unilever's corporate wide revenues.

  • Improving the company's focus on foods and 1-IPC activities regionally and globally.

  • Accelerating decision making and execution through tighter alignment of brand strategy with operations.

  • Strengthening innovation capability through more effective integration of R&D into the divisional structure and the creation of global innovation centers.

THE BEN & JERRY'S ACQUISITION

After considering offers from Unilever, Diageo (at the time the parent company of archrival HaagenDazs), Nestle, Roncadin (an Italian company). And Dreyer's (a rival maker of superpremiumi ice cream products and a longtime distributor of Ben & Jerry's products) the board of directors of Ben & Jerry's Homemade, Inc... In April 2000 agreed to accept Unilever's offer of $43.60 a share for all of the company's 7.48 million shares, resulting in an acquisition price of $326 million. The $43.60 price represented a premium of 23 percent over the closing price the day prior to the announcement of the agreement and was well above the $15.80 to $20.00 range the stock traded in prior to the five buyout offers becoming public knowledge in December 1999. Exhibit 7 shows Ben & Jerry's financial highlights for years prior to the acquisition.


Developments Following the Acquisition

To win approval for the acquisition from Ben & Jerry's cofounders and the board, Unilever agreed to keep the company's headquarters in Vermont. to operate it separately from Unilever for a period of time, to maintain employment at Current levels for at least two years, to hold employee benefits at current levels for at least live years, and to contribute 7.5 percent of pretax income annually to the Ben & Jerry's Foundation. Unilever further agreed to form an independent 11-member board of directors for Ben & Jerry's to monitor how well these conditions were being met, with eight of the board members to be named by Ben & Jerry's management, one by Unilever, and two by Meadowbrook Lane Capital. Ben Cohen and Jerry Greenfield were also to continue to have active roles in management.


THE BESTFOODS ACQUISITION

At the time of its acquisition by Unilever in mid- 2000, Best foods was a global company engaged in manufacturing and marketing consumer foods. The company had offices and manufacturing operations in 60 countries and marketed its products in I 10 countries. About 60 percent of Best foods' $8.6 billion in sales in 1999 came from outside the United Slates. Best foods employed approximately 44,000 people, of whom about 28,000 were at non-U.S. locations. Food industry analysts considered Bestfoods to be one of the best managed American food companies, and it was one of the 10 largest U.S.-based food products companies.

Bestfoods' corporate strategy in 2000 had four core elements:

  • Globalization of the company's core consumer, businesses the Knorr product line, salad dressings and food-service operations.

  • Continual improvement in cost effectiveness.

  • Seeking out and exploiting new ,market opportunities (via both new product introductions and extending sales of existing products to additional country markets).

  • Using free cash flow to make strategic acquisitions. Since the 1 980s, Bestloods had made over 60 acquisitions to expand its lineup of products and brands and to position the company in new geographic markets.

Benefits with the Acquisition

By year-end 2003, Unilever management believed that it had successfully integrated the operations of Bestfoods with those of Unilever. Businesses of the two companies had been merged in 63 countries across 5 regions of the world. producing �790 million in cost-saving synergies and efficiencies and leading to increased operating margins (15.7 percent for the first nine months of 2003 versus 14.8 percent in 2002 and 14.4 percent in 2001). Unilever's entire food division was operating under the name Unilever Bestfoods (UBF).

Weaknesses:

Noted several of these weaknesses in the organization have the dual leadership. And not connected with the costumers. Unilever have more than 1600 brands in sales and marketing efforts in 88 countries but so many brands low performances. The following are the main weaknesses

Unilever have the dual leadership and not connecting with the costumers. And the inefficient of brand management. Reduced spending for R&D inability to maximize acquisitions.


c) Incorporate into this business case information on market competition and analysis of marketing environment.

market factors

Opportunities:

The company observe the more opportunities in the global market . particularly in opening new markets and attractive advantages of the recent trade in the developing countries. Unilever star new business a chain of tea houses and Myhome , laundry and home cleaning services test market stating in Britain in 2000 and in the united states and India in 2001 (c-480). In other nations the labor costs are lower this is the opportunity to cut the operational costs and get chance to expand to other Ares. And also increase the needs of the healthy products. The following are the opportunities of the organization.

Changing consumer preferences and increasing need for healthy products.

Threats:

Unilever had sales per employee of around $160,000 in 2000 compared with the competitors like $205,000 for Nestle, $360,000 for P&G, 458,000 for kellogg's, and $605,000 for general milks (c-470). Comparing with the all the competitors Unilever revenues decrease. And also take care of the money exchange rates. Money exchange rates also give the effect on the organization.

The following are the main threats of the Unilever

Unilever revenues decrease and strong competition and also store brands are increasing. Tougher business climate. Money exchange rates.

In 2000, there was a wave of mega mergers involving high-profile food and household products companies (Exhibit 4 from the case study). Three factors were driving consolidation pressures in the food industry slower growth rates in the food sector, rapid consolidation among retail grocery chains (which enhanced the buying power of the major supermarket chains and enhanced their ability to demand and receive lucrative "slotting fees" for allocating manufacturers favorable shelf space on their grocery aisles), and fierce competition between branded food manufacturers and private-label manufacturers.

Growth prospects for many food companies had been bleak for several years, and the trend was expected to continue. In the United States, for example, sales of food and household products were, on average, growing 1 to 2 percent annually, just slightly higher than the 1 percent population growth. More women working outside the home, decreasing household sizes, and greater numbers of single-person and one-parent households were causing a shift of food and beverage dollars from at-home outlays to away from-home outlays. The growth rate for food and household products across the industrialized countries of Europe was in the 2 percent range, with many of the same growth-slowing factors at work as iii the United States. Food industry growth rates in emerging or less-developed countries were more attractive in the 3 to 4 percent range prompting most growth-minded food companies to focus their efforts on markets in Latin America, Asia, Eastern Europe, and Africa, where about 85 percent of the world's population was concentrated. The household and personal care business (excluding food products) was a �21 billion market, with sales of �5 billion in North America, �6 billion in Europe. �5 billion in lie Asia-Pacific region. �3 billion in Latin America, and �2 billion in Africa and the Middle East.


Strategies and Activities of Competitors

The comparisons of competitors with Unilever are Kraft, Nestle and P&G. Unilever had sales per employee of around $I 60,000 in 2000. compared with $205,000 for Nestle, $360.00O for Procter & Gamble. $458.000 for Kellogg's. and $605,000 for General Mills.

Source: Essay UK - http://doghouse.net/free-essays/information-technology/new-product-development.php


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