the product development process (2)
DESCRIPTION
The new product develoTRANSCRIPT
The Product Development
Process
Cosmetics, Toiletries, Insecticides, Household Cleaning
Products
Lecture II
The Product Development Process
The great reality in the product
development process is that
novelty and inventiveness is not
important. It is the ability of the
new product to satisfy identified
wants of targeted consumer groups.
The Product Development Process
Thus, The product development
process in most cases is really about
creating new story-lines to excite
consumers into making particular
choices.
Steps in The Product Development Process
IdeationDeveloping Product SpecificationsMarket and Product PlanningConcept and Prototype GenerationProduct RegistrationPackaging DesignFurther Formulation Development
Steps in the Product Development Process (Cont.)
Manufacturing System DesignReview Packaging and FormulationMarketing ReviewTest Market (Optional)Refining of Product Before Major
LaunchMajor Launch
Dispelling The Myths of New Product Development
Less than 5% of new products launched on the market are successful
Out of 100 new ideas, less than 2 become a commercial reality
Most companies are followers and not innovators (even the Body Shop)
Very few really novel innovations are ever launched commercially
Most new products are incremental steps in enhancement, rather than something completely new (similar to the automobile industry)
Attributes of a Good Cosmetic
Chemist Has initiative to conceptualise new product systems Is well read and conversed with raw materials Understands strengths and limitations of various raw materials Continually surveys market, environment and industry for new
developments Willing to undertake laborious lab work Able to take a market orientation when developing products Able to communicate effectively to others within the
organisation Is well versed in manufacturing processes Understands product costing and able to formulate
accordingly
Why do Companies Need New Product development?
Regulations change forcing product changes
Lifestyles are continually changing
To improve their market positioning and market-share
New Technologies
What is the definition of the ideation
process?
The process of conceptualizing a
new idea for manifestation into a
new product
Name some Corporate sources of
ideation?
Observation of products in the
domestic market Observation of products in overseas
markets Trade Magazines Supplier Submissions Internet Trade shows and conferences Lateral Thinking New Government regulation in regards to product
registrations, toxicity, occupational health and safety
What is lateral thinking?
What is the objective of developing
product specifications?
To develop an idea into a list of criteria
that can be developed into a tangible
product
What are functional and what are
ascetic ingredients?
What is the systems approach in developing product specifications?
look at the new product as a system and define individually each required function of the product
The Product System ProfileShampoo System ProfileFunction Potential Material
Primary surfactant ALS, ALES, TLS, SLES, NaDOBSSecondary surfactant/ Coconut MEA, Foam Stabiliser Cocamide MEA, Cocamidopropyl Betaine or aminePacifier/Pearliser Ethylene Glycol Distearate, Glycol StearateViscosity Control Sodium chloridePreservatives Potassium Sorbate, Diazolidonyl urea, Methyl and Propyl ParabensFunctional Additives GuarHydroxypropyl Trimmonium Chloride Panthenol, Dimethicone, Hydrolysed Keratin ProteinFragrance YesAscetic Ingredients Aloe Vera, Green Tea Extract, PanthenolDyes Yes
What is the role of the product
Manager?
A Product Manager will be appointed to oversee the project development.
Responsibilities:
a) Branding (image)
b) Packaging
c) Product
d) Budget projections
advertising, promotion, sales
e) Source of Production
Explain the concept
“Compatibility with Branding”
to ensure the finished product formulation
reinforces the brand image the company
wishes to market to consumers
- colour, odour, softness, efficacy,
appearance, use of particular material
What are the logistic considerations
that must be made when developing
a product?
Many retail outlets are open and suffer
very harsh temperature variations,
which may not be very kind to many
different types of products, especially
emulsions
What are the major issues in
manufacturing system design?
Is the proposed manufacturing process compatible with the formulation?
Will a new process need to be engineered and developed?
What modifications to the product formula will have to be made, if any?
What type of filling equipment is needed?
What are the attributes of a good
cosmetic chemist?
Why do companies need New Product
Development?
Trends in New Product Development
R&D budgets for product formulation development are getting smaller
- concentration of the international industry
- out-sourcing of development cheaper
- MNC’s see themselves as brand managers,
rather than product developers
Trends in New Product Development
Much higher reliance on outside development work
- cost efficient
Trends in New Product Development
Product development is becoming more centralised
Trends in New Product Development
Risk taking is becoming minimal within the industry
- high costs of new product launches
- more difficult to test market (market
concentration and costs)
Trends in New Product Development
A higher impacting regulatory environment may slow down new product development in the future
- cost of product registrations
- time of registrations
- higher degree of information required for
product registrations
Trends in New Product Development
Due to industry concentration, there is less room for entrepreneurial type product launches
- small one product companies are being
purchased by MNC’s
- Concentration and increase in launch costs
through retail chains
- Cost and requirements of product registration is
becoming a barrier to entry for small players
Knowledge Required to Undertake new product Development
1. Product Formulation
Different types of products require different types of knowledge
Product Formulation Examples
Shampoo
- surfactant
- emulsion
- irritancy
- herbs & fragrance
- dyes
Product Formulation Examples
Insecticides
- pesticide actives
- irritancy and toxicity
- aerosol formulating
- resins (mosquito coils)
- various others for different vehicles
Product Formulation Examples
Air Fresheners
- fragrance
- aerosols
- gum and polymer technology
- capillary & diffusion concepts
Knowledge Required to Undertake new product Development
2. Packaging
Knowledge Required to Undertake new product Development
3. Manufacturing Methods
Knowledge Required to Undertake new product Development
4. Efficacy Testing
Knowledge Required to Undertake new product Development
5. Marketing and market Development a) competitors b) Market growth & Decline c) product lifecycles d) Consumer psychology and determinants of demand e) The marketing mix f) channels of distribution g) promotion strategy h) retailer strategy
Knowledge Required to Undertake new product Development
6. Knowledge of regulatory system
- GMP
- Pesticides Regulations
- Therapeutic Goods Acts
- Packaging & Labeling requirements
- Regulations about making claims (in both
consumer and product legislation)
- How to register a product
Market Differentiation for new product Development
How and what form of a product that will be
developed will be governed by the market it is
being developed for.
International Markets
Will effect types of
- formulation
- packaging
- fragrance
- language
- colour schemes (product & packaging)
- pack sizes
- shipping cartons
- brand names and promotional strategies
Selected Distribution Channels
Upper Trade (hyper and supermarkets) Lower trade (convenience and sundry stores) Pharmacy Discount Trade Department Stores Direct Marketing
Market Segment
Generic or housebrand market Discount store brands Lower market end Middle Market segment Brand leader segment Pharmacy segment Direct Marketing brands
Shampoos formulated for Different Market SegmentsAttributes Generics Discount Lower Middle Leader Pharmacy Solids Level 5-15% 5-25% 10-30% 10-35% 25-40% 25-40%
Primary SLS SLS/ALS ALS/ ALS/ DEA LS DEA LS Surfactant SLES SLES MEA LS MEA LS TEA LS TEA LS
Secondary Alkanolamides Alkyl (amido) Betaines & Amine OxidesSurfactant
Pacifier/Visc. Sodium Chloride Glycol StearatesControl Ethylene Glycols
Functional Maybe in ascetic quantities Number of choicesIngredients
Fragrance Low cost selections Higher cost selections
Preservatives Formalin Sodium Benzoate Number of choices
Examples of New product Development
1. Incistern Blue Block
A block that is dispensed into the toilet
cistern that will dissipate blue dye into
the toilet bowl each flush
Incistern Blue Block
Claimed Functions
Surfactants clean side of bowl
Blue’s bowl water
Kills germs (disinfects)
Fragrance (some claim)
Incistern Blue Block
Target Market
Generic market in Australia &
New Zealand
Contract manufacturing supermarket
own brands
Incistern Blue Block
Development Criteria
(Developing Product Specifications)
Must perform same as market leader
and be 25% cheaper
Thus evaluate existing products in the
Market
Incistern Blue Block
Evaluation of Existing Products
Which product is market leader (ie, product most consumers prefer)
How does the market leader perform?
- efficacy - colour, surfactant cleaning,
product longevity
Incistern Blue Block
Which is the most important criteria to the
customer?
- In this case product longevity
Incistern Blue Block
Product Specification
An incistern blue block that can last for 400
Flushes
Incistern Blue Block
Evaluation of product formula
In this case product formula and production
process cannot be separated.
Two products on the market, both produced
and formulated differently
Incistern Blue Block
Thus the important question in the case of this
product is how is each product in the market
manufactured?
Incistern Blue Block
Evaluate Each Product to determine
production process
Probable Harpic Process
Solid ingredients melted and mixed Heating pot needs to reach 90 degrees C. Filling lines need to be heated Volume or weight filling Packaging PVC blister becomes mould
during the process
Probable Jeyes Bloo Process
Primarily a powder formulation Will require high pressure extrusion 3500psi Requires pre-measured cut for accurate
block size
Anticipated problems with each production process
Harpic System Jeyes Bloo System
Dusty Dusty
Cross Contamination Cross Contamination
Probable to clog Hydroscopic ingredients
along pipes may jam ribbon blender
Limitation in types Limitations in liquid
Of ingredients ingredients
Batch Process Excess pressure can
cause problems in plodder
Probable Harpic Formulation System
Major Surfactant ethoxylated alcohol C16C18
Dissipation Control Tallow fatty Alcohol C16C18
Coconut monoethanolamine
Xanthan Gum
Builder Sodium Tripolyphosphate
Dye System Acid Blue Dye no.9 liquid 50%
Selection of Ingredients
Surfactants: literature, supplier information Dissipation controllers: literature, supplier
information Gums: Texts Builders: Laundry technology Dyes: literature, supplier information
Formulation Issues
Ratio of surfactants to dissipation controllers STP must be a fine powder grade to prevent
clogging Xanthan gum (how is it going to be dissipated
into batch?) How to prevent dye oxidization? How to maintain a free flow during filling?
Probable Jeyes Bloo Formulation
Major Surfactant: Sodium Dodecyl Sulphate
Secondary Surfactants: nil
Dissipation controllers: guar or xanthan gum
Dye: Acid blue no. 9 powder
Formulation Issues
Dust control Clogging of ribbon blender Jamming of plodder
Thus small amount of moisture must be added
to formulation
System Comparison
Both formulation systems have similar unit production costs
Extrusion system more costly because of PVA wrapping system
Harpic system is a batching system, whereas Jeyes Bloo system is continuous
Performance of extrusion block, slightly better than blended block
Packaging Decisions
Limited by the nature of the product and process
Only modifications where ascetic changes, such as shape
Prototype Generation
Took 6 months;
trialing different materials
surfactant ratios
gum selection
builder trialing
correct dye dosage
Product Registration
Not required for a household product Any claims must be able to be substantiated for
Trade Practices legislation Product must meet weights and measures
requirements Product must meet biodegrability requirements Materials Safety Data Sheets must be prepared in
accordance with occupational health and safety requirements
Packaging Design and Testing
PVC blisters were tested to ensure they didn’t melt or become deformed during the manufacturing process
Tested for compatibility with product materials
Thicknesses corrected for best ascetic appearance
Tolerances negotiated with supplier Blister seals tested for time stability
Manufacturing System Design
Most difficult issue was to design a filler that would not clog up
Had to handle logistics of blister movement Took numerous adjustments and two total
redesigns of filling head to get it correct Slight adjustments made to formula to
achieve better flow
Launch
No test market Sales achieved almost 3,000,000 units per
annum Sold in Australia, New Zealand, New Guinea,
Singapore, Fiji, Hong Kong and Taiwan Still in market after 16 years
Examples of New product Development
2. Roach Attack
Ideation
Had problem of keeping wardrobes free of insects during long period of travel away from home
Wanted a non-poisonous continuous action method of solving this problem
Wanted a small space wardrobe air freshener
Product Specifications
Safe Long lasting (up to 3 months) Natural active ingredient Fragrant
Market & Product Planning
The objective of this project was to develop an insect repellent that could be marketed as a small space air freshener
- market for small space air fresheners is many times larger than insect repellents for wardrobes
Concept and Prototype Generation
System
Carrier: Wax. Powder or gel
Active ingredient: an essential oil
Efficacy Testing
With many products we have to design special efficacy tests, where methodology will be accepted by regulatory bodies
Product Registration
As an air freshener the product does not require registration
Recent changes in regulation requires the product to be registered as an insect repellent
Criteria: claims made
Manufacturing System Design
Manufacturing System Design
Launch
Malaysia: Carrefour, 7Eleven, Giant, Cosway Singapore: Mustaffa, Cold Storage, NTUC Australia: Woolworths, Coles, Discount
Stores New Zealand: Foodstuffs
Conclusions
Different projects will require emphasis on different disciplines, i.e.,
- formulation development
- manufacturing process development
- ascetic changes
- product registration
- marketing