The product development Process (2)
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The document discusses various aspects of new product development for cosmetics, household, and insecticide products. It begins with an overview of the product development process and importance of satisfying consumer wants. Several examples of new product development are provided, including the development of a toilet bowl blue block and wardrobe insect repellent. Key steps in the process like ideation, product specifications, testing, manufacturing, and launch are covered. Trends in new product development like outsourcing and centralization are also summarized.
The product development Process (2)
- 1. The Product Development Process Cosmetics, Toiletries, Insecticides, Household Cleaning Products Lecture II
- 2. 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.
- 3. 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.
- 8. Steps in The Product Development Process Ideation Developing Product Specifications Market and Product Planning Concept and Prototype Generation Product Registration Packaging Design Further Formulation Development
- 9. Steps in the Product Development Process (Cont.) Manufacturing System Design Review Packaging and Formulation Marketing Review Test Market (Optional) Refining of Product Before Major Launch Major Launch
- 10. 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)
- 17. 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
- 18. 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
- 19. What is the definition of the ideation process?
- 20. The process of conceptualizing a new idea for manifestation into a new product
- 21. Name some Corporate sources of ideation?
- 22. 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
- 23. What is lateral thinking?
- 24. What is the objective of developing product specifications?
- 25. To develop an idea into a list of criteria that can be developed into a tangible product
- 26. What are functional and what are ascetic ingredients?
- 27. What is the systems approach in developing product specifications?
- 28. look at the new product as a system and define individually each required function of the product
- 29. The Product System Profile Shampoo System Profile Function Potential Material Primary surfactant ALS, ALES, TLS, SLES, NaDOBS Secondary surfactant/ Coconut MEA, Foam Stabiliser Cocamide MEA, Cocamidopropyl Betaine or amine Pacifier/Pearliser Ethylene Glycol Distearate, Glycol Stearate Viscosity Control Sodium chloride Preservatives Potassium Sorbate, Diazolidonyl urea, Methyl and Propyl Parabens Functional Additives GuarHydroxypropyl Trimmonium Chloride Panthenol, Dimethicone, Hydrolysed Keratin Protein Fragrance Yes Ascetic Ingredients Aloe Vera, Green Tea Extract, Panthenol Dyes Yes
- 30. What is the role of the product Manager?
- 31. 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
- 32. Explain the concept “ Compatibility with Branding”
- 33. 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
- 34. What are the logistic considerations that must be made when developing a product?
- 35. 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
- 36. What are the major issues in manufacturing system design?
- 37. 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?
- 38. What are the attributes of a good cosmetic chemist?
- 39. Why do companies need New Product Development?
- 40. 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
- 41. Trends in New Product Development Much higher reliance on outside development work - cost efficient
- 42. Trends in New Product Development Product development is becoming more centralised
- 43. 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)
- 44. 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
- 45. 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
- 46. Knowledge Required to Undertake new product Development 1. Product Formulation Different types of products require different types of knowledge
- 47. Product Formulation Examples Shampoo - surfactant - emulsion - irritancy - herbs & fragrance - dyes
- 48. Product Formulation Examples Insecticides - pesticide actives - irritancy and toxicity - aerosol formulating - resins (mosquito coils) - various others for different vehicles
- 49. Product Formulation Examples Air Fresheners - fragrance - aerosols - gum and polymer technology - capillary & diffusion concepts
- 50. Knowledge Required to Undertake new product Development 2. Packaging
- 51. Knowledge Required to Undertake new product Development 3. Manufacturing Methods
- 52. Knowledge Required to Undertake new product Development 4. Efficacy Testing
- 53. 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
- 54. 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
- 55. 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.
- 56. International Markets Will effect types of - formulation - packaging - fragrance - language - colour schemes (product & packaging) - pack sizes - shipping cartons - brand names and promotional strategies
- 57. Selected Distribution Channels Upper Trade (hyper and supermarkets) Lower trade (convenience and sundry stores) Pharmacy Discount Trade Department Stores Direct Marketing
- 58. Market Segment Generic or housebrand market Discount store brands Lower market end Middle Market segment Brand leader segment Pharmacy segment Direct Marketing brands
- 59. Shampoos formulated for Different Market Segments Attributes 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 Oxides Surfactant Pacifier/Visc. Sodium Chloride Glycol Stearates Control Ethylene Glycols Functional Maybe in ascetic quantities Number of choices Ingredients Fragrance Low cost selections Higher cost selections Preservatives Formalin Sodium Benzoate Number of choices
- 69. 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
- 70. Incistern Blue Block Claimed Functions Surfactants clean side of bowl Blue’s bowl water Kills germs (disinfects) Fragrance (some claim)
- 71. Incistern Blue Block Target Market Generic market in Australia & New Zealand Contract manufacturing supermarket own brands
- 72. 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
- 73. 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
- 74. Incistern Blue Block Which is the most important criteria to the customer? - In this case product longevity
- 75. Incistern Blue Block Product Specification An incistern blue block that can last for 400 Flushes
- 76. 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
- 77. Incistern Blue Block Thus the important question in the case of this product is how is each product in the market manufactured?
- 78. Incistern Blue Block Evaluate Each Product to determine production process
- 81. 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
- 84. Probable Jeyes Bloo Process Primarily a powder formulation Will require high pressure extrusion 3500psi Requires pre-measured cut for accurate block size
- 85. 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
- 86. 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%
- 87. Selection of Ingredients Surfactants: literature, supplier information Dissipation controllers: literature, supplier information Gums: Texts Builders: Laundry technology Dyes: literature, supplier information
- 88. 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?
- 89. Probable Jeyes Bloo Formulation Major Surfactant: Sodium Dodecyl Sulphate Secondary Surfactants: nil Dissipation controllers: guar or xanthan gum Dye: Acid blue no. 9 powder
- 90. Formulation Issues Dust control Clogging of ribbon blender Jamming of plodder Thus small amount of moisture must be added to formulation
- 91. 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
- 92. Packaging Decisions Limited by the nature of the product and process Only modifications where ascetic changes, such as shape
- 93. Prototype Generation Took 6 months; trialing different materials surfactant ratios gum selection builder trialing correct dye dosage
- 94. 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
- 95. 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
- 96. 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
- 98. 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
- 99. Examples of New product Development 2. Roach Attack
- 100. 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
- 101. Product Specifications Safe Long lasting (up to 3 months) Natural active ingredient Fragrant
- 103. 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
- 104. Concept and Prototype Generation System Carrier: Wax. Powder or gel Active ingredient: an essential oil
- 105. Efficacy Testing With many products we have to design special efficacy tests, where methodology will be accepted by regulatory bodies
- 107. 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
- 113. Launch Malaysia: Carrefour, 7Eleven, Giant, Cosway Singapore: Mustaffa, Cold Storage, NTUC Australia: Woolworths, Coles, Discount Stores New Zealand: Foodstuffs
- 114. Conclusions Different projects will require emphasis on different disciplines, i.e., - formulation development - manufacturing process development - ascetic changes - product registration - marketing