In it to win it: How analytical strategies can optimize a manufacturer's process
The race is on: Manufacturers large and small are competing for limited in-store shelf space by creating new products to address changing consumer demands. Many products fail. However, successful products are backed by strategic analysis, often the most successful processes for bringing new products to market.
By employing certain analytical strategies at each stage of the process, such as white space analysis and competitive attribution analysis, manufacturers can optimize outcomes to improve reception and perception by consumers.
Taking it step by step
Bringing a product to market involves innumerable steps and moving parts, each of which offer opportunities for optimization. Logan Honeycutt, vice president of business development at Label Insight, outlines four main steps companies tend to follow in this process.
1. Conduct research.
The research portion of bringing a product to market involves gathering data and analysis on the target category, competitors, and consumers. White space analysis is key to identifying potential areas of differentiation in a category. Executives answer questions concerning the positioning of other products within the category, emerging trends in that category, and emerging ingredients, flavors, fragrances, and functionalities.
Executives determine consumer trends that could influence the perceptions of a product and the purchasing behaviors that surround it. Manufacturers may study the category, competitors' products, and even target consumer demographics. However, companies often overlook a key component during the research phase that could optimize reception, according to Honeycutt.
"Most companies should be spending a significant amount of time, in conjunction with all other activities, in understanding a shopper's path to purchase in order to generate best in class category strategies," said Honeycutt. "But in reality that just isn't the case as it is time intensive and relatively expensive to conduct shopper behavior analysis."
2. Create the product.
In this phase of product development, companies typically conduct a product attribution analysis to create a framework for differentiation from competitors' products, said Honeycutt. This entails identifying the products already on the market and the particular consumer need state they meet.
If a company conducts the research phase thoroughly and effectively, these decisions become easier to make. For products that use functional ingredients, this phase includes demonstrating efficacy of a functional ingredient, or bioactive compound, and determining how much of the ingredient a consumer must ingest to benefit, according to the Institute of Food Technologists (IFT).
Finally, and perhaps most importantly at this stage, is to identify all safety risks and develop plans to address them. The Department of Justice has made it clear that it won't hesitate to assign prison sentences to executives whose companies act irresponsibly with regards to food safety.
As part of FSMA preventive control requirements, companies must create protocols for addressing any potential safety hazards, and with a new product comes new risks. In addition to prevention of pathogen contamination, manufacturers that want to use functional ingredients must also determine the safety of the ingredient at its most effective level, as overfortification of certain nutrients could endanger consumers' health, according to IFT.
3. Run a competitive attribute analysis.
With competitive attribute data, manufacturers can better understand how competitors are positioning products. This understanding enables them to devise an optimized attribute communications strategy, which is essential to marketing and branding, Honeycutt said.
The questions here involve the pieces of information a manufacturer will include on the packaging, particularly claims regarding health, flavor, convenience, or other product features. These claims are meant to entice new consumers and to maintain existing customer loyalty.
IFT recommends that manufacturers "establish meaningful connections between the attributes of functional foods and the health-related consequences of consuming those foods." Those meaningful connections are attributable to any health-related ingredient, such as natural flavor ingredients, not just functional ingredients.
Without meaningful connections through clear and informative marketing messages, consumers won't understand a product's health benefits and may not be convinced enough to buy. That could leave companies with little incentive to bring new health-centric products to market in the first place, according to IFT.
By analyzing competitors' claims in a particular market segment, manufacturers can weed out which claims resonate with a target market.
4. Strategize retail execution.
Out of the entire product development process, most companies end up failing when it comes to retail execution at the shelf itself, Honeycutt said.
"You can create the most magnificent products, but if they aren't correctly positioned on the shelf then a shopper may never even notice them," said Honeycutt.
This is the reason manufacturers invest in effective category and merchandising analytical strategies. The key is to take insights from the product attribution analysis to create "a coherent, accessible, and easily shoppable category layout" so shoppers can find the products that fit their individual lifestyles, according to Honeycutt.
Deciding on and shaping a timeline
Copying the product model of a market leader takes less time than creating new categories or disrupting existing ones. For this reason, bringing a product to market could take as short as a few months, as Abbott did with its Curate line of snack bars. Or it could take more than a year or multiple years depending on the objective, scientific and market research involved, and the resources companies have available.
Manufacturers can reshape timelines, however, by leveraging the work already done by competitors or even other brands within a company’s own portfolio, Honeycutt said. Manufacturers entering a new category could take inspiration from ingredient statements from successful products to serve as a base for their own recipes and varietal ideas, according to Honeycutt.
A company’s objective also impacts the timeline, such as focusing on increasing speed to market versus minimizing resources needed to bring the product to market, said Honeycutt.
Another option is to ensure flexibility to make changes throughout the entire process, which is "more of a true innovation process that allows developers to make changes as the market and consumers dictate. This would typically be the longest of all of the types, but can lead to the most disruptive changes," Honeycutt said.
Product, category, and consumer research have long been a part of manufacturers' strategies for bringing new products to market. But without the right analysis of that research, companies can misappropriate data and misalign strategies so products inevitably fail to make an impression. With these analytical strategies, manufacturers can feel more confident throughout the process as they identify potential problems along the way.