the product development process (2)

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