M4D1: Managing Failure in the Critical Path
This activity will provide you with an opportunity to engage in discussion on a project management topic that was covered in this module. The class interaction will foster a learning environment in which you will learn from each other’s experiences and opinions. In addition to that, you will practice using the project management jargon and expressing your opinions in a professional manner.
The ability to manage a project requires the project manager to utilize a collection of tools and techniques selected for the specific insight, guidance, and usefulness to each project. A project manager’s toolbox may contain numerous tools, some that are used on every project, and others that are used only under special circumstances.
The options available in this discussion have ethical considerations that are important to consider as a project manager. This discussion requires you to identify how specific project management tools are applied and from the data derived, make important decisions about a project.
Respond to the following:
In Module 3, you created a Work Breakdown Structure (WBS) for your project.
How is WBS different from a project network?
How are the two tools related?
If creating a project network is quicker and it clearly displays all the elements of a project, then why do you need to create a WBS?
Briefly describe a business scenario for an ongoing project (this can be your project, a project you worked on, or a project you read about).
Identify how slack was used by the project manager.
Was this an appropriate use of the technique, or did the project manager err in this particular application?
What can you learn from the scenario presented in applying slack to a business project?
Consider that there is a failure along the project’s critical path from the scenario you described.
Briefly explain what options the project manager had to make to bring the project back into the allowable schedule.
Did the project manager take the appropriate actions?
How much time was lost because of the failure and how much time was made up with the correct decisions?
From the above example, what should be the lessons learned about managing a project?
Finally, consider the ethical considerations of building slack into a project.
Is this an acceptable business practice? Provide support for your choice.
Should a project manager explicitly disclose the use of slack when building or sharing a project schedule?
Consult the Discussion Posting Guide for information about writing your discussion posts. It is recommended that you write your post in a document first. Check your work and correct any spelling or grammatical errors. When you are ready to make your initial post, click on the “Reply”. Then copy/paste the text into the message field, and click “Post Reply.”
To respond to a peer, click “Reply” beneath her or his post and continue as with an initial post.
Evaluation
This discussion will be graded using the discussion board rubric. Please review this rubric, located on the Rubrics page within the Start Here module of the course, prior to beginning your work to ensure your participation meets the criteria in place for this discussion. All discussions combined are worth 15% of your final course grade.
M4D1 Product Development
INSTRUCTIONS
When preparing for your discussion post on this case, it is recommended that you read through it several times.
Read through it the first time to familiarize yourself with the prompt.
On the second reading, consider your assigned role in the situation, and let that guide your perspective.
Look deeper at the details: facts, problems, organizational goals, objectives, policies, strategies.
Next, consider the concepts, theories, tools and research you need to use to address the issues presented.
Then, complete any research, analysis, calculations, or graphing to support your decisions and make recommendations.
BACKGROUND
New product development can be very challenging. This case study researches the new development process and explores the elements that led to the failure of a new convenience food option. As you read the study, think about what you may have done differently.
PROMPT
Read the Case Study: “We must have the wrong consumers” – a case study on new food product development failure
(Links to an external site.)
and review the module resources. Answer the questions about the case study. Make sure to support your answers with relevant scholarly resources.
Tasks:
In the discussion forum, answer the following:
Applying your knowledge of the new product development process, diagnose where you consider the process went wrong in this particular case study and why. Identify a successful product with which you are familiar. Does your research suggest that the product adhered to any of the strategies mentioned? Evaluate what element of the product development process ensured success. In response to your peers, evaluate their proposed strategies. Recommend any specific improvements to their strategies to promote new product development success.
Support your answers using relevant, scholarly resources and citations in APA format.
Responses should comprise 200-600 words.
References
Ryynanen, T. & Hakatie, A. (2014). “We must have the wrong consumers” – a case study on new food product development failure
(Links to an external site.)
. British Food Journal, 116 (4), 707-722.
Consult the Discussion Posting Guide for information about writing your discussion posts. It is recommended that you write your post in a document first. Check your work and correct any spelling or grammatical errors. When you are ready to make your initial post, click on the “Reply”. Then copy/paste the text into the message field, and click “Post Reply.”
To respond to a peer, click “Reply” beneath her or his post and continue as with an initial post.
Evaluation
This discussion will be graded using the discussion board rubric. Please review this rubric, located on the Rubrics page within the Start Here module of the course, prior to beginning your work to ensure your participation meets the criteria in place for this discussion. All discussions combined are worth 20% of your final course grade.
PLEASE SEE PDF FOR THE CASE STUDY.
“We must have the wrong
consumers” – a case study on new
food product development failure
Toni Ryynänen
Department of Economics and Management, University of Helsinki,
Helsinki, Finland, and
Annaleena Hakatie
Verso Finland Ltd, Helsinki, Finland
Abstract
Purpose – The aim of this paper is to investigate, in detail, an unsuccessful food development project
that took place in 2008-2010. The case is studied from the viewpoint of an interpretive paradigm. This
article concentrates on constructing the critical elements that led to a food development project failure.
The plan was to have a traditional Finnish dish updated and introduced as a mass produced high-end
convenience food. The project included new convenience food development, packaging design,
consumer market research and a sensory study to back up the food product development on behalf of a
newly established company. Theoretical grounds for the case are based on the new product
development (NPD) research process in the food sector.
Design/methodology/approach – The method applied is an explorative single within-case study.
The research data were mainly obtained from qualitative materials that ranged from marketing plans
to case study field notes compiled by the researchers. Quantitative data were also obtained from
various types of materials but to a lesser extent.
Findings – The results of the study show that the failure of new product development was connected
to the factors identified in classic NPD research. In addition, five phenomena that contributed to
product development failure were constructed: path-dependency; “information condensations”; the
illusion of mutual knowledge and understanding; practices of problem definition; and
window-of-opportunity effects. The results are presented in a form of analytical generalisation that
can be applied, with certain restrictions, to other contexts for new food product development.
Originality/value – Failure rates of NPD have remained the same for the last 30 years in the food
sector. Failed NPD projects can be valuable assets for the food industry when properly analysed.
Examination of successful NPD projects has provided valuable lists of success factors, but knowledge
on phenomena having an effect on NPD failure is needed.
Keywords Case studies, New product development, Convenience foods, Consumer research
Paper type Case study
1. Introduction
A newly founded food company became engaged in a new food development project.
Its brand owners had an idea about introducing a new convenience food onto the
market. Consumer research was conducted by an outsourced marketing research
company. A sensory study was conducted by the university-based food research
organisation and new package designs created by an outsourced design consultant
were made. The prototypes of product and packs looked great. The consumer research
and the sensory study were most certainly expected to back up the revolutionary ideas
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0007-070X.htm
“We must have
the wrong
consumers”
707
Received 31 August 2012
Revised 25 October 2012
Accepted 30 October 2012
British Food Journal
Vol. 116 No. 4, 2014
pp. 707-
722
q Emerald Group Publishing Limited
0007-070X
DOI 10.1108/BFJ-08-2012-0215
originated from the brand owners. However, the presentation of the consumer and
sensory study results turned out to be the exact opposite. The taste of the product was
not as expected. It was indicated by the research that the consumers were not willing to
repeat the purchase as often as they should, and the quality image of the product was
not as expected. The research stated that the consumers were not willing to pay the
premium price either. Consumers seemed to have been somewhat biased towards the
taste and other extrinsic features of the new product. The brand owners exclaimed at
the meeting: “We must have the wrong consumers!”
The development of new food products or the updating of an existing product is a
risky undertaking. The vignette above describes what happened to the failed food
product development project that is examined in this study. New product development
(NPD) is perceived as one of the most important success factors for the food industry.
However, research indicates that many new food products developed never appear on
the market in the first place (Rudolph, 1995). It is also documented that the failure rate
for new products on consumer food markets is somewhere between 60 and 80 per cent
(Grunert and Valli, 2001; Traill and Grunert, 1997; Lord, 1999; Rudolph, 1995;
Stewart-Knox and Mitchell, 2003).
The purpose of this research was to take part in discussions about the low rate of
food product innovation introduced onto the market and the high failure risks involved
in NPD in the convenience food sector. The article presents a comparatively new
non-traditional approach of food product development, which describes and analyses
successful processes of NPD. Typically, case studies are applied in comparative
research settings, for benchmarking purposes or to describe and analyse food product
development projects that have succeeded in the market (Rudder, 2003; Rudder et al.,
2001). Only a few detailed analyses of failed food products or development projects
exist. An “unwritten rule” seems to be that in a successful NPD project, all of the
relevant factors have been done well. In a failed project some or all of these very same
elements are missing or alternatively have been conducted poorly.
There are clear reasons for applying success stories as research material: They are
easy to recognise and generally available. People are willing to reveal the successful
processes and to share their positive experiences. Companies also perceive positive
attention and publicity through the medium of marketing and communication with
interest groups. “Best practices” thinking and “the winner takes all” attitude are also
associated with a favourable analysis of successful food product development projects.
The strengths and weaknesses of analysing successful projects are evident. The
approach taken in this article is partly to challenge the current model. The purpose is to
study an unsuccessful project in order to investigate and therefore to understand better
the dynamics it embodies. It is hard to resurrect ideas that have been discarded by an
organisation. On one hand, it seems that nobody would work on anything that was
tagged as a failure. On the other hand, there are many expressions that refer to
valuable aspects of human flaws and failures: “learning the hard way”, “learning by
trial and error” and “learning by failing”. It is suggested that analysing food product
development failures can be, at best, more informative or illuminating than simply
repeating descriptions of success stories.
First, the article concentrates on typical NPD descriptions, as to what a new product
in the food sector is, and how a food product development failure is defined. Second, the
article presents case research materials, methods, and the case description. Third, the
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case is studied in detail. The third section identifies what happened during the project
and how various “propositions” (Yin, 2003) or “issues” (Stake, 1995) lead to the product
development failure. Fourth, the article discusses five phenomena that have been
constructed around NPD failure and the lessons learned. The applicability of the
results to other practical food product development contexts is discussed at the end of
the article.
2. NPD and the food sector
Current NPD research is mostly about descriptions of processes. Although, a small
amount of the research literature is devoted solely to the food industry, the most
fundamental practices and principles of NPD is claimed to be common across most
industries (Anderson, 2008; Rudder et al., 2001). Major types of new product
development descriptions are structured, sequential process models or alternatively
simultaneous and overlapping models. It is widely accepted that a good food-product
development process should be flexible and continuously evolve. It is also typical to list
key factors or major drivers of a new product’s success. The first stages, especially
planning and evaluation phases are emphasised. In these stages the viability of a new
product should be determined and decided upon. Another frequently mentioned issue
is a sharp and early product definition. A detailed project definition in terms of market
needs, market preferences and product specifications enables the developer to arrive at
sound stop or go decisions. Other issues are a cross-functional team approach, a focus
on evaluation and decision points, quality execution, quality management of
development process and a multi-stage and gate approach (Cooper, 1994).
Most models of NPD define between 4-13 success factors. The most general factors
driving success are typically related to market, company, project, and product (van der
Panne et al., 2003). The ultimate challenge of practical NPD is to bring all of the
relevant aspects of the success factors together in an effective and meaningful way. “In
the real world” of product development, all of the above mentioned factors co-exist and
they cannot be conveniently separated for detailed analysis. A further complication is
that each of these factors is usually divided into various sub-categories. They are so
inter-connected with each other in such a way that when one changes, it will probably
have an effect on other factors as well.
Hoban (1998) found that a lack of strategic focus, limited understanding of the
market, priorities not set or communicated, lack of financial resources, and focus only
on short-term profitability are perceived as having the highest negative impact on
NPD. Poor quality, limited creativity or vision and lack of support for risk-taking were
also rated as having a high impact on NPD failure. Lord (1999) concluded that the
major factors that have impacted on food NPD failure are the following: planning,
management, concept and execution. These major factors comprise sub-factors.
Planning includes strategies, competencies, distribution, market and consumer
analysis. Management comprises organisational culture, support, resources,
expectations and focus, development processes and decision processes. Concept
includes lack of consumer benefit or unique characteristics, lack of defined market
target, introduction at the wrong time, incorrect positioning, price, package and
marketing. Execution comprises failure to deliver the promise, lack of taste or texture,
non-functional packages and failure to execute the sales plan or to achieve appropriate
display or retailer support.
“We must have
the wrong
consumers”
709
There is substantial research on NPD processes, strategies, management and best
practices. It seems that research have repeatedly “verified” information on how to build
successful new products. Nonetheless, failure rates have remained roughly the same
during the last 30 years (Suwannaporn and Speece, 2010). It seems that researchers and
practitioners of NPD know what a successful process is, but the problem lies in how
one is able to detect the constituent elements of success during an on-going project.
Another issue is that although the success factors are known, there are other abstract
issues that have effects on NPD.
This article analyses product development failures, and argues that it can be used
for organisations to build up explicit and valuable knowledge about their NPD
activities. The article does not propose a solution for those problems that are faced by
new food product development. However, this study takes a different stance and takes
advantage of knowledge obtained from a failed project. The line of argument is that
when something gets labelled as failure, valuable information is lost in the act of
negative stigmatisation. It is claimed that by combining positive with negative
experiences a more complete understanding about NPD by an organisation is obtained.
The profile of a failed project depends on the definition of a new product. The term
NPD is utilised to describe a range of food product developments. It is summarised that
the main types of new foods are me-too products, line extensions, repositioned
products, new forms of and reformulation of existing products, new packaging of
existing products, innovative products (changes in an existing product otherwise than
mentioned) and creative or “never-seen before” products (Fuller, 2005; Linnemann et al.,
2006).The case studied is about an innovative food product.
It is also somewhat unclear how a new food product success or failure is defined. Is
it a product concept developed but not launched? Is it a launched new product that fails
to meet the expected targets? Is it a launched new item that generates revenues but
loses distribution and revenues too quickly in a defined period of time after the launch
(Lord, 1999)? This study concentrates on the first definition. The analysed development
project was cancelled during latest stages of the development, before the
mass-manufacturing and a launch stage. Most of the NPD carried out in the private
sector is aimed at producing a successful product that is distributed and sold on the
market. This was also the intention in the project described in this article which can be
considered a failure. It is maintained that the exploration of the particular project,
whether labelled as failed or not, can serve as alternative approach to map the
relatively uncharted terrains of an unsuccessful NPD. The fact is that the success
factors of NPD are already known and well-established in current innovation and
product development research. Despite this, NPD failures in the food industry are an
everyday occurrence.
3. Research materials, methods and the NPD project
3.1 Materials and methods
The method used was an explorative single within-case study. The case study method
was chosen because the phenomenon under scrutiny is complex, contextual, and too
context sensitive to be studied conveniently in any other way (Yin, 2003; Stake, 1995).
The case was also evolving during the NPD project itself. In typical case research, a
case is not an empirical project or any similar set of events as such, but a phenomenon
of which the project is an example. Darke et al. (1998) suggest that it is essential to
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differentiate between a case study research project and a consulting exercise. The
former should have wider interest for relevant research and practitioner communities,
whereas the latter is tailored to the sponsoring organisations specific interests and is
undertaken to provide results for those organisations. The research materials were
collected from the company project. The project was a single NPD process conducted in
a small and newly founded food company, and the case is about the dynamics of the
failed food product development. The unit of analysis is particular problems in NPD:
how these were framed and defined in the project and how problem solving unfolded.
The selection of the single case was based on pragmatic and convenience
considerations (Seawright and Gerring, 2008). The project is an exemplar of a
well-resourced but failed NPD in the food sector. Researchers had a rare opportunity
for unusual research access.
The research materials collected during the project included various types of
quantitative, but mostly qualitative materials. Case study field notes, case study
documents and tabular materials were collected during the project. Moreover,
“narratives” or notes compiled by the researchers during and after the data collection
were written. These notes include case analysis materials generated during the
interpretation stage of the study. Notes about the interactions between the players in
the product development process under study were taken. These were later analysed to
determine where tensions, disagreements and problems arose in the project. Attention
was also paid to those issues that seemed to be a hindrance to the project. Other
naturally occurring research material included marketing materials, product
positioning plans, cost figures, sales estimations, research reports created during the
project and presentations of the key participants.
Qualitative materials were collected by drawing on methods of participant
observation. The methodology of participant observation was utilised, and provided
information about interaction in relationships. During observations, the researcher
took on the role of observer-as-participant. The researcher and data triangulation has
the benefit of providing an in-depth understanding and grounds for analysing multiple
aspects and perspectives. One of the authors was educated as a designer and she is a
representative of a product and marketing development consultancy organisation that
took part to the development project from the beginning. She also participated in the
consumer research and sensory study, and she was responsible for collating and
analysing the case materials during the project. Another author is an unpaid academic
researcher who did not participate in the development project. His contribution was to
bring consumer research and case study knowledge to this study.
3.2 The NPD project
The names of persons and companies involved in this study have been omitted to
ensure confidentiality. Therefore the participants are simply referred as: brand owners
(a new food company); a product, marketing and packaging development consultant; a
public funding organisation; a marketing research company; and an university based
food development and research organisation. All but the first are so-called
complementors of the product development because their inputs were outwith the
aforementioned food company.
The brand owners initiated the project and provided the product ideas and initial
production plans. The product, marketing and packaging development consultant
“We must have
the wrong
consumers”
711
assumed the general management of the project. However, the brand owners reserved
the implicit right to intervene whenever they considered it necessary. The consultant
company provided both marketing materials and packaging design concepts. One of
the authors participated in the project as an employee of the consultant company. A
public funding organisation provided additional resources that made it possible to
conduct consumer and sensory studies during the project. The university based
research organisation planned and executed a sensory study after the product concepts
had been chosen for further development (consumer panel n ¼ 25; professional panel
n ¼ 6; all of the test subjects tasted four different products and commented on the
possible names of the products and designed packages). The international marketing
research company conducted a consumer survey after the sensory study had been
conducted and initiated food product modifications ðn ¼ 150; 63 per cent female, 37
male; age 18-30 years 33 per cent, 31-45 years 30 per cent, 46 , years 37 per cent;
interviews were conducted in market halls in the capital city area and lasted for about
20-25 minutes). Consumer studies conducted by small and medium-sized food
companies are typically “good enough” or “quick and dirty” as described by one of the
participants when alluding to practical consumer studies in the food industry. The
implication was that consumer studies, if conducted at all, are seldom rigorous, or valid
or reliable in terms of academic research. Consumer research is typically planned to
provide simple answers to food companies’ practical questions. However, the
participants of the NPD project did not question the results of the studies. Despite the
questionable validity of their information content, both the consumer and sensory
study are only briefly mentioned here. Both of the studies influenced the process in
which the project ended up in failure.
The developed food product was a traditional dish produced and consumed mainly
in the eastern parts of Finland. The food is typically hand-baked in households or
produced in small amounts by the small local bakers. The original products are mainly
sold in market trade or to a lesser degree in grocery shops as a special product. The
product development idea was to introduce this as a traditional dish into the
convenience food sector. The product was planned to be mass-produced and sold in
large quantities in super and hyper markets. The food was positioned as “high-end
ready-meal” product with distinctive quality features communicated through
professionally designed branding and packaging. The context for developing the
updated traditional food as convenience food was necessitated the start a new food
company with distinctive brand elements. This article deals with the first product
development. The product range was planned to be expanded later with line extensions
and other traditional foods.
The leading figures of the product development were two persons with a
considerable work record in leading product development positions in large food
companies. The persons were the brand owners of the new food company. The original
development idea was reasonable and well-justified. In the late 2008 brand owners
applied for funding from a public funding organisation that promotes innovations and
development of new products. Substantial funding was granted for NPD, and a product
and marketing development consultant was commissioned to develop both the food
product’s features and the brand characteristics (including marketing and packaging)
of the new company in the summer of 2009. The product and marketing development
consultant quickly organised co-operation with the university based food research and
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development organisation. The role of this organisation was to create recipes and test
the identifiable features of the new food product. At the product optimisation phase,
four “works like, looks like, tastes like” product prototypes were developed (Rudolph,
1995). The four prototypes embodied combinations of different product forms and
various recipes that required breakthroughs in both formulation and processing. One
of the prototypes was the brand owners’ original recipe. However, it did not meet the
taste expectations of the panel in the sensory study. The product was perceived as
being bulk, and its taste was described as uninteresting. Both the professional and the
consumer panel of the sensory study backed-up these results. The brand owners
rejected and diminished the results claiming that the participants of the panels: “. . .are
not real; they do not represent the true clientele or even potential buyers of the product,
because there were too many university students”. However, students are a
considerable consumer group for ready-made meals.
The original idea and the prototype of the brand owners’ was chosen for further
development. As the prototype was not the one recommended by the sensory study
results, it was heavily contested by the consultant commissioned to develop the
product, marketing materials and package design. Later, consumer research on the
product’s and brand features and packaging design was conducted by an international
marketing research company. The project funding was reconsidered in April 2010
based on these consumer research results. The main reasons for the reassessment of
the funding were price (too expensive for everyday consumption), position of the
product in the market (high-end product, suitable only for celebration and occasional
consumption) and consumer willingness to buy the product (once or twice in a month
at the current price, 4e, per 250 gram package). The representative of the marketing
research company formulated and summarised the results by the following sentence:
“There is no consumer interest towards a product that tastes like the tested one.”
Research material collection and the product development ended as described in April
2010. The developed product did not appear on the market as it was intended during
the development project.
The explicitly announced goal was to produce a significantly different food product
that drives consumer benefit. Therefore, the aim of the project was to develop a product
that would introduce a new food company onto the market and to offer higher margins
to the producer and to retailers. This was planned to be achieved through providing
consumer value by mixing tradition and novelty, convenience and taste satisfaction.
The package development was one of the major means to communicate the new brand.
However, the brand owners wanted to have a package that followed the existing
dominant packaging design format. These types of packs are widely used by the rivals.
The reasons for the failure based on the literature on NPD can be categorised. It can
be concluded that the food product development was product driven, not consumer or
market led. It became evident that the product definition was formulated in advance by
the brand owners, and therefore product features, consumer requirements, business
objectives and delivery issues were already fixed. From the very beginning, consumer
information and market situation analysis was based on the presuppositions of the
brand owners. Following traditional markers as criteria for successful product
development, the results of the consumer research can be defined as factors that
resulted in the failure.
“We must have
the wrong
consumers”
713
The literature provides other reasons for the failure. Cross-disciplinary product
development teams are typically referred to as one of the success factors of NPD
(Sherman et al., 2005; Suwannaporn and Speece, 2010). However, the impact of internal
and external communication, management, and power relationships can ruin otherwise
functional teamwork. In this case all of the participant organisations other than the
food company were treated as complementors or “outsiders” who should obey the
representatives of the food company. This did not happen in the initial stage of the case
project when the network of the development organisations was assembled. Many of
the participating specialists wanted to be involved in the project. They saw it as an
opportunity to create an interesting food product and a new brand rather than just one
of the usual business cases. The NPD idea was new, substantial funding was granted,
and several professional organisations involved in the development task. However, the
project and product failed before the market launch. What went wrong? In the next
section, the approach is changed from theory led examination of the NPD project to an
appraisal of research material led examination of the case itself.
4. NPD case in the food sector – what happened?
Based on the project meeting documents and observations of the actors, the
participants reached no consensus about the perception of the starting point of the
project. The fixed ideas of the brand owners became manifest during the project. The
differing ideas became visible especially when the sensory and consumer research
results were presented in the project meetings. This was most evident in situations
where the new information that was introduced did not fit easily into the original
product concept. Although, the product was presented as “novel, trendy, updated and
probably achieving major international demand” by the brand owners at the project
kick-off meeting, there was practically no room for actual product development. The
product idea was fixed from the start. The information introduced during the project
was also perceived differently by the various participant organisations.
The problems were mainly generated when the complementors offered their
professional views and ideas about how to improve the food product. From the brand
owners’ perspective they would have been better off, if the complementors had just
backed them up. During brand and marketing development meetings the following
point was raised by one of the consultants: “Why would anybody hire a consultant just
to repeat the ideas that are already determined?” The question was left unanswered.
The NPD project turned to be more complex after each “dragging” issue was
recognised. It is usual to state that a project must be re-evaluated after crucial new
information appears. This is in line with the stage-gate thinking (Cooper, 1994).
However, whenever a problem appears, an extensive evaluation of a product
development project is practically impossible to realise. Long-lasting NPD teams have
developed various procedures to deal with changing situations, but still problems are
dealt with implicit ”gut feeling” or with informal problem solving practices.
“Information condensations” were found to introduce hindrance factors to the
project. Basically new and mismatched ideas originated from the complementors, new
information provided by the consumer and sensory researches (results presentation
meetings), unsuccessful product feature experiments (changes in ingredients) and
communication between the participating organisations were examples of these
condensations in this case. One of the indisputable information condensations in the
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current project was consumers’ attitudes and the market situation revealed by the
research. To put it more accurately: the apparent mismatch between the overtly
positive expectations of the brand owners with those of consumers’ willingness to buy
the new product which was found in the research data. This was a major issue
concerning the whole project. The brand owners claimed repeatedly that “we must
have the wrong consumers” and “consumers must be estranged from reality” when
research results not compatible with their fixed presumptions emerged. The consumer
research and sensory study were especially directed at the potential customers of the
new product.
The aim of consumer research early in the NPD process is to identify the voice of the
consumer and make it heard up front to advance and steer the concept development
(Heiskanen et al., 2007; van Kleef et al., 2005). Consumers generally give reliable
judgements about new products that are relatively similar to products already on the
market (van Kleef et al., 2005). Intent-to-purchase turned out to be low when the price
was brought to the desired level. The premium marginal profit desired seemed
impossible to achieve. The brand owners were not willing to make changes to
properties of the product that were identified in the research as being weak.
Another drag on the NPD in this case that was constructed from the research
materials was “problem definition practices” of the project. When an issue that caused
some hindrance to the project emerged, some of the team members saw it as a serious
problem, others defined it just a minor snag. Creating mutual understanding about any
particular problem seemed to be difficult in any given context. For example, the
numerous rounds of developing the sensory properties of the product caused increased
friction between the participating organisations. Similarly, when the package design
started, it was decided that a distinctive premium package was to be designed in the
assignment. Later, after the several re-design rounds guided by the brand owners, the
package ended up looking like the contemporary dominant design on the market.
Surprisingly, professionally conducted NPD can also cause discussions to turn into
debates about problematic characteristics. As mentioned, the implicit idea of
packaging held by the brand owners was to follow the dominant design in the ready
meals food market. The consultant brought new ideas to build a distinctive and
distinguishable brand through a novel package design. However, the brand owners did
not support this strategy or its new ideas. This resulted in justification and counter
argumentation rounds between various representatives of participating organisations.
Some of them took a biased stance against the packaging designer, others backed up
the distinctive design as being innovative. This is an example of a clique of
professionals having power over other participants in a NPD project. The result in the
case was a partial withdrawal of the pack-designer. Consequently, she partly copied
the package design that followed the original idea of the brand owners.
A certain kind of “path dependency” can also turn out to be a problem. The choices
made early in the project will have profound effects on decisions that will be made in
the future. The written project plans and presentations in the kick-off meeting
described the project as creative, innovative, and open-minded. On the contrary, the
project was revealed to be quite rigid from the beginning. In this context, new
opportunities or ideas can suddenly turn out to be major hindrances to a process. When
a certain path is chosen and executed, it is not easy to change its direction. Moreover,
“We must have
the wrong
consumers”
715
when the direction of a project is changed, it will add costs and calls for major
revamping solutions.
A typical problem that arises from conducting consumer research relatively late in a
process is that the product is almost finished when consumer-testing occurs. In such
cases possible alterations that are needed are costly and time consuming. However, this
was not a problem in this project, since sensory study and later the consumer research
were conducted in the early phases. The problem was the interpretation of the results
and an unwillingness to react upon the new information. Finally, the impatience of the
financing sponsor put the project on hold. A rational analysis would state that the
major factor for the failure was the unsuccessful positioning of the product. A high
quality image was promoted artificially. In that the product did not live up to
expectations, and the price category was determined based on this image.
Repositioning the product was seen as being too costly because of the path
dependency effect. The high-quality character of the product would have been lost, if
the ingredients were changed to the cheaper options available.
The problematic collaboration and communication between the participants and
organisations that took part in the NPD turned out to cause light but enduring loss of
momentum. The initial positive atmosphere and mutual respect diminished during the
project. This was related to the differences in company cultures and working methods.
The brand owners were staunch advocates of a traditional product development
culture, whereas the consultant and representatives of the sensory study organisation
were pursuing a different cross-functional model of product development. When
problems became critical, the personal aspects of the issues emerged. This manifested
in a tendency to turn into stereotypical, organisational or personal traits, when
negative outcomes and hindrances surfaced. It is suggested in the literature that
product development teams make better stop and go decisions than individuals, and
teams make better decisions when members are located in different offices or spaces
(Schmidt et al., 2001). An exemplar of this was the structure of cross-functional product
development team in the current project. However, the participant organisations were
in practice individual actors rather than a seamless product development team
committed to the same initial objectives as the brand owners.
Strong project leadership and top management commitment to the project are
mentioned as success factors in NPD. However, project management was scattered
amongst the various actors in this case project. Although, the general management of
the product development was assigned to marketing and packaging consultant, the
participating organisations were managing their own processes. Furthermore, the
management was implicitly in the hands of the food company whose somewhat
stubborn views guided the ultimate direction of the project. A certain kind of “buyer”
or “outsourcing” attitude characterised the relationships between the brand owners
and the complementors. The brand owners positioned and regarded the
complementors as outsourced assets, although the complementors were experienced
professionals in their own fields. Taking due cognizance of the full potential of these
professionals would have probably resulted in a more positive outcome.
What managers involved in a NPD process believe to be the important success
factors cannot always guarantee a successful outcome (Suwannaporn and Speece,
2010). In addition, van der Valk and Wynstra (2005) argue that visible evaluation
processes need to be in place at different organisations and organisation levels to allow
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learning experiences to be passed on. In this case study project these procedures were
mainly missing.
5. Results and the lessons learned
Given the exploratory nature of this study and the corresponding need for insights into
the dynamics of product development failure, the case study method was used in this
study. The detailed analysis of the NPD project lead to a range of observations that
contributes to the knowledge of how this project changed from a successful beginning
into failure. The studied case shows that knowledge divisions matter greatly in
identifying problems and drawing on NPD collaboration (Andersen and Munksgaard,
2009). When focusing on managers “dimensions of thinking” instead of singular
success factors, the role of marketing research, strategic approaches, communications
issues, company experience and competencies were considered as dimensions that
drive success (Suwannaporn and Speece, 2010).
Listening to the consumer does not always end with the birth of the product idea.
The case showed that information acquired from consumers needs to be applied in a
constructive way and as early as possible. The significant question is about what parts
of the information are valuable from the NPD point-of-view. That is, how the
information will be turned into knowledge that is useful in a particular NPD situation?
There is some evidence that consumer research has its limitations, and sometimes the
information provided can steer the development project out of its intended course
(Ahlgren et al., 2005; Costa and Jongen, 2006; Heiskanen et al., 2007; Linnemann et al.,
2006; van Kleef et al., 2005; van der Panne et al., 2003; Trott, 2001). In the current case
the consumer research and sensory study results were systemically downplayed or
even disregarded completely by the brand owners.
Surprising problems arose, as they occurred in this project, when consumers
perceived the new product different to what was expected. Typically, these situations
initiate and implement changes to a concept when participants of the NPD project do
not question the research results. As previously stated, the choices made and executed
earlier in a process are hard to change later. In any event, corrective actions will
generate extra product development costs. If the path dependency effect is strong
enough, it will manifest as a downplaying of the various elements of research
(e.g. “consumers must be estranged from the reality”) or as questioning of the validity
of the research. Another tactic is to downplay the influence of consumers (“They
[consumers] cannot know what they want, because this product is completely new.
There are plenty of examples of successful products the consumers initially disliked
when asked in the early stages”). In addition, other external factors are typically
incurred: Extra costs, time constrains, already planned phases of the development
process cannot be postponed, required workforce to conduct the changes is missing,
and new contracts have to be negotiated and executed for subcontractors. There can
also be accusations that are subjected to project management, either to a single person
or to an organisation.
It has been suggested elsewhere that rather than providing room for creative
imagination and construction of new product ideas, external knowledge and
information from collaboration partners are primarily used for testing and modifying
one’s own ideas, which initiates further corroboration of existing ideas (Andersen and
Munksgaard, 2009). A similar set of interpretations can be easily attributed to the
“We must have
the wrong
consumers”
717
studied project. The original idea was firmly established before the collaboration took
place. From the standpoint of the brand owners the external actors raison d’être was to
consolidate the fixed decisions and to develop state-of-the-art packaging and branding
for the new product. However, valuable information generated in various meetings and
research created an unfavourable twist to the original plan. The project started to
encounter negative hindrances, because the new research information that needed to be
reacted upon was neglected.
5.1 Five phenomena and the NPD failure
First, the path-dependency was strongly evident in the project. This meant that the
start and especially the early phases of the product development project determined the
structure of the later phases of the project. The beginning of NPD is often called the
“fuzzy front end” because of its initially unstructured and unclear nature (Simms and
Trott, 2010). However, when the fuzziness decreases, the chosen path starts to guide
the project. The decisions made in early stages will steer the future decision making,
and it becomes increasingly harder to change the chosen direction. Alternatively, the
experiments are more time consuming and costly in the later stages. The minds of the
people involved, including management, are also harder to change. Justifications for
large changes become problematic. Path dependency, or that path a project is on, is
hard to define. The influence of path dependency is seldom perceived but it is probably
implicit. It is more likely to be visible before the implementation of NPD. Even then
members of the NPD team can interpret it differently. It is manifested in the feeling that
an already developed and perhaps completed stage of product development may have
to be redone. Researchers have found that crucial decisions should be made early on in
the process, when the changes are more easily conducted (Grunert et al., 2011).
Second, information condensations are specific situations that occur in the stream of
an NPD project. In these situations new information or otherwise relevant issues
suddenly emerge, and caused delays to the project. These moments will change the
nature of the NPD project, and typically they call for fast and radical intervention. In
this case study project new information provided by the sensory study and consumer
research, diverging ideas of complementors and numerous product feature tests
conducted by the sensory study organisation provided such unwanted delays. The
delaying issues were not solved, and the project started to generate friction. The drag
can turn out to be a problem for a project where iteration is not tolerated or when
project managers want to stick strictly to the plans they made earlier. New products
take time to design, develop, and launch. The requirements changed during the project,
but the original product idea was kept unchanged. The concept did not accommodate
new needs generated and discovered during the project.
Third, the illusion of mutual knowledge and understanding is related to the idea of a
product development project as being a clear and manageable whole. Participants of
the studied project seemed to share a uniform vision of the roles and goals of the
project in addition to the product under development. However, the perceptions
differed in various senses. Examination of the case materials revealed that there were
widely divergent opinions as to how this product development ought to proceed. The
participants came from different backgrounds and had no previous working
experience together as a team. There was also certain ambiguity about project
management, which had a negative effect on the working atmosphere. The full
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potential of the capabilities and experienced professional know-how of the team was
not fully utilised. Valuable time and resources were misspent over negotiations
concerning professional roles and power relationships. Andersen and Munksgaard
(2009) suggest that both multiple knowledge contexts and balanced relationship
atmospheres are necessary prerequisites for developing new marketable ideas
successfully. They proposed that imbalanced relationships lead to dominance of one
actor’s ideas and perspectives, and leads to the exclusion of alternative problem
framings.
Fourth, NPD can be identified as both problem defining and a problem solving
activity. NPD processes are seldom clear and straight forward. The development of
innovative and radical new products especially faces a multitude of challenges during
the stages of development. The difficulty in problem framing in NPD is the complex
nature of the creative practice. Problem defining practices have an effect on how the
problems should be solved. The bigger the product development team the harder it is
to define the problems. It also has to be defined who has responsibility for certain
problems in an organisation. Issues of responsibility, complexity and problem framing
practices are vital in a fast moving NPD project (Andersen and Munksgaard, 2009).
Problems should be seen in bundles, since solving single problems whenever they
emerge is only “putting out small fires”. Proactive problem framing and solving calls
for professional experience of perceiving relevant issues holistically.
Fifth issue identified can be summarised as the window-of-opportunity effect. It
became evident that a NPD project has to move forward at a fast pace. Time is a
powerful enemy not only in terms of product launch and the actions of business rivals,
but more so internally. It was noticed that if a problem or a hindrance was not solved
expeditiously, it tended to escalate. For example, the sensory study and design of
concrete product features became prolonged because the brand owners wanted to
create a “perfect” product. This was respectable goal in its own right, but most of the
later prototypes or tests with different ingredients were only minor details in the
development. A considerable amount of resources and especially time were spent on
making insignificant changes to the product concept. A similar issue was faced with
the package design, which was revised on a number of occasions. The prolonged
designing process eventually resulted in a compromise package. The innovative
elements were cut out one-by-one and the package ended up looking like other typical
convenience food packages sold on the market. It seems that when an issue under
development takes an undue amount of time the focus can get lost, resources are spent
in vain, and the end result can turn out to be a tedious compromise.
5.2 Discussion
There are common denominators for a successful NPD. As indicated at the beginning
of the article, the most general factors driving success are related to market, company,
project, and product (van der Panne et al., 2003). According to Lord (1999), the major
factors that have impacts on NPD failure relate to planning, management, concept and
execution activities. The importance of these categorisations was validated by this case
study. The mentioned factors driving success or failure of the food product
development can be found in the studied case. A downside of the traditional approach
to study NPD is that one can only define the significant factors for a certain NPD
project afterwards. It would be beneficial to create a knowledge base that can aid
“We must have
the wrong
consumers”
719
participants to notice potential failure factors as early as possible in the process and
thereby circumvent them. This is the reason why the reviewed research suggests that
the first stages of a NPD are most important. The same stages are typically the
fuzziest. It seems that the identified and crucial factors in NPD are generally only
recognised during the development processes itself. It is harder to indicate when these
factors are not working in practice as they should, and what should be done when a
problem in NPD project is perceived. This is a research gap the article tried to address,
and that needs to be addressed in greater detail in future studies.
The five phenomena constructed and described in this article are suitable categories
for examining any NPD development phase, participating actor or market, company,
project, and product related factors. Although, they are on an abstract level, the five
phenomena indicate when a project has encountered problems. Path-dependency
highlights the importance of the early stages of a project, and by definition also every
major subsequent decision made during that project. These situations determine the
forthcoming paths a development project can take. It is typically hard to cancel or
change previous decisions without substantial costs. Information condensations are
specific situations that introduce specific problems into the NPD processes. These
situations are potential sources that drive product development failure, since new
information has to be evaluated and acted upon quickly. When neglected, information
condensations have negative consequences by introducing drag in a project. The
illusion of mutual knowledge and understanding relates to communication practices.
As a source of bias, participants of NPD typically assume that everybody has a shared
understanding of the goals and procedures to achieve the desired target. In the current
case this objective seemed to be illusory. Ostensibly the same goal is revealed to be
something else or understood differently by the participants. People pushing different
goals are a particular source of failure. Practices of problem definition and problem
solving are connected to disagreements about how to proceed with the project. This
can be identified as a management problem, but it is not always apparent. There can be
implicit differences in problem framing that are affected by organisation cultures or
preferred courses of action. Various problem definitions and problem solving practices
can fragment team work and lead to failure. Last, the window-of-opportunity effect is
visible when participants of the NPD do not know how to proceed with the project.
When a project loses momentum, a series of minor and insignificant changes are
introduced. When a clear vision of understandings of how to advance a project is
missing, the window-of-opportunity quickly closes. In this case study these situations
led to misspent resources and inefficient work. Moreover, pointless work had a
negative effect on the social atmosphere of the team.
What can be claimed based on just one case? Statistical generalisations describing a
certain population are not possible. However, an analytical or theoretical generalisation
can be drawn. In NPD projects in the food sector there are common factors that are
frequently repeated. Therefore, the usefulness of the case study results lies in its
relationship to NPD practice conducted elsewhere. It can be claimed that when
participants of NPD projects notice phenomena described and examined in this article
they should be able to intervene and change the course of action. Becoming aware of
phenomena around NPD will improve the quality of processes and offer the possibility
of recognising otherwise implicit hints. The framework to analyse negative cases or
failed product development projects are suggested to be a catalyst for the general
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improvement of NPD. A better understanding of the factors in food NPD remains an
important issue, because all of the products developed cannot be successfully
introduced into the market. Failing quickly in the NPD process avoids failing big.
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Corresponding author
Toni Ryynänen can be contacted at: toni.ryynanen@helsinki.fi
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