Without attention to improvement, it is likely that any business will decline in profitability.
Attention is needed to market developments, competitors activity, customers needs and preferences and to the advent of new opportunities.
Many companies will want to grow and this might involve the purchase of new manufacturing plant to make a wider range of products.
A "product" is the totality of the baked part that can be eaten and enjoyed plus the packinging that protects and displays it to the potential consumer.
While the development of a new product might seem exciting there should also be attention to existing products. Attention to detail may revitalisethese products and it is much less risky to promote an established product than to hope to get acceptance of a new product.
The overall efficiency of a company may be hindered if too many low selling products are retained. A low selling product has disproportionate overhead costs and may be in less than ideal conditions when purchased tharough long storage life. A policy of deletion of low selling products is as important as investment in new products.
Improving current products
Attention should be given firstly to the best selling products. Build on strength, If sales can be increased, production runs and manufacturing efficiency and profitability can be improved. Competition is less likely to suceed if your product is the best.
Factors to consider for improving a product,
Look at the appearance and eating quality, could the flavour or texture be improved?
Look at process control and efficiency records to identify problem areas. Can the production efficiency be increased or the product variability be reduced?
Look at formulation cost. Can it be reduced by using other ingredients?
Look at the market position. Have competitors eroded your market share with a better product.? Could changes in pack size and presentation be attractive? Would the introduction of snack size or multipacks be worth considering?
Would a variation like chocolate coating coating or cream sanwiching offer a market extension opportunity?
does the pack protect the product sufficiently against damage in transport? Do the results from shelf life tests suggest that the product deteriorates too quickly?
It is always possible to improve a product. The question is whether a change is worth the effort and expense relative to other developments. However, the sales, marketing and production position of all existing products should be reviewed at least every six months. If a need for change seems apparent a development project, to integrate all aspects of change, should be set up. The development project should be managed in a similar way to that for a completely new product.
The need for new products
A new product may be considered necessary as a result of one or more of the following reasons,
A competitor product is eroding your market share. There is a need to offer a similar product or range of products to retain market share.
Your company range of products needs increasing on order to increase market share or to enter new markets.
There is a need to fill manufacturing capacity, the may be inder utilised plant or an opportunity, new flavours, products for partcular occasions or introductions from other countries.
There is a technical development that allows manufacture of a product previously not considered or not possible.