Innovation and new product development

Table of Contents

Executive Summary

1.0. Opportunity Identification and Selection
1.1. Company Background
1.2. Mission Statement
1.3. SWOT Analysis of Breville
1.4. The Market
1.5. Market Trends
1.6. Identified Consumer Need
1.7. The Product Innovation Charter
1.7.1. Focus
1.7.2. Goals and Objectives
1.7.3. Guidelines
1.8. Strategic Fit

2.0. Concept Generation
2.1. Idea Generation Techniques Used
2.1.1. Solving the Problem
2.1.2. Analytical Attribute Techniques
2.2. Concept Statements
2.2.1. Lock and Flip
2.2.2. Removing Strain
2.2.3. Elephant Sucker
2.2.4. Click and Drain
2.2.5. Sliding Vent
2.2.6. Netting Base

3.0. Concept Evaluation
3.1. The Full Screen
3.2. The Chosen Concept
3.3. Concept Testing
3.3.1. Purpose of the Concept Test
3.3.2. Concept Test Format
3.3.3. Selection of the Respondent Group
3.3.4. The Interviewing Process
3.4. A-T-A-R Model
3.5. Product Protocol
3.5.1. Target Market
3.5.2. Product Positioning
3.5.3. Product Attributes
3.5.4. Competitive Comparison
3.5.5. Augmentation Dimensions
3.5.6. Timing
3.5.7. Requirements
3.5.8. Potholes

4.0. Concept Development
4.1. Development of Concept
4.2. The Final Concept

5.0. Product Launch
5.1. Market Testing
5.2. Preliminary Financials
5.2.1. Income Statement
5.2.2. Cash Flow Statement
5.3. Launch and Marketing Strategy
5.3.1. Strategic Launch Planning
5.3.2. Launch Implementation
5.3.3. Launch Management

6.0. References

7.0. Appendices

Executive Summary

The following report details a proposal for a revolutionary new Breville product: a Click and Drain convenience pot. This report details the development of this innovative product from the initial Concept Development right through to a Financial Analysis and a Market Launch Strategy.

Breville’s new Click and Drain convenience pot is an ergonomically designed product to make draining boiling water from pots both safer and easier. This is achieved by clicking off one of the two ergonomically designed handles to expose water-draining holes. The Click and Drain is crafted in brushed stainless steel, and is made with a Quantanium™ non-scratch, non-stick interior. The glass Cook and Look™ lid of the new Click and Drain pot can be locked on for further convenience and safety.

The primary target market of the new Click and Drain pot is consumers who are aged between 17 and 40 and run busy, fast-paced lifestyles that restrict the amount of time available for meal preparation. They are likely to be employed full or part –time and are the consumers most likely to be setting up new homes, flats and apartments and needing to purchase kitchen equipment for the first time. These consumers would be motivated by speed and convenience. The increased safety of the Click and Drain over standard pots would be an added bonus.

The Click and Drain pot would be launched primarily in New Zealand with the long-term potential for launch overseas if the New Zealand launch is a success. After a series of analytical tests it has been established that the Click and Drain pot would have a projected profit of $540,000 in its second year of production and $800,000/year after five years. The Net Present Value (NPV) of the Click and Drain pot would be $1,643,000 and it would have an Internal Rate of Return of 62%.

1.0. Opportunity Identification and Selection

1.1. Company Background

Bill O’Brien and Harry Norville based in Australia, operating in the radio business, founded Breville in 1932. With the increased competition due to the advent of TV manufacturing, the founders decided to sell the Breville Radio Brand in 1951 and enter in the small appliance business, instead. In the 60’s, John O’Brien, Bill’s son, founded the Breville Research and Development centre. The company has been built up on innovative design and product development.

The first products developed were kitchen utensils, such as Breville Snack’n’Sandwich toaster – considered a household institution, launched in 1974. By the 80’s, the company had established a trading centre in Hong Kong and was exporting products to 15 countries. Today, Breville is the market leader in Australia in small electrical appliances.

The company has three business units: “kitchen”, “body” and “at home”. The kitchen collections includes baking & roasting, blending & juicing, coffee and kettles, cooking & steaming, grilling & frying, processing and mixing, toasting & snacking. All the products are designed to be really useful, responding to the customer’s demand. As said by John O’Brien, “the ultimate appliance is one that gets used every day, not just a showpiece”.

In 2001, Housewares International Pty Ltd (HWI), an Australian listed company, acquired Breville. More details about HWI and the acquisition can be seen in Appendix 1.

1.2. Mission Statement

Breville is to become New Zealand’s leading provider of branded house wares products, to be achieved through constant innovation and the development of products specifically targeted at everyday needs discovered in the marketplace.

1.3. SWOT Analysis of Breville

Strengths:

- Breville is a well-known and trusted brand within New Zealand that has been around for 70 years. It is known for producing quality products.
- Brand awareness levels are high, as is the availability of their product to consumers. New products produced by the company utilise this strong brand equity in gaining customer acceptance and purchase.
- The company specialises in kitchenware, which means they have a true understanding and considerable knowledge base of the food preparation market. Experienced staff is a key competency of the company.
- Breville already has well established distribution systems throughout the country that can easily be utilised for distribution of new products.
- The company closely follows consumer trends and acts upon customer feedback when designing new products, which ensures products are successful and tailored specifically to consumer needs. The company aims to produce products that are practical for every-day use.
- The company is diversifying into other markets including other home appliances and body care products.

Weaknesses:

- Breville competes in a mature market, where there are many competitors vying for market share.

Opportunities:

- There is opportunity for Breville to observe consumer trends towards convenience and provide products that make the process of cooking faster and easier.
- Breville could utilise their strong core capabilities further to diversify into other areas such as the home and body sectors they have already diversified into. They could also diversify their product ranges within existing sectors.

Threats:

- Large amounts of competition in the market make it difficult to innovatively differentiate their product from the offerings of other companies.
- The maturation of key markets may pose a threat to sales volumes.
- Movement away from cooking meals and towards convenience options such as dining out or ready-to-eat meals will also be affecting the level of sales of cookware products.

1.4. The Market

The key sector within the Breville Company is the Kitchen sector, where Breville is well known in New Zealand for producing equipment involved in the food preparation process. The broad target market for the new product development process is therefore the consumers partaking in food preparation. At this stage, consumers have a range of lifestyles and vary in age from 17 to 75+. The key component that links them is the need for products to assist is preparing for meals. It is necessary to observe trends within this market of people preparing meals at home, but it is also important to understand trends involving consumers who choose not to prepare home-cooked meals as they could ultimately be targeted also.

1.5. Market Trends

The Breville new product development team has identified key trends within the New Zealand market that can be capitalised on in the development of a new product in the kitchen cookware range. These food preparation trends include:

- New Zealand consumers are becoming increasingly ‘time poor’, and as a result, they are demanding products that deliver convenience in order to save time. (www.acneilsen.co.nz)
- The preparation of home-cooked meals is becoming a lost art, where only 25% of the population is cooking evening meals seven nights a week, of which 85% are over 55 years of age. Only 50% of these people are cooking from ‘scratch’ and are likely to be older people. (www.acneilsen.co.nz)
- In line with the convenience trend, food preparation time is decreasing, where 66% of consumers spend less than 30 minutes preparing a meal and 18% spend less than 15 minutes. (www.acneilsen.co.nz)
- In terms of food preparation, the overall trend is towards foods that are ready-to-make rather than being ready to eat. Consumers are keen to get involved in the food preparation process: they just don’t want it to take too long. (www.preparedfoods.com)
- Consumers are becoming more health conscious and desire food that is not only healthy, but in recent years, fresh. (www.preparedfoods.com) The preparation of home-cooked meals is related to this healthiness and freshness.
- As a general market trend, New Zealand’s population is ageing, which may also influence food preparation trends, as it is older people that are more likely to prepare home-cooked meals. Ageing consumers are likely to have differing needs than younger people due to differing lifestyles and physical capabilities.

1.6. Identified Consumer Need

It is evident in the trends within the food preparation market that consumers have a need for cookware that will help them to prepare home cooked meals that are quick and convenient but are also healthy and tasty. Consumers ultimately want to be involved in the preparation process, but need it to be simple so products must make the food preparation process easier and the product itself needs to be easy to use.

The use of stovetop pots is integral in the preparation of many quick and easy home-cooked meals, however there are several factors associated with draining water after boiling that makes traditional pots generally unpleasant to use. These include:

- Difficulty tipping due to heaviness of pot creating strain on joints.
- Difficulty draining when alone if pot is too heavy for a smaller person.
- Loss of lid and contents into sink if pot gets too heavy or slips.
- Burns from either coming in contact with the metal surface when attempting to retain control of the pot or from steam burns.

The new product development team has identified a need within the marketplace to provide a product that makes the process of draining boiling water out of a pot after cooking safer, quicker, and easier. In relation to the ageing population and a number of people that are affected by disabilities including joint problems, the elimination of joint strain during draining is an important consumer need that must be considered in addition to other functional aspects. Elimination of joint strain will however be applicable to the wider general market as well.

1.7. The Product Innovation Charter

1.7.1. Focus

The major trend observed in the food industry is the need for convenience and timesaving. As more people opt for meal options that are quick and easy, Breville will focus on the development of a cookware product that allows consumers to still be involved in the cooking process, but makes it faster and simpler. Specific focus will be put on the development of a product that makes the process of draining boiling water out of pots quicker, safer and easier.

This opportunity will be addressed by utilising:

- Superior production technology – materials such as quantaniumTM
- Innovative design – e.g. cook’n’look glass lid
- Experienced management team with extensive industry knowledge
- Strong supplier and customer relationships

1.7.2. Goals and Objectives

Short term

- Obtain 6% market share in the New Zealand market in the first year, and a 9% share by the end of the third year.
- Establish a 65% awareness level of the product in the target market.
- New product’s contribution margin should be over 20% in the first year.

Long term

- Market leadership in New Zealand
- Start product line extensions
- Launch in Australia, Canada and USA
- Increase awareness levels of Breville and the new product.

1.7.3. Guidelines

1. Minimise the development time and the time taken to get the product in the market.
2. The new product will conform to the current brand image and the company’s overall strategic direction.
3. The product development is to assist Breville in becoming the leading supplier of branded home wares in New Zealand.
4. The brand and product development skills attained from the New Zealand introduction are to be leveraged into offshore markets.

1.8. Strategic Fit

Breville’s catchphrases are “that’s the idea” and “innovations for real people”, which illustrate the desire to be innovative and create products specifically targeted at needs discovered within the marketplace. The concept of developing an innovative means of draining a kitchen pot is therefore consistent with their strategic direction of innovation and a customer focus. Although the company does not currently produce standard pots, there would be a strong strategic fit between the requirements of the new product and the core skills and competencies of the firm so such diversification would be viable. The company is likely to have the research and development, production, distribution, sales and marketing capabilities of producing some sort of draining pot due to the similarity with the materials and functioning of products in their existing range.

2.0. Concept Generation

2.1. Idea Generation Techniques Used

In order to come up with concepts that fit with the identified opportunity to develop a new convenient and safe draining system for kitchen pots, the new product development team utilised several idea generation techniques. These techniques included brainstorming and group creativity and analytical attribute techniques including perceptual map gap analysis (quantitative) and analogy and checklists (qualitative).

2.1.1. Solving the Problem: Brainstorming Techniques

The new product development team worked together through a series of brainstorming sessions, using group creativity to come up with as many valid concepts as were possible for a safe, convenient way of draining a cooking pot of its boiling water. All ideas were considered, and by having more than one brainstorming session, participants were able to have ‘incubation periods’ where time away from thinking about the project proved to enhance the design concepts. ‘Reverse brainstorming’ was also carried out, where the team defined all the weaknesses in the raw ideas and then thought of ways that these could be overcome, or alternatively realised that some of the ideas were fundamentally flawed.

2.1.2. Analytical Attribute Techniques

As part of the problem-solving phase some techniques are used to create views of the products that are different from the usual ones. These techniques allow discovery that come to people that know what they are looking for. Here the team members looked at the product attributes. There are three types of attributes: feature, functions and benefits. A feature leads to a certain function, which in turn leads to a benefit (Crawford, M., & Di Benedetto, A. 2003). The analytical attribute techniques used were:

Perceptual Mapping:

Perceptual mapping or gap analysis is a statistical method that maps the market and shows how various products are perceived by how they are positioned on the market map. The attributes used in the gap analysis are differentiating (an attribute that is decisive in the consumer decision) and important (attributes that are important when buying the product) (Crawford, M., & Di Benedetto, A. 2003).

The team created two different two-dimensional determinant gap maps with convenience/safety and convenience/price as the attributes. The attribute ‘convenience’ includes perceptions of how easy the product is to use and to what extent use of this product will decrease the amount of time spent on cooking a meal that is of a high quality. ‘Safety’ is an attribute concerning the probability of being burned from the metal surface, the steam or the hot water itself. ‘Price ’ is a simple reflection of the selling price of competing products. Price should always be evaluated considering the quality of the product as well, although this is not reflected in the gap map.

Abbildung in dieser Leseprobe nicht enthalten

Fig. II: Gap map for pots evaluating the factors convenience and price.

Checklists:

Checklists are one of today’s most widely used idea-generating techniques. The technique is frequently used as an aid in problem solving (Crawford, M., & Di Benedetto, A. 2003). Therefore it was a powerful tool for the team to use to develop concepts, which evolved due to problems with existing cooking pots.

These are some of the questions that were asked:

- Can any of our concepts be adapted?
- Can something be substituted?
- Is this function really necessary?
- Are there any more cost-efficient ways to do this?
- Can we use a different technique to make the product work better?
- Who else could use this product?
- What if we used another design, material, technology?

These questions helped the team to look at existing cook pots in a new way and to discover superior solutions for the production of a new pot in relation to both the consumers and the company. Using this qualitative technique after undergoing the quantitative gap analysis helped the team to understand more clearly where the gaps were and how they could be defined and filled.

Analogy:

The group also used analogy in the generation of ideas. This included considering everyday objects and life forms that could be applied to the problem of creating a pot-draining device. In particular, this technique was used in coming up with concept ‘C’, the ‘elephant sucker’ (see section 2.2). When considering how the water could be drained using a device that is separate from the pot itself, the group came up with the analogy of the elephant and how it uses its trunk to suck up water and then squirt it back out. This analogy is vivid and has a life of its own, it is full of concrete images, it is a process of activity and it is well known and therefore easy to visualise and describe (Crawford, M., & Di Benedetto, A. 2003).

[...]