Factors which Impact onFood Product Development

Internal Factors

Syllabus Link:

Internal Factors: Those factors that affect food product development and are often within the manufacturer’s control. These are also referred to as the ‘micro-environment’.

Internal Factors that Impact on FPD include:

● Personnel Expertise

● Production Facilities

● Financial Position

● Company Image

What are the Internal Factors that Impact on FPD?

Personnel Expertise

● The expertise of staff is crucial to the operation and development of a business. ● The personnel (staff or human resources) employed by a food company include:

➔ Production Staff➔ Financial Staff➔ Marketing & Sales Staff➔ Management Staff➔ Warehouse Staff➔ Product Testing & Quality Assurance Staff ➔ Product Development & Research and Development Staff➔ Maintenance and Engineering Staff

Personnel Expertise:

● The skill levels of workers have a direct effect on what can be produced. These days, many workers are required to be multi-skilled (employees can perform multiple tasks); this allows for greater mobility within and between staff categories and greater flexibility within company operations.

● Skills needed include; ➔ Leadership➔ Planning and Operation➔ Decision Making ➔ Task Management➔ Written and Oral Communication ➔ Ability to Work Collaboratively

● Formal Training and Experience are crucial.

Personnel Expertise:

● Staff in each area should have special responsibilities and functions as well as specialised knowledge, experience and training at a sufficient level to allow optimum performance.

● Training requirements for employees change due to developments in technology, changes in position, career path shifts and movements within a company.

➔ Production workers need to be able to work with new technology to manufacture new products.

➔ Quality assurance staff need to develop specifications for new raw materials and quality standards for new products.

➔ Marketing staff must have the versatility to promote new products, often to new and different markets.

➔ When making decisions about new products, a company must be aware of existing staff strengths and weaknesses and address any shortcomings either by training or by employing new, appropriately qualified personnel.

Personnel Expertise:

Production Facilities

● It is very difficult to produce any food product with the wrong equipment.

● Production facilities vary in complexity, level of technology, output capacity and also expense.

● Larger companies often use a mixture of production technologies, while smaller ones may depend on just one, often simple process.

The bigger the production ----> The greater the output size -------> The greater the profit

● Several types of processes are used for commercial food production.

Production Facilities:

CASE STUDY: Arnott’s

CASE STUDY: Arnott’s

Arnott’s: Using different machinery to re create the same product.Modern methods/ ingredients to improve traditional, well known products.

Financial Position

● A company’s financial position is a major factor in the type of equipment it can afford and hence its product range and new product development activities.

● The financial position of any company includes the value of its assets (equipment, property), cash flow, market share, interest rates, product range etc.

● Financial position is an important factor affecting the ability of a company to compete in the marketplace (the location where products are presented to consumers for sale).

● A strong financial position gives a company an advantage over its competitors in marketing, advertising, product range and product development.

Financial Position:

CASE STUDY: Cadbury

Company Image

● Public perception of a food company is a result of the company’s image, which generally evolves over years of operation.

● Company image is reflected mainly in its market segment and consumer attitudes towards the company.

● It may develop through some of the following factors:➔ Consumer perceptions of product quality➔ Form and convenience of products and packaging➔ Market availability ➔ Labelling

● Before trying to change its image, a company should consider carefully any possible consequences. For example; a company with an image relating to cheaper products (such as; Home Brand) should evaluate the effects of entering the luxury product market.

Company Image:

CASE STUDY: Arnott’sCocktail Inspired Range

Twisted Favourites

CASE STUDY: Arnott’s

Textbook Activity● Identify the internal factors affecting food product development in the

following example:

(A) A new cafeteria has been opened in a busy local shopping centre. The food is organic and made on the premises. An outsider is given the task of checking quality. The meals looked fantastic and the claim that only organic produce was used was true. However, it took over 20 minutes for an ordered meal to be served.