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Designing new products for targeted consumer segments is not for the faint of heart. It requires common sense, marketing savvy, knowledge, skill, art, science -- and an ability to predict the future. Companies often turn to a team of professionals to help them outwit the competition. That team may include psychometricians, modelers, ethnographers, qualitative and quantitative researchers with specialized areas of expertise, marketing managers, market researchers, and ingredient and flavor/fragrance suppliers. But no matter how many professionals are involved, the consumer is still in charge, defining the rules of the game by who they are, what they want and how they want it. That's why understanding -- and designing for -- demographics is such an essential step in product development. Marketing intelligenceThe Chicago-based American Marketing Association defines marketing as the function that "links the consumer, customer and public to the marketer through information -- information used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance and improve understanding of marketing as a process." Market intelligence is the gathering, processing and interpreting of relevant information useful to management. Marketing intelligence information allows for sound decision-making and may include any or all of the following: change (for better or worse) in product acceptance, competitive activities including the introduction of new or improved products, a changing pattern of distribution, and an identification of gaps. Joan Scheel, consultant for the Food Processing Center at the University of Nebraska in Lincoln, said during her IFT presentation at the 2003 Annual Meeting in Chicago, entitled "Strategies for Successful Product Development: Using Marketing Intelligence," that marketing intelligence falls into four main classifications: environmental, industrial, customer and competitor. Demographics fall under the environmental class. Scheel says that data may be combined with observation and experimentation, and that one must always ask, "What should I be looking for?" Because the information gathered includes facts and opinions, it must be accurate, timely, usable, understandable and meaningful. Marketing success can be gauged by performance analyses of sales market share, distribution, profit and cost, the sales force, and return on investment. Scheel and Linda Davis, the Food Processing Center's assistant director of technical services, work closely with food manufacturers as marketing consultants. Experts at market feasibility studies, Scheel and Davis help identify trends and market niches. Scheel remarked on how responsive the food industry has been to the low-carb movement for women, kids and ethnic groups. The challenge, Scheel says, is for food manufacturers to respond to trends before it's too late; key is anticipating trends and putting focus on a trend to get the product out to consumers. Those who wait may miss the market. Demographics change over time. The opportunity? Small market segments may grow. Scheel suggests targeting children by providing more healthy foods for them; the elderly by providing functional foods, nutraceuticals and easier-to-open packaging; and diabetics with low-carb solutions. She also suggests that we keep a watchful eye on food safety for our nation. Demographics at workUnderstanding consumer need allows manufacturers to develop specific products for each target segment. Each segment may hold different desires for product offerings and packaging -- all successful new products deliver on these needs and trends. The following covers some of the current highlights on product innovation and industry attention to satisfy those needs for different segments that have been identified, codified and catered to by the food industry. Among these are: aging-population segments, changing and diverse ethnic groups, women, kids, and Americans experiencing health-related problems. Kid and teen power. According to the report "U.S. Market for Kids Foods and Beverages" (http://market research.com), children between the ages of five and 14 influence 78% of total grocery purchases. Their expected control of $10 billion in food and beverage spending this year gives them massive consumer power. A new study from the Gaithersburg, Maryland-based Sodexho Research Institute found that children all over the world eat what they want to eat -- not what they are told to eat -- and enjoy food far more than their parents and grandparents ever did. Today, kids' taste preferences may make or break a brand, and these early preferences can last an entire lifetime. Rick Pendrous, editor of Food Manufacture, believes that campaigns for healthier foods are gaining unstoppable momentum, especially in the emotionally charged area of children's health. Pendrous wonders if the new focus on "unhealthy" products poses opportunities as well as risks. Many companies try to attract the attention of children through the use of effective packaging. But what are kid-appropriate packaging strategies? Technologies that appeal to kids, such as tube dispensers for dairy and peanut butter products, mesh utilitarian aspects of packaging with pure imagination and fun. These products are easy for small, weak hands to open and their colorful graphics are kid magnets. Relationship-building using cartoons works -- Elmo or Blue on a carton for the preschool crowd, for example -- resonate with children and leverage "pester power." What appeals to the under-6 crowd will not necessarily fly for older children. Cara Newkirk, a senior business development associate at Flavors of North America (FONA), uses ethnographic research to identify the flavor and product preferences of "tweens" and teens.
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Designing for Demographics
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