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NEW PRODUCT CONCEPT TESTING: FROZEN FOODS Case Study

INDUSTRY EXECUTIVE SUMMARY  Food manufacturing With rising product innovation costs and high competition for

shelf space at major retailers, food manufacturing companies are often tasked with finding the right product mix to METHODS maximize their sales potential. This was the problem facing  Concept testing Company A, a frozen food manufacturer looking to introduce a new line of frozen entrées.  TURF analysis Before launching the new line, Company A had to identify which new concepts would make up the strongest-selling MODE product line.  Online survey To solve this problem, the director hired FGI to conduct a new product concept test and use a set of SPECS advanced models to analyze the data. The result? An effective new product strategy for Company A.  408 respondents

BACKGROUND Company A, a mid-tier food manufacturer, had a well-performing line of frozen Asian entrées, but wanted to expand its share to compete with the market leader. To satisfy more consumer tastes and earn more shelf space, Company A decided to introduce a new line of high-quality and affordable frozen Southeast Asian entrées to its product mix. After working with a food consultant, Company A developed 9 entrée concepts. To create the strongest product lineup to offer retailers and consumers, Company A needed to identify which entrées would be the most popular within its target market.

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TARGET MARKET OPPORTUNITY

 Adults ages 25-54 Of the respondents that already purchased frozen  Household with children Asian meals and entrées, only 16% expressed under 18 high levels of satisfaction with the current  Someone in household eats Asian offerings. With the proper research and the food (e.g. Chinese, Japanese, optimal lineup, , and placement of the new Thai) entrées, Company A had the chance to increase  Purchase frozen meals, entrées, revenue and profit for both itself and retailers. or dinners

FGI’S SOLUTION To determine the best new product strategy for Company A, FGI conducted a concept test on its SmartPanel platform using a Total Unduplicated Reach and Frequency (TURF) analysis with Maximum Difference scaling. A total of 408 SmartPanel members participated in the study.

TURF ANALYSIS MAXIMUM DIFFERENCE SCALING

Total Unduplicated Reach and Frequency analysis Maximum Difference scaling is a discrete choice is a technique that determines the optimal model. It has a “forced choice” exercise where combination of products, given limited shelf space. respondents are required to make decisions about It identifies the combination of products that what is and what is not important to them. It is deliver the broadest number of unique, more effective at uncovering consumer preferences unduplicated buyers. than voting or ranking exercises.

FGI, Inc. । 6350 Quadrangle Drive, Suite 310 । Chapel Hill, NC 27517 । 919.929.7759 Page 3 RESULTS

 FGI identified the combination of 5 entrées that would include the most first-choice picks

from the survey data.

 The study also uncovered the optimal price point for these family-style entrées. Based on the findings,46% of respondents would be very willing to purchase at the optimal price

level determined by FGI.

 Lastly, FGI helped Company A identify the retailers likely to carry these new products. For example, 55% of respondents that shopped most often at Retailer X said they were very

likely to purchase these entrées.

With this knowledge, Company A can continue to profitably grow its line, increase market share, gain shelf space, and double revenue.

WHAT YOU CAN DO New Product Concept Testing: Before launching a new line, this form of research can help predict how your products will perform out in the marketplace. Depending on the results, concept tests can allow you to go back and make changes to your product offering to yield the highest sales possible.

ABOUT FGI For more than 30 years, FGI has been an established provider of services, advanced analytic analysis, and research-driven consulting for top companies around the world. Headquartered in Chapel Hill, NC, FGI’s mission is to help businesses stay ahead of the competition by staying connected to their customers.

FGI, Inc. । 6350 Quadrangle Drive, Suite 310 । Chapel Hill, NC 27517 । 919.929.7759