Business concepts explained: development of new products in the catering – hotel industry

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New product development in the restaurant business is essential to keep pace with rapidly changing trends, preferences and socio-economic factors. However, in recent times, innovation has become an essential form of risk mitigation, as companies are forced to rethink their product offerings in response to market volatility, supply chain challenges and the skyrocketing costs.

Here are seven commonly used terms in new product innovation:

  1. Knowledge

A new product or service usually starts with an idea which is an opportunity or an observed change in human behavior that forms the basis of a new concept. For example, the popularity of plant-based and sustainable products is due to the growing prevalence of environmentally conscious customers.

  1. Innovation vs renovation

“Innovation” generally refers to the creation of a new product, while “renovation” refers to an upgrade or improvement of an existing product. An example of product renovation is a modified formulation that results in a new product claim such as improved texture, less sugar, or fat-free.

  1. stage door frame

It is a scientific management framework frequently adopted in manufacturing companies that coordinates the commercialization of new products through different stages or gates. This framework is highly functional as it collaborates with different areas such as marketing, sales, and research and development.

  1. Rotating products

A rotational product is a product that is swapped into a customer’s product line in place of an existing product. Rotating products are popular in pantry, confectionery, and beverage categories which tend to feature different flavors.

  1. Value Engineering

This refers to the improvement of internal production processes resulting in lower product costs. Examples include optimizing packaging to reduce waste, improving pallet utilization, or extending shelf life to reduce inventory loss.

  1. Product cannibalization

This happens when a new product derives its sales from an existing, older product. This is common in many categories where new products are launched to an existing customer base.

  1. Rationalization of the range

This is the abandonment of certain products because of their relative profitability.

For more information and business advice, visit Sabella Consulting & Solutions www.sabellaconsulting.com

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