Complementary  analysis  discussion

As discussed above, the BMC does not consider the future, competition, and risks and opportunities. The authors believe these three aspects to be relevant when developing a product, and therefore this chapter will discuss these three aspects in order to complement the discussion in section 6.1.

6.3.1 Future perspective

As time goes by, and new products enter the market, competition will probably arise. As the BMC only applies a strategy for a snapshot in time, usually before the product is launched on the market, strategies should to be revised towards handling of competition. In general, it is important to stay agile and quickly respond to trends, whereas this process of revising strategies should be initiated rather quickly after launch.

Additionally, as an innovative product gets accepted by consumers and turns into an established product, the decision process for consumers changes. The main differences between the two processes are the first steps. When the decision concerns an innovative product, the first steps mainly focus on making consumers aware of the innovation and pursuing them to try it. This is the situation for the case product, which is a new and innovative product, where focus must lie on establishing trust for the function and the brand in

accepted, and competition probably enters, it is important to shift strategy towards making consumers choose this specific product, as opposed to all other products on the market.

Initially targeting experts and opinion leaders (as early adopters) is concluded to be the most beneficial strategy when developing an innovative functional pet food, according to the analysis. However, this is quite a narrow customer segment, not really financially sufficient in the long run as the innovation would only be adopted by a small number of people. It has also been established that, according to current trends, a growing number of pet owners are willing to pay more for exclusive pet food products. This means that as the innovation goes through the adoption process, the targeted customer segment for an innovative functional pet food needs to be revised into targeting the adopter group next in line (primarily early majority). Following the diffusion of innovation curve, this is also a natural step to take after gaining the trust of the early adopters.

Even though the initial targeted customer segment will change over time, it is part of a conscious strategy and does not mean time spent on reaching the previous target consumers will be in vain. In the case of functional pet food, it has been established that expert recommendations is a good way of reaching the broader masses, who require a trustful relationship, and need to accept the ingredient and understand the benefit. Thereby, the initial customer segment of opinion leaders also becomes part of a method, a channel, to gain the trust of not-so-early-adopters, and by that take the next step for the product.

A change in customer segment, and thereby also the consumers’ decision process, may also lead to a need to broaden product channels to not only include specialty retail stores, in order to fulfil the criteria for customer relationship and convenience. The next step, when the innovative functional pet food is accepted and is an established product on the market, would be to investigate whether it is something worth selling in the grocery stores. Whether the grocery stores are worth selling through probably depends on the complication of the function, and who the customer segment is. As for the case product, the function is rather complicated, and the intended customer segment is dog owners who are quite involved in their dog’s training.

Therefore it can be questioned whether grocery stores are profitable distribution channels for the specific case product.

6.3.2 Competition

Competition is touched upon in many of the building blocks individually, but not with a holistic approach. The niche ‘functional pet food’ does exist, as products with functions are present. But as functional foods is widely defined, and niche markets subjectively depend on the spectator, there should be possibilities of creating a niche within an already existing niche. Thus, by applying a niche market strategy and finding the specific need that the innovative functional pet food satisfies, the competition can be reduced.

However, applying a niche market strategy does not guarantee elimination of competition, as a profitable niche might attract competitors. Therefore, additionally to applying a niche market strategy, patenting of the effect and use of the function, can reduce or eliminate the competition. The more of the function that can be patented, the bigger the competitive advantage will be, as competitors need to find their own solutions to find a way to satisfy the consumers’ need. If, or when, competition is inevitable, strategies for how to differentiate from the competition need to be developed, and pricing within the niche market might have to switch towards competition-based pricing.

6.3.3 Risks and opportunities

One way of applying a niche market strategy is by using a push strategy, where the product is developed before finding a suitable segment. When developing a product by a push approach, there might be a risk that the consumers do not desire the, in this case, specific effect from the additive. It should be possible to minimise this risk by putting emphasis on communicating the benefit and thereby working towards creating a need. The need can be created in hindsight, after a product is developed, where consumers might not always be aware of their need of the product beforehand. This risk can be eliminated by using a pull approach instead, meaning the need already exists. Hence consumers do not have to be convinced as to why they need the product.

As a result of the innovative nature of the product, consumers’ behaviour and acceptance becomes a thoroughly discussed concept throughout the analysis.

However, it should be noted that failure rates within the functional food industry has, to a large extent, been derived due to shortcomings regarding the consideration of consumer acceptance. If this is due to industry actors disregarding the factor altogether, or to difficulties in identifying the correct determinants of acceptance, remains uncertain. Thus, it is important to be aware of the complexity of developing an innovative functional pet food and getting acceptance. The textbook examples of how to plan and act beforehand are merely guidelines, not factors guaranteeing success. Regardless, timing is crucial for consumer acceptance, since it might be that the market is not ready for the innovation, and the adoption never catches on. As for the case product, which can be perceived as rather radical and innovative since it applies to cognitive functions in an immediate way, the step from the existing functional pet foods might be too big for consumers today. To confront this risk, it could be a good idea to study the market and the intended consumers in order to understand whether the timing is right.

Lastly, the authors identify a few opportunities and positive effects that can be derived from developing an innovative functional pet food. After having successfully developed and launched a functional product within the pet food industry, the knowledge and experience gained can be utilised into developing a portfolio of products. The knowledge and experience can also be utilised into developing products for other industries or markets. As for the case product, this means that Lantmännen have the possibility to use the insights from the use of eidisine™ in dog food, and transfer this knowledge to other products, for example for their product range within food for humans. Additionally, paving the way for innovative functional foods within the pet food industry, and taking on a challenge like this, can have positive effects on the image of the company or brand. Being pioneers, and developing an innovative functional pet food which will create a niche market, can affect the way that the competition, and the consumers, view the brand.