Concept Development and Market Analysis Project Report

This project report details the concept development and market analysis for a sustainable market offering, focusing on Nature Valley's potential launch of an organic energy bar. The report begins with an application of Creative Problem Solving (CPS) to identify a market need for ready-made, organic energy supplements in Australia, considering rising health and environmental consciousness. It then delves into problem delineation, information gathering (including obesity statistics), and idea generation, proposing an organic energy bar. The project includes a profile of the proposed product, highlighting its sustainability benefits and brand perceptions. The second part of the report provides an environmental analysis using the PESTE framework, competitor analysis, and SWOT analysis. Finally, it conducts a market and customer analysis, identifying the target customers, market type, customer needs, and market growth potential, supported by secondary research methods. The student reflects on the learning process, emphasizing the insights gained in product concept development, business environmental analysis, and group research dynamics.

Running head: CONCEPT DEVELOPMENT
Concept Development
Name of the Student
Name of the University
Authors note

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CONCEPT DEVELOPMENT
Table of Contents
Task 1.........................................................................................................................................2
1.1 Applying CPS for a sustainable market offering.........................................................2
Problem identification............................................................................................2
Problem delineation...............................................................................................3
Information gathering.............................................................................................3
Idea generation.......................................................................................................4
Idea evaluation, selection and refinement..............................................................4
1.2 Profile..........................................................................................................................5
Task 2.........................................................................................................................................5
2.1 environment analysis............................................................................................5
2.2 Market and customer analysis..............................................................................8
References....................................................................................................................10

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CONCEPT DEVELOPMENT
Task 1
1.1 Applying CPS for a sustainable market offering
The Nature Valley is a popular organic product retailer in Australia, and it is a really
successful brand. This study aims to give an overview of the new product launch by this
company towards sustainable business expansion.
Creative problem solving or CPS is the process of drawing the solution to
organisational problems through effective and creative ideas. This process is defined and
executed in various ways since its advent in back 1940s. The CPS is the pre-implementation
process that a company takes into account. In this process, the problem is identified,
researched and solved through idea generation. There are a number of theories and ways to
perform the CPS process. One of the popular theories in this area is Titus' five-step CPS
implementation. These steps are discussed below-
Problem identification
The market demands in food and beverages industry of Australia is facing rapid
change. The reason behind this change is enhancing health and environmental consciousness
among the people. The whole world is facing common problems like obesity, declining
immunity and global warming effects that are related to the day to day lifestyles of people
(Gatignon, Gotteland and Haon 2016.). As the age of globalisation, people are being aware of
the negative outcomes of these aspects and trying to save them and the earth from its
consequences.
This is where the concept of organic food gains popularity and the market of such
foods are quite high nowadays. Other than organic fruits and vegetables, people are also
tending to use organic drinks, energy bars and other packaged items. But there is not much

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CONCEPT DEVELOPMENT
availability of the organic food products as they are a bit expensive, and their sourcing is not
as easy as the other products.
Problem delineation
The products that are available in the market are affecting the lifestyle and nature at
some time. The increasing availability of fast food and chemically treated vegetables and
fruits are affecting the health condition of the people. For the past few decades, people are
being habituated with a lazy and unhealthy lifestyle (Pikas et al. 2016). They are busy with
their job and forget to maintain their nutritional needs. This is resulting in obesity and health
declination. Some of the people are diagnosed with a complicated disease like cancer for
consuming unhealthy foods. Excessive use of pesticides and preservatives in the farms are
one of the reasons for all these.
Australian consumers are aware of these facts, and they are now trying to consume
more organic food in their daily meals. There are few companies who are supporting this
cause, and Nature Valley is one of them. This company has been providing organic food and
drinks to its customers for along period. But the problem arises when the consumers are
inclining towards the ready-made source of energy in organic form. There is increasing
demand for the food which is readymade and at the same time nutritious.
Information gathering
Gender Men Women
Obese 28% 27%
Not obese but overweight 42% 29%
Table 1: Total percentage of obese and overweight people in Australia 2014-15
(Source: aihw.gov.au)

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The obesity rate of people in Australia is increasing every year. Adults, as well as the
children, are the prey of unhealthy lifestyles and food consuming (Bogue, Collins and Troy
2017). The Australian government is also sharing the concern of these statistics. Organic food
is the only way out in this situation as they are pure and effective in nutritious values.
Numbers says that the organic market of Australia is increasing more than any other
western countries. Along with that, the farming of organic resources has a leap since 2000.
The estate of organic farms in Australia is the largest one all over the world.
 About 10% of the total agricultural land in Australia is producing organic
foods
 Total land conserved for this is 36 million hectors.
 The Australian food market has a leap of 1.6% during the year 2017-18.
 The estimated value of the organic food market in Australia is about $2.1
billion.
 According to the reports, the world organic food market would experience a
leap of about 10% by 2021.
 The readymade food market is one of the fastest-growing sectors of organic
FMCG markets.
Idea generation
Nature Valley has a wide range of food and drinks organic products to offer its
customers. The business could gain more profit if it targeted the young and mid-aged people
who are more concern about their intake and want some effective and readymade solution for
their energy supplements. Energy bars are available in the Nature Valley stock, but there are
no energy bars.

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Idea evaluation, selection and refinement
Offering a tasty and flavoured energy supplement would definitely attract the
attention of health-conscious customers. The supplement could be provided in the shape of
tablets, drinks or bars. Bars would be the first choice in this context, as they are easy to carry
and consume. An organic energy bar available in more than one flavour and bio-degradable
packaging could please the target customers.
1.2 Profile
Nature: Food product
Type: consumer good
The value provided: healthy and readymade option for the people who want instant
energy. People could use after their workout session or just to have a good tasting bar.
Visual offering:
Figure 1: the visual offering of the packet of Nature Valley Energy bars
(Created by the author)

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CONCEPT DEVELOPMENT
Sustainability benefits: This new product is not available in the market in any brand. The
competition would be low, and profit would increase.
This would be sugar-free and full of energy and nutrition. The product would be effective
for weight loss and healthy.
This bar would be manufactured from organic resources. Organic foods are
environmentally friendly and help in environmental sustainability.
Brand perceptions: Nature Valley has its brand name well-established. The company is
one of the first choices of the customer’s when they think of organic foods and beverages.
It has its online and offline business stores.
Marketing Research: secondary research has been conducted by gathering data from the
company websites, governmental statistics and other secondary resources.
Task 2
2.1 environment analysis
PESTE
 The political condition of Australia is stable, and the government policies are
quite favourable for the business world.
 Australia’s economy is continuously growing, and it is one of the developed
economic countries in the world. Recently, the country is struggling a bit in
managing the consequences of the recession.
 The people in Australia are changing their lifestyles, and they are even ready
to pay extra money for quality products and services (Horn et al. 2018). The
education level in Australia is high. Labour markets of Australia is not quite
impressive. But the organic farmers gain good profits from their farms.

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 Technology is one of the impressive aspects of Australia. Research and
development are majorly funded by the government (Sutanto et al. 2015). IT
and communication technology is impressive.
 Australia’s ecology is full of variation s and colours. Raw materials are easily
available for the food industry for the fertile lands of the countryside.
Competition
Direct competitors if this company are Kellogg’s, Herbalife Nutrition and Conagra,
True Elements and GAIA are the indirect competitors of the company.
Company name Leadership Employees Revenue
Kellogg’s Steven A. Cahillane 34,000 $13.7b
Herbalife Michael O. Johnson 8,000 $4.8b
Conagra Sean Connolly 12,600 $7.8b
True Elements Puru Gupta 44 $1.5m
GAIA Dolly Kumar 54 $3.2 m
Table 2: Competitors analysis of Nature Valley
(Source: owler.com)
The competitors have a wide range of product variety to offer, and direct competitors
are the known name of the Australian food market. The weakness of these companies is that
most of the brands e not organic and highly-priced.
Suppliers
 Getting suppliers for the organic raw material for the energy bar would not be a
challenge as there are plenty of organic agricultural farms in Australia.

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CONCEPT DEVELOPMENT
 The manufacturing units for the energy bars could be established in company
manufacturing areas.
 According to Jalalabadi, Sameri and Reece (2018), delivery methods need to be up to
the mark. People in Australia have various options, and they might shift to other
alternatives easily.
SWOT
Strength
 Strong economy
 Natural variations
 Excellent political conditions
 Supportive business environment
Weaknesses
 Expensive manufacturing costs
 High advertising costs
 High labour costs
Opportunities
 The growing demand for organic
markets
 Rapidly growing economy
 Educated population
 Government investments
Threat
 Saturated markets
 High competition
2.2 Market and customer analysis
Target Customers: Children, people of young and mid-age, active lifestyle and
preferred organic foods.
Market type: Potential market for this product is the customer who has a busy life
and needs a healthy supplement, for instance, energy.

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CONCEPT DEVELOPMENT
Customer need: according to Maslow’s need hierarchy, the psychological and safety
needs are two primary pillars of human life (Lamoureux et al. 2015). This new product would
mitigate the customer's need for healthy food and secure the safety of the environment and
health.
Market growth: The organic market is growing about 9.8% each year in Australia.
Influences on customers: The people of Australia are showing an inclination towards
organic foods, and they are interested in packaged organic food for their changed preferences
in food habits.
Research method: secondary resources like published statistical data and websites.

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Self-assessment
While doing this part of the report, I have learned the aspects of product concept
development. In the course of my study, I have gone through a number of resources to
understand how a company would plan its product designing in the first place. The
importance of business environmental analysis has been learnt by my team and me. Various
factors in the environmental analysis and the five steps of creative problem solving added to
my knowledge of concept building. I have learnt to do group researches and the concept of
role distribution while collecting the data. In this project work, I have taken various initiatives
to make it a success along with my group partners.

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References
Bogue, J., Collins, O. and Troy, A.J., 2017. Market analysis and concept development of
functional foods. Developing new functional food and nutraceutical products (pp. 29-45).
Academic Press.
Fuller, G.W., 2016. New food product development: from concept to marketplace. CRC
Press.
Gatignon, H., Gotteland, D. and Haon, C., 2016. Concept Development. In Making
Innovation Last: Volume 2 (pp. 175-208). Palgrave Macmillan, London.
Horn, R., Dahy, H., Gantner, J., Speck, O. and Leistner, P., 2018. Bio-inspired sustainability
assessment for building product development—concept and case study. Sustainability, 10(1),
p.130.
Jalalabadi, F., Sameri, A. and Reece, E.M., 2018, November. Product Development: From
Concept to Market. In Seminars in Plastic Surgery (Vol. 32, No. 04, pp. 191-195). Thieme
Medical Publishers.
Lamoureux, S.H., Pai, M., Al-Atraqchi, W.M.A., Malek, K.M., Municio, A.I. and Blanchard,
J.D., Affinova Inc, 2015. System and method for concept development. U.S. Patent 9,111,298.
Pikas, E., Koskela, L., Singh, V., Dave, B., Liias, R. and Sacks, R., 2016, May. Application
of the Domain Theory to Warehouse Concept Development: A Case Study. In Proceedings
of the CIB World Building Congress 2016 (pp. 374-385). Tampere University of Technology.
Department of Civil Engineering.
Sutanto, A., Yuliandra, B., Tjahjono, B. and Hadiguna, R.A., 2015. Product-service system
design concept development based on product and service integration. J Des Eng Res, 13(1),
pp.1-19.

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