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Commercialisation of food products for managing type 2 diabetes: Reaching success in a highly regulated market

Hofstedt Bengtsson, Dag LU and Schenning, Anna LU (2018) KLTM05 20181
Food Technology and Nutrition (M.Sc.)
Abstract
Diabetes is an increasing problem in the world, where obesity is a large risk factor for developing the most common type of diabetes, i.e. type 2 diabetes. Numerous pharmaceuticals exist for managing the disease. The importance of the consumption of healthy foods is less emphasised albeit being an important and effective tool for managing the disease. The master thesis aimed at investigating how companies successfully can commercialise food products for managing type 2 diabetes. Since the market is small, barriers to succeed in this market seem to exist. To evaluate this, a case study was conducted where several companies were evaluated on their internal and external strategies regarding this market. The macroenvironment of this market was... (More)
Diabetes is an increasing problem in the world, where obesity is a large risk factor for developing the most common type of diabetes, i.e. type 2 diabetes. Numerous pharmaceuticals exist for managing the disease. The importance of the consumption of healthy foods is less emphasised albeit being an important and effective tool for managing the disease. The master thesis aimed at investigating how companies successfully can commercialise food products for managing type 2 diabetes. Since the market is small, barriers to succeed in this market seem to exist. To evaluate this, a case study was conducted where several companies were evaluated on their internal and external strategies regarding this market. The macroenvironment of this market was defined with PESTEL, where the key drivers for change were identified. The companies approach to the microenvironment was evaluated with the 4 Ps. Unbiased expert interviews were also conducted to complement the information that the companies provided. Lastly, an online survey with 374 participants was conducted in order to strengthen the previous findings. Conclusively, the empirical findings lead to the identification of market barriers, where the most important ones were formulated. To address these barriers, Critical Success Factors (CSFs) were identified and the most important ones were formulated. A unique conceptual framework was then developed that connects the CSFs with the barriers that they address. The goal is that an implementation of this framework will increase the chances of success when commercialising a product for managing type 2 diabetes. (Less)
Popular Abstract
The market for food products for managing type 2 diabetes is currently small, and hence market barriers for commercialising these products seem to exist. These barriers were identified and Critical Success Factors (CSFs) have been formulated to address them. By combining the barriers and the CSFs, a unique conceptual framework on how to successfully commercialise food products for managing type 2 diabetes has been developed.
Diabetes is a serious chronic disease that is increasing globally. In 2015, diabetes caused 1.6 million deaths worldwide.(Global report on diabetes, 2016) Diabetes is an increasing problem in the world and more than 80% of all people with diabetes have type 2 diabetes (Mat vid diabetes, 2010). Therefore, type 2... (More)
The market for food products for managing type 2 diabetes is currently small, and hence market barriers for commercialising these products seem to exist. These barriers were identified and Critical Success Factors (CSFs) have been formulated to address them. By combining the barriers and the CSFs, a unique conceptual framework on how to successfully commercialise food products for managing type 2 diabetes has been developed.
Diabetes is a serious chronic disease that is increasing globally. In 2015, diabetes caused 1.6 million deaths worldwide.(Global report on diabetes, 2016) Diabetes is an increasing problem in the world and more than 80% of all people with diabetes have type 2 diabetes (Mat vid diabetes, 2010). Therefore, type 2 diabetes is a highly relevant research topic. Due to legal restrictions (The European Commission, n.d.b) there are few food products for managing type 2 diabetes on the market, despite the fact that certain foods or food constituents have been proven effective. Establishing a good market position today may be lucrative if the consumer awareness of and the incentive to use food products for managing type 2 diabetes increases. New food and beverage products often fail within the first year on the market (Armstrong and Kotler, 2009). For this reason, there is a need for tools that reduce the risk when launching new products.
A case study was conducted on four companies that have food products for managing type 2 diabetes or high blood glucose levels. The products were Diasip, Betavivo Crispy Oat Heart Cereals, DiaBalance everyday products and Good Idea. To broaden the analysis and enable the results to be applicable on a general basis, companies with different strategies and target consumers were selected. A stakeholder segmentation was done in order to visualise these differences. The market barriers are identified to help companies see potential risk factors when entering the market for food products for managing type 2 diabetes. The identified CSFs are designed to help companies understand and address these barriers.
A short description of the barriers is presented below.
1. Bringing research to market
The first barrier describes the difficulties in taking successful research and turn it into a commercial product. This barrier consists of many research-based problems. The first one is that it is expensive to conduct human studies, which is needed in order to be trustworthy and to be accepted by the medical community. Furthermore, food constituents might be effective on a lab scale but can not be scaled up to mass production. Lastly, there can be problems when researchers with great expertise in research, tries to take a product to market as this can lead to failure due to lack of expertise in e.g. marketing.
2. Health claim regulations
The Eu regulations are strict when it comes to the wording of health claims. The regulations are essentially made to protect the consumers but as companies are strictly controlled in what they can say, in many cases the health message is not delivered to the consumers. The extent and amount of research needed to prove the effect of a food constituent is expensive. Furthermore, promising studies have been conducted on food constituents without receiving authorised health claims. As a consequence of this, the EU health claim regulations have reduce the incentive for innovations in this area, which in turn have resulted in a limited market.
3. Size and profitability
The active ingredients in this kind of food products and the research on them are expensive, and the production process is oftentimes complex. This leads to high production costs. Also, this niche market has low production volumes, which further increases the production costs and accordingly also the price the end consumers have to pay for the product.
4. Consumer attitude and behaviour
Many people with type 2 diabetes have poor eating habits and these healthier food options could be hard to introduce as they might require a change in consumer behaviour and might also be perceived as less tasty than the alternatives. Some diabetics might prefer to cook their own anti-diabetic foods or proceed with their bad eating habits and take medication. This is a barrier as it is rooted in the attitudes and beliefs of the consumers, which are hard to change.
5. Communicating the benefits
Products might bring benefits when consumed, but if companies are not able to communicate those benefits to the consumers, the product may fail. Therefore, consumer education is important, where companies explain the benefits of their products in a reliable and understandable way. This is, however, difficult and expensive. A problem with this kind of products is that one does not always notice or feel an immediate effect when consuming them, making it even more crucial for companies to prove and explain the actual benefits of their products.
A short description of the CSFs is presented below:
1. Conceptualisation
When creating a concept, it is essential to find the consumer need. This means that the created concept must suit the target consumer, otherwise they will not buy the product.
A product must also be scalable. This means that the created concept must be able to work on the industry scale and not only on the lab scale. Minimizing the costs of the upscaled production will also results in a more attractive price for the end consumers. Lastly, it is important to find the right people to take the product to market. A researcher that is competent in research may not be the best person to take the product to market.
2. Being the best alternative
It is important to facilitate the life of the consumers, e.g. having the food products available in regular grocery stores. Furthermore, it important to minimise the change in eating habits for the consumers. This kind of food products may be perceived as less attractive and it is essential to convince the target consumers that the offered product is a viable alternative, or even better, the best alternative. To minimise the change in eating habits it is important that the taste of the
product is equally good to that of the non-diabetic mass market equivalents. Furthermore, the high price of food products for managing type 2 diabetes or high blood glucose levels may work as a quality marking and the product is seen as a premium alternative.
3. Know your place
It is important to establish the geographical positioning and consider the demographics there. Legal and cultural environments differ depending on the geographical market and more importantly it is essential to consider the target consumer segment. Furthermore, the sales channels must be chosen to suit the target consumers, which is based on the stakeholder segmentation. For example, the sales channels of the technology segment are medically oriented compared the other segments where the products are easily available in grocery stores. The marketing channels are equally important to consider since different consumer groups frequent different marketing channels.
4. Endorsement from credible sources
Endorsements from credible sources is important, and especially from healthcare professionals. Since health claims are highly regulated, the endorsements can work as a way of conveying these benefits. The endorsements also work as a way of communicating the benefits from an educational perspective. In other words, the health benefits are conveyed via a trusted and external source rather than from the companies themselves, which are biased. Endorsements from trusted organisations, such as diabetes organisations, can also prove effective.
5. Delivering the message
When delivering the message, it is important to provide information on the products’ health benefits in an easy and understandable way. In other words, the target consumers need to be considered when deciding on which information to provide and how to formulate it. It has been determined that trustworthy research, and preferably external research, is important when building consumer trust. One way of delivering the message is through health claims. Authorised health claims, which requires extensive research, may increase the legitimacy of the product. In other words, health claim regulations are not necessarily just a barrier.
In the developed conceptual framework, the CSFs are connected to the barriers in a way that assists in the development of a successful strategy for the commercialisation of food products for managing type 2 diabetes. The belief is that this developed framework is applicable for any company that is looking to commercialise this kind of food products.
For the academy, the framework increases the incentive for new food innovations for managing diseases like type 2 diabetes. For the industry, companies can with the help of the framework increase the chances of succeeding with the commercialisation of their food products. On a large perspective, if the framework is used to stimulate research on foods that may aid diabetics, and possibly lead to the creation of food products for managing the disease, there is also a social benefit. Not only will the general health status of type 2 diabetics increase, there will also be societal gain in reduced healthcare costs, which will lead to better welfare for the society as a whole. (Less)
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author
Hofstedt Bengtsson, Dag LU and Schenning, Anna LU
supervisor
organization
course
KLTM05 20181
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Type 2 diabetes, T2DM, Commercialisation, Barriers, Critical Success Factors, CSFs, Case study, Health claims, Health claim regulations, NHCR, Adopter Categorisation, FourFactors, 4 Ps, PESTEL, food engineering, livsmedelsteknik
language
English
id
8956752
date added to LUP
2018-09-12 10:56:09
date last changed
2018-09-12 10:56:09
@misc{8956752,
  abstract     = {Diabetes is an increasing problem in the world, where obesity is a large risk factor for developing the most common type of diabetes, i.e. type 2 diabetes. Numerous pharmaceuticals exist for managing the disease. The importance of the consumption of healthy foods is less emphasised albeit being an important and effective tool for managing the disease. The master thesis aimed at investigating how companies successfully can commercialise food products for managing type 2 diabetes. Since the market is small, barriers to succeed in this market seem to exist. To evaluate this, a case study was conducted where several companies were evaluated on their internal and external strategies regarding this market. The macroenvironment of this market was defined with PESTEL, where the key drivers for change were identified. The companies approach to the microenvironment was evaluated with the 4 Ps. Unbiased expert interviews were also conducted to complement the information that the companies provided. Lastly, an online survey with 374 participants was conducted in order to strengthen the previous findings. Conclusively, the empirical findings lead to the identification of market barriers, where the most important ones were formulated. To address these barriers, Critical Success Factors (CSFs) were identified and the most important ones were formulated. A unique conceptual framework was then developed that connects the CSFs with the barriers that they address. The goal is that an implementation of this framework will increase the chances of success when commercialising a product for managing type 2 diabetes.},
  author       = {Hofstedt Bengtsson, Dag and Schenning, Anna},
  keyword      = {Type 2 diabetes,T2DM,Commercialisation,Barriers,Critical Success Factors,CSFs,Case study,Health claims,Health claim regulations,NHCR,Adopter Categorisation,FourFactors,4 Ps,PESTEL,food engineering,livsmedelsteknik},
  language     = {eng},
  note         = {Student Paper},
  title        = {Commercialisation of food products for managing type 2 diabetes: Reaching success in a highly regulated market},
  year         = {2018},
}