Case Analysis – “The development of the Hovis Crusty White Loaf”
The case “The development of the Hovis Crusty White Loaf” is a success story of Hovis brand and the British Bakers (BB) company as to how they used the concept of New Product Development (NPD) in gaining competitive advantage and eventually was successful in capturing a large share of market despite of facing a tough competition. Adrian Watt and Stuart Chambers, the writers, have presented the case with further details of various functions performed and taken care of by Cathy- the brand manager of Hovis white bread along with the NPD team of BB Company in developing the new product “Hovis crusty white loaf” and also the issues they dealt during the overall product development process.
Hovis is a leading brand with a dominant force in the UK mass-market brand industry. The brand has been successful in the brown bread segment by maintaining a unique position in the minds of consumers as quality and healthy eating. In order to be the best brand in not only brown bread segment but also white bread segment, and also to grow its overall brand share from 12 percent to at least 18 percent of the UK share, Hovis employs a brand manager – Cathy who then with the help of an effective market research and continuous group efforts with the NPD team comes up with a new product strategy to gain a competitive advantage in the product design, with specifications and production techniques that couldn’t be copied easily by the competitors.
The case further explains each detailed functions including the market analysis, the problems encountered, the NPD team formation, devising of concept, the recipes and techniques recognized and followed to produce and launch the “Hovis crusty white loaf” after going through immense competition from other bakers such as In-store Bakeries (ISB) and Craft Bakers (CB). With proper planning and strategic move of producing a product that addressed the preference and need of the consumers, Hovis Crusty was an immediate hit and has been successful to maintain the leadership in both the brown bread and white bread segment.
Main performance objective for the Hovis Crusty loaf concept and its difference compared to the existing RHM white breads
As per the results of the market analysis carried out by Cathy, the white bread market was very competitive. On one hand, consumers preferred Crusty and Rustic loaves but were also inclined towards purchasing based on value and functionality. While on the other hand, the bread market competition was driven by sales volume rather than margins, meaning margins were always extremely tight with those breads purchased which was promoted through various discounts and special offers. In such a market scenario, in order to be competent and capture a large share, Cathy came up with a product concept (The Hovis Crusty Loaf Concept): a premium pre-sliced crusty white loaf that lasted for up to four days with its main performance objective to gain a competitive advantage in the product design, with specifications and production techniques that couldn’t be copied easily by the competitors.
The objective differs from those of the existing RHM white breads as it tries to break away from the competition of price and BOGOF promotions which is proved by its price positioning of 10p above the standard price and rather competes on the product benefit “a real style loaf that kept crusty for up to four days”.