Conclusions

In the case of large-scale dairy companies, the new product development process exhibits a high level of technological sophistication. Companies of such scale are able to expand their production through implementing product innovations and novel food processing techniques. Their strategical focus is on maintaining sustainable systems of food quality and safety and developing diversified value-added products in order to satisfy different consumer segments. The set-up and developed competitive advantages through combining traditions and innovations guarantee companies' solid market positions. These companies successfully apply technical and business tools in the new product development process, and effectively meet the requirements of national and international markets (Winger and Wall 2006). Additionally, as the niche markets are proving the most dynamic, in formulating vitamin-enriched milk, flavored dairy products, children's products[1], the large-scale companies can develop their competitive advantages by imposing such a new product range satisfying the highly specific segments. In line with this trend, the yogurt market also accounts for a growth of niche products such as drinking yogurts (+10.9% of sales), enriched yogurts, and probiotic yogurts, revealing additional market opportunities. Products targeting health benefits include dairy products enriched with different ingredients such as active bacteria, vegetal sterols, and omega 3s can be another good opportunity.

On the other hand, there exist small-scale dairy units that are exposed to the competitive pressure and lack of resources. Their capacity is insufficient to develop new products, and their chance is to satisfy open niche markets in offering traditional, local, and ethnic products. They should focus on high-value products and not try to compete in commodity markets.

There is another type of dairy units—new existing dairy companies applying innovative practices revealed through organic dairy production. Organic dairy production is a system of farm design and management practices for producing milk, yogurt, cheese, cream and other dairy products without the use of pesticides, synthetic fertilizers, or antibiotics (Mongeon and Summerhayes 2010). For some producers, organic dairy production can be a good opportunity to develop the existing strengths and to overcome the threats. Moreover, organic dairy units developing good agrifood practices and relying on financial support can develop value-added products as branded food products: farmer-owned brands, and geographical indications.8 Thus, the new products will gain: (1) competitive differentiation and consumer recognition and defense, and (2) company's solid market performance and long-term sustainable development. Nevertheless, brands became prominent in the food sector about 100 years ago, when some producers wanted to signal to consumers that their products were ofsuperior quality (Grunert 2006).

  • [1] http://www.sleever.com/trends/solution/milk-and-dairy-products
 
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