Food market research is a wide technical area that requires expertise in both qualitative and quantitative techniques. It includes processes such as product testing, consumer testing, product analysis, taste testing, consumer panelling etc. Another key aspect is product benchmarking and this article is all about it. Let’s take a look at what it is, what the process involves and its types:
What is Product Benchmarking?
Simply put, benchmarking is the search for the best practice inside a particular industry. The goal of product benchmarking is to compare your product with the best in the industry to identify areas of improvement. Although the idea may sound like competitor research, it is very different. While competitor research is focusing on another company’s performance measures, benchmarking involves focusing on your product and where it lies within the market.
The process of benchmarking involves looking outside one’s own company into the industry to identify the practices that others use or the positives and negatives of certain products. The process involves the following four steps:
- A thorough and detailed understanding of the current best practices in the industry.
- Analysis of the processes of product development and creation.
- Comparison of your own practices and products to those of other companies in the industry.
- Implementation of the best practices learnt.
All of this needs incredible expertise on the researcher’s part.
Types of Benchmarking
Following are the four types of benchmarking:
- Strategic Benchmarking
This type of benchmarking is used when the company needs to identify the best way to compete in the industry. It is the analysis and application of the processes that the best companies use and also involves improving your capabilities to adapt to the changes in the external environment. This is most suitable for correcting product development strategies that have become inappropriate.
- Competitive Benchmarking
This is used when a company wants to evaluate its position in relation to the different players in the market. In simple terms, it means comparing your company’s products and services to those of others. In the food industry, it includes features such as, product testing, consumer testing, taste test and so on. It helps in closing gaps to make sure that your process improves. One thing to note is that this benchmarking is carried out through trade associations and third parties to ensure that everything remains confidential.
- Functional Benchmarking
As the name suggests, this process involves finding ways to improve functions and work processes. The idea is to make the best use of practices available at your disposal. This can sometimes lead to innovation and incredible improvements in the procedures. Companies do this to make sure that their products do what they are supposed to do in the best possible way.
- Internal Benchmarking
It involves benchmarking products or services from within the same organisation, for example for branches located in different countries. This is usually implemented by companies that have recently expanded geographically but do not yet have developed knowledge sharing systems across all the units. Although there may be very few barriers in this type of benchmarking, it may not lead to innovation as the same practices will be repeated.