By: Chris Fontes Virginia Genao Jennifer Pique

By:
Chris Fontes
Virginia Genao
Jennifer Pique
Jeana Townsend
Rob Vassel
Olean Is A Revolutionary Product
Product Development Background
Initially scientists were looking for an easily
digestible fat that would help premature
babies gain weight
 25 years in development
 Over $250MM invested in R&D
 Olean is the brand name for olestra
 FDA approved in 1996 for savory snacks

Olean Is A Revolutionary Product
Nonmetabolizable Fat
Unlike other fat replacements, olestra is a
true fat
 Heat stability, texture and taste is extremely
similar to normal fat
 Sucrose polyester molecules are too big to
be absorbed by the body
 No calories, absorbs some essential
vitamins, some gastrointestinal distress

Olean Is A Revolutionary Product
Visual Representation
Regular Fat
glycerol
3 fatty acids molecules
Olestra
sucrose
7-8 fatty acids molecules
Olean Is A Revolutionary Product
Radically New
Continuous
Dynamically Continuous
Discontinuous
Olestra
House of Quality
Product Specifications
User Needs
Cost Consistency
Scientific
Flavor
& color composition enhancers
(in order of importance)
offer health benefits and no health risk
maintain or improve texture of product
maintain or improve taste of product
be socially acceptable
be similarly priced to normal cooking oil
++ strong positive effect; + positive effect
0 no effect; - negative effect
o
o
o
o
++
o
++
+
+
++
++
++
o
o
o
o
++
+
-
Stakeholders are key to Olean’s success
Stakeholders
Farmers
Procter & Gamble
Regulatory Bodies
Medical Community
Distributors
Customers
Critical Issues Have A Large Impact
Political
Company



International
regulatory
approval
Impact of
warning
labels
Life of
patents
Ecosystem


Co-branding
and licensing
agreements
Cooperation
of players
Infrastructure

Establishing a
standard
Critical Issues Have A Large Impact
Behavioral
Company


Changing
consumer
attitudes
Dimensions
of value
evolve from
taste and
texture
Ecosystem


Attitudes
towards
Olean as an
ingredient
Attitudes
towards
products with
fat-free
ingredients
Infrastructure

Consumer
attitudes
towards fat
substitutes
and health
trends
Critical Issues Have A Large Impact
Economic
Company


Huge
investment
required
Potential
huge returns
Ecosystem

Amount
consumer will
pay for a new
fat substitute
Infrastructure



Soybean
farmers of the
world
Soybean
supply
Potential
international
expansion
Critical Issues Have A Large Impact
Social
Company

Opinionmaker effect
–
Ecosystem

Jay Leno



Will consumers
think of Olean as
the standard?
Negative halo
effect on other fat
free products
Effect of media PR
Reaction of
medical community
Infrastructure


Acceptance
of serving
Olean to
guests
Acceptance
of serving
Olean to
children
Critical Issues Have A Large Impact
Technological
Company


Trade secrets
and patent
infringement
possibility
Impact of
competition
Ecosystem

Olean requires
process changes
–

Infrastructure

higher frying
temp
Educational
Curriculum
–
–
Production
changes
–

home ec
culinary
schools
ag science
Impact of
other fat
replacements
The Bayesian Network
Overview of Network
See Hugin
The Bayesian Network
Top Threats/ Opportunities
New Substitutes
 Word of Mouth
 Competitor R&D Levels
 Supply Available
 Snacking Trends
 Health Trends

3.71% (+/-)
1.10%
1.01%
1.01%
.93%
.87%
The Bayesian Network
Top Impactful Decisions
Plant Ownership
 Manufacturer Price
 Cooperative Marketing
 Advertising
 Patent
 Scientific Improvements

3.04% (+/-)
2.88%
1.61%
1.29%
1.04%
.82%
The Bayesian Network
The Upside
Own Plant + Manufacturer P is Low +
Patent Y + Cooperative Marketing Y +
Advertising H + Scientific Improvements H
= 10.20 (65.43)
 All Above + New Sub N + WOM P +
Competitor R&D L + Supply Availible Y +
Snacking Trends H + Health Trends H
= 19.08 (74.05)

Further Research Will Clarify Potential
Research Questions
Network Node
Research Question
Product Benefit
1.
Behavioral Trends
Social Trends
Consumer Awareness
Competition
Manufacturing
Capability
How do consumers value the various possible nutritional
characteristics? Which are most valuable and what is the utility of
each characteristic?
2. What is the expected price elasticity of consumer and manufacturer
demand?
3. What are the key drivers of snacking frequency and snacking
choice?
4. What impact will social (Jay Leno/activist) opinions have on
snacking choices?
5. What type of advertising will be most effective in building
consumer awareness?
6. What is the competitive set for Olean as perceived by
consumers and manufacturers?
7. How do consumers perceive the value of these competitive products
relative to Olean?
8. What is the product development and marketing capability of
existing and potential competitors?
9. What is the benefit of legal protection (patents, trademarks, and
trade secrets) in protection/retaliation against competitors?
10. What are the various manufacturing options and what are their
relative costs/values?
Questions???