Uncovering causes of stagnating product sales of a healthy snack: A system dynamics group model building project in a food processing company

Abstract

Product life cycle (PLC) analysis studies patterns of sales over time and the reasons behind those patterns. Such analysis can be challenging because of the interconnected effect of technical product characteristics, marketing mix elements, and the environment (e.g. competition, consumers). Moreover, employees from different functions have different backgrounds and perceptions about the origins of patterns, which constrains mutual understanding and hampers decision-making. The group model building (GMB) approach can be an effective method to support teams in solving complex dynamic problems, such as a PLC analysis of product sales. This study uses a GMB approach and presents a system dynamics model, which supported cross-functional collaboration in analysing causes of stagnating product sales in the PLC of a healthy snack product in a food processing company. Through multiple GMB sessions with the company team, a system dynamics model was developed, and several strategies were analysed. The model has proven useful in explaining the reasons behind the sales stagnation and in studying possible interventions. Moreover, GMB was successful in increasing participants' insight into the causes of the problem, improving communication, and creating a shared vision about the problem.