THE EFFECTS OF NEW PRODUCT DEVELOPMENT AS A STRATEGY FOR CORPORATE GRO…
New product can be said to be the life- blood of companies operating in a free market economy. Indeed developing a new product; a company should ensure that a good product development strategy is taken. The introduction of a new product into the market makes it possible for the company to remain in a competitive market environment.
In today’s market, no company can favorably win the entire market share without proper and effective development of its products. This is so because the needs of the society (consumers) changes over and over the time. Therefore, there is the need to change the system and processes of the production to meet the changes in demand; technology; taste and preference of the society.
Product introduction into the market is an important factor of corporate growth strategy and companies that are money – motivated cannot afford to dis- engaging this project of developing new product. New product development has become indispensable and inevitable in an organization; hence its impact cannot be over- emphasized. Today, in the Nigerian market complex situation with highly complex business operation, all companies are said to be adopting the new modern techniques of production. Philip kotler and Armstrong (1980) maintained that, a successful development of new product will lead to effective sales of the company’s product, hence; result in increase in the profit margin of the company.
Therefore, for a firm to survive in a competitive business environment, it should make known (advertise) to the public or its consumers; the existence of the newly introduced products because of the fact that most companies operating in the country are presently producing goods that have close substitutes.
It is against this back drop that the researcher’s interest has prompted him into choosing this topic (Effect of new product development as a strategy for corporate growth in Uni-Lever Nigeria limited) as a subject of concern for researching.
1.1 BACKGROUND OF THE STUDY
In a quest to achieve a sustained long term objective of dominating the market requires an effective appraisal of whether a company really desires to develop a new product so as to remain prominent in a competitive market environment.
The enhancement of corporate growth of an organization is achievable by means of introducing new product into the market. In other words, marketing-based on programme development will enhance an achievable strategy both financially and in a conceptualizing form. By the introduction of new product into the market, it requires the expenditure of money and it becomes an investment of the organization in the future.
As with any investment, there are risks associated with investment of new products because it can be harmful to the organization’s health and company’s stability. In considering the reason for new product development in an organization, reason for new product failure, various stages of a new product development, Product life cycle and its implications. Ways companies organize for new product development, managing a new product (management and strategy development), marketing channel policy, promotional policy, product design and development, market strategy, the roles of new product development in the enhancement of growth of an enterprise, problem of marketing new product.
Product innovation remains the best way to design and innovate for new product development for corporate growth.
1.2 STATEMENT OF THE PROBLEM
Today, most business organizations have recognized that there is high need for improvement in its product formation; which can only be resolved through the development of new product, to meet up with the ever changing needs of consumers. Business organizations have not been successful and are unable to achieve their goals and objectives, as a result of the firm’s inability to efficiently and effectively engage in new product development.
Thus, the research questions the researcher intends to use in exploring the mystery behind the problem stated; considering the effect of new product development as a strategy for corporate growth, includes:
i) What roles does new product development play as a strategy for corporate growth?
ii) What are the cost implications and effects on a firm; incurring and embarking on new product development?
iii) What effect has differentiation on new product development?
iv) What are the effects of competitors’ product in the market; on the new product development?
v) A raw material is a major determinant for new product development; what sort, source, and mobilization for raw materials procurement in form (quality), quantity available to the manufacturer?
It is as a result of these problems, the researcher is concerned about and seeking solution to proffer effective solution and strategies a firm should choose to embark on new product development.
i) Could the high cost of raw materials be a set back to new product introduction?
ii) Could new product development be relevant to the company?
1.4 OBJECTIVES OF THE STUDY
This study hopes to achieve the following aims and objectives:
i) To identify the problems encountered in new product development and its introduction into the market.
ii) To examine the effect of new product development on firms corporate growth.
iii) To identify the promotional tools employed in marketing the new product.
iv) To recommend feasible solutions to the problems stated; in the statement of the problem.
This research work will also be a help to students and other researchers, who may intend to write on similar topic in due time.
1.5 STATEMENT OF HYPOTHESIS
In order not to be bias in the conduct of this research, the use of hypothesis has become paramount for effective guide in the process.Two forms of hypothesis have been identified to be tested in this study.
HYPOTHESIS 1 Ho: The high cost of raw materials is a set back to new product introduction. Hi: The cost of raw materials is not a set back to new product introduction.
Ho: New product development is not relevant to the company.
Hi: New product development is relevant to the company.
1.6 SIGNIFICANCE OF THE STUDY
This research work/study would be of great importance to private investors; intending entrepreneurs; advertisement agencies; students and all other a sundry to product development in the following ways:
i) Analyzing the levels of competition in terms of sales; sale patronage between new products introduced into the market and old or existing ones in the market.
ii) It enhances the evaluation of the impact of advertising on the success and acceptability of a new product in the market.
iii) It is also significant to investors and entrepreneurs as to when and what to invest into; and invest as well as make suggestions of best product mix.
iv) It serves as a means of exposing the researcher to the practical aspect of the subject matter also for use as a source of the secondary data for further research work/study.
1.7 SCOPE OF THE STUDY
For the purpose of this research work/study, I will like to be restricted to the Uni-lever Nigeria limited.
The study intends to look into the effects and successes so far attained in the market as regards to new product development as a strategy for growth of the company.
The aim of embarking on new product development, the problems encountered during the new product development and possibly the duration taken in introducing new product ranging from 1999 -2014, which basically paved way for effectiveness in the product introduction based on quality improvement over the years.
1.8 LIMITATION OF THE STUDY
The researcher hope to be successful in carrying out his investigation, but this was not so because of some uncontrollable forces militating against this research work. Among such factors that limit the scope of the study includes:
i) Time constraint: This has always been a limiting factor to any project work. This research work is being carried out simultaneously with academic work and the crash programme of the studies in the institution, thus interfere with the research work which make the time too short.
ii) Financial constraint: Following the economic meltdown in our economy; reducing the flow of money in the circulation, the researcher was unable to make contacts with company and other sources of information, to collect information for this research work.
1.9 OPERATIONAL DEFINITION OF TERMS
i) Marketing: A supportive business activity which develops and satisfies both the consumer’s needs and wants at profit.
ii) Product: This is a tangible and intangible attribute, including financial; social; and psychological utilities and benefits associated with a company.
iii) Strategy: This is a way of achieving organizational objectives through the company’s workers and other resources.
iv) Development: According to S.A Enikansola (2003); sees it as transformation of product from one style, brand or package to an improved and a modern one to best satisfy the consumer’s needs.
v) Distribution channel: According to C.G Datong et al (2003); opined that distribution channel is the set of companies and individuals that exist in the transfer of goods as they are moved from one producer to consumers.
vi) Growth: Philips Kotler (2005); sees it as a period in the product life cycle; characterized with rapid sales, acceptance and substantial profit improvement.
vii) Competition: Osuola E.C(1992) defines it as effort made by the firm to win the minds and interests of consumers by production of high quality products to best Satisfy their target market.
OSUALA E.C (1992): Introduction to Research Methodology, African FEB. Nigeria, p.46
DATONG C.D et al (2003): Marketing Principles, Practices and Strategies, First Published, Plateau State Polytechnic pg.35
ONASANYA A.M (1991): Introducing a Product to the Marketplace. Management in Nigeria Seminar Paper Vol. 25 p.25
PHILIPS K. (2005): Marketing Management, Pearson Educational Publisher, Eleventh Edition pg. 349 – 359. Sunday A. E. (2003): Basic marketing. Second Edition, Ikeja Lagos, Nigeria p.68.