THE EFFECTS OF NEW PRODUCT DEVELOPMENT AS A STRATEGY FOR CORPORATE GROWTH IN UNI-LEVER NIGERIA LIMITED
CHAPTER ONE
1.0 INTRODUCTION
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’s 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.
1.3
RESEARCH
QUESTIONS
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.
HYPOTHESIS 2
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.
REFERENCES
OSUOLA 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
OSNASANYA A.M (1991): Introducing a Product
to the Market Place. 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
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