EFFECT OF PRODUCT INNOVATION ON MARKET PERFORMANCE OF NESTLE NIGERIA PLC (A STUDY OF NESTLE MILO)

ABSTRACT

The study examined the effect of product innovation on market performance of Nestle Nigerian PLC. (A study of Nestle Milo). Its objective were to examine the effect of packaging on sales turnover, ascertain the effect of the branding on the profitability, To ascertain the effect of product modification on customer satisfaction in the study area. The study adopted sample descriptive statistics using questionnaire distributed to 120 respondent. The study adopted ANOVA to analyze the data generated for the study. It was discovered that product Innovation Brand name, have positive and significant effect on sales volume, profitability and market share. It is recommended that the management of Nestle Milo should lay more emphasis on packaging of Nestle Milo should lay more emphasis on packaging attribute to encourage patronage hence, increase in sales turnover, attention should also be given to brad name as it goes on long way to differentiate a product with other commodity, as well as periodic modification on certain areas.

TABLE OF CONTENT

Title page                                                                                                                    i

Declaration                                                                                                                 ii

Certification                                                                                                                iii

Dedication                                                                                                                   iv

Acknowledgement                                                                                                      v

Table of content                                                                                                          vi

Abstract                                                                                                                       vii

CHAPTER ONE

1.0       Introduction                                                                                                    1

1.1       Background of the study                                                                                 1-2

1.2       Statement of problem                                                                                     3

1.3       Objectives of the study                                                                                   3

1.4       Research questions                                                                                         3-4

1.5       Research hypothesis                                                                                       4

1.6       Significance of study                                                                                      4-5

1.7       Scope of study                                                                                                5

CHAPTER TWO

2.0       Literature review                                                                                            6

2.1       Conceptual framework                                                                                   6-8

2.1.1    Concept of innovation                                                                                    8

2.1.2    Need for product innovation                                                                          9

2.1.3    New product development process                                                                 9-10

2.1.4    Idea Generation                                                                                              10-11

2.1.5    Idea screening (Palmer, 2000)                                                                        11

2.1.6    Concept Development and testing (Palmer, 2000)                                         11-12

2.1.7    Business analysis (Palmer, 2000)                                                                   12

2.1.8    Product development and testing (Palmer, 2000)                                          12-13

2.1.9    Test Marketing (Palmer, 2000)                                                                      13

2.1.10  Commercialization (Palmer, 2000)                                                                13

2.1.11  New product innovation                                                                                 14

2.1.12  Ethical issues around product innovation                                                      14

2.1.13  New product as a function of behavioral change                                           15-16

2.1.14  Product positioning                                                                                        16-17

2.1.15  Market segmentation                                                                                      17

2.1.16  Branding                                                                                                         17-18

2.1.17  Packaging                                                                                                       18

2.2       Empirical framework                                                                                      19-20

2.3       Theoretical framework                                                                                   20-22

2.4       Summary of literature review                                                                         22

CHAPTER THREE

3.0       Research methodology                                                                                   23

3.1       Research design                                                                                              23

3.1.1    Source of data                                                                                                 23

3.1.2    Method of data collection                                                                               23

3.2       Area of study                                                                                                  24-25

3.3       Population of the study                                                                                   25

3.4       Sampling techniques                                                                                       25

3.5       Sample size determination                                                                             25

3.6       Method of data analysis                                                                                  25

3.7       Model specification                                                                                        26

3.8       Validity                                                                                                           26

3.9.      Reliability                                                                                                       26

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1       General Description                                                                                        27-31

4.2       Hypotheses testing                                                                                          32-34

CHAPTER FIVE

5.1       Summary, conclusion and recommendation from finding the

following were deduced.                                                                                35

5.2       Conclusion                                                                                                      35

5.3       Management of Nestle Milo                                                                           35

Appendix                                                                                                        36

Research questionnaire                                                                                   37-38

References                                                                                                      39

LIST OF TABLES

Table 4.1         Gender                                                                                               27

Table 4.2         Marital Status                                                                                     27

Table 4.3         Educational Qualification                                                                  28

Table 4.4         Age Bracket                                                                                        28-29

Table 4.5         Packaging                                                                                           29

Table 4.6         Branding                                                                                             30

Table 4.7         Product improvement                                                                         31

Table 4.8         Product Modification                                                                         31

Table 4.9         Market Performance                                                                           31

CHAPTER ONE

1.0       INTRODUCTION

1.1       BACKGROUND OF STUDY

A driving force of competitive scuffle in the present chaotic environment is innovation: Introducing new product and services are at the nucleus of economic growth and development, the ability to initiative advancement of individual and organization’s small and medium size enterprise (SMES) furnish a great increase to target employment and economic growth specifically due to their initiative activities which becomes a man force of explaining competitive advantage and from performance. Accordingly the value fashioned by innovations slows potential circumstances that uncover new ways of doing things or new products and processes that add benefits to economic fortune.

In both developed and developing countries of the world SME companies have proofed to be prominent. In terms of employment and added values of gross domestic product yet their full potential remain untapped Schlog, (2004) cited on the support given for the start up of SMES necessitate them to become important engine for innovation and technological advancement gave a summary of the weight SMES lend to government and individuals.

Nowadays, it is recognized that business enterprises intends or stretch out their product and brands or else the new product will not happen. Product do not happen new market do not also occur by link and as a result of these instances future marketing managers should place emphasis on packaging as its relationship.

1.2       STATEMENT OF PROBLEM

Not all product innovation are successful aid for every product there is risk of harming the co-operate brand any incoherent attribute information about a new brand or product the product image. Also when product innovation are inconsistence with regards to consumers expectations, negative effect can occur were there are risk of losing credibly when using too may product hires the credibility can also be present as it decreases with low quantity product. This can make the consumer feel doubt about the creativity of the product which the company needs to overcome on those premises the product innovation on market performance.

1.3       OBJECTIVES OF THE STUDY

The general objective of the study is to examine the effect of product innovation on the market performance of Nestle Milo in Abia State.

Specific objectives are;

1.         To determine the effect of packaging turnover of the company

2.         To ascertain the effect of the brand on the profitability of the company

3.         To examine the relationship between the product improvement and market share of the company

4.         To assess the effect of product modification on customer satisfaction in the study area.

1.4       RESEARCH QUESTIONS:

The following questions below are to guide this study.

1.         What is the effect of packaging on sales turnover of the company under study?

2.         To what extent does the brand of the product affect the profitability of the company under study?

3.         What is the relationship between the product improvement and the market share of the company under study?

4.         What is the assessment of the effect of product modification on customer satisfaction in the study area?

1.5       RESEARCH HYPOTHESIS

The following research hypothesis, stated in their null form would be useful to this study and would be tested at 0.05 level study of significance.

HO₁:    Packaging of the products does not have any significant effect on the sales turnover of the company under study.

HO₂:    The brand of the products does not have any relationship with the profitability of the company under study.

HO₃:    There is no significant relationship between product improvement and the market share of the company under study.

1.6       SIGNIFICANCE OF STUDY

The findings of the study will provide valuable insight to marketing professionals in the fast moving consumers goods (FMCGs) industry identifying the significant dimensions of innovation attributes and benefits that affects consumer satisfaction interest to purchase and recommend the product to others. This study should help the marketing managers gain an insight into the important factors that contribute to the formation of a perfect market performance.

The identification of market performance attributes and benefits (consumer derived from product innovation) make his companies to develop effective marketing strategies that could increase the product appeal, increase consumer satisfaction level create, maintain and improve customer’s preference towards a particular product. The study will help this business owners and retails store operates to gain a better understanding of the important factors that contribute to the formation of product innovation and insistence.

 The findings of this study add to the body of knowledge, form part of future ‘learning materials future researches with interests in marketing will find the findings useful it will recommend future areas of study to enhance more knowledge in the fast moving Consumer goods. (FMCG)  industry.

1.7       SCOPE OF STUDY

This research work effect of product innovation on market performance is centered on consumers of nestle Milo in Abia State. The study will limit its scope on households in Aba. Umuahia and Ohafia metropolis representing the three senatorial zones of Abia State.

Therefore, any findings drawn from the above will be inferred on the ‘general consumers of nestle Milo in the study area.

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