ABSTRACT
The purpose of test
marketing is generally to obtain an accurate estimate of the new product’s
national sales potential and ndarily to identify ways to optimizes the
introductory marketing campaign.
This saying can be
formulated, “It looks like a nice product but let’s see how it plays among the
students in Yabatch!” Yabatech is used as a segment of market to suggest a
reflective microcosm of consumers for the whole higher institutions in Nigeria. The
thinking is that if the good students of Yabatech love your product, you can
safely assume that the rest of the institutions in the country will do the
same.
TABLE OF CONTENT
Title page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract
Table of content vii
CHAPTER ONE: INTRODUCTION
1.0
General Introduction 1
1.1 Historical Background
of Unilever Nigeria Plc 3
1.2
The Product of the
Company 5
1.3
The Organizational
Structure 5
1.4
Distribution System 7
1.5
Statement of the
Problems 8
1.6
Purpose of the Study 9
1.7
Research Questions 10
1.8
Hypothesis 11
1.9
Significance of the
Study 11
1.10
Scope of the Study 12
1.11
Limitations of the
Study 12
1.12
Definition of Terms 13
1.13
Reference 15
CHAPTER TWO : LITERATURE REVIEW
2.0
New Product
Development 16
2.1 Test Marketing Definitions 18
2.2
Objectives of Test
Marketing 23
2.3
Market Testing
Methods 24
2.4
Test Marketing of
Consumer Goods 24
2.4.1 Sales –Wave
Research 26
2.4.2 Stimulated Store
Technique 27
2.4.3 Controlled Store
Test Marketing 28
2.4.4 Standard Test
Market 29
2.5
Test Marketing of
Industrial Goods 32
2.5.1 Products –use-test 33
2.5.2 Introduction of
the Product of Trade Shows 33
2.5.3 Testing in
Distributors and Dealer’s Display Rooms. 34
2.6
Development the Test
Market Plan 35
2.7
Selecting The test
Markets 36
2.8
Determining the
Length of Test Marketing 39
2.9
How to Obtain
Distribution in the Test Market 41
2.10
Planning Advertising
Efforts in the Test Market 43
2.11
Deciding which
Variables to Measure 44
2.11.1
Purchasing 45
2.11.2
Attitudes 46
2.11.3
Advertising Mix 47
2.12
Projecting the results 48
2.13
The Brand Share
Prediction Model 49
2.14
Reference 53
CHAPTER THREE
RESEARCH METHODOLOGY 56
3.0
Introduction 56
3.1 Data Collection Method 56
3.2
Research Instruments 56
3.3
The population 57
3.4
The Sampling
Technique 57
3.5
Restatement of
Hypothesis 58
3.6
Administration of
Data to be Collected 58
3.7
Decision 62
3.8
Reference 53
CHAPTER FOUR
DATA PRESENTATIONS AND
ANALYSIS 64
4.1
Data Presentation and
Interpretation 64
4.2
Data Analysis 65
4.3
Hypothesis Testing 94
CHAPTER FIVE
SUMMARY OF FINDING,
CONCLUSION
AND RECOMMENDATION 101
5.1
Summary of Finding 101
5.2
Conclusion 102
5.3
Recommendation 103
5.4
Suggestion for
Further Studies 104
5.5
Reference 106
Bibliography
107
Questionnaire
Chi-square
table
CHAPTER ONE
1.0
INTRODUCTION
Development a new product is not easy. Not only are
customers needs and wants changing but competition continually makes current
products obsolete. New products are the lifeblood of any business. They
energize the company’s marketing, sales and distribution activities and provide
new opportunities in the face of declining markets for existing products.
New products are simply those that are basically
different from the goods, services and bundles of benefits already in the
market place.
New products are categorize under any of the following:
(i)
Products that derived
through new innovative ideas.
(ii)
Products that
replaced the already existing products and significantly unique.
(iii)
Initiative products
that not new to the market.
Olalekan (2002) says, “Market test, in-use tests and
other commercial experiments in limited geographical areas are conducted in
order to ascertain the feasibility of the full marketing program. In this
stage, design and production factors may have to be adjusted as a result of
test findings”.
According to Knut (1983), test marketing involves the
selection of and the selling of a product in an area which is representative of
the marketing area that will be used upon launching the product in full scale.
He goes further and says, the purpose of using test market is to reduce the
risk by obtaining better knowledge of how consumers will receive the product
and to test which sales set –up is best suited.
Adrian (2000), test market aims to replicate everything
that is likely to exist in the real
market but a smaller scale.
Test marketing is the stage in the New Product
Development (NPD) process. To conduct a test marketing affectively, it is very
essential to anticipate all the following steps and recognised their
interdependence (Harper 1982).
-
Develop the market
test planning
-
Select the market
test
-
Obtain distribution
in test market
-
Plan advertising
efforts in the test market
-
Decide what do
measure
-
Project the result
-
Presenting and use of
other marketing model.
By the time company goes
through these procedure in its effort to test market its new product, it must
have been also to pick up some valuable information about the users, traders,
market potential and other matters from test market will in turn aid the
company in its choice of action among alternative causes of actions.
1.1
HISTORICAL BACKGROUND
OF UNILEVER NIG. PLC
Unilever Nigeria Plc is a
corporate entity that is engaged in the manufacturing and marketing of
detergents and edible oils and fats, fruit drinks and toilet preparations. From
the beginning about 83 years ago, Unilever Nig. Plc the oldest surviving
manufacturing company in the country has today grown to its present position as
one of the biggest corporate bodies in Nigeria.
Unilever Nig. Plc was
formerly Lever Brothers Nig. Plc before changed its name to Unilever Nig. Plc
which is the original holding company it’s belong.
The story of Unilever is
linked to the history of one man who proved to be a generous in his successful
pioneering business among his cotemporaries. His name is Williams Hasketh Lever
who later becomes Lord Vixcount lever Hulem.
Unilever extended its
business activities to Nigeria where it was incorporated as West Africa Soap
Company on the 11th April 1923 by Lord Lever Hulem himself.
It started her operation in
1924 at Apapa with laundry soaps such as key, sunlight and magnet brands. In
1951, lux table soap was introduced and in 19th Feb., 1954, Lady O.M
Abayomi opened the margarine factory which was registered under the name van
Ren Rergh (Nig) Ltd. also at Apapa. Two years later Aba branch was opened with
a laundry soap factory. In 1963, the company started making toothpaste and
astral cream at Apapa.
Although the
surphur-exiplain was introduced in 1958 the production of detergent soap did
not start unit 1964.
1.2 THE PRODUCT OF THE COMPANY
Today, Unilever Nig. Plc
produces a large variety of products in four main sections.
(i)
Skincare product:- Breeze white, lux soap, astral soap and cream, asepso,
sunlight, 3-NSD bar and lifebuoy, Vaseline pure white pears baby lotion e.t.c
(ii)
Dental Product:- Close-up and
pepsodent.
(iii)
Fabric Product:- omo, sulf, vim, key
soap, sunlight, liquid dish wash and rim bar soap.
(iv) Food And Drink:
Oroyo blue band, royco cube,
lipton tea and free top, holsm and larver.
1.3 THE ORGANISATIONAL STRUCTURE
The Unilever Nig. Plc
reports to the overseas committee in achieving its objectives, the organisation
has various division headed by directors under a chairman/managing director.
Deputy chairman assists him.
It has a board of eight
executive directors carrying out its policies and interpreting its objectives
and formulating the strategies necessary to achieve those started objectives.
Departmental heads,
sectional heads, managers and staff and operatives assist each divisional
director. These people perform their own function within the total divisional
objectives towards achieving the overall objectives of the organisation.
The brand management system
is adopted on the marketing department where brand manager for a specific brand
is responsible for the success or failure of the brand. He directs every
activity involved in seeing the product to the market e.g. research, quality
control, forecasting and planning for the product.
1.4 DISTRIBUTION SYSTEM
Unilever Nig. Plc uses
different distribution channel to distribute its various products. The company sells directly to the industrials
uses like bakers and confectioners and the consumers of the products through the
distributors appointed by the company. The company normally base its
appointment on certain vehicles, warehouse etc.
For effective distribution
of its products, the company divided the country into:
(i)
North east
(ii)
North west
(iii)
Lagos area
(iv)
East
(v)
West/mid-west
Within each area,
distributors are appointed. These distributors sell to sub-distributors known
as attaches who sell to retailers before the products get to the final
consumer.
Other channels include:
cooperatives and supermarkets/department stores that distribute the products to
the final consumer.
1.5
STATEMENT OF THE
PROBLEMS
Whenever one considers new
product there is immediately talks of the risk, the problems and the failure
etc. These are so many problems in defining new products and in defining success
or failures.
It is obvious that the date
of launching affects the proportion of products extent at any particular time.
About one third o all product disappears in the first two years. Nowadays,
companies have launched fewer important new products, improved their method of
evaluation, (Kotler 2003). Also product if new may fail due to the following
reasons.
-
Do companies are
organised for today’s business not tomorrow? Because of this, does new product
suffer from insufficient attention?
-
Does a new product
project generate a momentum within a company, which is difficult to stop and
then looked at which rose tinted spectacles?
-
When sales forces
have been cut, they find it difficult to cope with new products?
-
Is it true that
wholesalers and retail traders have rightly become more selective than ever
before? And some new products have not obtained enough distribution to achieve
adequate consumer penetration?
-
Does the poor product
quality, high in price, sensitive market, confused presentation, lack of enough
advertisement are all frequent reasons for failure?
1.6 PURPOSE OF THE STUDY
It is in recognition of the
strong fact of test marketing as an important part f the entire product
strategy of the company that calls for this study. The primary purposes are:
To investigate the
relationship that exists between the marketing result and the actual
performance of the product when launched in the market place.
To assess the effectiveness
of test marketing of a new product, so as to form an opinion as regards its
success.
1.7 RESEARCH QUESTIONS
The research questions on
which hypothesis will be based are as follow:
To what extent can a
manufacturer rely on the test market result(s)?
What type of correlation (if
any) exists between market test result and actual performance in term of
estimating sales and profits?
Does the fact that test
marketing exposes the user to the risk of providing competitors with a clean
view of what the firm is trying to accomplish constitute an important flow in
the concept?
To what extent has test
marketing been effective in terms of industry trial and repeat buying
behaviours?
How can the effectiveness of
market test be measured?
1.8
HYPOTHESIS
The following have been
formulated for the purpose of this study:
-
That manufacturers
don’t normally test market their products before full-scale commercialization.
-
That manufacturers
don’t rely basically on the result of test marketing in determining product
performance.
-
That correlation does
not exists between test marketing result and post launching performance of the
new product.
-
That to a large
extent, test marketing has not been effective in term of inducing trial and
repeat buying behaviour.
-
That a unique and
well-researched product will not perform well in the market without test
marketing.
1.9
SIGNIFICANCE OF THE
STUDY
The objective of test
marketing is to investigate how it could be conducted so as to be able to have
substantial shares of the market.
Since test marketing is an
Integra part of the entire product development strategy is being appreciated by
various producers in Nigeria, its effectiveness in this regards needed to be
assessed.
1.10 SCOPE OF THE STUDY
The scope of this project
work is to cover the effectiveness of test marketing of new product and its
performance. The study focused primarily on the head office of Unilever Nig.
Plc, Apapa.
The questionnaire will be
distributed only to the staff both on top, middle and lower cadre at Apapa.
1.11 LIMITATIONS OF THE STUDY
Gathering the needed
information in most studies of this nature is usually met with a number of
limitations, this will not be exemption.
Due to secrecy of the
information as one of the top secret, the management of the Unilever Nig. Plc.,
may not be willingly to reveals some vitals information for the research work
because of fear of linkage to their competitors.
It will be limited due to
the use of appropriate instruments or technological tool needed to conduct the
research.
1.12 DEFINITION OF TERMS
Effectiveness:- A frame work for measuring the organisation’s
marketing capabilities and performance by making use of five dimensions; the strength of the
customer-oriented philosophy, the degree of integration within the marketing organisation, the adequacy of
marketing information , the firm’s strategic orientation and level of operation
efficiency.
Innovation:- “Making changes” is a process which covers the use of
knowledge or relevant information for creation and introduction of something
that is new and useful.
Market:- A group of potential customers with similar needs who
are willing to exchange something of value with sellers offering products that
satisfy their needs.
Marketing mix:- The set of controllable variables that the
organisation uses to influence its target markets and determine demand.
New product development
(NPD):- The process of identify, developing and
evaluating new product offers.
Performance: A tool used for measuring marketing, financial,
manufacturing and organisational against the background of the market
importance of each dimension.
Test marketing:- The process of measuring market response of a new
product or service by piloting it within a small area which is seen to be representative of the market as a
whole.
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