ABSTRACT
This project examines Test Marketing of New Product Its
Effectiveness and Product Performance, with reference to Unilever Nigeria Plc.
In order to achieve the objective, three specific objectives, three research
questions and three hypotheses were raised. Frequencies and percentages were
used in presentation of personal data and answering research questions. A
probability sampling technique was adopted as it ensures equal chance for all
elements. A total of one hundred and fifty (150) questionnaires were
administered, but only eighty (80) were returned. This means that approximately
81 % of the administered questionnaires were retrieved. Statistical tools such
as correlation, regression and analysis of variance were employed for this
study using statistical package for social scientist (SPSS) while Frequency
distribution table were used in the analysis and presentation of socio-demographic
data of the respondents. Regression analysis was used in order to estimate the
effect of some independent variables on the dependent variable were used to
test the three hypotheses. Based on the responses elicited by the respondent
and the result from the three tested hypothesis, it was established that the
study found that there is no relationship between the effectiveness of test
marketing on new products with a value r = 0.592 which signifies that change in
between the effectiveness of test marketing on new products, the important of
test marketing and product performance
of new product 47.6% of the variation recorded in and it
contribution in text marketing and findings show that there is no significant
relationship between the pricing associated. The value r = 0.518 signifies that
there in raising with marketing of new products. Base on the recommendation, it
was concluded that the most important factor that influences consumer buying
should be the case to consider when embarking on a business. Every business exist on society which is made
up of
people which form
the market, for every
type of product
an efficient market activity should create more effort in
their research department and more emphasis should also be laid on their
promotional activ
TABLE
OF CONTENTS
Title page i
Certification ii
Dedication iii
Declaration iv
Acknowledgement v
Abstract vi
Contents vii-x
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study 1-2
1.2 Statement
of the Problem 3
1.3 Objectives
of the Study 4
1.4 Significance
of the Study 4-5
1.5 Scope
and Limitation of the Study 5
1.6 Research questions 5-6
1.7 Research
Hypothesis 6
1.8 Definition
of Terms 6-7
CHAPTER TWO: LITERATURE REVIEW
2.1 Conceptual Framework 8-25
2.1.2 New Product Development 25-27
2.1.3 Critical success factors 27-28
2.1.4 Metrics 28-29
2.1.5 Critical success factors
and metrics for stages of the NPD
Process 29
2.1.6 Test Marketing 29-32
2.1.7 Objectives of Test Marketing 32-33
2.1.8
Marketing
Testing Methods 33
2.1.9
Test Marketing
Of Consumer Goods 33-34
2.1.10
Sales –Wave
Research 34
2.1.11
Stimulated
Store Technique 35
2.1.12
Controlled
Store Test Marketing 35
2.1.13
Standard Test
Market 35-36
2.1.14 Test Marketing Of
Industrial Goods 36-38
2.1.15 Selecting The Test Markets 38-41
2.1.16 How To Obtain Distribution
In The Test Market 41
2.1.17 Planning Advertising Efforts
In The Test Market 41-42
2.1.18
Deciding Which
Variables To Measure 42-44
2.1.19 Projecting the Results 44
2.1.20 The Brand Share Prediction
Model 44-46
2.1.21 Roles of Marketing Research 46-49
2.1.22 Process or Stages of New Product Development 49-53
2.2 Theoretical
Framework on New Product Development (NPD)
53-57
2.3 Review
of Related Studies 57-58
2.4 Production 59-62
2.5 Unilever
New Product Development Process and Strategy 62-63
2.5.1 Successful New Product Development Model 63-64
2.5.2 Further Studies 64-65
2.5.3 Digest 65
2.6 Historical
Background of Unilever Nigeria Plc 65-66
2.7 The Product of the Company
66
2.7.1 The Organisational Structure 66-67
2.7.2 Distribution System 67-68
2.8 Summary 68
CHAPTER THREE: RESEARCH METHODS
3.0 Preamble 69
3.1 Area of Study 69
3.2 Research Design 69
3.3 Study Population 70
3.4 Sample Size and Sampling Techniques 70
3.5 Sources of Data Collection 70
3.6 Instrument of Data Collection 70-71
3.7 Method Of Data Analysis 71
3.7 Validity and Reliability of Research
Instrument 71
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
4.0 Introduction 72
4.1 Demographic Information Of Respondents 72-76
4.2 Analyses Of Respondents’ Responses 76-83
4.3 Hypotheses Testing 83-91
4.4 Discussion Of Findings 91-92
CHAPTER FIVE: SUMMARY
OF FINDING CONCLUSION AND RECOMMENDATION
5.1
Summary Of
Finding 93
5.2
Conclusion 94
5.3
Recommendations 94-95
5.4
Suggestion For
Further Studies 95
References
96-98
Questionnaire
99-101
FIGURE
Fig. 1: Below shows the foregoing description of
marketing management. 48
Fig.
2: The organization of production 61
TABLES
Table 1: A
Classification of Factors of Production 61
Table 4.2: Descriptive Statistics 72
Table 4.3: Gender 73
Table 4.4: Age of the respondents 74
Table 4.5: Educational level of respondents 74
Table 4.6: Work experience of the respondents 75
Table 4.7: Current organizational status 75
Table 4.8: Department
in organization 76
Table 4.9: There is effective test marketing in sales of new product 76
Table 4.10:
Effectiveness of text marketing enhance the sales of new product 77
Table 4.11:
There is great quality tool in text marketing of new product 77
Table 4.12:
Considering all the quality of test marketing,
new product is
demanding 78
Table 4.13:
Would you rate your level of satisfaction with new product
Effectiveness 78
Table 4.14: There
is marketing strategy for a new product 79
Table 4.15: The importance of New product is
being practiced in text
marketing strategy 79
Table 4.16: Test
marketing of new product affect marketing strategy 80
Table 4.17:
There is endorsement for effective of new product in the
market. 80
Table 4.18:
Effectiveness of good marketing multiplies sales of new
production 81
Table 4.19: The
adoption of pricing associated with good marketing of
new product. 81
Table 4.20: The
factors of new price in the text marketing associate with
marketing
of new product 82
Table 4.21:
Price of new product gives good market strategy 82
Table 4.22: Text
marketing promote sales of new product 83
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Today’s
world is characterized
by major changes
in market and
economic conditions, coupled with rapid advances in technologies.
Companies invest in test marketing
on New Product
Development (NPD) to
ensure future success
in the market. (Patrick 2017). However, most test
marketing on new products development are often more likely to fail than
to succeed, addressing
changing tastes with
new products is
essential in maintaining customer
loyalty, so that
good New Product becomes
a key factor
in competitiveness. New
products development can
succeed if company
change the way they do test marketing (Euchner, 2008).
Recommended that NPD strategies and process should change to follow changes in
market and technology.
New products play several roles for
the organization, they help maintain growth and thereby protect the interests
of investors, employees, suppliers of the organization. New products help keep
the firm competitive in a changing market (Patrick, 2017). The consequence of
product development have a direct impact on competitiveness. They mean the
difference between falling behind a leading competitor in the market and being
the competitor who provides leadership, compelling others to meet similar standards
(Wheel Wright and Clark 2015). New products spread the marketing risk. The
investment community values new products; new product affect the top line and
therefore enhance the value of the firm and shareholder value (Patrick 2017).
The academic and the business periodical literature are replete with derailed
listings and explanations of both why new products fail and what factors are
related to success. There is no shortage of guidance available to those
interested in achieving the revenue growth, profit growth, and reputation for
innovation and leadership associated in achieving the revenue growth, profit
growth, and leadership associated with successful new product launches.
Organization invest many human, material and Monetary resources in new product
development. In addition, much research by both the academic and industry
sectors, has been conducted regarding the factors involved in new product
failure as well as success. Yet the statistics that we frequently hear cited
about product and it effectiveness on product performance are frightening. How
can these seemingly contradictory facts be reconciled.
Product management assists
organisations to plan, ensure repeatable sales and test marketing of new
products and services to suit the needs and wants of the customers (Johnson,
2019). Past studies have indicated that many large companies have a high
product failure rate of new product development at more than 65 per cent
(Adams, 2010). One of the reasons for the failure is the introduction of a nun
attractive new product in the market (Euchner, 2008). New product development
is a difficult process but it has been identified as an important precursor to
performance and effectiveness of product (Bendoly, Bharadwaj & Bharadwaj,
2012). As highlighted by Im and Rai (2008), organisations have come to realize
the importance of new product and it effectiveness for a company to survive in
this competitive environment.
The key driver of the Efficient
Consumer Response (ECR) initiative is an industry estimate that the excess cost
to the grocery system in the product performance and introduction process
renege as high as 4% of net sales these costs include both.
Industry data from a study
commissioned by the joint industry task force on new products and conducted by
Deloitte and Fouche consulting Group in 1995 suggest that new product
introductions cost the food system (manufactures, brokers, wholesalers and
retail grocery stores? Approximately & 252 per skill, per store. It is
important to note that the study was conducted using 1988 data. Assuming and
industry inflation rate of only 2.5% over the past 10 years, this figure now
approximates #320 per skill per store. The industry clearly spends a great deal
of money on products that are introduced but do not succeed.
The intention of this research is to
look at the problems and prospects of test marketing of new products it
effectiveness and product performance in Unilever Nigeria plc.
1.2 Statement of the
Problem
A close observation of the Unilever Nigerian
industry shows that the post mergers acquisition era in the sector has
witnessed phenomenal increase as typified by the performance of products, Unilever
Nigeria Plc made possible by product performance (Ojo, 2010). However, other product
performance have been able to operate optimally. This, therefore, suggests that
organizational sales performance, which refers to how well an organization is
doing in relation to intended purpose and competition, might depend to a large
extent on product development. But this has not yet been ascertained, as the
situation in the Unilever product appears not to have stimulated interest among
researchers and academics in the Nigerian intelligentsia. This might have been
informed in part by the apathy, levity and jaundiced perception with which many
scholars treated in Nigeria. Undeniably, the industry has made meaningful
contributions to our gross domestic product (GDP), employment generation, sport
sponsorship and promotion of Nigerian music and artistes (Mousend and Thompson,
2012).
Test Marketing
is a crucial
aspect in new
product effectiveness and product performance it’s
the very first step to which
determines the success of any product. It acts as the foundation and
cornerstone of any product.
Unfortunately
the effect of
test marketing is the
aspect that receives
the least attention; business
need not only
rely on promotional
strategies, but have
to fine tune their marketing research programme with
view of improving the quality of their product.
To obtain the desired and appropriate results from
test marketing, an organization must be guided by certain plans to satisfy all
or at least most of the company objectives for it to be worthwhile.
This tends to imply that the
successful Unilever product might have used effective product development to
achieve corporate goals and objectives. It equally implies that product failure
in other product might have been informed by ineffective product development.
However, these beliefs, hunches and conjectures have not been clearly
substantiated by a concerted empirical effort, thus creating a yawning gap in
existing literature which needs to be bridged. It is as a result of this
background that this study is designed to evaluate the impact of test marketing of new product its
effectiveness and product performance in Unilever Nigeria plc.
1.3 Objectives of the Study
It is in
recognition of the strong fact of test marketing as an importance part of the
entire product strategy of the company that calls for this study. The primary
objectives are as follows:
1. To assess the effectiveness of test marketing
of a new product.
2. To look at importance of test market
as it relate to new product
3. To examine the pricing associated
with marketing of new products
1.4 Significance of
the Study
A key aspect of FCR, efficient
product introduction, addresses the concern about the alarming number of new
products launched each year and the fact that most of these are live extensions
(Kaln and McAlister 2017). The July 1997 issue of progressive Grocer included a
supplement entitled “Efficient new product introduction”. This report was
intended to “describe techniques for new product and effectiveness of product
performance advancing the understanding of distributors, and manufacturers
within the grocery industry and cited project undertaken by Ernest and young
who provide the data cited in the report prime group, inc as part of the study,
computed product introduction success and failure rates.
Defining what constitutes a test marketing of new product its
effectiveness and product performance success or failure is a critical
first step in computing and assessing success and failure rates. If a product
concept demonstrates enough strength during early stage testing to warrant
investment in product development, but fails to survive beyond product or
market testing is this a new product failure? If a new product as launched and
gains retail distribution and generate revenues but those revenues fail to
meet stated targets is that new product a failure? If a new item is launched
and gain retails distribution generates revenues but this revenues fails to met
stated targets is that new product a failure? If a new item is launched and generate
significant first year distribution and revenues, but loses distribution and
revenues after the seasonal or are merely replacements for other products in
our existing line?
Clearly, therefore, the industry
needed to develop a consistent definition of what constitutes test market and new
product for product performance. However, even more basic was the need to
clearly define what constitutes a new product. Is a product new because it is
new to the consumer? Most industry observers agree that a product new to the
consumer is a new product. But how about a product that is new to the company?
Or a product that represents improved performance?
1.5 Scope and
Limitation of the Study
The scope of this study include test marketing of new product its effectiveness and product
performance, Using Unilever Nigeria plc, Agbara Ogun State
In carrying out this research, the
researcher encountered the following constraints, which are:
Time: The time given to the
researcher is not sufficient enough to carry out a thorough research. The
researcher had limited time to complete the research. Combining lectures hours
with the research work is indeed time demanding.
Finance: Fund is very necessary and
paramount for a successful research, but the researcher did not have all the
necessary funds to move from one place to another to source for data and
research materials.
1.6 Research questions
1. What
is the relationship between the role of test marketing and the effectiveness of
new products?
2.
What is the relationship between the
important of test marketing and product
performance of new product
3. What
is the relationship between pricing of test marketing and new products
1.7 Research
Hypothesis
Ho1: There is no
significance relationship between the effectiveness of test marketing on new
products
Ho2: There is no
significance relationship between the important of test marketing and product performance of new product
Ho3: There is no significance
relationship the pricing associated with marketing of new products and text
marketing
1.8 Definition of
Terms
New products: New products are good and services
that differ significantly in their characteristics or intended uses from
products preciously produced by the firm.
Efficient Consumer Response (ECR): is a trade and industry body
working towards making the grocery sector as a whole more responsive to
consumer demand and promote the removal of unnecessary costs from the supply
chain.
Product development: The creation of products with
new or different characteristics that after new or additional benefits to the
customer. It may also involve modifying an existing product.
Product concept: It is the understanding of the
dynamics of the product in order to showcase the best qualities and maximum
features of the product. Product concept believe that customers prefer products
that have the most quality, performance ad features.
Product launch: A product launch is the initial
showing of a product. The first time a customer see and can purchase the
product. It refer to a new product coming or being launched into the market.
Test market: Is a
geographic region or demographic group used to gauge the
viability of a product or service in the mass
market prior to a wide scale roll-out.
Organizational environment: They are institutions or forces
outside the organization that potentially affect the organizations
performance. These include supplies, customers, competitors, government,
regulatory agencies, public pressure etc.
Product: Is an object or system made available for consumer use; it is anything
that can be offered to a market to satisfy the desire or
need of a customer
Test Market: The selling of a new product in a
limited area to see how it will sells and highlight any possible problems.
Virtual test market: Is a computer simulation of
(tens of) thousands of virtual consumers that react via purchasing decisions to
new (and existing) product offering and marketing campaigns. As a
result, the virtual test marketing yields a market share prediction for each
product on the virtual market.
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