ABSTRACT
Due to the
economic condition of Nigerian society, firms undertaking new product
development are faced with an environment which is characterized by long lead
times from basic research to industrial application, a commercialization phase
with short lead times and an increasingly accelerated rate of obsolescence
under the global competition of the new product development process. Marketing
problems are numerous and inevitable as most products are not doing well to
satisfy the consumers, as a result of poor marketing research to improve the
quality of the product. The basic objective is to address the importance of
marketing research on new product development and also examine the
circumstances under which marketing research can likely be used in the stage of
new product development and its impact on profitability. The questionnaire and
interview methods were used to collect data for presentation and analysis. The
simple percentage justified the entire findings and the statistical techniques
of chi-square explicitly show that market research is pivotal tool for new
product development and management decision. The entire findings of the study
shows that in an attempt to evaluate the use of marketing assessment on new
product, the entire area of the study needs a proficient market research
development, more budgetary allocation is needed to propel marketing research
to boost new product. And the finding of this study is that company
organizational structures of market reveal lack of marketing research
department of its own and budgetary allocation to marketing research is
inadequate. The recommendation clearly stated that companies should take note
of the type of research approach to use at the stage which is concerned with
comparing the concepts with or against existing market of the competitor.
Companies believe that NPD is their life blood; it can be the better way to
survive firmly and be more competitive. In addition, the strategy of how to
manage NPD process effectively and efficiently is becoming a powerful way of
achieving a competitive edge.
TABLE OF CONTENTS
Title Page ----------------------------------------------------------------------------------------------------------i
Approval Page
----------------------------------------------------------------------------------------------------ii
Dedication
--------------------------------------------------------------------------------------------------------iii
Acknowledgement
----------------------------------------------------------------------------------------------iv
Abstract
-----------------------------------------------------------------------------------------------------------v
Table of Contents
-----------------------------------------------------------------------------------------------vi
CHAPTER ONE
1.1
Background of the Study
------------------------------------------------------------------------------1
1.2
Statement of the study
---------------------------------------------------------------------------------4
1.3
Objective of the study ---------------------------------------------------------------------------------5
1.4
Significant of the study
--------------------------------------------------------------------------------5
1.5
Scope of the study
--------------------------------------------------------------------------------------6
1.6
Limitation of the Study
--------------------------------------------------------------------------------7
1.7
Definition of Terms
------------------------------------------------------------------------------------8
CHAPTER TWO
2.1
Introduction
-------------------------------------------------------------------------------------------10
2.2
What is “New” About New product?
--------------------------------------------------------------10
2.3
What is a New Product Development? ------------------------------------------------------------11
2.4
Market Research and New Product Development
-----------------------------------------------12
2.5
Briefly Discuss on Market Research Process
-----------------------------------------------------14
2.6
New Product planning
-------------------------------------------------------------------------------15
2.7
Stages in New Product Development Process
----------------------------------------------------16
2.8
Product Life Cycle
-----------------------------------------------------------------------------------18
2.9
Product Mix Strategies
-------------------------------------------------------------------------------21
CHAPTER THREE
3.1 Introduction
--------------------------------------------------------------------------------------------24
3.2 Research
Design --------------------------------------------------------------------------------------24
3.3 Population
of the Study ------------------------------------------------------------------------------25
3.4 Sampling
Techniques and Sample Size -----------------------------------------------------------25
3.5 Method
of Data Collection --------------------------------------------------------------------------25
3.6 Method
of Data Analysis ----------------------------------------------------------------------------26
3.7 Research
Instrument ---------------------------------------------------------------------------------26
3.8 Justification
of Method ------------------------------------------------------------------------------26
CHAPTER FOUR
4.1 Introduction
-------------------------------------------------------------------------------------------27
4.2 Data
Presentation and Analysis --------------------------------------------------------------------28
4.3 Finding
------------------------------------------------------------------------------------------------39
CHAPTER FIVE
5.1 Introduction
------------------------------------------------------------------------------------------40
5.2 Summary
---------------------------------------------------------------------------------------------40
5.3 Conclusion
-------------------------------------------------------------------------------------------41
5.4 Recommendation
-----------------------------------------------------------------------------------43
Reference
--------------------------------------------------------------------------------------------44
Appendix---------------------------------------------------------------------------------------------47
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 marketing
research on New Product Development (NPD) to ensure future success in the
market. However, most marketing research 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 NPD becomes
a key factor in competitiveness. New products development can succeed if
company change the way they do marketing research. (Hollingsworth 1996, and
Jeffery 1998) recommended that NPD strategies and process should change to
follow changes in market and technology.
It
is widely recognized that effective new product development (NPD) processes are
causally important in generating long-term firm success (Cooper, 1993; Ulrich
and Eppinger, 1995; Wheelwright and Clark, 1995). They can lead to a core competence
that either there is a different firm from its competitors (Prahalad and Hamel,
1990) or provides a threshold competency that is necessary just to survive in
fast-changing and innovative industry sectors. Given the importance and value
of NPD to firm performance, researchers have developed descriptive frameworks
based on linear, recursive, and chaotic system perspectives, which provide
different insights and descriptive theories about NPD process structure and
behavior. These are then often the basis for normative research, which seeks to
predict and prescribe causality in NPD processes (Griffin, 1997).
Problems
in conducting effective marketing research on NPD are magnified in many major
industrial countries, where spending on research and development, and
management of NPD may be even less favorable. However, while some research on
NPD in the developing world has begun to appear, NPD success factors have
received some research attention, usually higher technology industries provide
the context. Developing countries are quite competitive in some industries,
which do not require advanced technology, but they still need to do marketing
research on NPD to keep up with market trends.
Marketing
research on NPD may not necessarily be applicable in the lower-tech industries
where these industries hold competitive advantage we examine the impact of
marketing research in NPD in industries. Management is often confronted with
the dilemma whether or not to invest in a particular stage of the new product
development (NPD) program, given market and technology uncertainties
surrounding such a decision in current markets, most of all technology-driven
or high-tech markets (Moriarty and Kosnik, 1989). The changing economic
conditions and technologies combined with increased domestic and global
competition, changing customer needs, rapid product obsolescence and the
emergence of new markets, require a fast resource allocation process in NPD;
see (Bower and Hout 1988, Griffin 1993, Gupta and Wilemon 1990 and Rosenau
1988). At the same time, market and technology uncertainty demand for
flexibility in the program; see (Sanchez 1995, Wind and Mahajan).
To
remain competitive we must focus more on value added products in the future,
which will require increased investment in marketing research.
Modern retailing
and changing consumer preferences foster demand for products with better
quality, longer shelf life, and better packaging. Foreign brands which were
previously imported for a high income minority are now manufactured locally and
affordable to the average.
NPD is probably
the most important process for many companies as it improves and develops the
company‟s innovativeness. In essence, NPD is a source of attracting customers
once the developed products have a high quality.
In
business new product development (NPD) is the complete process of bringing a
new product to market. A product is a set of benefits offered for exchange and
can be tangible (that is, something physical you can touch) or intangible (like
a service, experience, or belief). There are two parallel paths involved in the
NPD process: one involves the idea generation, product design and detail
engineering; the other involves market research and marketing analysis.
Companies typically see new product development as the first stage in
generating and commercializing new product within the overall strategic process
of product life cycle management used to maintain or grow their market share.
The
process of NPD is crucial within an organization, but it is a complicated and
time-consuming process in which several different activities are involved. NPD
is commonly defined by a number of researchers as the transformation of a
market opportunity into a product as a result of the integrative coupling of
market assumptions with technological possibilities (Krishnan and Ulrich,
2001., Griffm and Hauser, 1992, 1996). The Product Development and Management
Association (PDMA) in 2006 defined NPD as an overall process of strategy,
organization, concept generation, product and marketing plan creation and
evaluation, and commercialization of a new product. This means that NPD is a
process that begins with opportunity identification and ends with a set of
information that adds value to customers and brings returns to an enterprise.
1.2 STATEMENT
OF THE PROBLEM
- Marketing
research is a crucial aspect in new product development 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 impact of marketing research 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.
PROBLEMS OF
NEW PRODUCT DEVELOPMENT
From the foregoing, it is deduced that product
development is not an easy task. It is a risky and unascertained activity.
Since every product depends on markets for survival forecasting the failure.
This is the time a manufacturing when firms with poor skilled personnel and wit
inadequate technical know how will certainly die off.
It is risky to devote much time and money in the
development of a product, as the business word is dynamic. Technically and the
product itself are also problems. In most cases, companies do not produce
sufficient quantities to meet market demand for their products. So, this might
make competitors to gain anticipated shares of the market.
Environment factors will increasingly affect or
influence the decisions of development because no company will afford to was
its natural resources particularly its scare scientific and technical talent.
There is a problem of the organization inability to
draw up accurate in forecast of the necessary investments. Effective product
development response is hard to achieve where there is internal organizational
resistance to change.
There might be lack of enthusiasm to take on new
product development risks. Another problem is competitor’s
capacity to undertake product development. The competitors may have greater
capacity and available resources to produce on a large scale. This kind of
capacity may put the new product development activities of smaller competitors
at increased price market acceptability and inadequate market analysis, such as
failing to define market, or over estimating its size is also problem behind
product development.
1.3 OBJECTIVES
OF THE STUDY
The study is
specifically aimed at:
- Highlighting
and emphasizing the importance of marketing research on new product
development.
- To
examine the effect / extent of marketing research contribution to new
product development.
- Examine
circumstances under which marketing research is more likely to be used in
the stage of new product development.
- Identify
the factors that influence marketing research on new product development
- Also
recommend as the need arises in order to create customers satisfaction.
1.4 SIGNIFICANCE
OF THE STUDY
The
important area focused by the study is the impact of marketing research on new
product development; it is intended to achieve two aims; to contribute to both
theory and practice of marketing in Nigeria.
One of the
greatest and surest ways of achieving customer satisfaction is the planning and
implementation of proper marketing research programme in any business
organization.
Moreover, the
new marketing concept emphasizes on customer satisfaction and integration in
the organization towards achieving the single purpose. Therefore, to make these
possible, marketers must research properly so as to know the changing need of
their customers and the activities of their competitors.
Also the need to
re-examined other tools which could be used to reduce the high rate of product
failure instead of relying heavily on promotional activities with other tools
in marketing to establish whether or not new product will be accepted in the
market, it will also expose other areas that have inherent characteristics that
make marketing research inevitable instrument for product development.
To
contribute to the theory, there are several factors that affect new product
development like promotion, prices, distribution and marketing research but
most organization are not interested in research as it is said to be too
expensive not only looks outwards to existing and potential markets, the
customers (or market place), the competitive environment but also inwards at
the ways in which the organization respond to the demands of the market place.
1.5 SCOPE
OF THE STUDY
This
study is analytical in nature to New Product Development found in production
companies; the reason behind this delimitation is because the study intends to
assess the impact of marketing research on New Product Development.
The
scope of this study is limited in four respects: the unit of measure for this
research, the classification of the firm, the type of technology of the firm
and identification of firms for the study. First, consider the unit of measure
for this research. From the literature it can be seen that the unit of measure
common to new product development research is that of the „product‟. However, a
different approach is taken for the purpose of this research in that the unit
of measure is the „firms‟. The rationale for this approach is that unlike
larger and established firms where an individual NPD project is usually one
amongst a number of projects, in the case of this, it is more common that there
is no single NPD project upon which the firms is based. Therefore, NPD success
or failure can be measured in terms of firms‟ success or failure.
1.6 LIMITATIONS
OF THE STUDY
Some
constraints were encountered, during this project. These limitations do not
suggest that it is a unfulfilled activity, it only suggest that the activity
was conducted with proper care and caution which will make the activity
meaningful and result oriented:
- Miscellaneous
limitation problem developed due to changing environment.
- Uncertainty
of conclusions consumer is the focal point, buying motives are difficult
to judge precisely and accurately which bring some sort of uncertainty.
- Complexity
of the subject it fails to give complete and correct guidance to the
management on marketing issues.
- Also
cost expensive and time consuming activity it take longer period for
completion and the finding when available may prove to be outdated due to
fast changing market environment and cannot study all new marketing
product.
1.7 DEFINITION
OF TERMS
The terms used
in this study may carry slightly different meaning, we therefore consider it
necessary to define item to suit the context to which they are used in this
study.
MARKETING RESEARCH: Marketing research is the
function that links the consumer, customer, and public to the marketer through
information–information used to identify and define marketing opportunities and
problems; generate, refine, and evaluate marketing actions; monitor marketing
performance; and improve understanding of marketing as a process.
PRODUCT: is a very important element of the
marketing mix. Product is a bundle of utilities consisting of various product
features and accompanying services which are made up of set of tangible and
intangible attributes.
NEW PRODUCT: Is item really innovation, truly unique
in which there is a real need but for which there is no existing substitute is
generally considered satisfaction.
PRODUCT PLANNING: is the ongoing process of
identifying and articulating market requirements that define a product’s
feature set. Product planning serves as the basis for decisions about price,
distribution and promotion.
PROMOTION: is any technique that persuasively
communicates favorable information about a seller’s product to potential buyers
either directly others who can influence purchase decisions.
MARKETING: is the performance of business
activities which direct the flow of goods from the producer to the consumer or
user in order to satisfy customers and accomplish the company’s objective.
PRICE: is the amount of money which is needed
to acquire and exchange some combined assortment of product and its accompanied
services.
DISTRIBUTION: is concerned with the activities
involved in transferring the goods from the producer to the final buyers and
users. These activities could be classified as physical, legal, promotional,
and financial, all performed in the course of transferring ownership.
PACKAGING: is the general group of activities in
product planning which involves designing and producing container paper for a
product?
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