TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND
OF THE STUDY
1.1 STATEMENT OF THE PROBLEM
1.2 OBJECTIVES OF THE STUDY
1.3 HYPOTHESIS
1.4 SIGNIFICANCE OF THE STUDY
1.5 SCOPE OF STUDY
1.6 DEFINITION OF TERMS
CHAPTER TWO
LITERATURE
REVIEW
2.0 INTRODUCTION
2.1 NEW PRODUCT CLASSIFICATION
2.2.2 TEST MARKET
2.2.1PRACTICAL
USE OF TEST MARKETS
2.3 PRODUCT REPLACEMENT
2.4 VIRTUAL TEST MARKETS
2.5 SUCCESS AND FAILURE DEFINED AND MEASURED
2.6 NEW PRODUCT FAILURE
2.6.1 ACHIEVING SUCCESSFUL NEW PRODUCT
LAUNCHES
2.7 BRIEF HISTORY OF GUINNESS NIGERIA PLC
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION
3.1 RESEARCH DESIGN
3.2 POPULATION OF THE STUDY
3.3 SAMPLE AND SAMPLING TECHNIQUES
3.4 SOURCES OF DATA COLLECTION
3.5 METHOD OF DATA ANALYSIS
CHAPTER FOUR
DATA
PRESENTATION, ANALYSIS AND
INTERPRETATION
INTRODUCTION
DATA ANALYSIS
CHAPTRE FIVE
SUMMARY
OF FINDINGS, RECOMMENDATION AND
CONCLUSION
5.1 LIMITATIONS OF STUDY
5.2 CONCLUSION
5.3 RECOMMENDATION
5.4 SUGGESTION FOR FURTHER RESEARCH
REFERENCES
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND
OF THE STUDY
New
products play several roles for he 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, 1997). 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 1995).
Finally, 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 1997). 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 failure are frightening. How can these seemingly
contradictory facts be reconciled
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 development
and introduction process renege as high as 4% of net sales these costs include
both.
v All development and introduction costs associated
with failed products, including product
cancelled before introduction as well as products will drawn after launching.
v Excess costs incurred in launching successful new
products, principally excess manufacturing costs due to an initial massive
inventory building needed for introductory deals and special offers e.g free goods.
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 with on
Guinness Nigeria plc.
1.1 STATEMENT OF THE PROBLEM
The
purpose of the study is to look at the prospects and challenges of test
marketing as the affect now product in Nigeria
1.2 OBJECTIVES OF THE STUDY
This
research work has the following objectives:
1) To look at test market as it relate to breweries
industries in Nigeria
2) To identify the role of test marketing in the sales of new product
3) To examine the challenge associated with marketing
of new products
4) To learn the reason for conducting a test market
5) To examine the effect of test marketing on the
profitability of an organization
6) To identify the challenges and prospects of test
marketing of new products.
1.3 HYPOTHESIS
Hi: Test marketing has effect on the sales of
new products
Ho: Test marketing has no effect on the sales of
new products
Hi: Test marketing has an effect on the
profitability of a organization
Ho: Test
marketing has no effect on the profitability of an organization
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 1997). 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
introduction advancing the understanding of distributors, brokers 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 new product 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 new product success or failure. 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?
The
progressive Grocer report is notable for its specification of (1) a classification scheme for new food and
allied products which differentials new products from new it PCS: (2) a
specific definition of product failure which is used as a criterion to
determine whether a new product is classified as a success or a failure and (3)
empirical data on failure and success rates. Previously, with the exception of
data provided by information resources incorporated in their annual “New
product pacesetter” reports, little actual data has been provided to wither confine
or contend the conventional wisdom that 4 out of 5 (or worse) of all new
products fail.
1.5 SCOPE OF STUDY
The
scope of this study include new product development, test marketing prospects
and challenges. Using Guinness Nigeria plc Bottling company Edo State
as a case study. It will be done from the period of January to August 2014.
accommodated the records for a period of 2 years with Guinness Plc or their
distributors.
1.6 DEFINITION OF TERMS
1) New products: New products are good and services that differ
significantly in their characteristics or intended uses from products
preciously produced by the firm.
2) 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.
3) 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.
4) 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.
5) 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.
6) Test market: In the field of Business and marketing, is a
geographic region or demographic group used to gauge the validity of a product
or services in the mass market prior to a wide scale rollout.
7)
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.
8) Cross
functional team: Is a group of
people with different functional expertise working toward a common goal.
9) Market test: The selling of a new product in a limited area to
see how will it sells and highlight any possible problems.
10) 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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