EFFECTS OF NEW PRODUCT DEVELOPMENT AS A STRATEGY FOR CORPORATE GROWTH
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EFFECTS OF NEW PRODUCT DEVELOPMENT AS A STRATEGY FOR CORPORATE GROWTH
Chapter one
1.0 Introduction
New products can be described as the lifeblood of enterprises operating in a free market economy. When producing a new product, a corporation must guarantee that a good product development strategy is followed. The introduction of a new product into the market enables the company to maintain its competitive position.
In today’s market, no company can gain a significant market share without properly and effectively developing its products. This is because society’s (consumer) needs vary throughout time.
As a result, the manufacturing system and procedures must be modified to accommodate changes in demand, technology, and societal tastes and preferences.
Product launch into the market is an important component of company growth strategy, and financially motivated organisations cannot afford to abandon the project of producing new products. New product development has become vital and unavoidable in an organisation, thus its importance cannot be overstated.
Today, in the Nigerian market, with its very complex commercial operations, all organisations are stated to be embracing new modern production procedures.
According to Philip Kotler and Armstrong (1980), the successful creation of a new product will result in effective sales of the company’s product and hence an improvement in the company’s profit margin.
As a result, in order for a firm to survive in a competitive business environment, it must make the existence of newly introduced products known (advertise) to the public or its consumers, as the majority of companies operating in the country are currently producing goods with close substitutes.
Against this backdrop, the researcher’s curiosity motivated him to select this issue (The Effect of New Product Development as a Strategy for Corporate Growth in Uni-Lever Nigeria Limited) as a research topic.
1.1 Background of the Study
In order to attain a long-term goal of market dominance, a company must first determine whether it truly wants to produce a new product in order to remain competitive.
Introducing new products into the market can help an organization’s corporate growth. In other words, marketing-based programme development will improve an achievable plan in both financial and conceptual terms. The launch of a new product into the market necessitates a financial investment by the organisation in the future.
As with any investment, there are risks associated with investing in new products because they might be detrimental to the organization’s health and stability.
Consider the reasons for new product development in an organisation, the causes of new product failure, the stages of new product development, the product life cycle, and its ramifications.
How companies organise for new product development, managing a new product (management and strategy development), marketing channel policy, promotional policy, product design and development
market strategy, the roles of new product development in enhancing an enterprise’s growth, and the problem of marketing a new product.
Product innovation remains the most effective method for designing and innovating new products to drive company success.
1.2 Statement of the Problem
Today, most corporate organisations recognise that there is a significant need for improvement in product formulation, which can only be addressed by developing new products to fulfil the ever-changing wants of consumers.
Business organisations have failed to reach their aims and objectives due to the firm’s incapacity to engage in new product development in an efficient and effective manner.
Thus, the study questions that the researcher plans to utilise in unravelling the mystery behind the problem described, considering the effect of new product creation as a strategy for corporate growth, include:
i) How does new product development fit into business growth strategies?
ii) What are the costs and effects on a firm of incurring and commencing on new product development?
iii) How has differentiation influenced new product development?
iv) How do rivals’ products affect the market and new product development?
v) A raw material is an important factor in new product development; what type, source, and mobilisation for raw material purchase in form (quality), quantity are accessible to the manufacturer?
As a result of these issues, the researcher is concerned and looking for solutions in order to provide effective solutions and strategies for firms considering new product development.
1.3 RESEARCH QUESTIONS
i) Could the high cost of raw materials constitute a barrier to new product introduction?
ii) Might new product development be beneficial to the company?
1.4 PURPOSE OF THE STUDY
This study intends to achieve the following goals and objectives:
i) Identify the issues that arise during the development and launch of a new product.
ii) Investigate the impact of new product development on firm business growth.
iii) Identify the promotional tools used to market the new product.
iv) To offer feasible solutions to the difficulties identified in the problem description.
This research will also benefit students and other academics who may want to write about a similar topic in the future.
1.5 Statement of Hypothesis
In order to avoid bias in the conduct of this research, the use of hypotheses has become critical for effective guidance throughout the process. Two types of hypotheses have been identified for testing in this study.
HYPOTHESIS 1 Ho: The high cost of raw materials is a barrier to new product introduction. Hi: The cost of raw materials is not a barrier to innovative product development.
Hypothesis 2.
Ho: New product development is irrelevant to the company.
Hi: New product development is important to the company.
1.6 Significance of the Study
This research work/study would be of tremendous relevance to private investors, aspiring entrepreneurs, advertising agencies, students, and everyone else involved in product development in the following ways:
i) Analysing sales competition; sales patronage between new products launched into the market and old or existing ones.
ii) It improves the assessment of advertising’s impact on the success and acceptability of a new product in the market.
iii) It also helps investors and entrepreneurs decide when and what to invest in, as well as give recommendations for the optimum product combination.
iv) It exposes the researcher to the practical aspects of the subject topic while also providing secondary data for future research/study.
1.7 SCOPE OF THE STUDY
For the sake of this research/study, I would prefer to be restricted to Uni-lever Nigeria Limited.
The study attempts to investigate the market effects and successes associated with new product development as a firm growth strategy.
The goal of embarking on new product development, the problems encountered during new product development, and possibly the time taken to introduce new products ranging from 1999 to 2014, all of which paved the way for effectiveness in product introduction based on quality improvement over time.
1.8 Limitations of the Study
The researcher hoped to be successful in his investigation, however this was not the case due to some uncontrollable forces working against the research. The considerations that limit the scope of the investigation include:
i) Time constraints have always been a limiting factor in project work. This research is being conducted concurrently with academic work and a crash programme of studies at the university, interfering with the research and shortening the time frame.
ii) Financial constraint: As a result of our economy’s economic catastrophe, which reduced the flow of money in circulation, the researcher was unable to contact companies and other sources of information to gather information for this study project.
1.9 Operational Definition of Terms
i) Marketing: A helpful business activity that develops and meets both the requirements and desires of consumers while making a profit.
ii) Product: This is a tangible and intangible attribute that includes financial, social, and psychological utilities and benefits linked with a business.
iii) Strategy: A method of accomplishing organisational goals using the company’s employees and other resources.
iv) Development: S.A Enikansola (2003) defines development as the transformation of a product from one style, brand, or package to an enhanced and modern one that best meets the needs of the consumer.
v) Distribution channel: C.G Datong et al. (2003) defined distribution channel as the network of organisations and individuals involved in the transmission of commodities from one producer to consumers.
vi) Growth: According to Philips Kotler (2005), growth is a stage in the product life cycle marked by quick sales, acceptability, and significant profit enhancement.
vii) Competition: Osuola E.C. (1992) describes it as a firm’s effort to win the thoughts and interests of consumers by producing high-quality items that best satisfy their target market.
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