ASSESSMENT OF NEW PRODUCT DEVELOPMENT AND MANAGEMENT IN NIGERIA: A STUDY OF UNLIEVER NIGERIA PLC
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ASSESSMENT OF NEW PRODUCT DEVELOPMENT AND MANAGEMENT IN NIGERIA: A STUDY OF UNLIEVER NIGERIA PLC
Chapter one
INTRODUCTION
1.1 Background of the Study
When confronted with the challenges of quickly changing market conditions, the new product development process enables businesses to manage with increasingly intense competition.
Companies strive to obtain durable competitive advantages through continuous innovation. These efforts are crucial for businesses since getting a new product to market is costly and difficult due to the acquisition of new knowledge and technologies, as well as the implementation of new processes.
New Product Development is a commercial and engineering term that represents the entire process of introducing a new product to the market. In other words, product development is the process of designing, developing, and promoting a concept or product.
The product could be new to the market, new to your company, or an upgraded version of an existing product. When significant improvements are made to a product, it is sometimes labelled “new and improved.”
A product, according to Kotler(2006:633), is anything that may be sold in a market to meet a need or need. However, a product is far more than a physical object.
It is the whole set of rewards or satisfactions that purchasers believe they will receive if they buy the goods. It is the combination of all physical, psychological, symbolic, and service characteristics.
Stanton (2001:121) defines a product as a set of tangible and intangible features that the buyer accepts as providing wants-satisfaction. For example, the Nigerian soft drink business includes goods like Malta Guinness from Guinness Nigeria Plc,
Maltina drink from Nigerian Breweries Plc, and Mirinda from 7 UP Nig. Plc; in the detergent sector, there are Elephant Blue Detergent from PZ Industries Plc, and Omo, Key Soap, Loyco,
Blue Band, Lipton Yellow Label Tea, Knorr (acquired from Cabury in December 2005), Pears Baby Care, Lux, Vaseline, Close Up, and other brands from Unilever Nigeria Plc. In the banking industry, there are several options, including UBA Plc’s Master Card, Child Trust, and Sterling Bank Plc’s Maxi-yield.
A product is analogous to goods in accounting. Goods are tangible items that are available in the marketplace. This distinguishes them from a service, which is not a physical product. The phrase goods is generally employed by individuals who want to abstract from the specifics of a particular product.
As such, it is applicable to accounting and economic models. The term product is generally employed by individuals who investigate the specifics and breadth of a certain market offering. As such, it is beneficial to marketers, managers, and quality control specialists.
A “man” can also represent a “experience,” which, like a service, is intangible. However, an experience is unique to the receiving individual based on their background.
For example, amusement parks provide rides (product), accept credit cards (service), and audience involvement at the dolphin show (experience). My value for the dolphin show differs from yours, as does the level to which I value it in exchange for money.
According to Joe (2008:53), “items such as legal and medical services, haircuts, vehicle repairs, and classroom teaching also constitute product, even if they are not physical in nature.” Kotler (2003:342) defines a product as “anything that can be offered to the market for attention,
acquisition, use, or consumption that might satisfy a want or need” in light of the product’s dual nature, as well as the fact that purchasing implies selling.
He went on to say that a product “includes physical objects, services, persons, places, organisation, and ideas,” saying that people and organisations can draw buyers’ attention and that a person’s records or ideas, for example, might be purchased, whereas an organisation can be promoted.
1.2 HISTORICAL BACKGROUND OF UNILEVER NIGERIA PLC
UniLever Nigeria Plc is a multinational corporation founded in 1924 and listed on the Nigerian Stock Exchange as a Public Limited Liability Company in 1973. Its objective is “to be the biggest and most profitable consumer product company in Nigeria” and its mission slogan is “it add vitality to life.”
The Company is 50.84% owned and controlled by Unilever Overseas as the Parent/Technical Partner and 49.96% by Nigerians. It has a total of 90,648 stockholders and approximately three billion shares.
Furthermore, its shareholders’ fund is worth N5.57 billion, which matches the value of its net assets. The corporation achieved a profit after tax of N1,616,457,000.00 in the current fiscal year, 2009.
It has a registered/head office in NO.1, Billingsway, Oregun, Ikeja, Lagos, and regional offices in Abuja, Ibadan, and Jos, as well as factory sites/industrial parks at Agbara, Ogun State, Industrial Road Aba, and Billingsway, Oregun, Lagos. It also has a nationwide marketing outlet network of over 101 wholesalers.
Previously, the company was known and named by several names, including Lever Brothers (W.A.) Ltd. (until 1924) and West African Soap Company. Ltd. (until 1955); Lever Brothers (Nig) Ltd. (till 1973); and Lever Brothers of Nigeria Plc. (till 2001).
The company’s business sector activities include manufacturing and marketing consumer products such as home care and personal care products and foods.
In other words, UniLever Nigeria Plc is involved in the manufacturing and marketing of the following lines of products: non-soapy detergents/laundry soaps (Omo, Rin, Vim, Key); food/brinks (Lipton Yellow Label Tea, Home Cup Tea, Royco,
Blue Band, Oroyo); bakery products (Breadeen, Marva, Hossum, Masterline Special The campaign’s message was that Nigerian parents should not deny their children the opportunity to play because of ‘dirt’, because Omo is more than capable of dealing with the dirt.
Mr. Felix A. Ohiwerei chairs the company’s nine-member board of directors, which includes seven Nigerians and two expats (a British and an Ivorian).
The selection of Unilever Nigeria Plc as a case study allows for a broad examination of this research in order to recommend solutions, if any, or to establish the need to assess the development and management of new product development as an antidote,
so to speak, for organisational survival in a competitive market and structured economy such as Nigeria, regardless of the market leadership status that such organisation has already attained.
Over the years, the company has consistently grown and provided a solid return on investment to its shareholders, as indicated by its profitability, capital appreciation, dividend yield, earnings per share, and price earning ratio.
The company’s year-end financial summary from 2005 to 2009 revealed that it was successful, with good EPS and dividend returns to its investors, with the exception of 2009.
Currently, its net asset base is N5.5 billion. As one of the industry leaders in the conglomerate sector, its competitors are devising aggressive marketing methods to grab a significant portion of the market share.
As a result, UniLever Nigeria Plc must invest in a variety of new product development and management initiatives across its numerous brands in order to maintain strong brand premiums.
New product development as a veritable strategy for gaining the market, especially in a competitive business environment, involves quality improvement,
increasing the functional performance of a product such as durability, reliability, and taste, feature improvement, the addition of new features that expands the product versatility, safety, and convenience,
and a style improvement strategy that aims to increase the aesthetic appeal of the product in contrast to its function. UniLever Nigeria Plc has demonstrated its desire to continue to surpass itself and the industry by being a source of new product ideas and client services.
1.3 Statement of the Problem
Since the start of the industrial revolution, the corporate climate has become more sensitive and competitive. To survive and fulfil their aims and objectives, businesses must methodically adapt to changing consumer needs and offer products that meet their desires.
Successful new product development is critical to the survival of marketing organisations. It is, however, a difficult and risky enterprise, frequently due to the following factors.
It is usual in Nigeria to see a lot of organisational resources invested on product ideas that have not been thoroughly researched, particularly market-based research. As a result, the product either fails completely or achieves minor success.
It’s no surprise that there are so many of these things rotting away in the marketplace, asking for demand. When a product idea has a significant number of benefits to offer the market, the market will eagerly await its arrival.
Aside from conducting thorough research to generate a quality product, there is a need for a wide range of product management operations from conception to maturity,
or until disposal. Such management duties include developing appropriate pricing strategies, distributing promotional materials, and providing ongoing assistance to clients who have purchased the new product.
New product development demands massive funding, beginning with concept generation and continuing until the product is removed from the market.
It is expected that once the source of finance for the new product development project has been decided, management would generate an estimated cash flow statement based on estimated sales revenue and total cost.
They (management) should also establish a contingency budget to cover any unexpected expenses so that anomalies and discrepancies can be identified.
New product development places a higher burden on manufacturers/producers to strive for client satisfaction and loyalty in order to achieve their aims and objectives; this necessitates effective leadership.
And, because the project (new product development) needs significant capital, management should implement both short and long-term marketing programmes to ensure that a new product survives its cycle profitably.
For the purposes of this study, new products shall be defined as original products, improved products, changed products, and new brands developed by the firm through its own research and development efforts.
The development of a new product should be a continual process with strong managerial support to ensure the survival of commercial organisations.
1.4 Objectives of the Study
1. Determine the relationship between marketing research and new product development.
2. To understand how new product development affects consumer happiness and retention.
3. To assess the effect of technology and skilled labour on innovative product development.
4. To uncover significant marketing and non-marketing aspects that influence the success or failure of a new product in the marketplace.
5. Identify the influence of new product development on an organization’s profitability.
1.5 RESEARCH QUESTIONS.
1. Does marketing research have an impact on new product development?
2. In what ways does new product development affect customer satisfaction and retention?
3. How do technological advancements, skilled labour, management support, and appropriate capital affect product development?
4. What are the important aspects that influence the success or failure of a new product?
5. How much impact can new product creation and management have on an organization’s growth, survival, and profitability?
1.6 HYPOTHESES FOR THE STUDY
1. There is no correlation between marketing research and new product creation.
2. Customer satisfaction and retention are unaffected by the development of new products.
3. Technology and personnel have no impact on product development.
4. The crucial criteria do not decide whether new product development succeeds or fails.
5. New product development has no association with an organization’s profitability.
1.7 Significance of the Study
Certain characteristics or situations are required for rapid economic and industrial development in any civilization. One of these factors is research! If Nigerian companies could invest in research for new product development in Nigeria,
high-quality products would be developed that, in addition to meeting consumer demands, would help to employ our local resources, such as machinery, raw materials, and labour, thereby promoting economic and industrial growth and development.
This research study will attempt to uncover the reasons why new products fail or succeed in the market, allowing marketers to better understand why consumers accept or reject new products or prefer old/existing ones.
The study would also try to determine what affects consumers have and how they make purchasing decisions for new products. Furthermore, it will assist organisations planning to bring new products into a developing economy such as Nigeria in understanding how to analyse consumer and competitor aspects.
This research study will be useful to academic institutions, libraries, and other organisations because it wants to investigate the difficulties of increasing societal and governmental restraints linked with new product development and management in order to provide answers.
More importantly, this research will have a significant impact on Nigeria’s economy and society as a whole. Any economic climate with a high level of healthy business rivalry tends to produce high-quality products, the continuity, availability, and sustenance of which lead to economic growth.
1.8 Scope of the Study
The scope of this research is limited to Lagos State, with the primary focus on Unilever Nigeria Plc.
1.9 Limitations of the Study.
1. The primary barrier was most commercial organisations’ reluctance to release data or information that could fall into the hands of their competitors.
However, the legitimacy of the research work was not jeopardised by these limits because judicial use was made of the accessible materials, which I believe will be useful and provide additional insight and information to readers of this work.
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