CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND INFORMATION OF THE STUDY
The cause of failure of many companies today is because they do not recognize that “tomorrow may not be like today”. They fail to replace their old and existing products with new ones in line with the taste and fashion of the consumers. Like human beings, product also passes through different stages in their life cycle. We have the introductory, growth, maturity and the declining stages. It is the declining stage that brings about the need for new product development, especially in a highly competitive market environment of today. Therefore, it is the function of new product department to ensure that the life of the company’s product will be prolonged in the market.
The positive effect of new product development cannot be over emphasized. This is because new product development helps the company to meet the need of the consumers at a profit. Innovation of new ideas also aids re-marketing strategies maybe either proactive (leading) or reactive (following). The success of new product development will depend on having an effective source of new ideas and innovations, which can be incorporated as unique selling purpose. These unique selling prepositions must be relevant to the characteristics of market segment on which the product is to be targeted and must effectively differentiate the product so as to give it purchase appeal.
A product is a very important mix of the 4ps of marketing. It has the most visible contacts with buyers. If they do not meet the desires and wants of the buyers and unless immediate adjustments are made, failure will develop, for example, failure of Kwara breweries Beer called “ONE” in the 1980’s. A product can be an idea, a service, a good or any combination of these three. This definition includes physical goods and supporting services such as installation, guarantees, product information, promises of repairs or maintenance e.t.c. A product can also be defined as anything that can be offered to the market for attention, acquisition, use or consumption that might satisfy a need. This definition implies that product includes physical objects, services, persons, places, organizations and ideas.
What is important is that there must be concept of want satisfaction. A product must offer value package or bundles of benefits. This is why to a marketing manager, a product will be seen as a set of tangible and intangible attributes including packaging, colour, price, manufacturer’s prestige, retailer’s prestige and other augmented services which the buyer may accept as offering satisfaction of wants and needs. This is the more reason why a wise firm should sell product benefits than the physical items.
1.2 STATEMENT OF THE RESEARCH PROBLEM
It has been reported that anywhere 33% to 98% of new products introduced fail to achieve commercial success (Olabisi 2003). However, the symptom of failure is disappointment over an expected result. We can consider the product failure to result when the product falls short of expectation or does not achieve sales objectives at an acceptable cost. A new product in a competitive environment can face problems when the following listed point takes place or occurs:
(i) When the needs of consumers are not well predicted or identified.
(ii) High competitive environment.
(iii) Product deficiencies as a result of poor quality, poor promotion, poor performance, few or little significant benefits e.t.c.
1.3 OBJECTIVES OF THE STUDY
This research study intends to achieve the underlisted objectives.
(i) To provide useful suggestions and guide on how to develop a product effectively and efficiently in accordance to the expectation of consumers’ wants and needs.
(ii) To identify and examine the effectiveness of an organization’s survival in a highly volatile, rapidly changing and extremely high competitive environment by taking advantage of opportunities and minimizing threats in its operation.
(iii) To identify the key determinants that can ensure success of a product in an environment.
1.4 SCOPE OF THE STUDY
The scope of the research work will essentially be focused on the assessment of new product development in a competitive environment with specific reference to Seven-up Bottling Company Plc. The study covered some areas such as product life cycle concept, the industry’s competitive and immediate environment and the reason for new product development e.t.c. The main limitations of the research work are time and finances.
1.5 SIGNIFICANCE OF THE STUDY
This research work is of great importance to manufacturing organizations as it provides an insight into how organizations develops product as well as giving better understanding about product development criteria and the need for product development. The study also enables an organization to identify its areas of weakness and try to improve on the lapses so as to achieve organizational strategy.
Consequently, the research work is useful to individual and other interested researcher to acquire a broad knowledge of intricacy of product development.
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