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THE EFFECTS OF NEW PRODUCT DEVELOPMENT AS A STRATEGY FOR CORPORATE GROWTH
New product can be said to be the life- blood of companies operating in a free market economy. Indeed developing a new product; a company should ensure that a good product development strategy is taken. The introduction of a new product into the market makes it possible for the company to remain in a competitive market environment.
In today’s market, no company can favorably win the entire market share without proper and effective development of its products. This is so because the needs of the society (consumers) changes over and over the time. Therefore, there is the need to change the system and processes of the production to meet the changes in demand; technology; taste and preference of the society.
Product introduction into the market is an important factor of corporate growth strategy and companies that are money – motivated cannot afford to dis- engaging this project of developing new product. New product development has become indispensable and inevitable in an organization; hence its impact cannot be over- emphasized. Today, in the Nigerian market complex situation with highly complex business operation, all companies are said to be adopting the new modern techniques of production. Philip kotler and Armstrong (1980) maintained that, a successful development of new product will lead to effective sales of the company’s product, hence; result in increase in the profit margin of the company.
Therefore, for a firm to survive in a competitive business environment, it should make known (advertise) to the public or its consumers; the existence of the newly introduced products because of the fact that most companies operating in the country are presently producing goods that have close substitutes.
It is against this back drop that the researcher’s interest has prompted him into choosing this topic (Effect of new product development as a strategy for corporate growth in Uni-Lever Nigeria limited) as a subject of concern for researching.
1.1 BACKGROUND OF THE STUDY
In a quest to achieve a sustained long term objective of dominating the market requires an effective appraisal of whether a company really desires to develop a new product so as to remain prominent in a competitive market environment.
The enhancement of corporate growth of an organization is achievable by means of introducing new product into the market. In other words, marketing-based on programme development will enhance an achievable strategy both financially and in a conceptualizing form. By the introduction of new product into the market, it requires the expenditure of money and it becomes an investment of the organization in the future.
As with any investment, there are risks associated with investment of new products because it can be harmful to the organization’s health and company’s stability. In considering the reason for new product development in an organization, reason for new product failure, various stages of a new product development, Product life cycle and its implications. Ways companies organize 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 the enhancement of growth of an enterprise, problem of marketing new product.
Product innovation remains the best way to design and innovate for new product development for corporate growth.
1.2 STATEMENT OF THE PROBLEM
Today, most business organizations have recognized that there is high need for improvement in its product formation; which can only be resolved through the development of new product, to meet up with the ever changing needs of consumers. Business organizations have not been successful and are unable to achieve their goals and objectives, as a result of the firm’s inability to efficiently and effectively engage in new product development.
Thus, the research questions the researcher intends to use in exploring the mystery behind the problem stated; considering the effect of new product development as a strategy for corporate growth, includes:
i) What roles does new product development play as a strategy for corporate growth?
ii) What are the cost implications and effects on a firm; incurring and embarking on new product development?
iii) What effect has differentiation on new product development?
iv) What are the effects of competitors’ product in the market; on the new product development?
v) A raw material is a major determinant for new product development; what sort, source, and mobilization for raw materials procurement in form (quality), quantity available to the manufacturer?
It is as a result of these problems, the researcher is concerned about and seeking solution to proffer effective solution and strategies a firm should choose to embark on new product development.
i) Could the high cost of raw materials be a set back to new product introduction?
ii) Could new product development be relevant to the company?
1.4 OBJECTIVES OF THE STUDY
This study hopes to achieve the following aims and objectives:
i) To identify the problems encountered in new product development and its introduction into the market.
ii) To examine the effect of new product development on firms corporate growth.
iii) To identify the promotional tools employed in marketing the new product.
iv) To recommend feasible solutions to the problems stated; in the statement of the problem.
This research work will also be a help to students and other researchers, who may intend to write on similar topic in due time.
1.5 STATEMENT OF HYPOTHESIS
In order not to be bias in the conduct of this research, the use of hypothesis has become paramount for effective guide in the process.Two forms of hypothesis have been identified to be tested in this study.
HYPOTHESIS 1 Ho: The high cost of raw materials is a set back to new product introduction. Hi: The cost of raw materials is not a set back to new product introduction.