ASSESSMENT OF THE IMPACT OF MARKETING RESEARCH ON NEW PRODUCT DEVELOPMENT
Abstract
Due to the economic condition of Nigerian society, firms undertaking new product development are faced with an environment which is characterised by long lead times from basic research to industrial application, a commercialisation phase with short lead times and an increasingly accelerated rate of obsolescence under the global competition of the new product development process. Marketing problems are numerous and inevitable as most products are not doing well to satisfy the consumers, as a result of poor marketing research to improve the quality of the product. The basic objective is to address the importance of marketing research on new product development and also examine the circumstances under which marketing research can likely be used in the stage of new product development and its impact on profitability. The questionnaire and interview methods were used to collect data for presentation and analysis. The simple percentage justified the entire findings and the statistical techniques of chi-square explicitly show that market research is pivotal tool for new product development and management decision. The entire findings of the study shows that in an attempt to evaluate the use of marketing assessment on new product, the entire area of the study needs a proficient market research development, more budgetary allocation is needed to propel marketing research to boost new product. And the finding of this study is that company organizational structures of market reveal lack of marketing research department of its own and budgetary allocation to marketing research is inadequate. The recommendation clearly stated that companies should take note of the type of research approach to use at the stage which is concerned with comparing the concepts with or against existing market of the competitor. Companies believe that NPD is their life blood; it can be the better way to survive firmly and be more competitive. In addition, the strategy of how to manage NPD process effectively and efficiently is becoming a powerful way of achieving a competitive edge.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Today‟s world is characterized by major changes in market and economic conditions, coupled with rapid advances in technologies. Companies invest in marketing research on New Product Development (NPD) to ensure future success in the market. However, most marketing research on new products development are often more likely to fail than to succeed, addressing changing tastes with new products is essential in maintaining customer loyalty, so that good NPD becomes a key factor in competitiveness. New products development can succeed if company change the way they do marketing research. (Hollingsworth 1996, and Jeffery 1998) recommended that NPD strategies and process should change to follow changes in market and technology.
It is widely recognized that effective new product development (NPD) processes are causally important in generating long-term firm success (Cooper, 1993; Ulrich and Eppinger, 1995; Wheelwright and Clark, 1995). They can lead to a core competence that either differentiates a firm from its competitors (Prahalad and Hamel, 1990) or provides a threshold competency that is necessary just to survive in fast-changing and innovative industry sectors. Given the importance and value of NPD to firm performance, researchers have developed descriptive frameworks based on linear, recursive, and chaotic system perspectives, which provide different insights and descriptive theories about NPD process structure and behavior. These are then often the basis for normative research, which seeks to predict and prescribe causality in NPD processes (Griffin, 1997).
Problems in conducting effective marketing research on NPD are magnified in many major industrial countries, where spending on research and development, and management of NPD may be even less favorable. However, while some research on NPD in the developing world has begun to appear, NPD success factors have received some research attention, usually higher technology industries provide the context. Developing countries are quite competitive in some industries, which do not require advanced technology, but they still need to do marketing research on NPD to keep up with market trends.
Marketing research on NPD may not necessarily be applicable in the lower-tech industries where these industries hold competitive advantage we examine the impact of marketing research in NPD in industries. Management is often confronted with the dilemma whether or not to invest in a particular stage of the new product development (NPD) program, given market and technology uncertainties surrounding such a decision in current markets, most of all technology-driven or high-tech markets (Moriarty and Kosnik, 1989). The changing economic conditions and technologies combined with increased domestic and global competition, changing customer needs, rapid product obsolescence and the emergence of new markets, require a fast resource allocation process in NPD; see (Bower and Hout 1988, Griffin 1993, Gupta and Wilemon 1990 and Rosenau 1988). At the same time, market and technology uncertainty demand for flexibility in the program; see (Sanchez 1995, Wind and Mahajan).
To remain competitive we must focus more on value added products in the future, which will require increased investment in marketing research.
Modern retailing and changing consumer preferences foster demand for products with better quality, longer shelf life, and better packaging. Foreign brands which were previously imported for a high income minority are now manufactured locally and affordable to the average.
NPD is probably the most important process for many companies as it improves and develops the company‟s innovativeness. In essence, NPD is a source of attracting customers once the developed products have a high quality.
In business new product development (NPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new product within the overall strategic process of product life cycle management used to maintain or grow their market share.
The process of NPD is crucial within an organization, but it is a complicated and time-consuming process in which several different activities are involved. NPD is commonly defined by a number of researchers as the transformation of a market opportunity into a product as a result of the integrative coupling of market assumptions with technological possibilities (Krishnan and Ulrich, 2001., Griffm and Hauser, 1992, 1996). The Product Development and Management Association (PDMA) in 2006 defined NPD as an overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product. This means that NPD is a process that begins with opportunity identification and ends with a set of information that adds value to customers and brings returns to an enterprise.
1.2 Statement of the Problem
Marketing research is a crucial aspect in new product development it‟s the very first step to which determines the success of any product. It acts as the foundation and cornerstone of any product.
Unfortunately the impact of marketing research is the aspect that receives the least attention; business need not only rely on promotional strategies, but have to fine tune their marketing research programme with view of improving the quality of their product.
To obtain the desired and appropriate results from marketing research, an organization must be guided by certain plans to satisfy all or at least most of the company objectives for it to be worthwhile.
Thus marketing research if well defined and formulated has an impact on new product development of an organization and extent to which the firms put marketing research into practice or effect in solving their marketing problems is what this study intends to examine.
Marketing research is now widely accepted as one of the most important asset possessed by organization.
1.3 Objectives of the Study
The study is specifically aimed at;
Highlighting and emphasizing the importance of marketing research on new product development.
To examine the effect / extent of marketing research contribution to new product development.
Examine circumstances under which marketing research is more likely to be used in the stage of new product development.
Identify the factors that influence marketing research on new product development
Also recommend as the need arises in order to create customers satisfaction.
1.4 Significance of the Study
The important area focused by the study is the impact of marketing research on new product development; it is intended to achieve two aims; to contribute to both theory and practice of marketing in Nigeria.
One of the greatest and surest ways of achieving customer satisfaction is the planning and implementation of proper marketing research programme in any business organization.
Moreover, the new marketing concept emphasizes on customer satisfaction and integration in the organization towards achieving the single purpose. Therefore, to make these possible, marketers must research properly so as to know the changing need of their customers and the activities of their competitors.
Also the need to re-examined other tools which could be used to reduce the high rate of product failure instead of relying heavily on promotional activities with other tools in marketing to establish whether or not new product will be accepted in the market, it will also expose other areas that have inherent characteristics that make marketing research inevitable instrument for product development.
To contribute to the theory, there are several factors that affect new product development like promotion, prices, distribution and marketing research but most organization are not interested in research as it is said to be too expensive not only looks outwards to existing and potential markets, the customers (or market place), the competitive environment but also inwards at the ways in which the organization respond to the demands of the market place.
Survival is the key objective of most organization; today‟s world is characterized by major changes in market and economic conditions, coupled with rapid advances in technologies.
1.5 Scope of the Study
This study is analytical in nature to New Product Development found in production companies; the reason behind this delimitation is because the study intends to assess the impact of marketing research on New Product Development.
The scope of this study is limited in four respects: the unit of measure for this research, the classification of the firm, the type of technology of the firm and identification of firms for the study. First, consider the unit of measure for this research. From the literature it can be seen that the unit of measure common to new product development research is that of the „product‟. However, a different approach is taken for the purpose of this research in that the unit of measure is the „firms‟. The rationale for this approach is that unlike larger and established firms where an individual NPD project is usually one amongst a number of projects, in the case of this, it is more common that there is no single NPD project upon which the firms is based. Therefore, NPD success or failure can be measured in terms of firms‟ success or failure.
1.6 Limitations of the Study
Some constraints were encountered, during this project. These limitations do not suggest that it is a unfulfilled activity, it only suggest that the activity was conducted with proper care and caution which will make the activity meaningful and result oriented;
Miscellaneous limitation problem developed due to changing environment.
Uncertainty of conclusions consumer is the focal point, buying motives are difficult to judge precisely and accurately which bring some sort of uncertainty.
Complexity of the subject it fails to give complete and correct guidance to the management on marketing issues.
Also cost expensive and time consuming activity it take longer period for completion and the finding when available may prove to be outdated due to fast changing market environment and cannot study all new marketing product.
1.7 Definition of Terms
The terms used in this study may carry slightly different meaning, we therefore consider it necessary to define item to suit the context to which they are used in this study.
MARKETING RESEARCH: Marketing research is the function that links the consumer, customer, and public to the marketer through information–information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.
Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications. (Approved October 2004)
It‟s very necessary in an industry as it provides the entrepreneurs the necessary information before any serious decisions are made.
PRODUCT: is a very important element of the marketing mix. Product is a bundle of utilities consisting of various product features and accompanying services which are made up of set of tangible and intangible attributes.
NEW PRODUCT: Is item really innovation, truly unique in which there is a real need but for which there is no existing substitute is generally considered satisfaction. Replacement for existing product involving a significant differentiation from articles. Initiative product which are new to your company but not new to the market.
WANT: are desires for specific satisfiers of need which are person culture and the way he is brought up.
PRODUCT PLANNING: is the ongoing process of identifying and articulating market requirements that define a product‟s feature set. Product planning serves as the basis for decisions about price, distribution and promotion.
Product planning includes developing a product concept and testing it.
PROMOTION: is any technique that persuasively communicates favorable information about a seller‟s product to potential buyers either directly others who can influence purchase decisions.
MARKETING: is the performance of business activities which direct the flow of goods from the producer to the consumer or user in order to satisfy customers and accomplish the company‟s objective.
PRICE: is the amount of money which is needed to acquire and exchange some combined assortment of product and its accompanied services.
DISTRIBUTION: is concerned with the activities involved in transferring the goods from the producer to the final buyers and users. These activities could be classified as physical, legal, promotional, and financial, all performed in the course of transferring ownership.
PACKAGING: is the general group of activities in product planning which involves designing and producing container paper for a product?
