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THE IMPACT OF NEW PRODUCT DEVELOMENT ON THE GROWTH

OF A FIRM

(A CASE STUDY OF NIGERIA BREWERIES PLC ABA, ABIA STATE)

BY

AMADI GODWIN.C.

FPN/S01 /2007/2008/HMKT 545

A RESSEARCH PROJECT PRESENTED TO THE DEPARTIMENT OF

MARKETING SCHOOL OF BUSINESS AND STUDIES,

FEDERAL POLYTECHNIC NASSARAWA,

P. M. B. 001, NASARAWA, NASSARAWA STAE.

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE

AWARD OF HIGHER NATIONAL DIPLOMA (HND) IN MARKETING

AUGUST, 2009

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APPROVAL PAGE

This project report has been read and approved as satisfying the

requirement for the award of Higher National Diploma (HND) in the

department of marketing, federal polytechnic Nasarawa, Nasarawa

State.

By:

MALLAM MUHAMMAD YERO DATE


PROJECT SUPERVISOR

MR J.T SOLOMON DATE


HEAD OF DEPARTMENT

M.O. ODE
EXTERNAL EXAMINER DATE

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CERTIFICATION PAGE

This is to certify that this research was the original work done by Amadi

Godwin .C.

In award of higher National Diploma (H.N.D) in making.

MR J.T. SOLOMON DATE


HEAD OF DEPARTMENT

MALLAM MUHAMMED YERO DATE


PROJECT SUPERVISOR

MR J.T. SOLOMON DATE


PROJECT COORDINATOR

MR M.O. ODE DATE


EXTERNAL EXAMINER

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DEDICATION

This research work is dedicated to my Father which is in heaven. The

soon coming king.

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ACKNOWLEDGEMENT

First of all, I thank the almighty God for all his mercies, kindness,
protections, and salvation unto my soul.
I will be eternally grateful to my parents Mr. & Mrs. G.U. Ekwonye who
gave me sound education to HND level. Thank you so much for your
love.
I am indebted to my dear sister Oluchi A. Amadi who devoted her
time, useful advice, and money to the success of my H.N.D program.
Many thanks to my beloved brothers and sisters in Amadi’s family,
Mr. Solomon, Mr. Wisdom (Alias Wise), Mr. Prince – Chima (Alias Notin-
de-happen), Anty Stella, Aunty Peace, Anty Blessing & Precious. You are
indeed Papa’s Children. May God bless you all for your wonderful
encouragement and support.
Phill, Madam Mimi, My queen & princess, pastor Bassy, evang.
Rufus, Mr. eke, all St Peter youths/ members, all scripture union
members (SU), all EFAC member and all NIFES members: It is difficult
to put into words what you are to me, I tried to but could not. May Jesus
richly bless you people Amen.
My appreciation also goes to my Project supervisor, Mal.
Muhammued Yero and other departmental lecturers, Mal. Suleiman
Yero, Mal. Ibrahim Abubakar, Mr. Rowland Ezenwugo, Mr. J.T. Solomon,
Mr. Kuffery Iyang, Mrs. Monica Rowland, Mr. Iliya Bawa and non
departmental staff as well, also the Federal Polytechnic Library Staff.

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ABSTRACT

The success of an organization lies on their ability to develop new


products, innovate, and effectively establish the new product
development. The objective of this study basically focuses on the impact
of a new product development on the growth of a firm (A case study of
Nigeria Breweries Plc Aba, Abia State). In the subsequent chapters, we
will look into the meaning of new product development, factors militating
against it, and its influences / impacts on the growth of a firm.

LIST OF TABLE

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TABLE ONE: Qualification of the company staff
TABLE TWO: The experience of the workers.
TABLE THREE: The Company do not carry out research always
TABLE FOUR: The interval of the research
TABLE FIVE: The amount budgeted for research.
TABLE SIX: Inadequate research is a problem to the
company
TABLE SEVEN: Government inspects the company’s products.
TABLE EIGHT: Government policies affect the company’s new
product development.
TABLE NINE: The Company acquire loan from banks and other
external means
TABLE TEN: The rate of interest on loan
TABLE ELEVEN: Acquiring loan from other means at 30% is a
problem to the Nigeria Breweries plc
TABLE TWELVE: Does inadequate training hinder the growth of
your company?
TABLE THIRTEEN: Does training improve new product development.
TABLE FOURTEEN: Does new development increase the sales
volume of the volume of the firm?
TABLE FIFTEEN: Does new product development increase its
market shares

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TABLE OF CONTENTS

Title Page……………………………………………………………….i

Approval Page………………………………………………………....ii

Certification…………………………………………………………….iii

Dedication……………………………………………………………...iv

Acknowledgment……………………………………………………….v

Abstract…………………………………………………………………vi

List of Tables…………………………………………………………...vii

Table of Content……………………………………………………….viii

CHAPTER ONE: INTRODUCTION/BACKGROUND OF STUDY

1.0 Introduction………………………………………………………1

1.1 Background of Study……………………………………………1

1.2 Statement of the Problem………………………………………5

1.3 Purpose and Objective of the Study…………………………..6

1.4 Research Questions……………………………………………7

1.5 Significance of the Study………………………………………7

1.6 Scope and Limitation of the Study…………………………….8

1.7 Research Hypothesis…………………………………………..9

1.8 Definition of Terms……………………………………………..10

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CHAPTER TWO: LITERATURE REVIEW

2.0 Literature review…………………………………………………13

2.1 New product development……………………………………...13

2.2 Type of new product development………………………….....14

2.3 Product planning and product development…………………..15

2.4 Why new products are developed……………………………...17

2.5 Why new products fail or succeed……………………………...17

2.6 Organizational arrangement of handling

new product development………………………………………..19

2.7 From planning to commercialization……………………..……...22

2.8 The product development process………………………………26

2.9 The concept of product life cycle………………………………...28

2.10 The concept of innovation………………………………………...31

2.11 What brings about diffusion and adoption influences………….34

Reference…………………………………………………………..39

CHAPTER THREE: RESEARCH METHODOLOGY

3.0 Research Methodology…………………………………………..40

3.1 Sampling Unit / Frame……………………………………………40

3.2 Sampling Method…………………………………………………41

3.3 Determination of Sample Size…………………………………..41

3.4 Method of Date Collection………………………………………42

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3.5 Method of Questionnaire Development and Collection……...42

CHAPER FOUR: DATA PRESENTATION & ANALYSIS

4.0 Data Presentation and Analysis………………………………..43

4.1 Respondents Characteristics and Classifications…………….43

4.2 Data Analysis and Interpretation………………………………..43

4.3 Test of Hypothesis………………………………………………..52

4.4 Discussions of Findings………………………………………….60

CHAPTER FIVE: SUMMARY, CONCLUSION & RECOMMENDATION

5.1 Summary…………………………………………………………..62

5.2 Conclusion…………………………………………………………63

5.3 Recommendation…………………………………………………63

Reference………………………………………………………….65

Appendix…………………………………………………………...66

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CHAPTER ONE

1.0 INTRODUCTION / BACKGROUND OF THE STUDY

As human beings have always sought for growth and development

all through their lives span also an organizational product. A good,

service, idea that is perceived by same potential customers as new

are a new product. It may be through innovation, imitation or

renovation. In this piece of work, the researcher will concentrate on

the impact of new product development on the growth of a firm.

The researcher will also look at how new product development

determines both the levels of economic growth and standard of

living of citizens.

1.1 BACKGROUND OF THE STUDY

New product development is one of the avenues of enlarging the

size of the product port folio of any organization, increasing its

sales volume and enlarging its financial strength. Many

organizations seems not to have recorded much success as a

result of depressed economic situation. It is imperative to

recognize the fact that necessity give birth to invention or

innovation, and for an organization to avoid being forced out of

the market, it has to innovate.

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New product development is important in a competitive market

like that of Nigeria. It determines both the levels of economic

growth and standard of living of the citizens. Most products in the

markets today have undergone changes over times.

According to Mr. Roland’s Lecture note, new product has been

seen as the life blood of any organization. This is because seizing

new opportunities as they emerge is a way to increasing profits.

This means that a firm with a successful new products gives it the

chance of creaming off large profit before effective competition

develops. Every company must develop new product because

new products shapes the company’s future. Replacement product

must be created to maintain or build sales. Customers want new

products and firms will do their best to supply them. Companies

that fail to develop new products are putting themselves at great

risk.

Developing and managing products is critical to organization’s

survival and growth. Although several organizational approaches

to product management are possibly the share common activity

functions, and decisions necessary to guide a product through its

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life cycle. Product managers coordinate efforts and become the

strategic centre for the product in all markets.

Marketing managers focuses on products for specific market. A

venture team is sometimes used to develop new products.

Members of the venture team come from different functional area

within an organization and have authority to execute plans.

Product planning requires the coordination of such functional

areas such research and development, production and

engineering, research and finance, accounting and marketing.

Each of these areas of departments has functional authority over

some aspects of the product.

To maximize the effectiveness of a product mix, an organization

usually has to alter its mix through such methods as new product

or the development of existing product deletion of a product, or

the development of a new product. Product modification refers to

changing one or more of a products characteristics. This approach

to altering a product mix can be effective when the product is

modifiable, when customers can perceive the change, and when

the modification is desired by consumer. Products can be

changed through the quality, functional or style modifications.

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New product development involves generating idea, screening to

determine which idea to develop, expounding an idea through

business analysis, test marketing and commercialization. The

decision to enter the commercialization phase means that the

product has gotten to its full scale of production and that a

complete marketing strategy has been developed. The adoption

process by which the buyers go through in accepting a product

include; awareness, interest, evaluation, trial and adoption.

The process of a company in new product requires the

establishment of effective organization for managing the new

product development process. The development of new product

helps in improving the satisfaction of the consumers.

Therefore, this research is investigated on the impact of new

product development on the growth of firm using Nigeria

Breweries Plc Aba, Abia State as a case study. This industry

produces both alcoholic and non-alcoholic drinks; the alcoholic

drinks are: Star Larger Beer produced in1949, Gulder Larger

produced in 1970, Heineken re-launched in 1998, Legend Extra

Stout produced in 1992, Gulder Max Larger Beer produced in

2006. Their non-alcoholic drinks are: Maltina Bottle drink

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produced in 1976, Amstel malta produced in 1994, Maltina sip – it

produced in 2005, Fayrouz produce in 2006.

There has been also a acute problems militating against the

standard of new produce development in the Nigeria Breweries

Plc Aba and other related firms.

Consequently, the standard of new product development is limited

to the following problems; lack of research or the on made is

inadequate, lack of capital, government policies, lack of training

among personnel’s.

Therefore, proper production management should be maintained

to improve or encourage new product development on the growth

of Nigeria Breweries Plc.

1.2 STATEMENT OF PROBLEM

New product development has contributed much to the growth and

survival of Nigeria Breweries Plc and has also suffered many

problems. Therefore, this research work is designed to critically

evaluate the problems of a new product development which are as

follows;

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1. Lack of research or the inability of the management to find out

what the consumers need.

2. failure to find out the government rules and regulations

3. Lack of training programme; Failure to train marketing personnel

for new product and new markets.

4. Lack of Capital: The company cannot raise fund needed for new

product development when there is new ideas.

1.3 PURPOSE AND OBJECTIVE OF THE STUDY

The purpose of the research is to study the impact of new product

development on the growth of Nigeria Breweries Plc Aba. The

research study was designed to enable the researcher and the

firm;

1. To determine the importance of research findings on the growth of

Nigeria Breweries Plc.

2. To determine the relationship between government policies and

new product development.

3. To examine how inadequate training programmed affects new

product development.

4. Examine the criteria in granting loans For external finding of new

product development.

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5. To recommend ways Nigeria Breweries Plc could improve the new

product development.

1.4 RESEARCH QUESTION

Based on the statement of the problem, the objective and

statement of the project, the following research questions were

advanced;

1. Does inadequate research affect new product development?

2. What is the relationship between the government policies and new

product development?

3. What is the relationship between inadequate training programme

and new product development?.

4. What is the relationship between finance and the expansion of new

product development ?

1.5 SIGNIFICANCE OF THE STUDY

This research is counted on the impact of new product

development on the growth of a firm Nigeria Breweries Plc Aba.

This research work will go a long way in helping the following;

1. The Researcher: - It will enable the researcher to ascertain the

problems involved in the cost of developing a new product.

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2. The Firm: - This research work will help the Nigeria Breweries Plc

to identify the problems involved in the development of a new

product and also suggests the everlasting solution to them. It will

also help the firm to increase its sales volume, profit and market

share.

3. The Society: - This project work has gone deep to assist the

economy by increasing Job opportunities for the young graduates.

It will also help to develop marketing in the economy environment

both domestic and international.

1.6 SCOPE AND LIMITATION OF THE STUDY

In the cause of this study, the researcher uses senior, middle, and

Junior staff of Nigeria Breweries’ products, from four (4) selected

L.G.A. in Abia State, which include Aba North, Aba south,

Osisioma Ngwa, Isialangwa South.

However, in trying to make this research work a successful one by

enquiring relative information, the researcher encountered the

following constraints;

1. Time: - The time allowed for this research work is not enough for

intensive study of the project.

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2. Finance: - Shortage of fund also limited the researcher to only

four (4) local government areas as well as restricting him into

printing and administering questions to the selected few among

the senior, middle and junior classes of the company’s staff.

1.7 RESEARCH HYPOTHESIS

Hypothesis is a tentative statement about the universe which may

or may not be true. For the purpose of this research work, the

following hypothesis is considered;

HYPOTHESIS ONE:

HO: Inadequate research does not affect new product

development.

HI: Inadequate research affects new product development.

HYPOTHESIS TWO:

HO: There is no relationship between government policies and

product development

HI: There is no relationship between government policies and new

product development.

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HYPOTHESIS THREE:

HO: There is no relationship between new product development

and inadequate training.

HI: There is relationship between new product development and

inadequate training.

HYPOTHESIS FOUR:

HO: Finance procurement is not a problem to new product

development.

HI: Finance procurement is a problem to new product

development.

1.8 DEFINITION OF TERMS

To avoid misinterpretation of any aspect of this work, it becomes

necessary to the researcher to define some of the essential terms

used in this work.

These terms therefore should be understood as follows:

Product: This is one of the elements of marketing mix that

represents the basic offering being made to consumers. It is also

everything (both favourable and unfavourable) that one receives

as an exchange; it is a complexity of tangible and intangible

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attributed, including functional, social, and psychological utilities or

benefits. A product may be a good, services, or an idea.

Marketing Mix: This consists of four (4) major variables in

marketing, which serves as pillars that makes marketing to stand

well; they are product, place, price, and promotion. It is also called

the 4P’s and marketing elements

Marketing Strategy: This is the process of determining a target

market and choosing the marketing mix variables needed to

maximize satisfaction of those consumers. It is also the set of

objectives which an organization allocates to its functions in order

to support the overall corporate strategy, together with the broad

methods chosen to achieve these objectives.

Innovation: This is the process of producing something new

inform of product or service that someone or any company has

never produced it before. It is also refers to any good, service or

idea that is preserved by someone as new.

Research: This is an organized way of finding valid or useful

information about a particular domain or phenomenon in an

environment with a set of objectives. It can also be described as a

thorough investigation or in-depth search for the causes of any

problem within intention of preferring solutions.

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Commercialization: This is one of the product development

stages in which the product is first submitted to the market and

thus commences its life styles.

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CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 WHAT IS A NEW PRODUCT

Perhaps the key criteria as to whether a given product is new are

how the intended market perceives it. If they buyers perceives that

a given item is significantly different (from competitive goods being

replaced in some characteristic appearance / performance) then

that product is a new product.

New product development according to John (1981 P. 233) “Is the

creation and adjustment of goods and services to satisfy customer

demands”. In creating and adjusting products to satisfy customer

demands, management should realize that it is primary in the

business of providing satisfaction. People spend their money to

attain satisfaction and not the specific technical characteristics of

the item being purchased. It is for this reason that marketing

research into the needs and desires of intended market is so

highly important to product development.

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2.2 TYPES OF PRODUCT DEVELOPMENT

Product development is not limited to the creation of new products.

In fact, there are three basic types of product development

activities;

1. Development of new products

2. Improvement of existing products

3. Determination of new uses for existing products.

According to Kotler (1988 P. 428) if the product concept passes the

business test, it moves to R & D and or engineering to be

developed into a physical product. Up till now, it has existing only

as a word description, a drawing or a very crude mock-up. This

step calls for a large jump in investment which dwarfs the idea

evaluation costs incurred in the earlier stages. This stage will

answer whether the product idea can be translated into a

technically and commercially feasible product. If not the company’s

accumulated investment will be lost except for any useful

information gained in the process.

The R&D department will develop one or more physical version of

the product concept. It hopes to find a prototype that satisfies the

following criteria.

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1. The consumers see it as an embodying the key attributes

described in the product concept statement.

2. The prototype performs safely under normal use and conditions.

3. The prototype can be produced for the budgeted manufacturing

costs.

Developing a successful prototype can take days, weeks, months,

or even years before it could be effective. So also in designing a

new commercial average for example, will take several years of

development word. Even developing a new test formula can take

time also.

2.3 PRODUCT PLANNING AND PRODUCT DEVELOPMENT

According to Stanton (1978 P. 167) product planning embraces all

activities that enable a company to determine what product it will

market. Adeyemi M.A. (2004 P. 316) see product planning as the

process that involves screening new product ideas, testing their

feasibility in the market, and planning a programme to market

them.

Product development, a more limited encompasses the technical

activities of products research engineering and design more

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specially the combined slope of product planning and product

development includes marketing decisions in the following areas

1. Which product should the firm make and which should it buy?

2. Should the company market more or fewer product?

3. What brand, package and label should be used for each product?

4. What new use is there for new product?

5. How should the product be styled and materials should it be

produced?

6. In what quantities should each item be produced?

7. How should the product the product be priced?

Once a company has carefully segmented the market, chosen its

target customers, identified their needs and determined its market

positioning, it will now be easy for her to develop a new product.

However, market plays a key role in the new product process by

identifying and evaluating new product ideas and working with

R&D and others in every stages of development.

Every company must develop new products because new product

shapes the company’s future. A company can add new products

through acquisition routes which can take three firms; buying a

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license, buying from other companies, or Franchise from other

company.

2.4 WHY NEW PRODUCTS ARE DEVELOPED

Pride (1984) said that new products are developed and introduced

into the market for the following reasons:

1. To meet the customer’s needs and wants which are dynamic in

nature.

2. Companies develops new product in order to explore the

opportunity that is available to them.

3. New products are developed so as to tight competitors in the

market.

4. New products are been developed to ensure continuity of any

business ventures through making utilization of the idle and

excess capacity thereby making better profit.

5. New product development increases the total sales volume of the

firm.

6. It also increases its market share.

2.5 WHY NEW PRODUCTS FAIL OR SUCCEED

Kotler (2003 P. 351) why do some products fail, while others seem

to succeed? In one of his survey, the respondent executives gave

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the following reasons listed in order of frequency of mention for the

failure of new products (the 125 firms surveyed were considered to

be successful product innovators).

1. Inadequate market analysis over estimating potentials sales of the

new product, inability to determine buying motives and habits, and

misjudgments as to what products the market wanted in regards to

research.

2. Lack of training programme; failure to train marketing personnel for

new products and new markets.

3. Government policy; government constraints new products have to

satisfy consumer safety and environmental concerns.

4. Lack of capital; inadequate supply of money to some companies

with ideas but cannot raise fund to research launch and even

produce.

5. Shorter product life cycle; when a new product is successful, rivals

is quick to copy it. For example, Sony used to enjoy a three year

lead on its new products before others starts copying but now

Matsus hita will copy the product within six months, leaving hardly

enough time for Sony, to recoup its investment.

6. Fragmented markets companies have to aim their new products at

smaller market segment and this can mean lower sales and profits

for each product.

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7. Poor timing of introduction: The usual mistake here is to introduce

a product too late to the market, although in most cases the

problem is premature market entry.

2.5 ORGANIZATIONAL ARRANGEMENT OF HANDLING NEW

PRODUCT DEVELOPMENT

Robert (1978 P.29) observes that depending on the organization of

an organization most companies have product branch manager

who co-ordinates the new product ideas before going to the

product manager. In some companies, the following are the

responsibilities of new product::

1. Product Manager: - An average organization may have full

section of the department known as the product development in

the company

President

Executive Vice President

V.P of V.P of V.P of V.P of V.P of


Marketing Finance manufacturing personnel Research & development

Sales Production Marketing research Sales Advertising


manager manager manager promotion Manager

TRADITIONAL ORGANIZATION AND THE PRODUCT MANAGER


SOURCE: Robert, D. Histrictt, Marketing a new product (The Macmillan Press 2 nd Edition, (1978)

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2. New Product Department: - This takes in change of developing

new ideas and coordinating research both within and outside the

company for the product. Multidivisional firms may choose the new

product development organization. Some department have also

been labeled new product development department. This

organizational structures, separates new product development

planning and management tasks from the existing divisions in the

organization to centralize the new product decision-making

process and eliminates redundancy of these tasks across

divisions. This consists of part of the product developments like

sourcing for minor ideas within the company. This is normally

carried out where there one different managers in the production

development department.

President

Executive Vice President

Research & development Legal President New product

Finance Engineering Production Marketing

RELATIONSHIP OF NEW PRODUCT DEPARTMENT AND OTHER DEPARTMENT


SOURCE: Robert, D. Histrictt, Marketing a new product (The Macmillan Press 2 nd Edition, (1978)

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3. New Product Committee: This is responsible for one department

and not for all angle of the organization. This stands as a

department taking the responsibility of new product development.

4. The Venture Team: According to Robert (1978 P. 40), this type of

organization is not a new approach to new product development. It

seems to be better suited to the design and development of new

product that do not necessarily fit into the ongoing business of the

firm. A study of 98 venture managers for industrial and consumer

products at large corporations characteristics;

1. The venture team is organizationally separated from the remainder

of the organization.

2. Members are as revived from various functional areas such as

engineering, production, marketing, and finance

3. Existing lines of authority in the permanent organization are not

necessarily valid in the venture team.

4. The venture team manager usually reports to chief executive and

is given authority to major decisions.

5. The team is free of deadline and remains together until the task is

completed.

6. Freedom from time pressure fosters creativity and innovation.


To Management

New venture division Central Television Application Solid state


research & division division division
development 21
Venture Production Marketing Engineering Finance
team A

Venture
team B

SOLID LINES PERMANENT ORGANIZATION DOWTED LINE VENTURE


TEAM MINUTES
SOURCE: Robert, D. Histrictt, Marketing a new product (The Macmillan Press 2 nd Edition, (1978)

2.7 FROM PLANNING TO COMMERCIALIZATION

Robert (1978 P. 43) says that new product planning and

development organization often has difficulties in maintaining a

balance of emphasis between existing products in various stages

of development. Why does the preoccupation of operating

personnel with products already on the market cause difficulty in

generating interest in new product plans? Personnel in the

planning development stage do not always participate in the

product commercialization. Once commercialization is reached,

the planning personnel continues to plan and develop new

products. The problems of transferring knowledge from planning to

operation is frequently encountered but may be resolved by

allowing development personnel o move into operations. This

problem is not as great in the product manager of organization

because the product once it achieves commercialization. With the

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committee, new product department, and possibly the venture

team, this transfer of knowledge may be a more serious problem

since those groups are not likely to participate in the market

introduction. This responsibility would be given to the marketing

department. The problem of knowledge transfer, role conflict,

insufficient authority and so on may be minimized or eliminated

completely if the firm and its employees maintains a positive

attitude towards new product planning and development. A positive

attitude will help to ensure the success of any of the four

organizational structures.

THE RESEARCH AND DEVELOPMENT / MARKETING

INTERFACE

According to Robert (1978 P. 44), Those individuals responsible for

new product planning and development must interest with

research and development in order to ensure the technical

feasibility of any new product idea, as well as to determine the

actual specification required for consumer satisfaction. This

interaction often breaks down for two reasons;

1. Lack of good communication during relevant stages in the product

evolution process.

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2. Value conflict between the research and development group and

marketing personnel.

The First problem occur because research and development has

difficult responsibility of explaining the new technology used in the

new product development to the marketing staff. New designs,

materials, and procedure that must be clearly communicated to

those in the new product development organization are constantly

being developed. It is also imperative that research and

development groups be kept informed of the long-rage goals of the

firm in the marketing of new products so that effort is congruent

with these objectives.

Value conflict primarily because the researched development has

little appreciation for problems in branding, packaging, distribution,

pricing and promotion, and it must be instilled with awareness and

understanding of how the problems faced by marketing

organization affects the success of nay new product introduction.

Flexibility in managing role of research and development seems to

be the key to a successful cooperation. Communication and

understanding of the problems faced by each member will help to

minimize the conflict of interest. Frequent meetings and careful

scheduling will also aid in this inter face.

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IDEA GENERATION

New product development according to Anozie (2005) call for

generation of a large and interesting pool of possible product ideas

with a view to finding better ones. The greater the number of ideas

generated, the better the ones are lovely to be found. Anozie

(2005) further stated some sources of new product ideas as

follows:

1. Customers: - According to Anozie, the market concept demands

that the search for a new product ideas should start with the

identification of customer’s needs and wants. Ways of identifying

customer’s needs and wants are; Direct customer surveys,

Projective tests, focused group discussions, suggestion systems

and letters received from customers, and perpetual and

preferential mapping of the current product space to discern new

opportunities.

2. Scientists: - Use of research labs for basic research e.g.

production of TV and transistors, new forms of packaging was as a

result of research into solid state physics some companies exploit

the basic technology to search for minor modifications of existing

products.

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3. Competitors: - Competitors must watch the new product

development by companies. Marketing intelligence can come from

distributors, suppliers, and salesmen of the new product.

4. Company Salesmen and Dealers: - They are good sources of

product ideas because they have first experienced the customer’s

unsatisfied needs and complaints. They are often the first to learn

of the competitive developments.

5. Top Management: They can help by defining those product

market areas of greatest interest in which the new product is

needed.

2.8 THE PRODUCT DEVELOPMENT PROCESS

Given some of the major issues historically confronted by firms in

developing new products and given the continued proliferation of

new consumer and industrial products in the lake 1970’s, 80’s and

90’s respectfully. It is therefore necessary that a firm develop new

products for commercialization.

According to Kotler (2004 P. 349) companies that fails to develop

new products are putting themselves at great risk. Their existing

products are vulnerable to changing customer needs and tastes,

26
new technologies, shortened product life cycles, and increased

domestic and foreign competition.

Kotler (2004 P. 356) typically listed the product development

process as follows;

1. Idea Generation: The process of generating new ideas may

consist of brain storming, reverse brainstorming, attribute costing

or problem inventory analysis.

2. Screening: Techniques for evaluating new ideas may consist of

checklist or open discussion where ideas are either eliminated or

considered further.

3. Business Analysis: The use of focus groups and concept as to

the exact nature of the idea before its prototype is made. This

analysis should also provide further evaluation of idea in order to

eliminate any of those not considered favourably at this point.

4. Development: Prototype development of the idea must be

evaluated in terms of production problems, safety requirement

costs, and other modifications necessary before entering any test

market.

5. Testing: The setting up of test markets can provide valuable data

on the nature of the market and needed marketing strategy

27
changes or product modification necessary to ensure a successful

launch.

6. Commercialization: The new product is launched into the market

at full-scale production with a significant commitment of the firm’s

resources and reputation.

2.9 THE CONCEPT OF PRODUCT LIFE CYCLE

A.K Arowomole & M.A. Adeyemi (2005) see product life cycle as a

marketing theory in which products or brands follow a sequence f

stages including: introduction, growth, maturity and sales declines.

According to Cunblitt and Still (1971), product life cycle begins

where the new product development process ends. Among many

writers observed that products are like living organisms during

which they pass through certain stages, which begins when the

product idea is conceived through the time it is introduced into the

market.

The product life cycle is a attempt to recognize distinct stages in

the sales history of the product. The plc concept is mostly used as

a framework for developing effective marketing strategies in

different stages of the product life cycle. The stages of this cycle

cannot necessary be predicted in terms of exact time nor can it be

28
claimed that a specified product life cycle must follow all of the

stages with no alternative. The stages of the product life cycle are

as follows according Kotler (2004) ;

1. The Introductory Stage: This is a period of slow growth as the

product is introduced in the market. And because it takes time to

roll out a new product and fill dealer pipelines, sales growth tends

to be slow at this stage. Profits are also nonexistence or negative

at this stage. Promotional expenditures are at their highest ratio to

sales because of the need to

i. Inform potential consumers, ii. Induce product trial, and iii.

Secure distribution in retail outlets. Prices tend to be high

because costs are high.

2. The Growth Stage: This is a period of rapid market acceptance

and substantial profit improvement. Early adopters like the product,

and additional consumers starts buying it. New competitors enter,

attracted by the opportunities. They introduce new product features

and expand distribution. Prices remains where they are or fall

slightly, depending on how fast demand increases. The product

attain sales momentum through favourable word of firm. Firms

have to watch for a change from an accelerating to a decelerating

rate of growth in order to prepare new strategies. So also market

29
expansion strategies would help strengthen the firm’s competitive

position.

3. Maturity Stage: This is a period of a slow down in sales growth

because the product has achieved acceptance by most potential

buyers. Profits stabilize or decline because of increased

competition. Most products poses formidable challenges to

marketing management. The maturity stage is divided into three

phases; growth, stable, and decaying maturity. In the first phase,

the sales growth rate start to decline. There are no new distribution

channel to fill. In the second phase, sales flatten on a per capital

basis because of the market saturation. Most potential consumers

have tried the product, and future sales are governed by

population growth on a replacement demand. In the third phase,

decaying maturity, the absolute level of sales starts to decline, and

customers begin switching to other products.

4. Decline Stage: This is the period when sales decline for a number

of reasons, including technological advances, shifts in consumer

tastes, and increased domestic and foreign competition. All lead to

over capacity, increased price cutting and profit erosion. The

marketing strategy relevant to this period is to identify the truly

declining products, develop for each strategy of continuation

through marketing mix, concentration that is concentrating its

30
resources only in the strongest markets and channels or milking

strategy – that is sharply reduces its marketing expenses to

increase its current profits. Finally, the company may phase out the

product in a way that minimizes the hardship to company profits,

employees and customers.

2.10 CONCEPT OF INNOVATION

According to M.A. Adeyemi & A.K Arowomole (2004 P. 183)

“Innovation is the process of producing something new inform of

product or services that someone or any company has never

produced it. It also refers to any good, service or idea that is

preserved by someone as new. Development of new products,

services or ways of working. Pride (1974) defines, innovation as

the creation of something new and different. In other words, there

should be a recognition of opportunity and the creation of product

to satisfy the newly found opportunity. This implies that there will

be an attempt at planned change, the planning of new products to

permit the constant introduction of profit making opportunity

through planned marketing efforts. More so, this definition

embraces original products, major modification of existing products

duplication of competitors products, and product-line acquisition of

all which involves addition of something new into the production.

31
Continuous innovation is the only way to a very product obsolence,

yet successful new product developments is hard to achieve.

Reasons are;

1. Shortage of important new product ideas. Shortage of

fundamentally new technologies needed for major innovation

to avoid economic stagnation.

2. Fragmented market; Competition leads to fragmented

markets. New products are directed to capture a large share

of a small segment instead of the main market.

3. Growing social and government constraints: New safety,

ecological compatibility and other government requirements

which have affected / slowed down the rate of innovation

decision in may industries.

4. Costliness of new product development process. A company

has to develop a great number of new product ideas in other

to have or find out a successful one.

5. High rate of product and services fall short of expectation

especially among the consumer product manufacturers.

6. Shortage life spans of successful products: The rate of cult

throat competition among rivals shortens drastically the life

spans of even commercially successful products.

32
IMPORTANCE OF PRODUCT INNOVATION

Anozie (2005) listed the following importance of product

innovation:

1. The advancement of technology and the proliferation of new goods

and services are visible in every industry or company,

consequently most of today’s products are bound to be replaced

sooner or later. Hence, the profitability and every survival of most

companies or industries depend essentially upon a continuing flow

of successful new product. Therefore, is the only response to the

dynamic society and technology which is subjects to continuous

change.

2. Companies are increasing dependently upon new products for the

maintenance expansion of sales.

3. Few products, if any, perfectly satisfy the needs and frequency

change. The major objective of product innovation is to modify

product or renovate products to satisfy the need of consumers at a

reduced cost. The successful execution of this policy generates

customer’s loyalty. As the need arises companies should quickly

replace their current declining product before competitors do it for

them.

33
2.11 WHAT BRINGS ABOUT DIFFUSION AND ADOPTION

INFLUENCES

According to Mr. Awa (2005 P. 124) “No two products holds equal

potential for consumer’s acceptance”. While some products (such

as Baby Pampers, Gala meat, Barbing Chipper, and shoes) is to

achieve consumers endorsement almost over-night, others (such

as Golden guinea, Begedoff Larger beer, 33 export larger and

many more) crumbled in the liquor shelf for one requiring different

information sources at each successive stage in the process.

Purchase time is very important in diffusion theory because the

average time a consumer takes to adopt an innovation is a

predicator of the overall length of time that will be required for the

new product to achieve widespread adoption.

CATEGORIES OF ADOPTERS

Rogers (1983) articulates that or defines a person’s innovativeness

on “the degree to which an individual is relatively earlier in

adopting new ideas than the other members of his social class or

system”. In each product area, there are pioneers and early

adopter. Roggers proposed an adoption categorization scheme

based on time by dividing adopters into five(5) categories of

innovations.

34
2½ Innovations

34% 34%
13½ Early Late
Early Majority Majority
Adopters 16% Laggards

THE SEQUENCE AND PROPORTION OF ADOPTER CATEGORIES


AMONG THE POPULATION THAT EVENTUALLY ADOPTS

SOURCE: Redrawn from Everrett M. Rogers, Diffusion of


Innovations (New York: The free press, 1983)

1. Innovations: These are first consumers to adopt new products.

They enjoy trying new products and tends to be venture some

trash and daring. They account for 2½ % and are technology

enthusiasts. In return for low prices, they are happy to conduct

alpha and beta testing and report on early weaknesses.

2. Early Adopters: They are guided by respect. They are opinion

leaders n their communities and adopts new ideas early but

carefully. They represents 13½ % after the innovators and are also

visionaries who search for new technologies that might give them

a dramatic competitive advantage. They are less price-sensitive

and willing to adopt the product if given personalized solutions and

good service support.

3. Early Majority: They are deliberate, they adopt new ideas before

the average person. They account for 34% and are pragmatists

35
who adopts the new technology hen its benefits are proven and a

lot of adoption has already taken place. They make up the main

stream market.

4. Late Majority: They are skeptical, they adopt and innovation only

after a majority have tried it. They account for 34% and are

conservative who are risk averse technologies shy, and price-

sensitive.

5. Laggards: They are traditionally bound; they are suspicious of

change, mix with other tradition bound people, and adopts the

innovation only when it takes on a measure of tradition itself. They

accounts for 16% who resists the innovation until the finds out that

the status quo is no longer defensible.

STAGES OF ADOPTION PROCESS

According to Roggers, the innovation diffusion process is the

spread of a new idea from its sources of invention or creation to its

ultimate users or adopters. The consumer – adoption process

therefore focuses on the mental process through which an

individual passes form first leaving about an innovation to final

adoption.

36
Adopters of new products have been observed to move through

five stages:

AWARENESS

INTEREST

EVALUATION

TRIAL

ADOPTION

STEPS IN THE ADOPTION PROCESS


SOURCE: KOTLER (2004)

Awareness: - At this stage, the consumer becomes aware of the

innovation but lacks information about it.

Interest: - When a consumer develops interest in the product or

product categories, he searches for information about how far the

innovation can help him solve his consumption related problems with

ease.

Evaluation: - The consumer considers whether to try the innovation

by assessing the available information in the light of the problems at

37
hand and thereby noting whether further information could be sought

to further reduce ht risk involved in the decision. Most consumers

evaluation are cognitively or mentally related and may involve the use

of models, especially where two or more brands are to be considered.

Trial: - The consumer tries the innovation to improve his or her

estimates of its value. Risk is always very high at the trial stage, but it

is often reduced by free samples, warranties and guarantees,

instruction books and many others.

Adoption: - The consumer decides to make full and regular use of

the innovation base on the satisfactory performance of the product at

the trial stage or favourable evaluation of the product innovation.

FACTORS INFLUENCING THE ADOPTION PROCESS

Marketers recognize the following characteristics of the adoption

process; the effects of personnal influence; differing rates of adoption;

and differences in organization’s readiness to try new products.

38
REFERENCE

Awa Okorie .H. (2005), “ Marketing Basic Concepts and Decision”


Igwurunta, Port-Harcourt, River State

A.K. Arowomole & M.A. Adeyemi (2004), “Compendium of Marketing


Terminologies”

Anozie E.E. (2003), “Product-mix and Brand Strategy” Owerri, Imo State.

Philip Kotler (2003), “Marketing Management Eleventh Edition” Prentice


Hall Indian Branch.

Pride, M. & Ferrell O.C. (1982), “Fundamentals of Marketing Honghton


CO. Boston

Robert, D. Hisrictt (1978) “Marketing a new product” London 2 nd Edition

Udell, J.G. (1981), “Marketing in an age of change” An introduction. John


Willey & sons. Inc. Canada

39
CHAPTER THREE

3.0 RESEARCH METHODOLOGY

In this chapter, the research has to discuss the methodology used

to carryout the research work. The main intention was on the following

research unit, sampling method, and sample size, method of collection

of data, method of questionnaire distributed, and data analysis.

3.1 SAMPLING UNIT/FRAME

The population of this research work consist the staff of Nigeria

Breweries PLC Aba, using four (4) selected local government areas in

Abia State.

70 staff both senior, middle, and junior classes were used from each

local government making the entire population 280. Among the local

government are:-

1. Aba – North 70

2. Osisioma - Ngwa 70

3. Aba - South 70

4. Nsialangwa – South 70

Total 280 staff

40
3.2 SAMPLE METHOD

To draw the sample from the sampling unit, the researcher

adopted probability sampling method. This method gives all the member

of the sample unit equal chance to being selected. In this way, every,

member is qualified and whether or not he she is selected is a matter of

chance. Therefore, sampling method.

3.3 DETERMINATION OF SAMPLE SIZE

The sample size of this work was using the staff of Nigeria

Breweries PLC, under Aba-North local government area by adopting

Yaro Yamea’s formula;

N = N
1+ n (e) 2

Where N = sample size E = level of significant, and N =

population size.

TAKING A SAMPLE ERROR OF 5% WHERE n = 70

N= 70 = 70
I + 70 (0.05)2 1 + 70 (0.0025)

N= 70 = 70
1+0.175 1.175 = 60

N = 60, therefore sample size = 60

41
3.4 METHOD OF DATA COLLECTION

The obtained fine the respondents through the use of

questionnaire and interview. Such respondents were the staff of Nigeria

Breweries PLC Aba.

SECONDARY DATA:- The research also made use of literature that are

related to the topic such as textbooks, journal, magazines and many

others.

3.5 METHOD OF QUESTIONNAIRES DISTRIBUTION AND

COLLECTION

The questionnaires were distributed personally Aba North local

government area. Sixty (60) questionnaires were structured and

administered to the senior, middle and junior classes of staff and the 60

questionnaires were retread.

TABLE 3.6

Respondent Number Distributed Number Retread %

Senior Staff 25 25 42
Middle Staff 20 20 33

Junior staff 15 15 25

Total 60 60 100

42
CHAPTER FOUR

4.0 DATA PRESENTATION AND ANALYSIS

The purpose of this chapter is to present and analysis the collected

data using them to proffer solution to the research questions as well as

test the hypothesis stated in chapter one of this work.

4.1 RESPONDENTS CHARACTERISTICS AND CLASSIFICATION

In analyzing the data collected, the researcher tread to the

examine the reliability of the data collected from the respondents. This

was based on the questionnaire distributed and returned. Therefore, the

purposes of this analysis, the questionnaire were used. However, sixty

(60) questionnaires were distributed and returned during the data

collection.

4.2 DATA ANALYSIS AND INTERPRETATION

TEST OF RESEARCH QUESTION

Question 1: Qualification: What is the qualification of your work?

43
TABLE 4.21: RESPONSES

RESPONSES NO. OF RESPONDENT PERCENTAGE

FSLC 5 8.30

JSS 4 6.70

SSCE 10 17.00

NCE 5 8030

OND 30 50.00

HND and ABOVE 6 10.00

TOTAL 60 100

INTERPRETATION: The analysis shows that 5 respondent or 8.3% are

FSLC workers, 4 or 6.7% respondent and SS workers, 10 or 17%

respondents are SSCE, 5 or 8.3% respondents are NCE, 30 or 50%

respondents are HND and above workers in the company.

QUESTION 2: EXPERIENCE: What is the experience of the company’s

worker’s?

44
TABLE 4.22 RESPONSES.

RESPONSES NO. RESPONDENTS PERCENTAGE


1 -2 15 25
2-3 15 25
3 and Above 30 50
Total 60 100

INTERPRETATION: - From the table 4.2 above shows that 15 or 25%

respondents were 1 – 2 years experience, 15 or 25% respondents were

2 – 3 years of experience while 30 or 50% were 3and above years of

experience in the company.

QUESTION 3: Does your company carry out research always?

TABLE 4.23 RESPONSES

Responses No. of Respondents Percentage


Yes 20 33.33%
No 40 66.66%
Total 60 100

INTERPRETATION: - From the above table, 20 or 33% respondents

said Yes while 100 or 67% said No.

Therefore, the company does not carry out research always.

QUESTION 4:- If yes, how many years interval do they carry out their

research?

45
TABLE 4.24 RESPONDENTS

Responses No of Respondents Percentage


2 years 10 17
3 years 20 33
5 years 30 50
Total 60 100

INTERPRETATION: - Table 4.4 above shows that 10 or 17% of the

respondents said 2 years, 20 or 33% said 3 years while 30 or 50% said

5 years.

Therefore, it was greed that the company carries out research in every 5

year intervals.

QUESTION 5: How much does your company dget for research?

TABLE 4.25 RESPONSES

Responses No. of Respondents Percentage


Below N20, 000 40 67%
Above N20, 000 20 33%
Total 60 100

Interpretation: from the above table we see that 100 or 67% respondents

said that the company budget below N20, 000 for research while 20 or

33% respondents said that the company budget above N20, 000.

46
QUESTION 6: Is inadequate research a problem to new product

development on the growth of your company?

TABLE 4.26 RESPONSES

Responses No of respondents Percentage


Yes 43 72%
No 17 28%
Total 60 100

INTERPRETATION: - From the table above 43 or 72% of the

respondents said Yes, while 17 or 28% of the respondents said No.

QUESTION 7:- Does government agents? Make more to inspect your

products?

TABLE 4.27 RESPONSES

Responses No. of Respondents Percentage


Yes 48 80%
No 12 20%
Total 60 100

INTERPRETATION: - In analyzing the table above 48 or 80% of the

respondents agreed that government agents inspect the company , while

12 or 20% of the respondents said No.

QUESTION 8: Does the government policies effect the development of

new product in your company?

TABLE 4.28 RESPONSES

47
Responses No of Respondents Percentage
Yes 35 58.33%
No 25 41.67%
Total 60 100

INTERPRETATION: - From the table above 35 or 58:33% of the

respondents agreed that government policies effects new product

development in the company, while the remaining 25 or 41.67% of the

respondents disagreed.

QUESTIONS 9:- Does you acquire loan from bank and other external

means?

TABLE 4.29 RESPONSES

Responses No of Respondents Percentage


Yes 35 58.33%
No 25 41.67%
Total 60 100

INTERPRETATION: - In analyzing whether the company acquire loan

from banks and other external means, 35 or 33% agreed that the

company acquire loan from banks and other sources, while 25 or 41%

disagreed.

QUESTION 10: What is the rate of the interest on the loan?

TABLE 4.210 RESPONSES

Responses No of Respondents Percentage


10% 5 8.33%
20 25 41.67%
30% 30 50%
Total 60 100

48
INTERPRETATION: - From table 4.10 above, 5 or 8.33% agreed at 20%

while 30 or 50% agreed at the rate of 30%.

QUESTION 11: In question “10” with interest rate of 30%, do you think

that acquiring external fund is or problem to the company?

TABLE 4.211 Responses

Responses No of Respondents Percentage


Yes 55 91.67%
No 5 8.33%
Total 60 100

INTERPRETATION: - From the above table, 55 or 91.67% of that

respondents said Yes to the question, while 5 or 8.33% said No.

QUESTION 12: Does inadequate training hinder the growth of your

company?

TABLE 4.212 RESPONSES

Responses No of Respondents Percentage


Yes 45 75%
No 15 25%
Total 60 100

INTERPRETATION: - From the above table, 45 or 75% agreed that

inadequate training hinder the growth of the company, while 15 or 25%

disagreed.

49
QUESTION 13: Does training improve new product development?

TABLE 4.213 RESPONSES

Response No of respondent Percentage


Yes 46 76.67%
No 14 23.33%
Total 60 100

INTERPRETATION: - From the above table, 46 or 76.67% of the

respondents agreed while 14 or 23.33% disagreed.

Question 14: Does new development increase the sales volume of the

firm?

TABLE 4.214 RESPONSES

Responses No of Respondents Percentage


Yes 44 73.3%
No 16 26.6%
Total 60 100

INTERPRETATION: - From the above table, 44 or 73.3% of the

respondent said Yes, while 16 or 26.6% of the respondents said No.

QUESTION 15: Does new product development increase its market

share?

TABLE 4.215 RESPONSES

Responses No of Respondent Percentage


Yes 50 83.33%
No 10 16.67%

50
Total 60 100

INTERPRETATION: - The table above shows that 50 or 83.33% of the

respondents said Yes to the question, while 10 or 16.67% said No to the

question.

4.3 TEST OF HYPOTHESIS

For proper presentation and analysis of the data collection, the

four hypothesis were tested where necessary, in order to rest the

hypothesis stated in chapter one. Using chi-square method:

Formula = C = RT X CT

GT

When, RT = Row total

CT = Column total

GT = Grand total

Therefore, formula for the chi-square x2 = (O – E)2


E

Where, x2 = chi-square

O = observed frequency

E = Expected value

The degree of freedom has to be determined by using this formula,

(R-I) (C-I)

51
Where, R = number of rows

C = number of columns

Therefore, we have DF = (2 -1) (3 – 1)

2 degree of freedom 1 x 2 = 2

The critical value of significance and degree of freedom 2 under 0.05 =

5.99.

DECISION RULE

The decision rule for the test statistics is to accept the alternative

(Hi) hypothesis if the computed value is higher than the critical value

5.99 and if not, accept the null hypothesis (Ho) and reject alternative (Hi)

hypothesis.

HYPOTHESIS ONE

HO: Inadequate research does not affect new product

development.

Hi: Inadequate research effect new product development.

QUESTIONNAIRE 4em 6

Table 4.31 actual Observation (O)

Responses Senior Staff Middle Class Junior Staff Total


Yes 17 18 8 43
No 2 5 10 17
Total 19 23 18 60

Table: 4.32 expected frequency (E)

52
Responses Senior Staff Middle Class Junior Staff Total
Yes 13.62 16.48 12.9 43
No 5.38 6.52 5.1 17
Total 19 18 60

E = RT X CT

GT

Thus, the formula for the chi-square x2 = (O – E) 2


E
TABLE 4.33 Computation of the4 chi-square

(O – E)2
O E O–E (O – E)2
E
17 13.62 3.38 11.42 .085
2 5.38 -3-38 11.42 2.12
18 16.40 1.52 2.31 0.14
5 6.52 -1.52 2-31 0.35
8 12.9 -4.9 24.01 4.71
10 5.1 4.9 24.01 10.03

Decision rule: hence the computed value (10.03) of the chi-square is

greater than the critical value 5.99; we accept the alternative hypothesis

Hi and reject the null hypothesis Ho. Therefore the research

development.

HYPOTHESIS TWO

Ho: There is no relationship between the government policies and

new product development.

53
Hi: There is relationship between the government and new product

development.

Table 4.34 Responses

Response Senior Staff Middle Class Junior staff Total


Yes 14 189 3 35
No 1 4 20 25
Total 15 22 23 60

Table 4.35 Expected frequency (E)

Response Senior Staff Middle Class Junior staff Total


Yes 8.75 12.83 13.42 35
No 6.25 9.17 9.58 25
Total 15 22 32 60

Table 4.36 Computation of the chi-square

O E O–E (O - E)2 (O – E)2


E
14 8.75 5.25 27.36 3.15
1 6.25 - 5.25 27.56 4.41
18 12.83 5.17 26.56 2.08
4 9.17 - 5.17 26.73 2.91
3 13.42 - 10.42 108.58 8.09
20 9.58 10.42 108.58 11.33

31.97

DECISION RULE

54
If x2 CD > x2, reject Ho and accept Hi therefore with the computed

value 31.97 which is higher than critical value 5.99, than the researcher

accepts that there is relationship between the government policies and

new product development.

Test of Hypothesis there

Ho: there is no relationship between new product development and

inadequate training

Hi: There is relationship between new product development and

inadequate training.

Question 11 and 12

Table 4.37 Actual observation (O)

Responses Senior Staff Middle Class Junior Staff Total


Yes 19 20 6 45
No 1 3 11 15
Total 20 23 17 60

Table 4.38 Expected frequency (E)

Responses Senior Staff Middle Class Junior Staff Total


Yes 15 17.25 12.75 45
No 5 5.75 4.25 15
Total 20 23 17 60

55
Table 4.39 Computation of the chi-square

(O – E)2
O E OE (O – E)2
E
19 15 4 16 0.84
10 5 -4 16 32
20 17.25 2.75 7.56 0.44
3 5.75 - 2.75 7.56 1.32
6 12.75 - 6.75 45.56 3.57
11 4.25 6.75 45.56 10.72

20.07

DECISION RULE

Therefore, the researchers accept the Hi saying that there is

relationship between training and new product development.

HYPOTHESIS FOUR

Ho: Finance procurement is not a problem t new product

development

Hi: Finance procurement of a problem to new product

development.

Table 4.25 actual observation (O) 8 expected frequency

Responses Senior Staff Middle Class Junior Staff Total


Yes 12 (8.17) 16 (11.080) 7 (15.75) 35
No 2 (5.83) 3 (7.92) 20 (11.25) 25
Total 14 19 27 60

56
Table 4.310 Computation of chi-square

(O – E)2
O E O–E (O – E)2
E
12 8.17 3.83 14.67 1.80
2 5.83 - 3.83 14.67 2.52
16 11.08 4.92 24.21 2.18
3 7.92 - 4.92 24.21 3.06
7 15.76 - 8.75 76.56 4.86
20 11.25 8.75 76.56 6.81

21.23
DECISION RULE

Hence, the computed value 21.23 of the chi-square is greater than

the critical value (5.99). We accept the alternative hypothesis (Hi) which

says that finance procurement is a problem to new product development.

4.4 DISCUSSION OF THE FINDING

From the analysis of findings on the impact of new product

development on the growth of a firm (a case study of Nigeria

Breweries Plc Aba, Abia State), the researcher discovered the

following findings:-

1. The staff of Nigerian breweries PLC, Aba Complained that

research and development department does not carry out

adequate research. That they unable to find out what the

consumers needs and wants are overestimating potential sales of

57
the new products, and enablement to determine the buying

motives and habits of the forget markets.

2. Lack of training programme. There is insufficient training

programme for the marketing personnel for new products and new

markets which effect the new product development of the

company.

3. Ineffective government policies and regulation by government

agents hinder the growth of the company there includes, the

inspection fees, taxes, levies, quality, dates of production and the

expiring dates.

4. Lack of Capital: The respondents complained that inadequate fund

is a problem to the new product development. Even when new

ideas were generated the management cannot raise money

needed for research, launch and even product.

5. That shorter product life cycle affects new product development in

the organization. The respondents also complained that most

products have shorter life cycles.

58
CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 SUMMARY

Nigeria Breweries Abia Plc seems not to have recorded

much success as a result of depressed economic melt down. This

is because, they failed to recognize the fact that necessity gives

birth to invention or innovation. New product is indeed the life

blood of any organization and therefore stands as one of the

avenue of enlarging the size of the product portfolio of any

organization, increasing its sales volume and enlarging its financial

strength.

Once a company has segmented the market, chosen its

target customer groups and identified their needs and determined

59
its derived market positioning it is ready to develop and launch

appropriate new products.

Marketers should participate with other department in every

stage of new product development which are: idea generation,

screening analysis, development, testing and commercialization.

Finally, consumer’s adoption process also help on

organization to induce sales since it is the only way by which

customers learn about new products, try them, adopts or reject

them.

5.2 CONCLUSION

Conclusively, in reading through the chapters of this research

work, chapter one is expressly on the introduction of new product

development and most problems militating against them. Chapter

two tends to be more mature. It reviewed other authors write up on

the topic. Chapter three, the researcher stated the methods used

in data collection and distribution of questionnaire, which chapter

four was used to prove that all the research problems and

hypothesis stated in chapter one were true and real. This can be

seen through the response of the respondents from questionnaire

items 6, 8, 12, 13, which were analyzed using tabular form in

percentages. After that chi-square (x2) was also used to test the

hypothesis which were accepted the alternative hypothesis (Hi).

60
Showing that they are all problems facing new product

development which affects the growth of a firm.

5.3 RECOMMENDATION

Based on the findings of this study, the researcher recommended

the following suggestion to remedy the problems.

1. The company should developed their research and development

department so as to carry out adequate research to enable them

find what the consumers want and needs are in order to satisfy

them.

2. Good training programmed should be made available for the

marketing department or personnel of the Nigeria breweries plc.

For new production development which will expand the skill of

marketing personnel. It will also increase the quality of the

company’s produce.

3. The government policies should not be ignored or over looked to

avoid bund or sanction by the federal government.

4. To resolve the financial problems, government should set up a

financial institution that will be granting loans with low or little

interest rate to the company. This financial assistance will help go

a long way to improving the newly idea generation for the new

61
product development. This money should also be used for the

purpose it is made for.

5. The problem of poor timing of introduction of the products

management should know where, how, and when consumers

needs a new product and before every productions or introduction

should be made.

62
REFERENCE

Adeyemi, M.A. & Arowomola A.K (2004), “Compendium of Marketing


Terminologies

Anozie, .E.E. (2003), “Product-Mix and Brand Strategy” Owerri,


Imo State

Awa .H. Okorie(2005),“MARKETING Basic concept and Theory /


Decisions”, Igwurunta port-Harcourt. River State.

Benson .P. Shepipo, (1995) “Business Marketing Strategy” Cases,


Concepts and Applications, Boston skinner Printer Company
United State of America.

Chester Wasson (1980), “What is new about a new product” journal of


Marketing.

Marketing Journal (1991), “New product Development, Problem and


Prospect March Value 2

Philip Kotler (2003), “Marketing management Seventh Edition” Prentice


Hall Indian Branch.

Philip Kotler (1988), “Marketing Management 6 th Edition” analysis,


planning, implementation and control Prentice-Hall Indian Branch.

Pride .M. & Ferrell .O (1982), “Fundamental of Marketing Honghton


Mitten Co. Boston

Robert .D. Hisrictt (1978), “Marketing A New product London, The


Macmillan Press 2nd Edition.

Udell J.G (1981), “Marketing in an age or change” An introduction john


Willey and son, LNC. Canada.

63
APPENDIX 1

Marketing Department

School of Business

Federal Polytechnic Nasarawa

P.M.B

Nasarawa State

Dear Sir/Madam,

I am a final year student of the above named institution

and currently carrying out a research on the impact of new product

development on the growth of a Town (A case study of Nigeria Breweries

Aba, Abia State).

I will be very grateful, if you can provide adequate answer to the

questionnaires listed to enable me build up some information needed for

my research work.

All answer given should be treated with the most strict

confidentially.

Yours Faithfully,

AMADI GODWIN .C.

64
APPENDIX II

Please indicate you research on each item by inserting a tick (√) for the

dichotomous questions (that is questions requiring only Yes or No

answers).

i. Sex: Male Female and Above

ii. Age: 1 – 12, 21 – 30 31 – 40

iii. Qualification FSLC SSS SSCE

NCE OND HND and Above

iv. Years of experience with the company

1–2 2–3 3 and Above

v. MAIN QUESTIONNAIRE

1. Does your company carry out research always?

Yes No

2. If yes, how many years internal do they carry out research?

2 years 3 years 5 years

3. How much does your company budget for research?

Below N20, 000 above N20, 000

4. Does your company have research and development department?

Yes No

5. Does this department carry out research to new products?

Yes No

65
6. Is inadequate research a problem to new product development on the

growth of your company?

Yes No

7. If yes, is there any relationship between research department and new

product of development?

Yes No

8. Does government agent make move to inspect your products?

Yes No

9. Does the inspection help in the experience of the business?

Yes No

10. How often is the inspection?

Once a year twice a year thrice a year

11. Doe the government policies affect the growth of the company?

Yes No

12. How do you accept the company new product?

High Low

13. Do you acquire loan from bank and any other external means?

Yes No

14. What is the rate of the interest on the loan?

10% 20% 30%

66
15. In question “14” with interest rate of 30% and above, do you think

that acquiring external fund is a problem to the company?

Yes No

16. What is the cost of direct material in your production?

30% 40% 50%

17 How often do you have training programme per year?

Once twice none

18. Does inadequate training hinder the growth of you company?

Yes No

19Do you believe that training improve new product development on the

growth of the company?

Yes No

20. Is there any other competitor in the industry?

Yes No

21. Does new product development increase the sales volume of the

firm?

Yes No

22. Does it increase the market share?

Yes No

23. What is the duration of the company new product?

One year above one year

67
24. Does your company make use of break-even analysis and chart for

new product development?

Yes No

68