Effect Of Marketing Research On Product Development

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Effect Of Marketing Research On Product Development


Abstract


The research work focused on “effect of marketing research on new product development”. Discussing fully marketing research and new product development, its definition, importance, different types of marketing research and stages of new product development.

The research topic is concerned with the persistent increase of new product failure which faced many organizations of business and left many business in a serious financial loss. The relationship between marketing research and new product development. The effect of marketing research on new product development. The influence of marketing research on brand name of a new product.

In sorting the sample area, 60 questionnaires were administered to the staff of demas food limited, Eket, AkwaIbom state. Using random sampling method. Data collection method were primary and secondary and was analysed using Spearman Ranking to drive home points and findings. Reliability and validity was tested through the distribution of questionnaires to the staff of Demas food limited, Eket, AkwaIbom state. for conclusion, the respondents claimed that there is no relationship between marketing research and new product development.


Chapter One


1.0 Introduction

1.1 Background of Study

Today’s world is characterized by major changes in market and economic conditions, coupled with rapid advances in technologies. In other to ensure future success in the market companies invest in marketing research on New Product Development (NPD). Sometimes, 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 2006 and Jeffery 2008) 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, 2003; Ulrich and Eppinger, 2005; Wheelwright and Clark, 2005). They can lead to a core competence that either differentiates a firm from its competitors (Prahalad and Hamel, 2000) 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, 2007). 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. 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, 2009).

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; (Bower and Hout 2008, Griffin 2003, Gupta and Wilemon 2000 and Rosenau 2008). At the same time, market and technology uncertainty demand for flexibility in the program; see (Sanchez 2005, 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, (2002), (2006). 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. The problem might be the negligence of marketing in some firms since marketing might bring to the company little or no income. Finally several research has been carried out on the effect of marketing research on new product development but not even a single research has been carried out on the effect of marketing research on product development a case study of demas food limited Eket, Akwa Ibom state.


1.3 Aims and Objectives of Study

The main aim of the study is to examine the effect of marketing research on product development. Other specific objectives of the study include:

  1. To determine the extent to which marketing research has affected product development in Demas food limited, Eket.
  2. To determine the factors affecting marketing research in Demas food limited, Eket.
  3. To determine the effect of marketing research on product development in Demas food limited, Eket.
  4. To examine circumstances under which marketing research is more likely to be used in the stage of product development.
  5. To determine the importance of marketing research on new product development in Demas food limited, Eket.
  6. To proffer possible solution to the problems.

1.4 Research Questions

  1. What is the extent to which marketing research has affected product development in Demas food limited, Eket?
  2. What are the factors affecting marketing research in Demas food limited, Eket?
  3. What is the effect of marketing research on product development?
  4. What are the circumstances under which marketing research is more likely to be used in the stage of product development?

1.5 Research Hypothesis

Hypothesis One
  • Ho: Marketing research does not have any effect on new product development
  • Hi: Marketing research has effect on new product development
Hypothesis Two
  • Ho: There is no relationship between marketing research and new product development
  • Hi: There is relationship between marketing research and new product development
Hypothesis Three
  • Ho: Marketing research does not influence the brand name of a new product
  • Hi: Marketing research has influence on the brand name of a new product.

1.6 Scope and Limitations of the Study

The study on marketing research on product development is limited to Demas food limited, Eket, AkwaIbom state.

The study will focus on the following;

  1. Marketing research
  2. Stages of new product development.

There is nothing in life that has its advantages that does not have its limitations and restraining factors. The major limitations to this work is time, fund and people can be bias, gathering of information requires movement from one place to another, requires availability of funds.


1.7 Significance of Study

The study on the effect of marketing on research on product development will be of immense benefit to the entire Demas food limited, Eket in the sense that it will educate them in the area of 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. Finally, the study will contribute to the body of existing literature and knowledge to this field of study and basis for further research.


1.8 Definition of Terms

1. Product:

This is anything that is offered for acquisition, use and disposal and that satisfies the needs of the target market. The term product is broad and covers both tangible goods and intangible goods. Tangible goods have physical presence that can be seen, felt, smelt and touched e.g. mobile handsets, toothpaste, textbooks, television sets, while intangible goods include hair cut, financial service, accounting service and tourism.

2. Consumer:

This is an individual or organizational unit that uses or consumes a product.

3. Customer:

This is an individual or organisation that actually makes purchase decision or a person buying goods or services for a purpose etc.

4. Innovation:

This is a new product that has recently been offered to the market. It is any idea, practice or product perceived to be new by the relevant individual or group.

5. Innovators:

These are set of consumers that are the first to adopt or purchase an innovation. They represent approximately 2.5% of all the buyers who will eventually adopt the new product. They are active information seekers

6. Market:

Consists of individual and organisation who are interested and willing to buy a product and has the resources to engage in such transaction. A market may be defined as a place where buyers or sellers meet, goods and services are offered for sale and transfer of ownership occur.

7. Marketing:

Stanton W. J. (1981), defines marketing as “A total system of business activities designed to plan price, promote and distribute want satisfying goods and services to a present and potential customers, MIN London defines marketing as “The management process responsible for identifying, anticipating and satisfying customers requirement profitably”.

8. Research:

Research means to search for knowledge, information etc. Marketing research concerns investigation of the size, composition and characteristics of the market as well as distribution channels and market shares. It seeks to find out how many people buys, what they buy, why and where they buy

9. Strategy:

Indicates specific target market and the types of competitive advantage that are to be developed and exploited

10. Target Market:

This is the segment of the market that the company aims to serve with its marketing programmes and efforts.

11. Need:

Is e state of felt depreciation. A lack that is necessary for our physical and psychological well being. It includes psychological, safety, social, ego and actualization needs.

12. Peak Period:

This is the period at which a product has reached its highest level, it is also known as the maturity stage.


Chapter Five


Summary, Conclusion(s) and Recommendations

5.1 Summary or Synopsis of the Study Including Chapter by Chapter and Comprehensive Summary of the Findings

The findings of the study are as stated below:

Marketing is a valid marketing tool and plays a major role in new product development. Marketing research is a necessity in new product development, it is an antidote to product failure and influential to product success.

Marketing research also place an organisation on a better competitive ground and yield more returns on investment.

However, marketing research can be defined as the systematic design, collection, analysis and reporting of data and findings relevant to a specific situation facing the company or organisation. It also deals with identification of problems.

The project consist of five chapters, the introduction section as chapter one, which include the introduction, background of the study, statement of the problem, research questions, research hypothesis, definition of terms, scope and limitations of the study, significance of study and justification for investigation. Chapter two of the project deals with review of literature, introduction, models and theories relevant variable of the model theory, summary of the chapter. Chapter three contain step by step of what will be done and how it will be done, it helps the researcher to see the totality of the study.

The research method and design, sampling design and procedure, characteristics of the study population. This section is the basis for the possibility ofreplicating a study in order to establish its validity. Chapter four deals with data analysis and presentation, introduction, respondents characteristics and classifications, presentation and analysis of data, according to research hypothesis, then discussion of findings.

The last chapter highlights the summary, conclusion and recommendations. In this chapter, the researcher is expected to explain, interpret meaning out of the data presented and analyse in the previous sections.

Comprehensive Summary of the Findings

Marketing research is very important to the survival of a new product for any organisation to remain relevant in the market because it helps in generating new product idea. Though marketing research will not necessarily have direct effect on new product at all time.

However, marketing research should not be totally neglected as it is important for the growth of the company economically and build up the goodwill of the company in the long run.


5.2 Conclusion(s)

Taking cognizance of the above analysis, the conclusion is that marketing research is very crucial to the survival of new product and the organisation alike.

Finally, the extent of success of any product depends largely on the efficiency and effectiveness of the information at hand.

Therefore, proper caution should be applied when analyzing and implementing the research findings so as to maximally benefit from the enormous advantages of marketing research.


5.3 Recommendations Based on the Conclusions

Based on the conclusion, the company should not rely much on marketing research because it has perfect negative correlation.

Considering the analysis of the findings and the conclusion drawn from the study, it is recommended that Nigerian Bottling Company Plc should:

  1. Be mindful when implementing research findings.
  2. Establish internal research department with owned staffs.
  3. Create an atmosphere that fosters good rapour with the external research organization.

5.4 Limitations and Suggestions for Further Studies

The study is limited to the degree of truthfulness and objectivity of respondents and the conditions under which the respondents answered the questions.

The time given for this project is too short to conduct a thorough research work on the topic, coupled with the fact that I have to combine it with my academic programme. Also, financial constraint is another problem that I was been faced with.


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