The Impact Of New Product Development On Sales Volumes (A Case Study Of Peugeot Automobile Nigeria Limited Kaduna)

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The Impact Of New Product Development On Sales Volumes (A Case Study Of Peugeot Automobile Nigeria Limited Kaduna)


This research is a study to investigate “the impact of new product development on sale volume. The writer carefully examined how new product are developed in the company pan ltd, along with sale volume of the new generated product, new product can be described as nay product which has a new substance incorporated, the new substance could be modified favlour, colour, or even the pack. The objective is to enhance profitability towards the development of the organization and what new product development entails. The research is carried out in pan ltd kaduna where major facts, data and information where provided. Recommendations; the company should keep on developing new product for the betterment of the nation (Nigeria) and beyond if possible also briefly examined the introducing part of the project work. The statement of the general problem, the brief history/background and definition of terms. The ideal method use in population is random sampling, solution are provided in 6 questionnaires, the researcher used the following testable hypothesis which was drawn up this. Ho: revealed that the impact of sale volume in new product development facilities sales, encourage more new product generation enhance profitability differentiate Peugeot from the best competitors for its uniqueness and peculiarity. Hi; emanate from some uncontrollable marketing variable, however the unfavourable hypothesis are dropped.

Chapter One


1.1 Background of the Study

Companies that fail to develop new products are putting themselves at great risk. Risk of poor sales volume, space out of market into a small cubicle of not completely put out by competitors of the same product development strategies, initiatives and innovation conscious that is what that research is aiming to influence on sales volume. The existing products are vulnerable to changing customer needs and tastes, new technologies shortened product life circles and increased domestic and foreign competition once a company has carefully segmented the market, chosen its target customers, identified needs, and determined its market positioning.

It is better able to develop new products. New products development shapes the company’s future. Replacement products must be created to maintain or build sales of the organization.

Every enterprise is profit oriented, that can be actualized through prompt sales volume realize, and that depend on the quality, core products, physical tangible, augmented products and the application of promotional mix/tools of the newly developed product.

It is also clear that customers want new products, and competitors will do their best to supply them. For instance, each year over 16,000 new product (including line extension and new brands are introduced into groceries and drug stores.

In automobile company in general (especially PAN with it uniqueness and distinctive qualitative product) such cannot be less expected.

Automobile company Peugeot in developing a program to reach its intended market, must start with the product (new product) at hand for offering or service designed to satisfy the wants of the market segment. Therefore the executives must plan, develop and manage both individual (industrial users) product and industrial product assortment. This is not easy task as is shown by the large number of product failure in our economy.

1.2 Statement of General Problem

Understanding this concept – new product, we discover products or services that are borne of innovation but non existence previously with its present feature so it attracts problems at the level. A new product can be conceived and developed over night, it takes time and efforts to ring the new product idea into fruition. It also consumes a lot of money to bring a new idea generated into commercialized offer.

A new product is expected to be profitable and successful but opposite is the case sometimes to different companies products sometimes decline and die natural deaths due to inexplicable circumstances. Some organizations can tolerate a gradual decay while others adopt alternative actions to remedy the life of the dying product. The reaction of the company leads to new or modified products such products are born out of either innovations or invention that is problem in process.

More so innovations or inventions can be accepted or rejected by the intending customers and this rejection sends the manufacturer back to the drawing board to search for the right product good cost. While acceptance categorizes the intending customers according to the timing of their acceptance and adoption. New product continue to fail a disturbing rate in 1997, record 25, 261 new package goods products were lunched and that doesn’t include products you won’t find at your local supermarket, like technogism and software programmers. But equally stuming is the number that failed. Talking about new product failure in automobile industries, Peugeot 505 evolution (Nigeria innovation/made) was face out 9 years ago.

A twinkle of an eye in the life span of product life cycle of PAN when you consider that it cost N40 million to 90 million to launch a new product you wonder why people continue to innovate at all.

Budgeting for new product development is another problem. Research and development (R and D) outcomes are so uncertain that it is difficult to use normal investment criteria example today 3m innovation network makes more than 60,000 product including sand paper, adhesive, computer diskettes, contact lenses, etc.

And each year 3m launches score of new products. This and 15 billion company immodest goal is to have each of its divisions generate at least 30 percent of sales from product less than four year on the market.

Estimating cost of finding on successful new product considering the process of new product development each.

1. Idea screening 64 1.4 1,000 64,000
2. Concept testing 16 1.2 20,000 320,000
3. Product development 8 1.2 20,000 1600,000
4. Test marketing 4 1.2 500,000 2,000,000
5. National lunch 2 1.2 5,000,000 10,000,000
Total N5,721,000 N13,984,000

A new product can emerge due to the preventing circumstances within and outside the company such problems encompass. Organizing new product development the obsolescence of the existing product how to develop and create a new market the company’s strategic objective of product diversification the technological innovation and environmental influence.

1.3 Brief History of Peugeot Automobile Nigeria Limited

The name Peugeot is a family name and it happens to a product name too. Before 1975 individuals in Nigeria were importing vehicles into the country.

In 1979 the Federal Government of Nigeria took a firm decision, she decided to import motor vehicle and this continued till August 1970 when the Federal Government invited foreign automobiles companies for a supply and assembly of motor vehicles in the nations, therefore open application form of vehicles were offered. Many automobile companies abroad applied but only Volkswagen of Western Germany and automobile Peugeot of France were favoured and approved by the government. Peugeot is to be sited in Kaduna and in Yaba Lagos. The negotiation and agreement concluded in 1970 and the company Peugeot Automobile Nigerian Limited (PAN) was incorporated the same year.

In 1972 construction commenced in earnest and completed in March 1975 and commercial along that was during the military era. Production started immediately. The first motor vehicle (car) that was produced on that very day was: (i) 405 saloon car along the line are other version. (ii) 504 air conditioned, 504 ambulance, 504 Dagel, 504 SR 2000, 504 special, (ii) 504 delivery van, the best line, new ling, there was no 404 station wagon.

In January 1981, Peugeot 505 was produce, 505 evolution was produced along the line but was faced out for two year ago that year 2000. J5 was developed and introduced in 1991 that was when federal government introduced mass transit. All these mentioned above were the group of first generation of Peugeot products now classify as old generation. The beginning if the new generation includes. Boxer (which has come to replace 15) after that another new Peugeot product was developed, Peugeot 306 model. And so far other versions developed 306 standard, 306 best line, 306 XR, 306 SR, 406 prestige. The other version imported and marketed in Nigeria are 306 station wagon, boxer, 307, 206, the partner and the expert. The 607 and even 708. The partner, boxer and the expert are kit cars not pleasurable car like 306, 406, 607, 206 etc.

1.4 Background of the Subject Matter

The subject (new product development) has influence on the issue of sales volume which the researcher would like to unless in assembly and sales of PAN product and services in Nigeria, although the researcher discovered no new products idea generation either from customers.

The company staff, advertising and research agencies, competitors, through conferences, exhibitions, and trade fairs, company’s marketing department and R and D department of the company or through any of the processes to prototype development and test marketing or commercialization in new product development that is ever done or actualized in the assembly nation (Nigeria) rather, but in France, therefore the sales here must be influenced by the cost of raw material source shipped for imported and along with the cost of production in the assembly. This is why sales or marketing strategy apply is more focus on industrial market and government (local state and federal). Majorities and less industrial market (buyer). All that involve are due to the technicalities and uniqueness of the product.

There may be no use attempting to add a new product to the existing range, if such a firm has no clear-cut objectives of what the new product is supposed to achieve. It is not however, within the slope of this research piece make a comprehensive list of the various objectives of new products development as this varied widely from one firm to another.

By and large, the purpose of new product development of an unexplored market potentials which a company has identified. The firm having armed itself life PAN with such objective may then proceed to other steps in new product development.

1.5 Research Scope

This study: impact of new product development on sales volume is the aim of the research to go beyond the elementary understanding the subject at hand. To enlighten the reader and give deep insight or illumination on new product development (NPD), sales in generating and their interaction, relationship impact, connection, influences and enhancement that occurs.

1.6 Rationale for the Study

Normally a researcher have his aims and objectives for the study but this pieces of work is beyond mere aim for this project, there is a focus/goal and high expectation, and benefits for reader. Not just that alone but to other researcher of this or similar kind, to the company R and D and marketing department and even to the government at large the research work further emphasis on:

  1. The need of new product development
  2. Objective of new product development programme
  3. The constraint and solution project
  4. Innovation and adoption categories.
  5. Financial and general cost involve
  6. Balancing the sales volume while develop more new product frequently.
  7. Considering the product life cycle.

1.7 Limitations of the Study

Actually, this piece of work ought to be more voluminous that what it is not but due to the inhibiting factors encountered by the researcher during the period which are beyond control.

Inadequate finance brought delay, time wasting and access to total comprehensive information and data hence that is clearly understood or financial crisis is part and Persil of students.

The crash academic program of the researcher couple with lectures combining services with supervising of project all posed problems or threat in its way.

Lack of prompt innovation, invention and initiative ability by company R and D staff and new product failure. Financial deficiency by the company, all the processes of new product development involve money (huge amount). Its never done over night it takes time, labour and money.

Another constraint are sales, new product pass through adoption process or class according to Roggers. It consists of he innovator, adaptors, early majority, late majority and laggards (will consider each later in detail).

In this nature, sales is highly influenced slowly, fast or gradual some times or easily contribute the product declining and out of market when multitudes of late majority and laggards are commonly discovered.

Data provided has a little limitation to its effect hence the secret and organizational policy in some extent must be safe guided and through secured/experienced it at the course of the research.

1.8 Definition of Terms

New Products Development:

Any product which has a new substance incorporated, modified, flavor colour, or even the pack or if its is seen so (new) to consumer in new market or if new uses of it have been discovered.

Sales Volume Analysis:

Is a detailed study of the “net sale” section of a company’s profit and loss statement (its operating statement).


Is a set of tangible physical attributes assembled in an identifiable form or any thing offer for sale that have value.

Product Modification:

Adding to some features, style to improve and charge the existing product into a new one.

Quality Improvement:

An improvement perceived to the significant by customers in product appearance and performance.

Feature Improvement:

This is designed to increase the range and scale of product use that give exhaustic pleasure to the customer.

Style Improvement:

This aim to improve product aesthetic appeal rather than product preference, and it is center or shape, colour and texture variance.

Service Improvement:

Companies complement their product offers with service in order to heighten repeat purchase.

Quality Reduction:

This has led to price wars, inflation and declining marketing activities. Prices reduce to appeal price sensitive customers and reduce the impact of competition and improve profitability.

Promotional Benefits:

Companies tend to add value to their products through sales promotion, advertising personal selling, public relations and publicity.

Value Analysis:

The product formula altered in order to improve performance and ensure added value.

Product Space:

Is a market opportunity created by unsatisfied need which involve extension of product line or the development of a new product.

Product Line:

Is a group of product that are closely related either because they satisfy a class of needs are used together, sole to the same customers groups, are marketed through the same types of outlets, or fall within given price ranges. And is determine by the width, length and consistency of product mix.

Product Offer:

Are the collection of company provision which includes the company’s product service and other supportive activities.


Is anything including words, letter name, symbols, or band marks, and marks which may be a seller to distinguish his goods from those offered for sale by competitors.

Brand Name:

Is a word or group of word, letter number of the combination of the above which can be spoken, that helps to identyify, a product and differentiates from other goods e.g. the word Peugeot is a brand name.


This concerned with protection and promotion of product (new or modify) and it comes in different forms, example papers words, glass etc.

Chapter Five

Summary, Conclusion and Recommendations

5.1 Introduction

This chapter deals with the summary, conclusion and recommendation of the information gathered in the cost of the research work.

5.1 Summary

The data and information collected by the researcher thus could be seen that new product development in automobile vehicle company is highly acceptable and welcome by the large number of the company’s customers and distributors. The impact of new product development on sales volume in PAN Ltd has actually brought about immense growth in the company’s automobile industry. It has been observed that the various version and products produced by Peugeot automobile ltd are designed to suit the environment and nation as a whole, and to meet the table of market demand among other competitors. Examples Peugeot 504 pick-up is designed to convey goods from typical villages “rural to urban areas” into towns and cities of the country.

From farm or factory, contract site to markets 504 station wagon and 504 J5 is build to serve commuter purpose in our transportation company within towns ands later states. 504 ambulances is designed for special cases urgent case in the hospital convey doctor on call at night and morning coffee to various destination, while delivery van is meant for farmers and industrial uses/purposes. Among other versions are the best line, 504 new line, 504 dangel, 504 special and ordinary with their special/unique purposes.

Furthermore, Peugeot have developed convenient pleasurable cars which encompasses 306 standard, 306 best line, 306 XR, 306 SR, 406, 406 prestige, 206/307. And kit cars boxer, the partner and the expert.

Generally, the company have done better if not the best to satisfy the criticism of Nigeria with climate condition suitable motor vehicles and delivery and factory/industrial like kindness and pleasurable cars which is of course a character of Nigeria (full of pleasurable and enjoyment – live of life affluence).

Therefore, is obvious that Peugeot product is designed just for Nigeria in all area from rural to urban farms through industries to market, for the average, rich and wealthy Nigerians and what have you.

5.2 Conclusion

The new product development of the company (PAN) ltd on sales volume has been received great appreciation and commendation quite well from her customers and even sincere competitor. The manufacturer or producer of quality product of this nature hardly achieve its objectives until more new products are developed at a favourable sales (profit) and make use of the 4ps-product, promotion, price and place (distribution) strategy effectively that is why Peugeot products although only assembled in Kaduna (Nigeria) but found all our major center/town in Nigeria in terms of sales and every nooks and corners in terms of distribution “right place” where customers can buy with minimum efforts. With this Peugeot products can compete and maintain the market share today as it can classified among the market leaders or challengers.

Concisely, the stages of new product development is very vital to be observed – idea generation, idea screening, idea evaluation, prototype development and test marketing or commercialize. Each of these stages helps the competitors challenges and customers needs/end users demand.

From the vital issues and information collected by the receiver, PAN ltd is marketing oriented company. It has succeeded in having a total Nigerian market share of 70% in the right automobile sector industry. You see that I am correct to call Peugeot products company as a market leader especially in Nigeria. The after sales services product by the company to aid the customers sell fast make her unique and peculiar from other competitor that is why its difficult for Peugeot product (motor vehicle) to be push out of the market today.

5.4 Recommendations

Through the completion of the research analysis and interpretation in the course of writing a costly genuine research of this nature, this research work will best be completed by examining the whole entire project and make recommendations from the finding on the topic the impact of new product development on sales volume – case study of PAN ltd.

  1. The company should keep on developing new products for the betterment of the nation (Nigeria) and beyond if possible.
  2. The research and development (R and D) department of PAN should put more effort to develop new product in Nigeria, I mean PAN ltd should not always wait and depend on the Peugeot headquarters at France to only think through unthinkable thoughts, have great costly innovation for PAN to assemble. I am not saying that poor idea to be permitted into development, but hard work, creativity and initiation is highly required by professional like R and D department, new product development department or team, marketing department in action is so clear that a governor occurs when the company permits a poor idea to move into development and commercialization ltd. This distinguish three type of product failures:
    1. An absolute product failure losses money, it sales do not cover variable cost.
    2. A partial product failure losses money, but its sales do not cover variable costs and some of its fixed costs.
    3. A relative product failure yields a profit that is less than the company’s target rate return, yet product failures can serve one useful purpose investors, entrepreneurs and new product team leaders can learn valuable lesson about what not to do with this new developed product through the effort of the departments concerned. Therefore R and D departments should properly be incorporated into new protean and effective work. This will assist strongly in developing new product to enable the firm compete effectively in our Nigerian labour market. This might include both product and new product managers and committees and marketing department and include quality control section should be well equipped to handle complaints arising from customers and end users.
  3. I commend the training programme going on presently, that will aid to improve their knowledge on the job, also will increase the output of the employees. But the training programme should be carried out irrespective of the job class or level of the employees.
  4. Organize frequent seminars and workshops for sales team to educate them. And regular interaction between the firm business executive and the major dealers. Awards to the highest purchases yearly should be highly embarked upon with such workable policy.
  5. The pieces of Peugeot motor vehicles are highly even to average Nigerian that is because of the core product and argument of the cars. It is wrath the product for affluent class of Nigerians. And the high cost of the finished product is due to the cost involved in material procurement (the actual-real cost of transportation). If new product is developed here and marketed here, the company will only foot the cost of materials product, which will lessen the price of each car. 206, 306, station wagon, boxer, the partner and the expert and 307 for instance, if innovated, developed and marketed here certainly the price wouldn’t give rise to what it is in the market today. It is because they are not even assembled here in PAN Kaduna but imported. Therefore, the cost of shopping and flight have to be included because PAN is a profit oriented company.
  6. Sales force should be highly involved in marketing and the company should be fully involved in constant advertisement making, use of promotional tools – advertising personal selling, publicity, sales promotion, direct marketing and public relation (PR) then these aspects are left for dealers and distributors only, it will delay fast sales volume.
  7. In a nut-shell SWOT analysis should be drawn and deserves by marketing department for correction, adjustment, effectiveness, efficiency, productivity and what have SWOT analysis will help us to know the strength and achieving effort of the company. The company’s weakness and failure to correct, the opportunity and ways available for the firm to embark and adhere to it, and the threat/difficulties/opposition facing the company that need tackling or proffer solution with urgent attention.
  8. Finally, I will like to suggest ways to create new product ideas for the department concerned in PAN ltd.
    1. Organize seminars- session where groups of customers meet with the company engineers and designers to discuss problems and needs and brainstorm potential solutions.
    2. Allow time off (scouting time) for technical people to put on their own projects.
    3. Make a customer brainstorming session a standard feature of plant tours.
    4. Survey your customers. Find out what they like and dislike in your product and competitors products.
    5. Undertake fly-on-the-wall or “camping out” research with customers.
    6. Use iterative rounds a group of customers in one room focusing on identifying problems and a group of your technical people in the next room, listening brainstorming solutions. The proposed solutions are then tested immediately on the group of customers.
    7. Set up a keyword search that routinely scans trade publications in multiple countries for new product announcements and so on.
    8. Treat trade shows as intelligence missions, where you view all that is new in your industry under one roof.
    9. Have your technical and marketing people visit your supplier’s labs and spend with their technical people to find out what’s new?
    10. Set up an idea vault, and make it open and easily assessed. Allow employees to review the ideas and add constructively to them.

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