Product Innovation And Sales Performance Of Unilever Nig. Plc

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Product Innovation And Sales Performance Of Unilever Nig. Plc


Innovation are the growth engines for economic development of both developed and developing countries in the areas of job creation, contribution to Gross Domestic Product (GDP), poverty alleviation, and innovation of business ideas. As a result of this, several efforts have been made towards the improvement of their performance. Previous studies based in most advanced countries have established that in today’s globalized and competitive environment, companies focusing on innovation achieve not only competitiveness, but are also able to sustain them for a longer period of time for higher performance.

Chapter One


1.1 Background of the Study

Business strategy development is concerned with matching customers requirements (needs, wants, desires, preferences, buying patterns) with the capabilities of the organization, based on the skills and resources available to the business organization, leading to the issue of core competence (Holmesand Hooper, 2000). This concept has been defined as ‘something that the organization does at least as well as other organizations, or preferably better than, any other organization in the market’. According to Webster (2004),

when products are based on such core competencies, they define the organization’s value proposition in each target market and the organization’ s business strategy; thus, the business strategy adopted by an organization must be able to give it a competitive edge over other competitors in the industry.

Product innovation is widely recognized as central to the success of most companies. New products promote company growth, generate increased sales and profits, and are a crucial component in business planning. New product development is essentially an interdisciplinary activity requiring input from top management, scientific, technical, marketing, finance, sales and other personnel.

Successful product innovation depends on a variety of factors which include the nature and quality of information acquired or known during the new product process, the proficiency of process activities, characteristics of the marketplace, thecompatibility of the resource base of the firm with new product project requirements, the level and complexity of the technology used, organizational structures of the firm, and the innovativeness of the product itself (Cooper 2004,Crawford 2000).

Product innovation, defined as the market introduction of products that is either new to the firm and/or the firms market, and their sales performance has for many years been central to the literature on innovation (Teece, 2006; Laursen, 2012). This focus is understandable since new products is a key mechanism in which firms can achieve new sales, improve their market share(s) and steal business from competitors. However, research has shown that attempts to introduce new products often fail, both in the technological search phase, and in the market introdutiion phase (Van de Ven et al, 2009; Cooper & Kieinschmidt, 2000). The technological and commercial uncertainty surrounding the introduction of new products onto the market is considerable, and June hinder companies from reaping sales from new product introductions, or even hinder them from trying to innovate at all.

Still, some companies manage to introduce new products successfully and reap high economic performance from doing so (Van de Vrande et al, 2003; Clausen, 2013). Understanding why same firms do this better than other firms holds the premise to gain insight into the much debated issue of why firms persistently differ in their performance (Nelson, 2001).Studies have examined different factors and whether or not they promote product innovation and the sales performance of new products, such as marketing, external knowledge sourcing, research and development (R&D) and firm size (e.g. Laursen & Salter, 2006; lausen et al, 2012; zarnitski & Horwarth, 2012). However, most scholars have overlooked the role of non-technological innovation and its possible relationship with technological innovation, induding new product sales performance. This is at odds with early and seminal contributions to innovation theorizing.

Joseph Schumpeter is arguably the most influential theorist about innovation and the role of innovation in economic development {Fagerberg, 2003). Interestingly, his conceptualization of innovation includes market innovation (Schumpeter, 2004). He argued for a broad understanding of innovation which distinguished between the following: “Product innovation” (new good or a new quality of a good), “process innovation” (new method of production), “input innovation” (new source of supply of raw material), “organizational innovation” (new organization of industry) and “market innovation” (opening up of a new market) (Drejer, 2004).

Scholars have recently acknowledged the broad Schumpeterian conceptualization of innovation and are increasingly, focusing on non-technological innovation in itself and its possible relationship with technological innovation (see for instance Sapprasert & Clausen, 2012; Mo! & Birkinshaw, 2009; Damanpour et at, 2009). The purpose of this work is to help remedy this flaw by examining the role of market innovation in the sales performance of new product innovations. We focus on sales performance as sales are a clear signal of market adoption and success. This is in line with a Schumpeterian understanding of product innovation which distinguishes clearly between new products that have an impact on economic and industry evolution and products without such an influence (agerberg, 2003).

1.2 Statement of the Problem

The problem Product innovation and sales Performance is the failure to deal with change. Many organizations do not use the myriad tools, techniques, perspectives, and approaches for being innovative, despite the widespread dissemination of these ideas (Cooper and Kleinschmidt 2006; Majahan and Wind 2002; Daugherty and Heller 2004). The years-long struggle among firms in many industries (autos,communications, airlines, electronics, utilities) to adapt themselves to more innovation indicates that becoming and staying innovative is no easy thing. Moreover, studies indicate that the innovative organization is not less organized and more chaotic as some believe, but rather it is based on a fundamentally different system of organizing (Burns and Stalker 2001; Jelinek and Schoonhoven 1990; Dougherty and Corse 2006). To become capable of sustained product innovation June require changing the very approach to managing and organizing, which is a far more significant adjustment than adding new processes or new performance measurements. Toget beyond this problem, the development of yet another description of the innovative organization will not do. It is important to analyze capacities for innovation in such a way that we can also understand how to change from non-innovative to innovative.

The second problem is a lack of consensus concerning what “organization” and“capacity” are in the first place. This problem arises no doubt because the fields of innovation and technology management cut across many disciplines, from physics to psychology, from economics to sociology, from operations research to accounting. The diversity of views is less like blind men touching different parts of an elephant, however, and more like people at an accident scene who literally see something different. This is, of course, just one perspective, but it address the social and human aspects of organizing that are an important part of sustained innovation.This work sought to investigate the impact of product innovation and sales performance of Unilver Nig. Plc.

1.3 Purpose of the Study

The purpose of this study is to investigate the product innovation and sales performance of Unilever Nig. Plc while the specific sub-objectives are:

  1. To examine the association between technological innovation and sales performance of Unilever Nig. Plc
  2. To examine the association between Administration Innovation and sales performance of Unilever Nig. Plc.
  3. To examine the association between Strategic innovation and sales performance of Unilever Nig. Plc.

1.4 Research Hypotheses

The following null hypotheses are formulated from the above specific objectives:

  1. H01: There is no significant relationship between Technological innovation and Repeat Purchase.
  2. H02: There is no significant relationship between Technological innovation and Sales Growth.
  3. H03: There is no significant relationship between Administration Innovation and Repeat Purchase.
  4. H04: There is no significant relationship between Administration Innovation and Sales Growth.
  5. H05: There is no significant relationship between Strategic Innovation and Repeat Purchase
  6. H06: There is no significant relationship between Strategic Innovation and Sales Growth.

1.5 Significance of study

This study will be of benefits and interest not only to Unilever Nigeria Plcin Port Harcourt, but it will be valuable to other service sectors in Nigeria as a whole. The study will also be a source of primary and secondary data to other researchers who wish to conduct studies on related issues. It will again act as mainstream for generating, keeping and maintaining customers. The results of this study will make significant contribution to consumers of Unilever Nigeria Plc, as they are likely to experience improved service and relationship between them and their customer.

1.6 Scope of the Study

The scope of this study covers Product Innovation and Sales Performance. The geographical scope is Rivers State of Nigeria. The units of analysis covers Unilever Nig. Plc.

1.7 Definition of Terms

Product Innovation:

The development of new products, changes in design of established products, or use of new materials or components in the manufacture of established products

Technological innovation:

Is the process of combining and reorganizing knowledge to generate new ideas.

Innovation strategy:

Means setting formal plan and establishing organization‟s long-term strategy in order to achieve organization‟s goals and objectives.

Administrative innovation:

As a process of developing new management system, new administrative process and staff development programs.

1.8 Organization of the Study

The study is divided into five chapters. Chapter one deals with the study’s introduction and gives a background to the study. Chapter two reviews related and relevant literature. The chapter three gives the research methodology while the chapter four gives the study’s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to examine product innovation and sales performance of unilever plc.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of financial management in manufacturing sector.

5.2 Summary

Evidence from this study support the earlier held view that product innovation leads to improvement of firm’s performance. The outcome also fit the Ansoff Growth Model quadrant, where the introduction of new product and the improvement of existing ones were the center stage for SMEs growth both in the short and long run.

5.3 Conclusion

Lever Brothers products are some of the leading products in Aba, Abia State and are doing well in the market. The effective marketing strategies used by the company have made a great impact on the success of their products. The research findings indicated that consumers will continue to buy these products as a result of their good quality and moderate prices. The company should endeavour to adopt efficient and effective marketing strategies to ensure that the successes of their products are maintained

5.4 Recommendations

The results suggest that, unileversplc in the cities and with educated entrepreneurs were adopting product innovation at the expense of those in the rural areas. Financial constraints and limited market size were the main concerns. The survival of organizations in Nigeria hinges on the adoption of innovative practices if they are to compete fairly with their larger counterparts and overseas competitors. Future research and directions should focus on the involvement of external support from the government and other support institutions for collaborations in the adoption of innovation

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