Effect of Marketing Research on Product Development

Effect of Marketing Research on Product Development

Chapter One of Effect of Marketing Research on Product Development

INTRODUCTION

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.

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.

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.

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?

5.          What is the importance of marketing research on new product development in Demas food limited, Eket?

6.          What are the possible solutions to the problems?

STATEMENT OF RESEARCH HYPOTHESIS

H0:    Marketing research has no significant effect on product development.

H1:        Marketing research has a significant effect on product development.

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.

SCOPE OF STUDY

The study on marketing research on product development is limited to demas food limited, Eket, Akwa Ibom state.

LIMITATION OF STUDY

Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

DEFINITION OF TERMS

Effect       A change which is a result or consequence of an action or other cause.

Marketing Research         Marketing research is the function that links the consumer, customer, and public to the marketer through information–information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.

Product   An article or substance that is manufactured or refined for sale.

Development   The process of developing or being developed.