New Product Development and Organizational Performance (Study of Grand Malt)

CHAPTER ONE
Introduction
1.1 Background of the Study
Product development is important in any dynamic economy. It determines both the
level of economic growth and the standard of living of the citizens. Most products in the
market today have undergone changes overtime. Some that were in the market years
ago have faced out while ‘new’ products are introduced in the market on a continuous
basis (Anyanwu, 2003). Thus, the development of really new product is, of course, the
major aim and care of the product policy of most industrial and consumer firms
(Nwokah, 2002).
The product, according to Nwokah, (2002), is the most essential ingredient in the
marketing mix. This is because it holds together promotion, distribution (place), as well
as pricing policies. And, Cannon (1980) defines a product as anything that can be
offered to the market for attention, acquisition, or consumption, including physical
objects, services, personalities, organizations and desires; while Kotler (1984) defines
new product to include original products, product improvements, product modification,
and new brands that the firm develops through its R & D efforts.
As a way of avoiding product extinction, a firm’s decision to introduce new product is
taken after a careful evaluation by conceptual and quality personnel in the area of
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product strategy. Therefore, timely introduction of new products combined with the
care and handling of other products may be developed into an overall strategy of
product marketing. Frequently, the marketer can gain as such through choice of the
proper product innovation or modification as he might through the development of a
strong advertising campaign. All these are aimed at providing the firm with a
differential advantage over its competitors (Nwokah, 2002).
Companies that do not develop new products risk much. They will find their products
falling victim to changing consumer needs and tastes, new technologies, shortened
product life cycles, and increased domestic and foreign competition (Nwokah, 2002).
Thus, the sole goal in new product strategy formulation should be to reduce
sustainability and to differentiate products so as to remove the product from price
competition and at impairing the ability of the decision-maker to compare products.
Other benefits to company include countering technological obsolescence, improving
outdated facilities and machinery, offsetting industry declines, reducing
seasonal/cyclical slumps and other economic fluctuations, and making of waste and by-
products.
1.2 Statement of the problem
What consumers buy depends on their culture, social class, lifestyle and other
environmental variables. Still, the factors that make up the business environment are
constantly changing. By environment we mean the sum of all the external forces that
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influence legal, economic, political, social and physical elements. Also, high
technology products often require the installation of sophisticated support systems.
More still, Nigerian businesses are often confronted with the problem of inadequate
infrastructural facilities such as electricity, water supply, transportation, feeder roads,
communication, hospital, and so on. Thus, product development in Nigeria is
characterized by dangers and uncertainties. The danger may be in wasting financial and
human resources without achieving success in the production of the product; while the
uncertainties arise as to whether the products will succeed or die on introduction.
Therefore, any organization intending to introduce a new product or improve an
existing one, should adopt a product strategy that must be adapted to the extent that all
these systems are already in place favourably within the environment.
1.3 Objectives of the Study
1. To determine whether there is any significant relationship between New
Product Development and increased sales volume.
2 To ascertain whether there is any significant relationship between New Product
Development and profitability of an organization.
3 To determine if there is any significant relationship between New Product
Development and customer satisfaction.
4 To find out if there is any significant relationship between New Product
Development and customer loyalty.
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1.4 Research Questions
The following questions are for the purpose of this study:
i. Is there any significant relationship between New Product Development and
increased sales volume?
ii. Has New Product Development any significant relationship with profitability
of an organization?
iii. Is there any significant relationship between New Product Development and
customer satisfaction?
iv. Has New Product Development any significant relationship with customer
loyalty?
1.5 Research Hypotheses
H01: There is no significant relationship between New Product Development and
increased sales volume.
H02: There is no significant relationship between New product development and
profitability of an organization.
customer satisfaction.
customer loyalty.
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1.6 Significance of the Study
This research study, when concluded will contribute to knowledge in various ways.
To companies, it will be very useful to companies in that they will seek for
opportunities for new product development, which in turn will give them a competitive
edge in the industry.
To government, it will enable them to generate more revenue from both the company
who register their products.
And, to the Academics, this study will serve as a reference material to future
researchers.
1.7 Operational Definition of terms
Product: A set of tangible and intangible attributes, including packaging, color,
price, quality, and brand, plus services and reputation of the seller, offered to the market
for the satisfaction of needs or wants.
Competition: An event in which organizations and individuals compete (trying to
win something by defeating others who are trying to do the same).
Development: Introduction of new or improved product.
Offer: Something presented to the market for sale.
Market: The actual and potential buyers of a product or service.

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1.8 Limitations of the Study
The researcher faced the following constraints in the course of the research:
Time Constraints: Time is the most limiting factor in this research study. This is
because the time given to the researcher to carry out this study is not enough to carry
out a thorough study and produce a more valuable and reliable result.
Financial Constraints: The costs involved in printing of questionnaire, as well as that
of transportation to different companies, cities and states posed a limitation to this
study.
Attitude of Respondents: It has been proven that Nigerians are yet to know the
importance of Researches on companies, individuals, and the economy as a whole. That
is why many respondents always find it difficult to answer some questions or even to
provide real answers to the once answered.
1.9 Organization of the Study
This study has been divided into five chapters, which is the standard for a normal
academic research study. In chapter one, we introduce the topic, identifying points
made by scholars in the field of marketing and management to unveil the necessity of
new product development to any business that seeks to survive in the present day
dynamic and competitive business environment. Other areas covered in this chapter are:
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the problem statement, the Purpose, questions, hypothesis, significance, scope,
limitations and organization of the study.
In chapter two, the researcher reviews materials relating to the study at hand. Some of
the areas reviewed include the meaning, definition and characteristics of a product,
product development processes, and reasons for the success or failure of a new product,
among others. Chapter three is for research methodology. It will look into the
procedure or processes, techniques involved in the study. The sample size still will be
determined using a particular area where sampling numbers can be obtained.
Chapter four looks into the data collected using tables, figures, and percentages. The
data so analyzed will be interpreted for a reliable conclusion.
In chapter five, we will summarize the findings, conclude adequately and make
recommendations based on the findings.
1.10 Brief History of Grand Malt
SABMiller is one of the world's leading brewers with more than 200 beer brands and
some 70,000 employees in over 75 countries. We also have growing businesses in soft
drinks and we are one of the world's largest bottlers of Coca-Cola products. The main
brands of the company include: Trophy, Hero, Grand, Castle, Trophy Black, Castle
Milk Stout, Grand Malt, Beta Malt, Voltic Water, Redds Original, and Redds Vodka
Lemo (www.sabmiller.com/overview).
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In 2009 SABMiller entered the Nigerian beer market by acquiring an interest in Pabod
Breweries in Port Harcourt. SABMiller also agreed to acquire an interest in Voltic
International Inc. Voltic has water businesses in Ghana and Nigeria. From the 1st
January, 2012, SABMiller took operational management control of the Castel Nigerian
business, International Breweries. This resulted from the combination of the Castel and
SABMiller businesses in Nigeria and Angola. In August 2012, His Excellency Dr.
Goodluck Ebele Jonathan, President of The Federal Republic of Nigeria commissioned
the new Onitsha brewery in South Eastern Nigeria. This was SABMiller's first
'Greenfield' brewery facility to be built in the country following an investment of over
US$100 million. The new brewery marked the launch of 'Hero', a new local brand for
the region. (www.sabmiller.com/index.asp?pageid=2458).
The communities in Onitsha and surrounding towns stand to benefit significantly
through the creation of employment and through indirect commercially-related
activities and support services. Immediate direct job creation will see 180 local people
employed, with that number increasing to approximately 450 as production volumes
grow. Local raw materials such as sorghum and maize will be used where possible
supporting the local economy and the Government’s efforts toward poverty eradication
and job creation (http://www.sabmiller.com/index.asp?pageid=149&newsid=1997).
Trophy Premium Lager and Grand Malt, two high quality brands brewed by
International Breweries Plc and Pabod Breweries Limited (subsidiaries of SABMiller
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Plc in Nigeria) respectively were recently honored with the International Monde
Selection awards for quality in the gold category. The Monde Selection is an
international award which recognizes the taste and quality of brands from across the
globe using critical evaluation by an independent jury (www.tribune.com.ng).
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CHAPTER TWO
Review of Related Literature
2.0 Introduction
In this chapter, the researcher reviews literatures that have relationship with the stated
research objectives in chapter one. All the literature reviewed here are towards finding
out the core objective of this study which is, “The impact of new product development
to an organization’s performance”.
2.1 The Meaning, Definition and Characteristics of a Product
Products provide firms with the most important and visible contact with buyers. If an
entrepreneur’s products do not meet the desires and needs of consumers and unless
necessary adjustments are made – he will fail (Onuoha, 1994). He added that
developing products that meet the desires and needs of the consumers required the
knowledge of fundamental marketing and product concepts.
Many authors have given different definitions of a product. Cannon, (1980), defines a
product as anything that can be offered to the market for attention, acquisition, or
consumption, including physical objects, services, personalities, organizations and
desires. Stanton, (1981), define a product as a set of tangible and intangible attributes,
including packaging, colour, price, manufacturer’s prestige, retailer’s services, which
the buyer may accept as offering want-satisfaction. Ekeke (2009), on the other hand,
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defines a product as anything that can be offered to the market for attention, acquisition,
use or consumption which might satisfy a want or need. For Kotler (1997), it is
anything that can be offered to satisfy a need or want. He further classified products
into three (Physical good(s), Services, and Ideas).
From the above definition, Ekeke (2009) noted some points which we can term the
characteristics of a product in this study. They include:
i. A product is an offer. The offer could be a physical good (Hamburger, Shirt,
Biro, Car, etc.); a service (haircut, medical attention, shoe repair); a place
(Obudu Cattle ranch, Tinapa business and leisure resort, etc.); personality
(Wale Adenuga Jnr., Dr. Peter Odili, etc.) Idea (family planning, Zip up
program, etc.); Organization ( Niger Delter Development Commission
NDDC) etc.
ii. These offers must be able to satisfy identified needs when patronized by a
consumer.
iii. A product is seen as a package or bundle which may be a combination of
both the physical good and associated services that will enhance the utility
value of the product. This brings us to the levels of a product.
2.2 Levels of a Product
As obtainable from www.marketingteacher.com, the product may be subdivided into
three as shown below:

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Fig. 2.1 Level of a Product.
The Core product is NOT the tangible physical product. You can't touch it. That's
because the core product is the BENEFIT of the product that makes it valuable to you.
So with the car example, the benefit is convenience i.e. the ease at which you can go
where you like, when you want to. Another core benefit is speed since you can travel
around relatively quickly.
The Actual product is the tangible, physical product. You can get some use out of it.
Again with the car, it is the vehicle that you test drive, buy and then collect. You can
touch it. The actual product is what the average person would think of under the generic
banner of product.
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The Augmented product is the non-physical part of the product. It usually consists of
lots of added value, for which you may or may not pay a premium. So when you buy a
car, part of the augmented product would be the warranty, the customer service support
offered by the car's manufacturer and any after-sales service. The augmented product is
an important way to tailor the core or actual product to the needs of an individual
customer. The features of augmented products can be converted in to benefits for
individuals.
2.3 Features and Benefits of Products
Features and benefits of a product are also relevant to the three levels of the product.
Products tend to have a whole series of features but only a small number of benefits to
the actual consumer.
Let's look at this another way, if you buy a Nintendo console it has many features; for
example you can play games alone or you can play against another opponent or two or
three opponents. You can also have access to the Internet. Avatars are adaptable so you
can create yourself and your friends. These are all examples of features to the
consumer. However a consumer may buy it because he or she wants to stay fit and will
use software and peripherals to become healthier. Becoming healthier is the benefit to
the consumer.
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The consistent marketer will aim to discover the consumer’s preference for benefits and
will match individual features to the preference. That is why professional salespeople
for example, often ask many questions whereas a novice salesperson will just tell you
the features of the product (www.marketingteacher.com).
2.4 Classification of Products
Classifying products into meaningful categories helps marketers decide which strategies
and methods will help promote a business’s product or service. Many types of
classification exist. For example, marketers might categorize products by how often
they are used. One-time-use products, such as vacation packages, require completely
different marketing strategies than products customers use repeatedly, such as bicycles.
Product classification helps a business design and to execute an effective marketing
plan. (smallbusiness.chron.com).
Considerations
The key is to categorize your products in ways that make sense for your business. This
allows you to, for example, design separate marketing campaigns for each category of
product you offer. The alternative -- using a one-size-fits-all marketing plan -- is often
less effective than implementing several highly targeted plans. No simple recipe exists
for categorizing products and services, but there are some common product
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classifications in marketing: convenience, shopping, specialty and unsought products,
according to “The Advanced Dictionary of Marketing,” by Scott Dacko.
Convenience Products
Convenience products involve items that don’t require much customer effort or
forethought. Food staples often fall into this category, because customers can buy them
nearly everywhere and at roughly the same prices. Marketing convenience products can
be a challenge if there are many similar products competing for the customer’s attention
and driving down the price.
Shopping Products
Customers are willing to invest time and effort to buy shopping products. For example,
a customer might compare ingredients, prices and safety information for a variety of
deodorants before making a final purchase. Often, the most effective marketing
approach is to use advertising and heavy promotions to develop brand preference and
loyalty among customers, according to the book “Principles of Marketing,” by Ashok
Jain.
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Specialty Products
Specialty products require significant thought or effort. For example, a well-known
luxury car model might be available at just a few local dealerships, meaning an
interested customer has restricted options. Specialty products tend to be expensive,
durable goods, often involving authorized dealerships and personal selling.
Unsought Products
Unsought products are items customers aren’t aware of or don’t often think about. New
products that have no brand recognition fall under this classification, as do certain types
of insurance. The marketing problems presented by an unsought product are as follows.
First, you must convince customers they need the product or service. Second, you must
convince customers to buy the product or service from you and not your competitor.
2.5 New Product Development (NPD)
New Product Development (NPD) will take in to account the consumer’s preference for
benefits over features by considering research into their needs. NPD aims to satisfy and
anticipate needs. NPD delivers products which offer benefits at the core, actual and
augmented levels.
NPD might offer a replacement product for a current line, it could add products to the
current line, it could discover new product lines and sometimes it delivers very
innovative products which the world might not have seen before.
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New products are launched for all sorts of reasons. As we know from our previous
lesson on the business environment, legislation i.e. changes in the law can mean that
companies have to design and develop new products. An example of this was when we
moved from videotape recorders to digital and DVD recorders. So products need to be
modified for changing target markets.
Sometimes the company will need to increase the volume that a production plant
delivers, since maybe it is not running at full capacity. An example of this would be a
food manufacturer of tinned soup that has a factory which can operate 24/7, designing
different derivatives of the soup in order to lower the unit cost of production. So
product lines are extended, in this case the reason being is to ease operational
efficiency.
Intense competitive rivalry in the market will also lead to the need for NPD. Just think
about your smart phone and how quickly such products go through their product life
cycles, throughout your customer life-cycle.
Change in any element of the marketing mix would influence NPD, for example there is
a movement to shop online and some products need to be distributed via online
retailers, and the product is adapted to make it compact and simple to deliver. NPD can
be driven by many influences from changing consumer tastes to the need to adapt
products and services for local or international market (www.marketingteacher.com).
Another marketing tool for evaluating product is the Product Life Cycle (PLC).
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2.6 New Product Development Process
Every entrepreneur knows that productivity is one of the key ingredients for successful
product development. One of the two key processes in Robert’s Rules of Innovation is
the New Product Development Process. A formalized, NPD process – also referred to
and best practice: the Stage Gate Process – is a must, from simple to sophisticated.
The New Product Development process is often referred to as The Stage-Gate
innovation process, developed by Dr. Robert G. Cooper as a result of comprehensive
research on reasons why products succeed and why they fail.
When teams collaborate in developing new innovations, having the following eight
ingredients mixed into your team’s new product developmental repertoire will ensure
that its overall marketability will happen relatively quick, and accurately – making
everyone productive across the board.
Step 1: Generating the Idea
Utilizing basic internal and external SWOT analyses, as well as current marketing
trends, one can distance themselves from the competition by generating ideologies
which take affordability, ROI, and widespread distribution costs into account.
Lean, mean and scalable are the key points to keep in mind. During the NPD process,
keep the system nimble and use flexible discretion over which activities are executed.
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You may want to develop multiple versions of your road map scaled to suit different
types and risk levels of projects.
Step 2: Screening the Idea
Wichita, possessing more aviation industry than most other states, is seeing many new
innovations stop with Step 2 – screening. Do you go/no go? Set specific criteria for
ideas that should be continued or dropped. Stick to the agreed upon criteria so poor
projects can be sent back to the idea-hopper early on.
Because product development costs are being cut in areas like Wichita, “prescreening
product ideas,” means taking your Top 3 competitors’ new innovations into account,
how much market share they’re chomping up, what benefits end consumers could
expect etc. An interesting industry fact: Aviation industrialists will often compare
growth with metals markets; therefore, when Boeing is idle, never assume that all
airplanes are grounded, per se.
Step 3: Testing The Concept
As Gaurav Akrani has said, “Concept testing is done after idea screening.” And it is
important to note, it is different from test marketing.
Aside from patent research, design due diligence, and other legalities involved with new
product development; knowing where the marketing messages will work best is often
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the biggest part of testing the concept. Does the consumer understand, need, or want
the product or service?
Step 4: Business Analysis
During the New Product Development process, build a system of metrics to monitor
progress. Include input metrics, such as average time in each stage, as well as output
metrics that measure the value of launched products, percentage of new product sales
and other figures that provide valuable feedback. It is important for an organization to
be in agreement for these criteria and metrics.
Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to
be a valuable asset for future products and a basis for learning and growth.
Step 5: Technicalities + Product Development
Provided the technical aspects can be perfected without alterations to post-beta
products, heading towards a smooth step 7 is imminent. According to Akrani, in this
step, “The production department will make plans to produce the product. The
marketing department will make plans to distribute the product. The finance department
will provide the finance for introducing the new product”.
As an example; In manufacturing, the process before sending technical specs to
machinery involves printing MSDS sheets, a requirement for retaining an ISO 9001
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certification (the organizational structure, procedures, processes and resources needed
to implement quality management.).
In internet jargon, honing the technicalities after beta testing involves final database
preparations, estimation of server resources, and planning automated logistics. Be sure
to have your technicalities in line when moving forward.
Step 6: Beta / Marketability Tests
Arranging private tests groups, launching beta versions, and then forming test panels
after the product or products have been tested will provide you with valuable
information allowing last minute improvements and tweaks. Not to mention helping to
generate a small amount of buzz. WordPress is becoming synonymous with beta
testing, and it’s effective; Thousands of programmers contribute code, millions test it,
and finally even more download the completed end-product
(http://www.innovationexcellence.com)
Step 7: Commercialize
At this stage, your new product developments have gone mainstream; consumers are
purchasing your good or service, and technical support is consistently monitoring
progress. Keeping your distribution pipelines loaded with products is an integral part of
this process too, as one prefers not to give physical (or perpetual) shelf space to
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competition. Refreshing advertisements during this stage will keep your product’s name
firmly supplanted into the minds of those in the contemplation stages of purchase.
Step 8: Post Launch Review and Perfect Pricing
Review the NPD process efficiency and look for continues improvements. Most new
products are introduced with introductory pricing, in which final prices are nailed down
after consumers have ‘gotten in’. In this final stage, you’ll gauge overall value relevant
to COGS (cost of goods sold), making sure internal costs aren’t overshadowing new
product profits. You continuously differentiate consumer needs as your products age,
forecast profits and improve delivery process whether physical, or digital, products are
being perpetuated. (http://www.innovationexcellence.com).
Remember: The Process Is Loose
The entire new product development process is an ever evolving testing platform where
errors will be made, designs will get trashed, and loss could be recorded. Having your
entire team working in tight synchronicity will ensure the successful launch of goods or
services, even if reinventing your own wheel. Productivity during product development
can be achieved if, and only if, goals are clearly defined along the way and each process
has contingencies clearly outlined on paper. (http://www.innovationexcellence.com).
2.7 Product Management
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A product once commercialized faces the problem of management. The firm alone is
not in the industry and its competitors will like to enter the market if the product proves
successful. It therefore follows that the firm must manage its product right from the
introductory stage till the maturity or even declining stages Anyanwy (2003:47). Thus,
scholars have developed the Product Life Cycle (PLC) concept to be a guide to
managers in the attempt to manage their products.
2.7.1 Product Life Cycle
In theory it's the same for a product. After a period of development it is introduced or
launched into the market; it gains more and more customers as it grows; eventually the
market stabilizes and the product becomes mature; then after a period of time the
product is overtaken by development and the introduction of superior competitors, it
goes into decline and is eventually withdrawn.
The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a
seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts
down roots as it becomes an adult (maturity); after a long period as an adult the plant
begins to shrink and die out (decline).
In theory it's the same for a product. After a period of development it is introduced or
launched into the market; it gains more and more customers as it grows; eventually the
market stabilizes and the product becomes mature; then after a period of time the
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product is overtaken by development and the introduction of superior competitors, it
goes into decline and is eventually withdrawn.
However, most products fail in the introduction phase. Others have very cyclical
maturity phases where declines see the product promoted to regain customers. This calls
for strategies to be adopted at each level of the PLC.
2.7.2 Strategies for the Differing Stages of the Product Life Cycle.
The need for immediate profit is not a pressure. The product is promoted to create
awareness. If the product has no or few competitors, a skimming price strategy is
employed. Limited numbers of product are available in few channels of distribution.
Growth
Competitors are attracted into the market with very similar offerings. Products become
more profitable and companies form alliances, joint ventures and take each other over.
Advertising spend is high and focuses upon building brand. Market share tends to
stabilize.
Maturity
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Those products that survive the earlier stages tend to spend longest in this phase. Sales
grow at a decreasing rate and then stabilize. Producers attempt to differentiate products
and brands are keys to this. Price wars and intense competition occur. At this point the
market reaches saturation. Producers begin to leave the market due to poor margins.
Promotion becomes more widespread and uses a greater variety of media.
Decline
At this point there is a downturn in the market. For example more innovative products
are introduced or consumer tastes have changed. There is intense price-cutting and
many more products are withdrawn from the market. Profits can be improved by
reducing marketing spend and cost cutting.
Fig. 2.2 The Product Life Cycle
2.7.3 Problems with Product Life Cycle.
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In reality very few products follow such a prescriptive cycle. The length of each stage
varies enormously. The decisions of marketers can change the stage, for example from
maturity to decline by price-cutting. Not all products go through each stage. Some go
from introduction to decline. It is not easy to tell which stage the product is
2.8 Effect of New Product Development on the Performance of the Organization
Writing on “How to gain strategic advantage”, Ayodeji (2013), through
(http://www.punchng.com/business/am-business) pointed out that the need to take a
critical look at the resources available is important. The implication of this is that an
organization will be able to adjust the allocation of resources at its disposal to
strengthen its capabilities in the industry. An organization needs to allocate new
resources in the most effective way to gain significant advantage over competition.
To strengthen the strategic base of any organization, the point of differentiation between
an organization and its competitors needs to be leveraged for an impact. This calls for a
total look at the entire gamut of an organization’s operations to utilize the difference in
the composition of resources to gain leverage. The unique selling proposition of an
organization should differentiate its product and service quality from the competitor’s.
This is a visible way to gain advantage in the market place.
A workable strategy demands unconventional approach to achieve desired results. To
dislodge an established competitor, an organization can challenge the accepted norms in
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doing business in the industry. This is based on an aggressive platform to re-invent the
rules and change the equation. This will definitely enable an organization to gain a
competitive business advantage.
Innovation is fundamental to business strategy. The deployment of innovative
techniques can strengthen an organization’s grip on the industry. Innovation can occur
through new product development, marketing initiatives and opening up new market
opportunities. Occupying a space untouched by competitors is also an innovative
approach.
The place of the customer in strategy development is central to its overall success.
There is no point formulating a strategy without focusing on the end users. Customers
need to be given a premium place for the strategy to achieve stipulated goals and
objectives. The needs and expectations of the customers should be embedded in the
strategy document.
An organization’s strength should be leveraged upon to explore a business advantage.
The major weapon to outwit competitors is strategic thinking. Organizations need to
devise a channel through which they can break established competitive barriers.
Insightful strategy leads to superior edge and business growth. This should be visible
and discernible in the performance of the organization.
(http://www.punchng.com/business/am-business).
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2.9 The effect of Consumer Behaviour on New Product’s Success
Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A
firm needs to analyze buying behavior for:
 Buyers’ reactions to a firm’s marketing strategy have a great impact on the firm’s
success.
 The marketing concept stresses that a firm should create a Marketing Mix (MM)
that satisfies (gives utility to) customers, therefore need to analyze the what,
where, when and how consumers buy.
 Marketers can better predict how consumers will respond to marketing strategies.
2.9.1 Stages of the Consumer Buying Process
Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual
purchasing is only one stage of the process. Not all decision processes lead to a
purchase. All consumer decisions do not always include all 6 stages, determined by the
degree of complexity...discussed next. Nevertheless, the following stages were provided
in http://www.udel.edu/alex/chapt6.html as the six stages of consumer buying process:
1. Problem Recognition (awareness of need)--difference between the desired state
and the actual condition. Deficit in assortment of products. Hunger--Food.
Hunger stimulates your need to eat. Can be stimulated by the marketer through
product information--did not know you were deficient? I.E., see a commercial for
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a new pair of shoes, stimulates your recognition that you need a new pair of
shoes.
2. Information search--
1. Internal search, memory.
2. External search if you need more information. Friends and relatives (word of
mouth). Marketer dominated sources; comparison shopping; public sources etc.
A successful information search leaves a buyer with possible alternatives.
3. Evaluation of Alternatives--need to establish criteria for evaluation, features the
buyer wants or does not want. Rank/weight alternatives or resume search. May
decide that you want to eat something spicy, Indian gets highest rank etc.
If not satisfied with your choices then return to the search phase. Can you think
of another restaurant? Look in the yellow pages etc. Information from different
sources may be treated differently. Marketers try to influence by "framing"
alternatives.
4. Purchase decision--Choose buying alternative, includes product, package, store,
method of purchase etc.
5. Purchase--May differ from decision, time lapse between 4 & 5, product
availability.
6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive
Dissonance, have you made the right decision. This can be reduced by
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warranties, after sales communication etc. After eating an Indian meal, may think
that really you wanted a Chinese meal instead.
2.9.2 Consumer Behaviour and the Marketing Strategy
According to Adelene (2013), Consumer behaviour is the study of the way people seek,
purchase, use, evaluate and dispose of products and services. It is the psychology of
marketing, and it is used to determine why consumers seek one product alternative from
the other.
But why do consumers seek and purchase products? This is linked to the ideology of
needs and wants. Needs and wants exist if a consumer is unsatisfied, consumers seek
and purchase the products that can provide them with maximum satisfaction.
Consumer behaviour can be used by marketers to create the marketing strategy;
targeting each consumer effectively once they understand their needs and wants through
the research of consumer behaviour.
On the other hand, it is a strategy used to maximize limited resources of an organization
to increase its opportunities in sales and achieve a sustainable competitive advantage.
A marketing strategy is created by market research, which the needs, attitudes and
competitors products are evaluated, as well as the packaging, sales and distribution of a
product.
30
2.9.3 How to Research the Consumer
Use primary and secondary research. Marketers must analyze their consumers, as well
as using secondary information to make decisions to target their market. They may do
this through: surveys, focus groups, observation, interviews and secondary methods
such as online researching.
Marketers may also make decisions for their marketing strategy based on the
consumers’ demographic information. This information includes the consumers:
income, educational level, occupation, age, and location. This is known as segmenting
the market.
This information is used to predict purchasing habits of the consumer and make key
decisions in the product they are selling, such as pricing. For example, marketers
targeting consumers will a low income in a low socio-economic area will have to be
particularly price conscious when pricing their items.
Marketers must also understand the values of the consumer; this will provide them with
more success in their marketing campaigns. An example of this is quality; when
targeting consumers who value quality, marketers must sell them products that deliver
and re-enforce their values.
Marketers will be unsuccessful in any marketing campaign that doesn’t take into
account and reflect the values of the consumer.

31
Values impacting consumer choices are their knowledge, beliefs, morals and customs, it
has a significant impact on the products consumers seek and purchase.
2.9.4 Benefits for an organization
When the marketing strategy and consumer behaviour are intervened, marketers can
expect success in their sales, higher profit margins and competitive sustainability in the
market place Adelene (2013).
The benefits of using consumer behaviour to create a marketing strategy are the
knowledge marketer’s gain about the needs and values of their target market. Once
marketers understand this, it is most likely their message will be delivered to the correct
target market, resulting in an end sale.
Overall, consumer behaviour is the study of people that is used the market place as a
marketing tool to reach out to target segments. Where would we be without it?
(www.brightbluec.com.au/index.).
2.10 Synergism and Marketing of New Product
Uncertainty and speed of market place changes are leading to companies to take
different approaches to new product development (NPD). There is a need to reduce the
time to identify, develop and commercialize new technologies to timely meet market
demand. Due to the fluid market environment it’s not always possible (or strategically
32
wanted) to invest and have all competencies and capabilities within the firm. Time and
risk to market can be reduced through supply chain collaboration.
(http://www.ifm.eng.cam.ac.uk/research/csp/syntechcomp/).
Anyanwu (2003) defined synergism as a “comparative action of discrete agencies such
that the total effect is greater than the sum of the effects taken independently”.
Synergism is particularly important in market planning. All the marketing mix elements
– product, price, place, and promotion must be handled in such an interactive manner
for optimum result. According to him, synergism in marketing would involve
appropriate combination of the marketing mix elements, for what is being combined are
the efforts of individuals who are responsible for these marketing mix elements/areas.
Moreover, game-changing NPD activities can be stimulated through collaborators
jointly exploring current (and potential) technology competencies and capabilities.
Effectiveness and sustainability of these supply chain collaborations can be influenced
by aligning competencies and selecting the right partners.
(http://www.ifm.eng.cam.ac.uk/research/csp/syntechcomp/)
According to Ayodeji (2013), Organizations need people with a combination of
analytical skills and mental endowments. Analyses are not just done as routine
exercises but should be programmed to achieve desired results. The CEO and other top
management executives are not expected to conduct analyses to support their
preconceived ideas. This will not deliver results and the organization can never deploy a
33
successful strategy to outwit its competitors. Thus, Anyanwu (2003) concludes that the
ability to agree on a given goal and the ability to work towards that goal will determine
the ultimate marketing effort of the organization.
Also, according to Michael Burkett (2014), by observing behavior, companies can
better serve a customer's total needs by combining product design and supporting
services. To do this best requires the entire value chain team to understand the customer
beyond simply marketing's interpretation of those needs. If product development,
supply chain and customer support understand the customer well enough, they are in a
better position to add value and eliminate waste. Once development starts, it is then
necessary to observe the customers using the new product or service to ensure it meets
their needs. The more iterations of this process that are completed, the more likely it is
to meet customer expectations. (http://www.supplychainbrain.com/content/technology-
solutions).
2.11 Sources of new product ideas

Ideas for new products can be obtained, according to Anyanwu (2003), from many
sources some of which are
1. Findings of the research and development personnel
2. Company executives
3. Researches and new product competitors
4. Information from marketing people
5. Data secured from customers

34
6. Information from associating companies overseas.
7. Discoveries of technological and scientific institution
8. Information given by employees.
9. Data generated through brainstorming sessions.
10.Examination and study of unused patents.
2.12 Why Firms Develop New Products
From Nwokah’s (2002) point, a firm may develop a new product for the following
reasons:
1. Profit and customer satisfaction (the basic reason)

2. The product’s life cycle
3. The price success
4. Defensive Reason – Market share
5. The pressure of competition.
Moreover, product Innovation occurs because of:
1. Shrinking profit margins for established products.
2. Shorter live for established product, and
3. Excess capacity.
4. Schumpeter (1939), attributed innovation to a search for profit;
5. A search for increased demand (Brown, 1957);
6. The pressure of competition in the search for product differentiation as a factor
leading to innovation (Barnett, 1953).

35
Other benefits to company include: countering technological obsolescence, improving
outdated facilities and machinery, offsetting industry decline, reducing seasonal/cyclical
slumps and other economical fluctuations, improving job security and morale, and
making of waste and by-products.
2.13 Why Firms do not Develop New Products
Kotler (1980) outlined various reasons why firms do not engage in product
development as follows:
1. Shortage of important new product ideas

2. Fragmented markets – lower sales and profits.
3. Growing social and governmental constraints
4. Costliness of new product development process
5. Capital Shortage
6. Shorter life span of successful products.
Others which could be termed marketing problems are:
1. Marketing problems solvers often require new product facilities.
2. Customer resistance to new product
3. Problem between PP&D, marketing production and financial personnel.
4. Lack of technical manpower for PP&D
5. Company experience with past failures.
2.13 Reasons why new products fail in the market

36
According to Anyanwu (2003), the reasons why new products fail in the market are
varied but the major ones include:
1. Lack of distinctive advantages in product performance and price.
2. Initial overestimation of the target market which will result in low demand.
3. Inability to utilize company strength to capture profitable opportunities.
4. Unpredictable changes in consumer preferences for goods and services.
5. Products which facilitate competitive entry into the market by competitors.
6. Lack of support for the marketing intermediaries.
2.14 New Product Adoption Process
Any discussion of the new product development process would be incomplete without
consideration of how customers learn about new products, try them and either adopt or
reject them. Clearly, an understanding of these processes is vitally important to
marketers seeking to build an effective marketing strategy.
Rogers and Shoemaker have contributed much to theories of adoption and diffusion,
including the concept of the early adopter. This theory holds that just as some firms are
more innovative than others, so some individuals are more ready to try new products
than others. Its two other main premises are:
 Early adopters have characteristics which distinguish them from others.

37
 Early adopters tend to be ‘opinion leaders’ and are therefore able to play a major
role in promoting the new product to others.
It has been suggested by Rogers (1962) that an adoption curve like that in figure 2.3 is
representative of the way new products diffuse through a population or market segment.
Figure 2.3 The Adoption Curve
Source: Rogers, E.M. (1962), Diffusion Of Innovations.
As can be seen, the adoption process is represented as a normal distribution when
plotted over time. In the earliest stages it takes time for the market to become aware of
the product and only the more adventurous consumers prove willing to try that which is
38
new. These are the innovators. It is hypothesized that this group will represent around
two percent of those who eventually buy the product. The next wave of acceptance
comes from early adopters.
Rogers and Shoemaker suggest that the 5 adopter groups differ in their value
orientations. Innovators are perceived by Rogers to be Risk-takers who are keen and
able to try that which is new. Early adopters tend, according to Rogers, to be opinion
leaders within their communities. They adopt innovations fairly early on but do so with
some care and are then in a position to influence the adoption behaviour of others.
Marginally more deliberate in their decision as to whether or not to try the product are
those classified by Rogers as the early majority. The early majority adopts certain
innovations before the average person but they are rarely leaders. The late majority are
rather more skeptical or averse to risk than those mentioned in the foregoing groups.
They wait until the product or perhaps its technology - is in some way proven. Their
proof usually takes the form of positive experiences on the part of those who have
earlier adopted the product. Roger's final group is termed the laggards. Laggards are
less open to change, are more traditional and usually adopt the ‘innovation’ when it has
taken on a measure of tradition itself.
Clearly it is the innovators and early adopters which would seem to be the prime targets
for a firm launching a truly new product. However, no matter how intuitively appealing
Rogers' hypotheses regarding the separable characteristics of these 5 groups, no one has
39
established the existence of traits unique to innovators or early adopters. Rather,
empirical evidence suggests that individuals tend to be innovators in some respects and
laggards in others. Hence, we encounter the housewife who is skeptical about the new
methods of education which her children are being subjected to, but is the first in the
neighbourhood to experiment with the dishes she presents on important social occasions
when, if she makes a mistake, it could all go badly wrong.
Thus, the challenge for companies is to identify the characteristics of ‘early adopters’ in
its product areas. Fortunately, there are some research findings to encourage the
manufacturer in this pursuit. There are studies which appear to have shown that, for
example, innovative farmers tend to be better educated than their contemporaries. Other
studies have concluded that innovative housewives are more gregarious and of a higher
social status than their not so innovative contemporaries. Rogers put forward the
following hypothesis about those who are quicker to adopt innovations:
“The relatively earlier adopters in a social system tend to be younger in age, have a
higher social status, a more favourable financial position, more specialized operations,
and a different type of mental ability from late adopters. Earlier adopters utilize
information sources that are more impersonal and cosmopolitan than later adopters and
that are in closer contact with the origin of new ideas. Earlier adopters utilize a greater
number of different information sources than do later adopters. The social relationships
40
of earlier adopters are more cosmopolitan than for late adopters, and earlier adopters
have more opinion leadership.”
Whilst the conclusions reached by Rogers offer some hope to marketers, there remains
the problem of measuring some of these ‘indicators’. For example, there are no reliable
indices of phenomena such as gregariousness, cosmopolitan outlook and degree of
opinion leadership.
2.15 The effect of product characteristics on the rate of adoption
A widely accepted hypothesis is that the characteristics of an innovation affect its rate
of adoption. Five characteristics have been suggested as being particularly influential in
determining the rate of adoption of any innovation. Table 2.1 below summarizes them:
Table 2.1 The effect of product characteristics on the rate of adoption
The degree to which the product is perceived to be better than
alternatives will directly influence the speed of adoption. Thus, the
truly innovative product, which offers a meaningful benefit to
consumers, is likely to gain widespread adoption more quickly
than a “me-too” product. Hence the level of acceptance of long-life

Relative advantage
milk among rural populations since the product has the advantages
of longevity, hygiene and convenience (i.e. no need to own a
refrigerator) over fresh liquid milk.
Compatibility Any innovation which closely matches the target audience's values
41
and experiences is better placed to be accepted. When microwave
ovens were first introduced they met resistance because of
traditional values and experience. When International Harvester
launched the Axial Flow Combine Harvester it met strong
resistance because of the new machine's unconventional style of
operation. The technique employed when operating a conventional
combine harvester is to ease slowly into the crop and to gradually
gain speed as the material feeds through the machine. The
technique for operating an axial flow harvester is the complete
opposite. That is, the axial flow combine harvester enters the crop
field at high speed. For many combine operators the change to the
new technique was not easy to make since it was incompatible
with practices that had become intuitive. It simply did not ‘feel
right’ to operate a combine harvester in the way required by the
axial flow machine and the operators became a serious barrier to
adoption.
Where the innovation is relatively difficult to understand or use
adoption tends to be slow. Hence the slow and difficult progress
achieved by extension workers who sought to encourage peasant
farmers in Peru to adopt agrochemicals. The machinations of
chemistry were, and probably remain, a mystery to those farmers.
42
Since they could not understand how or why it should work, the
Complexity
farmers were consequently slow to take up the practice of applying
expensive powders, liquids and pellets to the land.
Divisibility Innovations which can be tried on a limited basis thereby limiting
the risk in adoption diffuse much more rapidly. In this respect,
agrochemicals and new seed varieties have an advantage in that a
farmer can apply them to a part of his/her acreage and observe the
results.
Ease of The extent to which the results of using an innovation are
communication observable and/or describable to others greatly influences the rate
of adoption. Thus, since fungicides take effect over time and their
chemical action is incomprehensible to most peasant farmers, their
adoption rates tend to be slow. Conversely, the concept of
fermentation of milk is well known, even amongst rural peoples,
and so the concept of long-life milk is readily understood among
both urban and rural populations.
It would be misleading to suggest that these 5 factors are the only influences on the rate
of adoption; initial cost, maintenance cost, risk, uncertainty and social approval are
43
mere examples of other influential factors. However, the 5 outlined would appear to be
central considerations in the case of all innovations.
Before we close this chapter, let us consider a few areas to consider for improving new-
product quality.
2.16 The Relevance of Grand Malt in Nigeria
With all the brewing companies having their brand of malt drink, competition in the
malt market has become no less competitive. To rent a space in the minds of prospects
and by extension, capture a sizeable share of the market, each malt drink is positioned
as top of the brand. Our product of the week, Grand Malt, brewed by SABMiller, one of
the world’s leading brewers, operating in six continents, including Nigeria, is positioned
for those who desire traditional rich, smooth malt taste.
The superior quality of Grand Malt, the company says, is achieved by a combination of
traditional brewing skills and the use of modern technologies. “Non-alcoholic malt
drinks can be made by either traditional brewing methods, where barley is steeped into
malt and then brewed into a creamy, rich consistency or made like a soft drink by using
malt extract. We use traditional brewing skills for all our non-alcoholic batches to
ensure our recognized superior quality.
It is brewed to perfection using only the finest natural ingredients. Grand Malt uses
traditional brewing skills retrieving high contents of vitamins and minerals from the
44
quality malt used. The high content of vitamins, minerals and nutrients provides the
whole family with the nourishment necessary for healthy living,” the company stated.
According to the Brewing giant, Grand Malt wants to be a part of consumers’ healthy
lifestyle. “It is important that you eat a varied and well-balanced diet, get enough
vitamins and minerals, and do regular physical exercise to maintain good health
throughout your life.
Physical activity and good natural nutrition are key factors in leading a healthy lifestyle
and reducing the risk of chronic illnesses. Drink a Grand Malt after your exercise. The
high content of carbohydrate and vitamin B Complex help your body to restore, build
up your energy level and improve your performance,” the company advised.
It listed the following as reasons why people engage in regular exercise:
1. Improves your health
2. Reduces stress
3. Improves your sex life
4. Builds energy
5. Brings creativity
6. Burns fat
7. Balances your body and mind
45
8. Builds stronger muscles
9. Puts you in a better mood
10. Makes you sleep better
It maintains that Grand Malt provides you with a rich and natural source of Vitamin B
Complex for your health. “Its unique sweet taste is recognized by consumers around the
world. The sweet notes are a combination of naturally occurring glucose, lactose, which
are quickly absorbed by the body and metabolized into energy.”
Compared to other malt drinks there are not more calories in a Grand Malt, SABMiller
further says, stressing that Grand Malt has a balance of carbohydrates for instant
absorption and long lasting energy. “It is rich in Vitamin B which helps in the
metabolism of food into energy. It contains no fat which is good for a healthy lifestyle.”
Grand Malt is available in retail outlets all over the country
(http://www.manufacturingtodaynigeria.com/index.php)
2.17 Areas of Consideration for Improving New-Product Quality
Even when customer needs are understood, there is plenty of opportunity for the new-
product development and launch (NPDL) process to break down. The reasons are many,
ranging from poor cross-functional communication to simple inertia in the process that
slows cycle time. A few areas to consider for improving new-product quality as
provided in www.supplychainbrain.com (2014) include:
46
i. Product portfolios should categorize quality risks - brand-new products carry
higher risk than minor extensions and should be segmented and managed
accordingly.
ii. Validate that customer requirements are addressed - scope creep often happens
during design cycles, so take extra care to approve any variation prior to
commercialization.
iii. Verify a robust product design and manufacturing readiness - fundamental in
design for Six Sigma use simulation and in design of experiments to optimize
functionality and manufacturing capability.
iv. Use a metrics hierarchy that defines total product launch success - measure
performance against strategic business value and operational goals for a complete
view.
v. Post-launch feedback and corrective action - capture customer feedback from
various sources, including directly, through channel partners and via social
media, and takes immediate action.
47
CHAPTER THREE
Research Methodology
3.1 Introduction
In this Chapter, we are going to look into the procedure or processes and the techniques
involved in the study. The sample size still will be determined using a particular area
where sampling numbers can be obtained.
3.2 Scope of the Study
According to Alugbuo (2002), this is the topical area that the researcher would
concentrate in his or her research. Thus, the aim of this study was to investigate the
48
effect of new product development using Grand Malt, which is the product of
SABMiller.
3.3 Selection of Data
The sources of data used in this work were of two types: Primary and Secondary Data.
Primary Sources: Primary data, according to Anyanwu (2000), are those data
that are gathered and sourced first hand by the researcher through the use of
questionnaire and interview. The researcher also made use of questionnaire and
interview in gathering information used in this study.
Secondary Sources: Extensive use of textbooks, the internet, magazines, and
unpublished works and lecture notes were of a great help in providing this qualitative
and reliable work.
3.4 Collection of Primary Data
The research instruments employed for the purpose of this study were the questionnaire
and oral interviews. Also, a little observation helped the researcher to arrive at a
reasonable conclusion.
3.5 Design and Administration of Questionnaire
Questionnaire comprises carefully designed question for the respondents to answer.
The questionnaire for this work will be made up of carefully standardized questions
49
designed in the format that best elicits the required responses from respondents. It will
be of two sections:
Section ‘A’ (for personal data) and section ‘B’ (research question). The data collection
form, however contains two types of questions. Thus:
i. The structured – undisguised (close ended) question. According to Akuezuilo
(1990), this offers the respondents a number of specific alternatives from which to
choose one over more answers as the case may be. This allows precise alternative
answers to be collected.
ii. Unstructured (open-ended) questions. They provide an opportunity for the
respondents to answer the questions in their own words and to express any idea they
thought pertinent, subject to their different frames of references. Materials constituting
secondary data for this work are to be drawn from professional journals, marketing
texts, magazines, business weeklies, newspaper, materials from the industry, etc. as will
be available and found useful. These will be consulted within the department and other
libraries around. Principal instrument for the primary data collection is a structural
question naïve, copies of which will be administered on a convenient sample of so staff
which will be selected randomly from the workers of the organization. Also, personal
interviews (informal) and little of observation will be carried out to clear critical issues
and to provide reliability of data.
3.6 Determination of Sample Size
50
A sample is that part drawn from the population or universe which should be the
representative (Anyanwu 2000). Thus, a sample size is determined from the sample
frame so as to arrive at an acceptable result at the end of the study. From the
population of the workers in the organization which is 180, the sample size can be
mathematically calculated at 5% error Tolerance and 95% degree of confidence by
using Taro Yamane’s formular: (Alugbuo 2002).
n = N
1 + N (e)2
Where:
n = sample size
N = population (200)
I = constant
E = error estimate (5%)
So,
n = 200
1 + 200 (0.05)2
= 200/ 1+200 (0.0025)
= 200
1 + 0.5
= 200
51
1. 5
Therefore, n = 133
= 130 to the nearest 10.
3.7 Sampling Techniques
Kotler (1984) contends that population answers the question, “who is to be surveyed)”
so, the population of this study consists of both senior and junior employees of
SABMiller, in Onitsha, Anambra State, numbering two hundred (200). However, the
researcher made use of random sampling method and employed non-probabilistic
sampling techniques in the study. This allowed equal chances of selection of
respondents.
3.7 Operational Measures of Variables
This study has investigated into the activities of a Nigerian brewery firm with a view to
assessing the independent variable “New Product Development” on the dependent
variable “organizational Performance” using specific respondents’ assessment
criteria.
3.8 Data Analysis Techniques
The following methods were used to analyze the data collected:
a. The simple percentages method for analyzing respondent personal data.
52
b. Descriptive analysis for analyzing interviews collected
c. The generated quantitative data in this study were tested using the Simple
Regression Analysis. The SPSS version 20 was used at 0.95 confidence level
(i.e. 0.05 level of significance) and test value = 3. The model of the study is
given as follows:
NAOP = f(ISV, POO, CUS, CUL)
Where
NAOP = New Product Development and Organizational Performance.
ISV = Increased Sales Volume.
POO = Profitability of an Organization.
CUS = Customer Satisfaction.
CUL = Customer Loyalty
Decision Rule
In order to validate (accept) or nullify (reject) any stated hypothesis tested with the
simple regression, major attention was paid to the R, R 2, t and P- values of the tested
constructs. Therefore, the null hypotheses were rejected where the SPSS p-values were
less than alpha (0.05) and t calculated greater than t value from the table (1.960); the
alternative hypotheses were accepted. Also, decisions on the individual variables were
based on their p and t values as shown in the SPSS coefficients output.
53
CHAPTER FOUR
Presentation and Analysis of Data
4.0 Introduction
In this chapter, all the data collected were be analyzed, presented, and interpreted so as
to create an easy understanding by users. However, the data analyzed here are those that
have direct relation with the research objective, questions and hypotheses as contained
in chapter one. It was divided into four sections. Thus:
a. Analysis of Demographic variables;
b. Analysis of major (research) variables;
c. Test of hypotheses; and
54
d. Discussion of Findings.
Let us look into them in details.
Section A
4.1 Analysis of Demographic Variables
This section shows the results on the nature of distribution and retrieval of the
questionnaire, the sex, age brackets, marital status, educational qualification as well as
the length of service of the respondents.
Table 4.1 Distribution and Retrieval of Questionnaire
Option Number Number retrieved and Percentage of

distributed used used
Managers 10 5 5.00%
Senior Staff 40 31 31.00%
Junior Staff 60 47 47.00%
Others 20 17 17.00%
TOTAL 150 100 100.00%
Source: field survey, February, 2016
From table 4.1, a total of 130 copies of the questionnaire were distributed to four
categories of the company’s workers. Out of these, 100 questionnaires (76.92%) were
retrieved and used. 5 questionnaires (5%), from the managers, 31 questionnaires (31%),
from the senior staff, and 47 questionnaires (47%) from junior, while 17 questionnaire
came from others.

55
Table 4.2 Demographic Variables of Respondents
Option Frequency Percentage
Sex:
Male 44 44.00%
Female 56 56.00%
Age:
20 – 25 22 22.00%
26 – 30 43 43.00%
31 – 35 10 10.00%
36 years and above 25 25.00%
Marital:
Married 30 30.00%
Single 62 62.00%
Others 8 8.00%
Academic qualification
FSLC 16 16.00%
WAEC/NECO 20 20.00%
OND 15 15.00%
B.Sc./HND 21 21.00%
IT Students 13 13.00%
Master and above 5 5.00%
Others 10 10.00%
Length of service
0 – 1 years 30 30.00%
1 – 2 years 40 40.43%
2 – 3 years 20 20.57%
3 year and above 10 10.00%
From table 4.2, 44 respondents (64.00%) were males, while 27 respondents were
(56.00%) were females. Also, 22 respondents (22.00%), 43 respondents (43.00%), 10
respondents (10.00%) and 25 respondents (6.67%) were of the age brackets: 20 - 25, 26
- 30, 31-35, and 36 years and above, respectively. Their marital status recorded 30
56
respondents (30.00%), 62 respondents (62.00%), and 8 respondents (8.00%) as married,
single, and other, respectively. Moreover, 30 respondents (30.00%), 40 respondents
(40.00%), 20 respondents (20.00%) and 10 respondents (10.00%) have served in the
company for a period of 0 – 1 years, 1 – 2 years, 2 – 3 years and 3 years up,
respectively. It was equally discovered that 16 respondents (16.00%) and 20
respondents (20.00%), 15 respondents (15.00%), 21 respondents (21.00%), 13
respondents (13.00%), 5 respondents (5.00%), and 10 respondents (10.00%) had
academic qualifications as FSLC, WAEC/NECO, OND, B.Sc./HND Masters, Students,
and others, respectively.
4.2 Analysis of Major (Research) Variables
In this section, questions 7, 9, 10, 11, and 12 will be analyzed.
Table 4.3 Respondents view on Satisfaction with the quality of Grand Malt as a
Product.

To a great extent 84 84.00%
To a Considerable Extent 16 16.00%
To a Low Extent 00 00.00%
No Idea 00 00.00%
Total 100 100.00%
From the table (4.3), 84 respondents (84.00%), 16 (16.00%) respondents were satisfied
with the service level of the company to a great extent and to a considerable extent,
57
while no respondent (00.00%) was satisfied to a low extent nor had no idea
respectively.
Table 4.4 Respondents View on Whether New Product Development has

significant relationship with Organizational performance

Strongly agree 82 82.00%
Agree 18 18.00%
Disagree 0 0.00%
Strongly disagree 0 0.00
Total 100 100.00
From table (4.4), 82 respondents (82%), 18 respondents (18%), 0 respondent (0.00%)
and 0 respondent (0.00%) strongly agreed, agree, disagree and strongly disagree that
New Product Development has significant relationship with Organizational
performance.
Table 4.5 Respondents View on Whether New Product Development Increases

Organization’ Profit Margin.

Agree 9 9.00%
Disagree 0 0.00%
Total 100 100.00
From table (4.5), 91 respondents (91.00%), 9 respondents (9. 00%), 0 respondent
(0.00%) and 0 respondent (0.00%) strongly agreed, agree, disagree and strongly
disagree that New Product Development Increases Organization’ Profit Margin.
58
Table 4.6 Respondents’ View on Whether Newly Introduced Product Brings
About Customer Loyalty.

Agree 29 29.00%
Disagree 0 0.00%
Total 100 100.00
From table (4.6), it could be seen that 71 respondents (71.00%), 29 respondents
(29.00%), 0 respondent (0.00%) and 0 respondent (0.00%) strongly agreed, agreed,
disagreed and strongly disagreed respectively, that Newly Introduced Product Brings
About Customer Loyalty.
Table 4.7 Respondents’ Views on Whether New Product Development result in
increased sales volume

Agree 00 00.00%
Disagree 00 00.00%
Strongly disagree 00 00.00%
Total 100 100
From the table (4.7), all the respondents strongly agreed that New Product Development
result in increased sales volume.
Table 4.8 Respondents’ views on whether new product development results in
customers’ satisfaction
59
Agree 20 20.00%
Disagree 05 05.00%
Strongly disagree 00 00.00%
Total 100 100
From table (4.8), on the average, 75 respondents (75.00%), 20 respondents (20.00%), 5
respondent (05.00%) and 0 respondent (0.00%) strongly agreed, agreed, disagreed and
strongly disagreed respectively, that new product development results in customers’
satisfaction.
In this section, all the hypotheses contained in chapter one will be tested using the chi-
square as stated in chapter three.
Test of hypothesis One

H1: There is significant relationship between New Product Development and
Test of hypothesis two
H1: There is significant relationship between New product development and
60
Test of hypothesis three
customer satisfaction.
H1: There is significant relationship between New product development and customer
satisfaction.
Test of hypothesis four
customer loyalty.
H1: There is significant relationship between New Product Development and
customer loyalty.
4.4 Discussion of Findings
The data collected proved that takers of Grand Malt are satisfied with the taste of the
product. Thus, as obtainable through www.tribune.com.ng, Grand Malt was honored
with the International Monde Selection awards for quality in the gold category. The
Monde Selection is an international award which recognizes the taste and quality of
brands from across the globe using critical evaluation by an independent jury.
Also, the study proved that New Product Developments result in increased sales
volume. So, when the marketing strategy and consumer behaviour are intervened,
61
marketers can expect success in their sales, higher profit margins and competitive
sustainability in the market place (Adelene, 2013).
Moreover, new product development results to an increase in organization’s profit
margin. From Nwokah’s (2002:40) point of view, Profit and customer satisfaction are
the basic reason why a firm may develop a new product.
The study equally revealed that new product development results in customer
satisfaction and also brings about customer loyalty. Thus, Michael Burkett (2014), by
observing behavior, companies can better serve a customer's total needs by combining
product design and supporting services. To do this best requires the entire value chain
team to understand the customer beyond simply marketing's interpretation of those
needs. If product development, supply chain and customer support understand the
customer well enough, they are in a better position to add value and eliminate waste.
Once development starts, it is then necessary to observe the customers using the new
product or service to ensure it meets their needs. The more iterations of this process that
are completed, the more likely it is to meet customer expectations.
(http://www.supplychainbrain.com/content/technology-solutions).
62
CHAPTER FIVE
Summary, Conclusion and Recommendations
5.0 Introduction
In this chapter, the researcher summarizes the major findings, concludes adequately,
and advances some recommendations together with some suggestions for further study.
5.1 Summary of Findings
The following major findings were made in the course of this study:
1. The study revealed that takers of Grand Malt are satisfied with the taste and
the nutritious contents of the product.
2. It was equally discovered that when the marketing strategy and consumer
behaviour are intervened, marketers can expect success in their sales, higher
profit margins and competitive sustainability in the market place. In other
words, Consumer behaviour influences the success of any product in the
market place.
3. Also, the study revealed that Profit and customer satisfaction are the basic
reason why a firm may develop a new product. That is to say that the success
of a new product in the market results to an increase in an organization’s
profit margin.
63
4. The study equally revealed that new product development is the responsibility
of all the departments of the organization. Thus, organizations need people
with a combination of analytical skills and mental endowments in the
development and effective marketing of a new product.
5. Moreover, the study disclosed that, among other things, Lack of distinctive
advantages in product performance and price or Initial overestimation of the
target market which will result in low demand can lead to a new product’s
failure in the market.
5.2 Conclusion
This study has investigated into the activities of a Nigerian Brewery Firm with a view
to identify the relationship between new product development and organization’s
performance.
Following the result of the research, we conclude that new product development has a
favourable effect on the performance of an organization. This is because it results to an
increase in the profit margin of an organization.
Also, it is concluded that Consumer behaviour influences the success of any product in
the market place. In other words, Marketers can make decisions for their marketing
strategy based on the consumers’ demographic information. This information includes
the consumers: income, educational level, occupation, age, and location. This is known
as segmenting the market.

64
It could equally be concluded that a newly introduced product can fail in the market.
This occurs when the market is not satisfied with either the quality, price, packaging or
any feature of the new product. The result of this will be that the firm loses all it has
spent in the course of developing the product. On the other hand, when the customers
are satisfied with the product, it brings about customer loyalty, which translates itself
to increased sales and profitability.
Therefore, Grand malt has been counted a successful product in the Nigerian market.
This is because of the high content of carbohydrate and vitamin B Complex which help
human body to restore, build up energy level and improve body performance, as
identified by users of the product.
5.3 Recommendations
Based on the findings of this sturdy, the researcher hereby makes the following
recommendations:
1. Organizations should use consumer behaviour to create a marketing strategy.
Once this is done, it is most likely their messages will be delivered to the correct
target market, resulting in an end sale of a product.
2. An organization needs to allocate new resources in the most effective way to gain
significant advantage over competition.
3. Organizations need to devise a channel through which they can break established
competitive barriers.
65
4. The needs and expectations of the customers should be embedded in the strategy
document.
5. To strengthen the strategic base of any organization, the point of differentiation
between an organization and its competitors should be leveraged for an impact.
This calls for a total look at the entire array of an organization’s operations to
utilize the difference in the composition of resources to gain leverage.
6. It is highly recommended that organizations should focus on long-term results of
NPD, such as NP customer performance, rather than solely focusing on short-
term financial results.
5.4 Suggestions for Further Studies
There researcher hereby suggests that further studies be carried out on the following
areas:
a. Effective and Efficient channel through which organizations can break
established competitive barriers.
b. How best to understand the needs and expectations of consumers in the
midst of differences in consumer behaviour.
c. How a firm can occupy a space untouched by competitors in the dynamic
business environment of ours.
66
References
Akuezuilo, E. (1990): Research Methodology and statistics for beginning students,
Awka: Christon printing and publishing company.
Alugbuo, C. C. (2002): A Practical Guide to Project Writing, Owerri: Credo
Publications
Anyanwu A. (2000): Research Methods in Business and social science, Owerri: Avan
press.
Anyanwu, A. (2003): Marketing Management, 2nd ed., Benin: Barloz Publishers Ltd.
Barnett, H. G. (1953): Innovation: The Basic of Culture Change, New York: McGraw-
Hill Inc.
Brown W. H. (1957): Innovation in the Machine Tool Industry, Quarl. J. of Economics.
Vol. 71.
Cannon, T. (1980): Basic Management Principles and Practice, London: Holt Rinchant
and Wiston.
Ekeke, J. N. (2009): International Marketing, Nimo: Rex Charles & Patrick Limited.
Kotler p. (1980): Modern Marketing for Nigerian, London: Macmillan Management.
Kotler, P. (1984), Marketing Management: Analysis, Planning and Control (5th ed.),
New Jersey: precise-Hill Inc.
Kotler, P. (1997), Marketing Management: Analysis, Planning, Implementation, and
Control (9th ed.), New Jersey: prentice-Hall Inc.
Nwokah, G. N. (2002): Dynamics of Product Management, Owerri: Avan – Panno
Global Ltd.
Onuoha, B. C. (1994): Entrepreneurial Development in Nigeria: An Integrative
Perspective, Okigwe: Avan Global Publications.
Rogers, E. M. (1962), Diffusion Of Innovations, New York: Free Press,
Schumpeter, J. A. (1939): Business Cycle Vol. 1, New York: McGraw-Hill Inc.
Stanton, W. J. (1981): Fundamentals of Marketing, Japan: McGraw-Hill Co. Limited.
Website Materials
67
Adelene (2013), Consumer Behaviour and the Marketing Strategy
(www.brightbluec.com.au/index.).
Ayodeji Ayopo (2013): Impact of Strategy on organizational performance,
www.punchng.com/business/am-business
Michael Burkett (2014): Areas of Consideration for Improving New-Product Quality,
http://www.supplychainbrain.com.
http://brightbluec.com.au/index.php/blog/article (2014): Consumer Behaviour And The
Marketing Strategy.
http://www.ifm.eng.cam.ac.uk/research/csp/syntechcomp/. (2011): Risk in New-Product
Launches Made Greater When All Parties, Including Supply Chain, Aren't on
Board
http://www.innovationexcellence.com (2014): New Product Development Strategies.
http://www.manufacturingtodaynigeria.com/index.php(2014): Grand Malt for
Traditional Rich Smooth Malt Taste
http://www.marketingteacher.com (2014): New Product Development.
www.sabmiller.com (2014): SABMiller - About us - Who we are - Overview
http://www.smallbusiness.chron.com (2014):The Classification of Products in
Marketing.
www.tribune.com.ng (2013): Trophy, Grand Malt bag international recognition -
Nigerian ...
http://www.udel.edu/alex/chapt6.html (2014): Stages of the Consumer Buying Process
Appendix One
68
Questionnaire
Please kindly mark ( √) to the option that corresponds with your views and be free to
give explanations where necessary.
Section A: Demographic Variables
1. Sex: (a) Male (b) Female
2. Marital Status: (a)Married (b) Single (c) Others
3. Age Bracket: (a) 20-25 (b) 26-30 (c) 31-35
(d) 36 and above.
4. Educational Qualification: (a) FSLC (b) WAEC/NECO (c)
OND (d) HND/B.Sc. (e) IT Students (f) Masters
(g) Others
5. Length of service (years) in the company (a) 0-1 (b) 1 - 2
(c) 11-15 (d) 16 years up.
6. Status in the company (a) Manager (b) Senior Staff
(c) Junior Staff (d) Others
Section B: Research Variables
7. To what extent are you satisfied with the quality of Grand Malt? (a) To a
great extent (b) To a considerable extent (c) To a low
extent (d) No Idea.
69
8. Are there areas of dissatisfaction with the product “Grand Malt”?
(a) Yes (b) No
How do you agree with the following statements?
9. There is significant relationship between New Product Developments and
organizational performance.
(a) Strongly Agree (b) Agree (c) Disagree
(d) Strongly disagree.
10. New Product Developments result in increased sales volume.
11. New product development results to an increase in organization’s profit margin.
12. New product development results in customer satisfaction.
(a) Strongly Agreed (b) Agree (c) Disagree
13. Newly introduced product brings about customer loyalty.
70
(a) Strongly Agreed (b) Agree (c) Disagree
14. How do you agree with the following departments as having a role to play in the
production of a new product?
S/N Department/Unit Strongly Agreed Disagreed Strongly

Agreed Disagreed
1. Top Management
2. Engineering
3. Marketing
4. R&D
5. Finance
6. Personnel
13. Could you please, give some reasons why you think Grand Malt should be taken?
a. ……………………………………………………..
b. ……………………………………………………..
c. ……………………………………………………..
d. ……………………………………………………..
14. When do you think is the best time to take Grand Malt?
……………………………………………………………..
……………………………………………………………..
15. Who should not take Grand Malt and why?
…………………………………………………………………..
………………………………………………………………….
………………………………………………………………….
71

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CHAPTER ONE

1.1 Background of the Study

Product development is important in any dynamic economy. It determines both the

offered to the market for attention, acquisition, or consumption, including physical

new product to include original products, product improvements, product modification,

As a way of avoiding product extinction, a firm’s decision to introduce new product is

proper product innovation or modification as he might through the development of a

differential advantage over its competitors (Nwokah, 2002).

sustainability and to differentiate products so as to remove the product from price

competition and at impairing the ability of the decision-maker to compare products.

Other benefits to company include countering technological obsolescence, improving

outdated facilities and machinery, offsetting industry declines, reducing

1.2 Statement of the problem

technology products often require the installation of sophisticated support systems.

infrastructural facilities such as electricity, water supply, transportation, feeder roads,

communication, hospital, and so on. Thus, product development in Nigeria is

uncertainties arise as to whether the products will succeed or die on introduction.

Therefore, any organization intending to introduce a new product or improve an

these systems are already in place favourably within the environment.

1.3 Objectives of the Study

1. To determine whether there is any significant relationship between New

Product Development and increased sales volume.

2 To ascertain whether there is any significant relationship between New Product

Development and profitability of an organization.

3 To determine if there is any significant relationship between New Product

Development and customer satisfaction.

4 To find out if there is any significant relationship between New Product

Development and customer loyalty.

The following questions are for the purpose of this study:

i. Is there any significant relationship between New Product Development and

increased sales volume?

1.5 Research Hypotheses

H01: There is no significant relationship between New Product Development and

increased sales volume.

H02: There is no significant relationship between New product development and

H03: There is no significant relationship between New product development and

H04: There is no significant relationship between New Product Development and

edge in the industry.

who register their products.

1.7 Operational Definition of terms

Product: A set of tangible and intangible attributes, including packaging, color,

for the satisfaction of needs or wants.

Competition: An event in which organizations and individuals compete (trying to

win something by defeating others who are trying to do the same).

Development: Introduction of new or improved product.

Offer: Something presented to the market for sale.

Market: The actual and potential buyers of a product or service.

Financial Constraints: The costs involved in printing of questionnaire, as well as that

of transportation to different companies, cities and states posed a limitation to this

importance of Researches on companies, individuals, and the economy as a whole. That

provide real answers to the once answered.

1.9 Organization of the Study

limitations and organization of the study.

determined using a particular area where sampling numbers can be obtained.

data so analyzed will be interpreted for a reliable conclusion.

recommendations based on the findings.

1.10 Brief History of Grand Malt

Breweries in Port Harcourt. SABMiller also agreed to acquire an interest in Voltic

Goodluck Ebele Jonathan, President of The Federal Republic of Nigeria commissioned

'Greenfield' brewery facility to be built in the country following an investment of over