Commercialization Of New Products And Innovations In Nigeria

Commercialization Of New Products And Innovations In Nigeria – The Impediments: (Case Study Of Hardris And Dromedas Ltd., Enugu State)

Commercialization Of New Products And Innovations In Nigeria – The Impediments: (Case Study Of Handris And Dromedas Ltd., Enugu State)

 New products are being introduced into the market everyday, as well as new ideas and technologies. Companies need to develop new products in order to satisfy their customers and maintain or increase their profitability and survival.

To place an order for the Complete Project Material, pay N5,000 to

GTBank (Guaranty Trust Bank)
Account Name – Chudi-Oji Chukwuka
Account No – 0044157183

Then text the name of the Project topic, email address and your names to 08060565721.  

It is important that companies should be innovative in product development in order to meet consumer needs and withstand competition from other producers. Old product are totally replaced or modified when developing new product. W.J. Stanton believes “There must be significant difference for an old product to be seen as new”

Product development and innovation are full of risks. Since many new products fail upon being launched into the market. Poor market research or product management could be a responsible factor for the failure of new product, wrong anticipation or needs, transfer of product ideas into physical products, advertising or pricing may also cause failure right from inception. Severe losses are incurred by companies when new product fails.

The company can introduce limited quantities of the product into the market. This is also known as “test marketing”. The aim of this exercise is to access consumers’ reaction in terms of demand and acceptability of the product. For a natural market, small quantities of product are test-marketed I different geographical areas in order to ascertain the reactions of customers in these areas.

Reactions and complaints by buyers and initial users are taken note of. The product can then withdraw and modification made.

Also, the speed of sales of new product is taken note of and used in making more reliable sales and profit forecast for the product. Market testing is important in order to avoid major losses incurred when large quantities of the product can be produced and sent into the market, only to be by the consumers.

Once the results of test marketing are satisfactory, the company then goes a head to produce the goods in large quantities and markets the product fully, this is known as commercialization.

1.2 STATEMENT OF REAEARCH PROBLEM

It provides the frame-work for researchers to fore-cast sale outcome, sales performance, known the position of the company in the market and possibly elevates the position of the product when necessary.

It will also serve as a guide to student who wishes to embark on new product development and commercialization.

1.3 OBJECTIVE OF THE STUDY

The objectives of the study include the following:

(1) To eradicate the obstacles imposed on commercialization of new products.

(2) To bring out the importance of new products and innovation in Hadris and Dromedas in Enugu metropolis.

(3) To explain the challenges of a new product and innovation.

(4) To explain how to plan for new product and innovation.

(5) To explain how new product and innovation can be finance.

1.4 SIGNIFICANCE OF THE STUDY

The study when analyzed will stand as a leading guide to the investor, innovators, individuals and corporate bodies in commercialization of new products and innovation in Nigeria.

The researcher is of the view that this research will stimulate the interest of marketing academics and corporate research in Nigeria on the role of modern marketing in the development and successful commercialization of new products and innovations. It will help organizations to embark on the development of new product and innovation, and also to apply marketing strategies, if they really want their new products to be commercialized effectively.

It will equally help students to avoid mistakes of the past and focus on sales forecasting.

1.5 SCOPE OF THE STUDY

This study will critically examine the impediments to the commercialization of new products and innovations in Nigeria. Talang Hardies and Dromedas ltd as a case study. This research work will be conducted in Enugu Metropolis s regard the collection of data.

1.6 RESEARCH QUESTIONS

Okafor (1996:50) defined research question as the breakdown of the problem statement in question forms, which the research formulates from the problem statement.

(1) What are the major causes of new product and innovation failure in Enugu Metropolis

(2) What are the strategies used in commercialization of a new product and innovation in Enugu metropolis.

(3) What are the steps involved in the development of new products in Enugu Metropolis.

(4) What are the impediments of commercialization of new products and innovation in Enugu Metropolis?

(5) What are the possible solutions to impediments of commercialization in Enugu metropolis.

LITERATURE REVIEW

2.0 INTRODUCTION

The commercialization of a new product and innovation involve all marketing efforts or activities geared towards the discovery of customers unsatisfied needs, finding an appropriate product which will satisfy such needs, and successfully getting the target consumers to adopt new product or innovation for the gratification of that previous unsatisfied need.

Kotler and Armstrong (2001: 349) are of view that commercialization has to do with “introducing a new product into the market”.

Professor A. O. Udeagha in his book Principle and Processes of marketing (2003:228) made it clear that “commercialization is the last stage of the new product development process. It is at this stage that the final decision is taken to produce the new product and to introduce it to its target market. The decision to commercialize a product is an indication that it has been adjudged adequate in all the attributes that determine its market acceptance and probability. The changes or modification that need to be undertaken following a review of the test marketing result, must naturally be taken care of before this decision. Commercialization can be reviewed as involving two phrases: The first is the preparation phrase during which arrangements are made for the financing of the product and the plant and machinery required for its mass-production are purchased. This is also the stage at which plans are made for promoting the product and the distribution channels are selected.

The second is the launching or introduction phrase. That is the stage at which the product begins its life cycle.

Innovation on the other hand, has to do with creating new ideas, products, goods or services. While kotler and Armstrong in their book principle of marketing (2001:768) define innovative marketing “as a principle of enlightened marketing that requires that a company seek real product and marketing improvements”

The company that overlooks new and better ways to do things will eventually lose customers to another company that has found a better way. Although, people differ greatly in their readiness to try new products. In each product area, there are “consumption pioneers’ and early adopters. Other people adopt new products much later.

2.1 THE IMPORTANCE OF NEW PRODUCTS AND INNOVATION

New product and innovations are the bases for the existence of today’s big business and the foundation of tomorrow’s growth industries.

Bryan Andrews (1985:2) emphasizes on the importance of new products innovations when he says “new products development is the best means of utilizing a company’s strengths and achieving long term growth, particularly when those strengths are found mostly in technology, design, and marketing”. Small companies can also penetrate a new market if they are innovative in technology or marketing concepts.

Companies need to develop new products in order to satisfy their customers and maintain o increase their profitability and survival. It is important that companies should be innovative in product development in order to meet challenges in meeting consumer needs and competition from other producers. Old products are totally replaced or modified when developing new products. W.J. Stanton believes there must be significance difference for an old product to be seen as new.

New products and innovation must be able to satisfy consumers need. It is very importance for consumers to know this, it is only in this sense that the view of Zikmund and Amico (1986: 215) that the product is a bundle of satisfaction can be appreciated and the need to be design it from the perspective of the buyer be realized.

The above view brings Kotler’s (1988:446) identification of three levels of the product namely, the core, the tangible and the augmented product quickly to mind. The core product which according to him, is the most fundamental aspect of the product, represents the solution to the buyer’s problem. It is the aspect that must give answer to the question: “Why does the buyer buy this or that product”. It is known for instance that the car is purchased to serve as a means of transportation, while items of furniture are procured for relaxation. These needs that are satisfied by these products constitute the core aspect of these products. The tangible product on the other hand, stands for the product as packaged, branded, shaped or colored. Product augmentation is, in its turn, achieved by offering such additional after sales services and benefits as delivery, installation, personal attraction, credit, warranty etc which are intended to smoothen sales.

2.2 PLANNING FOR NEW PRODUCTS AND INNOVATIONS

Anything worth doing is worth planning well. For a new product or innovation to succeed, it has to be planned for. The planning of new products and innovation falls within the jurisdiction of the marketing activities known as product planning. Udeagha (2003: 222) states that product planning consist s of the activities involved in planning the implementation of the company’s product policy. It is a business function that owes its existence to the fact that business takes place in a dynamic environment where change is the rule rather than exception. In such an environment, product come and go like human Beings, they are born, they grow, mature and decline (Dalrymple etal, 1983:357) or die.

In many case, they die even before growing o maturing. In order to survive in this type of environment, a business organization must anticipate such product changes by planning for new products development, replacement, product modifications and eliminations. Also the enunciation of either a single or multi-product policy by a firm is no guarantee for its successful implementation. This requires detailed planning if success is to be achieved.

In planning any of these activities (product development, replacement, elimination or in short the product mix or range) the product planner must not only consider the company’s product policy but also carefully monitor what is happening in its marketing environment. He must watch development in his, as well as in competitor’s organization, monitor trends in the market and in the economy to assess changes in consumer buying behaviuor and preference of the various elements of his or her company’s product-mix

For a company facing the decision of whether or not to embark on a new product or innovation, Bryan Andrews suggest the use of a profit analysis or technique. This analysis ties to find if a gap exists between the level of profits which the existing products are capable of contributing in the future and the desirable profit target for the company. The objective here is to establish the size of the gap between the expected profits from existing products marketed by the company and the profits the company should reasonably expect to make. The defined gap must be filled from new profit sources if the targets are to be achieved. These new profit sources are new product and innovation that could be taken up.

2.3 SOURCES AND PROCESSING OF NEW PRODUCTS’ IDEA

George and Emma Ude (2002: 50) states that new product idea can come from the following sources.

(1) MARKET RESEARCH: Information from customers and channel members may reveal a need for a totality of new product or modification of an existing one in the market.

(2) The research and development division of a company may offer product ideas which are then assessed by management.

(3) MANAGEMENT BRAIN STORMING: Managers may hold brainstorming sessions in which they suggest possible new products.

(4) COMPANY EMPLOYEES: Ideas of sales people, company workers, etc can contribute to new product ideas.

(5) Other sources like external research agencies, consultants, competitors, products, trade magazines, shows and seminars. Aderson advises that the task of collecting and evaluating such ideas should be centralized in one function (the development function), and people who have product ideas should know where to direct them so that they may receive proper attention.

Once the idea for a new product has been born, one would have o ask some questions to help screen the ideas in order to eliminate the impracticable or unprofitable ones. The following questions could be asked:

 Can it be done? Is the proposition technically feasible?

 Can we do it? Does the company have the necessary technical experience, or can it be acquired?

 Are the necessary resources available to successfully manufacture and market the product?

 Can the product be profitably sold at prices which will ensure a demand?

 Is there a real demand for the product or could one be created?

 Are we capable of successfully marketing the new product? What are the competitors doing, and how will they react?

 How do the potential benefits compare with the apparent risk?

Allen and Hamilton carried out a study on new product idea generation and processing in 1968 and found out that it took 58 ideas to yield one single new product.

When the survey was repeated for 700 companies in 1981, Brooz, Allen and Hamilton found that it took only seven ideas to yield one successful new product.

To expand it product-mix, a business organization has two main policy options.

(1)To acquire the required new products from outside the organization or

(ii) To create them within the organization

The creation of a new product within the organization involves a planning process commonly referred to by marketing specialist as new products development process or new product evolution cycle 9Baker etal: 1979).

This process or cycle consists of the following six stages or phrases.

I Idea generation

Ii Idea Screening

Iii Business analysis

IV technical development

V market testing

VI commercialization.

IDEA GENERATION: This is the stage in the product development process at which new product ideas are generated. Such ideas may come from individual or group of individuals. They could also originate from internal as well as external organizations participants or even from non-organizational participants such as competitors. A number of firms get their product idea by chance, while others have to plan for the generation of their ideas. While it is the authors view that a systematic approach to new method of ensuring consumer satisfaction in a dynamic environment, a decree of informality should be built in to the system to make room for initiative and originality.

IDEA SCREENING: This is the second stage of the product development process. At this stage, new product ideas are analyzed for their relevance to the company’s mission, their technological and marketing synergy as well as for their potential for satisfying consumer needs and wants. Ideas that are not pertinent to an organization’s mission and goal nor suited to its target markets are rejected at this stage. Also ideas that appear very risky are thrown out here. Screening also involves a general assessment of the organizations resources to further development, production and distribution of the proposed product. Equally important, is the need to ensure that the production of the product is free from all forms of legal constraints.

BUSINESS ANALYSIS: At the stage of business analysis, the product idea is subject to a more in depth scruting to determine their technical and commercial feasibility. At this stage, management is particularly expected to determine such things as the likely rate of returns on investment in the proposed products, the effect of the new products on the existing product mix (whether they are likely to strengthen or weaken it), their potential to facilitate access to new market and their overall- impact on the image of the firm. Infarct, this stage is a very crucial one because, it usually yields the product cause, it usually yields the product designs or the new product development document, which contains new product and get them ready for the market.

PRODUCT DEVELOPMENT: This stage now involves the translation of the product ideas, which is a concept, into a physical product. The production, research and development, and marketing department work as a team to develop the physical product. This is aimed at ascertaining the feasibility or possibility of producing such product. It is also aimed at producing a small quantity which will be later used for market testing.

TEST MARKETING: this is an experimental procedure that involves the introduction of a new product into a limited market to assess its market acceptance. For a national market, small quantities are test marketed in different geographical areas for varying reactions of customers in these areas. Reactions and complaints by buyers and initial users are taken note of. The producer can be withdrawn and modification made. Also the speed of sales and profit in making more reliable sales and profit forecast for the product. Marketing testing is important in order to avoid major losses incurred when large quantities of the product are produced and sent into the market only to be rejected by the consumers.

COMMERCIALIZATION: Once the result of testing marketing are satisfactory, the company then goes ahead to produce the goods in large quantities and market them fully.

PRODUCT DEVELOPMENT PROCESS

“`

“`

Total “` Ideas Screening

Idea “

“ Business Analysis

“ Product Development

“`

“` Text Marketing

““`

““““` Commercialization

“““““““““““““““`

“““““““““““““““`

“““““““““““““““`

New product

2.4 MARKET ANALYSIS FOR NEW PRODUCT AND INNOVATION

In the traditional approach to new product development, the designers and engineers would first develop a new product, design it, and get it ready for production. After production, the sales department would be called upon to sell whatever had been produced. But the market analysis approach has the distinction of starting new product development from the point of view of first identifying what the market requires, trying to create a product to fulfils that need.

The group public Relations Department of the U.A.C. ltd, expressing its view on this same subject says “market research must be considered an essential feature in the chain of events, either for the launch of a new product or the introduction of a product into a new area.

2.5 FINANCING NEW PRODUCT DEVELOPMENT

Finance is nothing but money available for use at the time it is needed. Financed is one of the major problems impinging on successful new product development and commercialization. It is obvious that founders of new business, investors, will have sufficient finance from their own resources that Is already available in order to cover the initial expenses. They therefore, need the cooperation of investors in commercializing their new products and innovations. Product and development.

Owners of new products or ideas or innovations can license them out to another company with enough funds, they can enter into joint venture or partnership with interested inventors, or borrow money from friends or financial institutions, in an effort to getting over their financial constraints. However, such an inventor or innovators need to be able to convince and gain the support of investors before they can release their funds. According to Ann Dambrough and Derek Kinrads, “winning support is largely a matter of the right approach, personal initiative and or having influential contacts”. Added to this, is the need to accompany the new product idea or innovation with a well-prepared feasibility and viability study.

To win the support of investors, it is advisable to use professional consultants. This is because many organization needing money quickly, do not have the time, the knowledge and or the resources to set up and carry out a successful major campaign on their own initiative.

2.6 DESIGNING AND NAMING NEW PRODUCT

There is sense saying that product imagery and packaging are of immense importance.

Designing according to Andrews (1999: 14) says “design is often the reliable for the essential personality of the product”. A good design should be adopted, to make the product easy to use, and good to look at, at least in the eyes of the potential customers.

Meeting a product for the first is like meeting a person for the first time. Therefore, according to Andrew, the name of a product means much more in the launch or introductory stage than it does after the product has become well established.

Philip Kotler gave some desirable qualifies for a brand name as follows:

(1) It should suggest something about the products benefits; a good example of this is Blue Omo.

(2) It should suggest product qualities, such as action, color or whatever. Snowhite and tooth paste illustrate this.

(3) It should be easy to pronounce, recognize and remember. Example of this coca cola or coke.

(4) It should be distinctive (i.e. different from others).

2.7 CHALLENGES OF NEW PRODUCTS AND INNOVATIONS

There are a lot of challenges facing new products and innovation. They are as follows:

(a) Technological Advances: companies that want to innovate or produce new products, should be advance in design and manufacturing technologies, with new technological equipment in order to follow suit with their competitors.

(b) ZIPPING TO MARKET: Along with the need to be both innovative and prolific, companies are being pressed to ways to get products to market faster.

(c) Develop a product strategy: Failure to decide which direction to take and why may be the biggest impediment to getting the right product to market quickly.

(d) DEFINE AND DIFFERENTIATE THE PRODUCT: A product may fail because the price was not right, the quality was poor, or the design was not alright, but the main reason usually is lack of competitive difference.

(e) TRACK YOUR FIRMS PROGRESS: Having a process for evaluating project at intervals along the way, confirms whether a product is developed, is still going to meet customers needs, whether it is still financially feasible, and technically possible to produce, and whether it is advisable in light of market or other developments.

(f) STAY FOCUSED ON YOUR GOAL: Companies should maintain discipline and focus as product are developed; they should save time and keep cost down.

(g) DON’T LOST SIGHT OF QUALITY: Companies should strive hard to produce quality product. According to Corper of Mc Master University “The companies have found that if the product is not right for the market, getting the product to the market first doesn’t make much difference.

2.8 PRICING THE NEW PRODUCT /INNOVATION

Utmost core must be taken in fixing the final price. This is because a later alternation of price can have an effect in the product; such that the firms have freedom to change prices after the product have been launched.

Udeagha (2003: 243) make it clear that the price of a product or service is the amount of money a buyer has to pay an order to obtain it. A person may pay #200,000 to buy a car why a company pays its chief executive #400,000 annually for his services. The amount of money involved in each of these transactions is the price of the product or service. It is the value of the product or service. Although money is use as an index of value and a means of exchange in each of these transactions, price can incorporate goods exchange for goods in a money economy. Example includes food offered to labourers working in a village farm, cars traded-in during a purchase transaction and counter-trade arrangement.

2.9 PRICE DETERMINATION

Business organizations do not fix the price of their goods and services in a vacuum. They take a lot of factors into consideration. Such factors as the cost of their products or services, the structure of the market or industry, the nature of demand etc, have since the beginning of economic been recognized as contributing in their various ways towards the determination of the price of goods and services.

Bryan Andrews “new product pricing decision mode” states that there are four main components which people are wiling to pay for inmost new product, these are;

(h) The product performance (ii) the decree of innovation over existing products. (iii) The product image and (iv) the brand name. He is of the opinion that new distinctive products can be priced above the existing levels of the market. But the market has to be sure he does, has a distinctive enough product to warrant the price. A failure to do that will provide a cheaper alternative to the companies who have the nerve to copy the new product and have no need to receive development cost.

The packaging imagery should be consistent with the price, so that, it does not confuse the customer into believing that the product is cheaper or more expensive than it really is.

2.10 ADVERTISING AND LAUNCHINH THE NEW PRODUCT

For every new product, there is a target market. The first task of a new product or brand is to inform the target market of its arrival. If people do not know that a new product exist they are hardly likely to buy it, except by “accident’. Only few brands can survive on such accidental sales. Michael baker observes that in a market, advertising is the chief way a producer can talk what it can do for them”.

Andrews prescribe that new product advertising should “arouse interest, stir up feelings of excitement and break through the initial of existing purchasing habit’. To him, the objective of new product advertising ought to be:

 To establish rapid awareness of this existence of the product amongst the target market.

 To communicate product information

 To generate favourable attitudes to the product.

 To create the appropriate imagery for the product.

Launching is the formal, elaborate activity of exhibiting the new product for the purpose of getting the customer to rapidly adopt it. For desirable impact to be made at launching, it is better for the new product to be kept until the conference or launching moment.

2.11 PRODUCT LIFE CYCLE (PLC)

George and Emma Ude (2002: 54) Opined that product life cycle commence immediately a new product is introduced into the market. It then grows, matures and eventually declines.

This life-cycle concept conforms to the sales history of successful new products. After the period of introduction, the product experiences rapid growth in sales during the growth stage. Plotted against elapsed time from introduction, sales will show as an “S”- shaped curve appearing as anew product may live in a shorter time than show in the graph. However, certain products like (Omo and pick milk) may last for years or decades without much change. These products are known as cash cows.

#

Sales

Profit

Volume

Sales

Profit Margin

O Intro- Growth Maturity Situation Decline

Production Time

Source: Adopted from Marlin Stone, products planning(London: Macmillan Press ltd, 1976).

The concept of the product life cycle should be of major interest to all marketing manager. Marketing managers should be sensitive to the market and be able to discover the stage their products are occupying, and how long it will last, and the specific marketing strategies that can help to exploit the opportunities and tackle the problems posed but the market.

2.12 MAJOR CAUSES OF NEW PRODUCT AND INNOVATION FAILURE

Umeh and Umanta (2002: 49) listed the major causes of new product failure are as follow:

1 Insufficient assessment of the potential market prior to development of the new product. This may be due to:

(a) Poor brain storming or new product ideas,

(b) Wrong assessment of customer needs

© Wrong determination of buying motives or why the customer wants to buy.

(d) Wrong information from market research team, customers, employees, wholesales, retailer and others in the distribution chain.

(2) Poor quality and poor performance of the new product in terms of consumer satisfaction.

(3) Simultaneous introduction of better products by a competitor or copying from competitors.

(4) Insufficient marketing effort to back up new products- This include low promotion and advertising, untrained sales people, poor augmentation of the product(no installation, delivery, after-service, warranty, spare parts available )e.g. in equipment, cars or electronics market.

(5) Over estimation of potential demand and thus unavailability of the product.

(6) Sudden change in taste, want or desires .

2.13 PROBLEM OF COMMERCIALIZATION OF NEW PRODUCT AND INNOVATIONS IN NIGERIA

There are multiferous problems impinging on the successful commercialization of new products and innovation in Nigeria. Innovators have always been mediocrities, facing severe opposition from the rest of the world.

Innovators take time to make their mark and gain popularity in the market place. The payback period of the money invested in new products or innovations may therefore be long. But the average Nigeria investor is impatient, and want to recover his investment as soon as he “already made” business which have shorter payback periods than in a new one. Little wonder, the average Nigerian businessman prefers being a manufacturer.

Nigeria consumers have an excessive taste for foreign made good and services. The general philosophy is “if it is foreign made, then it is the original and superior, but if it is Nigeria-made, then it is not original but fake inferior”. This is often a discouragement to Nigerian investors and marketers of new products. Those of them without patience, either quit the market or resort to using foreign labels on their Nigerian- made products. Though the quality of some of Nigeria products are not high enough to meet international standard, if they are given the chance in terms of quality.

Marketing is still very young in the 3rd world countries, and many companies and individual businessman have not yet adopted the marketing philosophy. We are still in the stage of production concept. It is only few industries such as beverages and soap ,where there are many competitors that have started adopting the marketing strategies are not made use of by many businessmen and innovators, carrying out new products. This lead to the rejection and failure of many new products, ideas, and innovation in the fail to fulfil a need yet unsatisfied.

Nigerian businessmen are not ready to invest on research. Even if they do, they do not make their result available to others. At the same time, the result of many researchers is misleading, because of people general negative attitude towards research. Marketers and those researching on new products and consumer, therefore face the difficulties of unavailability of research results high cost of research, and misinterpretation of research results.

Some positive effort is being made to promote and commercialize research efforts in Nigeria. A body known as the foundation for the promotion and commercialization of indigenous technology, (FPCIT) WAS FORMED AT Enugu in October 1986, and was commissioned officially by the former Anambra state Government in November 1987. The foundation has about 86 members (made up of representatives, colleges of technology, individuals and corporate investors, government officials and some persons of outstanding attributes.

Within it short time of existence, (FPCTT) was able to assemble the prototypes of all major indigenous innovations and research results, do cemented and re-appraised the inventory of existing raw materials machinery for indigenous technology in Enugu state and set up a comprehensive report of all these, to be made available to the public very soon.

The Enugu state chapter of the Nigerian Association of Small Scale industrialists planned to celebrate its Twentieth (20th). Anniversary towards the end of 1998, as part of the anniversary. (NASSI) plans to invite indigenous innovators to come for a demonstration of their new products and innovations before the public, between, April and May 1998. It equally plans to sponsor some inventors and innovators with financial problems for an exhibition. (NASSI) plans to compile a booklet modified “who does what in Enugu state soon. These efforts are aimed at encouraging indigenous innovators and bringing them before investors who might be willing to help in the commercialization of new products and innovators.

With all these efforts, it is believe that the country wills soon over-come most of the problems impinging the commercialization of new products and innovations.

RESEARCH METHODOLOGY

3.1 INTRODUCTION

This chapter deals with the method, that used for collecting the data required in carrying out the research work if explains the procedures that were followed and the instrument used in collecting the data. It simply describes all activities in the collection of all the necessary information required to the research project.

3.2 RESEARCH DESIGN

The research design method used in this study aims at discovering the inter-relationship between two variables. It is a research study using the questionnaire and personal interview as the instrument for drawing information from competent respondent.

3.3 SOURCE OF INFORMATION

The source of information relevant to this study was mainly primary and secondary data sources. The primary sources of data for this research study were through personal interview and the administration of questionnaire to its staff and management of the company.

The secondary source of data comprises of information from sales records of the company review of existing literature written by various authors relevant to the study etc.

3.4 POPULATION OF THE STUDY

The population for this project consists of people in the company who are the staff and management of Hardris and Dromedas Enugu, which totals (100) persons in its employment.

3.5 DETERMINATION OF SAMPLE SIZE

The sample was gotten from the total people in its employment and was carried out randomly. Because the population was not large enough the researcher decide to use the population as the sample size

3.6 METHOD OF DATA ANALYSIS

Table’s frequencies and percentage have been used in analyses of data and conclusion was drawn after the data analysis.

4.1 PRESENTATION AND ANALYSIS OF DATA

This chapter deals with the presentation, analysis and interpretation of data obtained in the course of this study, Analysis of data involves the application of statistical techniques to summarize and often to draw inferences about the population from which the data were abstracted.

The information gathered from the investors and innovators through personal interviews are presented herewith the aid of tables and later analysed with the aid of the frequencies and the use of percentage.

4.2 DISTRIBUTION AND RETURN OF QUESTIONNAIRE

OPTIONS NO OF RESPONDENTS % OF RESPONDENTS; RESPONSE

Questionnaire distributed 100 100

Questionnaire returned 75 75

Questionnaire not returned 25 25

Source: response to interviews conducted with innovators.

Table 1 above shows that the number of questionnaire distributed was 100. The questionnaires that were completed and returned was 75, while 25 were however not returned. For this reason, the researcher based her analysis of data on the returned questionnaire that is 75% of the total number of the questionnaire distributed.

Table 2

SEX DISTRIBUTION OF RESPONDENTS

OPTION NO OF RESPONDENTS PERCENTAGE OF RESPONSE

MALE 65 70

FEMALE 35 30

TOTAL 100 100

SOURCE: RESPONSE TO INTERVIEWS CONDUCTED WITH INNOVATORS

Table 2 above shows the sex of the respondents 70% were male white 30% of the innovators were male. This shows that most of the innovators are males.

Table 3

AGE DISTRIBUTION OF RESPONDENTS

OPTION NO OF RESPONDENTS PERCENTAGE OF RESPONSE

20-25 18 18

26-30 36 36

36-40 25 25

46 and above 21 21

Total 100 100

SOURCE: RESPONSE TO INTERVIEWS CONDUCTED WITH INNOVATORS

Table 3 above shows that 16% claimed their age to be between 20 – 25, 40% claimed their age to be between 26-35, 26% claimed their age to be between 36-45 while 18% claimed their age to be between 46 and above.

Table 4

DISTRIBUTION OF EDUCATIONAL QUALIFICATION

OPTIONS NO OF RESPONDENTS % OF RESPONDENTS

WAEC 20 20

NCE, OND 30 30

B Sc. & above 50 50

Total 100 100

SOURCE: response to interviews conducted with innovators

In the table above, we can see that 20% obtained WAEC certificate, while 30% have NCE and OND and 50% have B Sc. and above certificate.

TABLE 5

DISTRIBUTION OF MARITAL STATUS OF THE RESPONDENTS

OPTION NO OF RESPONDENTS PERCENTAGE

Single 25 50

Married 25 50

Total 50 100

SOURCE: RESPONSE TO INTERVIEWS CONDUCTED WITH INNOVATORS

Table 5 shows the marital status of the respondents. According to the table above, 50% were single and 50% were married.

ANALYSIS OF OTHER RESEARCH ISSUE

In this study we sought to know the extent to which Enugu innovators embarked upon creative (planned) new product development. First all they were asked what motivated them to develop their new products. The table below clearly explains this.

ACTIVATORS OF NEW PRODUCTS/INNOVATIONS IN NIGERIA

ACTIVATORS RESPONSES PERCENTAGES

Felt need 6 15.80

Inspiration/Ego 16 42.1

Requests/ order 8 21.05

Profit/ employment 8 21.05

Total 38 100

SOURCE: RESPONSE TO INTERVIEW CONDUCTED WITH INNOVATION

The table above shows what motivated innovators to develop their new products. The result was shocking. Out of 19 respondents, 15.80% of the innovators develop their new product in order to satisfy the customer’s needs which they had discovered. 42.10% develop their product out of inspiration 21.05% develop their product because people requested for it. While 21.05% develop their products because they wanted to make profit or be employed.

Table 7

TYPES OF MARKET RESEARCH PRIOR TO INNOVATION

TYPES RESPONSES PERCENTAGES

Informal/not detailed 6 15.80

Formal/ detailed 8 21.10

None of the above 24 63.10

Total 38 100

Source: response to interviews conducted with innovators

Table 7 above shows that 15.80% of the innovators did a little investigation personal observation of the market, while 21.10% of the innovators carried out formal or elaborate market research in order to discover customer’s needs and 63.1 % of the innovators interviewed never bothered themselves with the necessity of finding out what market looked like before innovation.

Table 8

TYPES OF MARKET RESEARCH PRIOR TO COMMERCIALISATION

TYPES RESPONSES PERCENTAGES

Informal/not detailed 16 47.10

Formal/ detailed 12 35.30

None of the above 6 17.60

Total 34 100

Source: response to interview conducted with innovators.

Out 34 respondents 47.10% of them completely neglected marketing research as shown in table above. 35.30% of them had informal or in elaborate marketing research, like merely taking samples to friends and asking their option about the new product. While 17.6% of the innovators had, formal and detailed marketing research prior to the commercialisation of their new products. One of the responding investors from Enugu observed that lack of market and marketing researches prior to the development and commercialisation of the new products was new products was the major reason for the failure of many new product in the market in Nigeria. He himself had once made the mistake when he introduced a new detergent into the market, without any prior market and marketing researches, only to discover later that his new product could not adequately meet the needs of the market.

Table 9

RATE OF PROCUREMENT OF PATENT RIGHT FOR NEW PRODUCTS

RATE NO OF RESPONSES PERCENTAGES

Nil 30 88.24

One 2 5.88

Two 2 5.88

Total 34 100

SOURCE: RESPONSE TO INVESTORS CONDUCTED WITH INNOVATORS

The table above shows that 88.24% of the individual and corporate. Innovators have not patented any of their new products. 5.88% has presented one new products while another 5.88% has patented new product. Further investigations revealed that many of the respondents were not aware of the benefits of patenting, while some felt it was not necessary. One of the respondent even boasted that nobody can copy his new product.

Table 10

FINANCE AS A CONSTRAINING FACTORS TO INNOVATORS

CONSTRAINT RESPONSES PERCENTAGES

Finance is a constraint 30 88.24

Finance is not a constraint 4 11.76

Total 34 100

SOURCE: RESPONSE TO INTERVIEWS CONDUCTED WITH INNOVATORS

From the above table, we can see that 88.24% of the respondents have financial problems constraining the commercialisation of their new products while only 1176% of them have enough funds. The only logical route for innovators who have shortage of funds for the commercialisation of their new products is to approach either individual or co-operate investors and ask for help.

Table 11

INNOVATORS SUCCESS/ FAILURE RATE IN CONVINCING INVESTORS OF THE NET COMMERCIAL ADVANTAGE OF THEIR NEW PRODUCTS RATING

Success/failure Innovators Percentage Investors Percentage

Failure 22 68.75 14 70

Success 10 31.25 6 30

Total 32 100 20 100

Source: response to interview conducted with innovators and investors.

As shown in the above, 68.75% of the innovators who approaches investors for financial help failed to convince the investors for the net commercial advantages inherent in their new products. Only 31.25% of them were successful in their bids 70% of the investors responded that the innovators who approached them for financial help failed to convince them of their net commercial advantages inherent in their new product. Only 50% of the investors were successfully convinced that were not commercial advantages in the new products brought before them future investigation reveled that most of the innovators did not have any feasibility and viability report to show investors. Most investors who were convinced were shown good feasibility and viability reports. The banks were the exception in that they demanded collateral securities in addition to the proof of the availability of the new product. The Enugu State president/ director of the Nigeria Association of Small scale industrialists; however confirmed that his association helped to secure loans from banks for twelve innovators (member) in 1987 without any proof of collateral securities. They only presented good feasibility and availability reports as tools par securing financial help from investors.

4.2 PRICING THE NEW PRODUCT

In Nigeria, customers usually link the price of a product with its quality and weight. High prices are associated with products that a heavy in weight and or superior in quality “original” or imported, “inferior” (low quality and low weight) products usually attract low prices. An innovator trying to commercialise a new product is expected to bear this in mind than fixing price for his product. This marketing research prior to commercialisation should be able to reveal to him his potential customers” views on the “right” price for the product. So that he will not be forced to start adjusting his price just as soon as he is introducing the new product. Thereby making the customers to loose confidence in him and the product.

When our responding innovators were asked the question: “what factors do you normally consider when fixing prices for your new products?” there answers showed that pricing passed a serious problem in the commercialisation of new products in Nigeria. The innovators generally did not give due consideration to the customers views on prices. This is shown in table 4.2.1 below

4.2.1

THE PRICING PRACTICES OF NIGERIAN INNOVATORS

PRACTICES RESPONSES PERCENTAGES

Cost plus mark up 26 81.25

Others 6 18.75

Total 32 100

SOURCE: RESPONSE TO INTERVIEWS CONDUCTED WITH INNOVATED

From the above one see that the pricing policy (practices) of Nigerian innovators generally follow the “cost plus mark up” method, which attracts 81.25% of the respondents. Only 18.75% of them used other methods, like what competitors are charging. The general adoption of the cost plus mark up pricing method was borne out to lack of detailed marketing research prior to the of detailed marking research prior to the commercialisation of new products coupled with the high cost of imported raw materials in the country.

Most Nigerian innovators feel that more attention should be given to the cost of the factors of production than to what customers feel about the price charged for new product.

Table 4.2.2

PRICING METHODS SUGGESTED BY NIGERIAN INNOVATORS

SUGGESTION NUMBER PERCENTAGE

Cost plus profit margin 24 75

Other 8 25

Total 32 100

SOURCE: RESPONSE TO INTERVIEWS CONDUCTED WITH INNOVATORS

The table above shows that 75% of the responding innovators suggested that the costs of the factors of production and profit margin should be given priority in pricing new products. This invariably leads to the adoption of the cost plus mark-up pricing method which they generally practice. Only 25% of the innovators suggested that other considerations such as those which would incorporate the policy of the customers and the reaction of competition be given priority.

The result of the pricing practices and the implementation of the suggestions of Nigeria innovators with respect to the pricing of new product has been the charging of price which are inconsistent with what customers are ready to pay.

RATE OF CHARGE IN PRICES OF NEW PRODUCT WITHIN THE LAST TWENTY-FORE MONTHS

RATE OF CHANGE RESPONSES PERCENTAGE

0 4 12.5

1-2 times 10 31.25

3-4 times 4 12.5

More than 4 times 14 43.75

Total 32 100

Source: response to interviews conducted with innovators.

The table above shows that 12.5% of the innovation change their prices between 3 and 4 times, and 31.25% changed their prices between 1 and 2 times. 12.5% of the respondents did not alter price at all. While 43.75% alter their prices between 4 and above.

FINDINGS, RECOMMENDATIONS AND CONCLUSION

5.1 SUMMARY OF FINDINGS

There is generally a grossly inadequate market research prior to the development of new products in Nigeria.

 , “inspiration Ego” and the desire for a profitable “own business” constitute the major activators of the inventions and innovations.

 The effort to commercialize most new products and innovations in Nigeria are unwillingly channeled towards meeting the sales and profit needs of the inventors and innovators, rather than satisfying the unfitted needs and wants of customers, as modern marketing philosophy advocates.

 Before introducing a new product into the market, adequate consideration is not being given to marketing research. Apart from the multi-nationals, the few investors and innovators who attempt any marketing research usually do not go beyond merely showing samples of the new product to friends, who usually voice their approval of the new products.

 Most indigenous new products and innovations are not patented. While some of the inventors do not know the advantages of patenting their new products, some feel it is lament over the inadequacy of founds and the lack of financial encouragement from both the government and investors for the commercialization of new products and innovations.

 Most Nigerian investors are aware of many new inventions and innovations within their areas of business, but they are awaiting the investors and innovators to come to them with their good feasibility and viability reports on the new products before they can invest in them.

 Most Nigerian innovators who have financial problems in commercializing their new products fail to convince investors the net commercial advantages inherent in such new products while many of the innovators hardly personally approach investors for financial help. Some who are unable to prove the commercial worthiness of their new products? The few who receive help from investors and the government are those who established or find out that their new products have not commercial advantages.

 Nigerian investors are too conscious of immediate profitability. Their only motive for joining in the commercialization of new products and innovations is the immediate net commercial advantages perceived in such new products.

 Both Nigerian innovators and investors prefer the joined commercialization of new products to the disposal and acquisition of the new products patent right.

 Customers’ view on price is usually given any consideration by Nigerian prodders when fixing prices for their new products. They generally advocate and practice “cost-plus” pricing. Any time there is a rise in factor cost, they automatically adjust their prices upwards, to make sure their profit margin or mark-up is maintained.

5.2 RECOMMENDATIONS

Based on the research findings, the following are recommended.

(1) Marketing academics are advised to set up marketing consultancy firms, with the aims of helping those in need of marketing services to carry out market and marketing research, write feasibility and viability reports and advise both innovators and investors on the commercialization of new products and innovations.

(2) Nigerian innovators should always carry out formal and detailed marketing research before bringing their new products into the market.

(3) Innovators with original new products should obtain patent right for them. This will make it easier for them to secure financial aid for the commercialization of such new products.

(4) Innovators who have financial problems in commercializing their new products should feel free to approach investors or government for help.

(5) Before fixing prices for their new products, investors and innovators should try to find out the acceptable prices for such new products.

5.3 CONCLUSION

New products and innovations are the basis for the existence for today’s big business and the foundation for tomorrow growth industries. Any nation seeking the present and future welfare of its citizens cannot afford to take lightly the issue of new product development.

In Nigeria today, there is a dire need for new products and innovations to satisfy the many impelled needs of the customers.

Innovators that are able to convince their target market about the worthiness of their new products prosper and they commercialized their product successfully.

Government is expected to play a more leading role than previously in the commercialization of new products and innovation by nationalizing and actively funding the foundation for the technology, emerging investors to invest more in new products development and commercialization, and also directing the research institutions to commercialize some of their new products and innovations.

Finally, government is expected to set aside some fund as loan to worthy innovators who have financial constraints in commercializing their innovations.

REFERENCE

Adirika Ernest Okey (1997) Marketing Planning Strategy. Lecture note HOD Final: Department of Marketing.

Andrews Bryan (1996) Creative Product development Longman Group Ltd.

A. O. Udeagha (2003) Principles and Processes of Marketing

George I. Umeh and Emma Ude Umanta (2002) Principle of Marketing: Jones communication Publishers

Hake . Bruno (1995) New product strategy. London: Pitman And sons ltd

Kotler and Armstrong (2001), Practice Hall of India Private Ltd New Delhi

Kotler and Armstrong (2001) Principle of Marketing Ninth Edition

Okafor U. S. (1996) Marketing research and Project Writing Publishers

Ozo J. U. (2001) Marketing Research Enizo Books. Imoore Avenue Ogui Enugu.

United African Company ltd (1997) Distribution and Distributors. London: Group Public Relations Department.

Wattes Roginald (1995) Reaching the consumers. London Business Book ltd

Zikmund W. and Diamico M. (1986) Marketing second Edition, John Hiley and sons, New York.

QUESTIONNAIRE

Questionnaires on the impediments of the commercialization of new products and innovations in Nigeria, focusing on Enugu Metropolis.

Instruction: Please indicate by ticking the appropriate

In the box provided

1. STATUS MANAGEMENT

SENIOR STAFF

JUNIOR STAFF

2. SEX FEMALE

MALE

3. AGE BELOW 25 YEARS

25-35 YEARS

36-44 YEARS

ABOVE 45 YEARS

4. MARITAL STATUS: SINGLE

MARRIED

DIVORCED

5. EDUCATION QUALIFICATION:

FIRST DECREE HND

HSC/UCE

PROF QUALIFICATION

WAEC/GCE/SSCE

 

SECTION B

Indicate by mark ( )

(1) Did you introduce any new products in to the market last three year?

(A) Yes

(B) No

(2) If you answer in (1) above is “Yes” was the product innovated by you or was it acquire from an innovator?

(A) Innovated by me

(B) Acquires from an innovator

(3) Are currently thinking of introducing any new product into the market?

(A) Yes

(B) No

(4) Have you been approached to by a new product or innovation within last twelve months?

(A) Yes

(B) No

(5) Would you briefly explain the major problems of innovators in Nigeria which prevent the commercialization of their new product and innovations?

Commercialization Of New Products And Innovations In Nigeria – The Impediments: ((Case Study Of Handris And Dromedas Ltd., Enugu State)

 

 

 

 

 

To place an order for the Complete Project Material, pay N5,000 to

GTBank (Guaranty Trust Bank)
Account Name – Chudi-Oji Chukwuka
Account No – 0044157183

Then text the name of the Project topic, email address and your names to 08060565721.  

Enter your email address:

Delivered by FeedBurner

Speak Your Mind

*