CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
New products play several roles for he organization, they help maintain growth and thereby protect the interests of investors, employees, suppliers of the organization. New products help keep the firm competitive in a changing market (Patrick, 1997). The consequence of product development have a direct impact on competitiveness. They mean the difference between falling behind a leading competitor in the market and being the competitor who provides leadership, compelling others to meet similar standards(Wheel Wright and Clark 1995).
Finally, new products spread the marketing risk. The investment community values new products; new product affect the top line and therefore enhance the value of the firm and shareholder value (Patrick 1997). The academic and the business periodical literature are replete with derailed listings and explanations of both why new products fail and what factors are related to success. There is no shortage of guidance available to those interested in achieving the revenue growth, profit growth, and reputation for innovation and leadership associated in achieving the revenue growth, profit growth, and leadership associated with successful new product launches. Organization invest many human, material and Monetary resources in new product development. In addition, much research by both the academic and industry sectors, has been conducted regarding the factors involved in new product failure as well as success. Yet the statistics that we frequently hear cited about product failure are frightening. How can these seemingly contradictory facts be reconciled
The key driver of the efficient consumer response (ECR) initiative is an industry estimate that the excess cost to the grocery system in the product development and introduction process renege as high as 4% of net sales these costs include both.
v All development and introduction costs associated with failed products, including product cancelled before introduction as well as products will drawn after launching.
v Excess costs incurred in launching successful new products, principally excess manufacturing costs due to an initial massive inventory building needed for introductory deals and special offers e.g free goods.
Industry data from a study commissioned by the joint industry task force on new products and conducted by Deloitte and Fouche consulting Group in 1995 suggest that new product introductions cost the food system (manufactures, brokers, wholesalers and retail grocery stores? Approximately & 252 per skill, per store. It is important to note that the study was conducted using 1988 data. Assuming and industry inflation rate of only 2.5% over the past 10 years, this figure now approximates #320 per skill per store. The industry clearly spends a great deal of money on products that are introduced but do not succeed.
The intention of this research is to look at the problems and prospects of test marketing of new products with on Guinness Nigeria plc.
1.1 STATEMENT OF THE PROBLEM
The purpose of the study is to look at the prospects and challenges of test marketing as the affect now product in Nigeria
1.2 OBJECTIVES OF THE STUDY
This research work has the following objectives:
1) To look at test market as it relate to breweries industries in Nigeria
2) To identify the role of test marketing in the sales of new product
3) To examine the challenge associated with marketing of new products
4) To learn the reason for conducting a test market
5) To examine the effect of test marketing on the profitability of an organization
6) To identify the challenges and prospects of test marketing of new products.