CHAPTER ONE

1.0   INTRODUCTION

1.1   BACKGROUND OF STUDY

Today’s world is characterized by major changes in market and economic conditions, coupled with rapid advances in technologies. In other to ensure future success in the market companies invest in marketing research on New Product Development (NPD). Sometimes, most marketing research on new products development are often more likely to fail than to succeed, addressing changing tastes with new products is essential in maintaining customer loyalty, so that good NPD becomes a key factor in competitiveness. New products development can succeed if company change the way they do marketing research.

(Hollingsworth 2006 and Jeffery 2008) recommended that NPD strategies and process should change to follow changes in market and technology. It is widely recognized that effective new product development (NPD) processes are causally important in generating long-term firm success (Cooper, 2003; Ulrich and Eppinger, 2005; Wheelwright and Clark, 2005). They can lead to a core competence that either differentiates a firm from its competitors (Prahalad and Hamel, 2000) or provides a threshold competency that is necessary just to survive in fast-changing and innovative industry sectors. Given the importance and value of NPD to firm performance, researchers have developed descriptive frameworks based on linear, recursive, and chaotic system perspectives, which provide different insights and descriptive theories about NPD process structure and behavior.

These are then often the basis for normative research, which seeks to predict and prescribe causality in NPD processes (Griffin, 2007). Problems in conducting effective marketing research on NPD are magnified in many major industrial countries, where spending on research and development, and management of NPD may be even less favorable. However, while some research on NPD in the developing world has begun to appear, NPD success factors have received some research attention, usually higher technology industries provide the context.

Developing countries are quite competitive in some industries, which do not require advanced technology, but they still need to do marketing research on NPD to keep up with market trends. Management is often confronted with the dilemma whether or not to invest in a particular stage of the new product development (NPD) program, given market and technology uncertainties surrounding such a decision in current markets, most of all technology-driven or high-tech markets (Moriarty and Kosnik, 2009).

The changing economic conditions and technologies combined with increased domestic and global competition, changing customer needs, rapid product obsolescence and the emergence of new markets; require a fast resource allocation process in NPD; (Bower and Hout 2008, Griffin 2003, Gupta and Wilemon 2000 and Rosenau 2008). At the same time, market and technology uncertainty demand for flexibility in the program; see (Sanchez 2005, Wind and Mahajan). To remain competitive we must focus more on value added products in the future, which will require increased investment in marketing research. Modern retailing and changing consumer preferences foster demand for products with better quality, longer shelf life, and better packaging.

Foreign brands which were previously imported for a high income minority are now manufactured locally and affordable to the average. NPD is probably the most important process for many companies as it improves and develops the company’s innovativeness. In essence, NPD is a source of attracting customers once the developed products have a high quality. In business new product development (NPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis.

Companies typically see new product development as the first stage in generating and commercializing new product within the overall strategic process of product life cycle management used to maintain or grow their market share. The process of NPD is crucial within an organization, but it is a complicated and time-consuming process in which several different activities are involved.

NPD is commonly defined by a number of researchers as the transformation of a market opportunity into a product as a result of the integrative coupling of market assumptions with technological possibilities Krishnan and Ulrich, (2001), Griffm and Hauser, (2002), (2006). The Product Development and Management Association (PDMA) in 2006 defined NPD as an overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product. This means that NPD is a process that begins with opportunity identification and ends with a set of information that adds value to customers and brings returns to an enterprise