PRODUCT INNOVATION AS A VIABLE OPTION IN A COMPETITIVE MARKET ENVIRONMENT
CASE STUDY BABA GOD PLASTIC LTD ASABA
1.1 Background of the Study
There are many firms (Industries) in Nigeria even in the world and these firms compete among themselves. They are always conscious of the other firm manufacturing g related or similar products in the market. It is the aim of any business firm to make profit in it bid to make profit, the firm has to reckon with other active business firms who also have that profit initiative in mind, there therefore lead to competition in which the survival of the fittest becomes highest market share and acquiring more of the target advances.
Even, corporate leaders at the top are beginning to recognize that innovating their products is a strategic decision of choice. It has become a basic business imperative for survival and a prerequisite for sustainable growth.
Ajagu (2005:8) opine that innovation is the backbone of all newness. He further put it clear that newness is the watch word of the new millennium. New products, new services, new brands and composing new approaches, process and delivery systems all have exploded into the scene during the last decade with a regulatory that defies comparison with events of a century or more.
Consequently upon these competitive features, in almost every sector, the market became easily flooded and saturated (competitive) then many companies become so desperate to improve sales. If we move from market to market, pharmaceutical to chemical, food and beverages, soap and toiletries, soft drink, plastics products and beyond, we can easily discover a kind of symmetry in the use of antidotes against the turbulent effects of wide sales innovations is one of the antidotes.
Innovation both in theory and in theory and in practice is not new phenomenon, but million years age, history made us to know that a man creature who was seen in Africa made use of stone tools for most of how activities. This creature was called home herbalist (a man could manipulate tools) with time the early affected a better way of life and living the tool industry underwent an almost revolutionary process of change much so that about 35, 00 B.C the early man was producing tools in a number of identifiable different styles and traditions, each apparently dated to the needs of the regions in which it is characterized. The major innovation in the tool industrial was the use of hand pinches (similar to the leather punches) of words or bones to strike flakes from especially prepared leaves of flint, quart rite or other crystalline stone.
These tools which were better than the farmer stone implement include knives and spear points available chisels and so on. Coming back home to Nigeria, we therefore sole calabashes. The coca craft man in Yoruba land started making better cups and other vitamins through casting. The practice was known only to small groups of professionals and is after protested as trade secrets by regions sanctions.
In effect, therefore innovation started many years ago. But recently, it has become common in practices being applied in many industrial and commercial setups, including institutions for various purposes.
Innovation can therefore be seen as the process of developing and introducing uniqueness in an existing way of doing things, products and services.
1.2 Statement of the Problem
History has proven that the objectives of any striving business in Nigeria and other part of the world is to make profit, this they fail to accomplish via product or service, the firm (business) offer to the market. Their product or services therefore are like blooms as it is to man survival, but their product in particular take a definite life circles, starting in decline. It is at this decline stage that marketers became frantic. This intense competition amongst firms serving in the same market has resulted in the use of various marketing strategies which includes;
A Price reduction
B Massive promotion
These two most common measures hence their draw back on price reduction so as to increase sales, it was discovered that the participants in the channel of distribution prevents the effectiveness of this strategies. The retailers who normally sell to final consumers do not pass on these saving to final consumers. In other words, if a company reduces price of its products to entice more customer’s patronage, the retailer after building do not resell to final consumers at the stated reduced prices.
Secondly due to the Rising cost of production owing to some recent economic policies and measures, price reduction become hard, therefore the ability of some firm is to adjust since slightly down increase sales become effective.
Thirdly, the most important draw back to price reduction is what may be called “The paradox of reduction is what may be called “The paradox of price of effects” since price reduction is meant to reverse the dealing sales, it was discovered that a down backwards adjustments of price of a product may lead to buyers to nurse the feeling that quality of the products has been reduce.
On the second measure usually adopted which is promotion, it is the time the promotion is in effect, it could only force marginal increase in sales. Therefore, one will continue to wonder why consumer reacts negatively or slightly positively, inspire of successful price and promotion use to love them.
In Nigeria market scene, for instance, one could see a barrage of products promotion among money spinner products raffle draws, criminal kingdom competition, and cash bonze Olympic Games competition and so on. All these show that there are effort being made to measure consumer trials and sustained patronage of a products. The question and now is why sale always increase marginally.
The reason of this study, therefore is liability of the preposition that innovation rather is a more viable option in he present day competitive market which is the form of the case study of this project works (Plastic Industry) given major weakness of the most used strategies which is the ephemerical nature of their results. Innovation as an option has not been given a consideration trial by firms in measuring sales.
This is the assumption of this study, that the cause of the negative or slightly positive consumer respond to the effort made to entice them is that none of the strategies great new customer’s values. They are all effort to “patch-up” and old product, instead of creating a new one if slight different one example are, price, reduction and old products that has become monotonous to them nevertheless, innovation, which helps create new consumer value has not been tried as vigorously as the aforementioned strategies.
Most of the Nigeria proprietorship place too much emphasis on new price strategy. When what they should be doing it to justify higher prices by uniqueness, styles, quality and so on. Nigeria is a particular and the entire developing countries in general one still in innovation darkness.
In summary therefore, the study points that if innovation is pursued like other strategies in common use, lay the numerous firm in Nigeria, sales will increase over along period. This is because innovation can be said to be the pinnacle to this problem on creation of new consumer values, characteristics of both promotion and reduction.
1.3 The Objectives of the Study
Specifically, the main objective of this study is to investigate properly the level of competition and at the same time offer opportunity to make some recommendation to different bodies which studied and implement will be useful to the present and future organization through the awareness of innovation.
Innovating the corporation means that your stock price will soon above that of your competition and your employees and customer will be behind you and applaud your success.
This study tends to achieve the general purpose of this work including the following.
1 To identify the role of innovation in competition
2 To determine the steps for successful innovation
3 To identify the factors militating against innovation.
4 To determines the effect of innovation on consumer patronage
1.4 Research Questions
1 Are there roles of innovation competition?
2 Are there steps in determining successful innovation?
3 Are there factor militating against innovation?
4 Are there infect of innovation on consumer patronage?
1.5 Research Hypotheses
1 Ho: There are no roles of innovation competition
Hi: There are roles of innovation in competition
2 Ho: There are no steps in determining successful innovation
Hi: There are steps in determining successful innovation
3: Ho: There are no factors imitating against innovation
Hi: There are factors imitating against innovation.
4 Ho: Innovation have no effect in consumer patronage
Hi: Innovation have affect I consumer patronage.
1.6 The Scope of the Study
This study undertook a plastic industry in Asaba (BABA-GOD PLASTIC)
This industry is into the production of the following plastic material, like chairs, baskets, tanks, etc.
Although, this study is going to be concentrated on continuous types or innovation, because innovation is an already existing tools, this is to enable one know the difference in the sale of the particular products immediately before and after the innovation
1.7 Significance of the Study
How can a firm that is not into innovation expect to survive in an environment where the only thing that is certain is change?
Product addition and subtraction are inevitable for successful management of and product line. This is necessitated in part by the fact that product go through growth and maturity and to eventually decline. That is to say ,t e small firms must examine their products line in other to know when ner or modified product are required to replace product that reach the final stage of their life circle.
A part from the fact that society is constantly changing which requires a corresponding changes since ask of life styles and apart from the fact that most product have life circles competition are no innovation could be immense help to the smaller firms. This is because when competition becomes stiff, the market and the intimate result becomes decreased price, etc sell off the pilling – up stack.
So rather than the smaller firms to follow with the bigger firms that have the comparative cost advance to reduce price. They let the consumer through instead seed the subsidization for their relatively higher price by creating uniqueness in their products.
For instance, sometime in 2007, there was a proliferation in the plastic market, following the entry of new firms like Leo plastic and son plastic industry with their brands. This proliferation forced price of other plastic materials (produced by other plastic industry) as regarding chairs and table, plastic designer basket to drop between 11% and 20% (percent).
It is exactly this type of situation in the market that requires innovation competition to avoid the price – cut cooperation that may not be profitable.
1.8 Limitations of the Study
In the course of carrying out this research work, the following listed below poses as constraints to the researcher:
1 Being that this researcher work is an academic research where student are not paid for the research and they are dependants. This will bring about financial constraints.
2 Research work is not what you do without materials e.g. 1.3 Journals, text books, inter-nets and news-papers etc time that was required to source for materials and to put them together was limited and as such theirs was time constrain which stand as a limitation to this research work.
3 In the process of carrying out this research work, I was faced with the problem of inadequate data as some formation I needed were kept off from me as confidential (Business Secret)
4 In the process of carrying out this research work, I also face the problem of ineffective communication as some respondents were not dedicated in attending to my question or interview.
5 Owing to the fact that this research work is an academic research where dateline is being given to students by supervisors to enable them graduate makes the scope/area of the study not to be wide.
1.9 Operational Definition of Terms
These are clear definition of terms used in the study, which may be unique to the society.
MAN: This is an association “The Marketing Association of Nigeria”
A.V.O.P: Anambra Vegetable Product.
Proliferation: A rigid growth or increase in number.
Truncated: To make something shortened by cutting off the top or end.
Product Life Circle: These are stages a product undergoes from introduction to withdrawer stage.
Innovation: To make change, to introduce new ideas, techniques, method
Segmentation: This is the division of something into parts.