Effects of Product Innovation on the Success of Telecommunication Companies in Nigeria
Chapter One
Objectives of the Study
The objective of the study is to examine the impact of product innovation on the growth of the organization. The specific Objectives are:
- To identify the impact of product innovation on the sales of MTN telecommunications PLC Ikoyi.
- To determine how product innovation improve on the profit of the organization
- To ascertain the level of consumer satisfaction.
CHAPTER TWO
LITERATURE REVIEW
Marketing Concept
The satisfaction of the consumers has now become one of the means through which an organization could survive. The consumers who are regarded as “Kings” are now governing the business environment. In essence, we are now in the consumers’ or buyers’ market and a firm with intention of making profits, increase turnover will have to include customer satisfaction as part of its strategy.
Marketing concept is now the new philosophy in the business world. Stanton (1988) describes this concept as:
“Marketing concept is a business philosophy which assumes that ‘consumer-need satisfaction’ is the economic and social justification for a firm’s existence. It is a guide to business planning which aim at analyzing and maximizing firm objectives while satisfying consumer demand. The concept believes that instead of a Firm trying to market what is easiest for it to make, it must find out ore about what customers wants and is willing To buy”
In other word, the marketing concept is a new concept whereby all firm’s planning and operations should be customer-oriented while profitable sales should be firm’s goal. The purpose of adopting this new philosophy of business is to improve customer relations because better relationships would also benefit the firm as earlier mentioned. Profit enables a firm to grow and even provide many satisfactions to customers and to strengthen the economy as a whole. Many firms do set goals of increased sales or a greater share of the market. However, increase in sales may lead to profit maximization.
This theory is captured in Nickels (1986) and stated as: “One goal of business firm is to make profit, for without profits the business will eventually fail.
Product Defined
Boonz and Kotler (2004) see a product as “tangible tasks that satisfy the consumer and industrial user when efficiently developed and distributed to chosen market segment.
Stanton (2002) defines product as ”a set of tangible and intangible attributes include packing, colour, price, manufacturers and retailers service which the buyer may accept as offering want satisfaction”.
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McCarthy (2002) ascertains that a product is “the benefit derivable from a physical entity or service marketed”. From the above definition, it can be clearly seen that when a consumer set out to buy a product, he actually desires to satisfy a need and thus sees the product as a means of satisfying ones desire.
Kotler (2006) defines product as “any want satisfying goods and services out of its perceived intangible attribution. This lead to emphasis on consumers satisfaction, which is the ultimate motives for buying the product by the users”.
It is opined that a product is any entity (goods or services) or idea that consumer believes will satisfy a want or desired.
New Product Defined
Kotler (2008) sees new product as “a product perceived by the consumer as such. In other words, the key element in determining what a new product is, is that is consumer perception rather than the degree of technical change. He further concludes that firms which fail to distinguish between new product and line extensions tend to exaggerate their level of innovative activity”.
Roberts (1993) defines a new product as “any product which has previously experienced by consumer, however, long it may have been in the market. This is to say that for a product to be new in his own view, it should not gain a previous knowledge of the consumer or potential customers, even if has stayed long in the market”.
Bridge (1977) depicts that new product “is what the consumer sees and consider as being an additional to the available choice he or she has and the firm on the other hand considered a product as new when such brand is new to the firm and this may include on existing one that has undergone some significant modification or product initiated from competition or to innovation in its entirely original product”.
We may conclude that a new product may be an invention or innovation or a modification of an existing product to an extent that consumers perceive the modified version as different. It may also be an existing product just entering a new market.
CHAPTER THREE
RESEARCH METHODOLOGY
Research Design
The research design adopted for this study is survey design. Descriptive survey method is considered more appropriate for collecting, analyzing and interpreting data gathered from respondents (Osuala, 2001).
Population of the study
The population of the study consists of all management staff of MTN telecommunications PLC Ikoyi, Lagos state with a population of 800 staffs, namely; top level management staff, middle level management staff and lower level management staff.
Sampling Size
The sample size of this study is 80 staff, this is in line with Roscoe (1975) 10% Rule of Thumbs which stated that 10% of the given population can be chosen as sample size.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
.Data Presentation
Data for this study were presented based on the tables below:
Research Question 1: What is responsible for product innovation in your firm?
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Summary
This research brings to light some of the benefits of product innovation, which can be regarded as organization’s survival strategy. Product innovation can be described as a situation where product is improved upon to meet the ever-changing needs of consumers, organizational turnover and profit. An “old” product can be placed as a “new” product in the market after making some minor changes .On the other hand, an entirely new product can also be introduced into the market as a result of research findings. Most technology based firm innovations are mostly technology-driven contrary to market-driven technology, which is stimulated by the consumers’ needs.
Products like any other living beings undergo a normal lifecycle and at every stage of the life cycle, the product experiences some changes in the demand for them. Product innovation can be also be carried out on product already in the market. Also, the research outlines that the firm could achieve its short-term and long-term objective through product innovation which would enhance increase in sales, profit maximization and consumers’ satisfaction.
Conclusion
In this research paper, the impact of product innovation on the growth of manufacturing firm was examined. The background has revealed that most products require innovation due to constant changes in the taste of consumers and the need for firm to increase sales and maximized profit.
It appears that philosophy of marketing concept is yet to be taken seriously, most firms reckon with this concept in practice. In the practical sense, the needs and wants of the consumers are satisfied through the firm’s product(s). For a product to meet these objectives of satisfactions, it must undergo product innovation at regular intervals because of the dynamic nature of consumer’s needs and wants that changes over time.
The idea behind product innovation does not end in the satisfaction of changing taste of the consumers, this aspect of product innovation also helps the firm to have an edge over competing products in terms of sales. Sales would increase over time because more consumers would be attracted to the new product. Not only would these, product innovation enhance the attainment of profit maximization to the firm as a result of increase in turnover. The rate at which consumers patronize such product has facilitated profit maximization.
Finally, it is worthy to note that product innovation is not limited to once in a product’s lifetime. A product can be innovated as many times as possible. This aspect of product innovation is mostly done on consumers’ goods. This is so because the cost in carrying out product innovation on consumers good is not that high as the amount that will be spent in carrying out innovation on industrial goods.
Recommendations
Having undertaken a thorough study of the impact of product innovation on the growth of manufacturing firm, it is deemed necessary to give some useful suggestions and recommendations, which would help in improving the quality of consumer goods and improving the satisfaction of consumers. The recommendations are as follows:
- Firms should engage in extensive research, to find out the actual needs of the consumers in relation to what should be produced. This would go a long way in preventing the production of products which are not actually needed because of its failure to satisfy the needs and wants of the consumers;
- In addition, firms should carry our research on the changing taste of the consumers periodically so as to adjust the already existing product, to meet the dynamic taste of consumers because failure to do so would reduce the product sales and profit;
- Since product innovation helps in reducing cost of consumer goods, MTN telecommunications PLC Ikoyi management should engage in it at regular interval so as to cut down the cost of value analysis strategy which is segment of product innovation;
- Management of MTN telecommunications PLC Ikoyi should ensure that Research and Development Department as well as feedback of consumers from sales personnel where new product strategic plan emanated from should be explored and made use of so as to enhance provision of products that are expected by consumers. Such report includes that from sales persons who are always in touch with the consumers and understand most of the competing products and in addition they know the position of their firm’s product in terms of competition in the market;
- Finally, in carrying out product innovation, management of MTN telecommunications PLC Ikoyi should ensure that the “new” product is real improvement on the old one. Consumers should not just be deceived that a product quality has improved while in the actual sense, there is no alteration on the
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