1.1 Introduction
Market orientation is defined as the competitive strategy that most efficiently generates the right kinds of behavior to create enhanced value for the consumer and therefore assures better long-term results for corporations (Narver and Slater, 1990). According to these authors, market orientation is based on orientation towards the customer, orientation towards competitors and inter-functional coordination.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.
1.2 Background of Study
The marketing concept originated in the western developed countries following the industrial revolution. Over a period of many decades the concept of marketing has changed, evolved and passed through two distinct stages, production and sales orientations. At the end of the 1940s, production efficiencies were regarded as essential for achieving and maintaining a successful and prosperous business activity but in the 1950s researchers began to argue that marketers should pay more attention to the customers’ needs and wants (Svensson, 2001).
Market orientation may also be an important determinant of innovation in the services sector. According to Atuahene-Gima (1996) in services like the insurance and banking industries, innovation success depends on the firm’s market orientation, especially on its customer orientation. Being in touch with your clients wants and needs, and being able to respond appropriately to them is a key to innovation success in the service sector. Furthermore, the market environment in the service sector is likely to be more competitive in terms of product innovation than in other industries. Innovation in services is more easily and quickly imitated (Tufano, 1992) and more difficult to protect by means of patenting. Thus, it may be than in this sector, the relationship between market orientation, innovation and business performance is particularly strong.
However, new product implies original products improvements, products (services) modification and new method of granting loans, Financing, customers’ advice interest rate, mode of payment etc. that the bank developed through its own research and development. Importantly, the recent distress syndrome in compared with the global technological and, economic changes has made the Nigerian banking environment very competitive and dynamic.
The development has led to selective purchase or patronage of product and services by customers, especially those that are still skeptical about the longevity of the banks and viability of their product. In this regard, marketing as an essential elements of communication mix has becomes the sought after strategy not only to already existing clients but also to non-potential one by any enterprising bank in the country today when a promising idea come along Bank PHB Nigeria Plc a venture team made up of the research who develop the idea and other people from personnel, sales/marketing, legal admin and foreign department or sections will team up to natures of the products, protect and member stays with such product until its has succeeded.
Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Evaluation of Marketing Orientation and New Product Development in the Insurance Industry.
1.3 Statement of Problems
Marketing is said to be applicable to all spheres of life, for this fact, the banking industry is not an exemption. For the achievement of the overall corporate objectives of prosperity, growth and contisciously structure their services in such a that they cater for the financial needs of not only the current customers but also the prospective customers. It is a fact that comprises irrespective of where they are located, hat product or service they offer, who their shareholders are et face one problem or the other.
Under new condition of competition, companies or banks that do not produce or develop new products or services risk much because of the changing consumer needs and tastes, shortened product life cycle, increased competition and new technologies etc.
The introduction of new product by the bank has led to a global competition in the industry. This is as a result of this; it makes the developing nation banking system to be developed nations where internet/electronic banking is the order of the day. A situation whereby bank lack clearly throughout policies, rewards and remuneration to help its staff and maintain it’s goal and loyal customers over a long time period. This slow and cumbersome relationship will not assist or sustain new product when introduced into its market. Thus political appointment also hamper the ability of the bank to introduce the right product at the right time to the right people, in that, they considered political friends in granting loans facilities to the genuine investors of the economic sectors.
1.4 Aim and Objectives of Study
The aim of the study is to evaluate the marketing orientation and new product development in the insurance industry. In achieving this aim, the following specific objectives were laid out as follows:
- To find out the new product development process in the Insurance Industry.
- To examine the problems associated with new product development in the Insurance Industry.
- To identify the strategies used by the Insurance Industry to overcome the problems of new product Development.
- To find out the impact of new product development on the profitability of the Insurance Industry.
- To provide suggestion and recommendations for the improvement of the operations of the Insurance Industry.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Is there any positive impact of new product development on the profitability of the Insurance Industry?
- Are there problems associated with new product development in the Insurance Industry?
- What is the new product development process in the Insurance Industry?
- What are the strategies used by the Insurance Industry to overcome the problems of new product Development?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: There is no negative impact of new product development on the profitability of the Insurance Industry
- H1: There is a negative impact of new product development on the profitability of the Insurance Industry
Hypothesis Two
- H0: There are no significant problems associated with new product development in the Insurance Industry
- H1: There are significant problems associated with new product development in the Insurance Industry
1.7 Significance of Study
The significance of this study cannot be overemphasized, because of the benefits. This research work serves as a pre-requisite for the award of Higher National Diploma in Business Administration.
It will be of benefit to Insurance Industry as it provides suggestions and recommendations for the improvement of marketing of financial products so as to increase their profitability.
The research work will be a source of information or materials to students and future researchers willing to further study on the subject matter.
1.8 Scope of Study
The study focuses on the evaluation of Marketing Orientation and New Product Development in Nigeria Insurance Industry.
1.9 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.10 Definition of Terms
The following terminologies that appear in this study are defined below:
- Marketing: The total system of business activities designed to plan, price, promote and distribute want satisfying goods and services to present and potential consumers.
- New Product: A good service or idea that is perceived by some potential customer as new.
- New Product Development: The development of original products, product improvement, product modification and new brands through the firms own research and development efforts.
- Product: Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, person, place, organization, and ideas.
- Respondents: Person who answer or responded to a question in a questionnaires or an observation unit on which such observations are measured of attributes can be made.
- Profitability: The degree to which income exceeds cost and expenditure.
- Bank: A commercial bank that provides checking account plus other traditional banking services.
- Questionnaire: A formalized schedule to obtain and record special and relevant information with tolerable accuracy and precision.
