1.1 Introduction
Product innovation is defined as a unique characteristic, which makes a given product different from existing products on the market (Bisbe and Otley, 2004). In the current strongly competitive business environment, innovation has become both the dominant quality that businesses pursue in their search for excellence and the leading factor resulting in product differentiation. Therefore, product innovation creates continuous profit, thereby improving the related performance measures of an organization. Moreover, a more innovative environment results in the increased use of advanced manufacturing technology, such as computer-aided design, computer-integrated manufacturing, and just-in-time systems.
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
Nigeria Breweries plc (NBPLC) is the country’s pioneer brewery incorporated on 16trh November 1946 and commercial production in 1949. it stated as a joint venture between the United African Company (UAC) international, UK and Heineken of Holland. Thus, at inception it was 100 percent foreign owned. Today, the company is 60% Nigeria owned and 40% foreign owned. The 40% foreign ownership is split almost equally between WA holdings ltd, (for UNILEVA) AND Heineken Bro Uwerijen BV.
Its principal activities includes the brewering and marketing of larger bear, 33 bear, stout, no-alcoholic malt drinks and the boiling of Schweppes ranges of soft drinks and crush range. It operates from six breweries locations namely: Lagos, Aba, Owerri, Kaduna, Ibadan, Enugu, but the Aba location has recently shut down, due to the general recession dilapidated infrastructure facilities, political instability and the attended policy inconsistency and high cost of production in Nigeria, the company suffered declining productivity and profit between 1985 and 1996.
However, with consistent, strong and innovative initiatives and marketing support for all its branches, along with the very enterprise driven customer service strategies, the overall performance of the company was dramatically improved by 1998. all the branch include star, gulder, legend extra stout, stout, maltina and Amstel and a range of soft drinks – Schweppes companies (Heineken Technical service) Bv premiums beverages international, B.V. Amstel Bro. Uwerijen shares). It also invested in right selection, training and motivation of its staff as well as improving the quality of its brand and substantially lunching itself into he new technological sphere in brewery industry.
The significant rise in profit after tax of the company from N1.7 billion between 1997 and 2001 is a reflection of the fact that global connectivity through partnering and networking infects dynamic sources of industrial rejuvanation , with the necessary re-engineering of operation through innovation, right management and networking, the firms emerged as a success string in Nigeria.
One important point about innovation is that it is not without cost, it requires the creation of tangible and intangible assets which increases production cost. S second basic argument about innovation and firm performance is that the innovation and firm performance is hat the innovation of new or technically superior product creates temporary monopolies, which improves the business performance of firms. However, such temporary imperfect competition can clearly be exploited in at least two ways. On the other, firms can raise prices on the imperfect competition can clearly be exploited in at least two ways. On the other, firms can raise prices on the imperfect competition advantage which imperfect returns on sales. Alternatively, firms can hold prices down, leading to more or less sharp improvement in the price-quality ration on the product resulting In increasing sales and profitability (however measured) may improve via innovation, but innovation will improve the growth of the firm.
Therefore, in International Equitable Association, Nigeria where the research was carried out, the activities that was conducted is to know the Impact of Product Innovation on the Growth of a Firm.
1.3 Statement of Problems
The introduction of new product innovation by firms 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. The business environment is fast changing competitions emerging derby business decisions and action becoming more risky as the market demands and needs are fluctuation daily external force is forcing many business organizations to move outward through innovation.
Firms, in the presence of these circumstances have to survive and grow or die prematurely, given the rapid change on taste, technology and competition, it become risky for a company to rely on its existing product. This is so dynamic, customers want and expect new and adversely unfavorable to Nigeria Breweries plc if it fails to apply adequate attention to it. Nigerian Breweries Company will branch a new product today tomorrow if they discover that rival firms having flooded the market with similar product satisfying the same needs. Hence the mission statement of Nigeria Breweries plc read to be leading beverage in Nigeria marketing consumer satisfaction in an environmentally friendly ways.
1.4 Aim and Objectives of Study
The aim of the study is to scrutinize the Impact of Product Innovation on the Growth of a Firm using International Equitable Association as a Case Study. In achieving this aim, the following specific objectives were laid out as follows:
- To find out whether product modification increase market acceptance of new products.
- To examine the effects of innovation on firms performance in Nigeria
- To determine if it pays to become involved in innovative activities
- To determine if product innovation increase the sales volume of new products.
- To identify whether there is a significant difference between the sales revenue of a product before and after innovated upon.
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:
- Does a consumer respond positively to the purchase of your company’s new product?
- Does product innovation the brewery industry bring about increase in sales volume?
- Is there any significant difference between the sales revenue of a product before and after innovated upon?
- To what extent has Nigeria breweries Awo-Omamma Owerri succeed in creating awareness for its product?
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.
- H0: There is no significant difference between the sales revenue of a product before and after innovated upon in Nigeria breweries Awo-Omamma Owerri
- H1: There is significant difference between the sales revenue of a product before and after innovated upon in Nigeria breweries Awo-Omamma Owerri
1.7 Significance of Study
Business organization justifies their economic and social existence to satisfy their respective customers through research on all the various brands of the different firms involved. It is a result of this fact and also due to time factor, finance and other constrains that this study will be delimited to the impacts of product innovation on the growth on Nigeria Breweries plc Awo-Ommama Oweri. However, for the purpose of this study only the growth effects of innovating where held constant. The target audience comprises of consumers in Federal Polytechnic Nekede, Evan Enwerem University Eating outlet, supermarket, bar and management staff of Nigeria breweries plc and Awo-ommama Owerri.
1.8 Scope of Study
The study focuses on the Impact of Product Innovation on the Growth of a Firm using International Equitable Association as a Case Study.
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.
- Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this establishment to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
- 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
- Dilapidated: in a bad start of repair failing to pieces.
- Innovation: the process of making changes introducing new ideas, methods, techniques etc.
- Marketing: it is a human activity directed toward satisfaction of wants and needs through exchange means.
- Network: a closely liked group of companies part in an n activity with another or other, especially one of the owners of the business.
- Rejuvenated: to make something look new in the market.
