CHAPTER ONE

1.1      INTRODUCTION

Companies that fail to develop new products are putting themselves at great risk. Risk of poor sales volume, space out of market into a small cubicle of not completely put out by competitors of the same product development strategies, initiatives and innovation conscious that is what that research is aiming to influence on sales volume. The existing products are vulnerable to changing customer needs and tastes, new technologies shortened product life circles and increased domestic and foreign competition once a company has carefully segmented the market, chosen its target customers, identified needs, and determined its market positioning.

It is better able to develop new products. New products development shapes the company’s future. Replacement products must be created to maintain or build sales of the organization.

Every enterprise is profit oriented, that can be actualized through prompt sales volume realize, and that depend on the quality, core products, physical tangible, augmented products and the application of promotional mix/tools of the newly developed product.

It is also clear that customers want new products, and competitors will do their best to supply them. For instance, each year over 16,000 new product (including line extension and new brands are introduced into groceries and drug stores.

In automobile company in general (especially PAN with it uniqueness and distinctive qualitative product) such cannot be less expected.

Automobile company Peugeot in developing a program to reach its intended market, must start with the product (new product) at hand for offering or service designed to satisfy the wants of the market segment. Therefore the executives must plan, develop and manage both individual (industrial users) product and industrial product assortment. This is not easy task as is shown by the large number of product failure in our economy.

1.2      STATEMENT OF GENERAL PROBLEM

Understanding this concept – new product, we discover products or services that are borne of innovation but non existence previously with its present feature so it attracts problems at the level. A new product can be conceived and developed over night, it takes time and efforts to ring the new product idea into fruition. It also consumes a lot of money to bring a new idea generated into commercialized offer.

A new product is expected to be profitable and successful but opposite is the case sometimes to different companies products sometimes decline and die natural deaths due to inexplicable circumstances. Some organizations can tolerate a gradual decay while others adopt alternative actions to remedy the life of the dying product. The reaction of the company leads to new or modified products such products are born out of either innovations or invention that is problem in process.

More so innovations or inventions can be accepted or rejected by the intending customers and this rejection sends the manufacturer back to the drawing board to search for the right product good cost. While acceptance categorizes the intending customers according to the timing of their acceptance and adoption. New product continue to fail a disturbing rate in 1997, record 25, 261 new package goods products were lunched and that doesn’t include products you won’t find at your local supermarket, like technogism and software programmers. But equally stuming is the number that failed. Talking about new product failure in automobile industries, Peugeot 505 evolution (Nigeria innovation/made) was face out 9 years ago.

A twinkle of an eye in the life span of product life cycle of PAN when you consider that it cost N40 million to 90 million to launch a new product you wonder why people continue to innovate at all.

Budgeting for new product development is another problem. Research and development (R and D) outcomes are so uncertain that it is difficult to use normal investment criteria example today 3m innovation network makes more than 60,000 product including sand paper, adhesive, computer diskettes, contact lenses, etc.

And each year 3m launches score of new products. This and 15 billion company immodest goal is to have each of its divisions generate at least 30 percent of sales from product less than four year on the market.

Estimating cost of finding on successful new product  considering the process of new product development each.

S/NO

STATE

NO OF IDEAS

PASS RATIO

COST PER PRODUCT

TOTAL COST

1.

Idea screening

64

1.4

1,000

64,000

2.

Concept testing

16

1.2

20,000

320,000

3.

Product development

8

1.2

20,000

1600,000

4.

Test marketing

4

1.2

500,000

2,000,000

5.

National lunch

2

1.2

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