NEW PRODUCT DEVELOPMENT AS A STRATEGY FOR SALES GROWTH, PROFITABILITY AND COMPETITIVENESS

The banking industry in Nigeria has become more competitive due to the reorganization of the banking service industry to make it more relevant for financing development projects. This has made the banks to invest more in information technology and introduced more products to ensure not only better returns but to enhance efficiency in service delivery. These explain why this study is designed to investigate the impact of new product development in enhancing sales growth, profitability and competitiveness in UBA as a case study of the firms in the banking sector.To carry out the study, related literaturesand some empirical studies were reviewed. The three hypotheses formulated for the study include:New products development has not made any significant impact on sales growth in UBA Nigeria Plc., new products development has not made any significant impact on profitability of UBA Nigeria Plc and new product development has not made any significant impact on competitive effectiveness of UBA Nigeria Plc.All of these hypotheses were tested withparameters which were estimated applying ordinaryleast square (OLS) regression. The data used in the analysis of data were derived from the financial statements of accounts of the UBA. The period of data used covered the period of 2001-2014. The results obtained using OLS were first subjected to second order tests or diagnostic tests to ensure that they were not spurious regression but realistic estimation of the true parameters of the regression parameters of the population of the study.The study establishes that new product development had not significantly affected the volume of sales of UBA during the period of the study. The study also established that new product development has no substantial impact on the profit making of UBA during the period of this study. The thesis also demonstrated that new product development had not impacted significantly in improving the level of UBA competitiveness in the banking industry.On the basis of these findings the study recommends that since the current new product developed had no significant influence on sales growth probably due to the nature of product being introduced, the company has to introduce a new product that is unique and capable of improving its sales potentials. Since the new product introduced could not improve theprofit making of thefirm during the period of review, it is important for the bank to introduce the product that is uniquein the banking sector that can enhance the bank’s profit-making. The thesis also recommends that since the existing new product couldnot improve thecompetitive advantage being enjoyed by the firm due to its non-uniqueness in the banking industry, the bank need to come-up with a newproduct that is unique and capable to enhance the company competitive position.

In Nigeria, the banking industry has been experiencing cyclical movements in its development patterns right from independence in 1960 to date. As a result of the importance of the banking industry in the economic development of the country, successive governments in the nation came up with different policies, programmes, regulations and strategies in the form of financial guidelines with the aim of improving the performance of the industry. These guidelines include: regulation, deregulation, liberalization, globalization, paging of interest rate, consolidation and the like. In essence, the relevance of any business organization lies in its ability to develop new product in line with the needs, wants, interests and or aspirations of the society or community within which it operates. However, changes in the consumer taste, preferences and aspiration, as well as technological innovations, open market economy, challenges of globalization coupled with the new banking consolidation policy aimed at sanitizing the fragmented and crowed banking industry in the country, have brought in discipline and orderliness in the sector. However, there is no guarantee that a successful product today will remain relevant or success in the near future.

However, with deregulation and liberalization policies, the central bank of Nigeria was able to reduce the number of small indigenous banks from 89 to about 25 mega-sized banks, solely to provide a wide range of new product.