INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It is known that human beings have always sought for growth and development all through their lives span also an organizational product. A good, service, idea that is perceived by same potential customers as new are a new product. It may be through innovation, imitation or renovation. In this piece of work, the researcher will concentrate on the effect of product innovation on the growth of a firm. The researcher will also look at how product innovation determines both the levels of economic growth and standard of living of citizens.
To facilitate banking process, innovation such as smart card, credit card, electronic transfers in the payment system and recently the lunching of internet banking have transformed the world into a global village linked with electronic impulses. New products are being introduced into the market everyday, as well as new ideas and technologies. Firms need to develop new products in order to satisfy their customers and maintain or increase their profitability and survival. To enhance this, Guaranty trust bank (GTB) launch a new service, GTBank social Banking , which is a unique platform initiated by the bank that allows people open accounts, make account balance enquiries, perform money transfers, pay bills and purchase airtime on facebook. . It is imperative to recognize the fact that necessity give birth to invention or innovation, and for an organization to avoid being forced out of the market, it has to innovate.
New product development is important in a competitive market like that of Nigeria. It determines both the levels of economic growth and standard of living of the citizens. Most products in the markets today have undergone changes over times. According to Mr. Roland’s Lecture note, new product has been seen as the life blood of any organization. This is because seizing new opportunities as they emerge is a way to increasing profits. This means that a firm with a successful new products gives it the chance of creaming off large profit before effective competition develops. Every company must develop new product because new products shapes the company’s future. Replacement product must be created to maintain or build sales. Customers want new products and firms will do their best to supply them. Companies that fail to develop new products are putting themselves at great risk. Developing and managing products is critical to organization’s survival and growth. Although several organizational approaches to product management are possibly the share common activity functions, and decisions necessary to guide a product through its life cycle. Product managers coordinate efforts and become the strategic center for the product in all markets. Marketing managers focuses on products for specific market. A venture team is sometimes used to develop new products. Members of the venture team come from different functional area within an organization and have authority to execute plans .Product planning requires the coordination of such functional areas such research and development, production and engineering, research and finance, accounting and marketing. Each of these areas of departments has functional authority over some aspects of the product.To maximize the effectiveness of a product mix, an organization usually has to alter its mix through such methods as new productor the development of existing product deletion of a product, or the development of a new product. Product modification refers tochanging one or more of a products characteristics. Thisapproach to altering a product mix can be effective when theproduct is modifiable, when customers can perceive the change,and when the modification is desired by consumer. Products canbe changed through the quality, functional or style modifications.
The concept of electronic money in Nigeria was introduced in 1990 when the Central Bank of Nigeria (CBN) gave approval to them. All state Trust Bank limited to offer a financial product known as smart card. Subsequently, Diamond Bank play card. Now, we have GTBank mobile application, which is a two in one application that provides customers access to the bank’s mobile banking and mobile money offerings.
However, the smart card scheme received uplift in February, 1998 when a consortium of a licensed bank surfaces a smart card company in Nigeria which is known as Smart card Nigeria plc with a mandate to produces and manages cards issued by the member bank of the consortium. Another consortium of more than 20 bank under the patronage of Gen card became operational in year 2000 including GTBank.
These innovations, which are still at a relatively early state of development have postnatal to challenge the predominate role of cash for making small value payments and make retail transactions easier and cheaper for consumers and merchants who are account holders.
Product development and innovation are full of risks. However, they also raised a number of policy issues because of the possible implication for Central Bank monetary policy consumer system etc. Since many new products fail upon being launched into the market. Poor market research or product management could be a responsible factor for the failure of new product, wrong anticipation or needs, transfer of product ideas into physical products, advertising or pricing may also cause failure right from inception. Severe losses are incurred by companies when new products fails.
In responses to implication technology development in the domestic financial sector, the Central Bank of Nigeria commissioned and information technology strategy study in 1991 with the objective of promoting efficient performance of its statutory duties. The product is being implemented in phase and both the licensed banks and the regulatory authority here demonstrated their appreciation of benefit derivable form the application and use of the information technology. It is important that companies should be innovative in product development in order to meet consumer needs and withstand competition from other producers. Old product are totally replaced or modified when developing new product.
In Nigeria (like in South Africa) it can be difficult to communicate important messages to a wide audience and so social media has also helped GTBank identify and communicate enhancements and problems with its products and services.
In view of foregoing, the Central Bank Governors of the group of ten (G-10) country commission a series of studies on specific issues related to electronic banking in Nigeria. GTBank has a well-defined financial inclusion strategy which continues to drive innovation of processes, products and services to ensure that people who are otherwise excluded from the financial sector are included, and are able to bank conveniently and at minimal cost.
According to W.J.Stanton “There must be significant difference for an old product to be seen as new”.
Therefore, the objectives of the research are to ascertain the effect of production innovation in a firm using Guaranty Trust Bank as the case study.
1.2 Statement of the Problem
The use of technology forms the backbone for better results in banking. The problems facing electronic banking in Nigeria are lack of adequate information and communication technological awareness campaign about electronic banking. In Nigeria, communication over the internet are insecure and often congested, the financial institution would also have to contend with other internet challenges including security, quality of service and some abbreviations in electronic fiancé (Guardian newspaper 2001). Today’s banking situation demands continuous innovation in order to meet the yearnings and aspirations of the ever demanding customers. Hence, banks need to roll out new products and services quickly and effectively, using latest cutting edge technology (Augusto, 2002).
Product Innovation has contributed much to the growth and survival of Guaranty Trust Bank Plc and has also suffered many problems. Therefore, this research work is designed to critically evaluate the problems of a product innovation which are as follows;
1. Lack of research or the inability of the management to find out what the consumers need.
2. failure to find out the government rules and regulations
3. Lack of training programme; Failure to train marketing personnel for new product and new markets
.4.Lack of Capital: The company cannot raise fund needed for innovated product when there is new ideas.
5. Most users of this banks are not on Social Network to enable them social banking.
6. There was no adequate public education on how to use E-banking product in Nigeria before the banks stated rolling them out.
7. Many of the banks can’t do what they are claiming to offer it terms of E- banking
8. A lot of people are averse to using E- products, they prefer cash transaction and your cant blame them because of No. 2 above. If your money gets stocked on the ATM you are on your own.
9. Poor service from the provider
1.3 OBJECTIVE OF THE STUDY
The purpose of the research is to study the effect of innovated product on the growth of Guaranty trust Bank Plc Awka. There search study was designed to enable the researcher and the firm;
To appraise how inactive regulatory bodies prevent the development of needed logistics technical supports.
To determine the importance of research findings on the growth of Guaranty trust Bank .
To determine the relationship between government policies and innovated product .
To examine how inadequate training programmed affects newproduct development.
To identify the degree acceptance of information and communication technology in the banking sector.
To explain the challenges of a new product and innovation
To recommend ways Guaranty trust Bank could improve the innovated product .
To determine how inadequate information and communication technology (ICT) awareness distorts the development of electronic banking in Nigeria.
To ascertain the extent to which lack of sufficient skilled manpower distorts the development of electronic banking in Nigeria.
1.4 RESEARCH QUESTIONS
A Research Question is a statement that identifies the phenomenon to be studied.
According to Okafor (1996:50) defined research question as the breakdown of the problem statement in question forms, which the research formulates from the problem statement.
To what extent has Information and communication technology enhance efficiency on Banking sector?
To what extent does lack of sufficient skilled manpower distorts the development of electronic banking in Nigeria?
Does inadequate research affect innovated product ?
What is the relationship between the government policies and innovated product ?
What is the relationship between inadequate training programme and innovated product ?.
What is the relationship between finance and the expansion of innovated product ?
What are the causes of new product and innovation failure in Guaranty Trust Bank, Nigeria
What are the steps involved in the development of new products in Gtbank, Nigeria
To what extent has Information and communication technology contributed to the growth on Banking sector?
What are the strategies used in GTbank based on new products and innovation in Nigeria
RESEARCH HYPOTHESIS
Hypothesis is a tentative statement about the universe which mayor may not be true. For the purpose of this research work, the following hypothesis is considered;
HO: Inadequate research does not affect innovated product.
HI: Inadequate research affects innovated product .
HO: There is no relationship between government policies and product innovation.
HI: There is no relationship between government policies and product innovation.
HO: There is no relationship between innovated product and inadequate training
.HI: There is relationship between product innovation and inadequate training.
HO: Finance procurement is not a problem to new product innovation.
HI: Finance procurement is a problem to innovated product .
1.HO;(NULL HYPOTHESIS) Information and communication technology is not
accepted by management in the Banks.
HI;(ALTERNATIVE HYPOTHESIS) Information and communication technology is
accepted by management in the Banks.
2.HO;(NULL HYPOTHESIS) Information and communication technology has not
contributed to social infrastructural development.
HI;(ALTERNATIVE HYPOTHESIS) Information and communication technology has
contributed to social infrastructural development.
3.HO;(NULL HYPOTHESIS) Information and communication
technology has not led to improvement of Information in the Bank which has improved their efficiency.
HI;(ALTERNATIVE HYPOTHESIS) Information and communication technology led to improvement of Information in the Bank which has improved their efficiency.
4. Ho: Inadequate information and communication technology distort the development of electronic banking in Nigeria.
Hi: Inadequate information and communication technology does not distort the development of electronic banking in Nigeria
5.Ho: Lack of sufficient skilled manpower distort electronic banking development in Nigeria.
Hi: Lack of sufficient skilled manpower does not distort electronic banking development in Nigeria.
SIGNIFICANCE OF THE STUDY
The significance of the study cannot be over emphasize., The study when analysed will stand as a leading guide to the Innovators, individuals and corporate bodies in Guaranty Trust bank in relation to product innovation in Nigeria.
The researcher is of view that this research will stimulate the interest of investors, corporate research in Nigeria on the effect of modern innovation development and successful enhancement of new products. The study will also reveal the need for improvement in the use of various Information and communication technology so as to satisfy the demanding, desires of their customers and compete with their counter parts in the banking industry. It will help organisations to embark on the development of new product and innovation, and also to apply marketing strategies, if they really want their products to be commercialized effectively.
This research is counted on the effect of product innovation on the growth of a firm Guaranty Trust Bank Awka, Anambra State.This research work will go a long way in helping the following;
- The Researcher: -
It will enable the researcher to ascertain the problems involved in the cost of developing a product innovation.
- The Firm: -
This research work will help the Guaranty Trust Bank to identify the problems involved in the development of a innovated product and also suggests the everlasting solution to them. It will also help the firm to increase its sales volume, profit and market share.
- The Society: -
This project work has gone deep to assist the economy by increasing Job opportunities for the young graduates. It will also help to develop marketing in the economy environment both domestic and international.
Scope of the Study
This study covers the effect of product innovation on the of a firm such as banking industry.
In the cause of this study, the researcher uses senior, middle, and Junior staff of Guaranty Trust Bank’ products, from four (4) selected L.G.A. in Anambra State, which include Njikoka, Anaocha ,Aguata, Dunukofia.
DEFINITION OF TERMS
To avoid misinterpretation of any aspect of this work, it becomes necessary to the researcher to define some of the essential terms used in this work.
These terms therefore should be understood as follows:
Product:
This is one of the elements of marketing mix that represents the basic offering being made to consumers. It is also everything (both favourable and unfavourable) that one receives as an exchange; it is a complexity of tangible and intangible attributed, including functional, social, and psychological utilities or benefits. A product may be a good, services, or an idea.
Marketing Mix:
This consists of four (4) major variables in marketing, which serves as pillars that makes marketing to stand well; they are product, place, price, and promotion. It is also called the 4P’s and marketing elements
Marketing Strategy:
This is the process of determining a target market and choosing the marketing mix variables needed to maximize satisfaction of those consumers. It is also the set of objectives which an organization allocates to its functions in order to support the overall corporate strategy, together with the broad methods chosen to achieve these objectives.
Innovation:
This is the process of producing something new inform of product or service that someone or any company has never produced it before. It is also refers to any good, service or idea that is preserved by someone as new.
Research:
This is an organized way of finding valid or useful information about a particular domain or phenomenon in an environment with a set of objectives. It can also be described as a thorough investigation or in-depth search for the causes of any problem within intention of preferring solutions.
Commercialization:
This is one of the product development stages in which the product is first submitted to the market andthus commences its life styles.
Product innovation: The development and market introduction of a new, redesigned or substantially improved good or service. Examples of product innovation by a business might include a new product's invention; technical specification and quality improvements made to a product; or the inclusion of new components, materials or desirable functions into an existing product.
Guarantors: This is a person that stands in for one in case of opening an accounts opting for loads and many other services rendered by banks. Guarantor tends to carry the risk of paying back defaultment incase of any default.
Electronic banking:
This is the main study of the project, Banking services tends to be getting more interesting and electronic Banking is a step taking to render services electronically to aid faster services to customers.
Automated Teller Machines (ATM): This is a physical assets being used by banks, built and erected concretely to give out cash, aid recharges (Phones), aid transfers, e.t.c. and it is utmost trend in the banking industry.
Teller: This is sheet but an important sheet of paper being used in banking environment to paying money and withdraws in case of a bank that uses it for withdrawals too.
LIMITATION OF THE STUDY
There are some of limitations of this study, despite the fact that Research would be successful. In any Research work, it may be impossible to take good care of all problems involved, the only thing a Researcher can do is to consider those factors that are essential to Research. The actual limitation of the study is financial constraints as well as time constraints due to other academic pressure.
