STATISTICAL ANALYSIS ON THE EFFECT OF TEST MARKETING ON NEW PRODUCT DEVELOPMENT: A CASE STUDY OF DELTA STATE POLYTECHNIC, OTEFE-OGHARA WATER FACTORY

Abstract

This paper investigates the effect of test marketing on new product development in Delta State Polytechnic, Otefe-Oghara Water Factory. The analysis was conducted using secondary data, which was official documents compiled by the establishment monthy, in order to investigate their progress margin. The analysis of the data was done through analysis of variance (ANOVA), correlation and regression coefficients. The ANOVA was done on the obtained regression result in order to check its validity, regression analysis was in order to investigate the relationship between the variables in view, while the correlation was conducted to measure the strength of the relationship existing between the tested variables.

The results revealed that there is about 0.374 units increase in the monthly sales volume of DRINKAM (which is the brand name of the product) indicating the fact that test marketing has an impact on the new product development, however, the correlation revealed that there is a moderately strong relationship between test marketing and the product development, as it was calculated to be 0.651 i.e. 65.1%. On the contrary there was no significant relationship between product development and the cost of distribution of the new product. In the case of the ANOVA, the analysis revealed a considerable lower mean square error estimate, suggesting that the amount of variability accounted for by the regression model is greater compared to the variability not explained by the model. This finding indicates that the regression model is effective in explaining and predicting the sales outcome of the new products.