CHALLENGES IN DEVELOPING A NEW PRODUCT/BRAND IN AN INFLATIONARY ECONOMY: A CASE STUDY OF LIM BREAD, IDAH

This study examines the challenges of developing a new product or brand in an inflationary economy, with Lim Bread, Idah, Kogi State, as the case study. Specifically, it assesses how inflation influences raw material costs, operational expenses, consumer purchasing power, and strategic decisions in product innovation and brand expansion. A survey research design was adopted, with a sample size of 206 respondents determined from a population of 425 using Taro Yamane’s formula. Out of the questionnaires distributed, 196 were correctly filled and retrieved, representing a 95.15% response rate. Data were collected through structured questionnaires and field observations, and analyzed using simple percentages and chi-square tests at a 5% level of significance. The findings reveal that 86.22% of respondents agreed that the current inflationary environment has increased raw material costs, making it difficult to launch new products; 83.16% agreed that inflation has limited consumer purchasing power, thereby reducing the feasibility of introducing new brands; 82.14% indicated that rising operational costs have constrained the company’s ability to develop and market new products; and 82.14% agreed that inflation has influenced consumer preferences and loyalty, making it harder for new brands to gain market share. Additionally, 84.18% affirmed that the inflationary climate has affected Lim Bread’s strategic decisions in innovation and brand expansion, while 82.65% noted that high inflation discourages investor support for new product development. The study concludes that inflation significantly raises production costs, limits demand, and prolongs development timelines, posing serious threats to innovation and competitiveness. It recommends proactive cost management, adoption of value-based pricing, increased local sourcing, and continuous market research to improve resilience. This research provides valuable insights for small and medium-sized enterprises in Nigeria’s food sector and informs policymakers on strategies to sustain business growth under economic instability.