Firstly because you are using a form.. Make sure you declare your using one:
<p>Please select the product you want to add
<form method="post" action="test.php">
<label>
<select name="menu1" onchange="MM_jumpMenu('parent',this,0)">
<option>Nylon Blisters</option>
<option>PP plastic</option>
</select>
</label>
<input type="submit" name="submit" value="Update">
</p>
This code will just display the results of the form input.. But you can use '$name' to update your database:
<?php
$name = $_POST['menu1'];
echo $name;
?>