Empirical study on the impact of market orientation and innovation orientation on new product performance of Chinese manufacturers

Abstract

Purpose -The purpose of this paper is to examine the role of market orientation and innovation orientation in new product performance as well as the potential moderating role of innovation orientation and environmental variables in the market orientation-new product performance link among Chinese manufacturing firms. Design/methodology/approach -A questionnaire survey was conducted among 227 manufacturing firms in mainland China. A total of six hypotheses related to market orientation, innovation orientation, and new product success as well as moderating effects of innovation orientation and environmental variables are examined by structural equation modeling and hierarchical regression techniques.Findings -The research results show that: first, the conceptual model is superior to the popular model in Western literature in terms of model fit goodness; second, market orientation and innovation orientation have significant and positive impact, which is higher than the average level in previous research, upon new product success; third, innovation orientation and technological turbulence have a positive moderating effect on market orientation-new product performance link; and fourth, market turbulence and competitive intensity have no moderating effects. In addition, managerial implications as to how to improve product innovation performance are provided for Chinese manufacturers. Originality/value -The paper contributes to the extant literature of market orientation and product innovation in the following three ways. First of all, the research empirically validates a modified conceptual model incorporating market orientation, innovation orientation and new product performance. Second, the facilitating impact of strategic orientations (including market orientation and innovation orientation) upon new product performance is higher than the average level in previous studies (primarily based on developed economies), indicating the greater effectiveness of two strategic orientations in transition economy and east-Asian cultural context. Third, by examining the potential moderating roles of innovation orientation and environmental variables, we are able to better understand how to match market orientation strategy with those moderators in order to help enhance the product innovation performance results of manufacturing firms.

Entrepreneurial orientation and firm performance: How can micro, small and medium-sized enterprises survive environmental turbulence?

“…EO constitutes five elements including autonomy, innovation, risktaking behaviour, proactive behaviour and aggressiveness (Lumpkin et al, 2009). The measures of market turbulence refer to product preferences, new products, new customers, productrelated needs (Zhang and Duan, 2010) and price sensitivity (Didonet et al, 2012).…”

“…Greater environmental turbulence indicates that customers' product preferences change over time and become more price sensitive (Zhang and Duan, 2010). Stable environmental turbulence occurs when customer preference is more predictable and firms are able to leverage their resources to achieve optimal performance.…”

The Influence of Organizational and National Culture on New Product Performance

“…Innovation orientation, innovative climate (e.g., Riel, Lemmnik, and Ouwersloot, ; Zhang and Duan, )…”

Social Capital and Firm Performance: Moderating Effect of Environmental Turbulence

“…This causes increasing uncertainty due to heightened market turbulence in which firms need to deal with. Marketing operations is necessary to respond the changing customer's preference (Zhang & Duan, 2010). This effort to respond market turbulence can be associated with business expansion in which not all of SMEs can do (Didonet et al, 2012).…”

“…Contingency effect can be environmental turbulence, which refers to the hostility of business environment, which can turn into various level of uncertainty (Zhang & Duan, 2010). This concept constitutes into three elements, i.e.…”