The Effects Of Responsive And Proactive Market Orientations, Product Innovation Capabilities, And Innovativeness On New-Product And Business Performance

Year 2015, Volume: 17 Issue: 2, 130 - 155, 01.06.2015

Serkan Kılıç

Abstract

Innovation is one of the most important fields of study in the social sciences. Innovation contributes to businesses if they make new products or services available. However, to understand innovation according to the logic of developing new products for the market, it is essential to establish a relationship between innovation and marketing. Thus, the new-product innovation concept is examined in the study. The purpose of this study is to determine the effects of businesses' market orientation, innovativeness and product innovation capabilities on new-product and business performance. In the study, research was conducted among the 1000 largest businesses identified by the Istanbul Chamber of Industry each year based on net sales of products (Turkish Liras) and carrying out product innovations in Turkey. Analysis of the 154 participants demonstrated that responsive and proactive market orientations affect new-product performance with the mediators of radical and incremental product innovation capabilities and innovativeness and affect business performance with the mediator of new-product performance. In this context and taking into account these effects, marketing managers implement strategies that will improve their performance on the dimensions of market orientation and with the mediators of product innovation capabilities and innovativeness.

Keywords

Market Orientation, Product Innovation, Capabilities, Innovativeness, New Product Performance

References

• Agarwal, S., Erramilli, M.K. and Dev, C.S., 2003. Market orientation and performance in service firms: role of innovation. Journal of Services Marketing, 17(1), pp.68-82.
• Akgun, A.E., Keskin, H., Byrne, J.C. and Aren, S., 2007. Emotional and learning capability and their impact on product innovativeness and firm performance. Technovation, 27(1), pp. 501-513.
• Akroyd, C., Narayan, S. and Sridharan, V.G., 2009. The use of control systems in new product development innovation: advancing the ‘help or hinder’ debate. Journal of Knowledge Management, 7(5/6), pp.70-90.
• Alam, M.S., Guild, P.G. and Sparkes, D., 2013. Market-scanning capability - a scale to measure firms’ ability to sense or respond to the changes in the marketplace. International Journal of Business and Management, 8(4), pp.10-19.
• Atuahene-Gima, K., 2005. Resolving the capability-rigidity paradox in new product innovation. Journal of Marketing, 69(1), pp. 61-83.
• Atuahene-Gima, K., 1995. An exploratory analysis of the impact of market orientation on new product performance a contingency approach. Journal of Product Innovation Management, 12(4), pp. 275-293.
• Atuahene-Gima, K., Slater, S.F. and Olson, E.M., 2005. The contingent value of responsive and proactive market orientations for new product program performance. Journal of Product and Innovation Management, 22(1), pp.464-482.
• Bagozzi, R.P. and Yi, Y., 1988. On the evaluation of structual equation models. Journal of the Academy of Marketing Science, 16(1), pp. 74-94.
• Baker, W.E. and Sinkula, J.M., 2005. Market orientation and the new product paradox. Journal of Product Innovation Management, 22(1), pp. 483-502.
• Baumgartner, H. and Homburg, C., 1996. Applications of structual equation modelling in marketing and consumer research: a review. International Journal of Research in Marketing, iss.13, pp. 139-161.
• Beverland, M.B. and Lindgreen, A., 2007. Implementing market orientation in industrial firms: a multiple case study. Industrial Marketing Management, 36(4), pp. 430–442.
• Biemans, W.G. and Harmsen, H., 1995. Overcoming the barriers to market-oriented product development. Journal of Marketing Practice, 1(2), pp.7-25.
• Birley, S. and Westhead, P., 1990. Growth and performance contrasts between ‘types’ of small firms. Strategic Management Journal, 11(7), pp. 535–557.
• Blythe, J., 1999. Innovativeness and newness in high-tech consumer durables. Journal of Product & Brand Management, 8(5), pp. 415-429.
• Bodlaj, M., 2010. The impact of a responsive and proactive market orientation on innovation and business performance. Economic and Business Review, 12(4), pp. 241-261.
• Bodlaj, M., Coenders, G., Zabkar, V., 2012. Responsive and proactive market orientation and innovation success under market and technological turbulence. Journal of Business Economics And Management, 13(4), pp. 666-687.
• Bonner, J.M. and Ruekert, R.W. and Walker, O.C., 2002. Upper management control of new product development projects and project performance. Journal of Product Innovation Management, 19(3), pp. 233-252.
• Calantone, R.J., Harmancıoğlu, N. and Droge, C., 2010. Inconclusive innovation “returns”: a meta-analysis of research on innovation in new product development. Journal of Product Innovation Management, 27(1), pp. 1065-1081.
• Callahan, J. and Lasry, E., 2004. The importance of customer input in the development of very new products”, R&D Management, 34(2), pp. 107-120.
• Chandy, R.K. and Tellis, G.J., 1998. Organizing for radical product ınnovation: the overlooked role of willingness to cannibalize. Journal of Marketing Research, 35(1), pp. 474-487.
• Cooper, R.G. and Kleinschmidt, E.J. 2007. Winning businesses in product development: the critical success factors. Research, Technology Management, 50(3), pp. 52-66.
• Cravens, D.W., Piercy, N.F. and Prentice, A., 2000. Developing market-driven product strategies. Journal of Product & Brand Management, 9(6), pp. 369-388.
• Davila, A., Foster, G. and Li, M., 2005. Designing management control systems in product development: ınitial choices and the ınfluence of partners. IESE Business School Working Paper, Spain: University of Navarra, pp. 1-41.
• Dibrell, C., Craig, J. and Hansen, E., 2011. Natural environment, market orientation, and firm ınnovativeness: an organizational life cycle perspective. Journal of Small Business Management, 49(3), pp. 467–489.
• Du, R.Y., Kamakura, W.A. and Mela, C.F., 2007. Size and share of customer wallet. Journal of
• Erdil, O. and Kitapçı, H., 2007. Tky araçlarının kullanımı ve firma yenilikçiliğinin yeni ürün geliştirme hızı ve işletme performansına etkisi. Atatürk Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 21(1), January, pp. 233-145.
• Erdil, S., Erdil, O. and Keskin, H., 2005. The relationships between market orientation, firm innovativeness and innovation performance. Journal of Global Business and Technology, 1(1), pp. 1-11.
• Eris, E.D., Neczan, O. and Ozmen, T., 2012. The effect of market orientation, learning orientation and innovativeness on firm performance: a research from Turkish logistics sector. International Journal of Economic Sciences and Applied Research, 5(1), pp. 77-108.
• Garcia, R. and Calantone, R., 2002. A critical look at technological innovation typology and innovativeness terminology: a literature review. The Journal of Product Innovation Management, iss. 19, pp. 110-132.
• Gebhardt, G.F., Carpenter, G.S. and Sherry, J.F., 2006. Creating a market orientation: a longitudinal multifirm, grounded analysis of cultural transformation. Journal of Marketing, 70(4), pp. 37-55.
• Griffin, A. and Hauser, J.R., 1993. The voice of the customer. Marketing Science, 12(1), pp. 223-253.
• Grinstein, A., 2008. The relationships between market orientation and alternative strategic orientations: a meta-analysis. European Journal of Marketing, 42(1/2), pp. 115-134.
• Gronroos, C., 2004. The relationship marketing process: communication, interaction, dialogue, value. Journal of Business & Industrial Marketing, 19(2), pp. 99-113.
• Han, J.K., Kim, N. and Srivatava, R.K., 1998. Market orientation and organizational performance: is innovation a missing link?. Journal of Marketing, 62(4), pp. 30-45.
• Heunks, F.J., 1998. Innovation, creativity and success. Small Business Economics, 10(3), pp. 263-272.
• Http://edis.ifas.ufl.edu/pdoob, 15.03.2013.
• Hult, G.T., Ketchen, D.J., 2001. Does market orientation matter? a test of the relationship between positional advantage and performance. Strategic Management Journal, 22(9), pp. 899-906.
• Hult, G.T.M., Hurley, R.F. and Knight, G.A., 2004. Innovativeness: its antecedents and impact on business performance. Industrial Marketing Management, 33(5), pp. 429-438.
• Hurley, F.F., Hult, G.T.M., 1998. Innovation, market orientation, and organizational learning: an integration and empirical examination. Journal of Marketing, 62(July), pp. 42-54.
• Iacobucci, D., 2010. Structural equations modeling: fit ındices, sample size, and advanced topics. Journal of Consumer Psychology, iss. 20, pp. 90-98.
• Iyer, G.R., Laplaca, P.J. and Sharma, A., 2006. Innovation and new product introductions in emerging markets: strategic recommendations for the Indian market. Industrial Marketing Management, 35(1), pp. 373-382.
• Jain, S.C., 1993. Marketing Planning and Strategy, Fourth edition, Cincinnati: South-Western Publishing Co.
• Jaworski, B.J. and Kohli, A.K., 1993. Market orientation: antecedents and consequences. Journal of Marketing, 57(3), pp.53-70.
• Jerrard, B. and Trueman, M. and Newport, R., 2004. Managing New Product Innovation, London: Taylor & Francis e-library.
• Jevons, C., 2005. Names, brands, branding: beyond the signs, symbols, products and services. Journal of Product & Brand Management, 14(2), pp. 117-118.
• Joo, J. and Sang, Y., 2013. Exploring koreans’ smartphone usage: an integrated model of the technology acceptance model and uses and gratifications theory. Computers in Human Behavior, 29(1), pp. 2512-2518.
• Kok, R.A.W. and Biemans, W.G., 2009. Creating a market-oriented product innovation process: a contingency approach. Technovation, iss. 29, pp. 1517-1526.
• Kumar, K., Subramanian, R. and Strandholm, K. 2002. Market orientation and performance: does organizational strategy matter?. Journal of Applied Business Research, 18(1), pp. 37-49.
• Lee, Y. and O’Connor, G.C., 2003. The impact of communication strategy on launching new products: the moderating role of product innovativeness. Journal of Product Innovation Management, iss. 20, pp. 4-21.
• Li, C.R., Lin, C.J. and Chu, C.P., 2008. The nature of market orientation and the ambidexterity of innovations. Management Decision, 46(7), pp. 1002-1026.
• Li, H. and Atuahene-Gima, K., 2002. The adoption of agency business activity, product innovation, and performance in Chinese technology ventures. Strategic Management Journal, 23(6), pp. 469-490.
• Li, H. and Atuahene-Gima, K., 2001. Product innovation strategy and the performance of new technology ventures in China. Academy of Management Journal, 44(6), pp. 1123-1134.
• Lichtenthal, J.D. and Wilson, D.T., 1992. Becoming market oriented. Journal of Business Research, iss. 24, pp. 191-207.
• Lichtenthaler, U., 2012. The performance implications of dynamic capabilities: the case of p r o d u c t i n n o v a t i o n . J o u r n a l o f P r o d u c t I n n o v a t i o n M a n a g e m e n t , d o i : 10.1111/j.1540-5885.2012.00957, pp. 1-16.
• Lichtenthaler, U. and Muethel, M., 2012. The impact of family involvement on dynamic ınnovation capabilities: evidence from German manufacturing firms. Entrepreneurship Theory and Practice, 36(6), pp. 1235-1253.
• Love, J.H. and Mansury, M.A., 2007. External linkages, R&D and innovation performance in US business services. Industry and Innovation, 14(5), pp. 477-496.
• Matsuno, K., Mentzer, J.T., and Ozsomer, A., 2002. The effects of entrepreneurial proclivity and market orientation on business performance. Journal of Marketing, iss. 66 (July), pp. 18-32.
• Mcgee, J.E., Dowling, M.J. and Megginson, W.L. 1995. Cooperative strategy and new venture performance: the role of business strategy and management experience. Strategic Management Journal, 16(7), pp. 565-580.
• Menguc, B., and Auh, S., 2010. Development and return on execution of product innovation capabilities: the role of organizational structure. Industrial Marketing Management, iss. 39, pp. 820-831.
• Mohr, J.J. and Sarin, S., 2009. Drucker’s insights on market orientation and innovation: implications for emerging areas in high-technology marketing. Journal of the Academy of Marketing Science, 37(1), pp. 85-96.
• MUSIAD, 2012. Küresel rekabet için ar-ge ve inovasyon. MÜSİAD Araştırma Raporları, 76, pp. 1-187.
• Narver, J.C. and Slater, S.F., 1990. The effect of market orientation on business profitability. Journal of Marketing, 54(4), pp. 20-35.
• Narver, J.C., Slater, S.F. and Maclachlan, D.L., 2004. Responsive and proactive market orientation and new product success. Journal of Product Innovation Management, 21(5), pp. 334-347.
• Nijssen, E.J., Hillebrand, B., Vermeulen, P.A.M. and Kemp, R.G.M., 2006. Exploring product and service innovation similarities and differences. International Journal of Research in Marketing, 23(1), pp. 241-251.
• Nybakk, E., 2012. Learning orientation, innovativeness and financial performance in traditional manufacturing firms: a higher-order structural equation model. International Journal of Innovation Management, 16(5), pp. 1-28.
• O’Cass, A. and Ngo, L.V., 2007. Balancing external adaptation and internal effectiveness: achieving better brand performance. Journal of Business Research, 60(1), pp. 11-20.
• Oke, A., 2004. Barriers to innovation management in service companies. Journal of Change Management, 4(1), pp. 31-44.
• Oswald, M., Brettel, M. and Engelen, A. 2012. How departments’ decision-making influence and interdepartmental dynamics relate to two facets of strategic market orientation. Journal of Strategic Marketing, 20(6), pp. 483-507.
• Otero-Neira, C., Lindman, M.T. and Ferna´ndez, M.J., 2009. Innovation and performance in SME furniture industries. Marketing Intelligence and Planning, 27(2), pp. 216-232.
• Rindfleisch, A. and Heide, J.B., 1997. Transaction cost analysis: present, past, and future. Journal of
• Rosenbusch, N., Brinckmann, J. and Bausch, A., 2011. Is innovation always beneficial? a meta-analyis of the relationship between innovation and performance in SMEs. Journal of Business Venturing, 26(1), pp. 441-457.
• Sadıkoglu, E. and Zehir, C., 2010. Investigating the effects of innovation and employee performance on the relationship between total quality management practices and firm performance: an empirical study of Turkish firms. International Journal of Production Economics, iss.127, pp. 13-26.
• Salavou, H., Baltas, G. and Lioukas, S., 2004. Organisational innovation in SMEs: the importance of strategic orientation and competitive structure. European Journal of Marketing, 38(9), pp. 1091-112.
• Sandvik, I.L. and Sandvik, K., 2003. The impact of market orientation on product innovativeness and business performance. International Journal of Research in Marketing, 20(4), pp. 355–376.
• Serviere-Munoz, L. and Saran, A., 2012. Market orientation, innovation, and dynamism from an ownership and gender approach: evidence from Mexico. International Journal of Management and Marketing Research, 5(2), pp. 1-17.
• Siguaw, J.A., Simpson, P.M. and Enz, C.A., 2006. Conceptualizing ınnovation orientation: a framework for study and integration of innovation research. Journal of Product Innovation Management, iss. 23, pp. 556-574.
• Slater, S.F. and Narver, J.C., 1998. Customer-led and market-oriented: let’s not confuse the two. Strategic Management Journal, 19(10), pp. 1001-1006.
• Slater, S.F. and Narver, J.C., 1995. Market orientation and the learning organization. Journal of Marketing, 59(3), pp. 63-74.
• Slater, S.F. and Narver, J.C., 1994. Does competitive environment moderate the market orientation-performance relationship?. Journal of Marketing, 58(1), pp. 46-55.
• Story, V., O’Malley, L., Hart, S. and Saker, J., 2008. The development of relationships and networks for succesful radical innovation. Journal of Customer Behaviour, 7(3), pp. 187-200.
• Thorbjornsen, H., 2005. Brand extensions: brand concept congruency and feedback effects revisited. Journal of Product and Brand Management, 14(4), pp. 250-257.
• Tsai K.H., Chou, C. and Kuo, J.H., 2008. The curvilinear relationships between responsive and proactive market orientations and new product performance: a contingent link. Industrial Marketing Management, 37(1), pp. 884-894.
• Verhees, F.J.H.M. and Meulenberg, M.T.G., 2004. Market orientation, innovativeness, product innovation, and performance in small firms. Journal of Small Business Management, 42(2), pp. 134-154.
• Vermeulen, P.A.M., De Jong, J.P.J. and O'shaughnessy, K.C., 2005. Identifying key determinants for new product introductions and firm performance in small service firms. Service Industry Journal, 25(5), pp. 625-640.
• Weston, R. and Gore, P.A., 2006. A brief guide to structural equation modeling. The Counseling Psychologist, iss. 34, pp. 719-751.
• Workman, J.P., 1998. Factors contributing to marketing’s limited role in product development in many high-tech firms. Journal of Market-Focused Management, 2(3), pp. 257-279.
• Yang, J. and Liu, C.Y., 2006. New product development: an innovation diffusion perspective. Journal of High Technology Management Research, iss.17, pp. 17-26.
• Yannopoulos, P., Auh, S. and Menguc, B., 2012. Achieving fit between learning and market orientation: implications for new product performance. Journal of Product Innovation Management, 29(4), pp. 531-545.
• Zhang, J., Benedetto, C.A.D. and Hoening, S., 2009. Product development strategy, product innovation performance, and the mediating role of knowledge utilization: evidence from subsidiaries in China. Journal of International Marketing, 17(2), pp. 42-58.
• Zhang, J. and Duan, Y., 2010. The impact of different types of market orientation on product innovation performance: evidence from Chinese manufacturers. Management Decision, 48(6), pp. 849-867.
• Zhang, J. and Duan, Y., 2010a, Empirical study on the impact of market orientation and innovation orientation on new product performance of Chinese manufacturers. Nankai Business Review International, 1(2), pp. 214-231.