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The Impact of Market Orientation, Product Advantage, and Launch Proficiency on New Product Performance and Organizational Performance

Published on Mar 1, 2004in Journal of Product Innovation Management3.78
· DOI :10.1111/j.0737-6782.2004.00059.x
Fred Langerak24
Estimated H-index: 24
,
Erik Jan Hultink34
Estimated H-index: 34
,
Henry S.J. Robben16
Estimated H-index: 16
Cite
Abstract
Some scholars have suggested recently that a market-oriented culture leads to superior performance, at least in part, because of the new products that are developed and are brought to market. Others have reinforced this wisdom by revealing that a market-oriented culture enhances organizational innovativeness and new product success, both of which in turn improve organizational performance. These scholars do not reveal, however, through which new product development (NPD) activities a market-oriented culture is converted into superior performance. To determine how critical NPD activities are for a market-oriented firm to achieve superior performance, our study uses data from 126 firms in The Netherlands to investigate the structural relationships among market orientation, new product advantage, the proficiency in new product launch activities, new product performance, and organizational performance. We focus on product advantage—because product benefits typically form the compelling reasons for customers to buy the new product—and on the launch proficiency—as the launch stage represents the most costly and risky part of the NPD process. Focusing on the launch stage also is relevant because it is only during the launch that it will become evident whether a market orientation has crystallized into a superior product in the eyes of the customer. The results provide evidence that a market orientation is related positively to product advantage and to the proficiency in market testing, launch budgeting, launch strategy, and launch tactics. Product advantage and the proficiency in launch tactics are related positively to new product performance, which itself is related positively to organizational performance. Market orientation has no direct relationship to new product performance and to organizational performance. An important implication of our study is that the impact of a market orientation on organizational performance is channeled through the effects of a market orientation on product advantage and launch proficiency; subsequently through the effects of product advantage and the proficiency in launch tactics on new product performance; and finally through the effect of new product performance on organizational performance. These channeling effects are much more subtle and complex than the direct relationship of market orientation on organizational performance previously assumed. Another implication of our study is that the impact of a market orientation on performance occurs through the launch activities rather than being pervasive to all organizational processes and activities. A reason for this finding may be that NPD is the one element of the marketing mix that predominantly is the responsibility of the firm, whereas promotion and distribution often are in control of organizations outside the firm (e.g., advertising agencies, major retailers) and whereas the channel or the market often dictates the price. Both implications provide ample opportunities for further research on market orientation and NPD.
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  • References (58)
  • Citations (363)
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References58
Newest
Published on Sep 1, 2001in International Journal of Research in Marketing3.32
Fred Langerak24
Estimated H-index: 24
(EUR: Erasmus University Rotterdam)
This study uses data from matched sets of suppliers, manufacturers and customers to examine the influence of the manufacturer's market orientation on the behaviors of salespersons and purchasers, the impact of these behaviors on relationships with customers and suppliers, and the effect of these relationships on the manufacturer's financial performance. The results show that market orientation positively influences customer-oriented behaviors of salespersons and supplier-oriented behaviors of pu...
Published on Aug 1, 2001in Journal of Marketing Research4.20
David H. Henard10
Estimated H-index: 10
(NCSU: North Carolina State University),
David M. Szymanski13
Estimated H-index: 13
(A&M: Texas A&M University)
Abstract Product innovation is increasingly valued as a key component of the sustainable success of a business’s operations. As a result, there has been a noticeable increase in the number of studies directed at explicating the drivers of new product success. To help managers and researchers synthesize this growing body of evidence, the authors conduct a meta-analysis of the new product performance literature. Of the 24 predictors of new product performance investigated, product advantage, marke...
Published on Nov 1, 2000in Journal of Marketing Research4.20
Christian Homburg63
Estimated H-index: 63
(UMA: University of Mannheim),
Christian Pflesser2
Estimated H-index: 2
Abstract Previous research addressing market orientation from a cultural perspective typically has used behavioral measures of this construct. Drawing on literature in the fields of organizational theory and marketing, the authors develop a multilayer model of market-oriented organizational culture. They draw an explicit distinction among values that support market orientation, norms for market orientation, artifacts indicating high and low market orientation, and market-oriented behaviors. On t...
Published on Apr 1, 2000in Journal of the Academy of Marketing Science9.36
Bryan A. Lukas22
Estimated H-index: 22
(University of Melbourne),
O. C. Ferrell42
Estimated H-index: 42
(CSU: Colorado State University)
Numerous scholars have debated whether marketing fosters or stifles innovation. The discussions, however, have been inconclusive due to limited empirical evidence. The authors investigate the relationship between two focal constructs in the debate: market orientation and product innovation. On the basis of a sample of U.S. manufacturing companies, the authors’ analysis shows that product innovation varies with market orientation. Specifically, (1) customer orientation increases the introduction ...
Published on Jan 1, 2000in Journal of Marketing7.82
Glenn B. Voss19
Estimated H-index: 19
(NCSU: North Carolina State University),
Zannie Giraud Voss11
Estimated H-index: 11
(Duke University)
Abstract Conventional marketing wisdom holds that a customer orientation provides a firm with a better understanding of its customers, which subsequently leads to enhanced customer satisfaction and firm performance. However, there are cautions that being too customer focused can lead to inertia, and anecdotal evidence suggests that it may be better to “ignore your customer” when developing new products. Building on the market orientation research stream, the authors examine the impact of three a...
Published on Dec 1, 1999in Strategic Management Journal5.57
Stanley F. Slater46
Estimated H-index: 46
(UW: University of Washington),
John C. Narver21
Estimated H-index: 21
(UW: University of Washington)
Connor, in ‘Customer‐led and market‐oriented: A matter of balance’, argues, among other things, that we propose that market oriented businesses focus on future customer needs to the neglect of current customer needs, that market oriented businesses over‐emphasize marketing activities in their value chains, that market oriented businesses emphasize generative learning to the neglect of adaptive learning, and that only large companies have the resources to become market oriented. These arguments a...
Published on Oct 1, 1999in Journal of the Academy of Marketing Science9.36
William E. Baker17
Estimated H-index: 17
(UVM: University of Vermont),
James M. Sinkula14
Estimated H-index: 14
(UVM: University of Vermont)
Although a large body of research theoretically asserts a positive relationship between market orientation and organizational performance, fewer empirical studies demonstrate it using multiple and varied organizational performance measures. Additionally, a series of recent studies have theoretically proposed, but not empirically demonstrated, that a firm’s learning orientation is likely to indirectly affect organizational performance by improving the quality of its market-oriented behaviors and ...
Published on May 1, 1999in Journal of Business Research4.03
Alfred M. Pelham4
Estimated H-index: 4
(GV: Grand Valley State University)
Abstract This study’s primary objective is to compare the industry environment impact with the impact of firm strategy and market orientation culture on small manufacturing firm performance. The extent of market orientation has a greater impact on small manufacturing firm performance, than the direct or indirect impact of the particular industry environment and strategy selection. Emphasis on growth/differentiation strategy has a significant impact on small firm profitability. Industry character...
Published on Dec 1, 1999in Journal of Market-focused Management
William E. Baker17
Estimated H-index: 17
(UVM: University of Vermont),
James M. Sinkula14
Estimated H-index: 14
(UVM: University of Vermont)
Recent studies have demonstrated effects of learning orientation or market orientation on innovation-driven organizational performance. While these studies have enhanced our understanding of innovation processes in the firm, they have been unable to determine the relative contribution of learning orientation and market orientation to innovation. The integration of these two fundamental strategic orientations in this research enables such an assessment. The model in this research also measures th...
Published on Oct 1, 1998in Journal of Marketing7.82
Jin K. Han7
Estimated H-index: 7
,
Namwoon Kim22
Estimated H-index: 22
(HKUST: Hong Kong University of Science and Technology),
Rajendra K. Srivastava33
Estimated H-index: 33
(University of Texas at Austin)
In recent years, a market-oriented corporate culture increasingly has been considered a key element of superior corporate performance. Although organizational innovativeness is believed to be a potential mediator of this market orientation–corporate performance relationship, much of the evidence to date remains anecdotal or speculative. In this context, the authors present a systematic framework to test the postulated “market orientation–innovation–performance” chain. To this end, the direct cau...
Cited By363
Newest
Published on Nov 29, 2018in International Journal of Production Research3.20
Gian Luca Gregori5
Estimated H-index: 5
,
Maria Rosaria Marcone1
Estimated H-index: 1
The authors structure the field of over-design, over-specification, and over-requirement (OOO) drawing from extant knowledge related to innovative managerial procedures in manufacturing systems, project portfolio management, and performance management. More specifically, we propose allowing the dominant perspectives of OOO and paving the way towards a coherent recognition foundation of innovative strategies in manufacturing systems. This lends itself to an analysis of innovative phenomena in des...
Dan Alex Petrovici12
Estimated H-index: 12
(UKC: University of Kent),
Michael Obal6
Estimated H-index: 6
(University of Massachusetts Lowell)
+ 1 AuthorsAndrew Fearne28
Estimated H-index: 28
(UEA: University of East Anglia)
Published on Jun 12, 2019in Asia Pacific Journal of Management2.74
Li Peng (Xi'an Jiaotong University), Yuan Li (Tongji University)+ 1 AuthorsMike W. Peng60
Estimated H-index: 60
(UTD: University of Texas at Dallas)
Integrating the institution-based view and the resource-based view, this article explores the contingent effects of national institutions and firm resource bases on the relationships between strategic orientations—i.e., entrepreneurial orientation (EO) and market orientation (MO)—and firm performance. This is accomplished through a meta-analysis of 160 independent samples reported in 154 studies drawing from 35,367 organizations in 33 countries (22 developed and 11 emerging economies). Consideri...
Published on Jun 1, 2019in Journal of Business Research4.03
Cong Cheng1
Estimated H-index: 1
(Zhejiang University of Technology),
M. Yang20
Estimated H-index: 20
(Adelphi University),
Monica Yang (Adelphi University)
Abstract The purpose of this paper is to investigate the processes underlying the relationship between creativity processes and new product performance. Drawing on the literature of new product development (NPD) and organizational creativity, we hypothesize that NPD speed mediates the relationship between creativity processes and new product performance and that encouragement by leadership moderates this mediating model. Using a sample of 245 companies in China, we found that (1) not all compone...
Published on Apr 1, 2019in Journal of Business Research4.03
Pamela Adams5
Estimated H-index: 5
(Seton Hall University),
Isabel Maria Bodas Freitas10
Estimated H-index: 10
(Grenoble School of Management),
Roberto Fontana14
Estimated H-index: 14
(UNIPV: University of Pavia)
Abstract This research aims at exploring the relationship between a firm's strategic orientation, marketing management in terms of marketing mix tactics, and innovation performance. We examine three types of strategic orientations: customer, technology, and combined customer/technology orientation. We analyze their direct effect on innovation performance as well as the moderating effect of marketing management in terms of the marketing mix on this relationship. We test our hypotheses on a sample...
Published on Mar 4, 2019in Journal of Risk Research1.70
Ana Paula Beck da Silva Etges2
Estimated H-index: 2
(UFRGS: Universidade Federal do Rio Grande do Sul),
Marcelo Nogueira Cortimiglia11
Estimated H-index: 11
(UFRGS: Universidade Federal do Rio Grande do Sul)
AbstractInnovation and risk are inseparable. In fact, literature on innovation management often recommends that innovation-oriented firms must actively monitor, evaluate, analyze and treat future events in order to mitigate risks whenever possible. This approach is particularly important in emergent economies characterized by unstructured national innovation systems and constant economic and market instability. However, there has been no systematic effort to identify and categorize risks that po...
Published on Mar 1, 2019in Creativity and Innovation Management2.02
Fábio Furlan Gama5
Estimated H-index: 5
(Luleå University of Technology),
Johan Frishammar24
Estimated H-index: 24
(Luleå University of Technology),
Vinit Parida14
Estimated H-index: 14
(University of Vaasa)
Published on Feb 1, 2019in Long Range Planning3.36
Ngoc Luu3
Estimated H-index: 3
(University of Sussex),
Liem Viet Ngo14
Estimated H-index: 14
(UNSW: University of New South Wales)
Abstract Recent research suggests that entrepreneurial orientation (EO) has a more complex effect on performance (i.e. non-linear instead of linear) than previously considered. We extend this view by examining the non-linear effect of each individual dimension of EO (i.e. innovativeness, proactiveness, and risk-taking) on firm performance in the context of a transitional, collectivist economy. Drawing upon social capital theory, we also examine under which social capital conditions (i.e., busine...