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.