Market Orientation, New Product Development and New Product Performance:A Model and Test

This paper aims at proposing, and empirically examining, a new model for studying the effect of market orientation over new product performance. While most available research has addressed such effect directly, without reaching conclusive results, the paper introduces a model suggesting that market orientation affects new product performance indirectly- through its effect over the New Product Development (NPD) process. To assess the proposed model and its associated hypotheses, structural path analysis was conducted on data collected from a sample of 335 manufacturing organizations registered in Jordan Industrial Estates Corporation (JIEC). Empirical results underlined that the three components of market orientation (i.e. customer orientation, competitor orientation, inter-functional coordination) had a direct significant effect over NPD process. On the other hand, NPD process had a direct effect over new product customer performance, while it had an indirect effect over new product financial performance. Based on the paper’s empirical findings, several conclusions were drawn. Furthermore, several managerial implications were suggested, while the limitations of this paper and future research avenues were also addressed.