The Effect of Market Orientation on Product Innovation

Abstract

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 of newto-the-world products and reduces the launching of metoo products, (2) competitor orientation increases the introduction of me-too products and reduces the launching of line extensions and new-to-the-world products, and (3) interfunctional coordination increases the launching of line extensions and reduces the introduction of me-too products.