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Market Orientation and Degree of Novelty

Keywords: responsive and proactive market orientation , incremental and radical innovation

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Abstract:

This study aims to examine the relationship between a responsive and aproactive market orientation and the degree of novelty. Data obtainedvia an Internet survey were analysed using structural equation modelling.An analysis of 325 Slovenian firms reveals that only a proactivemarket orientation is positively related to the degree of novelty. Whilethere is no evidence of statistically significant differences in the examinedrelationships given the firm size and environmental characteristics,separate analyses in each group indicate that a proactive market orientationmay be more important for small firms and firms operatingamidst a higher level of technological turbulence. This study suggeststhat a distinction between a responsive and a proactive market orientationis important for a better understanding of the effect of a marketorientation on the degree of novelty.

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