Improving firm performance through NPD: The role of market orientation, NPD orientation and the NPD process

Achieving sustained business performance is a challenge for many firms. Nowhere is this more obvious than in the food and packaged goods domain where manufacturers are significantly affected by globally aggressive competitors and retailers. Drawing on the resource-based view of the firm this study of 173 food manufacturers finds that the NPD process is a capability enabling the translation of a firm’s market orientation and its NPD orientation, both resources, into superior NPD program success, thereby enhancing overall firm performance. The results help clarify the somewhat ambiguous relationship between market orientation, product innovation and firm performance and demonstrate that firms wishing to leverage product innovation must have the cultural and structural foundations of both a market orientation and NPD orientation. Importantly, they must implement a well-executed NPD process in order to translate these broader firm resources into performance outcomes.