Empirical Research On Impact Of Different Types Of Market Orientation On Firm's Innovation And Business Performance

With the soar of economy, manufacturing firms in China developed fast. However, the main advantage for Chinese manufacturers is their low cost, instead of innovative capabilities. As the China's entry into WTO, Those firms have to face fierce competition from the world. In this case, product innovation is believed to be very important if the manufacturer wants its products successful and profitable. Among innovation determinants in existing field of research, market orientation has often shown to have strong link with the success of firms'innovative efforts. Unfortunately, most researchers neglect the proactiveness of market and did not distinguish the innovation type. Therefore, it's significant to study on the relationship between different market orientations and innovations and business performance.Based on Chinese and Western scholars'researches on responsive market orientation, proactive market orientation, incremental innovation, radical innovation, new product performance and business performance, this study determined the framework of the paper and the conceptual model. Inspired by the literature and group interviews, we designed the scales and surveyed 227 manufacturing firms in China mainland. Then, the paper mainly comes to the following conclusions:First, responsive market orientation and proactive market orientation are both positively related to incremental innovation and radical innovation. What's more, responsive market orientation impacts incremental innovation more significantly and proactive market orientation has more effect on radical innovation.Second, both types of innovation are expected to contribute to new product performance and overall business performance, and the effect of radical innovation is more important.Third, Responsive market orientation also has a direct positive association with business performance.