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Market Orientation and Innovative Performance: Comparing Service and Manufacturing Firms

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Innovation has been claimed to be the future driver long term organizational competitiveness and sustainability. In a similar vein, Malaysian companies need to be innovative as the competition rises globally and customers become more discerning. However, the National R&D Survey in the year 2012 indicates that Malaysia’s Gross Expenditure on R&D per GDP, even though steadily increased, is only 1.13% in 2012. Moreover, recent National Survey of Innovation reported that majority of manufacturing firms was classified as non-innovator compared to those in the service sector. One of the factors that are claimed to affect innovative performance is market orientation, yet very limited study is done in this area. Therefore, this paper aimed to investigate whether innovative performance and market orientation between manufacturing and service firms are different and whether there is a link between market orientation and firms’ innovative performance. Fifty firms were selected using convenience sampling as their participation was voluntary. Descriptively, the means for manufacturing firms for both innovative performance (Mean = 5.050) and market orientation (Mean = 5.507) are higher compared to service firms. However, t-test results indicate that there is no significant difference of both constructs between manufacturing and service firms. Consistent with previous studies, market orientation accounted for 46.2% of variance in firms’ innovative performance. This finding indicates competitive marketing strategies are equally important to different types of firms and the ability of firms to inculcate customer-focused culture would help to stimulate their innovative performance.
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Keywords: Innovative Performance; Market Orientation

Document Type: Research Article

Affiliations: Faculty of Technology Management and Business, Universiti Tun Hussein Malaysia, 86400 Batu Pahat, Johor, Malaysia

Publication date: April 1, 2017

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