Market Orientation and Degree of Novelty

Abstract

This study aims to examine the relationship between a responsive and a proactive market orientation and the degree of novelty. Data obtained via an Internet survey were analysed using structural equation modelling. An analysis of 325 Slovenian firms reveals that only a proactive market orientation is positively related to the degree of novelty. While there is no evidence of statistically significant differences in the examined relationships given the firm size and environmental characteristics, separate analyses in each group indicate that a proactive market orientation may be more important for small firms and firms operating amidst a higher level of technological turbulence. This study suggests that a distinction between a responsive and a proactive market orientation is important for a better understanding of the effect of a market orientation on the degree of novelty.responsive and proactive market orientation, incremental and radical innovation