The Effect of Responsive and Proactive Market Orientation on Product Innovation and Company Performance: A Case Study on MSMEs in the Culinary Field in D.I. Yogyakarta

Ichwan, A’bdul Fatach and Nursyamsiah, Siti (2019): The Effect of Responsive and Proactive Market Orientation on Product Innovation and Company Performance: A Case Study on MSMEs in the Culinary Field in D.I. Yogyakarta. Published in: Integrated Journal of Business and Economics , Vol. 3, No. 1 : pp. 32-42.

Abstract

This study aims to determine the effect of Responsive and Proactive Market Orientation on Product Innovation and Company Performance. The population in this study is the Micro, Small, and Medium Enterprise (MSME) in the Culinary Division at D.I. Yogyakarta and use 200 respondents as a sample. By using convenience sampling technique, the researchers have the freedom to choose any culinary MSME found around D.I. Yogyakarta to be the respondent. Hypothesis testing using Structural Equation Model (SEM) analysis. The findings show that there is a positive influence of responsive market orientation on product innovation performance, proactive market orientation on product innovation performance, product innovation performance on the company's market performance, and the company's market performance on the company's financial performance. The findings of this study contribute to MSMEs that information about market orientation adopted by business actors or companies can affect the performance of new product innovations in the market to improve the company's market performance which then affects the company's financial performance.

• Item Type: MPRA Paper
• Language: English
• Keywords: responsive market orientation; proactive market orientation; product innovation; company performance
• Subjects: A - General Economics and Teaching > A1 - General Economics > A11 - Role of Economics ; Role of Economists ; Market for Economists; D - Microeconomics > D1 - Household Behavior and Family Economics > D13 - Household Production and Intrahousehold Allocation

References

Anderson, J., & Gerbing, D, (1988). Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach. Psychological Bulletin Vol. 103, No. 3, 411-423.

Badan Pusat Statistik Balai Statistik Daerah BAPPEDA DIY. (2017). Laporan Akhir Analisis Produk Domestik Regional Bruto Daerah Istimewa Yogyakarta 2012-2016. D.I. Yogyakarta.

Bodlaj, M. (2010). The Impact of a Responsive and Proactive Market Orientation on Innovation and Business Performance. Economic and Business Review, Vol. 12, 241-261.

Day, G. (1994). The Capabilities of Market-Driven Organizations, Journal of Marketing, Vol. 58, 37-52.

Day, G. (1999). Misconceptions about Market Orientation, Journal of Market-Focused Management Vol. 4, No. 1, 5-16.

Foundation, T. A. (2001), Annual Report: Working to Build a Peaceful, Prosperous, and Open Asia-Pacific Community.

Gabrijan, V. (2005), The impact of marketing resources on organizational performance. Naše gospodarstvo, 92-103.

Ghozali, I. (2005), Aplikasi Analisis Multivariate dengan SPSS. Semarang: Badan Penerbit Universitas Diponegoro Semarang.

Harris, L. (1996). Benchmarking Against The Theory of Market Orientation. Management Decision, Vol. 34, No. 2, 25-29.

Hill, C. W. (2010). International Business: Competing in The Global Marketplace, 9th Edition. New York: McGraw-Hill.

Holmes-Smith, P. (2001). Introduction to Structural Equation Modelling Using LISREL. ACSPRI-Winter Training Program, Perth.

Homburg, C., & Pflesser, C. (2000). A Multiple-Layer Model of Market-Oriented Organizational Culture: Measurement Issues and Performance Outcomes. Journal of Marketing Research ,Vol. 37, No, 4, 449-462.

Kementrian Koperasi dan Usaha Kecil dan Menengah Republik Indonesia. (2016). Laporan Tahunan Kementrian Koperasi dan Usaha Kecil dan Menengah. D.I. Yogyakarta.

Kode dan Data Wilayah Administrasi Pemerintahan. (2018, January 11). Diambil kembali dari Kementrian Dalam Negeri : http://www.kemendagri.go.id/produk-hukum/2015/03/16/dfg

Kotler, P. (2003). Marketing Management, 11th Edition. New Jersey: Prentice Hall Inc.

Langerak, F., Hultink, E. J., & Robben, H. S. The Impact of Market Orientation, Product Advantage, and Launch Proficiency on New Product Performance and Organizational Performance. Journal of Product Innovation Management, Vol. 21, No. 2, 79-94.

Li, T., Tsalikis, J., & Seaton, B. (2008). The International Business Ethics Index: Asian Emerging Economies. Journal of Business Ethics, Vol. 80, No. 4, 643-651.

Lilien, G., Morrison, P., Searls, K., Sonnack, M., & Hippel, E. (2002). Performance Assessment of the Lead User Idea-Generation Process for New Product Development. Management Science, Vol. 48, No. 4, 1042-1059.

Narver, J., Slater, S., & MacLachlan, D. (2004). Responsive and Proactive Market Orientation and New Product Success. Journal of Product Innovation Management, Vol. 21, No. 5, 334-347.

Rejc, A. (2002). Role and Significance of Non-financial Information in Light of Firm Performance, Theory and Empirical Investigation, PhD Dissertation, Faculty of Economics, Ljubljana.

Sheth, J., & Sisodia, R. (1999). Revisiting Marketing’s Lawlike Generalizations. Journal of the Academy of Marketing Science,Vol. 27, No.1, 71-87.

Suryani, T. (2008). Perilaku Konsumen; Implikasi Pada Strategi Pemasaran. Yogyakarta: Graha Ilmu.

Trott, P. (2005). Innovation Management and New Product Development, 3th Edition. Harlow: Pearson Education. 24) Trott, P. (2008). Innovation Management and New Product Development, 4th Edition. Harlow: Pearson Education.

Zhang, J., & Duan, Y. (2010). The Impact of Different Types of Market Orientation on Product Innovation Performance. Journal of Management Decision, Vol. 48, No. 6, 849-867.

Zhang, J., & Duan, Y. (2010). The Impact of Different Types of Market Orientation On Product Innovation Performance: Evidence from Chinese Manufacturers. Journal of Management Decision ,Vol. 48, No. 8, 849-867.