Market Orientation and

New Product Development

in Global Industrial Firms
Brent M. Wren
Wm. E. Souder
David Berkowitz
The purpose of this article is to evaluate the impact that market for more export-oriented economies such as Korea. In terms of an-
orientation has on new product success in a cross-national context. tecedents, the most important organizational characteristic for de-
In a six-country study, two aspects of market orientation—market veloping a market orientation is cross-functional integration. Man-
intelligence and customer orientation—were examined relative to agerial implications are drawn concerning the findings. © 2000
traditional determinants of new product success. Antecedents of Elsevier Science Inc. All rights reserved.
market orientation are also investigated. The results generally sup-
port the importance of market orientation to new product success.
Market intelligence was found to be the most critical skill required
INTRODUCTION
regardless of country of origin, followed in most cases by customer
orientation. Technical skills played a larger role in product success In today’s highly competitive global marketplace, un-
derstanding the factors that determine new product suc-
cess or failure has become a focal point for both research-
ers and practitioners. A myriad of factors both external
Address correspondence to Dr. B. M. Wren, College of Administrative
(e.g., competitive superiority, market uncertainty, market
Sciences, University of Alabama at Huntsville, Huntsville, AL 35899. Tel: (256)
890-6817; fax: (256) 890-6328; E-mail: wrenb@e-mail.uah.edu fit) and internal (e.g., the product development process,
The authors thank the following people for their efforts in the data collection technical competence, managerial skill) to the firm have
phase of this project: Prof. Rudy Moenaert (University of Ghent, Belgium), been found to impact new product success [1, 2]. Re-
Prof. Jinjoo Lee (Korea Advanced Institute of Science and Technology), Prof.
David Buisson (University of Otago), Prof. S.A. Jenssen (Bodo Graduate cently, researchers have begun to explore the role of mar-
School, Norway). ket orientation in determining new product success [3, 4].

Industrial Marketing Management 29, 601–611 (2000)

© 2000 Elsevier Science Inc. All rights reserved. 0019-8501/00/$–see front matter
655 Avenue of the Americas, New York, NY 10010 PII S0019-8501(00)00120-6
 Market orientation spans internal and
external environments.
Market orientation is “the set of cross-functional pro-
cesses and activities directed at creating and satisfying cus-
tomers through continuous needs assessment” [5]. In other
words, market-oriented firms enhance performance by
systematically using market intelligence to better under-
stand the marketplace, and then develop product strategies
to meet consumer wants and needs. Research has estab-
lished that market orientation is manifest at several levels
in an organization [6]. For instance, research has demon-
strated that internal processes such as corporate culture,
managerial support, interdepartmental connectedness, and
customer-focused intelligence gathering and dissemination
are necessary components in a market-oriented firm [7–9].
These processes potentially impact information flows, re-
source allocations, and cross-functional R&D activities
that are so vital to new product development.
While substantial progress has been made in defining
the concept of market orientation, and its role in deter-
mining new product success, there is some evidence to
suggest that existing knowledge may not be equally ap-
plicable across markets, cultures, and industries [10, 11].
In their study of market orientation in U.S. and Scandina-
vian companies, Selnes, Jaworski, and Kohli [9] posited
that given the high level of government involvement and
lower levels of competition, Scandinavian firms might have
fewer incentives to be market oriented. In their study of Japa-
nese firms, Deshpande, Farley, and Webster [12] found that
BRENT M. WREN is Associate Professor of Marketing at the
University of Alabama in Huntsville where he specializes in
buyer–seller relationships and sales management.
WM. E. SOUDER holds the Alabama Eminent Scholar
Endowed Chair in Management of Technology and directs the
Center for the Management of Science and Technology at the
University of Alabama in Huntsville.
DAVID BERKOWITZ is Assistant Professor of Marketing at the
University of Alabama in Huntsville where he specializes in
marketing management and marketing of high technology
products.
602
“adhocracy” firms and “market” firms outperformed “clans”
and “hierarchies.” These results suggest that cultures focused
on creativity, technical skills, competition, and production
are superior to those characterized by participation, team-
work, and coordination, skills thought to be vital to market-
oriented firms. Likewise, in their study of European and Asia
work units Newman and Nollen [13] found that management
practices that are favored in the U.S. are likely to be ineffec-
tive in some other countries that are culturally different. Fi-
nally, there is research to suggest that the skills that comprise
market orientation (organizational support/systems, market
knowledge, interconnectedness, etc.) are more important in
industries characterized by rapid technology change, com-
petitive intensity, and market uncertainty [14, 15].
Market orientation holds tremendous potential as a
framework for assessing the performance of new product
development processes. As demonstrated by the few exam-
ples provided above, given vast differences in economies,
cultures, corporate structures, etc., it is conceivable that the
relative importance of market orientation to new product
success in various countries would differ. With global mar-
kets playing an ever-increasing role in the success of new
technologies/products research into the applicability of mar-
ket orientation concepts across countries is sorely needed.
The purpose of the current research project is to explore the
market orientation–new product success relationship in a
global context. Hypotheses are developed concerning the
relative role that market orientation plays in the success of
new product development projects. These hypotheses are
then tested using a multi-company sample across six diverse
countries. The results and implications discussed are partic-
ularly relevant for multinational or global organizations that
often operate in turbulent, uncertain markets.
BACKGROUND LITERATURE AND HYPOTHESES
Determinants of New Product Success
For more than 20 years researchers have tried to under-
stand why some products succeed when others fail. The
vast literature on new product success can generally be di-
 Market orientation impacts new product
success.
vided into four areas: (1) the competitive environment, (2)
the internal environment, (3) the new product development
process, and (4) product competitive advantage [16]. For
this research, we chose to focus on those factors completely
under the control of the firm (the internal environment and
the new product development process). The rationale for
this is based on the premise that market orientation is
largely an internal characteristic of the firm, and our goal is
to compare the impact that market orientation has on new
product success relative to other internal factors. We are not
dismissing the role of external factors and new product suc-
cess, we are simply choosing to narrow the study’s scope to
a manageable set of factors.
Research has identified several characteristics of the
firm’s internal environment that impact new product suc-
cess. The two most fully researched are the firm’s market-
ing and technical skills. Technical skills adequacy refers to
resources that the organization/new product team has in
terms of conceptualization, product development, engi-
neering, and production [12]. Technical competence en-
sures that companies can design and produce innovative
products, and that those products will be consistent with
consumer needs. Technical competence also helps speed
products to market by allowing companies to more quickly
adjust products to changes in the marketplace [2, 16–18].
Having solid technical skills is important, but having
marketing skills (i.e., advertising/promotional skills, solid
salesforce, distribution systems) consistent with the needs
of new product development projects is equally important
in determining success [1, 17, 19, 20]. This simply ex-
tends the long-established notion that marketing skills are
a primary source of competitive advantage [21] into the
realm of new product launches. For high-technology
products or radically new innovations, having appropriate
sales and promotional skills to inform and educate con-
sumers may be as important as the product itself. Compa-
nies often spend as much on the product introduction as
they do on the actual product development itself. Based
on this literature, the following hypothesis is tested:
Hypothesis 1: The degree of new product success will be
positively related to:
a. the level of marketing skills adequacy.
b. the level of technical skills adequacy.
Market orientation has been defined and operationalized
in many ways. The original conceptualizations held that
market orientation was a customer-focused process of intel-
ligence generation, followed by coordinated, interfunctional
marketing efforts to achieve long-term profitability [7, 8].
Virtually all subsequent operationalizations of market orien-
tation have included components related to customer orien-
tation and market intelligence (generation, dissemination).
The importance of market orientation for firms devel-
oping and introducing new products is intuitive. Firms
that are in touch with the market have a better under-
standing of customer wants and needs, as well as greater
knowledge of competitor activities and market trends.
These firms maximize the probability of success, other
things being equal. Extant research has confirmed the re-
lationship between market orientation and overall firm
performance [6, 9, 15] and more specifically, new prod-
uct success [4, 10, 17]. Based on this literature, the fol-
lowing hypothesis is tested:
Hypothesis 2: The degree of new product success will be
positively related to:
a. the level of market intelligence.
b. the degree of customer orientation.
Antecedents of Market Orientation
One of the most often cited factors is top management
support [9]. Top management influences product devel-
opment through their motivational role, as well as
through explicit support of the project. Managers who are
enthusiastic about marketing often motivate others within
the organization. If a particular manager enthusiastically
endorses a practice of being customer focused or continu-
ally discusses the importance of information generation
and sharing within the organization, others are likely to
adopt similar attitudes [15].
603
 Project manager skills refer to the ability of the project
manager to motivate team members through the use of a
participative management style and to serve as project
champion for the project [22, 23]. In new product devel-
opment processes, project managers can directly influ-
ence the team conduct and outcomes of new product de-
velopments by playing an advocacy role for the project,
lobbying for resources, designing a system for gathering
and disseminating market intelligence, and serving an in-
tegration role [22–24]. The project manager must also
coordinate new product development project activities
and ensure that team members have a unified vision. If
the project manager is not adequately prepared to coordi-
nate the team’s research, development, and marketing ac-
tivities, the ability of the firm to remain market oriented
will be diminished.
The other primary variable that has been linked to mar-
ket orientation is cross-functional integration. Research
has consistently demonstrated that when organizations
demonstrate high levels of interdepartmental connected-
ness there is greater sharing of market intelligence
throughout the organization [9, 16]. The end result is that
there is better coordination of the organization’s efforts
and all departments work toward a common goal. This is
of particular importance in the new product development
process, where cross- functional integration between the
technical (e.g., R&D) and commercial (marketing)
project members has repeatedly been found to be related
to new product success [1, 8, 10].
The article by Selnes, Jaworski, and Kohli [9] has al-
ready provided preliminary support for the importance of
top management and interdepartmental relations in a
cross-cultural context (U.S. and Scandinavia). Likewise,
Souder, Buisson, and Garrett [10] found support for these
relationships in New Zealand. Given this evidence, it is
expected that these variables will play a critical role in
FIGURE 1. Model of study variables.
604
the development of both elements of market orientation
in our five countries.
Hypothesis 3: The level of market intelligence will be posi-
tively related to:
a. the project manager’s marketing manage-
ment and motivational skills.
b. top management support for the project.
c. level of cross-functional integration on the
project.
Hypothesis 4: The degree of customer orientation will be
positively related to:
a. the project manager’s marketing manage-
ment and motivational skills.
b. top management support for the project.
c. level of cross-functional integration on the
project.
For visual reference, Figure 1 contains a summary of
the constructs included in the study. This model is tested
across multiple cultures to assess the generalizability of
hypothesized relationships. In the following section, re-
search methodology is discussed.
RESEARCH METHOD
Sample Design
To test the proposed model, data were gathered con-
cerning the new product development processes within
multiple high technology companies in six countries:
United States, New Zealand, Korea, Belgium, and Nor-
way and Sweden (combined into “Scandinavia” here).
Our goal in selecting countries was to include a vast array
of economies, cultures, and business orientations, so that
the proposed model could be rigorously tested in a di-
 Integration is key to market orientation.

verse context. In addition, these countries represent a de-
parture from more thoroughly researched countries such
as the U.K., Japan, and Germany. The entrepreneurial
orientation and the existence of numerous high technol-
ogy companies make these countries attractive from both
a research and managerial standpoint.
Data was collected on randomly selected new product
development projects for high technology industrial
products (telecommunications, electronics, pharmaceuti-
cals, biotechnology, and software) within each firm in
each country. The chief marketing and chief R&D offi-
cers within each firm completed all the questionnaire
items by consensus, with various project-level personnel
consulted in cascading interviews [24] to confirm the in-
formation. This hands-on interview process resulted in a
100% response rate. Table 1 provides a summary of the
sample size, as well as psychometric properties within
each country.
Measurement Scales
Given that the constructs comprising the conceptual
model have been extensively applied in prior studies [1, 3,
5, 16, 25], questionnaire items were readily available. Ex-
isting items were adapted and re-worded to fit the present
context. All constructs were measured using multiple
items, with the exception of the degree of new product de-
velopment success, which was measured using a single-
item measure. This item asked respondents to evaluate the
degree of commercial success for the new product. Mea-
sured on a five-point scale, responses ranged from “far
below expectations” to “far above expectations.” While
single-item measures have been questioned, slight varia-
tions of this particular item have been defended and effec-
tively applied in numerous large sample studies [cf. 20,
24, 26–28]. As illustrated in prior studies, the outcome of
a product introduction is relatively simple to assess, either
it succeeded or it did not. Thus, we felt safe applying the
single-item measure in our study. For the other, more ab-
stract constructs, multiple-item measures were more ap-
propriate. Appendix A contains detail on the measure-
ment source, response formats, and sample scale items for
the remaining constructs.
Measure Validation
Due to the use of multiple countries/cultures, numer-
ous steps had to be taken to verify that we had consistent
and stable measures [30]. First, for each construct, Cron-
bach’s alpha was calculated across all countries. Next,
the pooled sample was split based on country and Cron-
bach alphas were computed within each country. As Ta-
ble 1 indicates, all multi-item scales had acceptable coef-
ficient alphas, above the recommended .7, except the
marketing skills adequacy variable in Scandinavia (.69)
and Korea (.65) which are close.
To further validate our measures, we followed proce-
dures for assessing functional equivalence/measure invari-
ance of cross-cultural measures as outlined in recent stud-
ies, including Steenkamp and Baumgartner, Singh, and
Mullen [31–34]. The heart of this process involves running

TABLE 1
Sample Sizes and Coefficient Alphas

U.S. New Zealand Korea Scandinavia Belguim

Variable (n ⫽ 111) (n ⫽ 74) (n ⫽ 52) (n ⫽ 72) (n ⫽ 66)

Market intelligence .86 .82 .87 .81 .85

Customer orientation .71 .70 .74 .73 .72
Marketing skills adequacy .86 .82 .66 .70 .76
Technical skills adequacy .91 .86 .86 .91 .92
Project manager skills .76 .82 .72 .79 .82
Top management support .71 .72 .72 .75 .87
Integration .87 .88 .90 .93 .94

605
 Sample includes diverse set of countries.

a measurement model for all constructs within each country exist and the nature (positive or negative) of these rela-
and across countries to ensure that the constructs are invari- tionships. As can be seen from the results in Table 3 there
ant across groups (countries). To accomplish this we used are several significant relationships and, consistent with
the LISREL procedure set forth by Jöreskog and Sörbom. research hypotheses, they are all positive.
Looking first at the error terms, we found that the percent Next, we wanted to assess whether the group of study
of correlated error terms within countries ranged from 3% variables was consistent across all countries or whether a
to 9%, while in total more than 92% were uncorrelated. The particular variable might be more important or prominent
squared multiple correlations were also consistent across in one country relative to another. In other words, are the
countries (see Table 2). This indicates that the measures are vectors of means on the multiple dependent variables
stable across countries. In terms of model fit, the RMSEA equal across groups? To achieve this, we conducted a
of .092 with a chi-square of 365.09 with 225 degrees of multivariate analysis of variance (MANOVA) with the
freedom suggests that the data are reasonable representa- set of study variables serving as the dependent variables
tions for the model. In addition, the other fit indices recom- and countries representing the groups. MANOVA was
mended by Steenkamp and Baumgartner are all solid as chosen over a series of ANOVAs because of the statisti-
well. The CAIC (1508.04) for the model is smaller than the cal benefits related to error rates and composite effects of
CAIC for Independence (3618.77) and the CAIC for a satu- the dependent variables. For each dependent variable
rated model (2701.50). Also, the CFI (.95) and NNFI (.93) where significant overall country differences existed,
are both above the .9 threshold. Based on our analyses we univariate ANOVAs and appropriate post hoc tests were
concluded that our measures, while not perfect, are ade- used to examine differences further.
quate to allow for interpretation of the substantive results. The results of the MANOVA analysis in Table 4 gener-
ally indicate significant overall differences in the depen-
dent variable set as a function of country (Hotelling’s T ⫽
ANALYSIS AND RESULTS .261, F ⫽ 2.91, p ⬍ .001; Wilks’ F ⫽ 2.89, sig. .000). Be-
cause there are overall group differences, further analysis
To fully evaluate the research hypotheses across multi- was conducted via univariate ANOVAs to determine the
ple countries, several statistical techniques were utilized, source of between-country differences. Significant differ-
including correlation analysis, MANOVA, and multiple ences were found for customer orientation, marketing
regression analysis. As an initial test of the proposed re- skills adequacy, technical skills adequacy, top manage-
lationships, we first conducted a correlation analysis be- ment support, and level of cross-functional integration.
tween all study variables. While correlations do not ad- In terms of customer orientation, the mean for New
dress direction of relationship, they do provide a Zealand (3.82) was significantly greater than all other
preliminary test for whether any significant relationships countries; no other differences were significant. Market-
ing skills adequacy was significantly greater in the U.S.
(mean ⫽ 3.56), New Zealand (mean ⫽ 3.79), and Scandi-
TABLE 2 navia (mean ⫽ 3.55) than in Korea; Korea and Belgium
Squared Multiple Correlations were not significantly different from one another. There
X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X13 were no differences between any of the other groups.
The level of technical skills adequacy was very similar
NZ 0.71 0.83 0.21 0.40 0.42 0.54 0.43 0.26 0.90 0.45 0.69 0.49
BL 0.83 0.91 0.27 0.48 0.58 0.50 0.34 0.17 0.65 0.83 0.77 0.80
for the U.S., New Zealand, and Belgium, as these three
US 0.75 0.92 0.15 0.29 0.25 0.83 0.54 0.25 0.66 0.77 0.83 0.89 countries were significantly greater than Korea and Scan-
KR 0.78 0.82 0.35 0.60 0.59 0.70 0.55 0.12 0.32 0.51 0.66 0.64 dinavia. In terms of top management support, Scandina-
SN 0.75 0.88 0.26 0.40 0.45 0.48 0.44 0.27 0.66 0.69 0.70 0.72
via (mean ⫽ 3.38) typically has much less support for

606
TABLE 3
Correlation Matrix of Study Variables

Variables 1 2 3 4 5 6 7 8

New product success —

Market intelligence .573* —
Customer orientation .479* .665* —
Marketing skills adequacy .247* .427* .426* —
Technical skills adequacy .246* .311* .304* .332* —
Project manager skills .345* .345* .307* .237* .343* —
Top management support .249* .313* .359* .180* .267* .369* —
Integration .380* .435* .407* .184* .266* .366* .328* —

* Significant at p ⬍ .01

projects at the top levels than in the other countries; no other
between-country differences were significant. Finally, there
were several differences with regard to cross-functional in-
tegration. The U.S., New Zealand, and Scandinavia all re-
port similar levels of integration, as did Belgium and Korea.
Belgium (mean ⫽ 3.11) typically has the least amount of in-
tegration and it is significantly less than all other countries
except Korea. Korea is also significantly lower than all
countries except the U.S. and Belgium.
While the ANOVA assessment provided a picture of
the general level of each variable across countries, it did
not provide a real test of the study hypotheses. To ad-
dress the differential impact of market orientation on suc-
cess within each country, a series of multiple regressions
were used. These results are reported in Tables 5 and 6.
The results in Table 5 address the impact that market
orientation components have on new product success
within each country (Hypotheses 1 and 2). Hypothesis 1a
predicted a positive relationship between marketing skills
adequacy and product success. The only country where
marketing skills adequacy is significant is in the U.S.
(beta ⫽ ⫺.19). Therefore, H1a is not supported. In con-
trast, technical skills adequacy was significant in Korea,
Scandinavia, and Belgium, but not in the U.S. or New
Zealand. Therefore, hypothesis 1b is weakly supported.
The impact of market intelligence and customer orienta-
tion was fairly consistent across countries, providing gen-
eral support for Hypothesis 2. Recall that this hypothesis
specified a direct, positive relationship between both mar-
ket intelligence and customer orientation, and new product
success. In each case, both market intelligence and cus-
tomer orientation were significant predictors of new prod-
uct development project success. The only exception was
in Korea, where customer orientation was not significant.
What is interesting about these results is the relative
importance that each predictor holds within different
countries. In the U.S., the standardized beta weight for
market intelligence (.57) suggests that it is most impor-

TABLE 4
MANOVA Resultsa

U.S. New Zealand Korea Scandinavia Belgium

(n ⫽ 111) (n ⫽ 74) (n ⫽ 52) (n ⫽ 72) (n ⫽ 66)
Variable Mean Mean Mean Mean Mean F-ratio

New product success 2.82 2.87 2.75 2.66 2.36 1.35

Market intelligence 2.95 3.28 3.14 3.11 3.09 1.35
Customer orientation 3.47B 3.82A 3.49B 3.45B 3.44B 3.72*
Marketing skills adequacy 3.56A 3.79A 3.15B 3.55A 3.45AB 2.75*
Technical skills adequacy 3.83AC 3.94A 3.61BC 3.50B 3.91A 3.49*
Project manager skills 3.76 3.81 3.90 3.59 3.76 1.24
Top management support 3.80A 3.99A 3.84A 3.38B 3.78A 4.83**
Integration 3.51AC 3.68A 3.18BC 3.58A 3.11B 3.90**
a
Multivariate test (Wilks’): F-value 2.89, d.f. 32, sig. .000.
Post hoc tests performed using Duncan Procedure. Group means with common superscripts are not significantly different at alpha .05 level.
* Significant at alpha ⬍.05.
** Significant at alpha ⬍.01.

607
TABLE 5
Standardized Regression Results for Predictors of New Product Success

Variable U.S. New Zealand Korea Scandinavia Belgium

DV ⫽ Success
Market intelligence .57*** .42** .31** .28** .34***
Customer orientation .21** .29** .24 .32** .38***
Marketing skills adequacy ⫺.19* ⫺.07 .06 ⫺.16 ⫺.01
Technical skills adequacy .03 ⫺.01 .29** .19* .18**
Model Fit
F 19.96*** 11.86*** 13.92*** 9.12*** 18.13***
R2 .42 .37 .54 .36 .54

* p ⬍ .10.
** p ⬍ .05.
*** p ⬍ .01.

tant in determining success, followed in order by customer
orientation (.21), marketing skills adequacy (⫺.19), and
technical skills adequacy (not significant). Like the U.S.,
in New Zealand, market intelligence (b ⫽ .42) is most im-
portant followed by customer orientation (.29), marketing
skills adequacy and technical skills adequacy which are
both nonsignificant. In Korea, market intelligence (b ⫽
.31) is still the most important predictor of success, but
technical skills (.29) are second most important; customer
orientation and marketing skills adequacy are not signifi-
cant. In both Scandinavia and Belgium, customer orienta-
tion is the most important determinant of success (.32 and
.38, respectively), followed by market intelligence and
technical skills adequacy. Marketing skills adequacy was
not a significant predictor in either country. More will be
said about these findings in the discussion section.
Table 6 reports the results of multiple regressions ex-
amining the antecedents of market orientation (Hypothe-
ses 3 and 4). There was general support for Hypothesis 3
across all data sets. Only in Belgium, where integration
was the only significant predictor of market intelligence,
was the hypothesis not supported. Hypothesis 4 also re-
ceived strong support across all countries, with the ex-
ception of Korea. In Korea, only integration was a signif-
icant predictor of customer orientation. In all other
countries, at least two of the three hypothesized relation-
ships were significant. It is interesting to note that in ev-
ery country, integration was a significant predictor of

TABLE 6
Multiple Regression Results for Antecedents of Market Orientation

Variable U.S. New Zealand Korea Scandinavia Belgium

DV ⫽ market intelligence
Project manager skills .21** .02 .34** .22* ⫺.05
Top management support .22** .28** ⫺.03 .12 .12
Integration .26** .19* .29** .30** .59***
Model fit
F 17.75*** 3.84** 5.60*** 6.50*** 13.69***
R2 .32 .14 .26 .23 .40
DV ⫽ customer orientation
Project manager skills .29*** .14 .01 .28** ⫺.01
Top management support .13 .22* .13 .09 .31**
Integration .29*** .23** .40*** .19* .22*
Model fit
F 19.85*** 4.98** 4.69*** 4.65*** 4.81***
R2 .36 .18 .23 .17 .19

* p ⬍ .10.
** p ⬍ .05.
*** p ⬍ .01.

608
both market intelligence and customer orientation, attest-
ing to its importance in ensuring a market orientation.
DISCUSSION OF RESULTS
The most consistent finding in our analysis is that mar-
keting intelligence is the critical skill required for all
firms regardless of the country of origin. This is demon-
strated by the significance of market intelligence in our re-
gression results within each country. In each regression
model market intelligence was a significant and positive pre-
dictor of success and the significance is strong (i.e., ⬍ .05).
This supports the notion that gathering, recording and shar-
ing information about the marketplace creates a certain level
of market intelligence. This function provides necessary in-
put to the marketing managers whom are introducing new
products. Marketers who understand the market undoubtedly
do a better job developing and introducing new products.
A second consistent finding is that customer orientation is
also a significant and positive contributor toward success for
all but one country, Korea. Interestingly, the countries
where customer orientation exhibits strong significance
(U.S., N.Z., Belgium, Sweden, Norway) score high on the
individualism index [35]. Cultures that score high on this in-
dex produce managers that are more likely to use current
management practices and are more likely to be aware of
current market value [21]. Therefore individualist countries
are likely to endorse the practice of customer orientation.
Our third observation is that technical skills are re-
quired to a greater extent in those countries that have a
disposition toward exporting. Korea, Norway, Sweden
and Belgium have an export orientation. That is, the
firms in these countries develop products primarily for
export markets. Because firms in these economies need
to attract consumers in non-native markets they need to
compete with skills that are not found in their markets
abroad. Often it is technical skill that ensures that the
product will be viewed as having value relative to local
products. Specifically, Korea is an overwhelmingly ex-
port-oriented economy. This implies that the customer as
defined by our survey is not of interest to firms in Korea.
Being able to produce for another country’s consumer is
more critical. Therefore, this requires market intelligence
and technical skill rather than customer orientation.
In the U.S. and New Zealand technical skills were not a
significant predictor of new product success. As for the
U.S., the lack of significance for technical skill implies
that U.S. managers are less concerned about having a cor-
porate culture defined by technical competence. We be-
lieve this is because the U.S. culture is oriented toward hir-
ing technical competence on an ad hoc or as needed basis.
It is not uncommon for many companies to hire engineer-
ing and technical employees on a contract basis. Specifi-
cally, many U.S. firms engage in “buying” the best short-
term employees available to fit project needs. Therefore,
technical competence is viewed as something that can be
purchased with relative ease and there is less focus on it as
part of the corporate culture. We believe that the lack of
significance in New Zealand is primarily due their culture.
New Zealand is a small country with a highly innovative,
entrepreneurial spirit. These factors have caused them to
be naturally customer focused, rendering technical skills
less important to new product success.
The analyses of the antecedents of market orientation
provide interesting findings for discussion. First, it is clear
that integration is critical in explaining both market intelli-
gence and customer orientation. This is consistent with pre-
vious findings that have reported that the management of
NPD projects requires early interfaces between project per-
sonnel [25, 29]. Clearly, integration allows for increased
communication and knowledge sharing between the project
participants. This would contribute to the project by ensur-
ing that team members share a common vision and would
have the effect of unifying the project team’s efforts.
Second, in the U.S. and New Zealand, project manager
skill and top management support are significant and positive
predictors for both market intelligence and customer orienta-
tion. This implies that the manager is an important compo-
nent in assisting with giving the team a customer orientation
or passing on the appropriate information to create market in-
telligence. In individualistic societies like the U.S. and N.Z.,
support from project managers has a unifying or coordinat-
ing responsibility to the members of his/her team. If the
members of the team realize that the manager is hindering
the customer orientation by demanding solutions that are
time or product focused rather than customer focused they
will react accordingly and customer orientation will fall by
the wayside. The same can be said of market intelligence.
That is, managers that do not pass along critical market infor-
mation impede the learning process of all members of the
team. Therefore, team members are less informed about mar-
ket conditions and market intelligence ultimately suffers.
The lack of significance for top management support
in social economies such as Korea and Belgium is not
that surprising. Korea is a mass population country that
functions by rules to control behavior rather than individ-
ual managers. Likewise, the Flemish Belgians have many
mores that set appropriate behaviors. In situations like
609
 Market intelligence most critical skill
regardless of country

these, the manager has less impact because a sense of APPENDIX A

Sample Scale Items, Responses Format and Sources
right and wrong is more engrained in the culture.
Market Intelligence
Our forecast of the market demand five-point, Likert-type scale
MANAGERIAL IMPLICATIONS for this project were accurate. Strongly disagree/Strongly agree
The user’s requirements were well (Souder, Bouisson, and Garret [10];
This study has provided a detailed look at how each coun- understood. Song and Parry [17])
Customer Orientation
try succeeds in different ways. The influence of culture, eco- We took into consideration customers’ five-point, Likert-type scale
nomics, mores, social systems, and governments differen- problems with previous products Strongly disagree/strongly agree
tially impacts the relative importance placed on various when we designed this product. (Deshpande, et al. [12])
Customer needs were well defined and
determinants of new product success. While there are many taken into consideration in product
consistencies across countries (i.e., the dominance of market development.
Marketing Skills Adequacy
intelligence and customer orientation), there are differences Our market research skills were ideal five-point, Likert-type scale
that hold managerial implications. In addition to the impli- for this project. Strongly disagree/Strongly agree
cations of our results discussed within the Conclusions sec- Our salesforce skills were ideal (Cooper [1]; Song and Parry [16])
for this project.
tion, three primary implications bear repeating. Technical Skills Adequacy
First, it is clear that integration of teams is critical to Our manufacturing skills were at the five-point, Likert-type scale
gaining market intelligence, a customer orientation and desired level for this project. Strongly disagree/Strongly agree
Our engineering skills were at the (Cooper [1]; Song and Parry [16])
ultimately producing products that will be successful in desired level for this project.
the marketplace. Communication between team members Project Manager Skills
The project manager was able to five-point, Likert-type scale
becomes an essential part of the integration process.
motivate the team members. Strongly disagree/Strongly agree
Teams must be willing to listen to input from all mem- The project manager had a (Souder, Bouisson, and Garrett [10])
bers in order to produce successful products. participative management style. Song, Souder, and Dyer [23])
Top Management Support
Second, culture plays an important role in determining Top management was supportive of five-point, Likert-type scale
the type of employees that work for the firm. Some em- this project. Strongly disagree/Strongly agree
ployees need more managerial support and skill in order to Top management involvement in (Souder, Bouisson, and Garrett [10])
this project was very high. Song, Souder, and Dyer [23])
develop a customer orientation. Using tools such as Hof- Integration
stede’s individualism index provides a rationale why some What was the level of contact between five-point rating scale
countries are more likely to be customer oriented. Manag- the commercial and technical
entities? Very low/Very high
ers must pay attention to the cultural makeup of their teams. What was the level of information flow (Souder, Bouisson, and Garrett [10])
Otherwise, team members from different cultures may not between the commercial and Song and Parry [16]; Souder and
technical entities? Moenaert [29])
have a complete appreciation for the objectives of the team.
Finally, technical skills are important but not critical.
This is of course dependent on the orientation of the firm
and the culture of the country. Some cultures, for in-
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