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Influence of market orientation on performance: the moderating roles of customer participation breadth and depth in new product development

ABSTRACT With a greater number of B2B firms integrating customers into the new product development (NPD) process, how to utilize customer involvement in NPD is an important decision because it may be a double-edged sword carrying both bright and dark sides. Utilizing a sample of 193 B2B firms across various industries, we validate previous research that suggests market orientation positively influences NPD performance and subsequently examine how this relationship may either be enhanced or diminished contingent upon how customers are utilized in the NPD process. The results show that the market orientation–NPD performance relationship is enhanced by having customers participate in a greater number of activities throughout NPD (customer participation breadth) and diminished when customers are involved at deeper levels (customer participation depth). This research suggests that the exact involvement of customers is a critical decision and has clear implications for the dialogues about customer involvement and management of customer relationships.