Product launch, product advantage and market orientation in SMEs

Abstract

PurposeThe importance of new product development to the survival and success of firms is well supported in the literature; however, few studies have investigated new product development in small to medium‐sized enterprises (SMEs). This study aims to examine the impact of product launch, product advantage and market orientation on new product development performance and organisational performance in SMEs.Design/methodology/approachThis model was tested using data collected from 48 small and large sized firms in Ireland. Findings from 33 small and 15 large firms were compared, and a correlation analysis was used to establish the relationships defined in the model for both small and large firms.FindingsThe study identified several significant differences between the impact of product launch, product advantage and market orientation on new product development and organisational performance in small and large firms. It also indicated several areas in which small firms can improve their new product and organisational performance.Research limitations/implicationsThis research builds on prior empirical research that has established a positive link between customer and competitor orientation and performance of small firms.Practical/implicationsThe managerial implications suggest that managers need to place a greater emphasis on product launch proficiency, new product characteristics and market orientation.Originality/valueThe results show that a market orientation, as well as having a direct impact on organisational performance, also affects new product development activities.