Market Orientation Impact on Radical and Incremental Marketing Innovation: A Study of Saudi Arabia Hospital Marketing Efforts

Abstract

We conducted an empirical study to measure influence of market orientation on marketing innovation in hospitals in Saudi Arabia. The sample includes 109 hospital workers that have been identified as having an adequate knowledge of the subject of research. In particular we explain the impact of customer orientation, inter-functional orientation and competitor orientation on marketing innovation. Furthermore the moderating effects of centralization and formalization on those relationships are explained. The findings of our study suggest that there is an important role of market orientation for the successful implementation of innovation and business performance of hospitals in Saudi Arabia. The results indicated that there is a positive influence of customer orientation on radical innovation and incremental innovation, a strong positive impact of competitor orientation on incremental innovation and no significant impact regarding inter-functional coordination on both incremental and radical innovation. The moderating effect of centralization on market innovation and innovation proved to be insignificant and the formalization effect had a positive influence on the customer, competitor and inter-functional orientation and radical innovation relationship. Additionally our study is valuable (for the practice, and theory) as it assisted in developing and further elaborating the science of market orientation, particularly customer and competitor orientation and inter-functional coordination, and the influence on incremental and radical service which are relevant for the financial results of hospitals in Saudi Arabia. The contribution of this research was also to develop a conceptual and theoretical understanding on incremental and radical innovation in the effort to improve performance, especially for the Saudi Arabian hospitals. The practical implication of this study is the insight and the knowledge Saudi Arabian hospital managerial staff, in implementing the concept of market orientation in relation to innovation and overall hospital performance.