Marketing Capability and Firm Performance: Mediating Role of New Product Development and Management Innovation

Abstract

Purpose: This study evaluated the functional relationship between marketing capability and firm performance of selected firms in FMCG-Rice/Pasta/Spaghetti category in Lagos State, Nigeria, more so, it assessed the indirect effect of new product development and management innovation capability on the relationship between marketing capability and firm performance.

Methodology: This study employed a cross-sectional survey design and a sample of 452 employees of eight manufacturers of Rice/Pasta/Spaghetti in Lagos State, Nigeria. The multiple regression analysis to test the mediation hypotheses was conducted.

Findings: The results show that marketing capability has a positive and significant effect on firm performance (R2 =0.414, β=.576, F (1,450) =317,344, t=17.814, p =0.000). Further analysis shows that when the interaction term new product development and management innovation was included in the model as a multiple regression analysis, (Adj. R2 = 0.579, F(2,449) =344,864 p =0.000) reveals that while the coefficient of the interaction term of NPD & MI had significant effect ( 0.080, t= 14.390, p= 0.000) on firm performance, the coefficient of marketing capability became insignificant ( 0.054, t= -1.046, p= 0.296) suggesting that a full mediation effect is  established.

Implications: The findings suggest that marketing capability benefit firms' performance through developing new products and innovative management processes. Given this result, the firms should strengthen their commitment to develop new product and adopting innovative management process. Both can serve as strategies in responding to changing customer taste, internal-firm work relationships, disrupt competitive rivalry in new product development, and position the firms' marketing capability to achieving significant superior performance. Also, it is imperative for management to possess the knowledge to deploy ambidextrous marketing capability that would enable the firms to expand and explore market opportunities which facilitates achieving competitive advantage.