How to improve new product performance

through customer relationship management

and product development management:
evidence from China
Jianhui Yan, Yu Zheng and Jiaxin Bao
Business School, Hunan University, Changsha, China
Chongyu Lu
Lubin School of Business, Pace University, New York, New York, USA
Yanhui Jiang and Zhi Yang
Business School, Hunan University, Changsha, China, and
Chulan Feng
Changsha Branch, Country Garden Holdings LTD, Changsha, China

Abstract
Purpose – This paper aims to investigate how to improve new product performance in turbulent circumstances of emerging economies.
Design/methodology/approach – This paper used regression analysis to examine the performance impact of customer relationship management
(CRM) and product development management (PDM) concentration strategy in new product development (NPD). A detailed contingent analysis of
the market and institutional environments in emerging economies is also conducted based on a survey of 114 Chinese high-tech manufacturers.
Findings – The research findings show that PDM has a stronger positive effect on new product performance than CRM in emerging economies and
that the contingent effects of the market and institutional environment vary. More specifically, technological turbulence and enforcement
inefficiency can positively moderate the relationship between CRM and new product performance, whereas the moderating effect of market
turbulence on CRM is negative. Meanwhile, enforcement inefficiency negatively moderates the effect of PDM on new product performance, while
the moderating effect of market turbulence on PDM is positive.
Research limitations/implications – This paper is limited to a survey of high-tech manufacturing enterprises in China. Further research should
continues to explore and document the strategic issue about NPD in emerging economies by longitudinal study.
Originality/value – This paper contributed to theoretical and practical initiatives on the strategic issue of NPD and provided firms a further
understanding of how to select the right NPD strategy in emerging economies to improve new product performance.
Keywords Emerging economy, New product development, Customer relationship management, Product development management,
Market and institutional environment
Paper type Research paper

1. Introduction
New product development (NPD) is strategically important for
firms. There is a consensus among academics and business
managers that to achieve success in NPD, both market
resources (e.g. customer knowledge) and technological
resources (e.g. technological knowledge) are crucial (Jin et al.,
2019; Molina-Castillo and Munuera-Aleman, 2009; Sethi
et al., 2012). Numerous studies have focused on the
performance effects of customer relationship management
(CRM) and product development management (PDM), a
distinction that reflects how firms develop their new products
(Fang and Zou, 2009; Srivastava et al., 1999). CRM refers to
the process by which firms acquire advantageous customer
knowledge. It refers to the extent to which a company seeks to
Funding: The authors acknowledge National Natural Science Foundation
of China: NSFC (71573079). The funding, HNSSKP (2017ZK3054)
from the Soft Science Key Project of Hunan Province; and HNNSF
(2018JJ3089) from the Natural Science Foundation of Hunan Province of
China, is highly related to this study, and it was also supported in part by
this project.

The authors thank the Editorial board, especially Editor Johnston, Wesley
The current issue and full text archive of this journal is available on Emerald and two anonymous reviewers for their constructive comments and
Insight at: https://www.emerald.com/insight/0885-8624.htm valuable suggestions.

Received 10 May 2019

Revised 15 October 2019
Journal of Business & Industrial Marketing 10 March 2020
© Emerald Publishing Limited [ISSN 0885-8624] 26 April 2020
[DOI 10.1108/JBIM-05-2019-0190] Accepted 28 April 2020
 How to improve new product performance
Jianhui Yan et al.
develop long-term relationships with its customers (Palmatier
et al., 2008; Sin et al., 2005). PDM involves a concentration on
advancing technology (Fang and Zou, 2009; Ramaswami et al.,
2009).
It is generally agreed that both CRM and PDM are essential
to a firm’s success in NPD (Jin et al., 2019). However, the
relationship between CRM or PDM and new product
performance varies substantially. For example, some studies
have shown new products developed through great leaps in
technology and/or market advantages are more likely to
generate significant benefits for the firms that develop them
(Bonner, 2010; Jin et al., 2019). At the same time, Matikainen
et al. (2016) found that a heavy emphasis on CRM in NPD can
be a limitation. McNally et al. (2010) suggested that firms can
hardly enjoy new product financial success through market
newness focused. Wang et al. (2013) found that firms find it
very challenging to benefit from PDM. These contradictory
findings have puzzled business managers. Meanwhile, due to
limited resources, in practice firms can generally only focus on
one of these two management concentrations in NPD to
acquire a competitive advantage.
Furthermore, firms already operating in emerging economies
and multinational companies that intend to expand into
emerging economies compete fiercely to access the huge and
increasingly valuable markets of emerging economies (Sheng
et al., 2011). They are concerned about how to achieve stronger
new product performance to occupy a dominant position while
facing increasingly intense competition. Meanwhile, the
economic environments and legal institutions of emerging
economies are changing rapidly as a consequence of economic
liberalization and the transition toward market systems (Sheng
et al., 2011; Zhou and Poppo, 2010). These factors create
severe challenges for firms. Numerous studies have, therefore,
focused on the strategic issues that firms encounter in emerging
economies (Gu et al., 2008; Johnson and Tellis, 2008; Sheng
et al., 2011). However, issues related to NPD in these contexts
have generally been overlooked.
Consequently, it is important to explore how to improve new
product performance through CRM and PDM in emerging
economies and, more specifically, how the success of these strategic
approaches is contingent on the market and institutional
environment. To meet our research objectives, we developed a
conceptual model based on the resource-based view of the firm
(RBV) and institutional theory (Figure 1) and collected our
research data via a survey in the Chinese high-tech
Figure 1 Conceptual model
Journal of Business & Industrial Marketing
manufacturing industry. We find that PDM has a stronger
positive effect on new product performance than CRM in
emerging economies and that the contingent effects of the
market and institutional environment vary. More specifically,
technological turbulence and enforcement inefficiency can
positively moderate the relationship between CRM and new
product performance, whereas the moderating effect of market
turbulence on CRM is negative. Meanwhile, enforcement
inefficiency negatively moderates the effect of PDM on new
product performance, while the moderating effect of market
turbulence on PDM is positive. With these findings, we make
three main contributions to the literature. First, we extend
recent research on NPD strategy by exploring and comparing
the performance effects of CRM and PDM from a
comprehensive perspective. It is theoretically important to
consider this issue. Second, we contribute to the emerging
economies-related research by focusing on NPD strategical
issue in emerging economies. Third, we empirically test the
contingent effects of market and institutional environments,
providing valuable insights of the strategic issues related to
NPD.
The remainder of this paper is organized as follows. Section 2
reviews the related research of CRM or PDM and strategic
issues in emerging economies. Section 3 develops and
assimilates these insights into our research hypotheses to study
our conceptual model. Section 4 provides an overview of the
methodology. Section 5 reports the results of our empirical
analysis. Section 6 concludes the paper with a discussion of
findings, implications, limitations and areas for future research.
2. Literature review
2.1 Customer relationship management and product
development management
NPD-related studies have paid considerable attention to the
performance impacts of CRM and PDM, which are distinct
approaches taken by firms to developing new products (Fang
and Zou, 2009; Srivastava et al., 1999). “CRM” refers to a
marketing management concentration for NPD, while “PDM”
refers to a technological management concentration (Fang and
Zou, 2009; Srivastava et al., 1999; Zablah et al., 2004).
According to the capability-based perspective, CRM improves
firms’ ability to respond to external market opportunities and
threats (Carbonell and Escudero, 2010; Li and Calantone,
1998; Lynn et al., 2003; Iyer et al., 2018; Song et al., 2013).
Such capability improvement gives firms a greater
understanding of expressed and latent customer needs,
enabling them to cut costs, enhance customer service and
thereby improve the performance of new products (Elvers and
Song; 2016; Lim et al., 2017; Nätti and Ojasalo, 2008; Rollins
et al., 2012a; Salojärvi et al., 2010). However, as a considerable
amount of time is required to analyze the huge volumes of
customer data available, the knowledge gained may be out of
date by the time it has been absorbed (Carbonell and Escudero,
2010; Li and Calantone, 1998; Zirger and Hartley, 1994).
Consequently, to enable firms to perform better in turbulent
environments, CRM-related capability improvement alone is
insufficient (Matikainen et al., 2016; Song et al., 2013). Firms’
ability to transform customer knowledge into superior products
or services offerings should also be enhanced (Ashrafi and
 How to improve new product performance
Jianhui Yan et al.
Ravasan, 2018; Bendapudi and Leone, 2003; Lindh and
Nordman, 2017; Preikschas et al., 2017; Zhang and Zhu,
2018). According to the RBV, the emphasis placed
on customers in CRM enables firms to enjoy competitive
customer relationships. Studies have shown that forging strong
customer relationships can enhance customer satisfaction
(Chan et al., 2010; Straus et al., 2016), customer loyalty,
including attitudinal loyalty (Auh et al., 2007) and behavioral
loyalty (Revilla-Camacho et al., 2015) and customer equity
(Chae and Ko, 2016). Studies have also explored the effects of
competitive customer relationship on firms’ performance (Ata
and Toker, 2012; Athaide and Klink, 2009; Carbonell and
Rodriguezescudero, 2014; Frambach et al., 2016; Li et al.,
2019) such as growth and profitability (Schmitz et al., 2020;
Witell et al., 2014), relationship satisfaction (Athaide et al.,
2019; Harindranath et al., 2019).
With regard to PDM, numerous studies using the RBV have
stressed that this form of management provides unique
technological resource advantages. Firms that adapt
to technological changes or even lead market changes through
technological development undoubtedly perform better in
terms NPD (Schoenecker and Swanson, 2002; Song et al.,
2005; Talke et al., 2011). More specifically, by providing
competitive new products that benefit from advanced
technology, PDM tends to stress the crucial role of
technological resources in overall product development
(Cohen and Levinthal, 1990). Firms that focus on PDM often
try to use technological resources that are not easily transferred
to increase production process efficiency and thus product
development speed (Chandy et al., 2006; Yalcinkaya et al.,
2007). Firms with considerable technological resources can
quickly apply technological innovation in practice, spurring the
development of new technologies, products and intellectual
property rights in related industries (Zahra and George, 2002).
However, the accumulation of competitive technological
resources through PDM requires considerable time and money
because technological resources are idiosyncratic, uncertain
and predominantly tacit (Danneels, 2002; Granstrand, 1998).
Therefore, firms find it challenging to benefit from
technological resources. Wang et al. (2013) found that focusing
on a few specific technological advantages can weaken a firm’s
sensitivity to new market fields, which limits the diversity of its
innovative products.
2.2 Studies in emerging economies
Recent studies have paid increasing attention to emerging
economies, which are experiencing rapid changes in their legal,
institutional and economic environments (Cannizzaro and
Weiner, 2018; Gu et al., 2008; Johnson and Tellis, 2008; Ju
et al., 2018; Walters and Saeed, 2003; Zhou and Poppo, 2010).
Prior studies have explored various strategic issues in emerging
market contexts, including the effect of branding on business
relationship development (Koporcic and Ivanovagongne,
2020), the impact of different strategic orientations on firm
performance (Jiang et al., 2019; Yao et al., 2019) and the
importance of relationship networks for firms (Chung, 2019;
Dadzie et al., 2017; Mandjak et al., 2019). A few recent studies
have also addressed NPD in emerging economies
(Fletcherchen et al., 2017). Based on these studies, other
research has focused on the external contexts influencing these
Journal of Business & Industrial Marketing
effects such as institutional and market environments (Liu
et al., 2019; Wang et al., 2019; Wu et al., 2019). Studies have
shown that the institutional environment both provides
opportunities for and imposes constraints on firms (Chan et al.,
2008; Estrin et al., 2018; Hernandez and Guillen, 2018; Liu
et al., 2019). More specifically, they have pointed to multiple
key elements of the institutional environment such as
deficiencies in legal enforcement (Berry et al., 2010; Cova et al.,
2019; Estrin et al., 2018; Yan et al., 2018). North (1990)
suggested that third-party legal enforcement is an essential
public good provided by governments and can be more
important than written codes in supporting an efficient
economic exchange system (North, 2005). When the legal
institutional framework fails to implement effective punitive
measures, illegal or unfair competitive practices such as false
advertising, piracy, breach of contract and counterfeiting will
prevail in the market and disrupt the economic order (Ho,
2001; Sheng et al., 2011). Researchers have emphasized the
contingent effects of a turbulent market environment in
emerging economies (Fang et al., 2011; Iyer, 2014; Siggelkow,
2002; Teece et al., 1997). For example, Qian et al. (2016)
stated that market turbulence enhances the effect of guanxi on
financial performance and weakens its effect on strategic
performance in China. Carbonell and Rodriguezescudero
(2014) found that the positive impact of customer knowledge
focused strategies on new service development is reduced in
technologically turbulent environments.
In summary, most NPD-related studies have separately
focused on CRM or PDM and discussed their effects based on
different perspectives. Their findings regarding the relationship
between CRM or PDM and new product performance have
thus varied substantially. It is theoretically important to explore
and compare the performance effects of CRM and PDM using
a comprehensive perspective. This is the key contribution of the
current study. Meanwhile, although existing studies have
increasingly focused on strategic issues in emerging economies,
they have overlooked NPD-related issues, which are
particularly risky in this uncertain context. Firms in emerging
economies are always not able to establish comprehensive plans
for NPD because their resources and focus are limited
(Hortinha et al., 2011). It is both practical and timely to analyze
the contingent effects of environmental factors in emerging
economies to advance understanding of NPD-related strategic
issues in this context. The findings in this area represent
another important contribution of this study.
3. Hypotheses development
3.1 Customer relationship management vs product
development management
Following related studies (Fang and Zou, 2009; Ramaswami
et al., 2009; Srivastava et al., 1998), we classify firms’ NPD
strategies as either CRM-focused or PDM-focused, a
distinction that reflects how firms approach NPD (Fang and
Zou, 2009; Srivastava et al., 1999). CRM describes a
concentration on the customer, in which firms provide
personalized products or services to customers, interact with
customers and, ultimately build and maintain relationships
with their customers to acquire advantageous customer
knowledge (e.g. customers’ needs and preferences) (Fang and
 How to improve new product performance
Jianhui Yan et al.
Zou, 2009; Ramaswami et al., 2009). PDM refers to a
concentration on technology knowledge, in which firms focus
on advancing technology through product prototypes, new
product solutions and manufacturing processes to provide
competitive new products with the greatest value and benefit
for customers (Fang and Zou, 2009; Ramaswami et al., 2009).
Firms that focus on CRM in NPD form a close relationship
with their customers, which provides a competitive advantage
(Morgan and Hunt, 1994; Sirdeshmukh et al., 2002). Based on
customer knowledge gathered from these close relationships,
firms can further interact with their customers to provide
personalized products or services and satisfy their
heterogeneous needs. This process requires considerable time
and money. Therefore, such close relationships with customers
are specific to firms that focus on CRM and are difficult for
competitors to replicate. Customers who have a close
relationship with a firm will be more susceptible to the firm’s
cross-selling and up-selling strategies (Srivastava et al., 1999).
A close relationship also facilitates the formation of brand
loyalty and thus a willingness to purchase the firm’s products at
a premium (Zhang et al., 2015). From the firm’s perspective, a
close relationship with customers enables it to more accurately
understand its customers (e.g. customer demands and
preferences) and produce more personalized products or
services and respond to changing needs to satisfy its customers.
These effects can considerably enhance the performance of a
CRM-focused firm’s new products.
Firms focused on PDM in NPD accumulate a large amount
of competitive technological resources (Fang and Zou, 2009;
Fang et al., 2011; Ramaswami et al., 2009). With competitive
technological resources, firms can continuously iterate and
update their products to improve quality and produce high-
quality new products (Wind and Mahajan, 1997).
Furthermore, through their concentration on advanced
technology development, PDM-focused firms optimize R&D
and manufacturing processes to reduce the cost and time of
NPD and ultimately improve their effectiveness and efficiency.
More importantly, firms with competitive technological
resources are more likely to become innovation leaders and
enjoy an enviable reputation in the industry (Fang et al., 2016).
It is beneficial for firms to form alliances, formal or informal,
with other firms in the industry. In other words, firms can
acquire external knowledge from these firms with a dominant
position to predict the future trends of products more
accurately and use that information to develop relevant
technology in advance (Zhou et al., 2005). These effects can
significantly enhance new product performance for PDM-
focused firms.
In summary, firms that emphasize CRM depend on an in-
depth knowledge of market activities to generate new market
insights and enhance customer benefits, whereas firms that
emphasize PDM invest heavily in R&D and manufacturing
activities to further exploit advanced technology for NPD
(Sorescu and Spanjol, 2008). Because new product
performance is inherently dependent on the ability to satisfy
customers’ needs and preferences (Fang and Zou, 2009), we
argue that PDM has a stronger positive effect on new product
performance than CRM for two reasons. First, it is crucial to
identify customers’ uniquely heterogeneous needs and
preferences for NPD. When focusing on PDM, firms can
Journal of Business & Industrial Marketing
identify customers’ tacit demands and preferences more
accurately by providing diversified products and then
continuously improving them with competitive technological
resources (Sorescu et al., 2003; Wind and Mahajan, 1997).
Consequently, these firms can achieve stronger new product
performance by fulfiling customers’ tacit demands and
preferences. In comparison, CRM-focused firms depend on
market activities to generate insights about their customers’
explicit needs and preferences. These insights might be out of
date by the time they have been absorbed (Carbonell and
Escudero, 2010; Zirger and Hartley, 1994) and more likely to
be replicated by competitors due to the declining costs of
customer interaction. Second, it is important to identify
existing customers’ new demands and potential customers’
preferences for new products. Firms that focus on CRM
concentrate on identifying new demands of existing customers
and are inevitably weaker at recognizing potential customers’
preferences. In contrast, PDM-focused firms rapidly adapt to
or even lead technological change, which can identify existing
customers’ new demands and potential customers’ preferences
by providing various types of products and continuously
improving them using their competitive technological resources
(Sorescu et al., 2003; Wind and Mahajan, 1997). Therefore, we
make the following hypothesis:
H1: PDM has a stronger positive effect than CRM on new
product performance.
3.2 Contingent effects of market and institutional
environment
Firms do not operate in a vacuum. Configuration theory
suggests that a firm’s performance depends on internal
arrangements such as firm strategies and its fit with the
dynamic environment (Fang et al., 2011; Siggelkow, 2002;
Teece et al., 1997). More specifically, prior studies argue that
the success of NPD strategies is contingent on the external
dynamic environment (Bowman and Gatignon, 1996; Kerin
et al., 1992). Following this perspective (Fang et al., 2011;
Sheng et al., 2011), in this research, we focus on the market
environment (i.e. market turbulence and technological
turbulence) and institutional environment (i.e. enforcement
efficiency) to study the performance impacts of the fit between
two distinct types of firm concentration (i.e. CRM vs PDM)
and representative environmental factors in NPD.
3.2.1 Moderating effects of market environment.
Prior studies emphasize the importance of external market
uncertainties such as market opportunities and risks
(Rindfleisch and Heide, 1997; Sheng et al., 2011) in NPD. In
other words, different external market opportunities and risks
affect the performance impacts of CRM and PDM
considerably differently. Following previous research (Jaworski
and Kohli, 1993; Wheelwright and Clark, 1992), we investigate
the moderating effects of the market environment, including
market turbulence and technological turbulence because they
represent the dynamic external characteristics that affect firms,
generating numerous opportunities and risks in NPD.
Market turbulence refers to the rate at which consumer
demand and preferences change in a market (Jaworski and
Kohli, 1993). In a market with high turbulence, firms are
 How to improve new product performance
Jianhui Yan et al.
confronted with instability and unpredictable consumer
preferences and expectations (Sheng et al., 2011). In such
conditions, intensive customer knowledge is particularly
valuable to firms in helping them to develop new products that
appeal to changing customer demands (Rindfleisch and
Moorman, 2001). Consequently, firms that focus on CRM in
NPD can understand their customers’ needs and preferences
faster and more accurately than competitors because they
acquire and accumulate intensive customer knowledge by
continuously interacting with customers to build and maintain
relationships with them. This knowledge can be used to create
value for customers and improve new product performance. In
contrast, when firms are confronted with a low-turbulence
market, consumer preferences and expectations are relatively
stable and predictable. Intensive customer knowledge is less
helpful in this condition. As such, firms with a CRM
concentration in NPD cannot achieve competitive new product
performance through in-depth marketing activities.
Furthermore, in a more turbulent market environment,
technological knowledge accumulated by focusing on PDM in
NPD appears more important for two reasons. First, innovative
products are more likely to be favored by customers in a market
with high turbulence (Simonson, 2005). Second, firms with
advanced technological knowledge can produce innovative
products to exploit customers’ tacit demands and preferences
to lead the future of the market (Johnson et al., 2005). In such
conditions, firms with a PDM concentration can achieve better
new product performance by providing customers with
innovative products and services beyond their unstable and
unpredictable expectations. However, in a market with low
turbulence, advanced technological knowledge is less valuable
because firms can use existing technology to fulfill customers’
stable and predictable demands and preferences. While firms
that devote great efforts to PDM can also meet the needs of
customers, their advanced technological knowledge may be
redundant and costly. We argue that this redundant and costly
knowledge may eliminate the positive performance impact of
the PDM concentration in NPD. Therefore, we predict that:
H2: Market turbulence positively moderates the relationship
between CRM and new product performance.
H3: Market turbulence positively moderates the relationship
between PDM and new product performance.
Technological turbulence refers to the speed of change and
unpredictability of technology in a specific industry (Sheng
et al., 2011). A rapidly changing technological environment
pushes firms to continuously update their products to seize
opportunities or risk being squeezed out of the market (Li and
Calantone, 1998). In such conditions, customers consider
purchasing constantly updated products to be a relatively high-
risk activity, so they rely more on previous relationships with
firms when making purchase decisions to reduce the perceived
risk (Reinartz et al., 2004). Therefore, firms that focus on CRM
in NPD benefit from competitive relationships with their
customers to achieve better new product performance (Fang
and Zou, 2009). In contrast, when the degree of technological
turbulence is low, confronted with products that consist of
relatively stable and predictable technology, customers’
Journal of Business & Industrial Marketing
purchase-related risk is relatively low. As such, the competitive
advantage of customer relationships is less salient.
Moreover, a rapidly changing technological environment not
only shortens the life cycle of new products but also accelerates
the replacement of existing technological and innovative
knowledge. In other words, existing technological and
innovative knowledge accumulated by firms is rapidly squeezed
out (Sheng et al., 2011). Consequently, the competitive
advantage of technological and innovative knowledge is less
salient in a rapidly changing technological environment.
However, when technological turbulence is low, firms that have
accumulated competitive technological and innovative
knowledge will have a superior long-term competitive
advantage because a lot of time and money are required to
develop a PDM concentration in NPD, and thus, it is specific
to the firm and difficult for competitors to imitate or surpass. In
such conditions, firms with a PDM concentration in NPD will
achieve better performance. Therefore, we predict that:
H4: Technological turbulence positively moderates the
relationship between CRM and new product
performance.
H5: Technological turbulence negatively moderates the
relationship between PDM and new product
performance.
3.2.2 Moderating effects of institutional environment
Institutional theory suggests that institutions support the
effective functioning of the market mechanism (North, 1990).
Accordingly, studies show that legal enforcement, an essential
public good that governments provide (North, 1990), is more
important than written codes in supporting the efficiency of the
market exchange system (North, 2005; Sheng et al., 2011).
Without effective institutional enforcement, illegal or unfair
competitive behaviors such as piracy, false advertising and
counterfeiting, will prevail in the market and disturb the
economic order (Ho, 2001). Moreover, in such conditions, it is
difficult for firms to achieve protection against such illegal or
unfair competitive behaviors through normal legal processes
and third-party legal enforcement (McMillan and Woodruff,
1999). Furthermore, even though Chinese formal institutions
have undergone great changes and become more and more
efficient, as China’s opening-up (Hoskisson et al., 2000),
institutional enforcement still encounters huge challenges
(Luo, 2007). Consequently, we examine the moderating effect
of enforcement inefficiency on the relationship between CRM/
PDM and new product performance.
Enforcement inefficiency refers to the degree to which the
enforcement of institutions is problematic (Sheng et al., 2011).
In a market with inefficient institutional enforcement, piracy
and counterfeit products are a continuous problem. Customers
regard purchasing as a relatively high-risk activity in such a
market. To reduce the perceived purchasing risk, customers
rely more on previous relationships with firms (Reinartz et al.,
2004). Therefore, the competitive benefits of close customer
relationships are more relevant in such conditions (Fang and
Zou, 2009). In other words, firms that focus on CRM in NPD
will achieve better new product performance. In contrast, when
legal institutional frameworks are able to impose effective
 How to improve new product performance
Jianhui Yan et al.
punishments, firms are more likely to rely on legal methods to
compete in the market. In such conditions, the competitive
advantage of close customer relationships appears more silent.
In addition, without efficient institutional enforcement, firms
cannot enjoy the competitive advantage of advanced
technological and innovative knowledge because competitors
can easily violate intellectual property rights (Ho, 2001; Sheng
et al., 2011). In other words, advanced technological and
innovative knowledge accumulated by firms is not only costly
but also difficult to translate into better new product
performance in such conditions. However, when legal
institutional frameworks impose efficient punishments, piracy
and counterfeiting are punished. Consequently, firms that have
accumulated competitive technological and innovative
knowledge are in a superior position because having devoted a
lot of time and money to PDM in NPD, it is difficult for
competitors to imitate or surpass. In such conditions, firms
with a PDM concentration in NPD will achieve better
performance. Therefore, we predict that:
H6: Enforcement inefficiency positively moderates the
relationship between CRM and new product
performance.
H7: Enforcement inefficiency negatively moderates the
relationship between PDM and new product
performance.
4. Research methodology
4.1 Sample and data collection
To test our hypotheses, we chose Chinese high-tech
manufacturing firms as our research context for several reasons.
First, Chinese firms are a suitable context for studying strategic
issues in emerging economies (Sheng et al., 2011). Second, the
manufacturing sector is the preferred empirical context for
investigating innovation and NPD-related topics (Fang et al.,
2011; Yang et al., 2018). Third, the strategic trade-off between
CRM and PDM in NPD is especially important for high-tech
manufacturing firms because they are innovation-focused and
technologically intensive (Yang et al., 2018). Fourth, the
Chinese Government views high-tech industries as strategically
important and supports these firms with preferential policies
(Sheng et al., 2011). As shown in Table 1, according to the
National Bureau of Statistics of China, the Chinese high-tech
manufacturing industry has grown dramatically over the past
few decades. The number of high-tech manufacturing
enterprises reached 30,798 and made up 8.66% of all Chinese
manufacturing enterprises at the end of 2016. Therefore, it is
salient for high-tech manufacturing enterprises to consider how
to improve new product performance through CRM and PDM
in a dynamic market with institutional opportunities and risks.
Table 1 Development of Chinese high-tech and manufacturing industries
2000
Number of high-tech Manufacturing enterprises (Unit) 9,835
Number of manufacturing Enterprises (unit) 148,279
Proportion (%) 6.63
Journal of Business & Industrial Marketing
Consequently, we focused on the Chinese high-tech
manufacturing industry.
Based on the Hunan Provincial Bureau of Statistics, there
were 2,212 high-tech manufacturing enterprises in Hunan
province. Of these, we randomly selected 400 as our research
sample pool. We obtained contact details for the selected
enterprises from the district firm management committee.
After directly explaining our research purpose and content to
the high-level managers of these 400 enterprises by telephone
and e-mail, we received 184 responses. We subsequently visited
the firms in person to ensure that the information given was
true and to eliminate completion mistakes and failures.
Moreover, to reduce common method bias, we used the
double-informant questionnaire approach by sending the same
questionnaire to both the general manager and the product
manager in each firm. The responses from different informants
showed no systematic difference, thereby eliminating concerns
about common method bias. Ultimately, 152 responses were
collected within a month and a half (a response rate of
82.61%). In total, 38 cases were eliminated because over 6% of
the values were missing. Thus, 114 valid questionnaires were
left, constituting 75% of the total responses. The sample is
described in detail in Table 2.
4.2 Measurement
To ensure the validity and reliability of the constructs in this
research, our questionnaire was developed from previous
studies and extensive field interviews. We first used items from
previous-related research and then conducted translation and
back-translation (English – Chinese – English) with the
collaboration of marketing and management experts to ensure
the validity of the translation in a cross-cultural setting. All of
the items were measured on seven-point Likert-type scales
ranging from “strongly disagree” (Ahuja, 2000) to “strongly
agree” (Carson et al., 2004). We also conducted pretests
through personal interviews with 20 managers from 10 firms
(two senior executives from each firm) in China before
undertaking the survey. We asked them to express their
understanding of the concepts of CRM and PDM and to
describe the implementation of CRM and PDM in their firms.
The results showed a significant correspondence between the
respondents’ descriptions and the definitions of our variables in
the literature, further mitigating concerns about common
method variance in this research. Furthermore, nearly all of the
managers viewed the trade-off between CRM and PDM as an
important strategic issue.
4.2.1 Customer relationship management
To measure CRM, we used five items developed by Srivastava
et al. (1999) and Fang and Zou (2009) to ask informants to
indicate the implementation level of CRM in their firms
compared with their competitors. The items were as follows:
2005 2013 2014 2015 2016
17,527 26,894 27,939 29,631 30,798
251,499 343,584 352,365 358,665 355,518
6.97 7.83 7.93 8.26 8.66
 How to improve new product performance Journal of Business & Industrial Marketing
Jianhui Yan et al.

Table 2 Sample companies (N = 114)

Characteristics Category Frequency Proportion (%)
Firm industry Telecommunications equipment 5 4.4
Computer equipment 18 15.8
Other electronic equipment 20 17.5
Transportation equipment 5 4.4
Instruments 4 3.5
Office equipment and supplies 4 3.5
Electronic engineering 16 14.0
Other 42 36.9
Firm type State-owned 9 7.9
Privately-owned 72 63.2
Joint-stock 30 26.3
Overseas-funded 3 2.6
Firm age 1-5 years 61 53.5
5-10 years 26 22.8
10-20 years 19 16.7
20-30 years 4 3.5
over 30 years 4 3.5
Firm size less than ¥100m 91 79.8
¥100m-¥500m 13 11.4
¥500m-¥1bn 4 3.5
¥1bn-¥5bn 5 4.4
over ¥5bn 1 0.9

“firms develop CRM to segment customers and increase the
value of customers,” “firms develop CRM to obtain and retain
customers,” “firms develop CRM to improve the satisfaction of
customers and customer retention rate,” “firms develop CRM
to reduce cost” and “firms develop CRM to segment customers
and reduce costs.”
4.2.2 Product development management.
Six items adapted from Srivastava et al. (1999) and Fang and
Zou (2009) were used to measure the level of implementation
of PDM, comprising “firms develop PDM to augment the
quality and innovativeness of products,” “firms develop PDM
to design tentative new product solutions,” “firms develop
PDM to develop new solution prototypes,” “firms develop
PDM to identify and manage internal functional/departmental
relationships,” “firms develop PDM to develop and sustain
networks of linkages with external organizations,” and “firms
develop PDM to coordinate product design activities to speed
up business processes.”
4.2.3 New product performance
Related studies have considered effectiveness and efficiency to
evaluate the overall performance of NPD (Brettel et al., 2011;
Mauerhoefer et al., 2017). While effectiveness measures the
extent to which new products meet firms’ sales and profitability
targets (Mauerhoefer et al., 2017), efficiency reflects the speed
of new products from initial development to introduction into
the marketplace (Fang, 2008). Consequently, following this
body of literature, the dependent variable – new product
performance – was measured using a performance scale
adapted from Gatignon and Xuereb (1997). The informants
were asked to assess the overall level of new product
performance compared with their major competitors over the
past three years in terms of launch frequency, competitive
advantages, sales volume and the return on assets (ROA) of
new products.
4.2.4 Moderating variables
The moderating variables were market turbulence,
technological turbulence and enforcement inefficiency. Market
turbulence and technological turbulence were measured using
a three-item scale adapted from Jaworski and Kohli (1993).
The informants were asked to assess the rate of change in their
customers’ demands and the technology life cycle. Regarding
enforcement inefficiency, we used a four-item scale developed
by Li and Atuahene-Gima (2001), including “unlawful
competitive practices such as illegal copying of new products,”
“counterfeiting of your firm’s own products and trademarks by
other firms,” “ineffective market competitive laws to protect
your firm’s intellectual property” and “increased unfair
competitive practices by other firms in the industry.”
4.2.5 Control variables.
Consistent with previous research (Fang et al., 2011; Yang
et al., 2018), we used firm characteristics as control variables to
account for differences between firms that may affect new
product performance such as firm type, firm age and firm size.
To test the reliability and validity of our multi-item
measures, we performed several checks before testing the
hypotheses. We first used Cronbach’s alpha coefficients to
assess the reliability of our measures. The results ranged from
0.75 to 0.93 and reached the standard 0.7 Cronbach’s alpha
level proposed by Devellis (1991) and Nunally (1978). This
provides statistical evidence about the scale reliability of our
measures. Subsequently, to test the unidimensional and
convergent validity of each construct, we conducted
exploratory factor analysis and confirmatory factor analysis.
Each factor loading was positive and significant at the 0.01
 How to improve new product performance Journal of Business & Industrial Marketing
Jianhui Yan et al.

level, indicating that these items were responsive to changes in
the underlying constructs measured (Bagozzi and Yi, 1988).
Finally, to assess the discriminant validity of our measures, we
calculated the squared correlations between the latent
variables, followed by a comparison with the square root of
average variance extracted (AVE) of each construct. The
results show that the square root of AVE for each construct
ranged from 0.64 to 0.73, greater than the standard 0.5 level,
providing statistical support for the discriminant validity of our
measures (Fornell and Larcker, 1981). Table 3 reports the
construct, definitions and measures. The items, factor loading
and scale reliability and validity are described in detail in
Appendix.
5. Data analysis and results
Because our model incorporates interaction effects between the
NPD strategy (i.e. CRM and PDM) and market environmental
and institutional factors, there might be some endogenous
concerns.According to Hamilton and Nickerson (2003), two-
and three-stage regression methods can correct for these
endogenous concerns when both strategy (i.e. CRM and
PDM) and performance are continuous. Similar approaches
had also been used in related studies (Sheng et al., 2011;
Slotegraaf et al., 2003). Therefore, we used a three-stage
hierarchical regression model to test our hypotheses. Before the
regression analysis, we mean-centered each scale used to
construct the interaction terms to mitigate potential multi-
collinearity and clarify the interaction effects (Toothaker et al.,
1994). We report the descriptive statistics and correlations in
Table 4. The results show a significant correlation (0.78)
between CRM and PDM. Nevertheless, there were inherent
differences in their definition and sub-processes. Moreover, the
maximum value of variance inflation factor in our model was
6.68, far below the commonly accepted threshold of 10, further
eliminating concerns about multi-collinearity in our research.
We report the results of our regression analysis with new
product performance as a dependent variable in Table 5. We
performed the standard model accounting for controls (Model
1) and then sequentially enriched the model by including the
main effect (Model 2), the interaction effect of CRM and PDM
(Model 3) and moderating effect (Model 4). The R2 value
significantly increased, by 40% from Models 1 to 2 and 17%
from Models 2 to 4, suggesting that our hypothesized model fits
the data well. For H1, the results in Model 2 indicated a
statistically non-significant positive effect of CRM ( b = 0.02,
p > 0.1) and a significantly positive effect of PDM ( b = 0.37,
p < 0.01) on new product performance. The results of our
estimation for H1 in Model 3 were consistent. In Model 3 the
effect of PDM on new product performance was significantly

Table 3 Constructs, definitions and measures

Constructs Definitions Measures
New product performance Overall performance of new products Four-item measure of new products’ launch frequency/
competitive advantages/sales volume/ROA
CRM Overall level of concentration on customer during NPD Five-item scale developed by Srivastava et al. (1999) and
process Fang and Zou (2009)
PDM Overall level of concentration on technology during NPD Six-item scale adapted from Srivastava et al. (1999) and
process Fang and Zou (2009)
Market turbulence The rate at which consumer demand and preferences Three-item scale adapted from Jaworski and Kohli (1993)
change in a market
Technological turbulence The speed of change and unpredictability of technology in a Three-item scale adapted from Jaworski and Kohli (1993)
specific industry
Enforcement inefficiency The degree to which the enforcement of institutions is Four-item scale developed by Li and Atuahene-Gima (2001)
problematic
Firm type Firm ownership One item asking whether the firm is state-owned/privately-
owned/joint-stock/overseas-funded
Firm age Time since establishment of the firm One item asking how long age the firm was established
(3 years/5 years/10 years/20 years/over 30 years)
Firm size Value of firm’s capital resources (Yuan) One item asking how many resources the firm possesses
(less than ¥100m/¥500m/¥1bn/¥5bn/over ¥5bn)

Table 4 Descriptive statistics and correlations

Variables Mean SD 1 2 3 4 5 6
1. New product performance 4.73 1.08 1
2. CRM 5.27 1.24 0.27 1
3. PDM 5.39 1.05 0.33 0.78 1
4. Market turbulence 4.32 0.99 0.18 0.06 0.05 1
5. Technological turbulence 5.28 0.96 0.31 0.59 0.55 0.40 1
6. Enforcement inefficiency 4.77 1.33 0.24 0.29 0.31 0.44 0.37 1
 
Notes: p < 0.05; p < 0.01.
 How to improve new product performance Journal of Business & Industrial Marketing
Jianhui Yan et al.

Table 5 Results of regression analysis: new product performance as dependent variable

Model 1 Model 2 Model 3 Model 4
b t-value b t-value b t-value b t-value
Direct effects
CRM 0.02 0.14 0.02 0.12 0.17 1.25
PDM 0.37 2.74 0.37 2.78 0.21 1.62
Market turbulence 0.34 3.48 0.35 3.56 0.24 2.35
Technological turbulence 0.19 1.68 0.20 1.77 0.22 2.02
Enforcement inefficiency 0.61 6.45 0.60 6.38 0.56 4.94
Moderating effects
CRM 3 PDM 0.06 0.82 0.08 1.11
CRM 3 market turbulence 0.25 1.68
PDM 3 market turbulence 0.33 2.34
CRM 3 technological turbulence 0.32 2.80
PDM 3 technological turbulence 0.02 0.15
CRM 3 enforcement inefficiency 0.48 2.50
PDM 3 enforcement inefficiency 0.57 4.17
Control variables
Firm type 0.02 0.23 0.07 0.84 0.06 0.78 0.10 1.34
Firm age 0.03 0.29 0.04 0.48 0.04 0.44 0.01 0.10
Firm size 0.02 0.20 0.04 0.43 0.04 0.45 0.01 0.07
R2 0.002 0.40 0.40 0.57
Adjust R2 0.03 0.35 0.35 0.51
F 0.07 8.63 7.72 8.83
  
Notes: N = 114. p < 0.1; p < 0.05; p < 0.01

positive ( b = 0.37, p < 0.01), while the effect of CRM was
statistically non-significant ( b = 0.02, p > 0.1). Moreover,
the interaction effect of CRM and PDM was non-significant
( b = 0.06, p > 0.1). Consequently, H1 was proven. The
positive effect of PDM on new product performance was
statistically stronger than that of CRM.
In regard to the hypothesized moderating effect of market
turbulence, the results of Model 4 revealed a significantly
negative interaction between market turbulence and CRM
(b = 0.25, p < 0.1) and thus did not support H2. Figure 2
showed that CRM had a positive effect on new product
performance at low levels of market turbulence, but a slightly
negative effect at high levels. Therefore, H2 was not proven.
However, the results of Model 4 showed that the statistically
significant interaction between market turbulence and PDM was
positive ( b = 0.33, p < 0.05), in support of H3. Figure 3
indicated a slightly negative effect of PDM on new product
performance at low levels of market turbulence, but a positive
effect at high levels. Consequently, H3 was proven. In other
words, market turbulence significantly strengthened the positive
effect of PDM (but not CRM) on new product performance.
Regarding the moderating effect of technological
turbulence, as shown in Model 4, the positive interaction
between technological turbulence and CRM was statistically

Figure 2 Interaction effect of CRM and market turbulence Figure 3 Interaction effect of PDM and market turbulence
 How to improve new product performance Journal of Business & Industrial Marketing
Jianhui Yan et al.

significant ( b = 0.32, p < 0.01), in support of H4. Figure 4 Figure 6 Interaction effect of CRM and enforcement inefficiency
showed that CRM had a slightly negative effect on new
product performance at low levels of technological
turbulence, but a positive effect at high levels. Therefore, H4
was proven. However, the results of Model 4 revealed a
statistically non-significant interaction between
technological turbulence and PDM ( b = 0.02, p > 0.1),
providing no support to H5. As shown in Figure 5,
compared with high levels of technological turbulence, the
positive effect of PDM on new product performance was
similar at low levels. Consequently, H5 was not proven.
Technological turbulence significantly enhanced the
relationship between CRM (but not PDM) and new product
performance.
In regard to the moderating effect of enforcement
inefficiency, the results of Model 4 revealed a significantly
positive interaction between enforcement inefficiency and
CRM ( b = 0.48, p < 0.05), supporting H6. Figure 6
showed that CRM had a negative effect on new product
performance at low levels of enforcement inefficiency, but a statistically significant ( b = 0.57, p < 0.01), supporting
positive effect at high levels. Therefore, H6 was proven. H7. Figure 7 indicated a positive effect of PDM on new
Meanwhile, as shown in Model 4, the negative interaction product performance at low levels of enforcement
between enforcement inefficiency and PDM was inefficiency, but a negative effect at high levels.
Consequently, H7 is correct. These results suggest that
Figure 4 Interaction effect of CRM and technological turbulence enforcement inefficiency positively moderates the
relationship between CRM and new product performance
and negatively moderates the positive effect of PDM on
new product performance.

6. Discussions and conclusions

6.1 Summary of findings
Because of rapid changes in economic environments and legal
institutions, firms in emerging economies are confronted with
significant challenges (Sheng et al., 2011; Zhou and Poppo,
2010). Selecting the right NPD strategy is crucial.
Unfortunately, although studies suggest that CRM and PDM
are both important for the success of new products, studies
have generally not compared the two (Bonner, 2010; McNally
et al., 2010; Molina-Castillo and Munuera-Aleman, 2009; Jin
et al., 2019). This study compares CRM and PDM in NPD. It

Figure 7 Interaction effect of PDM and enforcement inefficiency

Figure 5 Interaction effect of PDM and technological turbulence
 How to improve new product performance
Jianhui Yan et al.
also presents a detailed contingent analysis of market and
institutional environments in emerging economies to establish
the moderating effect of different contexts. The empirical
research data is sourced from a survey conducted in the
Chinese high-tech manufacturing industry.
Our findings suggest that PDM has a stronger positive effect
than CRM on new product performance. We believe that when
focusing on PDM, firms can identify existing customers’ tacit
preferences and potential customers’ demands simultaneously
(Sorescu et al., 2003) and improve the efficiency of NPD
(Chandy et al., 2006; Yalcinkaya, et al., 2007). In contrast,
firms with a CRM concentration can only rely on market
activities to generate insights about existing customers’ explicit
needs and preferences. This is also the reason why McNally
et al. (2010) suggested, market advantages can negatively affect
the performance of new products.
We also measure the contingent effects of the turbulent
environment of emerging economies. More specifically, we
consider market turbulence and technological turbulence as
representative of the market environment and enforcement
inefficiency as representative of the institutional environment.
We find that market turbulence positively moderates the effect
of PDM on new product performance, while the contingent
effect on CRM is negative. We believe that these results further
support our argument that PDM has a stronger positive effect
than CRM on new product performance in emerging
economies with turbulent market environments. We argue that
firms are confronted with instability and unpredictable
consumer preferences and expectations in a high-turbulence
market (Sheng et al., 2011). In such conditions, it is difficult for
firms to translate detailed customer knowledge into stronger
new product performance, as customer demands and
preferences-related knowledge that acquired from CRM
change rapidly (Carbonell and Escudero, 2010). In contrast,
innovative products produced by PDM-focused firms that have
accumulated advanced technological knowledge are more
likely to be favored by customers in such a market (Simonson,
2005).
With respect to the contingent effect of technological
turbulence, we find that technological turbulence positively
moderates the performance impacts of CRM, but not PDM.
These results further confirm our argument that technological
turbulence can enhance customers’ perceived purchase-related
risks and thus increase the competitive benefits of customer
relationships (Reinartz et al., 2004). In addition, we suggest
that even though technological turbulence accelerates the
replacement of existing technological knowledge, firms can still
provide customers with diversified products to meet their
heterogeneous demands and thus capture potential market
opportunities more accurately than competitors (Sorescu et al.,
2003). This is also the reason why the negative contingent
effect of technological turbulence on PDM is statistically non-
significant.
We find that enforcement inefficiency positively moderates
the performance impacts of CRM and negatively moderates the
performance impacts of PDM. This supports our argument
that legal enforcement is more crucial than written codes in
supporting the efficiency of a market exchange system (Sheng
et al., 2011). In such an institutional enforcement inefficiency
conditions, consumers perceive relatively higher purchasing
Journal of Business & Industrial Marketing
risks and firms are confronted with difficulty to obtain
protection from the government about their advanced
technological knowledge. Therefore, firms that focus on CRM
in NPD will perform better than firms with a PDM
concentration. These results highlight the unique mechanism
underlying enforcement inefficiency and further support the
argument that it is necessary to distinguish the effect of
different institutional elements (Yan et al., 2018).
6.2 Theoretical implications
We make a number of unique theoretical contributions to the
literature. First, we extend recent research on NPD strategies
by exploring and comparing the performance effects of CRM
and PDM using a comprehensive perspective. Although a
consensus has been reached that marketing management and
technological management are both important to the success of
new products, related studies have separately focused on CRM
or PDM and explored their effects based on different
perspectives (Bonner, 2010; McNally et al., 2010; Jin et al.,
2019). They have thus yielded mixed results regarding the
performance impacts of CRM and PDM. Our findings suggest
that technological resources are more important than market
resources in ensuring the success of NPD. We argue that this is
an important research area that deserves further attention, as a
heavy emphasis on CRM could be a limitation.
Second, we contribute to research on emerging economies
by focusing on NPD-related strategic issues in emerging
economies. Firms in emerging economies face severe
challenges because of rapid changes in the economic
environment and legal institutions brought about by economic
liberalization and the transition toward market systems (Sheng
et al., 2011; Zhou and Poppo, 2010). These issues have
attracted a great deal of attention in marketing and strategic
research (Gu et al., 2008; Johnson and Tellis, 2008; Sheng
et al., 2011). However, the crucial issue of choosing an
appropriate NPD strategy, which is particularly risky in this
turbulent circumstance, has been overlooked. Consequently, it
is both theoretically and practically important and urgently
necessary to consider the impact of NPD-related strategic
issues on firms in emerging economies.
Third, we empirically test the contingent effects of
environmental factors based on the RBV and institutional
theory, thereby advancing understanding of strategic issues
related to NPD in emerging economies. More specifically, we
empirically explore the moderating effects of market
turbulence, technological turbulence and enforcement
inefficiency, which characterize the market and institutional
environments of emerging economies. Our findings suggest
that although relationship and technological resources have a
direct effect on NPD performance, firms should configure
these resources optimally in the appropriate environment.
Although our research provides only a snapshot of current
market and institutional environments, we believe that our
findings, in combination with those of prior studies, provide
valuable insights into this important research area.
6.3 Managerial implications
Emerging economies create new opportunities for companies.
Existing firms in these markets and multinational companies
seeking to expand into them devote considerable resources to
 How to improve new product performance
Jianhui Yan et al.
achieve better new product performance. However, the
dynamic markets and institutional environments of emerging
economies create severe challenges for both types of firm. To
date, few studies have explored this area. Contradictory
findings have been obtained regarding this strategic issue,
further puzzling B2B business managers. We believe that our
research findings provide valuable insights for these managers.
We also provide some suggestions for the governments of
emerging economies.
For B2B business managers, we strongly suggest that a heavy
emphasis on CRM in NPD in emerging economies might be a
limitation. PDM deserves more emphasis than CRM. Our
results highlight that although CRM is important, it depends
on how customer relationship resources are used (Rollins et al.,
2012a, 2012b). Customer relationships are more complex in
the B2B market than the B2C market, as they are developed at
multiple levels within and outside firms (Cortez and Johnston,
2017; Rollins et al., 2012a). Therefore, focusing on CRM in the
B2B market might create challenges for firms such as a loss of
control over NPD activities (Gruner et al., 2014). Furthermore,
firms have access to huge volumes of customer information in
today’s era of big data. The amount of redundant external
information entering and moving within firms overwhelms
analysts’ cognitive capacities (Jaworski et al., 2002). To
minimize the negative impact of customer information
overload, managers should carefully consider the generation
and utilization of such information (Delpechitre et al., 2019).
However, to secure their firms a dominant position, B2B
business managers in emerging economies should guide their
product development concentration strategy to adapt to
dynamic markets and institutional environments. More
specifically, firms should focus on PDM when market
turbulence is high because customer information may be out of
date by the time it has been transformed into products, while
innovative products produced by PDM-focused firms are more
likely to be favored by customers in such a market. In a market
with a high degree of technological turbulence, while both
PDM and CRM can enhance new product performance, firms
can perform better by strengthening their CRM concentration.
Customers perceive a high level of purchase-related risks in
such a market and are more likely to rely on relationships with
CRM-focused firms to purchase new products. When facing
inefficient legal enforcement systems, firms should focus on
CRM rather than PDM because it is difficult to improve new
product performance through advanced technological
knowledge in a market with significant illegal or unfair
competitive behavior such as piracy and counterfeiting.
We believe that our findings provide valuable insights for
governments of emerging economies such as China that seek to
regulate their markets to encourage innovation. The Chinese
Government views high-tech manufacturing industries as
strategically important and supports these firms by providing
preferential policies. We strongly argue that legal enforcement
is more effective than written codes in supporting the efficiency
of the market exchange system because inefficient legal
enforcement creates huge challenges for firms. More
specifically, we believe that governments should crack down on
illegal and unfair competitive behaviors such as piracy, false
advertising and counterfeiting. They should enhance market
supervision, protect intellectual property and strengthen the
Journal of Business & Industrial Marketing
efficiency of legal enforcement. They will thus provide a
relatively fair competitive environment in which for firms to
focus on PDM and build technologically innovative
knowledge. Moreover, in this competitive environment,
governments should increase subsidies or cut taxes to reduce
risks related to PDM-focused strategies for NPD, thus
improving firms’ performance and equipping them to
overcome the challenges and seize the opportunities presented
by the new global scientific and technological revolution.
6.4 Limitations and further research
Although our research provides new insights into the strategic
issue of NPD in emerging economies and contributes to both
theory and practice, it has some limitations that indicate
opportunities for future research. First, our sample is limited to
high-tech manufacturing enterprises in China. We argue that
emerging economies have a lot of features in common in terms of
their market and institutional environments and Chinese firms
are a suitable context for studying strategic issues in emerging
economies (Sheng et al., 2011). However, emerging economies
vary considerably in the stages of their economic and institutional
development. Further research could include a detailed
investigation to test the differing effects and verify our research
findings. Second, all of the variables in this study were measured
through a survey. The inevitable cross-sectional nature of our
research limits our findings regarding the causal linkages in our
conceptual model. Additional research projects could undertake
a longitudinal study to establish the causal linkages with greater
certainty and thus further verify our research findings.
Furthermore, to benefit from increasingly valuable markets,
firms want to know how to achieve better new product
performance in emerging economies. The CRM and PDM
concentrations in NPD are both crucial, but firms should adapt
their CRM or PDM concentration to their specific institutional
and market environment and exercise caution in their use of a
PDM concentration in certain conditions. Consequently, we
hope that further research continues to explore and document
institutional and market environment changes in emerging
economies, strategic choices of NPD concentrations and their
performance implications.
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Corresponding author
Yanhui Jiang can be contacted at: 155371038@qq.com
 How to improve new product performance Journal of Business & Industrial Marketing
Jianhui Yan et al.

Appendix

Table A1 Description of measurement scales

Constract Item Loadings Ca AVE CR
CRM
During the past three years, how do you rate your firm’s CRM compared with your major competitors: 5 0.92 0.63 0.89
1.Our firm develop CRM to segment customer and increase the value of customers CRM1 0.93
2.Our firm develop CRM to obtain and retain customers CRM2 0.90
3.Our firm develop CRM to improve the satisfaction of customers and customer retention rate CRM3 0.82
4.Our firm develop CRM to reduce cost CRM4 0.62
5.Our firm develop CRM to segment customer and reduce cost CRM5 0.66
PDM
During the past three years, how do you rate your firm’s PDM compared with your major competitors: 6 0.93 0.68 0.93
1.Our firm develop PDM to augment the quality and innovativeness of products PDM1 0.82
2.Our firm positively invest PDM to augment the quality and innovativeness of products PDM2 0.91
3.Our firm develop PDM to reduce cost PDM3 0.92
4.Our firm positively invest PDM to reduce cost PDM4 0.88
5.Our firm’s PDM responds to the market changes more quickly PDM5 0.68
6.Our firm’s PDM responds to the market changes more effectively PDM6 0.72
New product performance
During the past three years, how do you rate your firm’s overall level of new product performance
compared with your major competitors: 4 0.92 0.74 0.92
1. Launch frequency NPP1 0.80
2. Return on assets NPP2 0.89
3. Sales volume NPP3 0.93
4. Competitive advantages NPP4 0.84
Market turbulence
During the past three years: 3 0.75 0.56 0.79
1. In our kind of business, customers’ product preferences change quite a bit over time MT1 0.94
2. We are witnessing demand for our products and services from customers who never bought them MT2 0.69
before
3. It is very difficult to forecast where the demand of customers in our industry will be in the next MT3 0.67
five years
Technological turbulence
Over the past three years: 3 0.80 0.72 0.89
1. Technology in our industry is changing rapidly TT1 0.81
2. Technological changes provide big opportunities in our industry TT2 0.85
3. It is very difficult to forecast where technology in our industry will be in the next five years TT3 0.89
Enforcement inefficiency
Over the past three years: 4 0.87 0.64 0.87
1. Our industry has experienced some unlawful competitive practices such as illegal copying of new EI1 0.77
products
2. Our industry has experienced some unlawful competitive practices such as counterfeiting of your EI2 0.76
firm’s own products and trademarks by other firms
3. Our industry has experienced ineffective market competitive laws to protect firm’s intellectual EI3 0.74
property
4. Our industry has experienced increased unfair competitive practices by other firms in the industry EI4 0.91