PRODUCT DEVELOPMENT CAPABILITIES: EXPLORING MEDIATING AND MODERATING LINKS BETWEEN INTERNATIONAL PRODUCT ADAPTATION AND INDUSTRIAL MANUFACTURERS’ BUSINESS PERFORMANCE

Abstract

Product development is the crucial marketing capability for successfully and sustainably bringing new or adapted products to the market. Throughout the process, companies face challenges in how to adapt their products to international unknown markets while simultaneously enhancing their business performance. Inconsistent and confusing results on this relationship dominate previous research. We argue that the realisation of the marketing strategy of international product adaptation can only be accomplished by relying on a firm’s product development capability. The mediating link between product adaptation and performance induced by the product development capability moderated by sales integration and information processing was examined and confirmed for industrial goods manufacturers for the first time, which advances marketing capabilities theory in approving that the implementation of marketing mix capabilities into marketing strategy, the integration of the sales function and the processing of market information display a performance augmenting effect. Our results show that firms have to evolve a strong product development capability in order to be able to successfully implement strategic international adaptation decisions.