Relationship between Export Market Orientation and Firm Innovation.

Pearson‟s correlation analysis revealed that there is a significant positive and strong
relationship between export market orientation and firm innovation implying that export
market orientation has an impact on stimulation of firm innovation.
The findings are consistent with the observations of Salavou (2002) who argued that
innovativeness largely depends on the firm‟s willingness to adopt export market oriented
strategies of generating relevant market information, disseminating the information and
acting upon it. In addition, to ascertain the strong relationship between export market
orientation and firm innovation, authors such as Pelham & Wilson (1996) observed that
market responsive firm‟s display a higher commitment towards rapidly evolving
customer needs and constantly seek to ensure their satisfaction by offering more radical
product innovations. Further more Salavou (2002) and Elenal (2009) argued that such
response leads to production of products with greater value to customers thus
strengthening the firm‟s competitive position and ultimately resulting in higher levels of
profits. These finding are further supported by Hurley & Hult (2004) who asserted that
market orientation may be very important in today‟s rapidly changing environment since
firms may need information to respond to customer needs and preferences by introducing
new and modified products, systems and processes that can offer more value.

Firm Innovation and Firm’s Export Performance.

The findings revealed that there is a positive and strong relationship between firm
innovation and firm‟s export performance. This is in agreement with Joaquin ,Rafeal &
Ricardo (2007), Nguyen et al .( 2009), Natalia & Ines (2005 ) who noted that innovative
firm are likely to perform better than non- innovative firms mainly because through
innovation, a company faces up to the changes in its marketing environment.
Nguyen & Pham (2009) further support the existence of a strong positive relationship
between firm innovation and firm‟s export performance by stressing that innovating
firms have incentives to expand into other market which enable them to earn higher
returns from their investment. This position is further supported by Ussahawaninitchakit
(2007) who asserted that innovation has the capacity to increase and promote stronger
export competitiveness that can ultimately lead to sustainable export performance.
Thus given the fact that the business environment is characterized with various
competitors, numerous government regulations and ever changing customer needs, firms
must continuously innovate in order to remain relevant in their export markets.

Export Market Orientation and Firm’s Export Performance.

The correlations revealed that a strong positive relationship exists between export market
orientation and firm‟s export performance. These findings are consistent with the
observations of Codagan et al. (2003), Akyol & Akehurst (2003), Sanjeek et al. (2003),
Dodd (2005), Kropp et al. (2005) who observed that firms which focus on generating
export market information are in good position to perform better in their export markets
than the non market oriented ones as they posses a greater understanding of their
customer needs and preferences.Hoq et al. (2009), Sanjeev et al. (2003), Kropp et al. (2005) further provide a strong
evidence that there is indeed a strong link between export market orientation and firms
export performance because market oriented firms are likely to devise and adapt their
products, services and processes that continue to meet the needs of the evolving market.
In support of the above findings , authors such as Gray, et al. (1999), and Codagan
(2003) noted that market oriented firms are well positioned to thrive and succeed in
turbulent conditions such as intense competition, changes in customer needs, change in
industry technology because they understand their customers better and are more aware
of the choices competitors are offering. This largely helps these firms to position new
products and services more effectively and to charge higher prices for added customer
value.From the above observations and arguments, it can be stressed that the permanent search
for information on markets, understanding customer‟ actual and future needs, especially
in fast- growing and developing industries such as the fruit exports, is the key for
providing superior value to customers and to reach sustainable superior performance.

Predictive potential of export market orientation, firm innovation and export

An analysis of the predictive potential of firm innovation and export market orientation
revealed that firm innovation is a significant predictor of export performance while
export market orientation doesn‟t influence export performance within fruit exporting
firms in Uganda. This could be probably attributed to the fact that most firms in Uganda
concentrate on coming with new products, adopting new production processes and
venturing into new markets with little emphasis on marketing research that will provide
them with adequate information regarding their export markets. This is in line with the
findings of Stokes (2000) who acknowledged that firms tend to focus first on firm
innovation and later on customer needs while Chao et al. (2010) pointed out that market
orientation is an inadequate prescription of organizational success since it ignores the
creative abilities of a firm. This scenario could probably be attributed to the fact that
market orientation is so expensive for firms engaged in exporting and thus they
concentrate mainly on coming up with new products or adopting new production
processes or venturing into new segments with a hope that customers will be attracted to
their products.It was also revealed that among the components of export market orientation and firm
innovation it is only process innovation and market innovation which had a significant
influence of export performance of fruit exporting firms in Uganda. This implies that fruit
exporting firms in Uganda probably concentrate more on adoption of production
technologies and processes that are aimed at improving their output and constantly seek
out to expand their operations through venturing into new markets and segments.


The findings on the factor structure of export market orientation revealed that export
market intelligence generation formed the most important item with in the fruit exporting
firms in Uganda followed by responsiveness to market intelligence to market intelligence
and export market export market intelligence dissemination. Export market intelligence
generation was considered important because most firms revealed that they not only
generate a lot of information concerning trends in their export markets but also
periodically reviewed the likely effect of changes in their export environment. Therefore,
firms should generate and review information regarding their export markets if they are
to have a clear understanding of what is happening in their target foreign markets.
Further findings on the composition of firm innovation showed that adoption of process
innovation is the most important item among the fruit exporting firms in Uganda
followed by market innovation and lastly new product innovation. Process innovation
was considered the most important because most firms revealed that they constantly
upgraded and redesigned their technology to improve their production processes.
Therefore, it‟s important for firms which wish to enhance their innovativeness to adopt
new production technologies that will ultimately give them the capacity to produce new
products and enter into new markets.The factor structure also revealed that export profit contribution is the most important component of export performance followed by sales growth. This is a clear indication that the fruit exporting firms in Uganda are more concerned with making profits compared to increasing their sales. Therefore firms need to export to markets which offer higher profits than those which provide them with an opportunity to increase their sales.