A Study On The Relationship Among Interaction Orientation, Innovation And Business Performance

Interaction orientation reflects a firm’s ability to interact with its individualcustomers and to take advantage of information obtained from them throughsuccessive interactions to achieve profitable customer relationships. Interactionorientation has four dimensions:(a)customer concept, the belief that prescribes theunit of analysis of every marketing action and reaction to be the individual customer,(b)interaction response capacity, by which the firm offers successive products,services, and relationship experiences to each customer by dynamically incorporatingfeedback from previous behavioral responses of that specific customer and of othercustomers collectively,(c) customer empowerment, which a firm provides itscustomers avenues to connect with the firm and connect with each other,(d) customervalue management, which dynamically measure individual customer value and use itas its guiding metric for marketing resource allocation decisions.As soon as the concept of interaction interaction was introduced, it absorbed theattentions of the scholar. They study the antecedents and consequences and moderateof the interaction orientation. However, the history of the interaction orientation theory isnot very long; the research about interaction orientation is still little, it is still not clear aboutinteraction orientation. First, we still need to study the relationship between theinteraction orientation and innovation. Second, we still need to study how theinteraction orientation affects the business performance. Third, we also need to studythe situation that the interaction orientation works well.In order to make up the gap of the theory, we analyze the relationship betweeninteraction orientation and business performance and how the interaction orientationaffect the business performance base on the theory. We introduce a framework aboutinteraction orientation, inonovation, business performance, and the hypothesizesanout them, we think that the interaction orientation can positive affects business exploratory innovation and exploitative innovation; the interaction orientation canpositive affects business performance, in particular interaction orientation canimprove customer-based relational performance and customer-based profitperformance. Customer-based relational performance can improve customer-basedprofit performance. Exploratory innovation and exploitative innovation play themediate role between interatction oritentation and customer-based profit performance;market environment (matket turbulence, competitive intensity, technologicalturbulence) play the moderate between interatction oritentation and exploratoryinnovation, they also play the moderate between interatction oritentation andexploitative innovation.We test the hypothesizes base on the empirical data and get the followingconclusion:First, interaction orientation can improve the innovation; in particular interactionorientation can improve exploration innovation and exploitation innovation. The firmcan get more market information from the interaction with the customers, sointeraction orientation can improve the innovation.Second, interaction orientation can improve business performance,; in particularinteraction orientation can improve customer-based relational performance andcustomer-based profit performance.Third, exploration innovation and exploitation innovation can improve thecustomer-based profit performance. This paper study that two difference kinds ofinnovation: exploration innovation and exploitation innovation affect the businessperformance. The result is that both the exploration innovation and exploitationinnovation can affect the customer-based profit performance.Fourth, the customer-based relational performance can affect the customer-basedprofit performance. Both the customer-based relational performance and thecustomer-based profit performance are measure the business performance base on thecustomer. Customer-based relational performance measure the business performancebase on the customer’s attitude; and the customer-based profit measure the businessperformance base on the customer’s behavior. We study the relationship betweenthem, and find that the customer-based relational performance can affect the customer-based profit performance.Fifth, interaction orientation affects the customer-based profit performancepartly through exploration innovation and exploitation innovation. Base on theempirical data, we find that exploration innovation and exploitation innovation canpartly paly the the mediate role between interaction orientation and customer-basedprofit performance.Sixth, technological turbulence play the moderate between interatctionoritentation and exploitative innovation; matket turbulence play the moderatebetween interatction oritentation and exploratory innovation.The theory contribution of this study is mainly manifested in the followingaspects:First, we get that interaction orientation can improve the innovation, whichmakes the interaction orientation theory closely related to the innovation theory. Wefinad that interaction orientation can improve the innovation, in particular interactionorientation can improve exploration innovation and exploitation innovation.Second, we find how the interaction orientation affect the business performance,which can help us the fully understand the relationship between the interactionorientation and business performance. We find that exploration innovation andexploitation innovation can partly paly the the mediate role between interactionorientation and customer-based profit performance, which menas interactionorientation affects the customer-based profit performance partly through explorationinnovation and exploitation innovation. This conclusion can answer not only whyinteraction orientation can positive affect business performance, but also themechanism through what the interaction orientation affect business performance.Third, we analyze the moderate role of market environment between theinteraction orientation and innovation, which make us know applicability of theinteraction orientation better. This paper also analyzes the applicability of theinteraction orientation when analyzes how interaction orientation affect theexploration innovation and exploitation innovation. We analyze whether matketturbulence, competitive intensity, technological turbulence can play the moderate rolebetween between interatction oritentation and exploitative innovation; we also analyze whether matket turbulence, competitive intensity, technological turbulencecan play the moderate role between interatction oritentation and exploratoryinnovation. We find that technological turbulence play the moderate betweeninteratction oritentation and exploitative innovation; matket turbulence play themoderate between interatction oritentation and exploratory innovation.