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ABSTRACT This paper focuses on relationship between marketing performance and new product development process and their effects on a firm's performance. In order to measure hypotheses in study, multi-item scales are employed, and existing measures from literature are used. Marketing performance has impacts on new product cycle time and innovation capability. Furthermore, marketing performance, innovation capability, and product design capability affect a firm's performance. Managers should consider crucial role of innovation and new product design capability in order to obtain competitive advantage against potential rivals. However, firm's R&D activities require increased budget expenditures as well as organizational commitment to learning. Our study reveals that new product development cycle time has a non-statistically significant positive effect on a firm's performance, since firm's R&D budgets are insufficient in Turkey when compared to firms in other countries. Therefore, companies do not attempt to gain competitive advantage by offering new product and services faster than rivals, but they aim at surviving by meeting customer needs. In conclusion, our study confirms that marketing performance, innovation capability and product design capability affect a firm's performance. INTRODUCTION In today's competitive environment, firms should meet their customers' needs, develop new products that satisfy demand of their target customers, find new markets for their products, diversify their markets, and produce superior quality products with low costs and short delivery time in a timely manner. Product life cycles in especially high technology industries are even reduced to about one year due to rapid changes in technology and customer expectations. For instance, a survey revealed that fortune 1000 firms, well-known for their innovativeness, generate about one third of total revenues in their marketplace (Booz & Hamilton, 1982). New product development and marketing activities seem, therefore, to be among most crucial factors in obtaining and sustaining competitive advantage. According to Schaefer (1999), successful new products are principal indicators of profitability of a firm, so product development is argued to be an important source of competitive advantage for firms. However, new product development is a complex process including core competencies, and various tasks that must be partitioned into manageable-sized tasks. On other hand, ability to design and develop new products, in response to changes in customer needs, is not sufficient enough for a firm to have a competitive advantage (Rungtusanatham & Forza, 2004). A new product must also be cost-efficient, i.e., efficiently produced and competitively priced. Success of new product development process is related to firm's ability to determine and understand customer needs. Moreover, considerable marketing effort is needed to ensure that customer needs are properly identified and translated into technical specifications (Evans & Lindsay, 1996). Hence, marketing proficiency of firm has an impact not only on firm's performance but also on success of new products. Obviously, marketing makes a crucial contribution to longterm business success (Llonch et al, 2002). This paper has four sections. The second section surveys literature about relationships between a firm's performance, new product development and marketing proficiency. Research hypothesis is presented in third section. The fourth is devoted to methodology, measures, and tests of hypothesis. The managerial implications and study's limitations are discussed in fifth. LITERATURE Marketing Performance Kotier and Andreasen (1996, p. 379) defines marketing as the process of planning and executing programmes designed to create, build and maintain beneficial exchange relationships with target audiences for purposes of satisfying individual and organizational objectives. …
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