The Influence of Customer Orientation on New Product Development with Moderating Environmental Factors on MSME in Tulungrejo Village, Batu City

MSMEs (Micro, Small and Medium Enterprises) are an important sector in the Indonesian economy. Because Tulungrejo Village is a village that has a lot of tourism, it is very important for MSMEs in Tulungrejo Village to further prioritize the development of new products and customer needs. The purpose of this study is to help MSMEs in knowing the needs and desires of customers. In addition, it is also hoped that MSMEs can continue to innovate to develop ideas both in making new products and old products that are renewed.  This research uses quantitative methods and the data source in this study uses a questionnaire filled out by 66 respondents from MSMEs in Tulungrejo Village. The study found that there is a positive influence of customer orientation on new product development at MSMEs with moderating environmental factors in Tulungrejo Village.

MSMEs (Micro, Small and Medium Enterprises) are an important sector in the Indonesian economy. Because Tulungrejo Village is a village that has a lot of tourism, it is very important for MSMEs in Tulungrejo Village to further prioritize the development of new products and customer needs. The purpose of this study is to help MSMEs in knowing the needs and desires of customers. In addition, it is also hoped that MSMEs can continue to innovate to develop ideas both in making new products and old products that are renewed. This research uses quantitative methods and the data source in this study uses a questionnaire filled out by 66 respondents from MSMEs in Tulungrejo Village. The study found that there is a positive influence of customer orientation on new product development at MSMEs with moderating environmental factors in Tulungrejo Village.

INTRODUCTION
Small businesses play a strategic role and occupy an important position not only in terms of employment and community welfare, but also in terms of stabilizing social inequality (Arif, 2016). Because Tulungrejo Village is a village that has a lot of tourism, it is very important for MSMEs in Tulungrejo Village to further prioritize the development of new products. However, after being examined more deeply by researchers, the characteristics of MSMEs in Tulungrejo Village in terms of innovation and competitive advantage are still considered less than optimal in running their businesses. Therefore, they need to focus more on understanding customer needs so that they can provide satisfaction to customers and help build customer loyalty, namely by applying customer orientation and new product development to improve business and increasing competition.
Customer orientation is a business focus on customer needs and wants as a basis for designing, developing, and marketing products or services that can meet these customer needs (Bruno, Aversana, & Zunino, 2017). By paying more attention to customers, MSMEs can build customer trust and loyalty, and create a strong and positive brand image in the market (Susetyo & Yulianto, 2017). Thus, MSMEs that have a strong customer orientation will have a greater competitive advantage in the market and will be more likely to survive and grow in the long term. In the context of new product development, this allows MSMEs to create products or services that truly meet customer needs and wants.
MSMEs that successfully develop new products can increase their competitiveness and business growth in an increasingly competitive market. New product development (NPD) is a process that involves creating, designing, and bringing new products to market (Abdullah, 2019). In addition, NPD can also help MSMEs to increase the added value of the products or services they offer. By creating new products that are better and more useful, MSMEs can offer greater added value to their customers and increase differentiation from their competitors in the market (Kim, 2017). Compared to large companies that have bigger resources, MSMEs can utilize their flexibility advantage to develop new products at a lower cost and shorter time (Tabassum & Ozuem, 2019). This can help MSMEs to produce more innovative and quality products, and more quickly capture emerging market opportunities. Thus, NPD can be an important strategy for MSMEs to maintain and improve their business success in an increasingly competitive market.
There are several environmental factors in MSMEs that can affect customer orientation and NPD (Fitriani, Medinah, & Linarti, 2020). According to research conducted by Sinarasri & Hanum (2017), there are market competition, changes in trends and customer preferences, government regulations and policies, as well as technology and innovation. these environmental factors can be interconnected and influence each other. Therefore, MSMEs need to actively monitor and respond to changes in their environment to remain customer-oriented and develop new products that are relevant to the market (Sinarasri & Hanum, 2017).
The importance of this research is to help MSME players understand customer needs so that they can market their products optimally by understanding and implementing customer orientation. In addition, in understanding customer satisfaction, it is necessary to pay attention to the products being sold, one of which is by developing new products (NPD). By knowing the environmental factors that influence customer orientation and NPD, MSMEs can implement and develop marketed products so that they are in accordance with market needs so that they can increase business and survive in the market.

LITERATURE REVIEW Customer Orientation
According to Widelska & Krot (2021) customer orientation is the connection between a company's focus on customer needs and its level of innovation. As time goes by and many trends change, requiring companies to act quickly through innovative products and services and how to utilize innovative methods to communicate with the target market (Escrig, Mallen, Chiva, & Alcami, 2016).
In customer orientation, sales are not the main thing but customer orientation is the main thing (Zuraida, 2022). Customers always want to have something different in the product so that customer needs also change in a competitive environment and most companies follow customer orientation strategies to meet customer wants and needs because it has the main importance to improve business performance in competition and business survival is also based on customized products (Suwunniponth, Mutakalin, & Poprateep, 2022).
Meanwhile, according to Lubis, Suriyanti, & Azmi (2019) customer orientation is a type of organizational orientation where customer needs are the main basis of interest for companies to plan their strategies. By carrying out this orientation, the company's marketing information system can track customer needs and wants so that organizational performance can be guaranteed. Therefore, the company's ability to understand and serve customer needs and wants contributes to improving company performance (Fatonah, Haryono, & Sari, 2021). In customer oriented means that a company actively seeks to create, disseminate, and respond to market information (Bankole & Oghogho, 2022). Zuraida (2022) states that customer orientation is formed from companies that meet and know customer needs to realize the wishes of buyers as the goal of the company's interests in realizing customer satisfaction. In addition, customer orientation also affects performance directly with the help of customer repurchase intention (Suwunniponth, Mutakalin, & Poprateep, 2022).

New Product Development
Product development is an activity carried out to obtain the possibility of changing a product for the better (Assauri, 2016). New product development (NPD) is an important aspect of the company because it can reduce company losses, so the introduction of successful new products can help companies overcome declining profits (Tabassum & Ozuem, 2019). NPD is basically the introduction and development of new, more innovative products produced by the company or the reintroduction of old products into new markets (Salsabila, Jihadi, & Shanty, 2022). Tabassum and Ozuem (2019) stated that a company should ideally only develop one original product or product improvement through its own research and development. There is a possibility that new products have similar features to products that have been introduced in the market before (Silinevica, Igavens, & Salmane, 2017).
NPD is a method of bringing new products to market so in this case the company needs to involve designing, growing, developing, and launching new services or products. The development and commercialization of new products provides a competitive advantage and is critical to the growth and sustainability of the company (Iqbal & Suzianti, 2021).

Environmental Factor
According to Merry & Yoestini (2003) in Sudarti & Ermawati (2011) defines environmental factors as external forces that directly or indirectly affect the company's income for inputs (labor, financial resources, raw materials, information) and output income (information, packaging, goods, services, ideas). The dynamic environment in which businesses operate provides opportunities for growth, development and creation of value and wealth (Adagba & Shakpande, 2017).
According to Rizal, Suhadak, & Kholid (2017) the environmental analysis carried out generally includes two things, namely: 1. Analysis of the external environment that produces a picture of the opportunities and threats that will be faced by a company 2. Analysis of the internal environment that produces a picture of the strengths and weaknesses possessed by a company The success of a small business can be influenced by numerous factors, both internal and external, which play a significant role in its performance (Rizal, Suhadak, & Kholid, 2017). According to Adagba & Shakpande (2017) conducting a business environment analysis involves thoroughly evaluating the external factors that offer opportunities and pose threats to the company, as well as assessing the internal aspects that determine its strengths and weaknesses. The opportunities and threats are associated with the business's external environment, while the strengths and weaknesses are linked to its internal environment (Bachtiar, Atmoko, & Bachtiar, 2023).

Hypothesis:
1. Relationship between Customer Orientation and New Product Development 2. The Relationship of Customer Orientation to New Product Development with Environmental Factor as a moderating variable The approach used in this research is a quantitative approach, which is an approach that shows the relationship between two or more variables (Dewi & Warmika, 2016). In this study, the research methodology employed is focused on establishing a causal or cause-and-effect connection. Causal research refers to the type of research designed to identify and understand the relationship between independent and dependent variables, specifically examining the cause-and-effect dynamics between them (Sugiyono, 2018). The purpose of this study is to investigate the possibility of a cause-and-effect (causal) relationship between the independent variable, namely customer orientation ( 1) and the dependent variable new product development (Y).
The population in this study were MSMEs in Tulungrejo Village, totaling 193 MSMEs and total sample 66 MSMEs using Slovin formula with a tolerance limit of 10%. The primary data source used in this study comes from a questionnaire filled out by research respondents.
The sampling method used in this study is Probability Sampling with a combination of Simple Random Sampling and Cluster Sampling techniques. In this study, what researchers are looking for are MSMEs in Tulungrejo Village with 6 types of MSMEs as clusters that have the aim of prioritizing customer interests (customer orientation) with new product development. So that of the 66 samples of MSMEs in Tulungrejo Village, researchers used a combination of cluster random sampling techniques where researchers will examine MSMEs based on the type of MSME and randomly conducted by raffle method according to population data.
The data analysis technique using Moderated Regression Analysis (MRA). The utilization of MRA analysis is valuable in examining the causal connection between the independent variable and the dependent variable. This relationship can be influenced, either positively or negatively, by the presence of moderating variables.
The measurement scale in this study uses the Likert Scale with score 4, 3, 2, 1. The Likert scale is a frequently employed psychometric scale in questionnaires and is renowned as the predominant scale utilized in survey research (Taluke, Lakat, & Sembel, 2019).

RESEARCH RESULT Validity Test
The validity test was conducted to assess the validity of each question item included in the designed questionnaire. A question item is considered valid when its correlation value (R Count)>0.2387 (R table). Table 1 presents the validity test results for each question item on the questionnaire for the Customer Orientation (X), Environmental Factor (Z) and New Product Development (Y) variables.  (2023) For a question to be considered valid, its correlation value (R count)>0.2387 (R table). It is established that all R count values>0.2387 (R table). Therefore, it can be inferred that all the questions are valid.

Reliability Test
Reliability tests should exclusively focus on questions that have successfully passed or fulfilled the validity test. If a question does not meet the requirements of the validity test, there is no need to proceed with the reliability test. The subsequent outcomes present the results of the reliability test conducted on the valid question items.  (2023) The reliability of a research questionnaire is established if the Cronbach's Alpha value exceeds 0.6. It is confirmed that all the Cronbach's Alpha values surpass 0.6, indicating that the questionnaire is reliable.  Table 3, the probability value (p) or Exact. Sig. (2-tailed) is determined to be 0.324. As the probability value of p (0.324) is higher than the significance level (0.05), it can be inferred that the data follows a normal distribution.  (2023) Based on Table 4, it is known that the VIF value of Customer Orientation (X) is 1.348, so it can be concluded that there is no multicollinearity.  (2023) Based on Table 5, it is known that the Sig. Glejser value of Customer Orientation (X) is 0.100> 0.05, so it is concluded that heteroscedasticity does not occur.  (2023) Based on Table 7, it is known that the calculated F value is 3.886, and the sig value is 0.003. It is known that F count 5.886> F table value 3.98 and sig value 0.003 <0.05, then Customer Orientation (X) simultaneously or together has a significant effect on New Product Development (Y).  (2023) Based on Table 8, the following conclusions can be drawn:

Hypothesis Test
• The regression coefficient of the Customer Orientation Variable (X) is determined to be 0.270, indicating a positive effect. This implies that Customer Orientation (X) positively influences New Product Development (Y). • The t statistic or t count for Customer Orientation (X) is calculated to be 5.971, which is greater than the t table value. Additionally, the significance value (sig) is determined to be 0.003, which is less than the 0.05 significance level. These results indicate that Customer Orientation (X) has a statistically significant effect on New Product Development (Y). • Consequently, it can be concluded that Customer Orientation (X) has both a positive and significant impact on New Product Development (H1 Accepted).  (2023) Based on Table 9, it is known that the coefficient of determination (R-Square) is determined to be 0.356. This value signifies that the Customer Orientation (X) variable, when considered collectively or simultaneously, can account for 35.6% of the influence on New Product Development (Y). The remaining 64.4% of the variance is attributed to other variables or factors not included in the analysis.

Moderated Regression Analysis
Furthermore, moderation testing is carried out, namely testing whether the Environmental Factor (Z) significantly moderates the effect of Customer Orientation (X) on New Product Development (Y). Moderation testing is carried out using the Moderating Regression Analysis (MRA) approach. Table 10 presents the results of moderation testing.  (2023) It is known that the R square value of 0.237 means that the contribution of the influence of the customer orientation variable (X) on New Product Development (Y) after the moderation variable, namely the Environmental Factor (Z) is 43.7%.

Relationship between Customer Orientation and New Product Development
According to the research conducted by Jamilah, Sakti, and Herman (2020), it reveals that customer orientation and competitiveness have an indirect positive and significant impact on new product development through innovation. The authors argue that adopting a business strategy that emphasizes customer focus leads to the development of new products that are well-received by customers. Companies with a strong customer focus tend to outperform their competitors and achieve better performance in new product development. This is because they are able to tailor their products to meet customer needs and accurately anticipate customer demand (Zhang & Yang, 2018). Furthermore, customer engagement plays a vital role in enhancing the effectiveness of new product development and expediting the launch of new products (Nwaokorie, 2020).

The relationship of Customer Orientation to New Product Development with Environmental Factor as a moderating variable
According to the argument presented by Adis, Deek, and Lian (2008), there are varying perspectives regarding the moderating influence of environmental factors on independent variables. In their study, they emphasized the significance of the relationship between environmental variation and strategic orientation. Additionally, they examined the moderating effect of environmental factors, specifically the economic situation and supply conditions, on the association between strategic orientation, marketing strategy, and market research activities concerning new product development (NPD).

CONCLUSIONS AND RECOMMENDATIONS
This research was conducted to analyze the effect of customer orientation on new product development with moderating environmental factors in MSMEs in Tulungrejo Village, Batu City. Based on the results of the research that has been conducted, it can be concluded that: 1. There is a positive influence of customer orientation (X) on new product development (Y) at MSMEs in Tulungrejo Village. 2. Environmental factor (Z) moderates the relationship between customer orientation (X) and new product development (Y) at MSMEs in Tulungrejo Village. Based on the research results and conclusions above, there are several suggestions that can provide benefits to parties related to the results of this study given by the researcher, namely as follows: 1. MSME actors in Tulungrejo Village need to increase awareness of the importance of licensing letters and legislation related to MSMEs, namely holding literacy about SIUP and NIB by inviting employees from the local Trade Office as speakers, considering that this is one of the important environmental factors for the sustainability of MSMEs. This is because there are still several MSME actors who do not understand MSME licensing and legislation when filling out the questionnaire. 2. The level of creativity and innovation in developing new products needs to be increased by looking for references to similar products and conducting research related to the potential development of products to be launched. This is because MSME actors still have the same products and when filling out the questionnaire still do not understand or master the potential of the products being sold. 3. To obtain better study results, it is necessary to test again related to factors other than environmental factors that affect the relationship between customer orientation and new product development by adding more independent variables. 4. The results of this study are expected to be a reference for further research in the same field.

ADVANCED RESEARCH
Each study has a limitation, the limitation of this study is that after being examined more deeply by researchers, the characteristics of MSMEs in Tulungrejo Village in terms of innovation and competitive advantage are still considered less than optimal in running their businesses. The innovation carried out is still not optimal as seen from the products that are not too varied so that the competitive advantage achieved is still lacking. Therefore, they need to focus more on understanding customer needs so that they can provide satisfaction to customers and help build customer loyalty, namely by applying customer orientation and new product development to improve business and increasing competition. In addition, the number of respondents in this study is still limited and only uses 66 respondents. The researcher hopes that the next research can examine more other MSMEs that may have different views and situations.
Also, the limitation of this study is that the independent variable (New Product Development) are able to explain the dependent variable (Customer Orientation) by 35.6%. There is a remaining 64.4%, which means that there are still other variables that can affect this study.

ACKNOWLEDGMENT
The author sincel rel ly thanks to thel lel cturel rs who havel hel lpel d and guidel d to complel tel this journal. Thanks to all the family members and friel nds who havel providel d prayel rs, attel ntion, and moral support to thel author so that and always motivatel d to complel tel this journal.