Market orientation and marketing innovation of small and medium enterprises

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Kampala International University, College of Environmental Science and management
Globally, the small and medium enterprises are considered as engine of economic growth and development due to their contributions to poverty reduction, wealth creation and employment generation. But yet, in African context, a number of small and medium enterprises (SMEs) are forced to closedown in almost daily basis. As a result, only a small portion of them have been able to create wealth and employment beyond the first 3-5 years of inception. Prior studies have shown that, this problem could be resolved if evidence on the effect of market orientation on marketing innovation is established. The main objective of this study was to investigate the relationship between market orientation and marketing innovation of SMEs in Yobe State, Nigeria. To do this, the precise links of the effect of the dimensions of market orientation namely customer orientation, competitive orientation and inter-functional orientation on marketing innovation dimensions that include marketing product space, marketing process space, and marketing relationship space were examined. Building on the assumptions of resource-based view and market orientation theory, the current study used a cross-sectional and descriptive research design to collect data from the target respondents using a combination of the qualitative and quantitative methods (mixed methods approach). The research population comprised 2852 SMEs owner/managers and the sample size was 400 target respondents with a valid response of 376. Questionnaire and interviews were the primary source of data for research. Validity and reliability tests were carried out. Data analysis was done using mean, standard deviations, multiple linear regression and hierarchical regression analysis with the aid of SPSS software version 23. The study found that customer orientation significantly affects marketing innovation (β=0.610, p=0.00 < 0.05). Furthermore, competitor orientation was found to significantly affect marketing innovation (β=0.438, p=0.00 < 0.05). Similarly, inter-functional orientation was found to significantly affect marketing innovation (β=0.633, p=0.00 < 0.05). Firm age was found to moderate the relationship between market orientation and marketing innovation (β=0.679, p=0.00 < 0.05). In line with the research objectives, the study recommends that SMEs in Yobe state should take marketing innovation seriously since it plays a crucial role in how well they treat their customers and respond to competitors threats which in turn increase their chances of building a sustain competitive advantage and subsequence performance. Therefore, frequent marketing innovation should be used to identify the tastes and needs of customers which in turn improve both financial and non-financial performance of SMEs. Theoretically, the study provided implication by giving additional empirical evidence on the domain of the resource based view and market orientation theories to guide SMEs managers in adoption of marketing innovation. The study serves as reference to entrepreneurs and SMEs managers who are interested in achieving competitive advantage and profitable performance under the influence market orientation. The current findings support the assumptions of both resource based view and market orientation theories.
A dissertation submitted to the college of economics and management sciences in fulfillment for the requirements for the award of doctor of philosophy in management science (entrepreneurship) of Kampala International University, Uganda
Market orientation, Marketing innovation, Medium enterprises