Abstract
This paper aims to examine how the role of innovation capability in improving the marketing performance of Batik SMEs in Central Java, Indonesia during the Covid-19 Pandemic. The role of innovation capability (IC) is examined by analyzing its ability to mediate the influence of market orientation (MO), entrepreneurial orientation (EO), marketing capability (MC), and operational capability (OC) in improving marketing performance (MP). The relationship between these six concepts is something that has not received serious attention from academics in Indonesia. In this study, the 200 batik entrepreneurs were involved. The results showed that IC was proven to be an intervening variable in improving MP. Furthermore, this study expects that the development of IC can improve the MP of batik SMEs in Central Java during this pandemic, so that SMEs can continue to operate and develop.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Rosyada, M., Wigiawati, A.: Strategi Survival Umkm Batik Tulis Pekalongan Di Tengah Pandemi Covid-19. J. Bisnis dan Kaji. Strateg. Manaj. 4, 189–214 (2020)
Uncles, M.: Market orientation. Austr. J. Manage. 25(2), i–ix (2000). https://doi.org/10.1177/031289620002500201
Protcko, E., Dornberger, U.: The impact of market orientation on business performance - The case of Tatarstan knowledge-intensive companies (Russia). Probl. Perspect. Manag. 12(4), 225–231 (2014)
Han, J.K., Kim, N., Srivastava, R.K.: Market orientation and organizational performance: is innovation a missing link? J. Mark. 62(4), 30–45 (1998). https://doi.org/10.1177/002224299806200403
Narver, J.C., Slater, S.F.: The effect of a market orientation on business profitability. J. Mark. 54(4), 20 (1990). https://doi.org/10.2307/1251757
Masa’deh, R., Al-Henzab, J., Tarhini, A., Obeidat, B.Y.: The associations among market orientation, technology orientation, entrepreneurial orientation and organizational performance. Benchmarking 25(8), 3117–3142 (2018). https://doi.org/10.1108/BIJ-02-2017-0024
Aulia, R., Astuti, M., Ridwan, H.: Meningkatkan Kinerja Pemasaran melalui Orientasi Pasar dan Orientasi Kewirausahaan. J. Ilm. Manaj. dan Bisnis 20(1), 27–38 (2019). https://doi.org/10.30596/jimb.v20i1.2397
Setyawati, H.A.: Pengaruh Orientasi Kewirausahaan Dan Orientasi Pasar Terhadap Kinerja Perusahaan Melalui Keunggulan Bersaing Dan Persepsi Ketidakpastian Lingkungan Sebagai Prediksi Variabel Moderasi (Survey pada UMKM Perdagangan di Kabupaten Kebumen). Fokus Bisnis Media Pengkaj Manaj. dan Akunt. 12(2), 20–32 (2013)
Kirca, A.H., Jayachandran, S., Bearden, W.O.: Market orientation: a meta-analytic review and assessment of its antecedents and impact on performance. J. Mark. 69(2), 24–41 (2005). https://doi.org/10.1509/jmkg.69.2.24.60761
Na, Y.K., Kang, S., Jeong, H.Y.: The effect of market orientation on performance of sharing economy business: focusing on marketing innovation and sustainable competitive advantage. Sustain 11(3) (2019), https://doi.org/10.3390/su11030729
Puspaningrum, A.: Market orientation, competitive advantage and marketing performance of small medium enterprises ( SMEs). J. Econ. Bus. Accountancy Ventura 23(1), 19–27 (2020)
Kohli, A.K., Jaworski, B.J.: Market orientation: the construct, research propositions, and managerial implications. J. Mark. 54(2), 1 (1990)
Morgan, N.A., Slotegraaf, R.J., Vorhies, D.W.: Linking marketing capabilities with profit growth. Int. J. Res. Mark. 26(4), 284–293 (2009)
Morgan, N.A.: Marketing and business performance. J. Acad. Mark. Sci. 40(1), 102–119 (2012). https://doi.org/10.1007/s11747-011-0279-9
Carland, J.W., Hoy, F., Boulton, W.R., Carland, J.A.C.: Differentiating entrepreneurs from small business owners: a conceptualization. Acad. Manag. Rev. 9(2), 354 (1984)
Ramos-González, M., Rubio-Andrés, M., Sastre-Castillo, M.: Building corporate reputation through sustainable entrepreneurship: the mediating effect of ethical behavior. Sustainability 9(9), 1663 (2017). https://doi.org/10.3390/su9091663
Martens, C.D.P., Carneiro, K.D.A., Martens, M.L., da Silva, D.: Relationship between entrepreneurial orientation and project management maturity in Brazilian software firms. Rev. Ibero-Americana Estratégia 14(02), 72–91 (2015)
Lumpkin, G.T., Dess, G.G.: Academy of management review. Acad. Manag. Rev. 21(1), 135–172 (1996)
Ismail, N.A.: The roles of international entrepreneur orientation and geographical scope level to determine international performance: A case in the Malaysian halal food industry. Int. J. Entrep. 20(1), 129–142 (2016)
Lumpkin, G.T., Dess, G.G.: Linking two dimensions of entrepreneurial orientation to firm performance: the moderating role of environment and industry life cycle. J. Econ. Econ. Educ. Res. 16(5), 429–251 (2001)
Wales, W.J.: Entrepreneurial orientation: a review and synthesis of promising research directions. Int. Small Bus. J. Res. Entrep. 34(1), 3–15 (2016)
Nasip, S., Fabeil, N.F., Buncha, M.R., Hui, J.N.L., Sondoh Jr, S.L., Halim, D.N.P.A.: The influence of entrepreneurial orientation and social capital on the business performance among women entrepreneurs along West Coast Sabah, Malaysia. In: Proc. Int. Conf. Econ., vol. 2017, pp. 377–395 (2017)
Mohammad, I.N., Massie, J.D.D., Tumewu, F.J., Program, M.: The effect of entrepreneurial orientation and innovation capability towards firm performance in small and medium enterprises (Case Study: Grilled Restaurants In Manado). J. EMBA J. Ris. Ekon. Manajemen, Bisnis dan Akunt. 7(1) (2018). https://doi.org/10.35794/emba.v7i1.22255
Vorhies, D.W., Morgan, N.A.: Capabilities for sustainable competitive advantage. J. Mark. 69(January), 80–94 (2005)
Kyengo, J.M., Muathe, S.M.A., Kinyua, G.M.: Marketing capability and firm performance: an empirical analysis of food processing firms in Nairobi City County, Kenya. Strateg. J. Bus. Chang. Manag. 6(1), 544–555 (2019)
Theodosiou, M., Kehagias, J., Katsikea, E.: Strategic orientations, marketing capabilities and firm performance: an empirical investigation in the context of frontline managers in service organizations. Ind. Mark. Manag. 41(7), 1058–1070 (2012)
Winter, S.G.: Understanding dynamic capabilities. Strateg. Manag. J. 24(10 SPEC ISS), 991–995 (2003). https://doi.org/10.1002/smj.318
Terjesen, S., Patel, P.C., Covin, J.G.: Alliance diversity, environmental context and the value of manufacturing capabilities among new high technology ventures. J. Oper. Manag. 29(1–2), 105–115 (2011). https://doi.org/10.1016/j.jom.2010.07.004
Romijn, H., Albaladejo, M.: Determinants of innovation capability in small electronics and software firms in southeast England. Res. Policy 31(7), 1053–1067 (2002)
Adler, P., Shenbar, A.: Adapting your technological base: the organizational challenge. Sloan Manage. Rev. 32(1), 25–37 (1990)
Shafi, M.: Sustainable development of micro firms: examining the effects of cooperation on handicraft firm’s performance through innovation capability. Int. J. Emerg. Mark. (2020)
Calantone, R.J., Tamer, C.S., Yushan, Z.: Learning orientation, firm innovation capability, and firm performance. Ind. Mark. Manag. 31, 515 (2004)
Hughes, M., Martin, S.L., Morgan, R.E., Robson, M.J.: Realizing product-market advantage in high-technology international new ventures: the mediating role of ambidextrous innovation. J. Int. Mark. 18(4), 1–21 (2010). https://doi.org/10.1509/jimk.18.4.1
Neely, A., Filippini, R., Forza, C., Vinelli, A., Hii, J.: A framework for analysing business performance, firm innovation and related contextual factors: perceptions of managers and policy makers in two European regions. Integr. Manuf. Syst. 12(2), 114–124 (2001)
Dela Novixoxo, J., Pomegbe, W.W.K., Dogbe, C.S.K.: Market orientation, service quality and customer satisfaction in the public utility companies. Eur. J. Bus. Manag. 10(30), 37–46 (2018)
Boso, N., Cadogan, J.W., Story, V.M.: Entrepreneurial orientation and market orientation as drivers of product innovation success: a study of exporters from a developing economy. Int. Small Bus. J. 31(1), 57–81 (2013). https://doi.org/10.1177/0266242611400469
Tutar, H., Nart, S., Bingöl, D.: The effects of strategic orientations on innovation capabilities and market performance: the case of ASEM. Proc. Soc. Behav. Sci. 207, 709–719 (2015). https://doi.org/10.1016/j.sbspro.2015.10.144
Akman, G., Yilmaz, C.: Innovative capability, innovation strategy and market orientation: An empirical analysis in Turkish software industry. Manag. Innov. 12(1), 139–181 (2019)
Anderson, B.S., Covin, J.G., Slevin, D.P.: Understanding the relationship between entrepreneurial orientation and strategic learning capability: an empirical investigation. Strateg. Entrep. J. 3, 218–240 (2009). https://doi.org/10.1002/sej
Hauser, J., Tellis, G.J., Griffin, A.: Research on innovation: a review and agenda for marketing science. Mark. Sci. 25(6), 687–717 (2006). https://doi.org/10.1287/mksc.1050.0144
Naldi, L., Nordqvist, M., Sjöberg, K., Wiklund, J.: Entrepreneurial orientation, risk taking, and performance in family firms. Fam. Bus. Rev. 20(1), 33–47 (2007)
Porter, M.E.: The competitive advantage of nations. J. Multicult. Couns. Devel. (2001)
Weerawardena, J.: Innovation-based competitive strategy. The role of marketing capability in innovation-based competitive strategy, pp. 37–41 (2011)
Calantone, R.J., Di Benedetto, C.A., Divine, R.: Organisational, technical and marketing antecedents for successful new product development. R&D Manag. 23(4), 337–351 (1993). https://doi.org/10.1111/j.1467-9310.1993.tb00839.x
Dutta, S., Narasimhan, O., Rajiv, S.: Success in high-technology markets: Is marketing capability critical? Mark. Sci. 18(4), 547–568 (1999)
Wu, S.J., Melnyk, S.A., Flynn, B.B.: Operational capabilities: the secret ingredient. Decis. Sci. 41(4), 721–754 (2010)
Muzividzi, D.K., Mbizi, R., Mukwazhe, T.: An analysis of factors that influence internet banking adoption among intellectuals: case of Chinhoyi University of Technology. J. Contemp. Res. Bus. 4(11), 350–369 (2013)
Prabowo, H., Abdinagoro, S.B.: The role of effectual reasoning in shaping the relationship between managerial-operational capability and innovation performance. Manag. Sci. Later 11, 305–314 (2021). https://doi.org/10.5267/j.msl.2020.8.002
Narastika, A.A.R., Yasa, N.N.K.: Peran Inovasi Produk dan Keunggulan Bersaing Memediasi Pengaruh Orientasi Pasar Terhadap Kinerja Pemasaran. J. Ilmu Manaj. 7, 12 (2017)
Affandi, A., Erlangga, H., Sunarsi, D.: The Effect of Product Promotion and Innovation Activities on Marketing Performance in Middle Small Micro Enterprises in Cianjur (2019)
Liao, S.H., Chang, W.J., Wu, C.C., Katrichis, J.M.: A survey of market orientation research (1995–2008). Ind. Mark. Manag. 40(2), 301–310 (2011)
Cravens, D.W., Piercy, N.F., Baldauf, A.: Management framework guiding strategic thinking in rapidly changing markets. J. Mark. Manag. 25(1–2), 31–49 (2009)
Riswanto, A., Rasto, R., Hendrayati, H., Saparudin, M., Abidin, A.Z., Eka, A.P.B.: The role of innovativeness-based market orientation on marketing performance of small and medium-sized enterprises in a developing country. Manag. Sci. Lett. 10(9), 1947–1952 (2020)
Pelham, A.N.: Market orientation and other potential influences on performance in small and medium sized manufacturing firms. J. Chem. Inf. Model. (2000)
Rhee, J., Park, T., Lee, D.H.: Drivers of innovativeness and performance for innovative SMEs in South Korea: mediation of learning orientation. Technovation 30(1), 65–75 (2010). https://doi.org/10.1016/j.technovation.2009.04.008
Buli, B.M.: Entrepreneurial orientation, market orientation and performance of SMEs in the manufacturing industry: evidence from Ethiopian enterprises Bereket. Manag. Res. Rev. 40(3) (2017)
Chiva, R., Alegre, J.: Organizational learning capability and job satisfaction: an empirical assessment in the ceramic tile industry. Br. J. Manag. 20(3), 323–340 (2009)
Wang, C.L.: What comes first: market or entrepreneurial orientation? Strateg. Dir. 32(10), 7–9 (2016). https://doi.org/10.1108/sd-07-2016-0110
Yang, C.: The relationships among leadership styles, entrepreneurial orientation, and business performance. Manag. Glob. Transitions 6(3), 257–275 (2008)
Mitrega, M., Ramos, C., Forkman, S., Henneberg, S.C.: Networking capability, networking outcomes, and company performance: a nomological model including moderation effects. Ind. Mark. Manag. 41(5), 739–751 (2012)
Karanja, S.C., Muathe, S.M.A., Thuo, J.K.: The effect of marketing capabilities and distribution strategy on performance of msp intermediary organisations’ in Nairobi County, Kenya. Bus. Manage. Strateg. 5(1), 197 (2014). https://doi.org/10.5296/bms.v5i1.5723
Drnevich, P.L., Kriauciunas, A.P.: Clarrifying the conditions and limits of the contributions of ordinary and dynamic capabilities to realtive firm performance. Strateg. Manag. J. 279, 254–279 (2011). https://doi.org/10.1002/smj
Lai, F., Li, D., Wang, Q., Zhao, X.: The information technology capability of third-party logistics providers: A resource-based view and empirical evidence from China. J. Supply Chain Manag. 44(3), 22–38 (2008). https://doi.org/10.1111/j.1745-493X.2008.00064.x
Sabara, Z., Soemarno, S., Leksono, A.S., Tamsil, A.: The effects of an integrative supply chain strategy on customer service and firm performance: an analysis of direct versus indirect relationships. Uncertain Supply Chain Manag. 7(3), 517–528 (2019)
Rosli, M.M., Sidek, S.: The impact of innovation on the performance of small and medium manufacturing enterprises: evidence from Malaysia. J. Innov. Manag. Small Mediu. Enterp. 2013, 1–16 (2013). https://doi.org/10.5171/2013.885666
Aziz, N.N.A., Samad, S.: Innovation and competitive advantage: moderating effects of firm age in foods manufacturing SMEs in Malaysia. Proc. Econ. Finan. 35, 256–266 (2016). https://doi.org/10.1016/S2212-5671(16)00032-0
Naranjo-Valencia, J.C., Jiménez-Jiménez, D., Sanz-Valle, R.: Studying the links between organizational culture, innovation, and performance in Spanish companies. Rev. Latinoam. Psicol. 48(1), 30–41 (2016). https://doi.org/10.1016/j.rlp.2015.09.009
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this paper
Cite this paper
Ratnawati, A., Kholis, N. (2021). Developing Innovation Capability to Improve Marketing Performance in Batik SMEs During the Covid-19 Pandemic. In: Barolli, L., Yim, K., Enokido, T. (eds) Complex, Intelligent and Software Intensive Systems. CISIS 2021. Lecture Notes in Networks and Systems, vol 278. Springer, Cham. https://doi.org/10.1007/978-3-030-79725-6_30
Download citation
DOI: https://doi.org/10.1007/978-3-030-79725-6_30
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-79724-9
Online ISBN: 978-3-030-79725-6
eBook Packages: Intelligent Technologies and RoboticsIntelligent Technologies and Robotics (R0)