The impact of market orientation on marketing performance: exploring the moderating role of competitive advantage


This research analyses the influence of market orientation and competitive advantage on MSMEs’ marketing performance, with competitive advantage as a moderating variable. The research methodology employs path analysis using Smart PLS software version 4.0 and involves 397 MSME owners in Jambi City, Jambi Province, Indonesia. The analysis results indicate that market orientation and competitive advantage significantly influence MSME marketing performance. Additionally, competitive advantage moderates, strengthening the relationship between market orientation and marketing performance. These findings have practical implications for MSME owners, suggesting that focusing on developing market orientation and competitive advantage can enhance their marketing performance. Furthermore, this study contributes to the theoretical understanding of factors influencing MSMEs marketing performance and encourages further research on elements that most impact competitive advantage. It also provides recommendations for policymakers to support enhancing MSME marketing performance through various supportive policies. However, this research has limitations, such as the lack of specific elements of market orientation with significant impacts and a need to better understand the moderation mechanism between market orientation and marketing performance through competitive advantage, which could be subjects of future research.

Keyword : market orientation, competitive advantage, marketing performance, MSMEs

How to Cite
Dahmiri, D., Junaidi, J., Johannes, J., Yacob, S., & Indrawijaya, S. (2024). The impact of market orientation on marketing performance: exploring the moderating role of competitive advantage. Business: Theory and Practice, 25(1), 164–174.
Published in Issue
Mar 18, 2024
Abstract Views
PDF Downloads
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.


Abdullah, Y., & Rosliyati, A. (2020). The product market strategy, value creation, and competitive advantages a determinant factor of marketing performance. International Journal of Supply Chain Management, 9(3), 13–17.

Achmad, W. (2023). MSMEs empowerment through digital innovation: The key to success of e-commerce in Indonesia. Daengku: Journal of Humanities and Social Sciences Innovation, 3(3), 469–475.

Acikdilli, G., Mintu-Wimsatt, A., Kara, A., & Spillan, J. E. (2022). Export market orientation, marketing capabilities and export performance of SMEs in an emerging market: A resource-based approach. Journal of Marketing Theory and Practice, 30(4), 526–541.

Agarwal, S., Krishna Erramilli, M., & Dev, C. S. (2003). Market orientation and performance in service firms: Role of innovation. Journal of Services Marketing, 17(1), 68–82.

Akpan, I. J., Udoh, E. A. P., & Adebisi, B. (2022). Small business awareness, adoption of state-of-the-art technologies in emerging and developing markets, and lessons from the COVID-19 pandemic. Journal of Small Business & Entrepreneurship, 34(2), 123–140.

Al-Murad, N. Y. M. (2022). Apply green marketing strategies to improve market performance by competitive advantage as mediating: An analytical study of some small organisations in Iraq. Webology, 19(1), 1266–1281.

Aljumah, A. I., Nuseir, M. T., & El Refae, G. A. (2022). Business analytics and competitive advantage for SMEs in UAE: A mediating role of technology assets. In 2022 International Arab Conference on Information Technology (ACIT) (pp. 1–9). IEEE Xplore.

Armstrong, G., & Kotler, P. T. (2018). Principles of marketing. Pearson International.

Association of Southeast Asian Nations. (2023). Development of micro, small, and medium enterprises in ASEAN (MSME).

Barney, J. B., & Hesterly, W. S. (2010). Strategic management and competitive advantage: Concepts (Vol. 408). Prentice Hall.

Carbone, F., Moroni, S., Mattioli, W., Mazzocchi, F., Romagnoli, M., & Portoghesi, L. (2020). Competitiveness and competitive advantages of chestnut timber laminated products. Annals of Forest Science, 77(2), Article 51.

Chabowski, B. R., & Mena, J. A. (2017). A review of global competitiveness research: Past advances and future directions. Journal of International Marketing, 25(4), 1–24.

Chin, C. H., Lo, M. C., & Ramayah, T. (2013). Market orientation and organisational performance: The moderating role of service quality. Sage Open, 3(4).

Chong, D., & Ali, H. (2022). Literature review: Competitive strategy, competitive advantages, and marketing performance on e-commerce Shopee Indonesia. Dinasti International Journal of Digital Business Management, 3(2), 299–309.

Clark, B. H., & Montgomery, D. B. (1999). Managerial identification of competitors. Journal of Marketing, 63(3), 67–83.

Correia, R. J., Dias, J. G., & Teixeira, M. S. (2020). Dynamic capabilities and competitive advantages are mediator variables between market orientation and business performance. Journal of Strategy and Management, 14(2), 187–206.

Creswell, J. W., & Creswell, J. D. (2017). Research design: Qualitative, quantitative, and mixed methods approaches. Sage Publications.

Dabrowski, D., Brzozowska-Woś, M., Gołąb-Andrzejak, E., & Firgolska, A. (2019). Market orientation and hotel performance: The mediating effect of creative marketing programs. Journal of Hospitality and Tourism Management, 41, 175–183.

Davcik, N. S., & Sharma, P. (2016). Marketing resources, performance, and competitive advantage: A review and future research directions. Journal of Business Research, 69(12), 5547–5552.

Day, G. S. (1994). The capabilities of market-driven organisations. Journal of Marketing, 58(4), 37–52.

Dobni, C. B., & Luffman, G. (2003). Determining the scope and impact of market orientation profiles on strategy implementation and performance. Strategic Management Journal, 24(6), 577–585.

Drucker, P. F. (1954). The practice of management. Harper Business.

Efrata, T. C., Radianto, W. E. D., Budiono, S. C., & Marlina, E. E. (2019). The impact of innovation, competitive advantage, and market orientation on a firm’s marketing performance in the garment industry in Indonesia. In Proceedings of the 2019 International Conference on Organizational Innovation (ICOI 2019). Atlantis Press.

El Chaarani, H., Vrontis, P. D., El Nemar, S., & El Abiad, Z. (2022). The impact of strategic competitive innovation on the financial performance of SMEs during the COVID-19 pandemic period. Competitiveness Review: An International Business Journal, 32(3), 282–301.

Elgarhy, S. D., & Abou-Shouk, M. (2023). Effects of entrepreneurial orientation, marketing, and innovation capabilities, on market performance: The mediating effect of sustainable competitive advantage. International Journal of Contemporary Hospitality Management, 35(6), 1986–2004.

Fatikha, C., Rahayu, M., & Sumiati, S. (2021). Effect of entrepreneurship orientation and market orientation on marketing performance through competitive advantage. Jurnal Aplikasi Manajemen, 19(2), 448–458.

Fatonah, S., & Haryanto, A. T. (2022). Exploring market orientation, product innovation and competitive advantage to enhance the performance of SMEs under uncertain events. Uncertain Supply Chain Management, 10(1), 161–168.

Fernandes, C. I., Ferreira, J. J., Lobo, C. A., & Raposo, M. (2020). The impact of market orientation on the internationalisation of SMEs. Review of International Business and Strategy, 30(1), 123–143.

Frösén, J., Luoma, J., Jaakkola, M., Tikkanen, H., & Aspara, J. (2016). What counts versus what can be counted: The complex interplay of market orientation and marketing performance measurement. Journal of Marketing, 80(3), 60–78.

Gligor, D., Gligor, N., & Maloni, M. (2019). The supplier’s market orientation impacts the customer market orientation-performance relationship. International Journal of Production Economics, 216, 81–93.

Habib, M. A., Bao, Y., & Ilmudeen, A. (2020). The impact of green entrepreneurial orientation, market orientation and supply chain management practices on sustainable firm performance. Cogent Business and Management, 7(1), Article 1743616.

Handayani, R., & Handoyo, R. D. (2020). With innovation, is the prospect performance of large-medium enterprises expected to be better? Journal of Economics, Business, & Accountancy Ventura, 22(3), 411–423.

Hang, Y., Sarfraz, M., Khalid, R., Ozturk, I., & Tariq, J. (2022). Does corporate social responsibility and green product innovation boost organisational performance? A moderated mediation model of competitive advantage and green trust. Economic Research-Ekonomska Istraživanja, 35(1), 5379–5399.

Harjadi, D., Fatmasari, D., & Nurhasanah, A. S. (2020). Market orientation and product innovation to increase competitive advantages and its impact on marketing performance. Al-Amwal: Jurnal Ekonomi Dan Perbankan Syari’ah, 12(1), 12–21.

Haseeb, M., Hussain, H. I., Kot, S., Androniceanu, A., & Jermsittiparsert, K. (2019). Role of social and technological challenges in achieving a sustainable competitive advantage and sustainable business performance. Sustainability, 11(14), Article 3811.

Hayek, F. A. (1980). Individualism and economic order. University of Chicago Press.

Hoffman, D. L., & Novak, T. P. (1996). Marketing in hypermedia computer-mediated environments: Conceptual foundations. Journal of Marketing, 60(3), 50–68.

Hooley, G. J., Greenley, G. E., Cadogan, J. W., & Fahy, J. (2005). The performance impact of marketing resources. Journal of Business Research, 58(1), 18–27.

Johnson, W. C., & Sirikit, A. (2002). Service quality in the Thai telecommunication industry: A tool for achieving a sustainable competitive advantage. Management Decision, 40(7), 693–701.

Julian, C. C., & O’Cass, A. (2002). Examining the internal-external determinants of International Joint Venture (IJV) marketing performance in Thailand. Australasian Marketing Journal, 10(2), 55–71.

Kaleka, A., & Morgan, N. A. (2017). Which competitive advantage(s)? Competitive advantage-market performance relationships in international markets. Journal of International Marketing, 25(4), 25–49.

Karnowati, N., & Handayani, E. (2022). Mediation role of business performance on entrepreneurship orientation and market orientation to create MSME competitiveness in pandemic times. International Journal of Research in Business and Social Science (2147–4478), 11(6), 138–147.

Katadata Media Network. (2023). Indonesia Punya UMKM Terbanyak di ASEAN, Bagaimana Daya Saingnya?

Katsikeas, C. S. (1994). Export competitive advantages. International Marketing Review, 11(3), 33–53.

Keskin, H., Ayar Şentürk, H., Tatoglu, E., Gölgeci, I., Kalaycioglu, O., & Etlioglu, H. T. (2021). The simultaneous effect of firm capabilities and competitive strategies on export performance: The role of competitive advantages and intensity. International Marketing Review, 38(6), 1242–1266.

Kiyabo, K., & Isaga, N. (2020). Entrepreneurial orientation, competitive advantage, and SMEs’ performance: Application of firm growth and personal wealth measures. Journal of Innovation and Entrepreneurship, 9, 1–15.

Kotler, P., Kartajaya, H., & Setiawan, I. (2021). Marketing 5.0: Technology for humanity. John Wiley & Sons.

Kumar, V., Jones, E., Venkatesan, R., & Leone, R. P. (2011). Is market orientation a sustainable competitive advantage or simply the cost of competing? Journal of Marketing, 75(1), 16–30.

Länsiluoto, A., Joensuu‐Salo, S., Varamäki, E., Viljamaa, A., & Sorama, K. (2020). Market orientation and performance measurement system adoption impact on performance in SMEs. Journal of Small Business Management, 57(3), 1027–1043.

Lee, K., & Yoo, J. (2019). How does open innovation lead to competitive advantage? A dynamic capability view perspective. PloS One, 14(11), Article 223405.

Leonidou, L. C., Fotiadis, T. A., Christodoulides, P., Spyropoulou, S., & Katsikeas, C. S. (2015). Environmentally friendly export business strategy: Its determinants and effects on competitive advantage and performance. International Business Review, 24(5), 798–811.

Lestari, R., Pradani, T., & Digdowiseiso, K. (2022). The effects of digital marketing, entrepreneurship orientation, and product innovation on competitive advantage and its impact on the marketing performance of Talas Bolu Sangkuriang in Bogor City. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 5(1), 2081–2087.

Levitt, T. (1984). Marketing myopia. Journal of Library Administration, 4(4), 59–80.

Limakrisna, N., & Yoserizal, S. (2016). Determinants of marketing performance: An empirical study at National Commercial Bank in Jakarta Indonesia. SpringerPlus, 5(1), Article 1693.

Lings, I. N., & Greenley, G. E. (2009). The impact of internal and external market orientations on firm performance. Journal of Strategic Marketing, 17(1), 41–53.

Ma, H. (2020). Competitive advantage and firm performance. Competitiveness Review: An International Business Journal, 10(2), 15–32.

Martin, S. L., & Javalgi, R. R. G. (2016). Entrepreneurial orientation, marketing capabilities and performance: The moderating role of competitive intensity on Latin American international new ventures. Journal of Business Research, 69(6), 2040–2051.

Martinette, L. A., & Obenchain-Leeson, A. (2012). The relationship between learning orientation and business performance and the moderating effect of competitive advantage: A service organisation perspective. Journal of Service Science (JSS), 5(1), 43–58.

Martinette, L., Obenchain-Leeson, A., Gomez, G., & Webb, J. (2014). Relationship between learning orientation and business performance and the moderating effect of competitive advantage: An accounting services firms perspective. International Business & Economics Research Journal (IBER), 13(4), 779–792.

Mazaira, A., González, E., & Avendaño, R. (2003). The role of market orientation on company performance through the development of sustainable competitive advantage: The Inditex-Zara case. Marketing Intelligence & Planning, 21(4), 220–229.

McKenna, R. (1991). Marketing is everything. Harvard Business Review, 69(1), 65–79.

Merlo, O., & Auh, S. (2009). The effects of entrepreneurial orientation, market orientation, and marketing subunit influence on firm performance. Marketing Letters, 20, 295–311.

Mian, T. S., & Ghabban, F. (2022). Competitive advantage: A study of Saudi SMEs to adopt data mining for effective decision making. Journal of Data Analysis and Information Processing, 10(3), 155–169.

Ministry of Cooperatives and SMEs of the Republic of Indonesia. (2023). KemenKopUKM Gandeng BPS Lakukan Pendataan Lengkap Koperasi dan UMKM 2023.

Mohammadian, M., Allahverdi, M., & Salimi, A. (2013). The impact of export market orientation and competitive advantage on export performance (case study: The study of exemplary exporters of Iran Selected in 2012). Journal of Business Management, 5(4), 61–78.

Murray, J. Y., Gao, G. Y., & Kotabe, M. (2011). Market orientation and performance of export ventures: The process through marketing capabilities and competitive advantages. Journal of the Academy of Marketing Science, 39, 252–269.

Na, Y. K., Kang, S., & Jeong, H. Y. (2019). The effect of market orientation on performance of sharing economy business: Focusing on marketing innovation and sustainable competitive advantage. Sustainability, 11(3), Article 729.

Najafi-Tavani, S., Sharifi, H., & Najafi-Tavani, Z. (2016). Market orientation, marketing capability, and new product performance: The moderating role of absorptive capacity. Journal of Business Research, 69(11), 5059–5064.

Nerver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20–35.

Nursal, M. F., Rianto, M. R., & Bukhari, E. (2022). The influence of market orientation, entrepreneurial orientation, knowledge management and learning organization on performance mediated by innovation in culinary SME’s in Bekasi. East Asian Journal of Multidisciplinary Research, 1(8), 1691–1702.

Nuryakin, N., & Maryati, T. (2022). Do green innovation and green competitive advantage mediate the effect of green marketing orientation on SMEs’ green marketing performance? Cogent Business and Management, 9(1).

Pardi, S., Suyadi, I., & Arifin, Z. (2014). The effect of market orientation and entrepreneurial orientation toward learning orientation, innovation, competitive advantages and marketing performance. European Journal of Business and Management, 6(21), 69–81.

Patrisia, D., Linda, M. R., & Abror, A. (2022). Creation of competitive advantage in improving the business performance of banking companies. Jurnal Siasat Bisnis, 26(2), 121–137.

Porter, M. E., Magretta, J., & Kramer, M. R. (2014). Strategy and competition: The porter collection. Harvard Business Review Press.

Puspaningrum, A. (2020). Market orientation, competitive advantage and marketing performance of small medium enterprises (SMEs). Journal of Economics, Business, & Accountancy Ventura, 23(1), 19–27.

Protcko, E., & Dornberger, U. (2014). The impact of market orientation on business performance–the case of Tatarstan knowledge-intensive companies (Russia). Problems and Perspectives in Management, 12(4), 225–231.

Pusung, C. S., Narsa, N. P. D. R. H., & Wardhaningrum, O. A. (2023). Innovation, competitive strategy and MSME performance: A survey study on culinary SMEs in Indonesia during the COVID-19 pandemic. Business: Theory and Practice, 24(1), 160–172.

Qi, Y., Zhao, X., & Sheu, C. (2021). The impact of competitive strategy and supply chain strategy on business performance: The role of environmental uncertainty. Decision Sciences, 42(2), 371–389.

Rahman, S., Budiyanto, B., & Suwitho, S. (2021). The negative effect of market orientation on SMEs’ marketing performance in the creative economy sector, and how innovation mediating it. International Journal of Economics Development Research (IJEDR), 2(2), 77–91.

Raju, P. S., Lonial, S. C., & Crum, M. D. (2011). Market orientation in the context of SMEs: A conceptual framework. Journal of Business Research, 64(12), 1320–1326.

Rua, O. L., & Santos, C. (2022). Linking brand and competitive advantage: The mediating effect of positioning and market orientation. European Research on Management and Business Economics, 28(2), Article 100194.

Salim, M., Saputra, F., Hayu, R., & Febliansa, M. (2021). Marketing performance of bread and cake small and medium business with competitive advantage as moderating variable. Management Science Letters, 11(4), 1421–1428.

Samad, S. (2018). Examining the effects of environmental strategy and competitive advantage on business performance. Management Science Letters, 8(9), 891–902.

Slater, S. F., & Narver, J. C. (2000). The positive effect of a market orientation on business profitability: A balanced replication. Journal of Business Research, 48(1), 69–73.

Smith, W. R. (1956). Product differentiation and market segmentation as alternative marketing strategies. Journal of Marketing, 21(1), 3–8.

Song, X. M., & Parry, M. E. (1997). A cross-national comparative study of new product development processes: Japan and the United States. Journal of Marketing, 61(2), 1–18.

Sukaatmadja, I., Yasa, N., Rahyuda, H., Setini, M., & Dharmanegara, I. (2021). Competitive advantage to enhance internationalisation and marketing performance woodcraft industry: A perspective of resource-based view theory. Journal of Project Management, 6(1), 45–56.

Sutaguna, I. N. T., Achmad, G. N., Risdwiyanto, A., & Yusuf, M. (2023). Marketing strategy for increasing sales of cooking oil shoes in Barokah trading business. International Journal of Economics and Management Research, 2(1), 132–152.

Suwandana, I. G. M. (2023). Role of competitive advantage in mediating the effect of market orientation on marketing performance of Small Medium Enterprise (SME): Study on the gold and silver jewelry craft industry in Singapadu Village, Gianyar, Indonesia. European Journal of Business and Management Research, 8(1), 247–251.

Syahrial, H., & Nofriza, B. (2022). The effect of market orientation and product innovation on performance-mediated competitive advantage marketing (Case study of MSME Boutiq women in Medan market center). International Journal of Applied Finance and Business Studies, 10(1), 23–30.

Tjahjadi, B., Soewarno, N., Hariyati, H., Nafidah, L. N., Kustiningsih, N., & Nadyaningrum, V. (2020). The role of green innovation between green market orientation and business performance: Its implication for open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), Article 173.

Udriyah, Tham, J., & Ferdous Azam, S. M. (2019). The effects of market orientation and innovation on competitive advantage and business performance of textile smes. Management Science Letters, 9(9), 1419–1428.

Venkatraman, N., & Prescott, J. E. (1990). The market share-profitability relationship: Testing temporal stability across business cycles. Journal of Management, 16(4), 783–805.

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. Pearson.

World Trade Organization. (2023). MSMEs day 2020.

Wongsansukcharoen, J., & Thaweepaiboonwong, J. (2023). Effect of innovations in human resource practices, innovation capabilities, and competitive advantage on small and medium enterprises’ performance in Thailand. European Research on Management and Business Economics, 29(1), Article 100210.

Yasa, N., Giantari, I. G. A. K., Setini, M., & Rahmayanti, P. J. M. S. L. (2020). The role of competitive advantage in mediating the effect of promotional strategy on marketing performance. Management Science Letters, 10(12), 2845–2848.

Zaini, A., Hadiwidjojo, D., Rohman, F., & Maskie, G. (2014). Effect of competitive advantage as a mediator variable of entrepreneurship orientation to marketing performance. Journal of Business and Management, 16(5), 5–10.

Zhang, J. Z. & Watson IV, G. F. (2020). Marketing ecosystem: An outside-in view for sustainable advantage. Industrial Marketing Management, 88(January), 287–304.

Zhang, S., Yang, D., Qiu, S., Bao, X., & Li, J. (2018). Open innovation and firm performance: Evidence from the Chinese mechanical manufacturing industry. Journal of Engineering and Technology Management – JET-M, 48(May), 76–86.

Zhou, K. Z., Brown, J. R., & Dev, C. S. (2009). Market orientation, competitive advantage, and performance: A demand-based perspective. Journal of Business Research, 62(11), 1063–1070.