An empirical investigation between brand orientation and brand performance: Mediating and moderating role of value co-creation and innovative capabilities

Abstract

This study analyses the function of value co-creation in mediating the relationship between brand orientation, brand performance, and innovation capacities in China’s small and medium-sized enterprises (SMEs). Using the organization’s size differential characteristic, additional testing of these criteria across disaggregated SME levels is performed. The empirical examination of 240 enterprises in an emerging market setting was conducted using Structure Equation Modeling (SEM). According to the results of the moderation and mediation research, value co-creation and capabilities often displayed positive moderating effects across all organization sizes, but they are conditional and not invariant when disaggregated by enterprise size. The research reveals that business owners and managers must decide the most successful complements to their brand orientation efforts based on the appropriate combinations of business abilities for the size of their particular firms.

The Effects of Brand orientation on Mexican SMEs Business Performance

“…Studies on the adoption and application of various strategic orientations in organizations have attracted increasing attention from researchers, academics, and industry professionals, particularly due to the importance of management decisions that allow firms to achieve higher performance levels (Yueqiang, 2022). Therefore, SMEs that give greater value to their brands and have a better orientation of their brands, generally have greater success in financial markets, compared to those competitors that have a lower brand orientation (Yueqiang, 2022). Thus, in a highly competitive and globalized market, companies, particularly SMEs, seek to obtain more competitive advantages, as well as greater business performance, for which brand orientation plays an essential role (Wong & Merrilees, 2005).…”

“…The brand concept is one of the marketing activities, which has been analyzed and discussed relatively little in marketing literature (Wong & Merrilees, 2005). Likewise, various researchers, academics and marketing professionals have tried to rationalize and make efficient brand management systems which include, for example, brand perception, brand loyalty, brand knowledge, brand differentiation, brand equity, brand rewards, brand proliferation, brand image, and brand orientation (de Chernatony, 1992; Aaker, 1996;Keller, 2003), thereby seeking to firms, mainly small and medium-sized (SMEs), achieve not only greater business performance but also their own survival (Yueqiang, 2022). Furthermore, Piha et al (2021) considered that the relationship between brand orientation and business performance is generally affected by external influences, while other researchers concluded that given the competitiveness level existing in business environment and implementing only a brand orientation.…”

“…Furthermore, Piha et al (2021) considered that the relationship between brand orientation and business performance is generally affected by external influences, while other researchers concluded that given the competitiveness level existing in business environment and implementing only a brand orientation. External aspects can generate a low influence on business performance, compared to internal aspects (Yueqiang, 2022). Therefore, in the current literature, the debate is open whether companies, particularly SMEs, should implement various orientations at the same time, as well as which brand orientation activities would most improve the level of success and business performance (Gul et al, 2021a).…”

“…Therefore, the literature related to brand orientation and its effects on business performance in SMEs is very confusing and open to debate (Pardeshi & Khanna, 2021). Therefore, researchers and academics should guide their studies in providing robust empirical evidence that supports the assumption of the existing relationship between brand orientation and business performance, in a context of SMEs in emerging economy countries (Yueqiang, 2022). In this sense, the objective of this study is the analysis and discussion of the effects of brand orientation on business performance in a context of manufacturing SMEs.…”

“…It is important to establish that it is essential to analyze SMEs for two basic reasons, on one hand, because they are the largest number of existing companies in Mexico and, on other hand, because they contribute more than 50% of GDP and employment at the national level (INEGI, 2023). Additionally, given the existence of a lack of empirical knowledge in marketing literature about the link between brand orientation and business performance, especially in SMEs, there is an urgent need to implement a holistic analysis with all those variables of brand orientation that substantially improve business performance (Dunes & Pras, 2013;Coleman et al, 2015;Yueqiang, 2022), particularly in SMEs in emerging economy countries, as is the case of Mexico (Wong & Merrilees, 2005;Yueqiang, 2022). Under this context, the main contribution of this study is the provision of robust empirical evidence of the relationship between brand orientation and business performance of SMEs in an emerging economy country, as well as the contribution of scientific knowledge that contribute to filling the gap in the literature in the marketing field.…”