Effect of entrepreneurial and market orientation on consumer engagement and performance of manufacturing SMEs

Abstract

Purpose This study aims to examine the effect of entrepreneurial and market orientations on consumer engagement and the performance of manufacturing small- and medium-sized enterprises (SMEs) under the premise of the resource-based view (RBV) theory. Design/methodology/approach This study adopts a cross-sectional design, and quantitative data were collected from 360 manufacturing SMEs in Peninsular Malaysia. SMEs were selected using a stratified multi-stage sampling method from a total of 37,861 manufacturing SMEs. The respondents were selected from Selangor, Johor, Penang, Perak, Kelantan and Terengganu, as these states make up the majority (79 per cent) of the manufacturing SMEs in Malaysia. Findings Entrepreneurial and market orientations have statistically significant positive effects on consumer engagement. Consumer engagement in turn positively affects the performance of manufacturing SMEs in Peninsular Malaysia. Findings also revealed a partial mediation of consumer engagement between entrepreneurial and market orientations on performance. Research limitations/implications A larger sample size may improve the generalizability of the findings. Managers may be able to apply the findings of this paper in developing strategies for their manufacturing SMEs, specifically, by focusing on entrepreneurial and market orientation to raise consumer engagement and to improve the overall performances of their SMEs. Originality/value This study focuses on manufacturing SMEs in Malaysia, an emerging country with conditions unique to other industrialized countries. This study aims to demonstrate that integrated entrepreneurial and market orientations have significant effects on SMEs’ performance. This relationship could be mediated by consumer engagement. Specifically, consumer orientation may influence the effect of entrepreneurial and market orientations on overall firm performance..

An Integrative Model of Market Orientation on Innovation Performance

“…We hope that market orientation contributions can be optimized when MO also has CRM and knowledge management capabilities. In addition, CRM (Mamun et. al., 2018), and knowledge management (Ozkaya et.…”

“…Meanwhile, customer relationship management (CRM) is the ability of companies to build and maintain beneficial relationships with target customers influenced by market orientation . CRM efforts include activities such as building relationships, interacting, intensity of communications, and information sharing which all have an influence on innovation performance (Mamun et. al., 2018).…”

“…Market orientation as an implementation of the marketing concept has received a lot of attention from academics and practitioners (Cambra-Fierro, Melero-Polo, & Vázquez-Carrasco, 2013). Market orientation reflects the culture of the company by trying to create superior customer value and explore market trends to provide greater benefits for customers (Mamun et. al., 2018).…”

Role of Market Orientation on Innovation Orientation of Manufacturing Small and Medium- Sized Enterprises (SMEs) in the Accra Metropolis, Ghana

“…Market orientation has generally been recognized as the degree to which operations and strategies of organizations are designed to respond to market demand fluctuations (Sivageahnam, Al Mamun, Nasir & Ibrahim, 2015). Market orientation has been established in the literature as an essential construct of strategic orientation through which resources of organizations are converted to valuable outputs to customers (Mamun, Mohiuddin, Fazal & Ahmad, 2018). Mamun et al (2018) asserted that thorough knowledge of market orientation can aid organizations exploit opportunities in the marketplace, which can enhance the performance of such establishments.…”

“…Market orientation has been established in the literature as an essential construct of strategic orientation through which resources of organizations are converted to valuable outputs to customers (Mamun, Mohiuddin, Fazal & Ahmad, 2018). Mamun et al (2018) asserted that thorough knowledge of market orientation can aid organizations exploit opportunities in the marketplace, which can enhance the performance of such establishments. Mahmoud, Blankson, Owusu-Frimpong, Nwankwo and Trang (2016) advanced that market orientation is the origin of new product and services ideas, thus possessing the tendency of influencing the extent of innovation in organizations.…”