The role of the marketing strategy process in the innovativeness-performance relationship of SMEs

Abstract

Purpose The purpose of this paper is to examine the mediating role of the marketing strategy process in the relationship between innovativeness and organizational performance in SMEs. Design/methodology/approach The partial least squares-structural equation modeling technique was used to analyze data from Brazilian SMEs that belong to the software sector. Innovativeness was considered as a cultural aspect of the firm, which is related to being open to new ideas. The marketing strategy process was analyzed considering its two dimensions, i.e., formulation and implementation of marketing strategies. Organizational performance included variables of market, financial and innovation performance. Findings The results show that innovativeness positively influences organizational performance through the marketing strategy process. Specifically, the formulation of marketing strategies mediates the relationship between innovativeness and organizational performance. Implementation by itself does not mediate this relationship. When considering the path formulation→implementation as mediator, the influence is positive, i.e., formulation positively influences the implementation of marketing strategies and this path mediates the relationship between innovativeness and organizational performance. Therefore, the mediating role is stronger when considering the formulation-implementation path than when taking into account the activities of the formulation and implementation of marketing strategies separately. Originality/value This study contributes to the literature by discussing how innovativeness influences SMEs’ performance through subsequent stages of the marketing strategy process. This is one of the first studies to consider activities in the marketing strategy process as a mediator in the innovativeness-performance relationship and explore its sequence.

Marketing Strategy Process: analyzing the sequential relationships among its strategic activities

“…We also highlight that most of the literature on marketing strategy making has a normative standard based on models tested in large companies. Considering that SMEs can also improve organizational performance when formulation and implementation activities are well developed (Chung, Wang, & Huang, 2012;Finoti et al, 2017;Thorpe & Morgan, 2007), we argue that the current study has important implications to theory development regarding strategy making in small and medium firms.…”

“…Following the organizational strategy literature, some researchers have advanced the marketing field, by considering the marketing strategy making as formed by two major steps: formulation and implementation (e.g. El-Ansary, 2006;Finoti et al, 2017;Morgan et al, 2003;Morgan et al, 2012;Morgan, 2012;Trez & Luce, 2012). The results of these studies show that the formulation processes only have an impact on firms performance when they are followed by implementation efforts.…”

“…Some researchers have investigated the relationship between the processes of marketing strategy formulation and implementation. In general, their results demonstrate that formulation alone is not capable of generating positive results for the company, always depending on the implementation process (Finoti et al, 2017;Morgan, Katsikeas, & Vorhies, 2012;Morgan, Zou, Vorhies, & Katsikeas, 2003;Trez & Luce, 2012). Thus, despite the established relationship between the two process steps, and the broad interest on the topic, little is known about the interrelationships among the activities at each stage and even less about how the formulation activities individually influence the implementation ones (Hutzschenreuter & Kleindienst, 2006) (see Figure 1, p. 5 for an overview of how researchers are exploring the marketing strategy process).…”

“…For example, we highlight the studies on organizational antecedents such as innovative culture (Menon, Bharadwaj, Adidam, & Edison, 1999), market orientation (Lee, Yoon, Kim, & Kang, 2006) corporate structure (Jarrat & Fayed, 2001), and organizational vision (Naidoo & Wu, 2011). Regarding the results of marketing strategy process, researchers have emphasized the strategy success (Noble & Mokwa, 1999;Thorpe & Morgan, 2007), sales and profit growth (Sashittal & Jassawalla, 2001), market share (El-Ansary, 2006), customer satisfaction (Toaldo, Didonet, & Luce, 2013), and new product success (Finoti, Didonet, Toaldo, & Martins, 2017).…”

Leveraging medium-sized sport events to attract club participants

“…While it is often assumed that an event has an inspirational quality that encourages participation, research suggests this assumption is easily challenged (Grix, 2016) and that activation or leveraging is necessary (Taks et al, 2014). For best results, activation or leveraging by not-for-profit organizations (e.g., community sport clubs) should follow strategic marketing principles for both the formulation and implementation of the marketing strategies (Finoti et al, 2017).…”