PurposePrevious research has indicated that entrepreneurial marketing (EM) positively influences small and medium-sized enterprises’ (SMEs) performance. While most studies have examined the relationship in a stable environment, EMs’ effectiveness during environmental instability remains uncertain. Therefore, the study aims to investigate the influence of EM on Indian manufacturing-based SMEs’ performance during the COVID-19-induced environmental instability. Additionally, it explores the mediating role of innovative performance in the relationship between EM and SME performance.Design/methodology/approachThe data were collected by distributing a structured survey questionnaire to 302 owners/managers of SMEs. Hypotheses were tested using structural equation modeling (SEM).FindingsThe result indicates that EM significantly impacts both innovation and SME performance. Furthermore, the innovative performance partially mediates the link between EM and SME performance. The findings suggest that even within severely affected sectors (manufacturing) during the pandemic, SMEs can achieve growth and innovation through effective EM practices.Research limitations/implicationsThis study validates the theoretical notion that EM remains effective even in unpredictable environments such as the COVID-19 pandemic. The findings offer valuable insights for SMEs seeking innovative strategies to enhance their performance, particularly those in emerging economies.Originality/valuePrior studies have relied on a single layer of abstraction to analyze the impact of EM. The present study is the first to extend standard construct (EM) conceptualization. Furthermore, it evaluated the efficiency of EM in situations characterized by instability, which is rare in the EM and SME literature.