The Effect of Responsive and Proactive Market Orientation on Product Innovation and Company Performance: A Case Study on MSMEs in the Culinary Field in D.I. Yogyakarta

Abstract

This study aims to determine the effect of Responsive and Proactive Market Orientation on Product Innovation and Company Performance. The population in this study is the Micro, Small, and Medium Enterprise (MSME) in the Culinary Division at D.I. Yogyakarta and use 200 respondents as a sample. By using convenience sampling technique, the researchers have the freedom to choose any culinary MSME found around D.I. Yogyakarta to be the respondent. Hypothesis testing using Structural Equation Model (SEM) analysis. The findings show that there is a positive influence of responsive market orientation on product innovation performance, proactive market orientation on product innovation performance, product innovation performance on the company's market performance, and the company's market performance on the company's financial performance. The findings of this study contribute to MSMEs that information about market orientation adopted by business actors or companies can affect the performance of new product innovations in the market to improve the company's market performance which then affects the company's financial performance.

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

“…Market oriented companies will focus on understanding current customer wants and needs and future and focuses on understanding its competitors' short-term strengths and weaknesses, their long-term capabilities, and their competitors' current and future strategies (Sukartini et al, 2019). Market orientation is present or future customer needs related to gathering market surveillance, as well as building commitment to all parts of the company that will serve buyers in market information (Ichwan & Nursyamsiah, 2018).…”

The Model of Competitive Advantage for Increasing Business Performance in Small and Medium Industries of Woven Fabric (Endek) in Bali Province

“…This makes it possible, the product innovation carried out is a process in business activities that aims to increase the added value and competitiveness of the products produced(Muh, Rahman, Syamsu, and Madris (2019). Thus, the results of this study are not confirmed to the empirical findings ofPrajogo (2016),Aksoy (2017),Fatach & Nursyamsiah (2019),Zaefarian, Forkmann, &Mitrega (2017), andSharma, Davcik, &Pillai (2016) that innovation products made can improve business performance in SMEs.Further findings conveyed, that product innovation can determine business performance if it is mediated by competitive advantage. The results of this study are following the findings ofAstrid (2017) andMuh, Rahman, Syamsu, and Madris (2019), that product innovation as a source of competitive advantage can improve business performance.…”

“…According to an empirical study by Roespinoedji, Saudi, Hardika, & Rashid (2019); Hong, Cheong, &Rizal (2016), andCoccia (2017), a business can maintain its competitive advantage by implementing more product innovations. Contrary findings from Christian & Justinius (2021) and Prasetiyo & Pertiwi (2021), product innovation cannot give a company competitive advantage, However, effectively a company's businesses perform can be directly influenced by innovative its products are (Prajogo, 2016;Aksoy, 2017;and Fatach & Nursyamsiah, 2019). The company's efforts to innovate its products are intimately tied to the goods it sells to consumers.…”

“…Innovation in the products produced can absolutely improve consumer interest in purchasing, and corporate success is rising (Prajogo, 2016). According to studies by Fatach & Nursyamsiah (2019), Sharma, Davcik, & Pillai (2016) and Zaefarian, Forkmann, & Mitrega (2017), product innovation can determine the increase in business achievements of the company. Another case with empirical findings from Muh, Rahman, Syamsu, and Madris (2019) and Narida, Sastrya, & Achmadi (2021) that product innovation cannot ensure the business achievement of the company.…”

Achieving Marketing Performance through Acculturative Product Advantages: The Case of Sarong Samarinda

“…Innovativeness helps the SMEs to gain sales and revenues, thereby leading to sustainability (Tuan, Nhan, Giang, & Ngoc, 2016;Indriastuti, Nugroho, & Aryanto, 2017). However, there were reports (Al-Zyadaat, Saudi, & Al-Awamreh, 2012;Boermans & Roelfsema, 2015;Icwan & Nursyamsiah, 2019) noting that innovativeness had not been able to improved marketing performance. This inconsistency derived from prior empirical works imply that there is a possible intervening variable that may affect the relationship between innovativeness and marketing performance.…”