Market innovations driving competitive advantage in MSMEs

Abstract

In the constantly changing business environment, Micro, Small and Medium Enterprises (MSMEs) have to resort to various strategies to strive the competition. The diversity and complexity of the competitive markets necessitate the MSMEs to have a clear vision to achieve efficiency and flexibility. In several cases, MSMEs zero down to owning some kind of innovations. Globally, innovation has been categorised in four types, namely, ‘product, process, marketing and organizational’. Among these, the focus of this paper is on marketing innovation and how much literature supports its impact on attaining competitive advantage. This paper tries to broadly provide a holistic perspective on how impactful are marketing innovations in seeking competitive advantage through marketing capabilities based on extensive literature review. Significant research has been done in the fields of marketing practices, capabilities, newer trends and role of innovations in achieving competitive advantage. Marketing innovation has widely been defined as constituting modifications in product placement, promotion, pricing and packaging (Deshpandé, Farley, &Webster, 1993; Hurley & Hult, 1998; OECD, 2005). The discussion takes into account the imperative factor driving market innovations based on resource-based view i.e., market capability and studies its relation to the determinants of competitive advantage.