The Impact of Market Orientation and Dynamic Marketing Capability on the Marketing Performance of 'Make-To-Order' SMEs

Abstract

Objective – Literature suggest that companies should focus their Market Orientation (MO) on good marketing and business performance. However, previous research in this area deals mostly with large companies. The objective of this research is to study the significance of MO for small and medium enterprises (SMEs) with the specific production strategy of Make-To-Order. Methodology/Technique – The sample of this study is 111 Indonesia SMEs. The descriptive research design is supported by exploratory research. The structural model is analysed using the Structural Equation Modelling approach with LISREL 8.8 and SPSS 16.00. Findings – The result shows that MO does not have a significant impact on Marketing Performance. In the context of MTO, SMEs do not need to have a high Market Orientation to have satisfactory performance. It is more important for them to take care of the relationship with their principal companies. Government regulations, such as raw material regulations, also have an impact on SMEs performance. It is recommended that future research explore the types of capabilities of SMEs relating with the era of Industry 4.0. Other strategic orientations, such as production orientation, could be considered as factors in future research. Type of Paper: Empirical Keywords: Strategic Leadership Competence; Entrepreneurial Orientation; Market Orientation; Dynamic Marketing Capability; Business Environment; Marketing Performance; Maklun (MTO Strategy). Reference to this paper should be made as follows: Susanto, Y.B. 2019. The Impact of Market Orientation and Dynamic Marketing Capability on the Marketing Performance of ‘Make-To-Order’ SMEs, J. Mgt. Mkt. Review 4(3) 157 – 170 https://doi.org/10.35609/jmmr.2019.4.3(1) JEL Classification: M3, M30, M31.