The relationship between marketing strategies and innovative market orientation on performance of halal-certified agro-food SMEs

N.H Khairuddin,H Hashim,S.R Hussin,N.H Kamarulzaman

doi:10.26656/fr.2017.4(s1).s22

Abstract

Changes in Malaysian’s lifestyle have resulted in an increased demand for trusted agrofood products. Therefore, it is becoming a challenge for halal-certified agro-food SMEs in Malaysia to fulfil the demand by implementing marketing strategies and innovative market orientation. This study aimed to investigate the relationship between marketing strategies and innovative market orientation on performance of halal-certified agro-food SMEs. A systematic random sampling was used to select 321 halal-certified agro-food SMEs located in Peninsular Malaysia and a self-administered questionnaire using a structured questionnaire was employed to obtain responses from the target SMEs. Descriptive analysis, Chi-square analysis, and Pearson correlation analysis were carried out to analyse the data. Majority of the halal-certified agro-food SMEs involved in the study were categorised as small-sized companies with at least 5 to 75 employees. The finding revealed that there was no association between annual average sales and overall performance of halal-certified agro-food SMEs. The finding further indicated that there was a strong positive relationship between the performance (market share, sales, profitability, and growth rate) of halal-certified agro-food SMEs and marketing strategies and innovative market orientation. It is suggested that the halal-certified agro-food SMEs utilize their experience to develop more effective marketing strategies for better performance.

Highlights

According to SME Corporation Malaysia, small and medium enterprises (SMEs) can be categorised based on the number of full-time employees and annual average sales of the company
The present study revealed that there was a positive correlation between marketing strategies and performance of halal-certified agro-food SMEs
The performance of halal-certified agro-food SMEs for the past three years increased based on their market share, sales, growth rate, and profitability

Summary

Introduction

According to SME Corporation Malaysia, small and medium enterprises (SMEs) can be categorised based on the number of full-time employees and annual average sales of the company. Small and medium enterprises (SMEs) play an important role in the economic development of many countries including Malaysia (Sallem et al, 2017). According to Ramayah et al (2009), SMEs contributed 99.2% to the overall business establishments in Malaysia. The share of agro-food SMEs to agricultural value-added was reported as 42.2% with manufacturing industry contributed 18.3% of the share (SME Corporation, 2016). Despite the considerable significant contribution of agro-food SMEs to the Malaysia economy, the third-quarter report of 2017 indicated more than 40% of SMEs did not perform. Management, and marketing strategies are the key contributors to the failure of SMEs where they have been incompetent to sustain long enough in the marketplace (Sallem et al, 2017).

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