Linking entrepreneurial marketing to business performance: Innovation mediation and market sensing moderation

Abstract

Abstract Purpose: The study aims to examine how entrepreneurial marketing (EM), operationalized as market orientation (MO) and entrepreneurial orientation (EO), influences the business performance (BP) of traditional weaving micro-enterprises (MEs), while considering the mediating role of marketing innovation (MI) and the moderating effect of market sensing capability (MSC). Originality/value: This research contributes a contextualized framework that integrates Resource-Based Theory (RBT) and Dynamic Capability Theory (DCT) to explain how entrepreneurial strategies interact with dynamic capabilities to influence performance in heritagebased enterprises. While prior studies of entrepreneurial marketing primarily focus on general MEs, this study extends the discussion to cultural micro-enterprises, demonstrating that MO and EO yield different innovation pathways. The study adds value by highlighting the strategic importance of MSC as a capability that amplifies the benefits of innovation, particularly for market-oriented firms. Design/methodology/approach: A quantitative approach was used to test a theoretical model with Partial Least Squares Structural Equation Modeling (PLS-SEM). Data were collected from 190 Karawo micro-enterprises across Gorontalo province. MO and EO were conceptualized as strategic resources within RBT, whereas MSC was positioned as a dynamic capability aligned with DCT. Findings: MO significantly affects BP, both directly and indirectly through MI, suggesting partial mediation. EO, however, impacts BP only indirectly via MI, reflecting full mediation. Furthermore, MSC strengthens MO’s effect on MI but does not moderate the EO-MI relationship. These results suggest that market-oriented MEs achieve greater performance when supported by strong market sensing and marketing innovation capabilities. Contributions/implications: This study contributes to the entrepreneurial marketing literature by demonstrating that Market Orientation and Entrepreneurial Orientation influence business performance through different innovation pathways in heritage-based micro-enterprises. The findings extend the integration of Resource-Based Theory and Dynamic Capability Theory by highlighting the mediating role of Marketing Innovation and the conditional role of Market Sensing Capability. In practice, the study suggests that traditional micro-enterprises can improve performance by strengthening market-oriented behaviors, enhancing marketing innovation, and developing market-sensing capabilities to respond more effectively to changing customer needs.