۲- Theoretical background and research hypotheses

۳- Material and methods

۴- Discussion of the findings and conclusion

۵- Limitations and future research directions

References

Introduction

It is known that innovation has a significant impact on the performance of firms [1]. Most studies that focus on the relationship between innovation efficiency and firm size only sought to understand the findings in terms of the improvement of market performance and the exploitation of new market opportunities [2, 3, 4, 5, 6, 7]. This specific relationship was further established for small and medium-sized enterprises (SMEs), as well as large companies [8, 9]. Because of their number and the significant share of the workforce involved, SMEs play a crucial role in the economies [10]. Thus, strengthening the innovative aspects and knowledge of SMEs brings major opportunities, as innovation is a key to longterm competitiveness and promises further gains regarding private sector performance and economic development [11]. In this light, this paper aims to contribute to the literature by providing a better understanding of the links between the layers of innovation and market performance. Equally, the study empirically tests the resource-based view (RBV) and is extended from Terziovski’s work [12]. In contrast to numerous previous studies that indicate market performance as a dimension of the firm’s performance, this study provides a clearer view upon the relationship between the constructs of innovation that drive market performance. The first objective implies highlighting the importance of market innovation and innovation culture on product innovation in SMEs. Thus, it should be mentioned that innovation is significant at all stages of competition and creates wealth in the business environment for companies [13, 14, 15]. Some researchers argue that small firms invest more in product innovation than they do in process innovation [16, 17, 18]. Therefore, this study approaches only the effect of product innovation on market performance. Companies need to apply innovation culture in their practices, such as to allow them to succeed in terms of innovative products and services. It is creativity, empowerment, and change of organizational culture that drives innovation [19, 20]. Empirical evidence suggests that it is important to build, maintain, and promote a culture of innovation, if companies want to remain successful and create new products [21, 22]. However, despite the attention towards the topic of marketing innovation and innovation culture in the literature, previous research did not sufficiently analyzed the contribution of innovation culture and the impact of marketing innovation on product innovation. The second objective of the study is to address the importance of marketing innovation strategies and product innovation when considering superior market performance. The primary idea behind this research is that marketing innovation is a prerequisite when trying to improve market performance. Marketing and product innovation strategies are the key contributors to market performance. Competitiveness has become an indispensable element of survival in the marketplace [23], while innovation activities create superior value and benefits, such as allowing a company to differentiate itself from its’ competitors [24]. SMEs can effectively use market innovation to sell differentiated products and services in complex environments [9, 25]. The innovation literature suggests that product innovation affects performance [26, 27, 28, 29]. In the research, the focus was on the influence innovative activities have on market performance. This study contributes to the present literature by revealing the manner in which the development of a unique innovation culture and marketing innovation provides SMEs with product innovation success. It also sustains that the creation of innovative marketing strategies and product innovation capabilities maintain superior market performance on the part of SMEs.