The Mediating Role of Competitive Advantage on Marketing Innovation and Business Performance in Micro and Small Restaurants in Western Batangas

Ma. Luz  I. Sanchez,

The Mediating Role of Competitive Advantage on Marketing Innovation and Business Performance in Micro and Small Restaurants in Western Batangas

Discipline: business and management (non-specific)

Abstract:

This study addresses the gap in understanding how marketing innovation influences competitive advantage and business performance in micro and small-scale restaurants in Western Batangas. Specifically, it examines the roles of market orientation and product innovation in contributing to competitive advantage, characterized by value, rarity, inimitability, and non-substitutability. The objectives were to analyze the effects of marketing innovation on competitive advantage and business performance, while also exploring the mediating role of competitive advantage. Employing an Explanatory Sequential Mixed-Method design, the research commenced with the quantitative analysis of data gathered from 159 restaurant owners and managers using a self-constructed questionnaire. Statistical tools, including frequency analysis, percentages, means, simple linear regression, and the Sobel Test, were utilized. This was followed by qualitative insights obtained through Focus Group Discussions with five participants, analyzed using Thematic Analysis. Results showed a concentration of restaurants in Balayan, Nasugbu, and Calatagan, with most operations lasting less than ten years and employing between 1 and 99 staff. Findings indicated that both market orientation and product innovation have a positive impact on competitive advantage; however, competitive advantage did not significantly mediate the relationship between marketing innovation and business performance. The Sobel test and qualitative interviews confirmed this. The study concludes that marketing innovation enhances the performance of micro and small-scale restaurants indirectly by providing a competitive advantage. A concise business manual was developed to provide actionable strategies for restaurant owners aimed at improving product offerings, services, and overall competitiveness in the market.

References:

Abdulsamad, A., Ali, N. A., Mahomed, A. S. B., Hashim, H., Jandab, A., Hamdan, A., & Al Sharif, A. M. (2021). The impact of market orientation components on organizational performance of SMEs: The single industry approach in the food and beverage sector. Advances in Social Sciences Research Journal, 8(5), 504–516. https://doi.org/10.14738/assrj.85.10231
Ahmad Khan, I., Shar, A. H., & Junejo, M. A. (2023). Impact of cultural, marketing and product innovations on firm performance of SMEs. Journal of Social Research Development, 4(1), 36–49. https://doi.org/10.53664/JSRD/04-01-2023-04-36-49
Aland, C., Menahen Taneo, S. Y., & Widyaningrum, S. (2022). The effect of product innovation on the performance of food SMEs: The moderator effect of Quadruple Helix. International Journal of Economics, Finance and Management Studies, 8(1), Article 32. https://doi.org/10.47191/jefms/v8-i1-32
Braun, V., & Clarke, V. (2021). Thematic analysis: A practical guide. SAGE Publications. https://uk.sagepub.com/en-gb/eur/thematic-analysis/book248481
Cities and Municipalities Competitive Index. (2023). Western Batangas competitiveness data. Retrieved from https://cmci.dti.gov.ph
Creswell, J. W., & Creswell, J. D. (2023). Research design: Qualitative, quantitative, and mixed methods approaches (6th ed.) [E-book edition]. SAGE Publications.
Department of Trade and Industry. (2023). 2023 MSME statistics report. Retrieved from https://www.dti.gov.ph/resources/msme-statistics/
Harjadi, D., Fatmasari, D., & Nurhasanah, A. S. N. (2020). Market orientation and product innovation to increase competitive advantages and its impact on marketing performance: A study of food SMEs. Al Amwal: JurnalEkonomi dan Perbankan Syari’ah, 12(1), 11–20. https://doi.org/10.24235/amwal.v1i1.5457
Kaur, G. P., Bedi, H. S., & Saini, H. (2025). Leveraging innovativeness for enhanced small and medium enterprises performance: The moderating role of learning orientation. Journal of Innovation and Entrepreneurship, 14(1). https://doi.org/10.1186/s13731-025-00550-4
Kraus, S., Palmer, C., Kailer, N., Kallinger, F. L., & Spitzer, J. (2020). Digital entrepreneurship: A research agenda on new business models for the twenty-first century. International Journal of Entrepreneurial Behavior & Research, 26(6), 1181–1200. https://doi.org/10.1108/IJEBR-06-2018-0425
Kurniawan, C., & Nuringsih, K. (2023). The predictors of competitive advantage among F&B MSMEs in post-pandemic era. International Journal of Application on Economics and Business, 1(1). https://doi.org/10.24912/ijaeb.v1i1.217-223
Nonato, R. I., Banayo, D. E. P., & Cadano, R. D. (2023). Pandemic marketing strategies of selected restaurants: Evidence from the Province of Laguna, Philippines. Business and Economics in Developing Countries, 1(1), 15–22. http://doi.org/10.26480/bedc.01.2023.15.22
Wonglimpiyarat, J. (2020). Technology innovation management of small and medium-sized enterprises in the food industry: A market orientation perspective. Technology in Society, 63, 101365. https://doi.org/10.1016/j.techsoc.2020.101365
Yehia, M. H., Elbeltagi, I., & El-Gohary, H. (2019). Investigating the impact of marketing innovation on the performance of SMEs in emerging markets. International Journal of Business Innovation and Research, 19(1), 101–121.