Globally, marketing strategy has become a driver for customer value creation and competitiveness (Falát & Holubčík, 2017). Marketing strategy emphasizes how businesses can distinguish from their competitors, to benefit their clients which ultimately impacts competitiveness (Ibrahim & Harrison, 2020). Competitive advantage can be analysed using a resource-based view (RBV). RBV is the dominant framework to explain competitive advantage (Moreno-Gómez et al., 2020). Empirical research using an RBV in marketing is scarce (Kozlenkova et al., 2014). Therefore, it’s an opportunity for researchers to generate new knowledge on the intersection between an RBV and marketing.
Marketing strategies are activities that create value and enhance business competitiveness (Kamboj & Rahman, 2017). We focus on the influence of three marketing capabilities: marketing communications, marketing innovation, and marketing uniqueness for creating superior customer value and competitiveness (Falát & Holubčík, 2017).
Vásquez and Escamilla (2014) investigated 186 Mexican SMEs and found a lack of knowledge about the management and scope of social networks. Cant (2012) finds a lack of knowledge about marketing tools among South African SME managers and proves the correlation between business success and marketing knowledge and skills. Specifically, in Colombia, SMEs do not communicate effectively and have unstructured marketing plans with little innovation (Franco-Ángel & Urbano, 2019). Also, SMEs develop innovation internally, not through external allies (Restrepo-Morales et al., 2019), and focus more on process innovation than product innovation (Chang-Muñoz et al., 2022). Despite this low level of sophistication, Colombian SMEs are beginning to take advantage of digital marketing (Striedinger-Meléndez, 2018).
This knowledge gap is worrying due to the prominent role innovation has. SMEs still rely on traditional marketing communication strategies, which remain relevant but insufficient to succeed. Innovation and uniqueness are strategies that could provide the differential elements that complement the strategic toolbox that managers need. Recent research says innovation can be more important than communication to sustain a competitive advantage (Boisen et al., 2018). SMEs can use innovations to start their business, but a lack of communication skills creates problems in their commercialization (Hamari & Huttunen, 2016).
Although marketing capabilities have been previously studied (Ottosson & Kindström, 2016), most studies focus on the applicability of different marketing practices. They ignore in their analysis how business size affects the implementation of different marketing strategies on business competitiveness. For the above, this study aims to evaluate how three distinct marketing strategies (i.e., marketing communication, marketing innovation, and marketing uniqueness) impact the competitiveness level of Colombian SMEs and the effect of firm size.
This empirical study uses a unique sample of 176 Colombian SMEs. We used data collected during 2019. The sampling frame includes firms in traditional industries (manufacturing, retail, construction, and consumer services). Although there is not a large number of publications referring to emerging economies, and more specifically to Colombia (Striedinger-Meléndez, 2018), the Colombian scenario is interesting for the following reasons:
First, according to Striedinger-Meléndez (2018) , managers of Colombian SMEs do not have extensive knowledge in management. Therefore, we infer there could be a low use of marketing strategies. Second, the end of a more than 50-year-old conflict builds international trust and economic growth (Londono et al., 2020) creating opportunities for strategic development. Finally, the country has improved its macroeconomic indicators, including business growth, especially in SMEs, which are equivalent to 90% of all companies in Colombia (Moreno-Gómez et al., 2016).
In this study, we contribute in different ways. The main contribution to the literature is to analyze how business size moderates the potentially beneficial effect of marketing strategies on competitiveness in an emerging context (Colombia). Also, we provide information regarding the relevance and relative importance of different marketing capabilities development and their impact on firm competitiveness. Furthermore, this research offers researchers, policymakers, and marketing practitioners a better understanding of how marketing strategies increase SMEs' competitiveness. Lastly, we broaden the literature developed in industrialized economies by offering evidence on different marketing capabilities implemented in a developing country such as Colombia.
2. Theoretical background and hypotheses development
2.1 Theoretical Background
Over the past two decades, the resource-based view (RBV) framework has explained differences in firm competitive advantage (Barney, 1991; Barney, 2001; Moreno-Gómez et al., 2020). RBV theorists emphasize that businesses seek to generate a competitive advantage by developing combinations of resources and capabilities to enhance firm competitiveness (Wernerfelt, 1984; Moreno-Gómez et al., 2020).
Researchers have identified the importance of marketing for the success of SMEs (Bocconcelli et al., 2018). The adoption of marketing practices could contribute by helping them reach a long-term competitive advantage. Tang et al. (2007) evidenced that construction SMEs with a differentiated marketing strategy achieved superior performance and competitiveness.
Flatten et al. (2015) empirically confirmed the positive relationship between pricing strategy and firm performance in technology-oriented SMEs.
Marketing strategies are crucial for competitive advantage and performance (Tan & Sousa, 2015). However, marketing capabilities are an area that needs more discussion and research, since it does not go far enough in the challenges that organizations face. (Möller & Halinen, 2022).
Most studies on this topic are descriptive models that focus on case studies that refer to business networks, or quantitative models that investigate management issues. More research is needed to analyze multiple variables that show complex strategic problems (Möller & Halinen, 2022). For example, Vorhies and Morgan (2005) included variables in their models such as prices, product development, channel management, communication marketing, sales, market information, and marketing planning and implementation.
In addition, there are studies on the process of integrated marketing communications (IMC) focused on a resource-based vision (RBV) (Ahmad et al., 2019). A resource-based view could illuminate how marketing skills can enhance company performance (Khan & Khan, 2021). A resourced view of firm performance includes creativity and innovation resources (Valaei et al., 2022). Creative resources lead to company distinction, and distinct competencies include the uniqueness of a product or service and unique marketing (Khan, 2017). Other authors distinguish between marketing capabilities and innovation (Revilla‐Camacho et al., 2020). Consequently, this research proposes a robust analysis like the one carried out by Vorhies and Morgan (2005) but includes traditional and non-traditional marketing capabilities.
Traditional marketing strategies, also known as the 4Ps (product, price, place, and promotion) (Lahtinen et al., 2020), are a source of competitive advantage. However, marketing strategies have changed over time (Ahmad et al., 2019). Purchase and Volery (2020) suggest that marketing innovation strategies help to develop products or services. Furthermore, there is a growing trend to consider marketing innovation as part of branding strategies.
This study also contributes to clarifying the theoretical differences between communication, uniqueness, and innovative marketing strategies and the role of marketing in competitiveness. We build on literature explaining how SMEs, specifically KIBS, can take advantage of innovation strategies (Moreno-Gómez et al., 2020). Marketing innovations are becoming particularly important after the Covid pandemic. Today, companies should increase their e-commerce presence and other less famous marketing strategies to gain competitiveness (Dash et al., 2021). Although literature recommends marketing strategies to increase competitiveness irrespective of industry affiliation (Lafuente et al., 2020), we find firm size can be relevant.
2.2. Hypotheses development
2.2.1. Marketing communication strategies.
Traditional communication marketing strategies represent the ability to transmit marketing information from the sender to the receiver. For companies, this communication must generate interest to lead the consumer to be interested and subsequently to purchase (Boisen et al., 2018). AIDA (Attention, Interest, Desire, and Action) is one of the most implemented marketing communication models. This model is commonly used to enhance sales and financial performance (Lahtinen et al., 2020).
A company that does not obtain brand awareness rapidly must invest significant time and money in communication campaigns that go hand in hand with the company's life cycle, products, or services. A marketing campaign that does not impact consumers with its intended benefits may lead the company to lose its position in the market and, consequently, its financial sustainability may end (Boisen et al., 2018).
Promotion campaigns must generate trust in both consumers and sellers (Moldovan et al., 2014). When a customer concludes that the product or service is the same as that observed in the communication received, he increases his confidence in the company, and the purchasing possibilities are greater (Moldovan et al., 2014). Similarly, companies have understood the value of personalizing their communication with customers through information technologies, which reduce transaction costs, and also managing consumer behavior generates profitability for companies (Chiambaretto & Dumez, 2012).
Traditional media is becoming obsolete. Social media, product placement, event marketing, and viral marketing are now crucial. This change is a consequence of their easy access and low cost. The high competition between companies generates doubts in consumers to select the best purchase option, and they strive for an answer that gives them immediate satisfaction (Dash et al., 2021).
A trend that has been growing in the business sector is omnichannel communication marketing, where companies seek to improve the customer experience, contributing to organizational development (Verhoef et al., 2015). Organizations increasingly have physical and digital contact points with their clients (Mainardes et al., 2020). This communication strategy is relevant when you want to transmit a clear and uniform message to all customers.
Similarly, this strategy is successful for multiple market segments and when different points of contact are used and thus achieve more effectiveness with personalized messages. An uncoordinated implementation would lose competitive advantage (Verhoef et al., 2015; Mainardes et al., 2020).
SMEs can carry out omnichannel communication strategies to achieve brand awareness. A campaign that does not impact consumers with the intended benefits can lead the company to lose its position in the market and, consequently, end its financial sustainability (Boisen et al., 2018). Sustainability requires the design of a long-term successful communication strategy. Companies need an integration between the competitive advantage of the product or service and a supply chain where customers can reach them (Finoti et al., 2017). Consequently, we propose hypothesis 1.
Hypothesis 1: the adoption of marketing communication strategies positively impacts SMEs’ competitiveness.
2.2.2. Marketing innovation frequency.
Innovation has been considered a fuzzy construct, but recent efforts have tried to bring conceptual clarity to this concept. For example, Benazzouz, (2019) classifies innovation intensity into innovation frequency, innovation degree, and internationalization. Adopting this classification, we will focus on the first kind. Our interest in innovation frequency responds to the lack of knowledge regarding this topic in SMEs. Although innovation is in the soul of Apple and Google, we know little about the frequency of product innovation in SMEs (Moreno-Gómez et al., 2020).
Mimicking (Laings, 2018), definition of innovation, we define it as the technological development of an invention. However, we do not include the communication of the innovation as we consider it responds to a vastly different capability. Companies can have fluid research and development capabilities but not communicate them well to their customers.
For this article, we define innovation frequency as the introduction or modification of products and services using new or modified technology. This definition is suitable for small businesses that innovate, not only by creating products but also by copying existing ones. Frequency refers to the average number of innovations per period (Horowitz & Lai, 1996).
Innovation affects SMEs both positively and negatively. However, Rosenbusch et al. (2011) finds an overall positive effect on firm performance. We understand innovation intensity as the degree to which a firm faces innovation in its market (Griffith et al., 2021). Therefore, a company that is constantly innovating will be an innovation-intensive firm. Our definition of innovation is restricted to products or services using new or existing technologies. In this way, we avoid conflicts with our unique capabilities construct, which has a broader span and anchors into other firm resources and capabilities.
Innovation is a search for original and creative solutions to some issues and necessities (Ungerman et al., 2018). Branding strategies, offering design, and digitalization are drivers for marketing innovation (Purchase & Volery, 2020). According to Naidoo (2010) marketing innovation improves business performance. There is a consensus that innovative new products promote firms' performance (Rezvani & Fathollahzadeh, 2020).
Different marketing capacities can be an accelerator to innovation-led long-term sustained strategies (Josephson et al., 2016). Niche marketing strategies encourage companies to be innovative and take advantage of the opportunities. For example, bundling innovative products with previous market successes can lead to a continued increase in revenues (Chiambaretto & Dumez, 2012). These lead to the following hypothesis:
Hypothesis 2: The adoption of marketing innovations positively impacts the competitiveness level of SMEs.
2.2.3. Marketing uniqueness: Self-perceived use of unique resources and capabilities applied to marketing.
With a similar approach to how core competencies identify unique “resources and capabilities” see (Grant et al., 2014); this study explores how unique are the perceptions of these resources in the marketplace. We build on research showing that companies with unique marketing capabilities can improve their export performance (Blanco-Callejo & de Pablos-Heredero, 2019).
The uniqueness of resource capabilities is an effort of the company to optimize resources where these resources are relatively superior to competitors (Blombäck & Botero, 2013). Uniqueness can be grouped into two groups of intangible and tangible assets, as described by Yacob et al. (2021) . Utilizing the uniqueness of resource capabilities will encourage companies to quickly reach a better level of business and make competitive advantage readily available, and, at the same time, create superior value for customers (Yacob et al., 2021).
Managers can perceive that their company responds to the market uniquely, with multiple resources and capabilities such as strategy, marketing, leadership, or production. Ahmadjian (2016) explains that firms have distinctive capabilities or a combination of them that result in sources of competitive advantage. Similarly, Aaker’s Brand Equity construct (1996) identified that besides brand associations, quality, and loyalty, firms have other unique proprietary assets that become the basis of competition and a source of competitive advantage. These assets include resources such as patents or leadership skills. Instead of relying on bulky marketing budgets like large companies, SMEs can use unique resources to differentiate (Anabila, 2020). Blombäck and Botero (2013) identified that unique capabilities create a unique brand identity and performance.
Hypothesis 3: Managers’ perceived uniqueness of the firm’s resources and capabilities is positively correlated with SME competitiveness.
Size moderates the relationship between marketing strategies and competitiveness in organizations (Mohiuddin et al., 2019). Size is crucial in the relationship between marketing and business competitive performance. It is directly associated with the resources that the organization has (Moreno-Gómez et al., 2020). Larger firms may achieve higher competitiveness given their capacity to get an advanced technological level of production and economies of scale (Bobillo et al., 2006). However, SMEs show higher creativity, flexibility, and innovativeness, which is considered an advantage versus large companies (Nieto & Santamaría, 2010).
Larger companies have more resources that allow them to have the human capital to plan and develop marketing strategies tailored to the organization, while smaller companies require human resources that they cannot hire (Mohiuddin et al., 2019). Likewise, large companies have a greater formalization of regulations and organizational structure, which generates routines that make organic decisions easier. On the other hand, small companies have greater flexibility that translates into uncertainty about decision results (Park et al., 2018). Large companies also create costly standards for small competitors (Pekovic & Rolland, 2016). Therefore, we present the following hypothesis:
Hypothesis 4: Business size negatively moderates the relationship between marketing strategies and SMEs’ competitiveness.