Marketing Capabilities and Entrepreneurial Orientation Driving SME Performance: The Mediating Role of Return on Marketing Investment (ROMI)

Abstract

This study investigates the impact of marketing capabilities and entrepreneurial orientation on the performance of small and medium enterprises (SMEs) in the Klang Valley, Malaysia, using Return on Marketing Investment (ROMI) as a mediating variable, explaining how marketing capabilities and resource utilization enhance performance. This study applies the Resource-Based View (RBV) to examine how internal resources influence firm performance in SMEs. The framework highlights resource efficiency as a key driver of sustainable competitiveness. Given the competitive and resource-constrained environment faced by Klang Valley SMEs, effective marketing and entrepreneurial practices are critical for sustainable growth. This study posits that marketing capabilities and entrepreneurial orientation enhance SME performance directly and indirectly via ROMI. A quantitative approach will be adopted, collecting data from SMEs across various industries in the Klang Valley. SmartPLS will be used to conduct Structural Equation Modeling (SEM) to test the hypothesized direct and mediated relationships, providing robust insights into how firm capabilities and ROMI influence SME performance. The findings are expected to offer recommendations for SME managers and policymakers while contributing to the literature on SME performance in the Malaysian context.