International Journal of Economics, Commerce and Management

United Kingdom ISSN 2348 0386 Vol. 11, Issue 11, Nov 2023

https://ijecm.co.uk/

MARKETING INNOVATION AND THE PERFORMANCE

OF SMALL AND MEDIUM ENTERPRISES (SMEs) IN
DEVELOPING ECONOMIES: A PERSPECTIVE OF
SMEs IN THE RETAIL SECTOR IN NIGERIA

Ayodele Oniku, PhD

University of Lagos, Nigeria
[email protected]

Olumuyiwa Abiodun
Master of Science, Management and International Business
Birmingham City University, United Kingdom
[email protected]

Morolake Atinuke Emokpaire

Executive Master of Business Administration
University of Lagos Business School, Nigeria
[email protected]

Abstract
The growing reliance of small and medium enterprises (SMEs) in emerging and developing
markets like Nigeria has warranted the need for researchers and business professionals to pay
attention to means of enhancing SME performance. This study investigated marketing
innovation and SME performance in an emerging market based on insights from selected SMEs
in Lagos state. The methodology of the study was a survey method based on a quantitative
research approach. A sample of four hundred (400) respondents made up of SME owners,
managers and employees in the retail sector, was chosen using purposive and simple random
sampling techniques. The primary data was collected via a closed-ended questionnaire and

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analysed through descriptive and inferential statistical tools such as Pearson correlation
analysis. The study results discovered a respective significant impact of product innovation
(89.8%), pricing innovation (73.6%), promotion innovation (90.5%) and place innovation (92.2%)
on SMEs performance. The study concluded that there is significant relationship between
marketing innovation and SMEs performance in Lagos state in terms of place and promotion
innovation used in communicating, reaching and accessing the target market through social
media platforms, self-service platforms and online delivery processes. Based on the outcomes
of this study, it was suggested that SMEs in Nigeria should focus on strategically adapting to the
new dynamics and complexities of the business environment by adopting marketing innovations
that are aligned with their business processes to yield desired performance.
Keywords: Marketing Innovation, Product, Price, Promotion, Place, SME Performance

INTRODUCTION
Since the advent of the global COVID-19 pandemic in 2019, contemporary business
organisations all around the world have been operating in a highly challenging and competitive
environment (Adefulu, Ashikia, Makinde & Alao, 2021). Most small and medium enterprises
(SMEs) around the world have observed low-performance levels as a result of the ripple effect
of the pandemic and the informal nature of their business as well as marketing operations, this
is also observed in Nigerian SMEs, therefore, the need for strategic marketing and innovation
has become imperative (Aladejebi, 2020). The performance of SMEs is impacted by the degree
how well they can innovate products and services towards satisfying customers’ needs for
enhanced patronage leading to increased revenue and profit (Herr & Nettekoven, 2017; Umar,
Siti & Noor, 2020)
Modern corporate organizations' ability to successfully partake in and compete in a
competitive market has been linked to their ability to generate novel ideas and values that result
in top-tier market performance. When confronted with intense market competition, a company's
ability to become competitive depends on its capacity for innovation in business and marketing
(Urbancová, 2013 as cited in Adefulu et al., 2021). This study examines the connection between
marketing innovation and business performance in Nigeria's small and medium-sized
enterprises (SMEs). According to Anwana and Affia (2018), the Nigerian economy is a
developing one that significantly relies on manufacturing and production led by the contribution
of SMEs to the gross domestic product. Similar to other established nations, the Nigerian
economy relies significantly on small and medium-sized enterprises (SMEs). Nigeria's economy
is dominated by small and medium-sized enterprises across all sectors, including agriculture,

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construction, manufacturing, commerce and industry, services, and trade, illustrating the
importance of SMEs in a growing economy (Dogara, 2015; Adekunle & Alokpa, 2018)
Comparing Nigeria to other developing economies, SMEs contribute a considerably larger
proportion of GDP than they do in Nigeria at present. This is due to issues such as inadequate
financing, a poor legal and regulatory framework, a lack of basic and technical infrastructure,
and a lack of assistance for small and medium-sized businesses. Muddaha, Kheng, and
Sulaiman (2018) as well as Anthony and Olorunleke (2020) have argued that Nigerian SMEs
proprietors and managers have to enhance their usage strategic marketing methods to improve
their performance.
A poor marketing strategy and implementation is one of the most common challenges
small and medium-sized businesses face. Muddaha et al. (2018) and Alshamayleh et al. (2002)
report that the absence of an effective marketing plan, the inappropriate application of
resources, and a lack of marketing innovation are among the weaknesses of small and medium
enterprises worldwide.
The rate and speed at which things are changing and evolving in the contemporary
business environment is an increasingly important issue that affects the performance of
businesses whether large, medium or small. In an emerging market like Nigeria, small and
medium enterprises (SMEs) are considered drivers of economic activities. However, due to the
informal nature of SME operations and activities, they are vastly constrained by competitiveness
from larger organisations. This has caused the need to find innovative ways of carrying out
business operations such that they can attain desired performance and even compete with well-
established organisations.
Modern businesses, according to Kotler and Armstrong (2016) and Lamb, Hair, and
McDermott (2019), should actively pursue marketing innovations to remain relevant in the
changing competitive environment. In other words, a marketing innovation strategy is crucial for
increasing a business's productivity and, ultimately, its market performance (Lamb et al., 2019).
In light of the aforementioned, the purpose of this study was to determine the effect of
the forms of marketing innovations most suitable for enhancing performance of small and
medium-sized businesses in Nigeria.
Previous studies such as Muddaha et al (2018). Samada, Alghafisa and Al-Zuman
(2018). Cross (2018), Anthony and Olorunleke (2020), Adefulu et al (2021), Alshamayleh et al.,
(2021), Blommerde (2022) have considered strategic marketing practices and innovation in
relation to corporate performance, however, there seems to be limited evidence as regarding
impact of various forms of marketing innovations such as product innovation, price innovation,
promotion innovation and place innovation on the performance of SMEs in Nigeria. This study

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attempts to bridge the gap in the literature by investigating marketing innovations and the
performance of SMEs in Nigeria.

Research Hypotheses
In order to address the research questions of the study the following hypotheses were
formulated:
i. H0: There is no significant impact of product innovation on the performance of SMEs.
ii. H0: Pricing innovation has no significant impact on the performance of SMEs.
iii. H0: There is no significant impact of promotion innovation on the performance of SMEs.
iv. H0: There is no significant impact of distribution channel innovation on the performance of
SMEs.

LITERATURE REVIEW
Concept of Marketing and Marketing Innovation
In order to have a clear perspective on the conceptualization of marketing innovation, an
analysis of the two keywords ("Marketing” and “Innovation") is needed. Dixon-Ogbechi (2019)
citing AMA Publishing 2014, defines marketing as "the activity, set of institutions and processes
for creating, communicating, delivering and exchanging offerings that have value for customers,
clients, partners and society at large". Marketing in the opinion of Moore (1984) as cited in
Lamb et al (2019) entails the process of finding out what customers want and then
endeavouring to supply goods and services that meet such requirements and at a profit.
Innovation is described as successfully formulating and implementing new as well as
novel ideologies, concepts and creation of value within an organisation, its shareholders and
stakeholders (Janjić & Radjenovic, 2019). Innovation starts with an introduction of changes that
could be novel or modification of existing processes focused on improving and enhancing ways
in which an organisation presents products or services. This could be updating methods for
running operations; also adopting and adapting new business models (Kazmi, 2018; Janjić &
Radjenovic, 2019).
In essence, marketing innovation is a concept that relates to developing new ways of
applying and using marketing elements to create value for customers (Ilić, Ostojić &
Damnjanović, 2014). The importance of marketing innovation in contemporary organisations
includes the transformation of existing business and marketing strategies to adapt to a changing
environment, providing new products or services to meet areas of untapped market
opportunities, integration of new technologies to marketing activities as well as the creation of
new markets (Ilić, Ostojić & Damnjanović, 2014; Kazmi, 2018; Janjić & Radjenovic, 2019).

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Marketing innovation is the set of integrated decisions and actions utilized by an

organization in carrying out new marketing activities in terms of product, price, place and
promotion (Adefulu et al., 2021). According to Kotler and Armstrong (2016), marketing
innovation serves as a solution to challenges in marketing strategy relating to the capabilities of
tapping into opportunities. These innovation opportunities can include providing products or
services that are in short supply, providing products or services in a modified and superior
manner, and providing entirely new products or services (Kotler & Armstrong, 2016; Lamb et al.,
2019).
A marketing innovation strategy is essential for enhancing the efficiency of marketing
mix components. According to Umar, Siti, and Noor (2020), marketing innovation is centred on
building and developing the current models, processes, and business models to create new
value for customers, effectively (promote) consumer information, undermine rivals, and create
new advantages for all stakeholders.

Types of Marketing Innovation Strategies

Effective marketing management is enabled through innovation to create value based on
the combination of elements that will provide a competitive advantage (Išoraitė, 2016). The
following were identified as types of marketing innovation strategies by Gbolagade, Adesola,
and Oyewale, (2013) as well as Umar et al (2020).
Product Innovation: According to Kotler and Armstrong (2016), a product is anything that may
be presented to a market in hopes of attracting customers, selling goods, or providing a service.
Therefore, a product's innovative qualities include its improved form, function, labelling, and
scalability. Product innovation, as defined by Reguia (2014), involves the creation of new
products via the modification of a current product's design, functionality, and components.
Kanagal (2015) said that innovation is crucial for businesses because it triggers a domino effect
of other transformational actions inside the company and its products and services offered to
customers. As a result, innovations are developed to meet the demands of a technologically-
influenced consumer base and business sector. It is essential to discuss product development
in order to discuss product elements and product innovation. Product development, according to
Ansoff (1987) as referenced in Mbithi, Muturi, & Rambo (2015), is a kind of product innovation
that seeks to meet the requirements and desires of existing and new clients. Therefore, product
development is when businesses that already have a market for their goods and services create
new items for that market to take advantage of market possibilities. In order to generate value
for a company, product innovation integrates existing resources and capabilities with innovation
processes to create novel product offers for the market (Kanagal, 2015; Umar et al., 2020).

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Pricing Innovation: According to Kotler & Amstrong (2016) and Dixon-Ogbechi (2019), price is
the monetary cost that companies consider in consumers' perceptions of a product's worth.
Some describe price as the sum of money paid for a good, while others define it as the real or
estimated worth of a desirable good that is being exchanged. A crucial part of any pricing plan is
determining how prices will affect a company's bottom line. As a result, the competitiveness of a
business is heavily impacted by the prices they charge for their goods and services. Adefulu et
al. (2021) noted that attracting clients from a variety of socioeconomic backgrounds requires a
pricing strategy that is both flexible and imaginative. Pricing strategies may be broken down into
the following categories: cost-based, competitive, and customer-value-based (Sammut-Bonnici
& Channon, 2014; Nafuna et al., 2019).
Naruetharadhol, Ketkaew and Srisathan (2022) investigated innovative price-setting
approaches to high-value products for agribusiness farmers in Netherlands, pointing out that
valued-added pricing through online systems can be very effective. The authors defined
innovation in pricing as a tactic to pricing strategies and organized pricing structures that are
novel to the industry for the enhancement of consumer satisfaction and firm profitability. The
innovative pricing system uses online pricing by market segmentation, special pricing known as
freemium, and participative pricing (e.g., pay-what-you-want).
The use of digital pricing whereby consumers can select products and price match has
been considered as price discounting system by Liu, Yang and Zhan (2020). In other words, the
use of technology platforms to enhance pricing decisions for innovation strategy choices can be
seen in industries such as airline, automobile as well as technology-based supply chain among
manufacturers and common suppliers.
Promotion Innovation: The practice of communicating with current and future stakeholders, as
well as the broader public, is known as marketing promotion (Lamb et al., 2019). Promotion
innovation is evident in the use of social networking technologies to increase communication
interaction with a target market was cited by Ili, Ostoji, and Damnjanovi (2014). The innovative
nature of the marketing sector has made it possible for businesses to maintain constant lines of
communication with their customers. Lamb et al. (2019) noted that SEOs, websites, and digital
and online platforms are all examples of online innovation promotional factors. Marketers may
now reach their desired demographic both nationally and internationally due innovation
advancements in promotional technology (Anthony & Olorunleke, 2020; Blommerde, 2022).
Furthermore, Umar et al. (2020) cite a research by Bloch & Bhattacharya (2016) that found that
the promotion innovation approach significantly increased the effectiveness of marketing
communication and the creation of value. Essentially, the goals of promotion innovation are to

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educate the target audience about the merits of a new product and to create a favourable public
perception of the brand.
Place Innovation: Place element was described by Jones (2007) and Kotler and Armstrong
(2016) as the ease with which a client may reach a product or service. Kotler and Armstrong
(2016) expanded the definition of distribution to include the network of entities responsible for
getting a product into consumers' hands. Distribution of goods via traditional wholesalers and
retailers, as well as newer electronic and internet channels like self-service machines, is
essential to the success of any place innovation plan. Constant communication between the
service provider and the client after a product is purchased may also form the basis of the
innovation of place strategy. Ayedun, Oloyede, Oluwunmi, and Oyedele, (2014), expressed that
today’s business activities are facilitated through technologically enable distribution channels
that go a long way in making customers access products or services everywhere and anytime.
This is referred to as the omnichannel where customers can experience products or services
24/7.

Concept of Organizational Performance

According to research by Gavrea, Ilieş, and Stegerean (2011), the performance of a
country's organizations is a good barometer of economic growth. Continuous performance is the
goal of any business since it is the key to success in an increasingly competitive market.
Therefore, organizational performance is likely the most essential predictor of an organization's
viability and longevity, making it a crucial variable in management research. Research has
shown that this is the case (Gavrea, Ilieş, & Stegerean, 2011).
Measuring performance is a major challenge in the academic research environment.
Because small company performance measurements are multi-dimensional, there is still debate
among academics on how best to describe and quantify small firm performance (Gerba &
Viswanadham, 2016). The success of a small company may be measured by how well it creates
new employment and builds financially stable communities.
Academics also attempt to define business success by the extent to which a company's
goals are met. There are several ways to define "small business performance," which is
determined by how well a company meets its objectives. According to Gerba and Viswanadham
(2016), a company's performance may be defined as its propensity to generate desirable results
and behaviour. The success of a small business in the marketplace may be measured in a
variety of ways such as extent of productivity, level of customer attraction and retention,
revenue generation and profitability (Gerba & Viswanadham, 2016).

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Marketing Innovations and Business Performance

Blommerde (2022) investigated the correlation between service innovation and
productivity in SMEs. The research centred on the idea that innovations—that is, new or
considerably better services—are crucial to the long-term success of SMEs. The results
highlighted the significance of the connection between SIP and OP for service-based
businesses. Partial Least Squares Structural Equation Modelling (PLS-SEM) and multigroup
analysis were utilized to evaluate the assumptions in their research utilizing data from 802 Irish
service MSMEs. The result shed light on how business size, firm age, and customer profile
affect the SIP-OP connection for MSMEs.
Adefulu et al. (2021) looked examined the data from Nigeria to determine the connection
between strategic marketing, innovation culture, and competitive advantage at a subset of
petroleum products marketing firms. The study used a cross-sectional survey research
approach to collect data from a representative sample of the population consisting of 1568
managers at the sampled businesses. Multiple regression analysis was used to examine the
gathered data. Strategic marketing was shown to have a favourable and statistically significant
impact on the innovation culture and competitive advantage. Strategic marketing should be
used by the management of petroleum product marketing organizations with the goals of
creating an innovation culture and gaining a competitive edge, according to the research.
In comparison, the impact of marketing competencies on the innovation performance of
SMEs in Jordan was studied by Alshamayleh et al. (2021). As a result of the study's mixed
findings and the literature's lack of agreement, further investigation into the topic of marketing
capacities is needed. Primary data was acquired through an online questionnaire sent out to a
random sample of 385 people and analyzed using SPSS version 23. The research showed that
marketing competence significantly affects innovation outcomes. The results demonstrated that
the marketing capacity is a critical component impacting the innovative performance of SMEs.
The impact of marketing creativity on the success of Nigerian SMEs was investigated by
Umar et al. (2020). This study used a sample of 203 SMEs in the furniture industry to examine
the correlation between product innovation, price, marketing, and distribution tactics, and SMEs'
productivity. Multiple regressions were used to analyze the data. Results showed that innovative
marketing techniques had a beneficial effect on the productivity of small and medium-sized
businesses. It was determined that many businesses benefited from marketing innovation, thus
small and medium-sized enterprises (SMEs) should work to include it into their practices.
The connection between pricing tactics and earnings was studied by Nafuna et al.
(2019). The research set out to look at how different pricing methods affected the financial
success of Uganda's private primary schools, with a focus on how competitive advantage

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played a role. Using simple random selection, a total of 123 private elementary schools were
selected as study participants for this quantitative cross-sectional study. Profitability was
highlighted more than liquidity in the study's findings, suggesting a favourable association
between pricing tactics and financial success.
Product innovation and the efficiency of Ghanaian SMEs were studied by Osei et al.
(2016). Previous research from the world's most developed nations has shown that in today's
globalized and competitive market, organizations that place a premium on innovation not only
gain competitiveness, but also maintain it over the long term, resulting in improved performance.
The results of the research revealed a connection between product innovation and the success
and expansion of SMEs in Ghana. Using data at the company level and a structural equation
model, it was adequately classified that innovations in goods and services were key drivers for
revenue growth as key performance indicators. The data showed a favorable correlation
between the three factors of marketing innovation in terms of the product, the process and
aftersales services which all influence company's sales growth.

Framework of the Study

In light of the concepts discussed above the model of this study is developed using the
previous studies of Umar et al (2020) and Blommerde (2022) describing marketing innovation-
based marketing mix elements (product, price, promotion and place) contributing to
organisational performance from the perspective of SMEs. This is shown in the image below:

Figure 1: Conceptual Framework

Marketing Innovation Business Performance

 Product  Sales Revenue
 Price  Customer
 Place Patronage
 Promotion
Source: Researchers Construct (2023) adapted from Umar et al (2020).

METHODOLOGY
The study follows quantitative research method using a survey research strategy. The
deductive approach was considered in terms of testing and validating the Technology task fit
theory. Goodhue and Thompson's (1995) technology-task fit (TTF) theory explains how well a
given piece of technology will be used to complete a given set of tasks and how well its users
will perform under those conditions. Technology adoption, as defined by Rai and Selnes (2019),

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is based on how well tools meet users' needs in terms of both time and effort. According to the
task-technology fit theory put forward by Andersone, Nardelli, and Ipsen (2021), in order for
users to attain optimal performance and results, the functionality of the technology and the task
it tries to assist must be a good fit. The theory is useful for understanding how new digital
technologies and procedures are being integrated into marketing operations (Andersone,
Nardelli, & Ipsen, 2021).
The demography for this research was obtained from the SMEDAN survey of 2020,
which included 21,043,118 adequately registered SMEs in the Nigerian state of Lagos.
However, a sample was employed in this research due to the size of the study population. In
order to ascertain the sample size of this study, the Yamane (1967) formula was used to arrive
at the appropriate sample size of 400 respondents. In essence, SMEs owners and workers in
the retailing industry from each of the major market areas in Lagos state were chosen for this
research using multistage selection approaches made up of purposive and simple random
sampling procedures, which are considered advantageous for a ease, accessability and
representation (Saunders et al., 2014)
The data collected in this research was primary data from SME owners and staff in the
retail sector in Nigeria, regarding their marketing innovations and how it affects their
performance through a structured and systematic questionnaire. The five-point Likert scale was
asdopted for this study as it was considered suitable by previous studies of similar nature by
Umar et al (2020) Alshamayleh et al. (2021) in comparison to the three- or seven-point Likert
scale type because it allowed respondents to have clear and precise opinions on the study
variables detailed in the questionnaire, which made data analysis to be better structured.
Descriptive statistics (like frequency distribution, basic percentages, means and
standard deviations) were performed on the data using Statistical packages for the social
sciences (SPSS) version 20.0. The formulated hypotheses were verified by means of a
correlation analysis.

ANALYSIS AND FINDINGS

In a developing economy and market like Nigeria, this research focused on at how
marketing innovation impacts SMEs operational results. Four hundred (400) business owners
and workers from various SMEs in the retail sector in Lagos state responded to the
questionnaire based survey. 370 questionnaires were returned with full responses, rest having
missing values. The suitability criteria was based on those questionnaire responses from only
SME owners, managers and employees that were adequately completed and found fit for
statistical examination and analysis of the study variables.

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Data Analysis Relating to Demographic Data of Participants

Table 1: Frequency Distribution of Demography of the Respondents

Frequency Percentage (%)
Respondent’s Gender Female 180 48.6
Male 190 51.4
Total 370 100.0
Respondent’s age 21 – 30 years 110 29.7
31 - 40 years 54 14.6
41 - 50 years 190 51.4
Above 51 years 16 4.3
Total 370 100.0
Respondents Educational WASC/GCE 100 27.0
Qualification
B.Sc. / BA/ HND 204 55.1
M.Sc. / MA/MBA 66 18.7
Ph.D 0 0.0
Others 0 0.0
Total 370 100.0
Number of years of operating Less than 1 year 41 11.1
and working in an SME
1-5 years 70 18.9
6-10 years 54 14.6
11 – 15 years 98 26.5
16 – 20 years 107 28.9
Total 370 100.0
Respondent’s monthly income Below N5,000,000 18 4.9
level N5,000,001 to N10,000,000 213 57.6
Above N10,000, 001 85 23.0
Total 370 100.0
Ownership Structure. Family 71 19.2
Partnership 50 13.5
Sole 205 55.4
Private liability 34 9.2
NGO 10 2.7
Total 370 100.0

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Table 1 reveals that 51.4% of respondents are men and 48.6% of respondents are
women. This study suggests that the majority of responses are men. According to Table 1,
29.7% of respondents are between the ages of 21 and 30, 14.6% are between the ages of 31
and 40, 51.4% are between the ages of 41 and 50, and 4.3% are beyond the age of 51. This
research suggests that the majority of respondents are employed full-time, with the age range of
41 to 50 years being the median age.
Table 1 further revealed that 27.0% of respondents have completed the WASC or GCE,
55.1% have a BA, B.Sc., or HND, 18.7% have an MBA, 0.0% have a PhD, and 0.0% fall into
any other category. This demonstrates that the majority of respondents are knowledgeable and
well-educated enough inside the SMEs to understand the significance and implications of the
research.
The number of years the respondents owned and worked in an SME was displayed in
Table 1. Of the respondents, 11.1% owned and worked in an SME for less than a year, 18.9%
owned and worked in an SME for one to five years, 14.6% owned and worked in an SME for six
to ten years, 26.5% owned and worked in an SME for eleven to fifteen years, and 28.9% owned
and worked in an SME for sixteen to twenty years. This demonstrated that the majority of
respondents owned their businesses and were employed by SMEs with 16 to 20 years of
relevant experience.
Furthermore, Table 1 revealed the respondents’ monthly income level in SME
operations, 4.9% of respondents earn below N5,000,000 monthly in SME operations, 57.6%
of respondents earn between N5,000,001 to N10,000,000 monthly in SME operations, and
23.0% of respondents earn above N10,000, 001 monthly in SME operations. This indicated
that the majority of the respondents earn between N5million and N49million monthly in SME
operations.
Finally, Table 1 revealed the ownership structure of the SMEs, 19.2% of respondents
have SMEs with family ownership structure, 13.5% of respondents have SMEs with partnership
ownership structure, 55.4% of respondents have SMEs with sole proprietorship ownership
structure, 9.2% of respondents have SMEs with private liability ownership structure and 2.7% of
respondents have SMEs with non-government organisation (NGO) ownership structure. Hence
the majority of the respondents involved in this study are from SMEs with a sole proprietorship
ownership.

Analysis of Main Research Variables

The table 2 below presents the descriptive statistics (average mean and standard
deviation) of the main research variables.

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Table 2: Overall Average Mean and Standard Deviations of Marketing Innovation Elements
Variables Overall Average Mean Overall Average Standard deviation
Product Innovation 4.67 0.17
Pricing Innovation 4.73 0.19
Promotion Innovation 4.82 0.19
Product Innovation 4.84 0.19

Test of Hypotheses
Research Hypothesis One
H0: There is no significant impact of product innovation on performance of SMEs.

Table 3: Pearson Correlation Analysis

Product Innovation SMEs performance
Pearson Correlation 1 0.898
Product Innovation Sig. (2-tailed) 0.03
N 370 370
Pearson Correlation 0.898 1
SMEs performance Sig. (2-tailed) 0.03
N 370 370

The first hypothesis in this study was tested by means of the Pearson Correlation
analysis. The result as made known in the table above designates that there is a strong positive
impact of 0.898 of product innovation on SMEs performance. The p-value calculated is less than
level of significance (0.03: p < 0.05), representing that rejection of null hypothesis one and
acceptance of the alternative hypothesis one.

Research Hypothesis Two

H0: Pricing innovation has no significant impact on performance of SMEs.

Table 4: Pearson Correlation Analysis

Pricing innovation SME performance
Pearson Correlation 1 0.736
Pricing innovation Sig. (2-tailed) 0.01
N 370 370
Pearson Correlation 0.736 1
SME performance Sig. (2-tailed) 0.01
N 370 370

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The second hypothesis in this study was tested by means of the Pearson Correlation
analysis. The result as made known in the table above designates that there is a strong positive
impact of 0.736 of pricing innovation on SMEs performance. The p-value calculated is less than
level of significance (0.01: p < 0.05), hence giving the implication of rejection of null hypothesis
two and acceptance of the alternative hypothesis two.

Research Hypothesis Three

H0: There is no significant impact of promotion innovation on performance of SMEs.

Table 5: Pearson Correlation Analysis

Promotion Innovation SME Performance
Pearson Correlation 1 0.905
Promotion innovation Sig. (2-tailed) 0.02
N 370 370
Pearson Correlation 0.905 1
SME performance Sig. (2-tailed) 0.02
N 370 370
.
The third hypothesis in this study was tested by means of the Pearson Correlation
analysis. The result as made known in the table above specifies that there is a strong positive
impact of 0.905 of promotion innovation on SMEs performance. The p-value calculated is less
than level of significance (0.02: p < 0.05), hence giving the inference of rejection of null
hypothesis three and acceptance of the alternative hypothesis three.

Research Hypothesis Four

H0: There is no significant impact of distribution channel innovation on performance of SMEs.

Table 6: Pearson Correlation Analysis

Place innovation SMEs performance
Pearson Correlation 1 0.922
Place innovation Sig. (2-tailed) 0.01
N 370 370
Pearson Correlation 0.922 1
SMEs performance Sig. (2-tailed) 0.03
N 370 370

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The fourth and final hypothesis in this study was tested by means of the Pearson
Correlation analysis. The result as made known in the table above designates that there is a
strong positive impact of 0.922 of place innovation on SMEs performance. The p-value
calculated is less than level of significance (0.01: p < 0.05), hence giving the implication of
rejection of null hypothesis four and acceptance of the alternative hypothesis four

DISCUSSION OF FINDINGS
This study investigated the relationship between marketing innovation and the
performance of SMEs. As a result of the data analysis and test of hypotheses, several findings
were arrived at, that agreed and were in line with previous recent empirical literature on
marketing innovation and organizational performance (Umar et al., 2020; Adefulu et al., 2021;
Alshamayleh et al., 2021).
Firstly, the findings indicated the significant impact of product innovations on SME
operations with respect to new quality, features and enhancements of goods and services. The
majority of the respondents stated that their goods and services have been improved to offer
superior value through innovations that are related to durability, speed and reliability. The
findings were in line with the previous works of Adefulu et al (2021) giving empirical evidence
regarding as the role of marketing in a strategic manner that is enabled through innovation has
played in enhancing the performance of organizations, especially SMEs. This was also in
agreement with Alshamayleh et al (2021) in a study in Jordarn based on marketing capabilities
on the innovation performance of SMEs in terms of making products that care about new
dynamics and evolving in their delivery.
Furthermore, the findings indicated that pricing innovation has a significant impact on
SME performance. The majority of the respondents identified that SMEs use various pricing
models to engage customers as a means of innovating their pricing decisions. In essence,
through the use of value-based pricing, online retail pricing and electronic ticketing, SMEs have
increased the number of customers that are normally attended to leading to increased revenue
generation. The findings were in agreement with the studies of Anthony and Olorunleke (2020)
as well as Liu et al (2020) based on the assertion that pricing had a positive effect on the
revenue of business organizations. The findings however disagreed with the study of Umar et
al (2020) and because pricing was identified as the least in marketing innovation for SMEs, this
is because the price is attached to other elements and cannot contain innovation on its own.
The findings indicated the significant impact of promotion innovation on SME
performance. The majority of the respondents explained that social media and online platforms
have made waves for marketing communication innovations whereby goods and services can

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be promoted all around the world 24/7. Promotion innovations were found to be useful to SMEs
as a cost-effective means of creating awareness, interest, desire and purchase action. Through
promotion innovation customer engagement and relationship building can be achieved as social
media networking sites are used for interacting with customers. The findings were in agreement
with the studies of Amini et al (2012), Cross (2018) and Janjić and Radjenovic (2019) based on
the assertion that technology innovation in promotion has positive effect business organizations
market reach.
Finally, the study findings indicated that there is significant impact of place innovation on
SMEs performance. The majority of the respondents indicated that the distribution channel has
the most innovation for SMEs in terms on online delivery services, self-service platforms and
use of electronic systems. Since the advent of COVID -19 pandemic distribution innovation as
increased as many SMEs have embraced online delivery processes for goods and services as a
results of lockdown and social distancing regulations. The findings were further in line with
previous studies of Zawawi et al (2016) Aladejebi (2020), and Blommerde (2022) explaining that
innovation in the way organisations make offerings available at the right time and place for
customers. Place innovation facilitates speed and accessibility of goods and services, it
enhances revenue generation for organisations and purchase action for customers.

CONCLUSION
This study concludes that there is a significant relationship between marketing
innovation and performance of SMEs in Nigeria. The conclusion of this study based on the
research objectives and questions includes that product innovation, pricing innovation, and
promotion innovation have combined impact on business models and operations of SMEs in
Lagos state.
The study culminated on the fact that place innovation has the utmost impact
performance on SMEs in terms of reaching and accessing their target market through self-
service platforms and online delivery processes. Also, most, SMEs were found to innovate their
marketing communication via social media networking sites to interact, engage and relate with
customers and promote goods and services.
The product innovation was also observed to enhance the performance of SMEs,
especially in the area of product enhancements for superior value through quality, durability,
speed and reliability. The study concluded that pricing innovation is the least impactful because
price in itself is tied to other elements and its innovation is more of a cost implication to
customers than a revenue driver for organisations.

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Overall, this study concludes that marketing innovation has increased among SMEs
since the challenges arising COVID-19 pandemic of 2020 in terms of travel restrictions,
lockdowns, social distancing and other related issues, both in Nigeria and all around the world,
thereby creating innovations, business processes adapting to the new normal.

IMPLICATIONS OF THE STUDY

This study has implications to theory in terms of linking the task-technology fit theory to
how marketing innovations can align with organisational strategy to produce desired
performance. This study provides insight on the prevalent need for innovation in marketing to
address the changing business environment requirements. The findings from this study
provided information on marketing innovation along the lines of the 4Ps of marketing.
Furthermore, the findings from this study created insights for SME owners and managers on
how marketing innovations can formulated and implement for enhanced business performance.
Finally, the findings from this study present significance to students, researchers and scholars
as a source of additional material for future research into marketing innovation and the
performance of SMES. It is therefore recommended that;
i. Business leaders, managers and marketers of SMEs in the retail sector in Nigeria should
focus on strategically adapting to the new dynamics and complexities of the business
environment by applying marketing innovations that are aligned with business
processes.
ii. It is recommended for increased training and development of SME employees to be
aware of marketing innovations and how to harness technology to drive such
innovations.
iii. Organizations and management are recommended to periodically carry out employee
and customer surveys to be up to date with the ever-changing innovations and trends in
order to align strategies to meet evolving business environment.
iv. Lastly, it is recommended that government and key policy stakeholders work on
improving infrastructure for SMEs in the retail sector in Nigeria, also providing support
for SMEs in the retail sector in Nigeria to become more effective in marketing innovation.

LIMITATIONS AND FURTHER RESEARCH

This study centred on the marketing innovation and performance of SMEs in the retail
sector in developing economies such as Nigeria, the study was limited to owners and
employees of SMEs in selected areas of Lagos State As such further studies can be done in
other selected areas in Lagos State.

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Also, the study was constructed through the use of quantitative research procedures
based on a surevy research strategy, as such, it can be suggested that future studies employe
qualitative research through the means of focus groups, interviews and observations, as well as
mixed research procedures to give a more holistic representation of marketing innovation and
organisational performance.
Finally, the study was carried out with specific attention on SMEs in the retail sector in
Lagos state, thus future studies can be done on other large enterprises and organizations or
sectors like Telecommunications, Banking and Manufacturing.

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