The Relationship between Innovation and Marketing in SMEs in the EU Food Sector

Abstract

In the EU market small and medium sized enterprises (SMEs) represent the greater part of the food industry, specially with regard to traditional food products (TFPs). However, the growth of competition, connected mainly to globalisation, is making it very difficult for SMEs to survive. On the other hand, market opportunities for SMEs are connected to the evolution of consumer preferences toward food quality. To profit from such opportunities and to survive on the market, SMEs need to adapt their strategies, focusing on innovation aspects in order to meet consumer requirements and to compete on the market. The literature shows that firms’ market orientation and marketing capabilities are very important for innovation in food industries to guarantee that innovation reflects market needs. The purpose of this paper is to analyse the relationship between the level of firm innovativeness and the different stages of marketing management process, in order to understand if good results in marketing management can affect firm innovation. An interactive questionnaire available on the web has been used for the data collection, with the aim of evaluating SME marketing management capabilities and innovation development. The survey was conducted on 468 EU country SMEs producing TFPs. Linear Regression was run to assess the link between marketing activities and the level of firm innovation. Our empirical analysis reveals that SME marketing management capabilities show significant and positive relationships with a firm’s innovation. This aspect reinforces our assumptions on the strategic role of marketing activities on a firm’s capacity to understand consumer needs, and thus its need to be innovative and market oriented.