International Journal of Mechanical Engineering and Technology (IJMET)

Volume 8, Issue 7, July 2017, pp. 7084, Article ID: IJMET_08_07_009

Available online at http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=7
ISSN Print: 0976-6340 and ISSN Online: 0976-6359

IAEME Publication Scopus Indexed

SMALL AND MEDIUM ENTERPRISES

PRODUCT BENCHMARKING ADVANTAGES
ON MARKETING PERFORMANCE
Herning Indriastuti
Diponegoro University Semarang Indonesia

Budi Nugroho
Polytechnic Negeri Samarinda, East Borneo,Indonesia

Vincent Didiek Wiet Aryanto

Universitas Dian Nuswantoro Semarang Indonesia

ABSTRACT
This study aims at analyzing the effect of product innovation, explorative -
exploitative capability, and product benchmarking advantages on marketing
performance. SMEs Apparel firms in Central Java, Indonesia used as sampleof the
study. Sampling was done using purposive sampling technique. Data were collected
using a questionnaire given directly to the respondents. The total data that can be
further analyzed as much as 211 respondents. Data analyzing using Structural Equation
Modelling-SEM with the AMOS program assistance. The result showed that the product
innovation has significant effect on benchmarking product advantages. In addition,
benchmarking product advantages to be mediator in relation product innovation has
significant effect on marketing performance. Explorative-exploitative capability have
significant effect on benchmarking and marketing performance.
Key words: Product Innovation, Product Benchmarking Advantages, Explorative-
Exploitative Capability, Marketing Performance.
Cite this Article: Herning Indriastuti, Budi Nugroho and Vincent Didiek Wiet Aryanto,
Small and Medium Enterprises Product Benchmarking Advantages On Marketing
Performance. International Journal of Mechanical Engineering and Technology, 8(7),
2017, pp. 7084.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=7

1. INTRODUCTION
In the era of intense market competition nowadays, innovation is regarded as one of the most
important resources in a sustainable competitive advantage. Innovation is a key for companies
to survive in the midst of competition, making the company grow so much faster, more efficient
and more profitable (Alpay et al, 2012). Innovation is also becoming the way for company to

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 Herning Indriastuti, Budi Nugroho and Vincent Didiek Wiet Aryanto

maintain a competitive market (Lin et al, 2013) increase the value of the product, (Aydin et al,
2007) a key to compete in global competition (Akman and Yilmaz, 2008) to create growth and
sustained dynamic performance in a changing environment and it is crucial to improve the
competitiveness of the company and the company's marketing performance.
Although innovation in SMEs has a role to improve the performance of the company's
marketing, there are different opinion of results between product innovation and marketing
performance. Some researches (Hoonsopon and Ruenrom, 2012), (Avlonitis and Salavou,
2007), (Killa, 2014) stated that the product innovation has significant positive effect on
performance marketing. On the other hand, other researchers disagree their positive conclusion.
Some experts stated that product innovation doesnt have significant influence on marketing
performance (Cillo A et al, 2010),(Yalcinkaya et al, 2007),(Fu et al, 2008), (Al-Zyadaat et al,
2012). This research is an effort to fill the gap between product innovation and marketing
performance which mediated by benchmarking product advantages, and supported by
explorative-exploitative learning capability to improve marketing performance.
Small and medium enterprise (SME) recognizes that the existence of innovations giving a
remarkable contribution to the economic development and competitiveness of enterprises.
Many successful SMEs exist because they mimic other people's business or product (Me-too
business-product) and they are able to increase the marketing performance. Competitive
capability in the organization is the ability to learn, innovate and respond to global challenges,
dynamics, and ambiguity, which is used to develop strategies and make innovation more
effective. Small and Medium Industries (SMEs) due to their lack of capital, high cost of
innovation and limited resources, therefore choose to innovate with modification and imitation.
Accordingly (Verhees and Meulenberg, 2004), product innovation in SMEs should be under
the control of its owner, and owner must innovate products to modify the product with the
newness aspect, because the costs for product innovation is very expensive. Although in small
companies, product innovation according to (Verhees and Meulenberg, 2004); (Rosli and
Sidek, 2010) , contributes to performance improvement. ((Rosenbusch et al, 2011) examined
the relationship between innovation and the performance on smaller companies. Therefore, they
found out that the relationship between innovation and small business performance is highly
dependent on the specific situation. The way small and medium scale enterprises to innovate is
influenced by several factors such as the economic, financial, ownership and control of the
market situation.
Innovation, competitive advantage and performance are closely linked. One path to develop
new products is done by modifying the product. Creative product innovation has always focused
on product development and new markets demand with the aim at facilitating and speed up the
modification of products (Calantone et al, 2003). Modifications include the improvement of
quality, improving product attributes, improving product features and improving the
complexion or the range of products. It proves that although copying other product may raise
negative impression, on the other hand, it will also raise impression of superior product when
it is done with modifications (Najda-Janoszka, 2012). However, product development is not
only innovation, modification and imitative course (Schnaars, 1994) benchmarking is described
as practice that promotes imitation. Companies should conduct benchmarking towards its
products, benchmarking according to (Dattakumar and Jagadeesh, 2003); (Attiany, 2014) is the
approach taken for the improvement of continuous product by imitating other products,
improving knowledge of products to enhance the company's performance and help to focus on
the achievement of the target with allocation of resources. On a scale of SMEs benchmarking,
it is necessary to constantly improve and perfectionate the products they make for a better life
and as a way to improve corporate performance and competitive advantage by studying the
products of other companies. It is also influential to understand how to apply the studying

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 Small and Medium Enterprises Product Benchmarking Advantages On Marketing Performance

conclusion against its own products to increase competitive advantage and product performance
(Kerandi et al, 2014), (Kyro, 2003). Benchmarking is an adaptation of learning to set the best
treatment for product development. Benchmarking is done therefore the company is able to
comprehend customer needs, saving the cost of innovative ideas, able to identify the
weaknesses and strengths of other products and motivated to continuously improve the product.
Benchmarking (Watson, 2007) requires four evolutionary stages to develop, the first stage
is reverse engineering. It is engineering approach by comparing products, dismantle products
made by other companies and evaluate products in technical perspective, the comparison should
be focusing on the product, (product oriented approach). Second stage is competitive
benchmarking approach. This stage is not only focusing on the product but also the process of
product making (process oriented approach), the question to answer is why competitors can
produce such products which is more efficient. Third, the benchmarking process. This stage
defines that benchmarking is not just the imitating products from similar companies, but also
studying products from other companies. A process that occurs in companies that excel should
be studied and deeply analyzed as a comparison, before it will be applied to the product itself.
Fourth, strategic benchmarking, It is comparing the fundamental strategic products of other
companies. Global benchmarking is applied thoroughly both process and policy strategy.
Product benchmarking (Massa and Testa, 2004) summed up as a product that is made by
way of imitating modifications and other product portfolio by copying and modifying other
products. For apparel SMEs, this is very often case that the SMEs manufacturers make clothes
by imitating and learning products on the market, disassemble and modify the product and then
resulting products with the same pattern as the product market leader. Commonly, the
innovation made by benchmarking the other product, then expectation to compete with another
product with the same quality is raising.
Small-medium industries (SMEs) of apparel industry in Central Java, Indonesia, should be
encouraged to grow and innovate, eventhough small-medium industries apparel in Indonesia
still has several constraints: (1) management is still traditional family-oriented. ( 2) The
transaction is not smartly maintained, because the relationship between enterpreneurs and the
buyer / buyers based on trust, consequently, when the market experienced a decline in
performance, payments will also be delayed, therefeore, this way of payment maintenance will
affect the production sector. (3) The calculation of production costs is based on estimation
which may cause accounting miscalculation between the output and the input. (4) Lack of
capital and funding. It means the cost of production is higher than the profits earned, moreover,
if the bussines capital was taken from a bank loan, then the interest on loans is still too expensive
to be paid from the profit. (4) Lack of Innovation that tend to imitative due to limited capital.
(5) Marketing constraints because manufacturers tend to have their own customers,
consequently, they need institutions to shelter the customers. (6) The flood of cheap imported
products from foreign countries such as China. This is the underlying reason why SMEs apparel
in Central Java to innovate with benchmarking.
One theory from several studies related to innovation is the explorative-exploitative
learning capability. Words exploration - exploitation are the two key concepts of learning
capability (Atuahene-Gima, 2005), (Yalcinkaya et al, 2007) which are required in product
development. This capability is used to exploit, explore and transfer the knowledge for the
exsistence of product development. Furthermore, they are required as a way of the company to
address and meet the needs of customers and to detect competition level and the movement of
products on the market as well. (March, 1991) indicates that there are two fundamentally
different models of learning. They are exploitation and exploration. Exploitation aims to expand
the existing knowledge. Next, exploration requires new knowledge and aims to increase the
skills for the company. Exploration-Explotation learning capability creates the intangible

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 Herning Indriastuti, Budi Nugroho and Vincent Didiek Wiet Aryanto

resource to be tangible resource as competitive advantage ((Wernerfelt, 1984), (Barney, 1991)

, in turn in, a function of the firm know-how.

2. CONCEPT OF DEVELOPMENT AND HYPOTHESES

2.1. Product Innovations and Benchmarking Product Advantages
Innovation occurs because of learning existence, invention and commercialization. In other
words, innovation is an dynamic organization to integrate technology, institution and market
changes in order to maintain existence and development. Some studies divide the innovation as
a process of innovation, product of innovation, innovation managerial, innovation marketing
and technological innovation (Dibrell et al, 2008).
The peculiarities of the product has a competitive advantage with its unique characteristic
(Barney, 2001). New product development will affect the resulting product advantage to
compete with competitor products. Results of the study (Song and Parry, 1997) stated that
development of new products will increase the value of the peculiarities of product value. One
research (Waranantakul et al, 2009) resulted in a significant positive effect on innovation
capabilities to product services advantage. One research (Lages et al, 2009) proved product that
innovation producing high quality products lead to product advantage. It was also supported by
other researches (Chailom and Mumi, 2010), (Hult and Ketchen, 2001), (Lee and Hsieh, 2010).

Hypothesis 1: The higher the product innovation, the higher degree of benchmarking
product advantages

2.2. Exploitative Explorative Capability and Bencmarking Product Advantages

Absorptive capacity of the company to acquire knowledge aims to assimilate, transform,
explore and exploit knowledge that is used to generate a dynamic organization. It is
accomplished by acquiring knowledge of external companies. One way to acquire the external
knowledge depend on the company's ability to develop routines that facilitate the unification of
existing knowledge with new knowledge. Acquisition, assimilation, transformation,
exploration of knowledge is necessary to develop innovations that will improve the company's
competitive power (Chen et al, 2009), (Cohen and Levinthal, 1990).
Learning exploration-exploitation capability is an important key to improve in new product
development. This capability has positive and significant impact on new product development
advantage (Lisboa et al, 2011). Exploration capabilities against the product are used to develop
product advantage by developing the technology, expertise and processes.
Learning Exploration-exploitative defined (He and Wong, 2004) as a tool to explore the
existing products and new markets to improve the competitive level of the company.
Exploration as the implications of the company's behavior in conducting research, discovery,
experimentation, diversity of the products. Exploration is used to provide solutions to the
product selling value. Exploration is also used to face market challenges with the best approach
to the have a go in market interaction, to sharpen newness of a product technology and product
features, to create a new market segment, and to perform the new positioning strategy. It is
surely tough to raise the level of serenity between the exploitation demand and exploration
effort in companies for the long term according to (March, 1991), however, it will increase the
company's competitive advantage.
Research (Voss and Voss, 2012) in a study of SMEs products defined exploration products
as new product development, new technology and product capability. Exploitation develop
products existence. Exploration and exploitation of products give competitiveness of the
product to increase.

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 Small and Medium Enterprises Product Benchmarking Advantages On Marketing Performance

Hypothesis 2: The higher the explorative-exploitative learning capability, the higher degree
of modification bencmarking product advantage

2.3. Benchmarking Product Advantages and Marketing Performance

Products advantage (McNally et al, 2010) is a superiority or difference of products offered by
competitors, with the advantages of product innovation dimension which consists of relative
product advantage, compatibility, complexity, observation as a significant product advantages
assessed from the uniqueness of the product. Research (McNally et al, 2010) resulted in product
advantage has significant impact on business performance. (Li and Calantone, 1998) suggested
that the advantages of the new product to meet the needs of consumers and presumably will
increase marketing performance.
Products advantage (Hua and Wemmerlov, 2006) has been comprehended as an acceptable
level of dimensional products through product design, product attributes, qualities. Product
advantage collaborated with new technologies will improve marketing performance. Marketing
performance will be improved because according to some researches (Langerak et al, 2004),
((Hsieh et al, 2008) and (Yang et al, 2014) the product will have value of innovation, have
unique benefits for consumers to improve the quality of products. This will be a solution for
consumers demand for better products.
Benchmarking the product is a way of learning adaptation to other products that the product
is able to adapt quickly to the market. By doing benchmarking, the product has a cheaper price
than competitors with better quality. By benchmarking, companies on a scale of SMEs do not
need to have a department of research and development as large as big companies. This
creativity concept is supported by (Najda-Janoszka, 2012). Benchmarking according to
(Kerandi et al, 2014) and (Kyro, 2003) also improves the general performance of the company.

Hypothesis3: The higher the bencmarking product, the higher degree of marketing
performance

2.4. Product Innovation and Marketing Performance

Dibrell et al (2008) said that the kind of innovation that was developed by a small company
usually is product innovation and process innovation. Product innovation is a change in the final
product offered by the company, while process innovation is a series of changing steps in order
to achieve a particular purpose of the product. Innovation is a way to improve the company's
capability and capacity.
Research studies (Lin et al, 2013) suggested that green product innovation which has
indicators of how to increase the variety of products, redesign old products, improve product
quality, expand market of green-based products, apply green based technology will give a
positive influence on marketing performance. Hoonsopon and Ruenrom (2012) said that
product innovation is important to improve the quality of life, improve marketing company,
continue the company's cash flow, overcome competitive pressures, address the demand
uncertainty, revolution of technology and short production cycles. Shortly, radical and
incremental product innovation will improve marketing performance.
Avlonitis and Salavou (2007) stated that the innovation of products consist of uniqueness
and newness in small and medium enterprises (SMEs) has positive and significant impact on
the performance of marketing. It was proved from the market share and sales volume. Research
studies (Lau et al, 2010) suggested that product innovation is a source of productivity and agent
of organizational change for companies to survive, because only companies with full and
powerful products innovation will open up greater opportunities for challenging products

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 Herning Indriastuti, Budi Nugroho and Vincent Didiek Wiet Aryanto

marketing with competitors. This research was supported (Prajogo, 2006), (Bates and
Khasawneh, 2005), Akman and Yilmaz (2008), Rosli and Sidek (2010), Pagani (2013).

Hypothesis4: The higher the benchmarking product, the higher degree of marketing
performance

2.5. Exploitative-Exploitative Learning Capability and Marketing Performance

Exploration (Atuahene-Gima, 2005) refers to the tendency of companies to improve and expand
the knowledge to innovate existing products. It requires proper skills and efficient processes.
Research Atuahene-Gima claimed that competence of exploitation has positive effect on the
performance of incremental innovation. Moreover, competence exploration has positive effect
on the performance of radical innovation.
Exploitation and exploration concepts play a role in the newness of products. Furthermore,
the company can achieve the target if the company is able to utilize the knowledge and
expertise. Exploration power aims to minimize the risk of loss and increase the profit of the
company by meeting the needs of consumers and markets. To develop new products,
manufacturers will try to integrate the power of exploration and exploitation assisted by
engineering research development (Calantone and Rubera, 2011). The power of exploration
and exploitation of products research also have positive and significant impact on the
performance of the new product (Bauer and Leker, 2013).
According to (Garcia et al, 2003), the use of knowledge is very useful for the company's
growth. Knowledge should be contributing to product development. By searching knowledge
through processing of research decomposition and development, then exploration and
exploitation activities will be revealed. Exploration activities and explorative will affect the
relative value of knowledge innovation. Ambidexterity according to He and Wong (2004)
defined as the interaction between exploitation and exploration of learning. Furthermore, it is
positively associated with growth in sales for more than three years, this proves that exploitation
and exploration of companies improve marketing performance.
Exploitation and exploration by (Sarkees et al, 2014) was used to transfer the input to be
more efficient compared to competitors. Exploitation and exploration are used for planning and
applying such execution to improve competitiveness. Exploitation related to the appreciation
of the company to the consumer. Indeed exploitation and exploration involve risks, and
experimental exploration for the development of new products and new markets affect the
viability of products, enhance product innovation, new product concepts and new technologies.
A Research (Sarkees et al, 2014) suggested that the exploration and exploitation capabilities
influence on superior performance.
Companies need intellectual capacity and technology to explore and maintain knowledge.
A failure to maintain and enable knowledge can influence companies comprehension to
business matter. Exploration and exploitation refers to the maintenance of knowledge
throughout time (Lane et al, 2006).

Hypothesis 5: The higher the explotative-exploitative capability, the higher degree of

marketing performance.

3. RESEARCH METHOD
3.1. Sample and Data Collection
Respondents in this study were the owners and managers of the SME apparel industry in Central
Java. Population of research spread in the area of the Kudus, Pekalongan, Klaten, Pemalang,

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 Small and Medium Enterprises Product Benchmarking Advantages On Marketing Performance

Semarang, Surakarta. The sampling technique used was purposive technique sampling methods
with specific criteria.
Implementation of data collection spread across six districts / cities for the research process
had been being conducted in May-July 2015. Prior to the data collection process, researcher
had accomplished the quality of the questionnaire instrument by testing the validity and
reliability based on University standard research.
350 questionnaires had been distributed to SMEs apparel owners and managers, then there
were 300 papers collected, and after screening process, there were 211 papers left. The data
were analyzed by using structural equation modeling with AMOS program.

3.2. Measurement
This research was applying the ten indicators with Likert scale. Variable of benchmarking
advantage in this study was adapted from Hua, Wemmerlov (2006), Hsieh (2008), Watson GH
(2007). The benchmarking for product advantage in this research include benchmarking for
products superior quality, distinctive design, unique attributes and specific features. Product
innovation indicators was adapted from Lages et al (2009); Dibrell (2006); Lin (2013).
Explorative-exploitative learning capabilities was adapted from March (1991) and (Atuahene-
Gima and Murray, 2007). Marketing performance was adapted from (Agha et al, 2011),
(Matsuno and Mentzer, 2000), (Voss and Voss, 2000)

3.3. Research Finding

The research used estimation of Coeffisient Cronbach's Alpha (), Composite Score Reliability
(CR) and Average Variance Extracted (AVE) to construct reliability assessment. Statistical
results for all database with a value of alpha and the value of the composite reliability (CR)
must be above 0.7 (see table 2). Value of Average Variance Extracted (AVE) is recommended
to be above 0.5. Table 2 shows the measurement scales, confirmatory factor analysis and
reliability. Cronbach's alpha Coeffisient and AVE estimation was also done by Sobel test to
determine whether the advantage of product benchmarking would fill the gap between product
innovation and marketing performance or not. Sobel test would also be used to comprehend the
influence of explorative capabilities-exploitative toward marketing performance. Sobel will be
of significant value when Sobel test has a value of > 2 and a two-tailed probability <0.05 (Soper,
2016).
The statistical results shows that the product innovation, explorative-exploitative capability
have positive and significant impact tothe advantage of product benchmarking, as well as
product innovation, advantage of product benchmarking, explorative / exploitative capabilities
have positive and significant impact on the marketing performance. Statistical results are
presented in Table 1:

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 Herning Indriastuti, Budi Nugroho and Vincent Didiek Wiet Aryanto

Table 1 Regression Weights: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

Bencmarking_Product_A <--
Product_Innovation ,370 ,083 4,462 *** Significant
dvantages -
Bencmarking_Product_A <-- Explorative_Exploitative_
,387 ,086 4,522 *** Significant
dvantages - Capabilities
<-- Bencmarking_Product_
Marketing_Performance ,594 ,158 3,764 *** Significant
- Advantages
<--
Marketing_Performance Product_Innovation ,248 ,105 2,369 ,018 Significant
-
<-- Explorative_Exploitative_
Marketing_Performance ,268 ,108 2,486 ,013 Significant
- Capabilities

Table 2 Measuremant Scales, Confirmatory Factor Analysis, and Reliabilitas, Cronbachs Alpha
Coefficient and AVE, Sobel Test
Contruct and Measurement Standardized CR AVE
Items Loadings
Product Innovation
Develop new product according 0.72
the capacity 0.76
Enhance existing product 0.75
Develop the old design for a 0.75 0.83 0.83 0.57
new product
Developed variations of
material
Explorative-Exploitative
Capability 0.80
Experiment on new product 0.76
Creating new opportunies 0.81
Develop insight knowledge 0.77 0.86 0.87 0.56
Conduct comparative study in
order to enroll power explortion
products
Benchmarking Product
Advantage 0.69
Quality of benchmarking 0.72
Design of benchmarking 0.67
Uniqueness Attribute of 0.64 0.77 0.84 0.59
benchmarking
Spesific Fitur of benchmarking
Marketing Performance
Increase the number of 0.69
customers 0.72
Growth in profitability 0.67
Growth volume of sales 0.64 0.86 0.88 0.56
Growth the marketing area
Reflective, 10 point Likert
answer scale, (1) strongly
disagree- (10) strongly agree.

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 Small and Medium Enterprises Product Benchmarking Advantages On Marketing Performance

Contruct and Measurement Standardized CR AVE

Items Loadings
Please comment on the
characteristic of the industry
you are active in disagree and
strongly agree
Sobel test Sobel test One-tailed Two-tailed
Product Innovation 2.544 .005 .010 Significant
Benchmarking Product
Advantage-Marketing
Performance
Explorative-Exploitative 2.507 .006 .012 Significant
Learning Capability
Benchmarking Product
Advantage-Marketing
Performance

3.4. Measurement validation

Measurement model was using AMOS 20 by applying the maximum likelihood (ML)
procedural. The statistical results with a model that is fit Chi-square = 111.53, df = 98, CMIN
/ DF = 1.138, GFI = 940, TLI = 990, CFI = .992, RMSEA = .026, Hoelter = 230. Value of Sobel
test> 2 and two-tailed value <0.05 which means significant.
Multi-items analyzed by estimated factor loading, Cronbach alphas, Composite Reabilities
(CR) and Average Variances Extracted (AVE). All results are positive and significant factor
loading (p .05) Cronsbach alphas, Composite Reabilities (CR) range of .77 to .86 and .83 to
.88 all values above 0.7. Lastly, AVE all cases above 0.5. And all the indicators and construct
reliability on the results support of this study. Hoelter value> 200 at a rate of .01 and .05 then
the model is considered fit, and the sample number 211 is considered sufficient to make the
model fit. Results Sobel test = 2,544 and two-tailed value of <0.05, it means that the value of
Sobel test between product innovation and marketing performance is capable to be mediated
by benchmarking product advantage. Sobel test also shows benchmarking product advantage is
able to mediate between the exploration-exploitation capabilities and marketing performance.

3.5. Structural Model

Final results of the study has shown structural models of the relationship between dependent
and independent variables with a satisfactory value or goodness-of-fit.
Model Chi-square = 111.53, df = 98, CMIN / DF = 1.138, GFI = 940, TLI = 990, CFI = .992,
RMSEA = .026, Hoelter = 230.

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 Herning Indriastuti, Budi Nugroho and Vincent Didiek Wiet Aryanto

Figure 1 Full Structural Model

Output regression coefficients are shown in Table 1, indicating a strong correlation for all
the hypotheses that have been tested. Hypothesis test produces a positive and significant
correlation between the influence of product innovation to the advantage of product
benchmarking (H1 supported), exploitative-explorative capability has a positive and significant
relationship to advatage of product benchmarking (H2 supported). Product benchmarking
advantage has a positive and significant impact with marketing performance (H3 supported).
Product innovation has a significant positive effect on the marketing performance (H4
supported). Explorative-exploitative capability has a positive and significant relationship to the
marketing performance (H5 supported).

4. DISCUSSION AND IMPLICATION

4.1. Theoretical Implication
This research has found the effect of product innovation to the product benchmarking
advantage. It has proven that the higher the product innovation, the higher marketing
performance of a company. This result is supported by (Song and Parry, 1997); (Hult and
Ketchen, 2001); (Waranantakul et al, 2009); (Lages et al, 2009); (Chailom and mummy, 2010).
The sobel test also revealed that product innovation is the antecedent of the product advantages.
Consequently, the higher the company's product innovation the better improvement of the
company's products. Advantage of Product benchmarking also has positive results and
significant impact on the performance of a company's marketing. It has stated that the higher
the advantages of product benchmaking, the higher the performance of the company's
marketing. This statement is supported by some researches (McNally et al, 2010); (Li and
Calantone, 1998), (Hua and Wemmerlov, 2006); (Langerak et al, 2004); (Hsieh et al, 2008).

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 Small and Medium Enterprises Product Benchmarking Advantages On Marketing Performance

The advantage of product benchmarking is also affected by the high level of learning. In
fact, knowledge of the company will determine the quality of product advantage. This
conclusion is supported by Chen et al (2012); (Cohen and Levinthal, 1990), Lisbon (2011);
Voss, Voss (2012). Exploration and exploitative capabilities against products also have positive
and significant impact on company's marketing. It is supported by (Atuahene-Gima, 2005);
Calantone, Rubera (2011); (Bauer and Leker, 2013), Sarkees (2014). These results confirm that
the product innovation, advantage of product benchmarking, explorative-exploitative learning
capability have positive and significant impact on the performance of marketing. Sobel test has
proved that the advantage of product benchmarking is able to mediate business gap between
product innovation and marketing performance. These results are expected to be added to the
study of marketing strategy.

4.2. Managerial Implication

Results of the study provide an alternative for owners and managers of SMEs in the apparel
industry in Central Java, Indonesia. Firstly, product innovation is an important indicator to
develop new products, enhance existing products, develop old products redesigning process to
establish benchmarking products and finally develop a variety of products. Furthermore,
increasing product innovation will increase product benchmarking which will give products
advantage. Therefore, in order to get innovative benchmarking product, manufacturers of SMEs
need to develop a superior quality of benchmarking, a distinctive design of benchmarking,
unique attributes of benchmarking, specific features of benchmarking and conduct marketing
performance indicators to increase the number of customers and increase profit within the
company. Secondly, with the capability to approach market with explorative-exploitative
learning, companies recomended to make a new concept, develop experiment to result new
products, develop new opportunities, increase the knowledge to produce new products, set a
comparative study with other companies and for that reason, SMEs will be competent enough
to increase product benchmarking to get some advantages and raise the performance marketing.

4.3. Conclusion
Results of this research indicate the important role of the advantages of benchmarking product
in bridging the gap between the product innovation and marketing performance. Eventhough
there was researches result claimed that there is contradiction between product innovation and
marketing performance by the study of (Yalcinkaya et al, 2007), (Fu et al, 2008), (Al-Zyadaat
et al, 2012), results of this contradiction is concluded with clear statement that benchmarking
product advantages are able to mediate the gap between product innovation and marketing
performance. Benchmarking product advantages are also capable of mediating explorative-
exploitative learning capability to increase marketing performance. And 5 results supported the
hypothesis stated.

4. 4. Future Research
To win the global business competition SMEs must be able to innovate in order to improve
marketing performance. Even if the SME apparel industries using imitation and modify
innovation, SMEs should be able to continue product innovation to survive. Surely, it is better
when SMES are also able to make their own branch label to simplify consumers in identifying
products of SMEs in the market. Finally, this research gives focus on the SME apparel
industries in Central Java, Indonesia, to develop new strategy of Indonesian SMEs marketing
in the future. Hopefully, the next research about advantage of benchmarking product will be
applied to other industries such as the creative industries to perfectionate modifications and
imitations patterns against other products.

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 Herning Indriastuti, Budi Nugroho and Vincent Didiek Wiet Aryanto

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