Does Marketing Strategy Matter for Microcredit Firms? Market Orientation, Innovation and Performance in Developing Economies

Entrepreneurship as a means for alleviating poverty has garnered significant attention among businesses, policy makers, and scholars in recent years. Yet, little attention has been given to the approach by which the poor actually seek out and interact with customers to offer goods and services and participate in the marketplace. Marketing capabilities are central to business innovation and performance but are underdeveloped in the entrepreneurship and management literatures. Building from theory in strategic marketing, we examine customer orientation as a key intervening variable between individual antecedents and business outcomes in a subsistence economy. We sample over 600 small business owners involved in a microcredit program in Nairobi, Kenya, finding that customer orientation has positive effects and selling orientation has negative or nonsignificant effects on business performance. Further, a customer orientation is facilitated by cognitive and emotional empathy with the customer, but empathy is hampered by the level of poverty deprivation for the entrepreneur. We also find that necessity-motivated entrepreneurs are less likely to adopt a customer orientation