Absorptive Capacity in Fashion Product Marketing: A Ratoc Perspective

Abstract

This research aims to bridge the research gap in the literature by developing a conceptual model consisting of the concepts of market orientation, absorption capacity, new product development, and business performance. In this study, the population is Micro, Small and Medium Enterprises (MSMEs) in Surabaya's fashion sector. This group was chosen because it plays an important role in the Indonesian economy and can prove its existence in the Indonesian economy. The analytical method used in this study is structural equation model analysis (SEM) with AMOS program. The data collection method used questionnaires distributed to a total population of 243 fashion SMEs in Surabaya. The test results show that market orientation has a positive and significant effect on acceptability, acceptability has a positive and significant effect on new product development, and acceptability has a positive and significant effect on business development. This shows that new product development has a positive and significant impact on business success. The implication in this study is that to manage small businesses in the fashion industry what needs to be prepared is that it is necessary to always collect information about competitors, have differentiation, and modify the products offered to customers to improve company performance and profits.