Arlina Nurbaity Lubis

Type of the article: Research Article

Abstract
This paper examines how marketing capability and product advantage influence market performance in creative culinary SMEs operating in North Sumatra, Indonesia. Recognizing that internal strategic resources must align with consumer perceptions to drive success, the study positions perceptual product congruity as a psychological mediator linking organizational capabilities to market outcomes. Using Partial Least Squares-Structural Equation Modeling (PLS-SEM) with data from 334 culinary businesses, the analysis reveals three key direct effects: marketing capability on perceptual product congruity (β = 0.413; f² = 0.218), product advantage on perceptual product congruity (β = 0.369; f² = 0.146), and perceptual product congruity on market performance (β = 0.456; f² = 0.239). Importantly, perceptual product congruity also mediates the relationships between marketing capability and performance (β = 0.144, p = 0.001) and between product advantage and performance (β = 0.162, p < 0.001). These findings demonstrate that psychological alignment between products and consumer identity drives performance, particularly for culturally meaningful offerings like traditional culinary products. The research extends self-image congruity theory to resource-constrained SMEs in emerging markets while offering practical guidance for perception-based marketing strategies that leverage cultural narratives and identity alignment.