THE EFFECT OF MARKETING ETHICS AS A MODERATOR ON THE RELATIONSHIP BETWEEN CUSTOMER ORIENTATION AND SMES PERFORMANCE IN SAUDI ARABIA

Abstract

Recent literature has demonstrated the importance of consumer orientation (CO) for small and medium-sized enterprises (SMEs); however, doubts persist about how CO can improve SMEs performance due to its ambiguity. We examine the marketing ethics (ME) that govern the relationship between COs and SMEs. A proposed model was empirically tested using a structural equation model (SEM) on 408 manufacturing SMEs in Saudi Arabia. The findings indicate that CO has a positive effect on the performance of SMEs and, more importantly, that this effect is indirect because ME fully moderates it. These findings indicate that CO improves performance when firms invest in marketing ethics development. While consumer orientation is critical, it may not be enough to boost performance if the firm is unable to adhere to marketing ethics practices.