THE ROLE OF PRODUCT INNOVATION IN MEDIATING THE EFFECT OF MARKET ORIENTATION ON MARKETING PERFORMANCE AMONG HAND ACCESSORY MSMES IN GIANYAR REGENCY

This study aims to analyze the role of product innovation in mediating the influence of market orientation on marketing performance among hand accessories MSMEs in Gianyar Regency. The method employs a quantitative causal design with a purposive sampling technique involving 50 artisans, analyzed using Structural Equation Modeling-Partial Least Squares (SEM-PLS). The results indicate that both market orientation and product innovation positively and significantly impact marketing performance, with product innovation serving as a strong partial mediator. Theoretically, these findings strengthen the Resource-Based View (RBV) paradigm in small businesses by proving product innovation acts as a dynamic capability that forms a competitive advantage from market insights. Practically, the study concludes that understanding consumer trends will not optimally boost profit without creative product execution. MSME owners are advised to actively enhance market sensitivity and routinely refresh visual designs, model variations, and material quality to maintain profitability amidst intense competition in Gianyar's creative industry.