This study was studied to obtain the results of the analysis and identification of the effect of product innovation and market orientation on competitive advantage, the effect of product innovation and market orientation on marketing performance, and the effect of competitive advantage on marketing performance. The population in this study were all owners of Food SMEs in Salatiga City, amounting to 667. The sample in this study was 100 respondents who were taken based on simple random sampling method. The results of the analysis of this study conclude that product innovation has a positive and significant effect on competitive advantage. Market orientation has a positive and significant effect on competitive advantage. Product innovation has a positive and significant effect on marketing performance. Market orientation has a positive and significant effect on marketing performance. Competitive advantage has a positive and significant effect on marketing performance, and competitive advantage can be an intervening variable between product innovation on marketing performance and market orientation on marketing performance.
Keywords: Product Innovation, Market Orientation, Competitive Advantage, Marketing