<![CDATA[This study aims to analyze the effect of product innovation on marketing performance with competitive advantage as a mediating variable among traditional Balinese clothing MSMEs in Gianyar Regency. This research employs a quantitative approach with an associative design based on the Resource-Based View (RBV) perspective. The sample consists of 50 respondents selected using purposive sampling technique. Data were collected through Likert-scale questionnaires and analyzed using Structural Equation Modeling based on Partial Least Squares (SEM-PLS). The results indicate that product innovation has a positive and significant effect on marketing performance. Product innovation also has a positive and significant effect on competitive advantage. Furthermore, competitive advantage has a positive and significant effect on marketing performance and is proven to partially mediate the relationship between product innovation and marketing performance. These findings suggest that the ability of MSMEs to develop product innovation and transform it into competitive advantage is a key factor in enhancing marketing performance more effectively. Theoretical implications of this study reinforce the role of product innovation in creating competitive advantage that enhances marketing performance, while practically, MSMEs should focus on developing unique designs and motifs, improving product quality, and leveraging local cultural values to avoid price-based competition and increase market attractiveness.]]>
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