Abstract
This study aims to build a new theoretical model to overcome the gaps of the finding of previous studies on the effect of marketing innovation on business performance. The marketing strategy then becomes a potential mediation used to overcome this gap. The collaboration of theoretical and empirical studies is used to enrich the Strategic Marketing Management literature. An empirical study used survey data on a minimum of 280 selected SMEs from 10 regencies/ cities in Central Java, Indonesia by examining the regression relationship between marketing capability, marketing strategy, and business performance of SMEs. Confirmatory Factor Analysis
is used to measure the validity and reliability of the construct used. Data analysis techniques used Structural Equation Modeling (SEM) with AMOS Version 22.0. By examining the diverse literature on Marketing Innovativeness, Marketing Strategy and Business Performance, this study offers a unique analysis of the culture of market innovation and its effect on Marketing Strategy and Business Performance of SMEs in Indonesia.

Keywords: Marketing Innovativeness, Marketing Strategy, Business Performance