The purpose of the research is to analyze the organizational antecedents of marketing capabilities and their impact on business performance using a sample of small and medium enterprises (SMEs). More specifically, the research analyzes the effect of the organizations’ internal marketing (IM) practices on the employees’ implementation of a coordinated set of commercial abilities crucial to firms’ competitiveness. Results of the research indicate that IM, or the management of human resources as internal organizational clients, is a key determinant in motivating employees effectively to develop both strategic and operational marketing capabilities. Marketing capabilities exert a significant and positive effect on clients’ satisfaction and loyalty, which ultimately lead to better organizational performance in terms of sales, profit, and market share. The research also contributes to ...