Frugal Innovation in Marketing: Strategic Pathways for Small Businesses with Limited Resources

Small businesses often operate under severe resource constraints, yet they must compete in a marketing landscape dominated by highly funded and well-staffed competitors. This paper reframes those limitations not as liabilities but as opportunities for innovation, proposing that small enterprises can build sustainable competitive advantage through strategic frugality, narrative authenticity, and adaptive digital practices. Drawing on theories of entrepreneurial marketing, frugal innovation, and bricolage, a new framework is developed and validated through a qualitative empirical study involving twelve SMEs from Estonia, Sweden, and the UK. The findings confirm that low-budget strategies, when executed with clarity and creativity, can outperform more traditional approaches in customer engagement, brand loyalty, and visibility. The study contributes a model of lean strategic signalling and offers practical insights for small business owners navigating growth under constraint.