East Kalimantan's Dayak bead products have a deep value, not only as a spiritual and cultural symbol, but also as a form of artistic expression and community creativity. The skill of beading is passed down from generation to generation and reflects high hand skills. In its development, bead crafts are not only cultural heritage, but also have economic value, especially when marketed as typical souvenirs, ethnic accessories, and decorative elements that raise the local image of East Kalimantan. This shows that beaded crafts have great potential as a culturally based creative product that is able to attract the attention of tourists and national and international consumers.

However, in the modern era, the bead craft industry faces various significant challenges. Competition is getting tighter, both from similar handicraft products from other regions and from imported products at cheaper prices. The lack of effective promotion and branding has caused East Kalimantan bead products to be less known in the wider market. Most business actors still rely on direct sales through small stores with limited market reach. In addition, the limited use of digital platforms and social media also narrows the opportunity to expand the market. Fluctuations in demand influenced by trends and people's purchasing power further complicate marketing performance.

Another problem faced is the lack of product innovation. Many businesses still maintain traditional designs without significant updates, making them less desirable to young market segments who tend to seek contemporary designs without abandoning cultural identity. The lack of new material development, more efficient production techniques, and diversification of product functions, makes the competitiveness of bead products stagnant. This condition has implications for low sales volume and profitability. The results of initial observations at the Mattan Galery UKM in Samarinda also show that most of the artisans are over 45 years old and consider this business as only a side job with limited income. The low interest of the younger generation to continue this business adds to the challenges for the sustainability of beaded crafts.

This phenomenon has led to a decrease in the number of bead craft business actors in East Kalimantan from 2020 to 2024. This decline not only has an impact on the economic aspect of business actors, but also threatens the preservation of local cultural heritage. In fact, MSMEs have proven to have an important role in economic development, job creation, and poverty alleviation (Liu et al., 2022; Woźniak et al., 2019; Yolanda, 2024). However, MSMEs in Indonesia still face obstacles such as access to financing and marketing limitations (Diana et al., 2022), which directly impact business performance, including East Kalimantan bead crafts (Agus Suyono & Zuhri, 2022).

One of the important strategies to meet this challenge is through product innovation. Innovation is believed to be able to drive increased sales, revenue, and business sustainability (Cuevas-Vargas et al., 2021; Wang & Juo, 2021). However, innovations that are excessive or not in accordance with market needs can actually have a negative impact on marketing performance (Kusuma, 2022). Therefore, product innovation needs to be directed to be able to balance cultural identity and contemporary market needs. In this context, the excellence of iconic

products is thought to be a mediating variable that strengthens the influence of innovation on marketing performance. These advantages create clear differentiation, increase competitiveness, and help maintain business sustainability (Wibowo et al., 2024).

Based on empirical phenomena and previous studies, it can be concluded that East Kalimantan bead craft business actors need relevant innovations and strengthening the advantages of iconic products to improve competitiveness and marketing performance. Therefore, this study took the title "The Influence of Product Innovation on Marketing Performance through Iconic Product Excellence in Bead Handicraft Business Actors in East Kalimantan"

This study examines the influence of product innovation on marketing performance with the advantage of iconic products as a mediating variable in bead craft business actors in East Kalimantan. The results of the analysis with Partial Least Square (PLS) show several key findings.

First, product innovation has a positive and significant effect on the excellence of iconic products (β = 0.555; p = 0.000). This confirms that the development of design, function, and technology is able to create differentiation that strengthens product iconography. These findings are consistent with previous research (Jiang & Haoxiang, 2022; Anom & Safii, 2022) which states that innovation is the main driver of the creation of iconic products with brand loyalty and long-term competitiveness.

Second, the excellence of iconic products has a positive and significant effect on marketing performance (β = 0.488; p = 0.000). Products with distinctive characteristics, cultural symbols, or unique designs not only function as a result of innovation, but also as a differentiation strategy that increases brand recall, customer loyalty, and market attractiveness (Soukhathammavong & Park, 2019; Kotler et al., 2022).

Third, product innovation has a significant effect on marketing performance through the excellence of iconic products (β = 0.344; p = 0.000). This is in line with the theories of Resource-Based View and Dynamic Capabilities, which explain that innovation creates unique resources and adaptive capabilities that are difficult to replicate. However, new product innovations will have an optimal impact if they are realized in the form of iconic products that consumers recognize.

Fourth, the excellence of iconic products has been shown to mediate the relationship between product innovation and marketing performance (β = 0.271; p = 0.000). This means that consistent innovation based on local culture is able to strengthen product iconography so as to increase the attractiveness and performance of marketing. Iconic products are not only an aesthetic element, but also an important means of differentiation in a competitive market (Subagyo, 2023; Ningrum et al., 2020).

Overall, the results of this study confirm that product innovation plays an important role in improving marketing performance, but the influence is stronger when mediated by the excellence of iconic products. In the context of East Kalimantan bead crafts, business actors need to combine innovation with local cultural identity to create products that are unique, emotionally valuable, and have sustainable competitiveness.

This research shows that product innovation has an important role in improving the marketing performance of bead craft business actors in East Kalimantan. Innovation has been proven to have a significant effect on the excellence of iconic products as well as directly on marketing performance. In addition, the excellence of iconic products has a significant effect on strengthening competitiveness and marketing, and has been proven to mediate the relationship between product innovation and marketing performance. Thus, innovation combined with the strengthening of the characteristics of products based on local culture is able to create differentiation that increases attractiveness, consumer loyalty, and business sustainability.

Beadcraft business actors in East Kalimantan need to continue to develop innovations in design, materials, and production techniques while strengthening local culture-based characteristics so that products are more iconic, easily recognizable, and highly competitive. Continuous innovation will maintain product relevance to market trends while improving marketing performance. In addition, strengthening the excellence of iconic products has been proven to be able to mediate the influence of innovation on marketing, so it needs to be used as the main strategy in product differentiation.

Local governments are expected to support through training and facilitation, especially related to innovation, digital marketing, and business management. For further research, it is recommended to expand the model with other variables such as promotion strategies, customer satisfaction, brand loyalty, and the use of social media to provide a more comprehensive picture of the determinants of the success of marketing beadcraft based on local culture.

Further research can be directed at the expansion of the model by including other variables such as promotional strategies, customer satisfaction, brand loyalty, and marketing digitalization that are increasingly relevant in the modern era. In addition, a more in-depth study of the role of social media and e-

commerce platforms in strengthening the advantages of iconic products is also important. Comparative studies with other regions that have local culture-based crafts can provide a more effective picture of differentiation strategies. Long-term (longitudinal) research is also recommended to look at the consistency of the influence of innovation on marketing performance in the face of changing trends and consumer behavior. Thus, further research can provide a more comprehensive understanding of the factors that determine the success of marketing local culture-based bead crafts.