The main aim of this study was to investigate the relationship between market orientation and the functioning of small and medium companies via competitive advantage and marketing innovation in Ardebil Province. The current study is a descriptive and scientific from the viewpoint of practical purpose and the way of it is done, since it is not only addresses the current situation in realizing the relation of each of the research variables using the testing system of structural equation modeling but also it is practical hence its anticipated results can be used to improve the functioning of small and medium companies. The statistical population of this research was the small and medium-sized companies in Ardebil Province. The whole companies whether small or medium-sized are about 624 in Ardebil Province that the sample size of these 624 companies using Morgan Table equals to 238 companies. Data collections have been done through Naidoo standard questionnaire. After collecting data, they have been analyzed using SPSS and LISREL software in two different parts of descriptive and deductive statistics respectively. The obtained results from testing system of structural equation modeling represent the confirmation of the research hypotheses except the seventh and eighth. Finally, some suggestions have been presented about the obtained results of the current research.