•Qualitative study exploring and investigating dimensions of family business efficacy (FBE) in family firms and the relationship with dynamic marketing capabilities and firm performance.•The study conceptualises a novel FBE construct consisting of eight dimensions.•FBE is positively associated with dynamic marketing capabilities.•FBE leads to family firm performance. In today’s competitive environment, the growth and survival of family firms depend significantly on the extent to which they can build, extend, or reconfigure organisational capabilities in response to changing environments. Family members’ belief in their unified efforts to organise and execute courses of action can be instrumental in addressing business and marketing challenges and goals. This study aims to conceptualise a novel Family Business Efficacy (FBE) construct that is posited as a distinct form of efficacy at the collective level in family firms. The research employs a qualitative inductive design to investigate FBE of family businesses in Saudi Arabia and the UK. The findings identify eight dimensions of FBE that reflect family members’ beliefs regarding collective abilities to produce desired marketing outcomes for the family business. This paper contributes a conceptualisation of FBE as the basis for scale measurement and further empirical assessment of FBE on firm marketing performance.