Preprint has been published in a journal as an article
Preprint / Version 1

Determinants of SME’s Business Performance: The Role of Digital Marketing and Online Consumer Behavior


Penentu Kinerja Bisnis UKM: Peran Pemasaran Digital dan Perilaku Pelanggan Online

##article.authors##

DOI:

https://doi.org/10.21070/ups.1108

Keywords:

Digital Marketing, Firm Performance, Behaviour

Abstract

The Covid 19 pandemic and the development of digital technology and the internet have changed the way business is digitally based, so that many marketing activities have also turned to digital. This study aims to explain the implementation of Digital Marketing and online consumer behavior on MSME business performance. This research was conducted on SMEs in Surabaya. The sample used is 169 SMEs with a purposive sampling approach, namely SMEs that have used Digital Marketing. The analysis tool used is SmartPLS. The results of this study indicate that digital marketing has a significant effect on online consumer behavior, digital marketing has a significant effect on business performance, and online consumer behavior has a significant effect on business performance as well as online consumer behavior mediates the relationship between digital marketing and MSME business performance.

Downloads

Download data is not yet available.

References

BPS, PRODUK DOMESTIK BRUTO INDONESIA 2018-2022. Jakarta: BPS RI, 2022.

OECD, SME and Entrepreneurship Policy in Indonesia 2018. in OECD Studies on SMEs and Entrepreneurship. OECD, 2018. doi: 10.1787/9789264306264-en.

KEMENKOPUKM, “PERKEMBANGAN DATA USAHA MIKRO, KECIL, MENENGAH (UMKM) DAN USAHA BESAR (UB) TAHUN 2018 - 2019,” https://kemenkopukm.go.id/data-umkm/, 2020.

S. Nurhaliza, “Peran dan Potensi UMKM 2022 Sebagai Penyumbang PDB Terpenting di RI,” https://www.idxchannel.com/economics/peran-dan-potensi-umkm-2022-sebagai-penyumbang-pdb-terpenting-di-ri, Dec. 14, 2022. https://www.idxchannel.com/economics/peran-dan-potensi-umkm-2022-sebagai-penyumbang-pdb-terpenting-di-ri

KEMENKOP UKM, “20,76 Juta UMKM di Indonesia Masuk Ekosistem Digital pada 2022,” https://dataindonesia.id/bursa-keuangan/detail/2076-juta-umkm-di-indonesia-masuk-ekosistem-digital-pada-2022, Dec. 27, 2022. https://dataindonesia.id/bursa-keuangan/detail/2076-juta-umkm-di-indonesia-masuk-ekosistem-digital-pada-2022 (accessed Jan. 11, 2023).

B. Arianto, “Pengembangan UMKM Digital di Masa Pandemi Covid-19,” ATRABIS: Jurnal Administrasi Bisnis, vol. 6, no. 2, 2020, doi: 10.38204/atrabis.v6i2.512.

L. Marlinah, “Peluang dan Tantangan UMKM Dalam Upaya Memperkuat Perekonomian Nasional,” Jurnal Ekonomi, vol. 22, no. 2, 2020, doi: 10.37721/je.v22i2.644.

K. North, N. Aramburu, and O. J. Lorenzo, “Promoting digitally enabled growth in SMEs: a framework proposal,” Journal of Enterprise Information Management, vol. 33, no. 1, pp. 238–262, Jan. 2020, doi: 10.1108/JEIM-04-2019-0103.

T. Yuliaty, C. Sarah Shafira, and M. Rafi Akbar, “Strategi UMKM Dalam Menghadapi Persaingan Bisnis Global Studi Kasus Pada PT. Muniru Burni Telong,” Journal Management, vol. 19, no. 3, pp. 293–308, 2020.

C. Nurlaila and H. Fitriyah, “Effect of E-Commerce, Use of Accounting Information Systems and Business Capital in Student Decision Making for Entrepreneurship,” Academia Open, vol. 5, Dec. 2021, doi: 10.21070/acopen.5.2021.2594.

A. L. Dewi and W. P. Setiyono, “The Effect of Financial Literacy, Financial Inclusion, Fintech Crowdfunding on MSME Performance in Sidoarjo Regency,” Indonesian Journal of Innovation Studies, vol. 20, Oct. 2022, doi: 10.21070/ijins.v20i.727.

A. G. Frank, L. S. Dalenogare, and N. F. Ayala, “Industry 4.0 technologies: Implementation patterns in manufacturing companies,” Int J Prod Econ, vol. 210, no. January, pp. 15–26, 2019, doi: 10.1016/j.ijpe.2019.01.004.

D. Ivanov, A. Dolgui, and B. Sokolov, “The impact of digital technology and Industry 4.0 on the ripple effect and supply chain risk analytics,” Int J Prod Res, vol. 57, no. 3, pp. 829–846, 2019, doi: 10.1080/00207543.2018.1488086.

M. Ardolino, M. Rapaccini, N. Saccani, P. Gaiardelli, G. Crespi, and C. Ruggeri, “The role of digital technologies for the service transformation of industrial companies,” Int J Prod Res, vol. 56, no. 6, pp. 2116–2132, 2018, doi: 10.1080/00207543.2017.1324224.

S. Ukamah, S. Hermawan, and H. Fitriyah, “The Influence of Product Quality and Service Quality on Online Through Digital Marketing as Intervening Variables During the COVID-19 Pandemic,” JBMP (Jurnal Bisnis, Manajemen dan Perbankan), vol. 8, no. 1, Apr. 2022, doi: 10.21070/jbmp.v8vi1.1626.

Y. Sun, X. Shao, X. Li, Y. Guo, and K. Nie, “How live streaming influences purchase intentions in social commerce: An IT affordance perspective,” Electron Commer Res Appl, vol. 37, p. 100886, Sep. 2019, doi: 10.1016/j.elerap.2019.100886.

C. Coman, M. M. Popica, and C.-I. Rezeanu, “The Adoption of Digital Marketing by SMEs Entrepreneurs,” in Advances in Intelligent Systems and Computing, 2020, pp. 431–441. doi: 10.1007/978-3-030-37737-3_37.

S. Kemp, “Reports digital 2022 indonesia,” WE ARE SOCIAL, Feb. 2022. https://datareportal.com/reports/digital-2022-indonesia (accessed Jun. 30, 2022).

SIMON KEMP, “DIGITAL 2023: INDONESIA,” Report, Feb. 09, 2023. https://datareportal.com/reports/digital-2023-indonesia (accessed Mar. 09, 2023).

N. Noerlina and T. N. Mursitama, “The Role of Digital Marketing in Engaging SMEs and Education Institution in Emerging Economy,” WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS, vol. 19, pp. 660–665, Feb. 2022, doi: 10.37394/23207.2022.19.58.

M. R. Miah, A. Hossain, R. Shikder, T. Saha, and M. Neger, “Evaluating the impact of social media on online shopping behavior during COVID-19 pandemic: A Bangladeshi consumers’ perspectives,” Heliyon, vol. 8, no. 9, p. e10600, Sep. 2022, doi: 10.1016/j.heliyon.2022.e10600.

E. Croes and J. Bartels, “Young adults’ motivations for following social influencers and their relationship to identification and buying behavior,” Comput Human Behav, vol. 124, p. 106910, Nov. 2021, doi: 10.1016/j.chb.2021.106910.

M. A. Hossin, M. N. I. Sarker, Y. Xiaohua, and A. N. K. Frimpong, “Development dimensions of e-commerce in Bangladesh,” in Proceedings of the 2018 International Conference on Information Management & Management Science - IMMS ’18, New York, New York, USA: ACM Press, 2018, pp. 42–47. doi: 10.1145/3277139.3277152.

F. Eggers, T. Niemand, S. Kraus, and M. Breier, “Developing a scale for entrepreneurial marketing: Revealing its inner frame and prediction of performance,” J Bus Res, vol. 113, pp. 72–82, May 2020, doi: 10.1016/j.jbusres.2018.11.051.

N. Baporikar and R. Fotolela, “E-Marketing for SMEs,” in Research Anthology on Small Business Strategies for Success and Survival, I. R. Management Association, Ed., IGI Global, 2021, pp. 867–886. doi: 10.4018/978-1-7998-9155-0.ch043.

D. Chaffey and F. E. Chadwick, Digital Marketing, 7th ed. Pearson, 2019.

T. Piñeiro-Otero and X. Martínez-Rolán, “Understanding Digital Marketing—Basics and Actions,” C. M. Machado and J. P. Davim, Eds., Springer, 2016, pp. 37–74. doi: 10.1007/978-3-319-28281-7_2.

R. Agnihotri, R. Dingus, M. Y. Hu, and M. T. Krush, “Social media: Influencing customer satisfaction in B2B sales,” Industrial Marketing Management, vol. 53, pp. 172–180, Feb. 2016, doi: 10.1016/j.indmarman.2015.09.003.

D. Nunan, O. Sibai, B. Schivinski, and G. Christodoulides, “Reflections on ‘social media: Influencing customer satisfaction in B2B sales’ and a research agenda,” Industrial Marketing Management, vol. 75, pp. 31–36, Nov. 2018, doi: 10.1016/j.indmarman.2018.03.009.

S. F. Wamba and L. Carter, “Social Media Tools Adoption and Use by SMEs,” in Social Media and Networking, IGI Global, 2016, pp. 791–806. doi: 10.4018/978-1-4666-8614-4.ch035.

H. M. Taiminen and H. Karjaluoto, “The usage of digital marketing channels in SMEs,” Journal of Small Business and Enterprise Development, vol. 22, no. 4, pp. 633–651, Nov. 2015, doi: 10.1108/JSBED-05-2013-0073.

M.-C. Stoian, P. Dimitratos, and E. Plakoyiannaki, “SME internationalization beyond exporting: A knowledge-based perspective across managers and advisers,” Journal of World Business, vol. 53, no. 5, pp. 768–779, Nov. 2018, doi: 10.1016/j.jwb.2018.06.001.

H. Karjaluoto and M. Huhtamäki, “The Role of Electronic Channels in Micro-Sized Brick-and-Mortar Firms,” Journal of Small Business & Entrepreneurship, vol. 23, no. 1, pp. 17–38, Jan. 2010, doi: 10.1080/08276331.2010.10593471.

M. E. Keke, “The use of digital marketing in information transport in social media: the example of Turkish companies,” Transportation Research Procedia, vol. 63, pp. 2579–2588, 2022, doi: 10.1016/j.trpro.2022.06.297.

M. Hartemo, “Email marketing in the era of the empowered consumer,” Journal of Research in Interactive Marketing, vol. 10, no. 3, pp. 212–230, Aug. 2016, doi: 10.1108/JRIM-06-2015-0040.

R. C. Handayani, B. Purwandari, I. Solichah, and P. Prima, “The Impact of Instagram ‘Call-to-Action’ Buttons on Customers’ Impulse Buying,” in Proceedings of the 2nd International Conference on Business and Information Management, New York, NY, USA: ACM, Sep. 2018, pp. 50–56. doi: 10.1145/3278252.3278276.

H. Matta, R. Gupta, and S. Agarwal, “Search Engine optimization in Digital Marketing: Present Scenario and Future Scope,” in 2020 International Conference on Intelligent Engineering and Management (ICIEM), IEEE, Jun. 2020, pp. 530–534. doi: 10.1109/ICIEM48762.2020.9160016.

V. Herlina, S. Yacob, J. Johannes, and A. Octavia, “Role of social media marketing in improving marketing performance for smes during the covid-19 pandemic: a literature review,” Put It Right Journal, vol. 1, no. 1, pp. 47–56, Feb. 2022, doi: 10.22437/pirj.v1i1.17183.

J. ; Järvinen, A. ; Tollinen, H. ; Karjaluoto, and C. Jayawardhena, “Digital and Social Media Marketing Usage in B2B Industrial Section.,” Marketing Management Journal, vol. 22, no. 2, pp. 102–117, 2012, [Online]. Available: http://search.ebscohost.com/login.aspx?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=1534973X&AN=87023191&h=xiZ9x6ix7Q/EbkkUMLFXnTdaH5Cs7nldjRKHDBhE28Uy6wRMDYXejAy2XmAqKI+qIvCajRkjXhd59RA2TsBu5Q==&crl=c

J. Setkute and S. Dibb, “‘Old boys’’ club”: Barriers to digital marketing in small B2B firms,’” Industrial Marketing Management, vol. 102, pp. 266–279, Apr. 2022, doi: 10.1016/j.indmarman.2022.01.022.

A. Algumzi, “Impact of digital marketing on SMEs performance in Saudi Arabia: Implications on building NEOM,” Transnational Marketing Journal, vol. 10, no. 1, pp. 27–38, Apr. 2022, doi: 10.33182/tmj.v10i1.1414.

F. Wang, “Digital marketing capabilities in international firms: a relational perspective,” International Marketing Review, vol. 37, no. 3, pp. 559–577, May 2020, doi: 10.1108/IMR-04-2018-0128.

A. S. Patil, N. R. Navalgund, and S. Mahantshetti, “Digital Marketing Adoption by Start-Ups and SMEs,” SDMIMD Journal of Management, vol. 13, no. April, p. 47, Mar. 2022, doi: 10.18311/sdmimd/2022/29677.

C. Coman, M. M. Popica, and C.-I. Rezeanu, “The Adoption of Digital Marketing by SMEs Entrepreneurs,” 2020, pp. 431–441. doi: 10.1007/978-3-030-37737-3_37.

A. T. Stephen, “The role of digital and social media marketing in consumer behavior,” Curr Opin Psychol, vol. 10, pp. 17–21, Aug. 2016, doi: 10.1016/j.copsyc.2015.10.016.

R. Dhivya, G. Shinde, B. Mayappa Bandgar, C. M. Velu, A. Sade, and Y. Sucharitha, “An Analysis Of Consumer Electronics Products To Determine The Impact Of Digital Marketing On Customer Purchasing Behaviour,” Journal of Positive School Psychology, vol. 6, no. 6, pp. 6986–6995, 2022, [Online]. Available: http://journalppw.com

A. Prabhakar and H. Katole, “Impact of digital marketing techniques on Customer behavior in Retail,” Central European Management Journal, pp. 414–419, 2022, doi: 10.57030/23364890.cemj.30.4.36.

F. Schutte and T. Chauke, “The Impact of Digital Marketing on Consumer Behaviour: A Case Study of Millennials in South Africa,” African Journal of Hospitality, Tourism and Leisure, vol. 11, no. 2, pp. 875–886, Jan. 2022, doi: 10.46222/ajhtl.19770720.263.

S. Nurmaliki and S. Riyanto, “The Influence of Consumer Behavior, Competitive Advantages on the Performance of MSMEs during Covid-19,” Int J Innov Sci Res Technol, vol. 5, no. 6, pp. 625–629, Jul. 2020, doi: 10.38124/IJISRT20JUN486.

V. Victor, J. Joy Thoppan, R. Jeyakumar Nathan, and F. Farkas Maria, “Factors Influencing Consumer Behavior and Prospective Purchase Decisions in a Dynamic Pricing Environment—An Exploratory Factor Analysis Approach,” Soc Sci, vol. 7, no. 9, p. 153, Sep. 2018, doi: 10.3390/socsci7090153.

S. M. Utomo, J. R. Sandjaja, W. S. Yustiawan, and D. P. Alamsyah, “Consumer Behavior and Sustainable Performance: Perceived of E-Service Quality on Online Shopping,” in 2021 9th International Conference on Cyber and IT Service Management (CITSM), IEEE, Sep. 2021, pp. 1–4. doi: 10.1109/CITSM52892.2021.9588935.

G. Agustiningsih, W. Anindhita, and M. Arisanty, “Mapping of Indonesian Consumer Behavior on Social Media - Netnography Study of Online Shopping Behavior on Social Media for Improving MSME in Indonesia,” KnE Social Sciences, vol. 2, no. 4, p. 312, Jun. 2017, doi: 10.18502/kss.v2i4.902.

R. S. Sumi and M. Ahmed, “Investigating young consumers’ online buying behavior in COVID-19 pandemic: perspective of Bangladesh,” IIM Ranchi journal of management studies, vol. 1, no. 2, pp. 108–123, Sep. 2022, doi: 10.1108/irjms-09-2021-0127.

Sugiyono, Metode Penelitian Kuantitatif Kualitatif dan Kombinasi Mixed Methods, 2nd ed. Bandung: Alfabeta, 2020.

L. L. L. Negrão, A. B. Lopes de Sousa Jabbour, H. Latan, M. Godinho Filho, C. J. Chiappetta Jabbour, and G. M. D. Ganga, “Lean manufacturing and business performance: testing the S-curve theory,” Production Planning & Control, vol. 31, no. 10, pp. 771–785, Jul. 2020, doi: 10.1080/09537287.2019.1683775.

S. Z. Ahmad, A. R. Abu Bakar, and N. Ahmad, “Social media adoption and its impact on firm performance: the case of the UAE,” International Journal of Entrepreneurial Behavior & Research, vol. 25, no. 1, pp. 84–111, Jan. 2019, doi: 10.1108/IJEBR-08-2017-0299.

T. S. Patma, L. W. Wardana, A. Wibowo, B. S. Narmaditya, and F. Akbarina, “The impact of social media marketing for Indonesian SMEs sustainability: Lesson from Covid-19 pandemic,” Cogent Business and Management, vol. 8, no. 1, 2021, doi: 10.1080/23311975.2021.1953679.

I. G. A. K. Giantari, N. N. K. Yasa, H. B. Suprasto, and P. L. D. Rahmayanti, “The role of digital marketing in mediating the effect of the COVID-19 pandemic and the intensity of competition on business performance,” International Journal of Data and Network Science, vol. 6, no. 1, pp. 217–232, 2022, doi: 10.5267/j.ijdns.2021.9.006.

J. F. Hair, M. Sarstedt, C. M. Ringle, and J. A. Mena, “An assessment of the use of partial least squares structural equation modeling in marketing research,” J Acad Mark Sci, vol. 40, no. 3, pp. 414–433, May 2012, doi: 10.1007/s11747-011-0261-6.

I. Ghozali, Partial least squares : konsep, teknik dan aplikasi menggunakan program SmartPLS 3.2.9 untuk penelitian empiris, 3rd ed. Semarang: Badan Penerbit Universitas Diponegoro, 2021.

J. F. Hair Jr. et al., Manual de Partial Least Squares Structural Equation Modeling (PLS-SEM) (Segunda Edición). OmniaScience, 2019. doi: 10.3926/oss.37.

J. F. Hair, G. T. M. Hult, C. M. Ringle, and M. Sarstedt, A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) Second Edition, 2nd ed. SAGEPublications,Inc, 2017.

A. W. Sasmoko, I. Gautama, and A. Bandur, “Mediating effects of digital marketing on dynamic capability and firm performance: Evidence from small and Medium-sized Enterprises (SMEs) in Indonesia,” International Journal of Recent Technology and Engineering, vol. 8, no. 1, pp. 461–464, 2019, Accessed: Jun. 23, 2022. [Online]. Available: https://www.ijrte.org/wp-content/uploads/papers/v8i1C2/A10760581C219.pdf

I. Daud et al., “The effect of digital marketing, digital finance and digital payment on finance performance of indonesian smes,” International Journal of Data and Network Science, vol. 6, no. 1, pp. 37–44, Dec. 2022, doi: 10.5267/J.IJDNS.2021.10.006.

A. Djakasaputra, O. Y. A. Wijaya, A. S. Utama, C. Yohana, B. Romadhoni, and M. Fahlevi, “Empirical study of Indonesian SMEs sales performance in digital era: The role of quality service and digital marketing,” International Journal of Data and Network Science, vol. 5, no. 3, pp. 303–310, 2021, doi: 10.5267/j.ijdns.2021.6.003.

M. T. Nuseir and A. Aljumah, “The role of digital marketing in business performance with the moderating effect of environment factors among SMEs of UAE,” International Journal of Innovation, Creativity and Change, no. 3, pp. 310–324, 2020.

A. Bin Yamin, “Impact of Digital Marketing as a Tool of Marketing Communication: A Behavioral Perspective on Consumers of Bangladesh,” American Journal of Trade and Policy, vol. 4, no. 3, pp. 117–122, Dec. 2017, doi: 10.18034/ajtp.v4i3.426.

C. du Plessis, “A Scoping Review of the Effect of Content Marketing on Online Consumer Behavior,” Sage Open, vol. 12, no. 2, p. 215824402210930, Apr. 2022, doi: 10.1177/21582440221093042.

S. Dewinatalia and Irwansyah, “Digital Marketing on Young Consumer Behavior: Systematic Literature Review,” Budapest International Research and Critics Institute-Journal (BIRCI-Journal), vol. 5, no. 3, pp. 24389–24404, Aug. 2022, doi: 10.33258/birci.v5i3.6461.

N. Hermina, A. Rendra, M. Gilang Ramadhan, J. Alcacer, M. H. Saudi, and O. Sinaga, “The Influence of Consumer Behavior and Marketing Strategy Towards Marketing Performance of MSME in West Java Through Competitive Strategies in the Covid-19 Pandemic Break,” Solid State Technology, vol. 63, no. 4, pp. 4469–4479, 2020, [Online]. Available: www.solidstatetechnology.us

I. K. Kanten, G. S. Darma, and J. Fahy, “Consumer Behaviour, Marketing Strategy, Customer Satisfaction,and Business Performance,” Jurnal Manajemen dan Bisnis, vol. 14, no. 2, pp. 143–165, Oct. 2017, doi: 10.2307/1252221.

Posted

2023-05-15