The Role of Entrepreneurial Marketing in the Indonesian Agro-Based Industry Cluster to Face the ASEAN Economic Community

Abstract

The agro-industry plays an important role in the Indonesian economy. However, Micro, Small and Medium Enterprises (MSMEs) in this industry face various challenges to be competitive, one of which is the implementation of the ASEAN Economic Community (AEC) agreement. The study aims to develop a model for the agro-industry Micro-Small Medium Enterprises to face the ASEAN Economic Community (AEC) using entrepreneurial marketing approaches. This research was conducted at three centers of agro-based industry clusters in Indonesia. The respondents were business actors representing the leading Micro-Small and Medium Enterprises (MSMEs) in the fruit-processing industry cluster, fish processing industry cluster and milk processing industry cluster. Primary data collection was conducted through structured interviews using close ended questionnaires. This study used Structural Equation Modelling analysis with a Partial Least Squares (PLS) approach to develop a model of enhancement for the agro-industry clusters in dealing with AEC. The findings suggest that the entrepreneurial marketing has significant impact in increasing business development and business competitiveness. The MSMEs possessing great competitiveness would be more ready to penetrate their business into other ASEAN markets. In addition, supportive government policies that encourage and improve innovativeness can significantly increase the entrepreneurial marketing ability.