Traditional Marketing Practice Model and Entrepreneurship Marketing in SMEs in Indonesia

Ernani Hadiyati,Suprayitno ,Martaleni

doi:10.5539/ijbm.v14n1p95

Abstract

Small Medium Enterprises (SMEs) in Indonesia have a significantly strategic role in the national economy to improve employment, Gross Domestic Product (GDP) and export value, thus increase the economic growth in Indonesia. The purpose of the study is to describe and analyze the traditional marketing practices and entrepreneurial marketing and their effects on business performance. The object of the research is industrial SMEs in garment production, located in East Java Province. The number of research samples is 134. The data is analyzed by using SEM-PLS and Different Test Statistics. The result of the study indicates that the traditional marketing practice model and entrepreneurial marketing influence business performance. And the other research results show that there are differences in traditional marketing practices and entrepreneurial marketing in SMEs. The concept of entrepreneurial marketing is suitable for SMEs to improve their business performance. From the research it is recommended that the government policy, with its SME empowerment program, is able to overcome marketing challenges. For SMEs, they need to consider and learn the entrepreneurial marketing concept as a new paradigm in marketing.

Highlights

The economic performance in Indonesia does rely on the role of large businesses, and Micro, Small and Medium Enterprises (MSMEs) and is proven to have relatively better resilience compared to large scale businesses
The data is processed by using the SEM method based on Partial Least Square (PLS) using a SMARTPLS software version 2.0 M3, developed at the University of Hamburg Germany
The measurement model consists of relationships between items of observable variables and latent constructs measured by those items

Summary

Introduction

The economic performance in Indonesia does rely on the role of large businesses, and Micro, Small and Medium Enterprises (MSMEs) and is proven to have relatively better resilience compared to large scale businesses. Amidst the economic crisis and the recovery effort in Indonesia today, SMEs play a very strategic role. In 2011-2013 period according to Central Bureau of Statistics data of MSMEs, the performance of MSMEs on economic contributions generally fluctuated. The number of business units and employment in the last 2 years has not improved. The contribution of MSMEs to GDP and the export value of the 2 periods declined recently. The government always tries to make policies in empowering MSMEs in Indonesia. MSMEs spreading throughout all regions and rural areas are able to contribute to the economy in the region

Objectives

Methods

Results

Discussion

Conclusion