The influence of product quality and digital marketing on the performance of SMEs: A case study of SMEs supported by the representative office of Bank Indonesia in South Sumatra Province

Indra Kuspriyadi; Marlina Widiyanti; Aslamia Rosa; Muchsin Saggaff Shihab

doi:10.21744/ijbem.v6n4.2228

Authors

Indra Kuspriyadi Sriwijaya University, Palembang, Indonesia
Marlina Widiyanti
marlinawidiyanti@fe.unsri.ac.id
Sriwijaya University, Palembang, Indonesia
Aslamia Rosa Sriwijaya University, Palembang, Indonesia
Muchsin Saggaff Shihab Sriwijaya University, Palembang, Indonesia

Keywords:

Competitiveness, digital marketing, MSME performance, product quality, SMEs performance

Abstract

This research explores the intricate dynamics between product quality, digital marketing strategies, and Small and Medium Enterprises (SMEs) performance. The study focuses on the entire population of 43 SMEs affiliated with the Representative Office of Bank Indonesia in South Sumatra Province in 2022. These SMEs benefit from comprehensive guidance provided by Bank Indonesia consultants and actively participate in mentoring programs spanning both conventional and Sharia SME schemes, reflecting a census-based sample selection. The findings derived from multiple linear regression analysis underscore a noteworthy positive and significant impact of product quality and digital marketing on SME performance. In a marketplace saturated with similar products in South Sumatra Province, SMEs must cultivate distinctive attributes that resonate with the local community, thus enhancing their competitive edge. Additionally, the geographical remoteness of SMEs from the city center emerges as a pivotal factor influencing their performance. This remoteness not only affects production logistics but also poses challenges to sales, thereby shaping the overall performance landscape of these enterprises. In essence, this research contributes valuable insights into the multifaceted relationship between product quality, digital marketing strategies, and the performance of SMEs, particularly those aligned with Bank Indonesia in South Sumatra Province.

Downloads

Download data is not yet available.

References

Algumzi, A. (2022). Impact of digital marketing on SMEs performance in Saudi Arabia: Implications on building NEOM. Transnational Marketing Journal (TMJ), 10(1), 27-38.

Aristha, F. (2020). Pengaruh Kualitas Produk Terhadap Kinerja Bisnis Melalui Keunggulan Bersaing (Studi pada UMKM Batik D.I. Yogyakarta). Jurnal Bisnis Dan Ekonomi.

Behl, A., Gaur, J., Pereira, V., Yadav, R., & Laker, B. (2022). Role of big data analytics capabilities to improve sustainable competitive advantage of MSME service firms during COVID-19–A multi-theoretical approach. Journal of Business Research, 148, 378-389. https://doi.org/10.1016/j.jbusres.2022.05.009

Bouwman, H., Nikou, S., & de Reuver, M. (2019). Digitalization, business models, and SMEs: How do business model innovation practices improve performance of digitalizing SMEs?. Telecommunications Policy, 43(9), 101828. https://doi.org/10.1016/j.telpol.2019.101828

?ater, T., & ?ater, B. (2010). Product and relationship quality influence on customer commitment and loyalty in B2B manufacturing relationships. Industrial Marketing Management, 39(8), 1321-1333. https://doi.org/10.1016/j.indmarman.2010.02.006

Effendi, A. (2022). An Analysis of the Crispy Mushroom Business For Small And Medium-Sized Enterprises (SMEs) In Indonesia. An Analysis of the Crispy Mushroom Business For Small And Medium-Sized Enterprises (SMEs) In Indonesia, 3(361), 1411-1420.

Ernita, E., Suseno, B., Dewi, M., & Ilham, M. (2023). Pengaruh Kualitas Produk, Sistem Akuntansi, Dan Pemasaran Online Terhadap Kinerja Usaha UMKM Medan The Kitchen Of Asia (Mentai) Di Kota Medan. Jurnal Ilmiah Muqoddimah: Jurnal Ilmu Sosial, Politik, dan Humaniora, 7(1), 324-331.

Esubalew, A. A., & Raghurama, A. (2020). The mediating effect of entrepreneurs’ competency on the relationship between Bank finance and performance of micro, small, and medium enterprises (MSMEs). European Research on Management and Business Economics, 26(2), 87-95. https://doi.org/10.1016/j.iedeen.2020.03.001

Falciola, J., Jansen, M., & Rollo, V. (2020). Defining firm competitiveness: A multidimensional framework. World Development, 129, 104857. https://doi.org/10.1016/j.worlddev.2019.104857

Guan, J. C., Yam, R. C., Mok, C. K., & Ma, N. (2006). A study of the relationship between competitiveness and technological innovation capability based on DEA models. European journal of operational research, 170(3), 971-986. https://doi.org/10.1016/j.ejor.2004.07.054

Harini, C., & Rahmayuna, N. (2023). Entrepreneurship Marketing Development Model To Improve SMEs Economic Performance In Semarang. Jurnal Manajemen Dayasaing, 25(1), 53-58.

Insch, G. S., & McBride, J. B. (2004). The impact of country-of-origin cues on consumer perceptions of product quality: A binational test of the decomposed country-of-origin construct. Journal of business research, 57(3), 256-265. https://doi.org/10.1016/S0148-2963(02)00323-5

Kaharuddin, K. (2021). Dampak Pemasaran Digital Bauran Pemasaran 7P Terhadap Kinerja UMKM Kota Palopo (Doctoral dissertation, Universitas Muhammadiyah Palopo).

Kawira, K. D., Mukulu, E., & Odhiambo, R. (2019). Effect of Digital Marketing on the Performance of MSMES in Kenya. Journal of Marketing and Communication, 2(1), 1-23.

Khumaidah, K. (2023). Pengaruh Kualitas Produk, Inovasi Produk dan Media Sosial Terhadap Kinerja Pemasaran pada UMKM Tenun Ikat di Desa Troso Pecangaan Jepara (Doctoral dissertation, IAIN KUDUS).

Kim, J., Kang, S., & Lee, K. H. (2021). Evolution of digital marketing communication: Bibliometric analysis and network visualization from key articles. Journal of Business Research, 130, 552-563. https://doi.org/10.1016/j.jbusres.2019.09.043

Lailla, N., & Sriminarti, N. (2022). The Role Of MSME Marketing Strategy In Achieve Competitive Advantage. Procedia of Social Sciences and Humanities, 3, 437-442.

Lakhal, L., & Pasin, F. (2008). The direct and indirect impact of product quality on financial performance: A causal model. Total quality management & business excellence, 19(10), 1087-1099.

Marjukah, A. (2022). Pengaruh Pelatihan Pemasaran Digital Terhadap Kinerja UMKM di Masa Pandemi Covid. Jurnal Keuangan Dan Bisnis, 20(1), 1-12.

Marjukah, A., Prasetyo, J., & Setyabudi, A. (2021). Peran Kolaborasi Bisnis Dan Digital Marketing Terhadap Kinerja Bisnis UMKM di Masa Pandemic Covid-19. In Widyagama National Conference on Economics and Business (WNCEB) (Vol. 2, No. 1, pp. 780-789).

Marpaung, F. K., & Sibarani, H. J. (2018). Bagaimana Pengaruh Digital Marketing Dan Capacity Building Terhadap Kinerja Ukm Di Kota Medan?. Akrab Juara: Jurnal Ilmu-ilmu Sosial, 3(4), 35-41.

Mason, M. C., Floreani, J., Miani, S., Beltrame, F., & Cappelletto, R. (2015). Understanding the impact of entrepreneurial orientation on SMEs’ performance. The role of the financing structure. Procedia Economics and finance, 23, 1649-1661. https://doi.org/10.1016/S2212-5671(15)00470-0

Mechman, A., Omar, S. S., Hamawandy, N. M., Abdullah, A. S., & Qader, A. N. (2022). The Effect of Digital Marketing, And E-Commence on SMEs performance of Baghdad. Journal of Positive School Psychology, 6(3), 4197-4212.

Mehralian, M. M., & Khazaee, P. (2022). Effect of digital marketing on the business performance of MSMES during the covid-19 pandemic: The mediating role of customer relationship management. In 37th Digital Marketing and Customer Behavior Science Conference (2022).

Melovi?, B., Jocovi?, M., Dabi?, M., Vuli?, T. B., & Dudic, B. (2020). The impact of digital transformation and digital marketing on the brand promotion, positioning and electronic business in Montenegro. Technology in Society, 63, 101425. https://doi.org/10.1016/j.techsoc.2020.101425

Nindhita, Y., Subekti, H., Musfiyana, R., & Lestari, S. U. (2022). Analysis of the Effect of Information Technology Development, Absorbility Capacity on MSMe Business Performance. J. Econ. Financ. Manag. Stud.

Oktahirsa, S., Wahab, Z., Shihab, M. S., & Widiyanti, M. (2021). The Influence of Product and Service Quality on the Consumer Satisfaction in PT. Main Commercial Hospi Palembang Branch. International Journal of Social Sciences, 4(2), 220-227.

Olshavsky, R. W., & Miller, J. A. (1972). Consumer expectations, product performance, and perceived product quality. Journal of marketing research, 9(1), 19-21.

Onyango, K. (2021). Influence of Digital Marketing Strategies on Performance of Cutflowers Exporting Firms in Kenya. Journal of Marketing, 9 (2).

Orzan, M. C. (2020). The Effects of Digital Marketing on Performance in The Textile Industry. Journal of Industria,72.

Pelsmacker, P. D., & Tilburg, S. V. (2023). Digital Marketing and Online Reviews on Performance. International Journal of Hospitality Management, 72, 47–55.

Phiri, M. (2020). Impact of digital marketing capabilities on market performance of small to medium enterprise agro-processors in Harare, Zimbabwe. Business: Theory and Practice, 21(2), 746-757.

Prasad, V. K., Ramamurthy, K., & Naidu, G. M. (2001). The influence of internet–marketing integration on marketing competencies and export performance. Journal of international marketing, 9(4), 82-110.

Prihatini, D., Wirratih, H. W. R., Havidz, I. L. H., Havidz, S. A. H., & Aima, M. H. (2021). Determinants of Intention to use Mobile Payment: an Empirical Study of MSMEs in Indonesia by the Millennial Actors. In 2021 3rd International Conference on Cybernetics and Intelligent System (ICORIS) (pp. 1-4). IEEE.

Primadhita, Y., Budiningsih, S., Wicaksana, I., & Melani, A. (2023). Pengaruh Pemasaran Digital, Kualitas Produk, Dan Inovasi Hijau Terhadap Kinerja UMKM Makanan Dan Minuman. Jurnal Manajemen & Bisnis Digital, 2(1), 49-61.

Saefudin, N., Dora, Y. M., & Latifah, I. (2023). Analysis of Business Development for MSMEs In Bandung City. At-Tadbir: jurnal ilmiah manajemen, 7(2), 204-217.

Sitompul, D. P., Salqaura, S. A., Rini, E. S., & Sembiring, B. K. F. (2021). Implementation of entrepreneurial marketing in improving sustainability performance of SME in pandemic age: case study on start up in Medan. International Journal of Business, Economics & Management, 4(2), 301-309. https://doi.org/10.31295/ijbem.v4n2.1643

Suchánek, P., Richter, J., & Králová, M. (2014). Customer satisfaction, product quality and performance of companies. Review of economic perspectives, 14(4), 329-344.

Sudirjo, F. (2023). Marketing Strategy in Improving Product Competitiveness in the Global Market. Journal of Contemporary Administration and Management (ADMAN), 1(2), 63-69.

Tirtayasa, S., Khair, H., & Yusri, M. (2021). Influence of education of entrepreneurship, self efficacy, locus of control and entrepreneurs characters of enterprises (the study case is all the students of private university in Medan). Indonesian Journal of Education, Social Sciences and Research (IJESSR), 2(1), 53-64.

Tolstoy, D., Nordman, E. R., & Vu, U. (2022). The indirect effect of online marketing capabilities on the international performance of e-commerce SMEs. International Business Review, 31(3), 101946. https://doi.org/10.1016/j.ibusrev.2021.101946