The Role of Marketing and Digital Marketing Capabilities: Entrepreneurial Orientation on the Marketing Performance of Public Enterprises

Abstract

Public enterprises and small and medium enterprises (SMEs) have similar goals in the eyes of the state. SMEs that get government or public bodies funding can make it a public enterprise. These enterprises in Indonesia face challenges due to limited resources, low market reach, and low marketing expertise. They must leverage their marketing capabilities effectively and adopt strategic approaches such as entrepreneurial orientation and digital marketing. This study explores digital marketing mediation and marketing capabilities in the relationship between entrepreneurial orientation and marketing performance in public enterprises. Survey techniques were used for this study, and data were obtained from 176 respondents who are entrepreneurs who use social media in their marketing activities. Data are processed and analysed using smartPLS. The results of this study show that entrepreneurial orientation significantly affects marketing capabilities, digital marketing and marketing performance in MSEs. Digital marketing and market capabilities have a direct positive influence on marketing performance. In addition, digital marketing and market capabilities mediate the relationship between entrepreneurial orientation and marketing performance. Marketing capabilities mediate the relationship between digital marketing and marketing performance.