The Influence of Innovation Capability and Entrepreneurship Capability on E-Marketing Performance, Mediated by Competitive Advantage, to Enhance Culinary SMEs in Ponorogo

Abstract

Ponorogo, a well-known culinary center in East Java, is famous for its Ponorogo satay and a variety of other delicious food offerings. In support of culinary businesses, the government consistently arranges exhibitions for Micro, Small, and Medium Enterprises (MSMEs). However, small and medium-sized culinary enterprises in this region face challenges when it comes to improving their ability to innovate, their entrepreneurial skills, and their competitiveness in the realm of online marketing. This research aims to explore the impact of innovation and entrepreneurial capabilities on the performance of e-marketing among these culinary businesses in Ponorogo. It seeks to understand how these capabilities affect the effectiveness of e-marketing and how competitive advantage plays a role in this relationship. To achieve this, the study employs a mixed-method approach, collecting quantitative data through a survey involving 212 randomly selected participants. The gathered data is then analyzed using Structural Equation Modeling (SEM) with the assistance of the SmartPLS 3.0 software application. The study's findings underscore a significant positive association between innovation capability and e-marketing performance, suggesting that SMEs with stronger innovation capabilities tend to achieve better outcomes in e-marketing. Similarly, entrepreneurial capability exhibits a positive correlation with e-marketing performance, indicating that SMEs with a robust entrepreneurial mindset demonstrate enhanced effectiveness in e-marketing. Furthermore, the research reveals that competitive advantage plays a pivotal role as an intermediary between innovation capability, entrepreneurial capability, and e-marketing performance. The implications of this study offer valuable insights for culinary SMEs in Ponorogo, guiding them in refining their e-marketing strategies. By cultivating a culture of innovation and fostering entrepreneurial activities, these SMEs can bolster their competitive advantage, ultimately leading to improved e-marketing performance. Policymakers and industry stakeholders can leverage these findings to develop targeted support programs and initiatives for culinary SMEs, thereby fostering sustainable growth and prosperity in the regional culinary sector.