The Role of Entrepreneurial Marketing in the Indonesian Agro-Based Industry Cluster to Face the ASEAN Economic Community
Abstract
:1. Introduction
2. Literature Review
2.1. Entrepreneurial Marketing
2.2. Agro-Based Industry Cluster
2.3. Micro, Small and Medium Enterprises
3. Research Method
3.1. Research Model
3.2. Data Collection
3.3. Data Analysis
4. Results
4.1. Profile of the Agro-Industry SMEs Actors
4.2. Profile of the Agro-Industry SMEs Capability
4.3. Analysis of Structural Equation Model (SEM)
Hypotheses Testing
5. Discussion
6. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Category | Criteria | Fruit-Processing İndustry (%) | Fish Processing İndustry (%) | Dairy İndustry (%) |
---|---|---|---|---|
Age | 21–30 years | 55 | 23 | 13 |
31–40 years | 10 | 23 | 13 | |
41–50 years | 29 | 42 | 52 | |
>50 years | 6 | 13 | 23 | |
Subtotal | 100 | 100 | 100 | |
Highest education | Did not finish school | 0 | 0 | 3 |
Elementary school | 13 | 10 | 3 | |
Junior high school | 36 | 26 | 19 | |
Senior high school | 45 | 61 | 49 | |
University | 6 | 3 | 26 | |
Subtotal | 100 | 100 | 100 | |
Reason to start business | Own motivation | 81 | 65 | 84 |
Follow the parents | 136 | 29 | 16 | |
Follow the relation | 6 | 0 | ||
Subtotal | 100 | 100 | 100 | |
Seeking of business information | Never | 10 | 10 | 13 |
Rarely (min. Once a year) | 19 | 35 | 26 | |
Often (min. Once a month) | 58 | 42 | 48 | |
More often (more than once a month) | 13 | 13 | 13 | |
Subtotal | 100 | 100 | 100 |
Category | Criteria | Fruit-Processing İndustry (%) | Fish Processing İndustry (%) | Dairy İndustry (%) |
---|---|---|---|---|
Length of business | Less than 5 years | 42 | 55 | 23 |
5–10 years | 35 | 32 | 58 | |
More than 10 years | 23 | 13 | 19 | |
Subtotal | 100 | 100 | 100 | |
Turnover per month (US$) | 1–707 | 74 | 68 | 61 |
>707–1415 | 13 | 16 | 7 | |
>1415–2122 | 10 | 7 | 16 | |
>2122–2830 | 0 | 3 | 3 | |
>2830–3537 | 3 | 6 | 0 | |
>3537 | 0 | 0 | 13 | |
Subtotal | 100 | 100 | 100 | |
Type of business | Household industry (1–4 people) | 81 | 90 | 74 |
Small industry (5–19 people) | 16 | 7 | 19 | |
Medium industry (20–99 people) | 3 | 3 | 7 | |
Subtotal | 100 | 100 | 100 | |
Ownership of Production Equipment | Very inadequate | 13 | 26 | 20 |
İnadequate | 58 | 64 | 58 | |
Adequate | 26 | 10 | 19 | |
Very Adequate | 3 | 0 | 3 | |
Subtotal | 100 | 100 | 100 | |
Capital Ownership | Very inadequate | 13 | 10 | 23 |
İnadequate | 74 | 80 | 58 | |
Adequate | 13 | 10 | 19 | |
Very Adequate | 0 | 0 | 0 | |
Subtotal | 100 | 100 | 100 | |
Stability of personnel | Very inadequate | 3 | 7 | 6 |
İnadequate | 62 | 58 | 58 | |
Adequate | 32 | 32 | 36 | |
Very Adequate | 3 | 3 | 0 | |
Subtotal | 100 | 100 | 100 | |
Business Status as Source of Income | Not main income | 3 | 3 | 0 |
Additional family income | 52 | 58 | 26 | |
Main income | 35 | 36 | 61 | |
Very likely to become main income | 10 | 3 | 13 | |
Subtotal | 100 | 100 | 100 | |
Fulfillment of Household Needs | 0–25% | 19 | 26 | 16 |
26–50% | 26 | 48 | 29 | |
51–75% | 45 | 23 | 48 | |
76–100% | 10 | 3 | 7 | |
Subtotal | 100 | 100 | 100 | |
Other Business Ownership | none | 42 | 42 | 74 |
1 other | 58 | 48 | 10 | |
2 others | 0 | 10 | 16 | |
3 others | 0 | 0 | 0 | |
Subtotal | 100 | 100 | 100 |
No. | Criteria | Cutoff Value | Results | Note |
---|---|---|---|---|
1. | R-square of endogenous latent variables | Chin (1998) classifies R2 values of 0.67; 0.33; and 0.19 as “substantial”, “moderate” and “weak” | Competitiveness = 0.419 | Fit |
Entrepreneurial marketing = 0.204 | ||||
AEC readiness = 0.377 | ||||
Business development = 0.450 | ||||
2. | Loading factor | ≥0.7 | All indicators have a loading factor ≥ 0.7 | Fit |
3. | Composite Reliability | >0.6 | Competitiveness = 0.904 | Fit |
Entrepreneurial marketing = 0.855 | ||||
Government support = 0.923 | ||||
AEC readiness = 0.933 | ||||
Business development = 0.904 | ||||
4. | Average Variance Extracted (AVE) | >0.5 | Competitiveness = 0.759 | Fit |
Entrepreneurial marketing = 0.542 | ||||
Government support = 0.599 | ||||
AEC readiness = 0.736 | ||||
Business development = 0.573 | ||||
5. | Square Root AVE | Greater than the value of correlation between variables | All AVE square root values of latent variables are greater than other latent variables | Fit |
6. | Cross Loading | Each indicator has a higher loading for each latent measured, compared to other latent indicators | All construct variables have a greater correlation on latency alone than correlation to other latencies | Fit |
Construct | Item Used | Factor Loading |
---|---|---|
Entrepreneurial Marketing | 1.1.3.06 The level of ability to develop existing products | 0.777 |
1.1.3.08 The level of ability to be creative in sales | 0.71 | |
1.1.3.09 The intensity level of the application of product diversification | 0.725 | |
1.1.3.10 The level of diversity of the types of products currently available | 0.757 | |
1.1.3.11 The frequency level follows the tastes of customers in the market | 0.711 | |
Government support | 1.1.4.04 The level of frequency the government organizes marketing and sales training | 0.752 |
1.1.4.05 The level of frequency the government organizes product production/processing training | 0.773 | |
1.1.4.06 The level of frequency the government organizes financial training | 0.809 | |
1.1.4.07 Frequency level for equipment assistance from the government | 0.808 | |
1.1.4.08 Frequency level of facility (market) for small businesses by the government | 0.747 | |
1.1.4.09 The level of frequency of competition control among the SMEs by the government | 0.782 | |
1.1.4.10 The level of frequency control of competition between SMEs with large businesses by the government | 0.773 | |
1.1.4.11 The level of government frequency in providing easy licensing procedures for MSMEs | 0.744 | |
Business development | 1.1.5.03 The level of ability to invest in other additional factors of production such as adding equipment and employees | 0.731 |
1.1.5.04 The rate of profitability of the product every year | 0.734 | |
1.1.5.06 Growth rate of employment per year | 0.726 | |
1.1.5.08 The growth rate of assets in the form of current assets such as cash, receivables or inventories | 0.799 | |
1.1.5.09 The growth rate of assets in the form of fixed assets such as land, buildings, machinery or equipment | 0.789 | |
1.1.5.10 The growth rate of assets in the form of intangible assets such as patents, copyrights or rental rights | 0.743 | |
1.1.5.11 The growth rate of assets in the form of long-term investment | 0.772 | |
Competitiveness | 1.1.6.01 Level of ability to compete with other similar businesses in the City/Regency | 0.874 |
1.1.6.02 Level of ability to compete with other similar businesses in the province | 0.933 | |
1.1.6.03 The rate of increase in the number of customers each year | 0.802 | |
AEC readines | 1.1.7.02 The level of readiness of business actors in facing the arrival of competing products from ASEAN countries | 0.759 |
1.1.7.03 The level of competitiveness of human resources possessed to produce products according to MEA standards | 0.88 | |
1.1.7.04 The level of ability to deal with the arrival of similar products originating from ASEAN countries | 0.91 | |
1.1.7.05 The level of ability to face the arrival of entrepreneurs from ASEAN who opened similar factories such as the business of the father and mother | 0.854 | |
1.1.7.06 The level of ability to cooperate in terms of capital with employers in ASEAN countries | 0.879 |
Endogenous Variable | β | t Value | Decision |
---|---|---|---|
H1.Government support → Business development | 0.509 | 7.414 | Supported |
H2.Government support → Entrepreneurial marketing | 0.452 | 5.922 | Supported |
H3.Entrepreneurial marketing → Business development | 0.264 | 3.012 | Supported |
H4.Business development → Competitiveness | 0.412 | 4.271 | Supported |
H5.Entrepreneurial marketing → Competitiveness | 0.336 | 3.367 | Supported |
H6.Competitiveness → AEC Readiness | 0.614 | 7.784 | Supported |
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Sarma, M.; Septiani, S.; Nanere, M. The Role of Entrepreneurial Marketing in the Indonesian Agro-Based Industry Cluster to Face the ASEAN Economic Community. Sustainability 2022, 14, 6163. https://doi.org/10.3390/su14106163
Sarma M, Septiani S, Nanere M. The Role of Entrepreneurial Marketing in the Indonesian Agro-Based Industry Cluster to Face the ASEAN Economic Community. Sustainability. 2022; 14(10):6163. https://doi.org/10.3390/su14106163
Chicago/Turabian StyleSarma, Ma’mun, Stevia Septiani, and Marthin Nanere. 2022. "The Role of Entrepreneurial Marketing in the Indonesian Agro-Based Industry Cluster to Face the ASEAN Economic Community" Sustainability 14, no. 10: 6163. https://doi.org/10.3390/su14106163