The Influencing Factors of Competitiveness in Small and Medium Enterprises in Indonesia

SMEs (Small and Medium Enterprises) plays important role in national economy. It is shown by development of small enterprises in Indonesia, especially in rural such as Songkok centre. The role of marketing becomes very important for SMEs because of the rapid business competition conditions. The main aim of this research is to analyse the effect of entrepreneurial marketing and marketing performance on competitiveness. Study case of this research was conducted in SMEsSongkok centre located in Lamongan District, East Java, Indonesia. Songkok is a Muslims’ symbol of identity, considering that Indonesia has the biggest Muslims population in the world so it is expected to enhance the selling. Taking sample was conducted with census method by fulfilling questionnaire given induration of about 30 days. There were 75 respondents. In this research, indicator that is used in entrepreneurial marketing included a concept, method, strategy, and market intelligence. Marketing performance variable consisted indicators of entrepreneurial orientation, technology orientation, customer orientation, competitor orientation and inter-functional coordination. Competitiveness variable consisted indicators of price, quality, delivery and product line. Analysis method of data was processed by using SEM-PLS (Structural Equation Modelling-Partial Least Square). The result of this research showed that there was positive effect between entrepreneurial marketing variable and marketing performance on competitiveness in SMEs of Songkok centre in Indonesia. Entrepreneurial had positive effect on marketing performance of 11.303. Then, entrepreneurial marketing had positive effect of 4.141. Whereas marketing performance toward competitiveness had the lowest effect of 2.659. The result became a benchmark in developing Songkok business, including in marketing system which was applied by entrepreneurs.