Evi Trisetyasi, Yuyun Iriani, Zahwa Nur Syahda

INNOVATION AND DIGITAL MARKETING STRATEGIES OF MSMES IN BAUBAU CITY TO ENHANCE COMPETITIVENESS IN THE MODERN ERA

Introduction

Innovation and digital marketing strategies of msmes in baubau city to enhance competitiveness in the modern era. Baubau City MSMEs leverage innovation & digital marketing to boost competitiveness. Learn strategies, supporting & inhibiting factors, and insights for regional economic growth.

Abstract

Although micro, small, and medium enterprises (MSMEs) play a crucial role in regional economic development, many MSMEs in Baubau City still operate conventionally and have not yet optimally utilized digital technology. This study examines innovation, digital marketing strategies, and the supporting and inhibiting factors faced by MSMEs in Baubau City to increase their competitiveness. A descriptive qualitative method was used. Data were collected through in-depth interviews with five purposively selected MSME informants, supplemented by field observations and documentation. Data analysis was conducted according to the Miles et al. (1994) model, which consists of data reduction, data presentation, and drawing conclusions. MSMEs in Baubau City utilize digital-based product, packaging, and service innovations. This includes online ordering and cashless payments. For promotion, sales, and customer interaction, digital marketing strategies utilize platforms such as Instagram, Facebook, TikTok, Shopee, and WhatsApp Business. However, the level of utilization varies among informants. Supporting factors include available technology, high consumer interest in local products, and government-facilitated digital training. Inhibiting factors include limited knowledge of digital marketing, limited capital, inability to create engaging content, and increasingly fierce market competition. This study adds to the MSME literature by providing empirical evidence from Eastern Indonesia that the synergy between innovation and digital marketing is a key mechanism for building competitive advantage. This research differs from previous studies that consider each of these elements separately. Instead, it demonstrates how these elements contribute to the digital transformation of the regional economy. It includes small businesses in underserved areas through the Resource-Based View and Dynamic Capabilities framework.

Review

This study addresses a highly relevant and timely topic concerning the digital transformation of Micro, Small, and Medium Enterprises (MSMEs) in Baubau City, an area of Eastern Indonesia often overlooked in mainstream research. By focusing on innovation and digital marketing strategies, the authors tackle a critical challenge for regional economic development: the transition of conventionally operating MSMEs towards optimal utilization of digital technology to enhance competitiveness. The abstract effectively highlights the study's goal to explore the current state, strategies employed, and the factors influencing this digital shift, promising valuable insights into how these businesses can thrive in the modern era. The stated unique contribution of examining the *synergy* between innovation and digital marketing, rather than treating them separately, positions the research to offer a more holistic understanding of digital transformation in regional economies. The methodological approach, a descriptive qualitative design employing in-depth interviews, field observations, and documentation, is appropriate for exploring the nuanced experiences of MSMEs. The use of five purposively selected informants, while typical for in-depth qualitative inquiry, suggests that the findings offer rich detail but may have limited generalizability beyond the specific context of Baubau City and the interviewed businesses. The application of the Miles et al. (1994) model for data analysis provides a structured framework for ensuring rigor. The findings clearly delineate how MSMEs in Baubau City leverage digital innovations (product, packaging, service, online ordering, cashless payments) and utilize various digital marketing platforms (Instagram, Facebook, TikTok, Shopee, WhatsApp Business), although with noted variance in utilization levels. Crucially, the identification of both supporting (available technology, consumer interest, government training) and inhibiting factors (limited knowledge, capital, content creation skills, fierce competition) provides a comprehensive picture of the operational environment. Overall, this research makes a valuable empirical contribution, particularly by extending the MSME literature to an underserved region and demonstrating the practical application of the Resource-Based View and Dynamic Capabilities framework. By illustrating the synergistic relationship between innovation and digital marketing as a mechanism for competitive advantage and regional economic transformation, the study provides a compelling case for integrated strategies. While the sample size inherently limits broader claims, the detailed qualitative data offers a solid foundation for understanding the specific challenges and opportunities faced by MSMEs in such contexts. Future research could build upon these findings by employing a larger, more diverse sample to validate the generalizability of these factors or by developing specific policy recommendations based on the identified inhibitors to further foster digital adoption among MSMEs in similar emerging economies.

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