DIGITAL CAPABILITY AND MARKET ORIENTATION AS DRIVERS OF MARKETING PERFORMANCE: THE MEDIATING ROLE OF CUSTOMER ENGAGEMENT IN INDONESIAN FASHION MSMES
Published:
2026-09-26Downloads
Abstract
This study examined the effects of market orientation and digital capability on marketing performance through the mediating role of customer engagement among Indonesian fashion micro, small, and medium-sized enterprises (MSMEs). The study was motivated by rapid digital transformation and intensifying competition in the fashion MSME sector, which require firms to develop strategic capabilities to achieve sustainable marketing performance. Previous studies have largely examined market orientation, digital capability, and customer engagement independently, leaving limited empirical evidence on an integrated framework explaining how these capabilities collectively contribute to superior marketing outcomes. A quantitative survey was conducted among owners and managers of Indonesian fashion MSMEs actively utilizing digital marketing platforms. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicated that market orientation and digital capability significantly enhanced customer engagement and marketing performance. Customer engagement also had a significant positive effect on marketing performance and significantly partially mediated the relationships between market orientation and marketing performance, as well as between digital capability and marketing performance. These findings demonstrated that customer engagement functioned as a critical strategic mechanism through which organizational capabilities were translated into superior marketing outcomes. The study contributed theoretically by providing empirical validation of the Suleman Integrated Digital UMKM Marketing Model and extending Dynamic Capabilities Theory by integrating market orientation, digital capability, customer engagement, and marketing performance within a comprehensive strategic framework. Practically, the findings provided actionable insights for MSME owners, policymakers, and business development institutions in developing digital transformation strategies that strengthen market responsiveness, digital capabilities, customer engagement, sustainable marketing performance, and competitive advantage.
Keywords:
Market Orientation Digital Capability Customer Engagement Marketing Performance MSMESReferences
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