Mediating Effect of Social Media Marketing Adoption Towards Business Performance: An Approach of Structural Equation Modelling Partial Least Square (SEM-PLS)

Abstract

Business environment in Malaysia has become more competitive due to the advancement of technology and globalisation including the small and medium enterprises (SMEs). SMEs have so long devised various marketing strategies in order to penetrate the online advertisement clutter alongside improving their performance. Past studies have shown that using ICT such as social media help to improve SMEs’ performance. The owner-managers themselves determine the adoption of social media in their marketing due to the process of information collection and analysis are highly relied on them. Most of the SMEs have their own websites but these are primarily used as an information tool only. Thus, this study investigated the mediating role of social media marketing adoption between technological support, organisational support, government support and competitive intelligence towards the performance of SME. The theoretical framework of this study is substantiated by Resource-based View (RBV) theory and supported by Technology, Environment and Organisation (TOE) framework. This study has been carried out in the East Coast region of Malaysia consisting of Kelantan, Terengganu and Pahang states and also employed a questionnaire survey method. From 1920 questionnaires distributed, 339 responses were returned and found usable for the final analysis using the structural equation model partial least square (SEM-PLS). The findings revealed that the adoption of social media marketing mediates the relationship between these technological, organisational, and government supports, the competitive intelligence, and SME performance. Finally, the study’s theoretical and practical implications as well as the limitations and directions for future research were provided and discussed.

CEO cognitive trust, governmental support and marketing innovation: empirical evidence from Chinese small, medium and micro enterprises

“…In Western Australia, Gengatharen et al (2005) found that governmental support encouraged SMME marketing innovation, such as in their degree of e-marketing adoption. These findings have also been confirmed in Malaysian SMMEs (Samat et al, 2020). Thus, the following hypothesis is proposed:…”

“…Compared with a covariance-based SEM, PLS-SEM has more relaxed conditions for its use and is more suitable for testing mediation; thus, it is known as the “silver bullet” of research (Hair et al , 2011). Relevant to our study, PLS-SEM has recently been used in marketing innovation studies (Costa and Didonet, 2020; Samat et al , 2020) and knowledge management research (Bjorvatn and Wald, 2020).…”

Study of MSMEs Performance: Factors Affecting MSMEs Performance through Marketing Adoption with Social Media

“…Some of the studies that have been discussed by previous researchers explain that there are several important things in achieving good company performance. Research conducted by ; Ahmad et al (2018); Effendi et al (2020) and Samat et al (2020) concluded that there is a relationship between the technological context, organization, and environment to company performance with the help of mediation of marketing adoption through social media. Other studies discussed by Chatterjee & Kumar Kar (2020); Gavino et al (2019); Patma et al (2021); Pranoto & Lumbantobing (2021) found that there are other factors that affect the company's performance.…”

“…Unlike the case with the opinion that Ahmad et al (2018) and Alkateeb & Abdalla (2021) in their research found that there is no positive relationship between variables caused by companies that consider that technology is no longer a special thing and has become a common thing for companies to use. It is further concluded by Samat et al (2020) that the management of the company has a must to accept and realize the positive side of technology in the aim of utilizing social media as a useful marketing tool.…”

“…Moreover, company management with a clear and appropriate strategy can help in optimizing the adoption of social media as a company marketing tool. Samat et al (2020) in their discussion also conveyed the importance of the role of organizations in facilitating employees in order to maximize the use of social media with training and coaching. Meanwhile, in the research conducted by Samsudeen et al (2021), rejecting the existence of a positive relationship between company managerial and the adoption of social media as a company marketing tool.…”