SMEs Internationalization Process through Brand Awareness and Perceived Quality

Abstract

The development of technological knowledge of SMEs is increasing, and the dynamics in the global economy had a significant effect on SMEs. SMEs need to expand their market share to expand in international markets. This research examined the effects of brand awareness and perceived quality on the internationalization process of SMEs that were carried out on 367 SMEs in Madura. The research results indicated that the brand awareness variable had no significant effect on the internationalization process of SMEs. The significance value was more significant than 0.05, namely 0.079 > 0.05, and had a smaller tcount than ttable, namely 1.760 < 1.966. Meanwhile, the perceived quality variable had a significant effect on the internationalization process of SMEs because the significance value obtained was smaller than 0.05, namely 0.000 < 0.05, and had a greater tcount than ttable, namely 8.671 > 1.966. The variables of brand awareness and perceived quality simultaneously had a significant effect on the internationalization process of SMEs. Based on the results of the F-test on the comparison between Fcount > Ftable, the Fcount was 61.817, or more significant than Ftable, 3.01. The analysis results showed that the magnitude of the effects of brand awareness and perceived quality on the internationalization process of SMEs was only 24.9%. The remaining 75.1% might be affected by variables not mentioned in this research.

Mode of Entry Strategy on SMEs Internationalization in East Java: A Review of Literature

“…From the inner side of the company, these factors are, in fact, a common problem in Indonesian SMEs [43]. Study Sultoni et al [44] found that it was necessary to increase brand awareness and quality of SME products in Madura to make them more attractive in the international market. The limitations of SMEs in the internationalization process are also found in research by Purwanto [45]; the study results indicate that there are obstacles to the internationalization of the Magetan leathercraft business, namely complicated international trade procedures for SMEs, no overseas marketing channels, and limited resources.…”

“…The main problems in Indonesian SMEs specially in East Java include working capital and investment and difficulties in marketing, distribution, and procurement of raw materials and inputs. Other performance impacts have limited access to information regarding market opportunities and others, limitations in the field of HR expertise, technological capabilities, high transportation and energy costs, little communication, high costs due to complex bureaucratic administration starting from obtaining business permits, and uncertainty due to policies an economy that is unclear or uncertain in its direction [44]. The relationship between innovation and organizational resources and skills is an important factor in efforts to win a competition in the global era, even in the context of Indonesian SMEs, because innovation is the key to competitive advantage [24].…”