Utilization of Social Media and Its Impact on Marketing Performance: A Case Study of SMEs in Indonesia

  • Berto Mulia Wibawa School of Business, Monash University, Malaysia, Department of Business Management, Institut Teknologi Sepuluh Nopember, Indonesia
  • Imam Baihaqi Department of Business Management, Institut Teknologi Sepuluh Nopember, Indonesia
  • Ninditya Nareswari Department of Business Management, Institut Teknologi Sepuluh Nopember, Indonesia
  • Rachma Rizqina Mardhotillah Department of Management, Universitas Nahdlatul Ulama Surabaya, Indonesia
  • Faras Pramesti Department of Business Management, Institut Teknologi Sepuluh Nopember, Indonesia
Keywords: Social media, social platform, SMEs, marketing performance, Indonesia


The role of social media has changed both producer and consumer behaviour worldwide. It connects businesses and customers to communicate with each other seamlessly. Social media can bring many advantages for SMEs, but many SMEs still have not realized it. Several SMEs have higher marketing performance through social media channels, while most SMEs struggle to implement social media benefits because of their limitation in technological knowledge. This study explores why and how SMEs use social media and its impact on marketing performance by using an explanatory pilot study as a research method. The qualitative data analysis were examined through thematic analysis. The findings of this study provide nuance to explain the role of social media for SMEs in six main themes: (1) Branding, advertising, and promoting; (2) Enhancing community interaction and content sharing; (3) Building trust and relationships; (4) Reaching potential customers; (5) Digital marketing trends, and (6) Low-cost promotion and content customization. Another notable contribution of this study is the importance of social media adoption to improve SMEs' marketing performance through creative advertisement using lower marketing costs.


Adi, A., & Hidayat, A. (2018) Indonesia is Asia's Biggest Instagram Market with 45mn Users. Retrieved January 10, 2020, from https://en.tempo.co/read/894655/indonesia-is-asias-biggest-instagram-market-with-45mn-users.

Ahmad, S. Z., Ahmad, N., & Bakar, A. R. A. (2018). Reflections of Entrepreneurs of Small and Medium-sized Enterprises concerning the Adoption of Social Media and its Impact on Performance Outcomes: Evidence from the UAE. Telematics and Informatics, 35(1), 6-17. https://doi.org/10.1016/j.tele.2017.09.006

Agnihotri, R., Dingus, R., Hu, M. Y., & Krush, M. T. (2016) Social media: influencing customer satisfaction in B2B sales. Industrial Marketing Management, 53(14), 172-180. https://doi.org/10.1016/j.indmarman.2015.09.003

Aral, S., & Weill, P., (2013) IT assets, organizational capabilities, and firm performance: how resource allocations and organizational differences explain performance variation. Organization Science, 18(5), 763-780. https://doi.org/10.1287/orsc.1070.0306

Aritz, J., Walker, R., & Cardon, P. W. (2018). Media use in virtual teams of varying levels of coordination. Business and Professional Communication Quarterly, 81(2), 222-243. https://doi.org/10.1177/2329490617723114

Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative research in psychology, 3(2), 77-101. https://doi.org/10.1191/1478088706qp063oa

Calantone, R., Cavusgil, S., & Zhao, Y. (2002). Learning orientation, firm innovation capability, and firm performance. Industrial Marketing Management, 31(6), 515-524. https://doi.org/10.1016/S0019-8501(01)00203-6

Croes, E. A. J., Antheunis, M. L., Schouten, A. P., & Krahmer, E. J. (2016). Teasing apart the effect of visibility and physical co-presence to examine the effect of CMC on interpersonal attraction. Computers in Human Behavior, 55(48), 468-476. https://doi.org/10.1016/j.chb.2015.09.037

Deloitte Access Economics. (2015). Deloitte Report: SMEs Powering Indonesia's success higher SME digital engagement could lift Indonesian economic growth by 2% a year. Retrieved January 10, 2020, from https://www2.deloitte.com/id/en/pages/financial-advisory/articles/smes-powering-indonesia-success-report.html

Drury, G. (2008). Opinion piece: social media: should marketers engage and how can it be done effectively? Journal Direct Data and Digital Marketing Practice, 9(3), 274-277. https://doi.org/10.1057/palgrave.dddmp.4350096

Durmaz, Y., & Efendioglu, I. (2016). Travel from traditional marketing to digital marketing. Global Journal of Management and Business Research, 16(2), 34-40.

Dwivedi, Y. K., Kelly, G., Janssen, M., Rana, N. P., Slade, E. L., & Clement, M. (2018). Social Media: The good, the bad, and the ugly. Information Systems Frontiers, 20(3), 419-423. https://doi.org/10.1007/s10796-018-9848-5

Dwivedi, Y. K., Ismagilova, E., Hughes, D. L., Carlson, J., Filieri, R., Jacobson, J., ... & Wang, Y. (2021). Setting the future of digital and social media marketing research: Perspectives and research propositions. International Journal of Information Management, 59, 102168. https://doi.org/10.1016/j.ijinfomgt.2020.102168

Fadil, A. (2015). Value co-creation process in small and medium enterprise by utilization of viral marketing as a branding tool: a system dynamic approach. Procedia-Social and Behavioral Sciences, 169, 258-265. https://doi.org/10.1016/j.sbspro.2015.01.309

Felix, R., Rauschnabel, P. A., & Hinsch, C. (2017). Elements of strategic social media marketing: A holistic framework. Journal of Business Research, 70(1), 118-126. https://doi.org/10.1016/j.jbusres.2016.05.001

Gamage, A. S. (2003). Small and medium enterprise development in Sri Lanka: a review. Meijo Review, 3(4), 133-150.

Germain, M. L., & McGuire, D. (2014). The role of swift trust in virtual teams and implications for human resource development. Advances in Developing Human Resources, 16(3), 356-370. https://doi.org/10.1177/1523422314532097

Ghobakhloo, M., Hong, T. S., Sabouri, M. S., & Zulkifli, N. (2012). Strategies for successful information technology adoption in small and medium-sized enterprises. Information, 3(1), 36-67. https://doi.org/10.3390/info3010036

Gligorijevic, B., & Luck, E. (2012, August). Engaging social customers-Influencing new marketing strategies for social media information sources. In International Conference on E-business Technology and Strategy (pp. 25-40). Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-34447-3_3

Hallingberg, B., Turley, R., Segrott, J., Wight, D., Craig, P., Moore, L., & Moore, G. (2018). Exploratory studies to decide whether and how to proceed with full-scale evaluations of public health interventions: a systematic review of guidance. Pilot and feasibility studies, 4(1), 104. https://doi.org/10.1186/s40814-018-0290-8

Han, H., Nguyen, H. N., Song, H., Chua, B. L., Lee, S., & Kim, W. (2018). Drivers of brand loyalty in the chain coffee shop industry. International Journal of Hospitality Management, 72, 86-97. https://doi.org/10.1016/j.ijhm.2017.12.011

Hanaysha, J. R. (2017). Impact of social media marketing, price promotion, and corporate social responsibility on customer satisfaction. Jindal Journal of Business Research, 6(2), 132-145. https://doi.org/10.1177/2278682117715359

Haryani, S., Motwani, B., & Sabharwal, S. (2015). Factors affecting the consumers attitude towards internet induced viral marketing techniques. Arabian Journal of Business and Management Review, 5(4), 1-4. https://doi.org/10.21863/ijmbc/2015.4.3.017

He, W., Wang, F. K., & Zha, S. (2014). Enhancing social media competitiveness of small businesses: insights from small pizzerias. New Review of Hypermedia and Multimedia, 20(3), 225-250. https://doi.org/10.1080/13614568.2014.889225

Ho, J. Y., & Dempsey, M. (2010). Viral marketing: Motivations to forward online content. Journal of Business Research, 9(63), 1000-1006. https://doi.org/10.1016/j.jbusres.2008.08.010

Indonesian Law No. 20 of 2008, Micro, Small and Medium Enterprises (2008). https://www.ojk.go.id/sustainable-finance/id/peraturan/undang-undang/Pages/Undang-Undang-Republik-Indonesia-Nomor-20-Tahun-2008-Tentang-Usaha-Mikro,-Kecil,-dan-Menengah.aspx

Iqbal, M. (2015). SME governance in Indonesia-a survey and insight from private companies. Procedia Economics and Finance, 31, 387-398. https://doi.org/10.1016/S2212-5671(15)01214-9

Jones, N., Borgman, R., & Ulusoy, E. (2015). Impact of social media on small businesses. Journal of Small Business and Enterprise Development, 22(4), 611-632. https://doi.org/10.1108/JSBED-09-2013-0133

Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business horizons, 53(1), 59-68. https://doi.org/10.1016/j.bushor.2009.09.003

Kim, A. J., & Ko, E. (2012). Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand. Journal of Business Research, 65(10), 1480-1486. https://doi.org/10.1016/j.jbusres.2011.10.014

Meske, C., & Stieglitz, S. (2013, June). Adoption and use of social media in small and medium-sized enterprises. In working conference on practice-driven research on enterprise transformation (pp. 61-75). Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-38774-6_5

Ministry of Cooperatives and SMEs Republic of Indonesia. (2018), Performance Report of Minsitry of Cooperatives and SMEs Republic of Indonesia. Jakarta: Ministry of Cooperatices and SMEs Republic of Indonesia.

O'Reilly, T. (2005). What Is Web 2.0 Design Patterns and Business Models for the Next Generation of Software. Retrieved January 12, 2020 from https://www.researchgate.net/publication/24114032_What_Is_Web_20_Design_Patterns_And_Business_Models_For_The_Next_Generation_Of_Software.

Oh, C. S., Bailenson, J. N., & Welch, G. F. (2018). A systematic review of social presence: Definition, antecedents, and implications. Frontiers in Robotics and AI, 5(114), 1-35. https://doi.org/10.3389/frobt.2018.00114

Park, C., & Kang, B. K. (2003). Factors influencing on trust toward e-commerce by consumer experience of online buying. Information Systems Review, 5(1), 81-95.

Pescher, C., Reichhart, P., & Spann, M. (2014). Consumer decision-making processes in mobile viral marketing campaigns. Journal of Interactive Marketing, 28(1), 43-54. https://doi.org/10.1016/j.intmar.2013.08.001

Priambada, S. (2017). The potential of social media for small and medium enterprises (SMEs) in Malang. Seminar Nasional Sistem Informasi Indonesia (SESINDO), 9(1), 239-244.

Sela, A., Goldenberg, D., Ben-Gal, I., & Shmueli, E. (2018). Active viral marketing: Incorporating continuous active seeding efforts into the diffusion model. Expert Systems with Applications, 107, 45-60. https://doi.org/10.1016/j.eswa.2018.04.016

Serrano, E., & Iglesias, C. A. (2016). Validating viral marketing strategies in Twitter via agent-based social simulation. Expert Systems with Applications, 100(50), 140-150. https://doi.org/10.1016/j.eswa.2015.12.021

Singh, S., & Sonnenburg, S. (2012). Brand performances in social media. Journal of Interactive Marketing, 26(4), 189-197. https://doi.org/10.1016/j.intmar.2012.04.001

Soto-Acosta, P., Popa, S., & Martinez-Conesa, I. (2018). Information technology, knowledge management and environmental dynamism as drivers of innovation ambidexterity: a study in SMEs. Journal of Knowledge Management, 22(4), 824-849 https://doi.org/10.1108/JKM-10-2017-0448

Srirejeki, K. (2016). Social media application for MSMEs empowerment in the digital economy era. Jurnal Masyarakat Telematika dan Informasi, 7(1), 57-68

Statista. (2019). Countries with the most Instagram users 2019. Retrieved January 10, 2020 from https://www.statista.com/outlook/216/120/digital-advertising/indonesia#market-arpu

Strauss, A., & Corbin, J. (1990). Basics of qualitative research. Sage publications.

Tonedeaf. (2013). Airline now lets you bring instruments on a plane after musician outcry. Retrieved December 12, 2019 from http://www.tonedeaf.com.au/345124/airline-now-lets-you-bring-instruments-on-a-plane-after-musician-outcry/

We are Social and Hootsuite. (2019) Digital in 2020. Retrieved January, 10 2020 from https://wearesocial.com/digital-2020.

Wibawa, B. M., & Nareswari, N. (2019). MSMEs Focus on Instagram Account Quality: Key Factors to Prioritize in Instagram Posting. Jurnal Sosial Humaniora, 2019(01), 66-74. https://doi.org/10.12962/j24433527.v0i01.5761

Woodcock, C. P., Beamish, P. W., & Makino, S. (1994). Ownership-based entry mode strategies and international performance. Journal of International Business Studies, 25(2), 253-273. https://doi.org/10.1057/palgrave.jibs.8490200

Yamin, A. B. (2017). Impact of digital marketing as a tool of marketing communication: a behavioral perspective on consumers of Bangladesh. American Journal of Trade and Policy, 4(1), 49-54. https://doi.org/10.18034/ajtp.v4i3.426

How to Cite
Berto Mulia Wibawa, Imam Baihaqi, Ninditya Nareswari, Rachma Rizqina Mardhotillah, & Faras Pramesti. (2022). Utilization of Social Media and Its Impact on Marketing Performance: A Case Study of SMEs in Indonesia. International Journal of Business and Society, 23(1), 19-34. https://doi.org/10.33736/ijbs.4596.2022