MARKETING PERFORMANCE OF BATIK TULIS BASED OF ENTREPRENEURSHIP ORIENTATION IN DAERAH ISTIMEWA YOGYAKARTA SME's.

Author:Suwandari, Lusi
Position:Report
 
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INTRODUCTION

Small Medium Enterprise(SME) has been trusted as supporting of economic development in a country, both in advanced country and developing country (Sulaeman, 2004). Indonesian Bank (BI) records the economic in Indonesia, one of which is supported by Small Medium Enterprise that provides contribution until 99% for Indonesia economic development, which in 2012 reaches 6.2% and the rest is 1% in form of big business. According to the context of national industry development, the attention to grow Small Medium Enterprise is at least based on 3 reasons, which is Small Medium Enterprise absorbs many labours, Small Medium Enterprise intensives in using local natural resources and makes positive impact towards the equitable of income distribution and economic development in village (Kuncoro, 2010).

Small Medium Enterprise in Indonesia today is faced on readiness faces ASEAN Economic Society (MEA), in which most of goods trading of intra ASEAN gets benefit rate 0% (zero rate). This is a chance for Small Medium Enterprise to fulfil ASEAN market needs with product excellence possessed, especially the product that has competitiveness as creative and innovative industry (Wicaksono & Nuvriasari, 2012). Small Medium Enterprise has to keep and improve standard, design and product quality in order to be appropriate with customer's provision in ASEAN (Abdurofiq, 2015). As for, SME-Industry based, which is covering business units that conduct production process which is known by the term of Small Medium Industry (SMI) is managed by Ministry of Industry. SMI is a business group with the number of labour is about 5 until 99 people and the selling turnover is between 200 million until 50 billion IDR that is owned by Indonesian (Protret Tiga Setengah Tahun Pelaksanaan Rencana Pembangunan Jangka Menengah Industri Manufaktur 2005-2009, 2008). One of the famous Small Medium Enterprise in Indonesia is Batik Tulis business in Daerah Istimewa Yogyakarta. In the 1980s, Batik is formal dress that must be worn in every state event or others formal events in Indonesia. Batik is one of cultural heritage belongs to Indonesia that has acquired the admission from UNESCO since 2nd October 2009 (Nurainun & Rasyimah, 2008). The development of Batik Tulis Small Medium Enterprise is getting decreased; it is seen from the decreasing of Batik production business which switches to other business. Business of Batik in Daerah Istimewa Yogyakarta in 1970 reached 1200 business units, while in 2014 there are 697 business units which is recorded in Department of Cooperative, Industry and Commerce (Nurainun & Rasyimah, 2008). The reduction in the number of Batik Small Medium Enterprise is not be separated from the low of marketing performance gained, for processing results of resources that is owned by Small Medium Enterprise, which is human and product. Truly, to improve company marketing performance is needed the support from human resources in entrepreneurship orientation (Cho & Jung, 2014).

Indonesia is a country that is famous with the term of multicultural. It can be seen from the diversity of arts and cultures which spreads widely in every area, included Daerah Istimewa Yogyakarta. Batik Tulis is one of arts and cultures from Daerah Istimewa Yogyakarta, but arts and cultures will not develop if business of Batik Tulis has no entrepreneurship orientation, remembering it is one of the initial capital to reach a good company performance (Lumpkin & Dess, 1996). Small Medium Enterprise of Batik Tulis has opportunity ad chance where Batik is one of Indonesian's arts and cultures, in fact of many Small Medium Enterprises of Batik Tulis cannot keep struggle the growing and the competitiveness finally. It is caused some obstacles, such as: the decreasing of young generation who is interested to sustain business of traditional Batik Tulis and they prefer Batik with using printing technology (Saraswati & Pamungkas, 2016). From those statements, it seems degradation of entrepreneurship orientation from businessmen of Batik Tulis. The decreasing of Batik craftsmen's interest is contrary with the government's effort to encourage Small Medium Enterprise (Tambunan, 2005). So that it needs attention to Small Medium Enterprise, especially entrepreneurship orientation from businessmen of Batik Tulis in Daerah Istimewa Yogyakarta.

Entrepreneurship orientation reflects the priority that company identifies and takes the chance from external environment like factor of politic, economic, social culture, technology, environment, law and all of them play role in explaining individual decision to use the opportunity (Block, Fisch, Hahn & Sandner, 2015). Those cases can be guidance that one of factor which influences company performance in its marketing is entrepreneurship orientation that is triggered by surrounding environment factor in order to encourage entrepreneurship activity. External factors influence the tendency of businessmen to be involved in entrepreneurship activity (Suh & Kim, 2014). Government as economy regulator and one of company's external factors form economic climate for company, helps providing infrastructure and learning for businessmen, make environment's rule in which business operates and take the active role in promotion and marketing (Ghazali & Weetman, 2006). Some studies show that business is related to external factor involvement can improve company performance and give contribution for competitive advantage (Menguc, Auh & Ozanne, 2010; Shiamwama, Ombayo & Mukolwe, 2014; Wang, Zhou, Ning & Chen, 2015). Remember, there is relationship between environment factor with marketing performance (Gadenne, Mia, Sands, Winata & Hooi, 2012), so it needs to be reviewed the relationship of marketing performance with entrepreneurship orientation on Small Medium Enterprise of Batik Tulis in Daerah Istimewa Yogyakarta.

Each of Batik Tulis which is created has value content, not only the value from price but also another invisible value which is searched by customer like traditional and prestige (Cass & Ngo, 2011). This is implying the importance of observing value creation on Batik Tulis in order to improve customer's interest in having or conducting Batik Tulis's purchasing of others Batik or ordinary clothes. By improving value from Batik Tulis product, so it will also improve customer's buying interest. Reviewing of that, the meaning is marketing performance of Batik Tulis will improve if the creation of Batik Tulis by Small Medium Enterprise's actors in Daerah Istimewa Yogyakarta can be improved. Truly, there is correlation between value creation and marketing performance (Abdullah & Sukandi, 2011; Cass & Ngo, 2011). Value creation is process happened inside of company, resources that is bought as input to production process, to get the new use value. Entrepreneurship orientation has positive effect in company value creation, where the high entrepreneurship orientation will make decision to allocate the resources which can create value in business opportunity (Martins & Fernandes, 2015). So as with the correlation from external factors in product value creation (Prada & Andrade, 2014). Innovation as one of entrepreneurship orientation dimensions can bring company to get the benefit (Kafouros, Wang, Piperopoulos & Zhang, 2015). Small Medium Enterprise is known as source of innovative product and innovation system process and the strong of entrepreneurship orientation relationship with performance is depends on the characteristic of external environment (Wiklund & Shepherd, 2005).

Reviewing of research phenomenon seems the study focuses on marketing performance evaluation for entrepreneurship orientation and external factors through value creation, with the study on Small Medium Enterprise of Batik Tulis in Daerah Istimewa Yogyakarta. The review is related to the relationship of entrepreneurship orientation with marketing performance are conducted before (Wiklund & Shepherd, 2005), but the relation with external factors and value creation fully have never been reviewed, in particular of Small Medium Enterprise in Indonesia. So it seems the research position recently is completing the previous research, which is useful for Small Medium Enterprise generally, which the importance of developing entrepreneurship orientation.

MATERIALS AND METHODS

The Relationship of Entrepreneurship Orientation, Environmental Factor and Value Creation

In development of entrepreneurship orientation, it is defined as strategic process that is conducted by company; entrepreneurship orientation reflects policy and practice that become basic for decision and entrepreneurship action (Rauch, Wiklund, Lumpkin & Frese, 2009). Therefore, entrepreneurship orientation can be regarded as the process of entrepreneurship strategy creation that is used by decision maker in reaching the company's goal, maintaining their business and creating competitive advantage. Generally, entrepreneurship orientation is a company strategic orientation that can comprehend aspect of decision making of entrepreneurship which is specific, style, method and practice (Frank, Kessler & Fink, 2010). Besides that, it is said that entrepreneurship orientation reflects style and special methods about strategic guidance, decision making and running a business (Lan & Wu, 2009).

Surely, entrepreneurship orientation can be valued from some dimensions, in study of Hughes & Morgan (2007), identified five dimensions of entrepreneurship orientation that have a big influence on performance as the important priority for small business which has limited resources that is growing, such as: innovation, be brave in taking risk, proactive, aggressively compete and autonomy. The same cases also stated by Naldi, Nordqvist, Sjoberg & Wiklund (2007) & Rauch et al. (2009), who judge that entrepreneurship orientation is better seen...

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