Abstract

Small Medium Enterprises (SMEs) in Indonesia have a significantly strategic role in the national economy to improve employment, Gross Domestic Product (GDP) and export value, thus increase the economic growth in Indonesia. The purpose of the study is to describe and analyze the traditional marketing practices and entrepreneurial marketing and their effects on business performance. The object of the research is industrial SMEs in garment production, located in East Java Province. The number of research samples is 134. The data is analyzed by using SEM-PLS and Different Test Statistics. The result of the study indicates that the traditional marketing practice model and entrepreneurial marketing influence business performance. And the other research results show that there are differences in traditional marketing practices and entrepreneurial marketing in SMEs. The concept of entrepreneurial marketing is suitable for SMEs to improve their business performance. From the research it is recommended that the government policy, with its SME empowerment program, is able to overcome marketing challenges. For SMEs, they need to consider and learn the entrepreneurial marketing concept as a new paradigm in marketing.

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