Strategic Alignment of Digital Marketing and Business Model Innova tion as Drivers of Performance Growth
Abstract:
A Dynamic modern business environment is characterized by frequent and numerous market changes. A signif icant change in marketing field occurred following the introduction of Internet a few decades ago, in the term of digital marketing. Digital marketing topic has been studied from various perspectives by scholars in the recent years as an effect of Internet usage advances. The Internet has also fundamentally changed the para digm of today's business communications, altered the way in which information is shared, and set an enormous influence on marketing strategy. There are prior studies on the relationship between new technology adoption and firm performance, as well as business model innovation and firm performance. Most of these studies confirmed that there is a significance correlation between both new technology adoption and business model innovation as well as new technology adoption and firm performance, of which some of them emphasize on the adoption to the Internet or e-commerce. This paper investigates empirically in one integrated research model on the relationship between mentioned variables to firm performance, which the scope of digital marketing includes not only the use e-commerce but also the digital advertising. The survey was undertaken in Greater Jakarta, Indonesia, to 215 firms in the field of consumer shopping goods. The outcome reveals that there is a direct impact of business model innovation to firm performance, but in contrary, the impact of digital market ing adoption on firm performance is not significant. This study also found that the relationship between digital marketing adoption and firm performance is fully mediated by business model innovation. The policy maker, e-commerce platform companies and digital marketing agencies, can use this study to educate and support local businesses for digital marketing usage, in a structured fashion, since it provides the insight on the issues of these firms in adopting it including the requirement to innovate the business model.
