THE IMPACT OF DIGITAL MARKETING ON MARKETING OUTCOMES OF SMES THE MEDIATING ROLE OF INNOVATIVE PRODUCT DEVELOPMENT

Abstract

Over recent decades, digital innovations in product creation, communication, and marketing have gained significant attention in research and decision-making across businesses of various scales. Technological advancements have greatly influenced corporate marketing strategies, consumer purchasing behav-ior, and market structures. This study examines the impact of digital marketing on marketing performance in Small and Medium Enterprises (MSME) in Pek-anbaru, with product innovation as a mediating factor. Targeting SMEs that utilize digital marketing, a purposive sampling method selected 53 Pekanbaru SMEs that met the research criteria. Path analysis through Structural Equation Modeling-Partial Least Squares (SEM-PLS) was applied as the analytical method. Findings indicate that digital marketing significantly enhances both marketing performance and product innovation. Furthermore, product innova-tion directly improves marketing performance, underscoring its role as a medi-ator in the relationship between digital marketing and marketing performance in Pekanbaru MSME.