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Abstract

The use of digital channels does not always lead to better business performance; therefore, it is important to understand how digital marketing translates into marketing outcomes. This study aims to examine the effect of digital marketing on marketing performance, with product innovation and competitiveness acting as parallel mediators, amongst micro, small and medium-sized enterprises (MSMEs) in the food and beverage sector in Yogyakarta. This study employs a quantitative approach using a cross-sectional survey via an online questionnaire administered to 107 MSME owners or managers selected through purposive sampling. The data were analysed using partial least squares–structural equation modelling (PLS-SEM) with SmartPLS 4, based on dynamic capabilities theory. Digital marketing does not have a direct effect on marketing performance. However, digital marketing has a positive effect on product innovation and competitiveness, both of which in turn have a positive effect on marketing performance. Product innovation and competitiveness were found to mediate the effect of digital marketing on marketing performance. The effect of digital marketing on product innovation is the strongest relationship, whilst competitiveness has a greater effect on marketing performance than product innovation. These findings indicate that the benefits of digital marketing depend on the ability to transform customer information into product innovations and enhanced competitiveness.

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digital marketing marketing performance product innovation competitiveness

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Setyono, H., Hendrawan, S., Fikri, M. A., & Nurisaputri, A. D. (2026). Digital Marketing and Marketing Performance: The Mediating Role of Product Innovation and Competitiveness. Economics and Digital Business Review, 7(2), 1161–1178. https://doi.org/10.37531/ecotal.v7i2.4262
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