Abstract
This study aims to analyze the role of innovation in mediating digital marketing capability to increase the marketing performance of SMEs. Many studies have found that SME digital marketing capabilty can increase marketing performance. Does this effect also apply if the relationship between these two variables is mediated by innovation? This research was conducted in Malang Raya, East Java, Indonesia on SMEs. The respondents are 157 SMEs (Small and Medium Enterprises) under the guidance of PT Rakyatpreneur Agroniaga Bertumbuh; however, only 106 SMEs completed the questionnaire in full. Research analysis using Partial Least Squares (PLS) method. The results of the study are: digital marketing capability directly affects innovation but not on marketing performance. Innovation has a significant positive effect on marketing performance. Indirectly, digital marketing performance has a significant positive effect on marketing performance through innovation. These results indicate that the role of the innovation variable is important in increasing the influence of digital marketing capability on marketing performance as a mediating variable. In this research the influence of digital marketing capability variable only increasing marketing performance if via innovation variable.