THE MEDIATION ROLES OF MARKETING INNOVATION AND MARKET ORIENTATION BETWEEN ENTERPRISE SOCIAL MEDIA UTILIZATION AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES) IN SAUDI ARABIA

Abstract

The usage of social media (SM) by small and medium enterprises (SMEs) received relatively less attention, and the findings in the literature are mixed in terms of the effect of SM on SME performance. This study examines the effect of enterprise SM utilization on SME business performance in Saudi Arabia. SM utilization is operationalized into SM internal utilization and SM external utilization. Based on the resource-based view and contingency theory, this study proposed that SM internal utilization positively affects SME business performance and marketing innovation (MI). The study also proposed that SM external utilization positively affects SME business performance and marketing orientation (MO). MO and MI are expected to affect the SME business performance. MI is proposed as a mediator between SM internal utilization and SME performance, while MO is proposed to mediate the effect of SM external utilization on SME performance. The population of this study is the SMEs in Al-Riyadh city in Saudi Arabia. A systematic random sampling is deployed. The data was collected using a questionnaire. The questionnaire was validated, and a pilot study was conducted to check its reliability. A total of 374 respondents representing SMEs participated in this study. The data examination was conducted, and descriptive statistics of respondents and variables were presented. The finding was derived using Smart PLS version 4. The findings showed that SM internal utilization positively affected SME business performance and MI. SM external utilization affected SME business performance and MO. Both MO and MI positively affected the SME business performance. MI partially mediated the effect of SM internal utilization on SME business performance, while MO also mediated the effect of SM external utilization on SME business performance. The findings were discussed, as well as the theoretical and practical implications. More studies in different locations, populations, and sectors, and using different variables are needed. Decision makers are advised to create a rewarding culture for innovative ideas, be more engaged with customers to understand their needs and wants and create rewarding competition and surveys to assess customers’ demands.