MEDIATING INTELLECTUAL CAPITAL ON DIGITAL MARKETING FOR MARKETING PERFORMANCE IMPROVEMENT OF COPPER-BRASS CREATIVE INDUSTRY SMEs

This study used path analysis as research method to analyze the mediating of intellectual capital variable on digital marketing for marketing performance improvement of copper-brass creative industry SMEs in Tumang, Boyolali as the center of copper-brass creative industry in Indonesia. Digital marketing as independent variable with indicators which are cost, incentive program, site design, and interactive. Intellectual capital as intervening/mediating variable with indicators, human capital, organizational capital, and social capital. Then, marketing performance as dependent variable with measuring indicators are sales volume, customer growth, and revenue growth. Primary data was obtained by questionnaire as research instrument. Population in this study is copper-brass creative industry SMEs in Tumang, Cepogo, Boyolali. The sample size is 99 manpower respondents, either owner or employee. The result of this study indicate that Copper-brass creative industry SMEs can improve and optimize marketing performance by rising digital marketing which will affect the increasing of intellectual capital and marketing performance.


INTRODUCTION
The presence of Small, Medium, Enterprises (SMEs) is one of Indonesia's economic supporting factors and regional economic strength.The government encourages SMEs to increase productivity during the Covid-19 pandemic and supports them by preparing a number of stimulus and incentives, such RUU Cipta Kerja.Through RUU Cipta Kerja, it is expected that market access will become easier for the marketing certainty of SMEs products and services.To reach an open market, digitalization is the way.For SMEs, especially those with conventional schemes, a big opportunity to enhance business performance will come through business digitalization by utilizing various types of digital platforms (1).It is undeniable that, in order to build connectivity, innovation is needed (2) and must be balanced with intellectual capital (3).Intellectual capital is any knowledge that can be turned into profit, which includes skills and knowledge of human resources, infrastructure, relationships, information systems, technology, creativity, and innovation (3).
Digital marketing or marketing 4.0 is a new marketing approach that is very needed in industry performance improvement, particularly marketing performance in this revolution era of industry 4.0 (3).However, skills and abilities are required to optimize the use of digital platforms, which is still a new thing for some SMEs.Moreover, SMEs in rural area with their creative products that have quite far access to the business centre must find it more difficult to reach a wider market.These creative products are hard to be recognized by consumers and become more expensive with conventional marketing scheme (1).One of the creative products that needs to be highlighted is the copper-brass creative industry SMEs in Tumang village, Cepogo, Boyolali, which is the largest copperbrass creative industry in Central Java as well as the centre for Indonesian copper-brass creative industry SMEs.Those creative industry products experienced a decrease in sales up to 50% due to the COVID-19 pandemic (4).Previously, in April 2019, the Ministry of Trade had provided assistance in the form of 32 machines for entrepreneurs at Tumang copper-brass creative industry centre to accommodate the large demand of these creative products (5).It is known that around 60% of total copper-brass creative product According to the research findings (3,19,26), digital marketing has a positive and significant impact on marketing performance, either directly or indirectly, with intellectual capital as an intervening variable.E-marketing as a part of digital marketing has a huge impact on marketing performance nowadays, so it is very important to pay more attention to digital marketing (36).Social media as a part of digital marketing has a high influence on the marketing performance of an industry (37).Digital channels are very effective as a marketing strategy for SMEs (38).
Based on the given theories, a conceptual

RESULT AND DISCUSSION
This part explains all the findings of this research, which consists of demographic profile of the respondents, a descriptive analysis of variable, a path analysis of hypotheses, and a hypothesis test.

Validity and Reliability Test Result
Validity and reliability tests were conducted to ensure that the questionnaire was valid and reliable.The validity test in this research used the Pearson Product Moment correlation by comparing the significant value with alpha (0.05).The instrument is valid if the significant value is less than 0.05.This test produced a number of dimensions and items can be seen on the Tabel 1.

Path Analysis
Path analysis in this study consists of two structural equations.Structural equation 1 aims to determine the impact of digital marketing on intellectual capital.Table 4 shows the results of the path analysis.According to the results of Table 5, the following formula can be used to calculate the path analysis coefficient: so the final results of Table 5 can be represented by this equation: Y = 0.510 X + 0.86…………………….[2] where X and Y represent digital marketing and intellectual capital, respectively.
Structural equation 2 aims to determine the impact of digital marketing, and intellectual capital on marketing performance.According to the results of Table 7, the path coefficient can be calculated with the following formula: Furthermore, structural equation 2 is represented by this equation: Z = 0.251 X + 0.487 Y + 0.758…………… [4] The influence structure of digital marketing on intellectual capital and the effect of digital marketing and intellectual capital on marketing performance can be illustrated by Figure 2. Furthermore, the determination of direct influence, indirect influence, and path analysis for each variable can be seen in Table 8.   9.
framework has been built, and a research model has been proposed to examine the influence of digital marketing and intellectual capital toward marketing performance of copper-brass craft SMEs in Tumang, Boyolali.The conceptual framework consists of three variables: in which Digital Marketing as independent variable: intellectual capital as an intervening or mediating variable, and marketing performance as dependent variable (See Figure 1).

Figure 1 :
Figure 1: Conceptual Framework Based on the literature review and conceptual framework, the following hypotheses can be drawn:

Figure 2 :
Figure 2: The Structural Model Influence of Path Analysis

CONCLUSION
This research has provided an empirical investigation to determine the influences of digital marketing on intellectual capital and the marketing performance of copper-brass creative industry in Tumang, Boyolali.Digital marketing partially has positive influences on intellectual capital.Hereafter, both directly and indirectly, digital marketing partially has a positive and significant effect on marketing performance mediated by intellectual capital.Furthermore, intellectual capital, as an intervening or mediating variable in this study, partially has a positive and significant influence on marketing performance of copper-brass creative industry SMEs in Tumang, Boyolali.The findings of the study might offer some implications, either theoretically or practically, in terms of theoretical implication.The outcomes of this research sustain and enrich the knowledge and theories on how copper-brass creative industry SMEs in Tumang, Boyolali, can reach intellectual capital and marketing performance through digital marketing, especially during pandemic COVID-19 and post-pandemic COVID-19.Meanwhile, practically, the implication for copper-brass creative industry SMEs especially in Tumang, Boyolali, since there are several indicators that need to be improved.In reference to the recommendation in the discussion, the results of this study provide several ways to improve marketing performance.Copper-brass creative industry SMEs can improve and optimize marketing performance again by rising digital marketing, which will affect the increase of intellectual capital and marketing performance.Limitations in this research stem from resources such as time, energy, and costs.If there is no limitation on costs, it will be possible to conduct research with broader data by adding samples and respondents.It is expected that there will be more future research regarding this topic.Future research is suggested to develop the relationship among variables in this research by employing other factors that may affect marketing performance.This needs to be accomplished to complement what already exists in this research.Furthermore, the results of this study and other future studies are expected to be able to help stakeholders in managerial decision.Finally, it is suggested for future research to perform a study with larger sample which may be possible with the continuous growth of copper-brass creative industries SMEs in Tumang, Boyolali.

Table 8 : Direct and Indirect Influence
Source: Primary Data Processed, 2021

Table 9 : The Result of T-Value for Testing the Hypotheses of the Research
A t-table value can be obtained from a tdistribution table with a significant level of 5% (0.05), one-tailed, and df, df = nk, where n is a total sample, and k is a total number of Accordingly, sales volume will increase, and customer and revenue of copper-brass creative industries will grow rapidly.