COMPETITIVE ADVANTAGE AS A MEDIATING VARIABLE BETWEEN E-COMMERCE AND PRODUCT INNOVATION TOWARDS MARKETING PERFORMANCE OF SMALL AND MEDIUM-SIZED ENTERPRISES IN KENDAL

Path analysis is used on this study in studying the effect of e-commerce and product innovation on competitive advantage and the impact on marketing performance of SMEs in Kendal Regency, Central Java. The method of collecting data is by using a questionnaire. The sample is amounted to 100 SMEs in Kendal, Central Java, Indonesia. The result indicates that e-commerce together with product innovation have positively significant influence partially and simultaneously toward competitive advantage of SMEs in Kendal. The competitive advantage has a significant positive influence on the marketing performance of SMEs in Kendal. E-commerce together with product innovation mediating by competitive advantage positively significant effecting on marketing performance of SMEs in Kendal, directly and indirectly. The outcomes of this research answered the effect of e-commerce and product innovation toward competitive advantage and marketing performance of SMEs in Kendal, Central Java. The SMEs owner can optimize and improve the marketing performance by escalating use of e-commerce and optimizing product innovation that will affect the increasing competitive advantage and marketing performance.


INTRODUCTION
In Indonesia, Small and Medium-sized Enterprises (SMEs) play an important role for economy.Kendal has a fairly large number of SMEs at around 155.696 SMEs with 11.733 SMEs already digitalized (1), this can be potential in regional economy improvement.
Nevertheless, based on RKPD of Kendal Regency, SMEs are often facing obstacles in product marketing, they can produce their products but find it difficult to distribute their products due to the lack of marketing networking.In the 21st century nowadays, the rapid growth of internet users should be the reason why the company should try to implement e-commerce.E-commerce has the strength of simplified distribution, reduced costs, no time limitations and other advantages over the traditional business model (2).In fact, according to the Kendal Government, around 79.7% of SMEs have not sold using online media.So, it is necessary to digitize SMEs with at least every SME in Besides, tight competitions in this era require businesspeople to be able to provide new things that can attract customers to make purchases, for example is innovation.
Innovation consists of several aspects, one of them is product innovation.Product innovation is associate degree innovation utilized in the entire company operational that a brand-new product created and marketed, as well as innovation within the whole purposeful method / the use (6).Product innovation is result of any processes that combined and influence each other (7).
Product innovation is a thing that can be seen as product functional progress so that product can be better than competitor products (5).If the product has an advantage that is seen as value added for consumers.It is expected that product innovation can drive the increasing of consumers purchase decisions.Dimension of product innovation is new product for the world, improving the existing product, new product line, and adding for existing product line (7).Company that has a good product innovation can improve their competitive advantage (8) and can enhance their marketing performance (6).
Competitive advantage is a group of factors that differentiating small business of competitors and giving unique position and advantage for small business in the market (9).
The definition of competitive advantage is highlighted on superior resources and competencies of the company (5).Several dimensions of competitive advantage i.e., innovation, differentiation, and led on low costs (10).With e-commerce companies can get benefits that are used as an alternative source of competitive advantage (11).The use of e-commerce will escalate the competitive advantage (3).There is a positive interplay between e-commerce and competitive advantage (12,13).With product innovation, companies carry out product development, so that they can create products that have competitive advantages.There is a positive relationship and significant influence between product innovation and competitive advantage (8,14).
Marketing performance is achievement measurement obtained from marketing activity process in a whole in the organization (5).Marketing performance is factors that often used to measure the impact of applied strategy in the company, good marketing performance defined in three values, viz.sales value, sales growth, and market portion (6).
Meanwhile, indicators used to measure marketing performance among others sales volume, customer growth, and profitability E-commerce has influence on marketing performance, meaning that a better ecommerce or online marketing will be able to improve the marketing performance of SMEs (15).Be found a positive effect between ecommerce toward marketing performance

METHOD Data Collection Method
Primary quantitative data was used in this study and is obtained using a questionnaire that was created and distributed through physically directing distribution to the respondents.

Population and Sample
All the SMEs in Kendal, Central Java are the population in this research.The 100 SMEs as the sample was determined by using Slovin formula with 5% of confidence level.

Nonprobability sampling with convenience
sampling technique is used to take the samples.While the unit of analysis for this research are SME owners.

Research Instrument Development
The

Descriptive Analysis
Descriptive Since all the hypotheses has significant value < 0.05 then all the hypotheses are accepted.
Then can be concluded that there is a positively significant influence of ecommerce and product innovation partially toward competitive advantage.And there is a positively significant effect of e-commerce, product innovation, and competitive advantage partially toward marketing performance.

Path Analysis
Two structural equations of path analysis exist in this research.Structural equation 1 aims to see the effect of e-commerce and product innovation on competitive advantage to examine the outcome of the path analysis may be seen within the Table 2.     Accordingly, to assign the direct and indirect effect, and the path coefficient of each variable can be seen on the Table 6.The impact of e-commerce and product innovation to competitive advantage is 33.5%.
The impact of e-commerce, product Kendal encouraged to have one WhatsApp contact, one mainstream social media, one Google business/maps, and one mainstream ecommerce.So therefore, SMEs especially in Kendal can apply e-commerce since the use of e-commerce will increase the competitive advantage (3) and marketing performance (4) of the company.E-commerce is incorporated activities concerning consumers, manufactures, carrier companies and middleman traders using computer networks, i.e., internet.E-commerce definition is any form of goods and services sales transaction (trade of goods and services) by using electronic media (5).Directorate General of Taxes (DJP) Indonesia has mapped four ecommerce transaction models namely online marketplace, classified ads, daily deals, and online retail.

( 4 ,
5,16).The improvement of marketing performance is built on product innovation(14).Other researchers concluded that product innovation encompasses an important impact on marketing performance(5,6).Competitive advantage was a mediator in the relationship between e-commerce and marketing performance of SMEs (16).That result means that occur a relationship and impact among ecommerce, competitive advantage, and marketing performance.Competitive advantage was the mediator of product innovation and marketing performance, and competitive advantage has positively influence on the marketing performance (6,14).According to the previous studies and based on several existing literature showed that there is a relationship and influence of e-commerce using toward competitive advantage, product innovation toward competitive advantage, ecommerce against marketing performance, product innovation to marketing performance, and competitive advantage toward to performance.Therefore, this research can be a good combination to find out problems and find solutions to the competitive advantage of marketing performance in SMEs in Kendal, through the application of e-commerce and product innovation.

Figure 1 :
Figure 1: The Structural Model Influence of Path Analysis Source: Developed in this research, 2021 innovation, and competitive advantage to marketing performance is 39.4%.Directly, the use of E-commerce positively and significantly affects the competitive advantage of SMEs in Kendal, Central Java.This result is in accordance with the research's results conducted by previous researchers (3,11-13).The outcome of the study shows that in the use of e-commerce, indicators of the use of electronic payments for buying and selling products/services of SMEs in Kendal are quite good.Most SMEs who are respondents also already have an online marketplace as a place to sell goods/services.But on the indicator of human resources owned, the level of SMEs that have employees who can operate e-commerce or online stores

Table 1 : Hypothesis Testing Result
Source: Primary data processed, 2021

Table 6 : The Direct and Indirect Influence
Source: Primary Data, 2021