Local Wisdom as Strategic Entrepreneurial Marketing: An Exploratory Factor Analysis and Regression Study

Abstract

This study potrays the impact of integrating local wisdom into marketing strategies on the marketing performance of Small Medium Enterprises (SMEs) in a country with rich and diverse cultural heritage called Indonesia. Using Exploratory Factor Analysis (EFA), the research identifies key dimensions of local wisdom-based marketing strategies. Subsequently, regression analysis is employed to evaluate the influence of these dimensions on marketing performance. To gather the data, this study used a set of questionnaires that was given simultaneously to 330 SMEs Indonesia. The first set was given in order to know the factors of LW-SEM and the second set was given in order to know the influence of the constructed factors to SMEs’ marketing performance. This study concludes that strategic entrepreneurial marketing can effectively integrate local wisdom values within SMEs forming the concept of LWSEM. This approach is built on eight key factors that are vital in addressing cultural storytelling, community engagement, and sustainable practices. The findings indicate that a better implementation of LWSEM significantly enhances marketing performance, showcasing how SMEs can preserve Indonesia’s cultural heritage while simultaneously improving their marketing performance.