Abstract:
The study aims to identify the relationship between Technological,
Organizational, and Environmental factors, digital marketing capabilities,
innovation capabilities, and business performance of SMEs. The
quantitative approach is suitable for this study. A convenient sampling
technique was applied to select respondents and sample units are the
owners or managers of SMEs. A structured questionnaire was developed and
delivered to 400 SMEs. Data were analyzed by using AMOS with Structural
equation modeling. The findings revealed that Technological, organizational,
and environmental factors significantly influence digital marketing
capability, and digital marketing capability significantly impacts the
performance of SMEs. Innovation capability significantly strengthens the
relationship between digital marketing capability and the performance of
SMEs. Digital marketing capability significantly mediated the relationship
between the technological, organizational, and environmental factors and
the performance of SMEs. Based on the theory of resource-based view and
TOE framework, the novel model was developed with the link between TOE,
DCM, and the performance of SMEs with the moderator role of innovation
capability and the mediation role of DCM. SMEs should prioritize
investments in digital technologies that align with their marketing
objectives. Fostering a culture of continuous learning and innovation within
the organization can significantly enhance digital marketing capabilities.
Policymakers and industry associations should develop supportive
programs and incentives to encourage technology adoption among SMEs.
