The Significance and Impact of Social Media on Local E-Entrepreneurship: A cross-platform study on analyzing the approach of Indonesian local creative online businesses in positioning their brand identities and marketin

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The Significance and Impact of Social Media on Local E-Entrepreneurship:

A cross-platform study on analyzing the approach of Indonesian local creative

online businesses in positioning their brand identities and marketing their

products.

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Stefany Winona Santosa

Student No. 10696512

MA New Media and Digital Culture

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Supervisor: Dr. Jan Simons

Second Reader: Dr. Tim Highfield

University of Amsterdam

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ABSTRACT

The emergence of social media as a new entrepreneurial tool in the digital economy has been commonly embraced by numerous entrepreneurs. Recently, much attention has been directed toward the creative industry, as the creative industry has contributed a small percentage to the economic growth of the overall economy in Indonesia. Interestingly, many local creative businesses today mainly operate in the digital sphere. With a strong presence of various social media platforms, local creative digital businesses are increasingly utilizing these new media tools to successfully position their brand identities and market their products to the appropriate target customers. This research has looked into the manner in which local creative online businesses in Indonesia use different social media platforms to position their brand identities and market their products. A qualitative content-analysis study was done across two social media platforms, namely the websites and Instagram accounts of eight local creative digital businesses in Indonesia. This cross-platform study indicates that the two platforms mainly complement one another. Through looking into the traditional manner in which non-creative businesses approach brand identity positioning and product marketing, this research has been able to gain insight into the manner in which creative business approach brand identity positioning and product marketing. It was found that, indeed, the eight local creative digital businesses in Indonesia utilized the traditional manner in which businesses position their brand identities and market their products. However, as the creative industry ranges across a number of subsectors, this study has also demonstrated that the manner in which brand identities were positioned and products were marketed differed between each subsector. This research provides a new perspective on the study of the creative industry in Eastern societies. As a number of studies have been directed solely toward Western societies, creative industry scholars can potentially yield the results of this study for further research.

KEYWORDS: social media; digital entrepreneurship; local business; creative industry; digital economy; brand identity; marketing

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INTRODUCTION

The term “digital economy” has been increasingly favored in the 21st_{century. According to}

Terranova (35), the term is characterized by the development of technology and the emergence of a new type of worker. As it develops rapidly worldwide, digital economy has been regarded as the driver of innovation, competitiveness, and growth. Entrepreneurs and small- and medium-sized enterprises (SMEs) hold significant potential in this development.

New digital trends, such as social media platforms, are increasingly altering the business scene. Such patterns have enabled entrepreneurs to take advantage of markets through knowledge transfer. With data accessible through the online sphere, entrepreneurs can acknowledge customers’ demands. Through recent figures, it was shown that SMEs from across different countries are actively taking advantage of the Internet to increase their growth, both in size and in sales (Lee 114).

A digital environment naturally drives entrepreneurial activity (Gray n pag). As the online sphere does not necessitate capital, such platforms allow opportunities for entrepreneurs to establish businesses and compete in markets. The Internet can also be a medium of opportunity for entrepreneurs to acquire new skills (Gray n pag). For the past decade, rapid growth in entrepreneurs has corresponded to the use of digital technology and the rise of e-commerce (Gray n pag).

With advancements in technology, significant development is contributed across different countries. Technology itself is believed to be the leading source of economic growth. This then leads to various business innovations. The Internet provides entrepreneurs with multiple ways of extending their customer reach and enabling competition for market share (Kvochko n pag). For example, the establishment of social media platforms has allowed businesses a powerful way to market their products (Kvochko n pag).

Due to the current situation, the digital economy has been increasingly essential in the eyes of both multinational and local entrepreneurs. Interestingly, a small extent of the economic growth is derived from the creative industry. Popularized almost two decades ago, the term creative industry is used to describe the sector that is comprised of theatre, music,

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film, the visual arts, and heritage (Newbigin n pag). However, for more than a decade, with the rise of new media, these sectors have further extended to advertising, interactive leisure software, publishing, and software and computer service (BOP Consulting 16-17).

Nonetheless, the growing significance of the economic impact of the creative industry has been undervalued. Evidently, little attention is given by the government to measuring the overall contribution of the creative sector to economic growth across countries (Newbigin n pag). As mentioned by Khajeheian (125), entrepreneurship, with the help of new media objects, can be a pathway to eluding economic crisis, especially in developing countries.

Indonesia, among other developing countries, may take advantage of the advancement of technology to further boost the growth of economy and employment (Khajeheian 125). Through the use of social media platforms, such as Facebook, Twitter, and Instagram, local entrepreneurs can easily establish new businesses. Interestingly, Indonesia has been well-known for its creative sector. With local creative online businesses becoming more prevalent, the Indonesian Minister of Economy has heavily encouraged numerous local entrepreneurs to market their products across the country. With such potential, a small percentage of the economic growth has derived from success in the creative industry market.

On a national scale, the creative industry in Indonesia has reached exponential growth for the past three years (Sasongko n pag). Based on the national data, the creative industry sector has employed over 15.9 million employees and contributed 7.3% to the gross domestic product (GDP) across Indonesia (Sasongko n pag). With such growth, the economic value of the creative industry has extended beyond the petroleum industry. Considering the vital role of the state in the development of the creative sector, the Indonesian government, along with the President of the Republic of Indonesia, founded the Creative Economy Agency with the goal to promote innovation-based employment by creating an environment that is conducive to the development of the creative industry (Sasongko n pag).

The creative industry, interestingly, does not operate in isolation from the rest of the industrial sectors (BOP Consulting 12). Instead, this industry is “a source of innovation for the

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wider economy” through the utilization of design, branding, and advertising (BOP Consulting 12). In this research, I aim to explore the approach Indonesian local creative digital entrepreneurs take in positioning their brands and marketing their products in the competing market. By analyzing the traditional approach to brand identity positioning and product marketing, this research can assess whether the approach for brand positioning and product marketing in the creative industry follows or contrasts with the traditional manner. For this research, the traditional manner of brand identity positioning and product marketing entails the approach used by traditional businesses outside the creative sectors.

1.1 Problem Background

Brand positioning and product marketing can be approached in numerous ways across various social media platforms. Prior research, however, does not provide insight on whether local digital entrepreneurs utilize the traditional approach of brand identity positioning and product marketing in competing in the creative market.

Initially, establishing a business can be challenging for many entrepreneurs. Particularly with the emergence of the digital economy, an abundance of entrepreneurs increasingly operate their businesses online. With a significant number of competitors present in the online market, entrepreneurs are prescribed to establish their brands uniquely (Dickson and Ginter 1). Operating in a niche market can be difficult. Identifying the right consumers is fundamentally crucial, allowing businesses to operate better in comparison to larger competitors (Sujan and Bettman 455). Businesses should be able to grasp the attention of consumers through targeting their brands to the appropriate consumers (Nakara et al. 386). A useful approach to communicating one’s brand often involves the precise identification of its target market. Consumers who share needs similar to those a business desires to fulfill can be referred to as a business's target market (Fuchs and Diamantopoulus 1763). Essentially, these consumers are inclined to purchase the products offered by the business. Identifying the target market will allow a business to initiate appropriate means of establishing its brand to the consumers (Nakara et al. 386). Brand positioning and product marketing are highly effective when executed toward the correct target consumers. However, targeting the right consumers across numerous social

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media platforms can be challenging. Different platforms essentially entail different consumer segmentation (Geho and Dangelo 61). Extensive research is essential to assist entrepreneurs in identifying the appropriate target market for each social media platform.

Establishing a unique element for a brand is essentially pivotal in sustaining an online business. Clearly, identifying the right target market is not sufficient to grasp the attention of consumers. As businesses are actively competing in a market, an entrepreneur needs to be able to separate his business from the rest of his competitors (Kotler 308). This can be done through establishing a unique value proposition. When a brand’s most essential value is highlighted, consumers are more inclined to remember the business (Ghodeswar 5). However, with the ever-increasing number of online businesses, businesses are frequently unable to distinguish themselves from one another. As they opt to market the same products, the executed marketing strategies between businesses are relatively similar (Simatupang et al. 198). As a result, a business may position its brand poorly. In resolving the issue at hand, a brand’s unique value proposition can be delineated over visual and textual contents created on social media platforms. However, the way a brand aims to include its unique value proposition across different social media platforms remains unknown. With various social media platforms entailing different consumer segments, brand positioning and product marketing can be done differently across social media platforms.

Lastly, the emergence of social media has enabled entrepreneurs to take advantage of various social media platforms. Consequently, various social media platforms entail different purposes and usage. For each platform of social media, essentially both businesses and consumers utilize it in various manners (Geho and Dangelo 64). When contents are created on social media platforms, entrepreneurs should be able to generate appropriate content for each social media platform (Geho and Dangelo 64). For instance, utilizing Instagram in product marketing can be difficult if not executed appropriately. Instagram, as a social media platform, allows users to upload pictures and videos onto their profiles. To effectively market a product using Instagram, a business must mainly focus on creating visual content that will attract its target consumers (GetCraft 21). Accordingly, the use of textual content is not the primary consideration for such a platform. When appropriate content has been created through an

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attractive visual and an engaging caption, a business has strongly grasped the attention of consumers. Frequently, businesses tend to utilize all social media platforms in the same manner (GetCraft 2). As a result, businesses often generate repetitive content for various platforms. This may not be an effective approach to brand positioning and product marketing. Consumers often lose interest in contents that are incorrectly posted on specific social media platforms.

1.2 Research Question

Brand identity positioning and product marketing are regarded as two different elements. Commonly, brand identity positioning is an approach to undertaking the image of business so that it is successfully visible and distinguishable in the minds of consumers (Kotler 308). In contrast, product marketing is essential for informing consumers about the product offered by a business (Neti 9).

In dealing with the issue of brand positioning and product marketing for local Indonesian creative online businesses through the use of social media, this research focuses on the following research questions:

RQ 1: How do local creative online businesses position their brand identities through the use of social media platforms?

RQ 2: How do local creative online businesses market their products through the use of social media platforms?

1.3 Academic Relevance

Analyzing the approach of Indonesian local online businesses in positioning their brands and marketing their products is very thought-provoking due to the limited research that has been done on how local online businesses position themselves in the market. Much research has been directed only toward the manner in which social media assists in the success of online businesses, but not specifically of local creative online businesses.

Adequate research has been conducted on the study of social media marketing for small businesses. However, this research has been directed toward and tested solely on

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Western societies. Nonetheless, the use of social media in positioning small and medium enterprises has been demonstrated to be significantly transformational for entrepreneurs (Nakara, Benmoussa & Jaouen 387). From a Western European academic scholar perspective, this research may serve as a complementary asset in the study of the creative industry. Fundamentally, investigating the manner in which Eastern societies approach brand identity positioning and product marketing can reduce generalization between two different societies. This being said, the traditional approach to brand identity positioning and product marketing may not entirely fit into less developing countries such as Indonesia.

From a social media marketing perspective, positioning small and medium enterprises can be compelling since social media platforms are affordable marketing tools. In a research study done by Nakara et al. (392), social media was approached as a new marketing tool for small businesses in France. Due to the Internet being interactive in nature, Web 2.0 has enabled consumers to review and present feedback about brands and their products (Nakara et al. 392). This, then, allows newly entered entrepreneurs to scrutinize their brands in the market continually. With such an approach, small and medium businesses can appropriately position their brands and market their products in the competing market. Although there is available research on the social media platform as a new tool in marketing, the applicability of the study remains unknown for the population of Indonesia.

With the vast opportunities that social media can offer, pursuing the market’s attention from the outset may be challenging for new entrepreneurs. As various target groups use social media platforms, the possibility of not knowing where to build the appropriate engagements with the right consumers can be confounding (Hughes n pag). The local creative online business is very distinctive among other businesses. Its distinct identity lies in the locality of the product designs. However, how local entrepreneurs strategize in positioning their brand identities remains unknown. Researching how social media may significantly impact their brand identity and help them to market their products can be enlightening for ensuring the sustainability of local creative online businesses.

Additionally, due to limited research, a study analyzing how local creative entrepreneurs position their brands may also provide insight for new entrepreneurs.

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Through the analysis of brand positioning, new businesses not only can assess whether they have successfully situated their brands in the competing market, but also can further identify whether such an approach can maintain the businesses in the long run (Hughes n pag).

With the increasing trend of traditional crafts, the creative industry is stressing the importance of authenticity and quality of the products sold (Klamer 1). However, creative business as a meaningful work, primarily in the regions of Indonesia, has been disregarded by a tremendous demographic group for an extended period. Interestingly, the newly emerging interest in creative business has enticed young and new entrepreneurs to dive into the market.

Knowing that positioning and marketing of creative business can be approached differently, this research provides valuable insight that allows entrepreneurs to enter and position themselves in the market. As the market for creative business remains considerably small, the use of social media as a marketing tool may expand the market to those who are unaware of it.

Interestingly, products made by the creative business do not only include one type of product. A wide array of these products is available in the Indonesian market. According to the Indonesian Agency for Creative Economy (BEKRAF n pag), the following subsectors reside in the creative industry of Indonesia: art, advertising, application and game development, architecture, culinary, craft, fashion, film, animation and video, interior design, music, performing arts, photography, product design, publishing, television and radio, and visual communication design. This raises the question whether each product category is marketed differently. In carrying out this research, a new understanding may be established. Presumably, analyzing various types of products available in the creative sector allows this research to illustrate the different approaches used by an entrepreneur in positioning its brand and marketing its products. In a sense, brand positioning and product marketing are executed differently for each product type.

From the perspective of the Indonesian creative industry, much attention is given to the art, crafts, and fashion sectors (Hidayat and Asmara 1). In contrast to this matter, the creative industry in Western societies, such as the United Kingdom, focus its attention more

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prominently on the design, software, and digital sectors (Winston n pag). As mentioned in a report done by British Council on “Mapping the Creative Industries”, the term ‘creative industry’ in Britain includes not only the traditional form of art, but also “service businesses such as advertising, manufacturing processes that feed into cultural production, and the retail of creative goods” (BOP Consulting 15). Again, from this research, academic scholars can highlight a possible distinction in the manner in which Western and Eastern societies execute brand identity positioning and product marketing. This can once again hinder over-generalization across different countries.

Notably, Indonesia possesses an exponential economic growth in its creative industry. However, numerous issues are still faced by the industry. As stated by Triawan Munaf, the head of Creative Economy Agency in Indonesia, the creative industry is progressing slowly due to a lack of academic research about the Indonesian creative business (Amindoni n pag). Also, a lack of marketing knowledge constrains entrepreneurs from growing their business further (Amindoni n pag). Frequently, local entrepreneurs fail to associate their brands in the market. The lack of consumer research due to insufficient infrastructure, both digitally and physically (Amindoni n pag), prevents entrepreneurs from finding consistency in positioning their brands. From this research, new findings can be established in providing both Indonesian entrepreneurs and academic scholars with insightful knowledge on how social media platforms can be utilized for brand positioning and product marketing.

Today, numerous Indonesian local entrepreneurs are very active on social media. For example, the use of Facebook and Instagram is common among both local entrepreneurs and their customers. Additionally, with the help of their own websites, local entrepreneurs often also incorporate the story behind the establishment of their businesses to associate their brands with authentic local creative online businesses. To some extent, local entrepreneurs are very eager to establish their brand identity with their customers to achieve long-term success for their business. Therefore, when taking into consideration such factors, better strategies in brand positioning and product marketing can be established for Indonesian local creative online businesses.

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THEORETICAL FRAMEWORK

In this chapter, works of literature related to the relevant concepts for this research are reviewed. Explanations of the digital economy and creative industries in Indonesia are introduced beforehand. This is continued by a discussion of the significance of creating local businesses in the creative market. Then, analyses of entrepreneurial marketing (EM) are examined, followed by an in-depth look at brand positioning. Lastly, the emergence and role of social media in entrepreneurial activity, brand positioning, and marketing activities are discussed.

The selected works of literature for EM, brand positioning, and the emergence and role of social media in entrepreneurial activity, brand positioning, and marketing activities were carefully chosen from a non-creative business point of view. In this manner, analyses can be conducted to explore the applicability of such theories and concepts to the creative businesses.

2.1 Digital Economy

Society and the economy are changing rapidly due to the development and growth of information communication and technology. In this new age of network intelligence, the notions of traditional economy, wealth creation, and business structures are deliberately challenged (Babu 1). With the global economy being subjected to a digital transformation, economic activity has shifted toward online connection across consumers, businesses, devices, and data (Deloitte n pag). By definition, digital economy refers to all economic activity that is established entirely on digital technologies (Techopedia n pag). It is clear that Indonesia is gradually entering the digital economy. With the increasing presence of digital entrepreneurship, a large number of entrepreneurs are utilizing existing technologies, such as social media, to compete in the market.

2.2 Creative Industry in Indonesia vs. United Kingdom

In carrying out this research, a fair understanding of the different definitions and subsectors between the creative industry in Indonesia and in the United Kingdom is essential.

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Indonesia

In the 21st_{century, the creative industry has emerged as one of the most significant economic}

sources in the world (Hidayat and Asmara 1). Since 2009, the government of Indonesia has increasingly paid serious attention to the formation of the creative economy agency (Hidayat and Asmara 1). Various scholars debate the term ‘creative’. However, creativity can, to some extent, be regarded as a new means of developing the economy sector. According to Hidayat and Asmara (2), the notion of creative economy mainly focuses on “the role of creativity as a force in contemporary economic life.” To a large extent, the development of economy and culture have intertwined into a broader process of development. Frequently, the application of this concept has extended to the developing countries as well (Hidayat and Asmara 2).

According to the Indonesian Agency for Creative Economy (BEKRAF n pag), the following subsectors reside in the creative industry of Indonesia:

❖ Art

❖ Advertising

❖ Application and Game Development ❖ Architecture

❖ Culinary ❖ Craft ❖ Fashion

❖ Film, Animation, and Video ❖ Interior Design ❖ Music ❖ Performing Arts ❖ Photography ❖ Product Design ❖ Publishing

❖ Television and Radio

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United Kingdom

According to a report on ‘The Geography of Creativity in the UK’, the creative industries in the United Kingdom are expanding immensely more than any other sectors across the country (Winston n pag). London essentially holds 40% of all creative industry employment and one-third of the creative businesses. In the mid-1990s, the term ‘creative industry’ was first used on a national level by the government of the United Kingdom. As mentioned previously, the term entails activities beyond the traditional art forms; “service businesses and manufacturing processes that feed into cultural production, and the retail of creative goods” are also included in the definition (BOP Consulting 15).

According to the Department for Culture, Media and Sports in the United Kingdom (BOP Consulting 16-17), the following industries are categorized in the creative industry of the United Kingdom:

v Advertising v Architecture

v Art and Antiques Market v Crafts

v Design

v Designer Fashion v Film and Video

v Interactive Leisure Software v Music

v Performing Arts v Publishing

v Software and Computer Services v Television Radio

With the numerous subsectors present in the creative industry of the United Kingdom, interestingly, the software and computer services sector has been indicated to be the biggest

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creative industry across the UK (BOP Consulting 17). This sector encompasses “the creation, production and supply of tools and applications and of software products” (BOP Consulting 17). A large amount of focus and resources from the Government and from academic scholars is often directed toward this subsector (Winston n pag).

Through this comparison, the particularity of the creative industry in Indonesia can be a highlight in comparison to the Western societies such as the UK. It is evident that Indonesia, as a developing country, gives more attention to the art, crafts, and fashion sectors (Hidayat and Asmara 1). As the creative economy in Indonesia is expected to become the new driver in the whole Indonesian economy, a significant percentage of the growth mainly comes from the art, crafts, and fashion sectors. Interestingly, social media plays an essential role in the following trend (Global Business Guide Indonesia n pag). As more Indonesians are showing preference towards the handicraft sectors, Indonesian customers are more inclined to consume from the mentioned sector. On the same note, this also brings about the manner Government put a significant amount of resources in growing the art, crafts, and fashion sectors further (Sasongko n pag).

2.3 The Establishment of Local Business in the Market

The core strength of a local business lies in the idea of its locality. With proximity to its consumers regarding distance, the local business has the competitive advantage of delivering rapid service to consumers (Kapferer 169). Consequently, this allows entrepreneurs to receive not only a high level of awareness from the consumers but also a considerable level of trust and personal connections (Kapferer 169).

Interestingly, local entrepreneurs often approach the competing market by not following the trend created by global brands (Kapferer 169). In a sense, through positioning their brand in a localized manner, entrepreneurs can attract more consumers. The distinct attributes reflected on not only their brand, but also on their products, allow their brand to stand out in the eyes of consumers.

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Evidently, developing a local brand can, to some extent, be challenging. However, an essential approach that often is taken into consideration by local entrepreneurs is through culturally positioning their businesses. In a sense, the products offered by these local businesses focus on locally made and associated products. Concerning the production process, locally produced goods in developing countries provide a significant benefit in terms of lower cost of production (Kapferer 169).

Indonesia, as one of the largest exporters of local handicraft products, has significantly demonstrated that the Indonesian creative industry contributes various economic opportunities, especially concerning economic growth and employment opportunities. In an article published by Unesco (n pag), the creative economy of Indonesia contributed to 7.1% of Indonesia’s GDP in 2014, and as a result, over 12 million workers are employed in the creative sector. This proves that the establishment of local businesses allows potential contribution to a better state of the Indonesian economy (Unesco n pag).

2.4 Entrepreneurial Marketing

Traditionally, marketing and entrepreneurship are treated as two distinct economic practices (Hills et al. 99). However, in the case of local entrepreneurs, a considerable amount of constraints is often overlooked. Through the use of marketing, local entrepreneurs can gain a competitive advantage in operating in the market (Hills et al. 100). Frequently, the unique opportunities, strategies, processes, and practices local entrepreneurs are working with may enable an effective approach to competing with multinational businesses (Hills et al. 100). As mentioned in the previous section, smaller scale businesses would allow entrepreneurs to have a closer relationship with their consumers. With a greater understanding of the consumer’s needs, market trends, and market positioning, local entrepreneurs are much more capable of carrying out a practical marketing approach (Hills et al. 100).

For years, the importance of marketing in entrepreneurial activity has been acknowledged in determining the success of a business (Hills et al. 101). The concept of EM itself is much different from traditional marketing. Therefore, understanding the notion of EM in this

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research may serve as a guideline to assess whether this approach is commonly use in the local creative online businesses in Indonesia.

The notion of EM centers around the idea of innovation and satisfying the needs of the market (Stokes 13). A bottom-up approach is adopted when entrepreneurs target their consumers. Further, a greater preference for interactivity is very much apparent in EM, focusing on the relationship development of existing and future consumers and adopting a word-of-mouth approach to communication. Generally, the characteristic of EM can also be described by clustering informal information from consumers; this is often done through the use of social media platforms.

Figure 2.1 Entrepreneurial Marketing Processes Source: Stokes. 2000, p. 13

To extend the description above, the four elements of EM are discussed in further detail: Innovation Orientation (Stokes 7)

Through creativity and innovation, entrepreneurial activity can succeed to a greater extent. Entrepreneurial activity typically arises with the development of an innovative idea. Then, entrepreneurs attempt to find a market for the given product. However, it is also essential to take into account the importance of satisfying consumers’ needs and demands. When carrying

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not only benefit from fulfilling the needs of the market, but they are also innovating their products. Essentially, EM centers around the development of an idea and follows with research on the acceptance of the product within the market.

Bottom-up Strategies (Stokes 8)

Traditionally, marketing strategy has involved the means of segmentation, targeting, and positioning. However, as mention previously, local entrepreneurs often practice a ‘bottom-up’ approach. This is where entrepreneurs initially serve the needs of a small number of consumers, then gradually expand their reach to a broader target audience. Through such an approach, fewer resources are required, and this allows flexibility and adaptability for the product to sustain in the market.

Word-of-mouth Marketing (Stokes 10)

Entrepreneurs are increasingly initiating personal relationships with their consumers. The interactions developed with the target market indicate a strong preference for personal contact with the consumers. When entrepreneurs can listen and respond to the needs of the consumers, a conversational relationship is built between them. The word-of-mouth approach, as an essential method in interactive marketing, facilitates the development of consumer bases such as reviews, ratings, and recommendations. Recent figures have shown that through such an approach, entrepreneurs can gain new consumers.

Networking (Stokes 12)

Market research has been an integral part of sustaining a business for decades. However, today, entrepreneurs take an informal approach to clustering market information through networking. Commonly, entrepreneurs communicate with key stakeholders operating in the market. Their focus on assessing the opportunities and threats of the market they are operating in allows them to monitor their performance.

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2.5 Brand Identity Positioning

In carrying out this research, a fair understanding of brand identity positioning is essential. Brand positioning can be approached in various manners. Analyzing the different approaches can help entrepreneurs identify the most appropriate means of positioning their local brands in the market. Brand positioning can be defined as undertaking a business’s image for a brand to be successfully visible and distinguishable in the minds of the target market (Kotler 308). Commonly, a well-positioned brand allows value proposition to be created when there is an appeal to the needs of a specific consumer segment (Fuchs and Diamantopoulos 1764). When executed effectively, there is a rapid potential for a brand to be established firmly in the market. Evidently, the centrality of effective positioning strategy lies on the consumer’s perceptions and choice (Fuchs and Diamantopoulos 1764).

Through brand differentiation, an attempt at creating a niche market for the brand can be executed (Sujan and Bettman 454). With this strategy, the brand is set apart from the generality of the rest of the market. In directing solid attention to the brand, differentiating attributes of the brand are used. For this approach to be implemented effectively, a brand should not be perceived as a quintessential example of the overall market. Instead, brand should be recognized as a specialized product (Sujan and Bettman 454). This allows the brand to appeal to a focused market. Local creative online businesses in Indonesia are in an apparent segmented market in the Indonesian economy. With the rich cultural diversity present in Indonesia, an established creative sector is visible in the market. The handicraft industry has convincingly been demonstrated to be the most promising subsector and is driving an ‘autopilot’ and exponential growth to the Indonesian economy (Amindoni n pag). Inherently, brand differentiation allows the capturing of numerous advantages. On an accumulated level, this strategy enables the affordance of a broader market (Sujan and Bettman 454).

2.5.1 Brand Identity

Naturally, entrepreneurs can position their brands on an immense number of associations (Fuchs and Diamantopoulos 1766). For the establishment of a brand to be effective in the market, the brand must first concentrate on determining its identity (Ghodeswar 5). The identity of a brand

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requires alignment with its consumers. On top of that, as mentioned earlier, a brand should be able to differentiate from its competitors. To do so, a well-planned, nurtured, and supported brand image must be carried out (Ghodeswar 5). It is essential for a brand to acknowledge what it stands for and efficiently express its identity in the market. To some extent, in the presence of aggressive competition within the market, an established brand reputation enables entrepreneurs to distinguish themselves from competing brands (Ghodeswar 5). By establishing a clear and consistent brand identity, enticing attributes of the brand allow consumers a better understanding of where the brand is positioned in the market (Ghodeswar 5).

2.5.2 Brand Association

A clear brand identity can be developed through a set of brand associations. To create such associations, extensive research on consumers is needed. This will enable entrepreneurs to better understand their brand and the brands of their competitors (Ghodeswar 5). Research on consumers extends beyond existing and prospective consumers; instead, the inclusion of research on former consumers, industry experts, and intermediaries is also essential (Ghodeswar 5).

Brand strengths associated with beliefs and values are exceptionally dominant in the eyes of consumers. With an established brand image, a fixed perception of the brand and its associations is visibly perceived by consumers (Ghodeswar 5). As an essential phase, a brand needs to be able to establish a personality in the eyes of consumers. In a sense, consumers need to be able to relate to and believe in the brand and sense consistent communication from the brand (Ghodeswar 5). With a visible presence of personality attributes, a brand can achieve distinct differentiation in the market. This results in competitors not being able to easily imitate or copy the established brand (Ghodeswar 5). On top of that, personality associations also allow a direct relationship with consumers.

2.6 The Emergence of Social Media

With the emergence of social media in the 21st_{century, interaction and communication of}

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media, for years, has impacted an abundance of facets of human communication, which influences businesses as well (Edosomwan et al. 1). According to the definition of social media, the term itself can be defined as the various forms of electronic communication in which users often generate communities in the online sphere through the sharing of information, personal messages, and other forms of content (Merriam-Webster n pag).

The earliest occurrence of social media can be traced back to the idea of creating an easier means of communication through the development of technology (Edosomwan et al. 1). The evolution of social networking over time developed into the use of digital media. However, the notion of social media did not begin with the computer. Instead, the telephone during the 1950s facilitated the earliest notion of social networking (Edosomwan et al. 2).

Through the development of the Internet, which was officially made available to the public in 1991, numerous social media platforms and sites had begun to emerge. With a significant boost in the use of such platforms and sites, the interactions of consumers and businesses are significantly transformed into an era of Web 2.0. The notion of Web 2.0 can be understood by the way platforms and sites are formed and used. In short, consumers of the Internet can create user-generated content through which they can interact and collaborate with one another in an online sphere (O’Reilly p 18).

Without a doubt, the Internet and social media are increasingly becoming a necessity for consumers in their day-to-day activities. With the use of social media extending beyond means of communication to business creation, a report from Digital In 2017 Growth Overview addresses that the usage of the Internet continues to expand, summing up to approximately 3.75 billion active users (Nguyen n pag). Concerning the number of Internet consumers, Indonesia has become the fastest growing country in 2016 (Nguyen n pag). This generates a 51% growth of Internet consumers, resulting in three times more growth than the global average.

Naturally, understanding the emergence of social media enables a greater consideration of how local entrepreneurs begin to use social media as means for businesses. Through analyzing the significant change in social media use over the years, a better understanding of how local entrepreneurs can continuously innovate and position their brands in the market to gain a competitive advantage can be attained.

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2.6.1 The Role of Social Media in Online Entrepreneurial Activities

The approach businesses use to operate has advanced along with the emergence of social media. As stated by Jagongo and Kinyua (213), entrepreneurs frequently do not have all of the skills and knowledge necessary to develop sustainable businesses. However, with the unlimited data and information available on the Internet, entrepreneurs are now able to gain access to various resources that were not available previously. Through understanding usage of the Internet, businesses are able to maintain their relevance in the competing market (Jagongo and Kinyua 213). Social media is increasingly becoming an essential tool for entrepreneurs to grow their businesses (Jagongo and Kinyua 213). This is done through understanding the use of social media as a communication and marketing tool.

The development of a brand’s position in the market can often be carried out through the use of social media. With the 21st_{century being a society with an ever-increasing preference}

for technology, data and information about consumers are continually being exposed for businesses to take advantage of. As a result, entrepreneurs are now able to escalate their reach to consumers (Jagongo and Kinyua 214). As the Internet allows greater accessibility to consumers, the process of information exchange becomes much easier and faster for entrepreneurs to satisfy the demand and needs of the market (Jagongo and Kinyua 214).

Concerning social media’s communicative advantage, many entrepreneurs can favorably increase the presence of their brands online (Jagongo and Kinyua 214). Increasing the online presence of a brand can signify their ability to position the brand in the market and market their product for the consumers to purchase. To achieve success, a brand needs to be visible in an environment where consumers are highly present. Low barriers to the use of social media have allowed local entrepreneurs to compete in the same market as multinational businesses. Through such competition, small to medium enterprises are accustomed to an equal opportunity to be exposed to the whole market.

In an article by Mangold and Faulds (358), the authors identified the ability for businesses to connect with existing and potential consumers through the use of social media. The engagement between consumers and businesses allows their relationship to develop better over

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time. Such a relationship not only provides businesses with effective marketing strategies, but an additional opportunity for communication and distribution channels, greater customer support, and interactive virtual community are also established (Mangold and Faulds 357). Often, the use of extensive feedback from consumers enables entrepreneurs to improve the products offered for the existing and future needs of the consumers (Jagongo and Kinyua 214). Various forms of feedback, including reviews and ratings that are done through social media platforms, are increasingly visible for businesses to take into account.

It is evident that newly found online entrepreneurship is commonly established with the help of social media. With social media granting greater market analysis and research, a new market is explored. In a study conducted by Samuel and Joe (643), businesses that used social media to grow were found to be more successful than those who did not. The research indicates that geographical barriers are diminished, which, as a result, creates and expands the market for the product even further (Samuel and Joe 643). Social media is continually granting businesses the ability to innovate by assessing the most suitable practices and customizing to the market’s needs and demands (Samuel and Joe 643). With the increased use of social media, new entrepreneurs are encouraged to find innovative approaches to “tapping new markets and stepping into entrepreneurship” (Samuel and Joe 643).

2.6.2 The Use of Social Media in Brand Positioning

Captivated by the accelerated use of social media by consumers, businesses are heavily taking advantage of social media in positioning their brands and marketing their products (Tsimonis and Dimitriadis 328). Greater reach of audience implies a better opportunity for businesses to connect with their customers. With such interactivity, the nature of social media as digital media has allowed entrepreneurs to share and exchange information with their consumers (Tsimonis and Dimitriadis 329). As mentioned previously, the key to an effective brand positioning is for consumers to identify the distinct product offered by the business in the market. When entrepreneurs can create a relationship with their consumers, they can better situate their brand for the consumers to notice and trust in purchasing the products offered.

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Recent figures have shown that entrepreneurs are increasingly dedicating a vast amount of their budget to the use of social media (Tsimonis and Dimitriadis 331). This indicates an interest in creating an online presence on social media platforms. Such a shift can be illustrated by numerous factors, such as the rise of technological development that contributes to the increase in many social media users, and low expenditure invested for viral marketing (Tsimonis and Dimitriadis 331).

The development of brand community on social media platforms can be an approach in establishing a position in the market. By definition, brand community refers to a community of consumers with a shared interest in a specific brand (Tsimonis and Dimitriadis 330). Through brand community, a platform for behavior engagement is created for consumers to participate in. Businesses are heavily employing this activity to further engage with their consumers (Tsimonis and Dimitriadis 330). At the most common level, entrepreneurs aspire to engage with existing loyal consumers, influence the perception of consumers regarding their brands, circulate information, and learn from and about their consumers (Tsimonis and Dimitriadis 330). With the presence of a brand community, businesses can provide their consumers with a platform for the consumers to communicate with one another regarding the brand’s experience (Tsimonis and Dimitriadis 330). Through such platforms, consumers are provided the opportunity to learn about the previous product experiences of other consumers. This not only enables consumers to better trust a brand, but also allows businesses to establish a position in the market, gaining more exposure and attention from the consumers. Seemingly, both the consumers and the businesses benefit from the various approaches businesses use to operate on social media (Tsimonis and Dimitriadis 330).

Certainly, the emergence of social media has expedited the use of electronic word-of-mouth (eWOM) (Tsimonis and Dimitriadis 331). The occurrence of eWOM can be observed in numerous online platforms, namely forums, virtual communities, and social networking platforms. Ideally, this then allows consumers to circulate brand-related information to a more significant reach of consumers online (Tsimonis and Dimitriadis 331). As a result, brand positioning occurs in the market. Further, consumers’ interactions also allow entrepreneurs to research and gather information about consumers’ preferences, desires, and needs (Tsimonis

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and Dimitriadis 331). This enables entrepreneurs to gain further attention from the consumers for converging the needs of the market.

With a considerable number of social media users, the presence of a brand on multiple social media platforms enables consumers to be informed and familiarized with the business, thus creating brand awareness (O’Flynn).

2.6.3 The Use of Social Media Marketing

A traditional approach to marketing is no longer viable to sustain a business. In recent years, entrepreneurs are increasingly becoming more aware of the importance of social connectivity as an integral key to marketing strategies (Geho and Dangelo 61). Today, entrepreneurs are not only able to take full advantage of social media as a marketing tool, but the advancement of digital technologies also enables them to gather data and information on consumers to optimize their social media marketing approaches (Geho and Dangelo 61).

In a recent study conducted by Neti (6), three definite benefits are derived from using social media marketing. The use of social media as a marketing tool enables entrepreneurs to create a space for consumers’ suggestions, and not only position their products in the market (Neti 6). With a significant increase in the visibility of social media influencers, entrepreneurs can take advantage of these influencers to help increase their brand awareness (Neti 6). Well-respected actors on social media often have a significant impact on how consumers perceive a brand. This is because they tend to become trendsetters in the market. Lastly, the use of social media platforms is free, allowing entrepreneurs a significant reduction in their marketing budget (Neti 6).

Understanding the relevance of social media as a marketing tool is inherently beneficial for new entrepreneurs. Social media is a communicative tool that allows brands to be accessible and visible in a market where the needs are met (Neti 7). In a sense, the effectiveness of social media as a marketing tool is measured through the ability of a brand to create a personality and relationship with consumers (Neti 7). As a result, this allows the emergence of consumer loyalty. Essentially, creating and sustaining brand loyalty are essential approaches to marketing. The

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various means utilized by entrepreneurs to ensure brand loyalty can be largely observed through social media marketing (Erdogmus and Cicek 1353).

Further, an essential feature of product marketing is the degree of similarity or difference the brand is seen as having in comparison to its competitors (Sujan and Bettman 454). In marketing a new product, various alternatives are available for entrepreneurs to follow. This can be done by marketing the brand as a ‘differentiated’ product within the overall market (Sujan and Bettman 454). In the case of local creative online businesses in Indonesia, the products themselves are marketed differently in the market. However, due to unfamiliarity with the products, consumers are often unaware of the presence or existence of the product. In an opening remark at the 2017 International Handicraft Trade Fair in Jakarta, Joko Widodo, the president of the Republic of Indonesia stated that the unfamiliarity of consumers with the Indonesian local craft products could be precarious to the growth of creative business in Indonesia (Hermansyah n pag). Product marketing is inherently crucial for local Indonesian entrepreneurs. As the product is positioned differently in the overall market, important attributes or product characteristics can push the brand into being superior to its competitors (Sujan and Bettman 454). According to a suggestion made by the President, a competitive edge can be gained through improving three aspects, namely product specification, pricing strategy, and on-time delivery (Hermansyah n pag).

Marketing is essential for informing consumers about the product offered by a business and cultivating the business’s brand image (Neti 9). Through this, social media plays a vital role in marketing. Interestingly, the use of social media allows business to be perceived as ‘real’ to consumers (Neti 9). Brand personality enables consumers to associate themselves with the brand.

Maximizing the marketing potential of social media is an intrinsic element in business operation. Interestingly, social media platforms have significant capacity to influence products purchased by consumers (Geho and Dangelo 61). Business-specific tools have been developed by social media platforms to encourage entrepreneurs to use social media as a marketing tool (Geho and Dangelo 61). This then allows entrepreneurs to brand an online profile. For instance,

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Facebook developed Facebook Pages Insights, which enables a business to view the number of visitors on a Facebook Business Page (Geho and Dangelo 61).

In the case of Small-Medium Enterprises (SMEs), a profound transformation in the use of social media platforms is allowing SMEs to grow exponentially. With limited capital and resources, social media has become an affordable marketing tool that enables entrepreneurs to market their local products in the competitive market (Nakara et al. 386).

Great attention should be given to considering the use of social media marketing. Concerning size, major social media platforms have a significantly large number of users (Neti 10). This signifies a vast reach of a target market. Great transparency can also be found in social media marketing. Reviews and ratings created on social media platforms allow the expression of genuine opinions about a brand from a consumer’s perspective (Neti 10). Additionally, heavy website traffic can be generated through the use of social media. Through a link to the website of a business in social media platforms, consumers can visit the website simply and instantly. To some extent, this can be regarded as virtual word-of-mouth (Neti 10).

The existence of various social media platforms available online implies a variation of use (Nakara et al. 400). A clear aim of social media use needs to be set for different social media platforms. Through clear and distinctive strategies across different platforms, businesses can effectively market their products in an appropriate manner. Social media platforms can be distinguished into two uses, namely business platforms (e.g., LinkedIn) and private platforms (e.g., Facebook).

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METHODOLOGY

In this chapter, the methodology of this research is discussed to help answer the research questions. Initially, the overall research design is presented, followed by the research method, unit of analysis, and sampling. The following section composes the data analysis of the research.

3.1 Research Design

The objective of this research is to explore the practice local creative digital entrepreneurs carry out in positioning their brands and marketing their products through the use of social media platforms. Brand positioning and product marketing can be approached in various manners on social media platforms. The use of varied media contents, such as hyperlinks, texts, images, and videos, allows a brand to be identified in the market. Such contents can also help entrepreneurs market their products in a distinct fashion to consumers.

In this research, one social media platform is analyzed, namely Instagram. As an additional platform, the websites of the local creative online entrepreneurs were also included for analysis.

3.1.1 Instagram Business Profile

Instagram, among other social media platforms, provides a simple and cost-effective means for entrepreneurs to be able to reach out to their consumers (Wally and Koshy 2). As a relatively new mode of communication, Instagram functions as a platform that allows users to upload pictures and videos into their profiles (Hu et al. 595). With significant growth in the number of users over the years, Instagram had successfully attracted over 500 million active users by the end of 2017 (Statista n pag).

As of 2016, Instagram had emerged to be more than just a private social media platform. Through a new function, named Instagram business profile, entrepreneurs can gain various advantages from the advanced features offered (Later n pag). These features may include Instagram ads, promoted posts, a contact button, and the addition of links to Instagram stories. Through July 2017, over 15 million businesses had used Instagram business profile (Later n pag).

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Without a doubt, Instagram has helped flourish local Indonesian entrepreneurs in recent years. It has substantially contributed to supporting the growth of these local entrepreneurs (Tempo n pag). For the most part, local Indonesian entrepreneurs are utilizing their Instagram business profiles as the central platform for interacting with their consumers (Tempo n pag). A sequence of enticing daily posts and Instagram stories has enabled local entrepreneurs in Indonesia to successfully position their brands and market their products (Tempo n pag).

Insightful information can be attained when exploring the Instagram business profile of Indonesian local creative online entrepreneurs. With the ever-increasing growth and popularity of utilizing Instagram as means for business, various contents can be analyzed to determine the way in which entrepreneurs position their brands and market their products in the local market.

3.1.2 Research Method

Qualitative research was conducted in this study. The use of qualitative research is best suited for this research due to its exploratory nature. In carrying out this research, an in-depth understanding of underlying reasons, opinions, and motivations was achieved. Through an inductive approach, unique findings were generated. This approach enabled initial observation to be developed into theories at the end of the course of the research (Research Methodology n pag). To a large extent, a qualitative approach in this research has allowed complex social phenomena to be understood within a clear context (Kohlbacher n pag).

The practice of content analysis was executed in this qualitative research. By definition, content analysis is an approach that allows the context of content to be analyzed by breaking it into segments. Each segment is then coded independently. The following codes were integrated into broader, substantial categories (Schreier 172). The application of content analysis is beneficial due to its ability to extort the context disclosed in the hyperlinks, texts, images, or videos of the post (Marsh and White 23).

3.1.3 Units of Analysis

In carrying out a content analysis research, both visual and textual units were clustered. The sources of these grouped data were collected from the 1) websites and 2) Instagram accounts of

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eight different Indonesian local creative online businesses. Five out of eight businesses had both the websites and Instagram accounts. However, the remaining three only used Instagram as a primary platform for positioning and marketing their businesses.

The analysis of textual contents obtained from the different categories present on the website allowed assumptions to be made on how these local businesses position their brands. As mentioned previously, local creative online businesses are positioned uniquely in the market. For instance, when browsing through the websites, under the category ‘About’, consumers can often read through the journey and story of how the brands were established. To some extent, this allows greater emotional connection between the brand and its consumers, resulting in a positive approach in positioning the brand in the eyes of the consumers.

An in-depth analysis of brand-related Instagram posts created by the local entrepreneurs was also performed. The analysis was centered on the visual and textual elements included in the posted contents and their captions. User-generated content, such as comments and likes, were disregarded in this study. This was because the focus of the study itself centers around how Indonesian local creative online businesses present themselves on Instagram, and not around how consumers perceive the businesses.

This research aimed to evaluate the manner in which local creative online businesses generate visual and textual contents of their social media platforms in positioning their brand identity and marketing their products. In carrying out this methodology, the identification of particular brand values and marketing values found in the visual and textual contents produced by the local creative online businesses helps to answer the research questions. Thus, the various approaches to positioning one’s brand could be analyzed. This also entailed the approach local businesses used to market their products to the consumers online.

3.1.4 Indonesian Creative Online Businesses

In order to answer the research question, this research investigated the manner in which local creative online businesses generate visual and textual contents of their social media platforms in positioning their brand identity and marketing their products. The selected brands include a

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variety of Indonesian creative businesses from the category of handmade ceramics (craft), batik-related goods (fashion), and jewelry (product design).

For this research, data was collected from the following local creative online businesses: ❖ Ayu Larasati Ceramics

❖ Kandura Studio ❖ Manakala

❖ Kana Natural Dyed Goods ❖ Noesa

❖ Sejauh Mata Memandang ❖ KAR

❖ Massicot

These selections were made because these brands acquired more than 10,000 followers on their Instagram accounts. This provokes the assumption that, to some extent, these newly established online SMEs are growing in terms of size and customers. In addition, these local creative online businesses also represent three subsectors, namely craft, fashion, and product design, of the Indonesian creative industry.

3.1.5 Sampling

In addressing the research questions, two samples were attained. The first sample includes the textual contexts obtained from the four websites of the Indonesian creative online businesses. Such samples were acquired to analyze the approach businesses used to position their brands to the consumers. Refer to Table 3.1 for a list of the selected websites.

Category Creative Online Business Website

Handmade Ceramics Ayu Larasati Ceramics http://ayularasaticeramics.co m/

Handmade Batik Goods Kana Natural Dyed Goods https://kanagoods.com/

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Handmade Batik Goods Sejauh Mata Memandang https://shop.sejauh.com/ Table 3.1 List of Local Creative Online Business Websites

The second sample includes visual and textual contexts obtained from the nine Instagram accounts of the Indonesian creative online businesses. Brand-related Instagram contents were selected to analyze how businesses both positioned their brands and marketed their products. As mentioned earlier, the focus of the visual and textual contexts was derived from the texts, images, and videos included in each Instagram post. For this research, brand-related and marketing-related Instagram posts were collected from each account, comprising a total of 80 Instagram posts. Identically to the first sample, the selected local creative online businesses varied from Indonesian handmade ceramics to batik-related goods and jewelry. Refer to Table 3.2 for a list of the selected Instagram accounts.

Category Creative Online Business Instagram

Handmade Ceramics Ayu Larasati Ceramics https://www.instagram.com/ alarasati/

Handmade Ceramics Kandura Studio https://www.instagram.com/ kandurastudio/

Handmade Ceramics Manakala https://www.instagram.com/

manakalaliving/

Handmade Batik Goods Kana Natural Dyed Goods https://www.instagram.com/ kanagoods/

Handmade Batik Goods Noesa https://www.instagram.com/

noesa.satu/

Handmade Batik Goods Sejauh Mata Memandang https://www.instagram.com/s ejauh_mata_memandang/

Handmade Jewelry KAR https://www.instagram.com/

karjewellery/

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massicot_/ Table 3.2 List of Local Creative Online Business Instagram Accounts

The Instagram posts were selected based on a purposive sampling method. This non-probability sampling method allows a selection of the sample based on the objective of the research (Crossman n pag). By including entities with values that were most relevant to the purpose of the research, a sample was created (Tongco 148). The chosen Instagram posts were selected from posts uploaded from the period of November 1, 2017 to May 15, 2018. Through a limited time-range, a sample of measurable size was collected.

3.2 Data Analysis

In executing qualitative data research, data analysis occurred hand-in-hand with the period in which data were being collected. By carrying out this process, the first pieces of data collected could be reviewed and mentally processed to establish unique patterns. Seemingly, appropriate analyses were essential in evaluating the data that had been collected. In illustrating the data findings, a more in-depth explanation and understanding of the qualitative research was established.

3.2.1 Grounded Theory Approach

In carrying out this research, a grounded theory approach was implemented. Grounded theory concerns the “identification and integration of categories of meaning from data” (Corbin and Strauss 70). Throughout the process, grounded theory served as a guideline in identifying numerous categories, creating links between categories, and establishing a relationship between categories (Corbin and Strauss 70). As a result, a theory was established presenting an explanatory framework for understanding the research. Interestingly, grounded theory is also referred to as a constant comparison approach due to its continuous redefinition of relationships and categories and flexible data interpretation (Marsh and White 25). As a result, theoretical insights could be developed systematically using inductive reasoning. Due to the explorative

The Significance and Impact of Social Media on Local E-Entrepreneurship: A cross-platform study on analyzing the approach of Indonesian local creative online businesses in positioning their brand identities and marketin