Sustainable Physical Resources and SME Marketing Performance: The Mediating Roles of Value Co-Creation and Pareto Sales Network in the Silk Industry

Abstract

This study aims to develop a marketing performance model for natural silk weaving Micro, Small, and Medium Enterprises (MSMEs) in South Sulawesi by examining the effects of product orientation, sustainable physical resources, and entrepreneurial orientation on marketing performance, with value co-creation and Pareto sales network as mediating variables. The study employed a quantitative, associative, and cross-sectional survey design. The research was conducted among natural silk weaving MSMEs in Wajo and Bone Regencies, South Sulawesi. From a population of 244 business operators, 142 respondents were selected using proportional random sampling. Data were analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM) with SmartPLS. The results show that product orientation, sustainable physical resources, and entrepreneurial orientation have positive and significant effects on marketing performance. Sustainable physical resources also significantly influence value co-creation and Pareto sales network, while product orientation significantly affects value co-creation and entrepreneurial orientation significantly affects Pareto sales network. There is a gap between the MSMEs' internal capabilities and their actual marketing performance. Although MSMEs possess strong product orientation, physical resources, and entrepreneurial orientation, these attributes have not yet fully translated into optimal marketing performance. Therefore, strategic interventions should focus on strengthening value co-creation and reinforcing the Pareto sales network by enhancing personal communication with key customers and optimizing the use of partner networks for market expansion.