Social Media Capability Optimization to Achieve Greater Marketing Performance for Local SMEs: A Theoretical Framework

Abstract

Social media marketing is a strategic approach that leverages social media platforms to enhance brand visibility and engage with consumers, offering significant advantages over traditional marketing methods, including cost-effectiveness and precise targeting. This study explores the concept of Social Media Capability (SMC), which encompasses the competencies necessary for organizations to effectively utilize social media for achieving marketing objectives. Strong SMC enables businesses to create engaging content, interact with customers, analyze data, and align social media strategies with overall business goals. As organizations face rapidly changing market dynamics, possessing robust SMC allows them to adapt to consumer preferences and competitive pressures. The role of Small and Medium Enterprises (SMEs) in national economies is well recognized, particularly their contributions to employment and cultural heritage preservation. In Indonesia, Batik SMEs exemplify this dual role, promoting traditional craftsmanship while providing economic benefits to local communities. However, these enterprises encounter challenges, such as limited financial resources and stiff competition from larger brands, which hinder their growth and sustainability. To address these challenges, SMEs must optimize their internal resources, guided by Resource-Based Theory (RBT), which emphasizes the importance of unique, valuable, and organized resources in achieving competitive advantage. This study proposes a theoretical framework that positions SMC as a vital intangible resource for enhancing SMEs' marketing performance, particularly in the fashion industry. By examining the integration of SMC into Customer Relationship Management (CRM) systems, this framework seeks to clarify how effective management of SMC can translate into improved firm performance. Ultimately, this research aims to provide practical insights for SME owners, highlighting the importance of SMC as an internal resource that can be strategically leveraged to gain a competitive edge in the market. Through a literature review and the development of a comprehensive framework, the study underscores the critical role of SMC in enabling SMEs to navigate the complexities of the modern business landscape and enhance their overall performance