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

Authors: Marlia Rianti; Akhmad; Sri Mardiyati; Ratnawati Tahir; Irma Sribianti
Sustainable Physical Resources and SME Marketing Performance: The Mediating Roles of Value Co-Creation and Pareto Sales Network in the Silk Industry
DOI
10.25125/ijoear-oct-2026-28
DIN
IJOEAR-OCT-2026-28
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.

Keywords
Sustainable Physical Resources Product Orientation Entrepreneurial Orientation Value Co-creation Pareto Sales Network.
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Introduction

Micro, Small, and Medium Enterprises (MSMEs) are independent business entities that play a vital role in labor absorption and contribute significantly to a nation's economic and industrial growth [2], [3]; they are also crucial for maintaining competitiveness and economic sustainability in the modern era [4]. As a developing nation, Indonesia relies on MSMEs as the dominant economic force, with the sector comprising 56.54 million units, representing 99.99% of all national economic actors. These MSMEs contributed 58.05% to the GDP (at current prices) in 2023, a figure that rose to 59.08% in 2024.

The marketing performance of natural silk weaving MSMEs in South Sulawesi remains volatile, despite the products possessing high cultural value, recognition as a distinctive local heritage [5], and status as a strategic global commodity [6]. Empirically, most MSME operators still rely on traditional marketing patterns focused on local markets and direct sales, facing limitations regarding access to broader markets, promotional capabilities, and product quality consistency. This situation results in sluggish sales growth and weak competitiveness, particularly when faced with modern textile products and imported silk fabrics offered at more competitive prices. This phenomenon highlights a gap between the potential value of the products and the actual marketing performance achieved by these MSMEs.

Marketing performance, as a measure of achievement, is also viewed as a concept for gauging the market success attained by a product. This metric serves as an indicator of a business's progress. Furthermore, marketing performance is frequently used to assess the impact of implemented strategies on outcomes such as sales volume, sales growth rates, and market share [7]–[10].

Numerous researchers and marketing experts have employed various approaches to understand marketing performance. A wide range of factors and their influence on marketing performance have been investigated and measured; these include entrepreneurial orientation [11]–[19], which has been shown to have a positive effect on marketing performance. Another variable is product innovation orientation; studies [20]–[24] have concluded that there is a positive influence of product orientation on marketing performance. Recent empirical research has identified additional variables affecting marketing performance, namely value co-creation [25]–[29] and the Pareto sales network [30]. Marketing performance is a topic situated within marketing theory, specifically within the realm of strategic marketing [31].

Substantively, strategic marketing [32] is defined as a market-driven strategy development process that accounts for environmental changes and the need to offer superior customer value. The value co-creation approach examines marketing performance based on the joint ability of the customer and the company to create product value. In contrast, the Pareto sales network approach views marketing performance from the perspective of strategic customer groups, focusing on network breadth and loyalty to the company.

Both the Pareto sales network and value co-creation approaches are appropriate when viewed through the lens of superior customer value. However, the authors take the view that they occupy different positions: value co-creation is process-oriented, whereas the Pareto sales network is outcome-oriented. From a systems approach perspective, integrating several previous research models raises questions regarding inputs; as explained by [33], the fundamental elements or components of a system are input, process, output, and feedback. Resources are required as inputs, while outputs can be extended to encompass impact.

Based on this, the researcher proposes a new input-oriented variable concerning the management of tangible and intangible resources, grounded in the Resource-Based View theory, which acknowledges the importance of resources to a firm's competitive position [34]–[36]. The new variable proposed in this study is "sustainable physical resources," with indicators comprising resource functionality, resource recombinations, and resource creation and decay.

This research is significant for advancing the study of marketing for agribusiness products, specifically natural silk weaving, and understanding the marketing performance of MSMEs. Such understanding is vital for improving community welfare, given the substantial contribution of MSMEs to the economy and their capacity to absorb labor. The central issue addressed in this study is: "How do product orientation, entrepreneurial orientation, sustainable physical resources, value co-creation, and Pareto sales networks enhance the marketing performance of natural silk weaving MSMEs in South Sulawesi?" This study aims to formulate a marketing performance model based on the relationships with these independent variables.

The problem-solving approach in this study involves formulating a marketing performance model for natural silk weaving MSMEs that integrates internal business orientations (product and entrepreneurial orientations), the sustainability of physical resources, value co-creation mechanisms, and the strengthening of strategic sales networks (Pareto sales networks). This approach aims to bridge the gap between the potential value of natural silk products and the actual marketing performance achieved by MSMEs in South Sulawesi.

Conclusion

Based on the results and discussion, the following conclusions are drawn:

  1. Product Orientation has a positive and significant effect on Value Co-Creation and Marketing Performance. This implies that the better MSME operators attend to motif uniqueness, the originality of natural silk raw materials, design innovation, and product quality, the greater their ability to engage customers in the value co-creation process, which ultimately drives improved marketing performance.
  2. Sustainable Physical Resources have a positive and significant effect on Value Co-Creation, the Pareto Sales Network, and Marketing Performance. This indicates that the management of physical resources, such as the maintenance and renewal of traditional looms (ATBM), stable raw material availability, the combination of appropriate technology with traditional skills, healthy workspaces, and the development of natural dyes and new production tools, is closely linked to the MSMEs' ability to build customer relationships, expand strategic sales networks, and enhance marketing performance.
  3. Entrepreneurial Orientation has a positive and significant effect on the Pareto Sales Network and Marketing Performance. In other words, the proactive and innovative attitudes of business operators, along with their willingness to take risks, are closely associated with the ability to build strategic sales networks and improve marketing performance.
  4. Value Co-Creation partially mediates the relationship between Product Orientation and Marketing Performance (with a VAF value of 51.5%) and the relationship between Sustainable Physical Resources and Marketing Performance (with a VAF value of 22.2%).
  5. The Pareto Sales Network partially mediates the relationship between Sustainable Physical Resources and Marketing Performance (with a VAF value of 22.2%) and the relationship between Entrepreneurial Orientation and Marketing Performance (with a VAF value of 46.9%).

n general, Bugis natural silk weaving MSMEs in Wajo and Bone Regencies demonstrate strong potential regarding product orientation, sustainable physical resources, and entrepreneurial orientation. However, their marketing performance remains at a moderate level relative to their internal capabilities. These findings indicate that enhancing marketing performance depends not only on product quality and internal business capabilities but also on how MSME operators build customer relationships through value co-creation and leverage customer and business partner networks via the Pareto Sales Network. Both aspects are crucial for the gradual development of natural silk weaving product marketing, aligned with the specific characteristics of MSMEs in Wajo and Bone.

The study's findings reinforce the Resource-Based View (RBV) perspective, which emphasizes that physical resources, managed sustainably through functionality, combination, and resource creation, form a vital foundation for achieving sustainable competitive advantage. Thus, the sustainable physical resources approach proves capable of making a significant theoretical contribution to explaining the marketing performance of natural silk weaving MSMEs in South Sulawesi.

This research has successfully identified the factors influencing the marketing performance of natural silk weaving MSMEs in South Sulawesi. However, the journey toward developing a competitive silk weaving industry remains long. Close collaboration among business operators, the government, academia, and the community is essential to realize the immense potential of this strategic commodity. It is hoped that this research contributes, however modestly, to the advancement of knowledge and the well-being of natural silk weavers in the Bugis region.

Agriculture Journal IJOEAR Call for Papers

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