MARKETING-DRIVEN MSME EMPOWERMENT MODEL FOR COMPETITIVE ADVANTAGE AND POVERTY REDUCTION IN EAST JAVA

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role in economic development and serve as a crucial instrument for poverty alleviation in East Java, yet they face a paradox of growth: while dominating the national business structure and absorbing significant labor, most remain micro-scale with limited competitiveness, market access, and income stability. This study aims to formulate an MSME empowerment model that places marketing strategy as the core capability to build sustainable competitive advantage and drive economic transformation for the poor. Employing a qualitative approach with an interpretive case study design, data were collected through in-depth interviews, field observations, and document analysis, and examined using interpretive thematic analysis. The findings reveal that marketing strategy (through product differentiation, brand identity strengthening, market expansion, and consumer legitimacy) functions as a valuable and inimitable resource within the Resource-Based View (RBV), thereby forming the foundation of MSMEs’ sustainable competitiveness. The proposed empowerment model outlines a transformation pathway: strengthening marketing capabilities, fostering competitive advantage, expanding markets, stabilizing income, creating local employment opportunities, and generating multiplicative effects in poverty reduction. Theoretically, this research enriches the literature on MSME empowerment by positioning marketing as a strategic capability, while practically it underscores the need for policy in East Java to shift from partial capital-assistance approaches toward comprehensive strategies that place marketing at the core of competitiveness development and as a tangible instrument for structural poverty alleviation.