International Journal of Engineering Business

and Social Science

Vol. 1 No. 04, April 2023, pages: 321-330

e-ISSN: 2980-4108, p-ISSN: 2980-4272

https://ijebss.ph/index.php/ijebss

321

Hybrid Process ; Defense Strategies For Micro, Small and Medium

Enterprises In The Pandemic

Nurdiana Mulyatini

, Elin Herlina

, Yusup Iskandar

1,2,3

Faculty of Economics Galuh University, Ciamis-West Java

E-mail: dianamulya@ymail.com

Submitted: 08-04-2023 Revised: 12-04-2023, Publication: 23-04-2023

Keywords

Abstract

Hybrid Process,

Marketing Strategy,

Micro, Small and

Medium Enterprises

(MSMEs)

Covid Pandemic -19 has destroyed all sectors, including the economic sector,

especially micro, small and medium enterprises (MSMEs). In the midst of

economic uncertainty, digitalization plays a very important role for MSMEs

players to survive and grow significantly. This research is intended to see the

extent to which business actors design and run online and offline business

processes (Hybrid Processes) to survive in the midst of a pandemic. The research

approach uses a quantitative approach with an explanatory survey of 100 small

business actors in Ciamis district, West Java province. The data analysis

technique used is regression analysis with the help of SPSS data processing

software. The results show that business actors who combine online and offline

strategies (Hybrid Strategy) are proven to be able to survive and achieve

significant business growth, besides that this strategy is able to create a new

ecosystem that supports MSMEs growth and economic growth.

for possible open access publication

under the terms and conditions of the Creative Commons Attribution (CC BY SA)

license (https://creativecommons.org/licenses/by-sa/4.0/).

Introduction

Micro, Small and Medium Enterprises (MSMEs) play a crucial role in the economic development of

Indonesia by contributing to job creation, GDP growth, social safety nets, exports, and investments (Sofyan,

2017)(Sarfiah et al., 2019)(Raharja & Natari, 2021)). They are recognized as a part of the national economy with the

potential to improve the welfare of the community, as stated in the 1945 Constitution. According to the Ministry of

Cooperatives and Small and Medium Enterprises, there are currently 64.2 million MSMEs in Indonesia, accounting

for 61.07% of the GDP or Rp. 8,573.89 trillion. MSMEs are able to absorb and employing 97% of the workforce,

and can collect up to 60.42 percent of the total investment in Indonesia. (Tambunan, 2020)However, the Covid-19

pandemic has negatively impacted the sustainability of MSMEs, resulting in layoffs and financial difficulties. Unlike

the 1998 monetary crisis, where MSMEs helped boost the economy, they are now struggling. Digitalization is seen

as the primary solution for economic recovery (Juliyanti & Wibowo, 2021). Moreover, the impact of the pandemic

has caused a decrease in the mobility of goods and people, thereby triggering a decrease in demand for goods and

services. (Arianto, 2020); (Farhani & Chaniago, 2021).

People's consumption patterns of products and services shifted from offline to online during the pandemic.

All digital operations, including transactions, are done digitally because they are faster, more effective, more efficient

(kusmiyati, 2021). Due to activity constraints, the business rivalry map that company actors must anticipate is

distinguished by changes in the industrial environment with four business characteristics, namely Hygiene, Low-

Touch, Less-Crowd, and Low-Mobility (Hapke et al., 2021). Businesses that can adapt to these four traits will be

successful in the pandemic era (2021, Bahtiar). Consumer wants are met by digital platforms during a pandemic,

which compels people to stay at home and keep their distance.. MSMEs are aware of the trend of consumer shifting

to digital shopping. MSMEs must be able to develop strategic business models that are able to combine online and

offline activities. ((Mubarok et al., 2021), Dinantara, Pamulang, & Pabuaran, nd) . The big challenge faced by SMEs

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IJEBSS Vol. 1 No. 04, April 2023, pages: 321-330

today is how to adapt to new normal conditions due to the Covid-19 pandemic. The pandemic has taught important

lessons about adapting end-to-end business processes with digital technology adaptation. Then

marketplace eventually become a reliable place to bring together MSMEs with consumers. (Octavina & Rita, 2021).

Nonetheless, there are evident issues with digitizing MSMEs, where poor internet connectivity remains a

barrier in certain distant places. MSME players' awareness of technology, online marketing, manufacturing

processes, and online market access is still deemed inadequate. Additionally, customers continue to be wary about

performing digital transactions. (Wijoyo & Widiyanti, 2020). Furthermore, some MSME actors have not been able

or acclimated to employing technology in their operations, necessitating a lot of adaptation steps in order for their

operational patterns to shift from selling physical storefronts to internet-based platforms. ((Arianto, 2020);)

(Rahmawati et al., 2021). The condition of low knowledge about the operation of online marketing applications

(Facebook Business, Instagram Business, WhatsApp Business, Shopee, Tokopedia, GrabFood, GoFood, etc.) from

MSME actors is an obstacle in implementing online business strategies. (Zafirah & Tandos, 2021)

The government has implemented the National Economic Recovery (PEN) program to support MSMEs,

with incentives and funding provided in 2020 and 2021. Over 30 million MSMEs benefitted from the program in

2020, with a total of Rp. 112.84 trillion in support. In 2021, the government has allocated Rp. 121.90 trillion to

continue the economic recovery momentum and assist MSMEs (Masruroh et al., 2021)). Additionally, the Proudly

Made in Indonesia National Movement Program (Gernas BBI) aims to encourage MSMEs to participate in digital

platforms. Data from the Ministry of Cooperatives and SMEs for Creative Economy Empowerment in 2021 shows

that currently the number of MSMEs that have been onboarding in the digital ecosystem has only reached 19 percent

or around 12 million MSMEs, although this number is relatively larger than in 2020 which was still at 13 percent. or

about 8 million MSMEs (Avriyanti, 2021). The role and trend of MSME business transition from offline to online

marketplace is illustrated by the results of the Katadata Insight Center (KIC) survey in 2021, including 86% of

MSMEs using 1 to 3marketplacesto market products. In fact, the rest use 4 to 6 marketplacesas sales channels

(Alfrian & Pitaloka, 2020).

According to the results of the Digital SME Confidence Index 2021 explained that the 2021 Digital SME

Confidence Index showed an index number of 2.49, an increase of 4.9% compared to the 2020 SME Confidence

Index (2.37), this showed an increase in digital SME optimism in line with the index's convergence to normal

conditions (index 3.0) and 20% of businesses have switched their sales channels from offline to online during the

pandemic and 89% of businesses are using online channels to sell their products/services.

Based on data from the West Java Province Industry and MSMEs Service, before the COVID-19 pandemic,

only 20 percent of West Java MSME players entered the marketplace. After being assisted and trained, now 34

percent of MSMEs have entered the marketplace (Annur, 2020).

The number of MSMEs in West Java Province by business category is shown as follows:

Table 1. Number of MSMEs by Business

Business Category

Total

Business Category

Total

Accessories

14,567

Convective

310,060

Batik

14,567

Culinary

2,239,092

Embroidery

2,081

Food

1,637,701

Craft

520,235

Beverage

303,817

Fashion

507,750

Services/Other

707,520

Source: Open Data West Java (2021)

From this data, in general, the limited activity of MSMEs due to the PPKM policy for several quarters in

2021 has an impact on decreasing performance for MSME actors. Based on a report from Bank Indonesia in the first

quarter, it revealed that only 26.2% of MSMEs actively use e-commerce for sales, 69.5% of MSMEs do not have

bank loans, and only 6.1% have loans from fintech and non-bank financial institutions. other. Based on data from

the MSME Crisis center in West Java, many MSMEs have been affected by the pandemic in almost all areas in West

Java Province

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Source: ABDSI-UMKM Crisis Center, West Java 2021

Figure 1. West Java MSMEs affected by the Covid-19 Pandemic

For the Ciamis Regency area based on West Java Open Data data in 2021 there are 188,633 MSMEs and

39% affected by the pandemic. Many things have been done by the Regional Government of Ciamis Regency to

carry out recovery for MSMEs affected by the pandemic through three stages, namely: emergency response,

restructuring and recovery. The government has launched a digitalization program to encourage MSME

competitiveness not only because of the pandemic, but also technological disruption that requires MSMEs to go

digital. This research is intended to see the extent to which MSME actors take advantage of the development of

information technology and design a business by utilizing a digital platform with a Hybrid Strategy, namely running

a business with online and offline processes. (Justitia et al., 2021).

Hybrid Process

In marketing, it is known as (hybrid marketing) which is a combination of various strategies, methods,

processes, and tactical approaches to achievemarketing objectives. Hybrid Marketing covers a wide range of areas

from the combined use of various strategic planning processes to the strategic use of different distribution channels.

(Li, 2000) (FITRI, 2022). The hybrid marketing model is a smart management strategy to achieve greater profits in

the digital era, not only serving offline but also marketing products online through digital platforms. (Chang et al.,

2021). The digital platform is a location, container, or mechanism for people to gather in order to share information,

trade, or offer services and products. All of the above actions may be completed in one location thanks to the

existence of a digital platform. Juliyanti and Wibowo (2021). When a single marketing method is insufficient to

target different market groups, hybrid marketing is utilized (Yogandhi & Darma, 2021). Hybrid marketing nowadays

is integrating two or more marketing or advertising approaches to produce a coherent concept. (Tang et al., 2022).

The COVID-19 pandemic has changed people's behavior a lot. This condition has forced companies to start

changing the way they do business, which initially used traditional methods to switch online to digital marketing, or

for companies that have been using two methods, namely online and offline, are now turning to digital marketing

strategies. (Kingsnorth, 2022).The main advantage of digital marketing is that it can target a wider market at much

less cost and in much more scalable ways. (Chaffey & Ellis-Chadwick, 2019). The other advantages of digital

marketing are that more cost-effective, does not need to use sales human resources, the Marketing team does not

need to go into the field, the product branding process is easier and has high growth potential. (Mandal & Joshi,

2017), Digital marketing is a marketing or promotional activity using digital media with the aim of attracting

consumers quickly. (Giantari et al., 2021). The types of digital marketing commonly used according to (Awaluddin,

2021) include: websites, search engine marketing, social media marketing, online advertising, email marketing and

video marketing (Chakti, 2019).

To implement a hybrid marketing business model strategy, companies must be able to analyze the business,

carry out digital development and collaborate with delivery service operators, prepare skilled human resources to

serve customers quickly, and maximize digital promotions by creating creative content uploaded to social media for

promotion. build brand awareness and develop more diverse products. (Zafirah & Tandos, 2021)

Marketing Strategy

Marketing strategy is an effort to market and introduce products and services to the public. This business

strategy is able to reach consumers who are targeted and considered prospective. (Elwisam & Lestari, 2019). A good

marketing strategy is the key to the success of any type of business. Without a marketing strategy, the business will

have no focus. Without focus, we will fail in achieving the goals and objectives that have been set. Failure to plan

means failing to build a business. (Farinloye et al., 2020).For this reason, marketing planning needs to be done, the

marketing plan is a component of the marketing strategy, which comprises comprehensive marketing activity

documentation and a timetable for implementing marketing objectives. (Palmatier & Sridhar, 2020). Marketing

strategy is more long-term than marketing plan. This is due to the fact that the marketing strategy covers the overall

picture of the message to be given, whilst the marketing plan describes the specifics of how to carry out the stated

strategy. (Hughes et al., 2020) Choosing the right marketing strategy for the company will bring huge profits. The

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4p marketing strategy becomes the basic component and becomes the initial benchmark for the business so that

consumers want to buy their products. The important elements in a marketing strategy are product, message,

customer, promotion and marketing team (Funk et al., 2022). The 4p marketing strategy or also called the 4p

marketing mix includes product, price, place, and promotion (Linardo, 2018). The advantages of developing a

marketing strategy include increased sales, long-term growth for the company, understanding what customers want,

meeting needs and exceeding customer expectations, strengthening relationships with target markets, and the ability

to build a brand in the minds of consumers. (Naimah et al., 2020)

Elder n types of marketing strategies have an end point in profit maximization, but generally the objectives

of marketing strategies are seen in the implementation process including: 1) Determining the right target market, 2)

Maximizing the allocation of company resources. (Rahmawati et al., 2021)). As for the function of marketing

strategy; 1) As a product marketing guideline, 2) As a measure of success, 3) as a control tool in supervision

(Mandasari et al., 2019), Marketing strategy influences several distinct aspects at the same time, each of which has

a part in deciding an organization's sales income and profit. (Palmatier, RW, & Sridhar, S. (2020)

Micro, Small and Medium Enterprises (MSMEs)

According to Law Number 20 of 2008 on Micro, Small, and Medium Businesses, MSMEs are business

groupings controlled by a single person or a group of persons. various corporate entities according on predetermined

criteria, such as: 1) Micro-enterprises have annual sales of up to Rp. 2,000,000,000.00 (two billion rupiah); 2) Small

businesses have annual sales of more than Rp. 2,000,000,000.00 (two billion rupiah) but less than Rp.

15,000,000,000.00 (fifteen billion rupiah) and the working capital criteria are: Limit Rp.1 billion for a microbusiness.

Small Business: Rp. 1 billion to Rp. 5 billion, More than IDR 5 billion to IDR 10 billion for Medium Businesses.

Small businesses are included in the MSME category, where this type of business has an annual net worth of not

more than Rp.300,000,000.00. There are three types of small businesses, namely small industries, small-scale

enterprises, and informal enterprises. Medium enterprises are also included in the MSME category. (Nugraheni et

al., 2020). The current pandemic condition can be a challenge as well as an opportunity for MSMEs in an effort to

improve and empower their business, so that they are able to develop into a tough and strong business. With hard

work and creativity, MSME actors must be able to innovate in marketing their products, while maintaining quality,

characteristics, mature concepts and strategies, and must also be adaptive, especially during the pandemic (Alfin,

2021).

During the pandemic, there are two main problems faced by MSMEs, namely: 1) financial problems and

supply/demand, including the lack of operational facilities, resources, and funding, 2) MSMEs are still lacking in

mastery of digital platforms. (Setiono, 2020). The e-commerce sector can provide a better understanding of the use

of online platforms so that MSMEs can market products effectively, e-commerce now refers more to digital

technology or the internet. Both can be used to run e-commerce based on the 4C principles of connection, creation,

consumption, and control (laura Hardilawati, 2020), (Susanti et al., 2020)). The e-commerce industry may create

relevant services to help MSMEs digitize. An adaptive approach needs to be applied by generating profits through

MSME services (Firdaus et al., 2020).

To survive the pandemic, MSMEs should adopt several strategies. Firstly, they should prioritize meeting

the needs of consumers. Secondly, they should continue to innovate and create products and services that align with

changes in consumer preferences and behavior. Thirdly, they should invest in research and development to enhance

their resilience in times of crisis. Fourthly, they should not become complacent, as competition will intensify. Fifthly,

they should prepare the next generation of MSME leaders to be more resilient. Sixthly, they should maintain good

relationships with vendors, suppliers, and distributors. Seventhly, they should join MSME organizations to expand

their networks and businesses. Lastly, they should collaborate with banks as strategic partners to obtain financing,

information, and assistance for business development. (Susanti et al., 2020)

Based on the theoretical framework above, the following hypothesis can be formulated:

Partially there is a positive and significant effect of Hybrid Process on MSMEs

Performance

Partially there is a positive and significant effect Significant Marketing Strategy on

MSMEs Performance

Simultaneously there is a positive and significant effect of Hybrid Process and

Marketing Strategy on MSMEs Performance

Materials and Methods

The research method used is a descriptive method that describes the characteristics of the population or

phenomenon being studied. (Syahril Iskandar, 2020), with a quantitative approach that emphasizes the analysis of

numerical data (numbers) processed by statistical methods with an explanatory survey research design to test the

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hypothesized inter-variable relationship (Rukajat, 2018). In this study there are 2 (two) independent variables,

namely Hybrid Process with offline and online indicators and Marketing Strategy with product, price, place and

promotion indicators and one dependent variable, namely MSME Performance with indicators of increasing

income and increasing the number of consumers. Data collection techniques used a questionnaire to 100 MSMEs

actors who became the research sample taken at random. The data analysis technique used is regression and

correlation analysis with the help of SPSS data processing software.

Results and Discussions

Kondisi Persaingan Notaris Bank

From the research results from questionnaires distributed to 100 respondents in this case MSME actors

with the following characteristics:

Source: Research Results, 2022

Figure 2. Characteristics of Respondents.

Male (58%) with the most education level Bachelor Degree (38%), length of business 6-15 years (49%)

and the most type of business, namely in the culinary and other fields (food, beverages, handicrafts, etc.) with the

proportion of each 30%. The MSMEs who became respondents mostly marketed goods through 3 marketplaces

(Shopee, Bukalapak, Lazada) and the most widely used media was Instagram with a minimum monthly sales

turnover of 15-25 million.

From the empirical data obtained, then testing the data obtained through Validity which emphasizes the

accuracy of measurements and reliability which emphasizes the reliability of measurements. The validity value is

used to measure the validity or validity of a questionnaire.

Table 2. Validity of Research Instruments

Variable

Number of

Questions Questions

Hybrid

Process Process

10 questions

Valid

Marketing Strategy

10 questions

Valid

MSME

Performance

15 questions

Valid

Source: SPSS data processing Results

From these data the research instrument is said to be valid and valid as a measurement instrument if the

value is > from 0, 30 (according to Sugiyono in (Saputra, 2020). To evaluate the consistency of responses from

respondents for all indicators, one of which is Cronbach's Alpha with the reliability of the instrument as follows:

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Table 3. Reliability of Research Instruments

Variable

Cronbach's Alpha

Decision

Process

0.754

Reliable

Marketing Strategy

0.791

Reliable

MSME

Performance

0.837

Reliable

Source: SPSS Data Processing

Results reliability test shows that 0.7 identifies satisfactory internal consistency reliability so that it is

worthy of being used as a research instrument with a good degree of reliability (good). (Silalahi, 2018). It means

that all of the research variables are declared reliable or meet the requirements to be used as research measurement

instruments.

The results of descriptive calculations by comparing the interpretation criteria are obtained as follows:

Table 4 Achievement Criteria for Each Variable

Variable

Mean

Std Deviation

Range

Hybrid Process

9,360

5,67

,770

,110

Marketing

Strategy

0,530

5,72

,600

,450

MSME

Performance

2,560

7,54

,010

,960

Source: Results of SPSS data processing.

Based on descriptive calculations, the overall score achievement criteria for all variables are on the criteria

enough to get better. Meanwhile , to find out the linear relationship between research variables through

Correlation Matrix which is processed with SPSS Software , namely:

Table 5. Correlation Coefficient Through Correlation Matrix

Variables

Hybrid

Marketing Strategy

MSME Performance

Hybrid Process

1,000

0.380

0.464

Marketing Strategy

0.380

1,000

0.260

MSME Performance

0.464

0.260

1,000

Source: SPSS Data Processing Results

From the data above the relationship between variables Hybrid Process on MSME Performance obtained

a correlation value of 0.464 with a moderate degree of relationship (relative relation), the relationship between

marketing strategy and MSME performance obtained a correlation value of 0.260 with a rather weak relationship,

and the Hybrid Process and Marketing Strategy relationship obtained a value of 0.380 with a degree of relationship

strength. a bit weak.

The results of the verification analysis in order to analyze the model and useful evidence to find the truth

of the proposed hypothesis using the regression value as follows:

Table 6. Hypothesis Testing Results Partial and Simultaneous

Model

Unstandardized

Coefficients

Stand

ardized

Coefficients

ig.

d. Error

Beta

(Const

ant)

42,0

253

,724

000

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Process Hybrid

,323

040

,105

,993

000

Marke

ting Strategy

,395

,299

,839

000

a. Dependent Variable: MSME Performance

ANOVA

Model

Sum

of Squares

an Square

ig.

egression

432,

271

216

,135

,033,00

198,369

esidual

53,5

563

0,640

otal

. Dependent Variable: Performance of SMEs

b. Predictors: (Constant), Marketing Strategy, Hybrid Process

Source: Results of SPSS data processing.

Based on the results of data processing, it shows the t-count value > from the t-table value with an alpha

of 0.05, which is 1.661, where partially both the process Hybrid variable and the marketing strategy variable on

the performance of MSMEs has a positive and significant influence and has been proven true. Meanwhile,

simultaneously the effect of Hybrid Process and Marketing Strategy has a positive and significant influence on the

performance of MSMEs with a calculated F value of 4.033 > from F table which is 2.70. The value of the coefficient

of determination is shown in the following table:

Table 7. Value of the coefficient of determination

odel

Square

Adjust

ed R Square

Std.

Error of the

Estimate

Durbi

n-Watson

Square Change

52,

.158

1.320

62 1.464

Sourc

Source: SPSS data processing Results

Based on the table, it can be seen that the R value of 0.352 means that the Hybrid process variable and

Marketing Strategy affect the MSME Performance variable by 35, 2%, while the remaining 64.8% is influenced

by other factors outside the study.

From the results of the study, it can be seen that MSMEs in Ciamis Regency during the pandemic used

digital platforms to market goods and help marketing branding during the pandemic, and it was proven that the

marketing strategy through the Hybrid process used was able to increase income and the number of consumers,

this is in line with research (FITRI, 2022); (Rahayu et al., 2022). hybrid process easier for MSME actors to provide

information and interact directly with consumers, expand market share, increase awareness and increase sales for

SMEs.

Conclusion

Based on the results of the study, it can be concluded that during the pandemic, MSMEs are required to

make strategies to be able to survive amid changes in people's consumption patterns and all-digital activities. The

hybrid process is a marketing strategy choice for MSME actors. Based on the research results, many MSME actors

choose to use the collaboration of these offline and online strategies. Although in its implementation there are still

many obstacles, especially digital literacy problems. The results showed that there was a positive and significant

effect of the hybrid process on the performance of MSMEs even though the effect was relatively small, but it

showed that with the limitations it had, MSMEs were able to survive as indicated by the ability to increase sales

turnover and increase the number of consumers, as well as from all the indicators studied. are in the criteria of

being quite towards good.

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This research is expected to be able to contribute to the development of science and can be useful for

improving the performance of micro, small and medium business actors, especially during the pandemic in making

the best strategies and alternatives to market the products they produce (Irwansyah et al., 2021).

Acknowledgments

We would like to thank the Journal Manager who has given us the opportunity to publish the results of

this research. In addition, I would also like to thank the resource persons and MSME actors who have provided

information to improve the results of this research so that it deserves to be published. May Allah SWT repay all

the kindness that has been given to us.

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