Review Article
Austin J Bus Adm Manage. 2023; 7(2): 1060.
The Utilization of Instagram as a Marketing Strategy for SME in Indonesia (A Case Study on @khimar.yumnaa)
Putri AA; Kywe ChK; Temiralieva M; Jabrayilzade T; Tick A*
Keleti Károly Faculty of Business and Management, Óbuda University, Hungary
*Corresponding author: Tick A Keleti Károly Faculty of Business and Management, Óbuda University, 17 Tavaszmező str., Budapest, Hungary. Tel: 1084; +36 1 666 5261 Email: [email protected]
Received: July 14, 2023 Accepted: August 09, 2023 Published: August 16, 2023
Abstract
Small and Medium Enterprises (SMEs) are becoming more popular in Indonesia, especially after the pandemic. The government also encourages people to establish their own businesses as it has a good impact on the nation’s economy. @khimar.yumnaa, is one of the Indonesian SMEs established in 2017. Unlike other SMEs which usually failed 1-2 years after it was first established, @khimar.yumnaa is able to sustain their business for more than 5 years. Instagram is now becoming one of the most popular tools for SME marketing, and @khimar.yumnaa is also utilizing Instagram as its main marketing platform. Therefore, this research aims to describe the marketing strategy of @khimar.yumnaa and its effectiveness towards their business by doing an analysis on the Instagram features by @khimar.yumnaa. This research is implementing a qualitative study by doing four semi-structured interviews that were conducted with the owner and also 3 customers of @khimar.yumnaa. The outcomes show that optimally using the Instagram features, building interaction with customers, and having good content planning are the main drivers for the success of @khimar.yumnaa Instagram marketing strategy.
Keywords: SME; Instagram; Marketing strategy; Social media marketing
Introduction
The Small and Medium Enterprises (SMEs) sector in Indonesia currently has a major and crucial contribution towards the nation's economic growth. According to the latest press release published by the Coordinating Ministry For Economic Affairs of The Republic of Indonesia, as of 2022, the SME sector contributes up to 60.5% towards the national GDP, and it also has a contribution of 96.9% towards the total national employment absorption [1].
Based on this fact, SMEs are believed to be able to not only reduce the unemployment rate but also to strengthen Indonesia’s economy in the present time and also in the future. That is why right now, the government of Indonesia is showing and providing full support to SME owners through empowerment programs such as training. SMEs have also recently become very popular in Indonesia, especially after the Covid-19 pandemic hit and many workers were getting laid off from their companies. In the midst of this precarious situation, they had to find a solution to be able to continue their lives, therefore during the Covid-19 period many SMEs had sprung up, especially among the younger generation. Based on the most recent data, currently, there are around 9 million SMEs in Indonesia as of 2022 [2].
Despite the fact that currently the SME sector is growing rapidly and has a major contribution towards the nation’s economy, it does not cover up the fact that the SME sector is also facing several challenges. The main problems include lack of knowledge in managing financial activities and also a lack of knowledge in marketing, which unfortunately leads most of the SMEs in Indonesia to go bankrupt within only less than 2 years of operating [3].
In this competitive era, not only do business owners need to have a good product, but they also need to have a good marketing strategy to keep growing and due to the digitalization, at present a lot of SMEs in Indonesia are using digital media such as social media platforms to market their products. This is supported by the fact that the internet and the technology in this digital era has grown rapidly, and many people are starting to spend more time online [4]. Therefore, it would be more financially efficient for a business to market their product through online platforms. Instagram is one of the most popular social media platforms nowadays. It exists as an embodiment of technological advances. Its use has developed from being just a platform for virtual social networking through photo and video sharing, into a marketing platform as well [5]. Through Instagram, SME owners are able to share photos and videos through their accounts, and are able to interact with customers through some other features provided by Instagram, such as direct message and Instagram stories. In other words, Instagram is one of the best solutions for marketing, especially for small businesses.
Even though Instagram has many advantages and many features that can be used for marketing purposes, using it without implementing a good strategy will be useless. It is important for a business to understand a good marketing strategy in order for them to be able to fully optimize the use of Instagram platform and also the features that they offer. Even though many SMEs are now starting to use Instagram as part of their marketing strategy, which is good because they are following the market trend and using a financially-efficient method to market their product, many still really need to learn on how to do it properly to be able to succeed and avoid failure in the first year.
The current situation that has been mentioned above has raised urgency in a study on how to do a proper marketing strategy on Instagram for SMEs in Indonesia. Based on this, the researchers decided to do a study on one of the SMEs in Indonesia that has successfully sustained their business for more than 2 years and is using the Instagram platform as their main marketing strategy. @khimar.yumnaa is an online-based Indonesian SME that has been established since 2017. They sell various types of hijab for Muslim women ranging from the age of 20 up to 55. Unlike most other SMEs in Indonesia that usually use both social media platforms like Instagram and also e-commerce platforms to market their product, @khimar.yumnaa only uses Instagram since they were first established. Currently, they have more than 22,000 followers on Instagram. The owner of @khimar.yumnaa started the business in 2017 with an initial capital of only around 600,000 IDR (45 EUR). Now, they are successfully obtaining revenue of more than 40,000,000 IDR (2,500 EUR) per month. Ever since they first operated, the only marketing platform used is Instagram.
Doing a study on a successful SME will surely help other SME owners in Indonesia to learn how to market their product properly through Instagram, especially those who also sell similar products which then will lead them into having a successful business. By doing this research, the effective marketing strategies through Instagram can be identified and it is hoped that there will be more successful SMEs in the future. The more successful the SMEs, the greater the impact on the Indonesian economy, which is going to be beneficial for the whole nation. The outcome of this research will be able to provide solutions to the problems and challenges that the SMEs in Indonesia are currently facing, especially in the scope of marketing, due to the fact that this research will focus on the basis of how @khimar.yumnaa implement a marketing strategy through Instagram to market their product effectively. Based on the background above, this research aims to describe the marketing strategy of @khimar.yumnaa and its effectiveness towards their business by doing an analysis on the usage of Instagram features by @khimar.yumnaa. The paper is structed as a theoretical background will be provided, as well as the method used and the data obtained along with the result analysis, and lastly it will be closed with a conclusion based on the analysis of the result.
Literature Review
Many studies have been conducted to determine how social media platforms like Instagram may be used to help small online businesses and improve business performance. Due to its low cost and minimal technical requirements, social media is the most widely used digital platform and has become a trend. Businesses utilize social media not just as a tool for marketing, but also to gather data on the market, competitors and customers in order to increase productivity and innovation. Social media is particularly beneficial for businesses in promoting their goods, reducing marketing expenses, strengthening consumer relationships, gaining market share, and accessing information for product development [6]. The research of Shah et al. [7] states that companies are increasingly shifting their business to social media platforms like Instagram, which allow users to engage with each other. Companies are making effective use of this capability to market their brands and promote their products in a cost-effective way [7].
Furthermore, several studies have been done to examine how Instagram contributes to social network marketing. Social media is a medium of internet communication that enables people to interact without being constrained by time or geography. Instagram is one of the most popular social media platforms and one of the most used applications among social media users. Instagram can be used as one of the tactics in MSMEs marketing which can benefit small businesses since it can increase sales, and expand marketing [8]. According to Alfaruq [9], Instagram is an important marketing tool that enables effective corporate communication. Businesses can engage with their customers on Instagram by posting photos and videos to share information, and receiving comments and like to get customer feedback [10].
Another study has been conducted by Akbar [11] to discover the factors that influence the usage of Instagram and its impact on the financial and non-financial performance of Malaysian SMEs. The results from this study show that cost-effectiveness, innovative behavior, and interaction all have a good impact on Instagram use for business. The findings also revealed that using Instagram for business has a significant beneficial impact on the financial and non-financial performance of SMEs [11].
Following all of the studies on finding the impact of social media on a business, it can be concluded that social media is very useful to enhance business performance, especially for SMEs. Social media has a lot of features that can be be utilized for marketing purposes in a cost-effective way. Despite the fact how useful the platform can be to a business, if the businesses don’t have adequate knowledge on how to fully utilize it then it won’t be effective.
While extensive research has been conducted to discover how effective a social media platform can be towards a business using a quantitative methodology by spreading questionnaires to both practitioners, which are the SMEs and also the customers, not much research has been conducted to deeply understands and discover how a successful SMEs utilizing the Instagram features as their main marketing strategy. Therefore, the purpose of this paper is to do an analysis on the usage of Instagram features by one of the successful SMEs in Indonesia.
Methods
This research aims to describe the marketing strategy of @khimar.yumna through Instagram and also to describe its effectiveness, therefore both qualitative and quantitative methods will be used in this research because it is required to perceive the interview with the owner and employee of the business more deeply in order to understand how the company is utilizing Instagram for product marketing effectively and successfully. The researchers will also do an observation on @khimar.yumnaa Instagram page to gain sufficient data for the research.
The sampling method used in this research is purposive sampling with non-probability technique. Primary data collection will be conducted in the forms of semi-structured interview with the owner and also 3 customers of @khimar.yumna who agreed to participate in the study. They will be interviewed separately, the interviews will be audio-recorded and notes will be taken during the interviews. Two types of semi-structured interview questionnaires will be developed. The first version is for the owner and the second one is for the customers. All of the interviews will be conducted virtually through google meeting due to the different location between the researchers who are currently residing in Hungary, and the interviewees who are residing in Indonesia. This method is used in purpose to save both time and costs.
To stay in ethical conduct, the researchers will provide a digital consent form for all of the interviewees that later they will sign and send back to us after the interviews are done. All participants’ identities will be kept anonymous.
The research analysis method used to analyze the interview results is a source triangulation method, where the researchers will compare answers from different sources to enhance the results’ validity.
This research paper hopes to give additional references specifically in the scope of marketing communication and also as supporting data for the upcoming research in the same field, especially about the use of Instagram as social media for SMEs marketing strategy. The researchers hope that the result of this research will increase the knowledge of the reader in the world of marketing communication, especially about social media marketing.
Results
From the results of the data collection which was done through online interviews with the owner and also 3 customers of @khimar.yumnaa, the results will be divided into 3 different parts. On the first part, the researchers will analyze the information about how @khimar.yumnaa optimally utilized the instagram features to market their product effectively, the second part will be about the interaction and also engagement that @khimar.yumnaa do on a daily basis with their customers, and lastly is the content planning process of @khimar.yumnaa. The details of each finding will be described as follows.
Utilization of Instagram Features
Based on the interviews, the owner of @khimar.yumnaa stated that they are optimally utilizing all of the features available on Instagram platform for marketing purposes. The features include direct message, story, highlight, post and its caption, reel, biodata to put necessary information on the profile surface and also Instagram paid advertising which is known as ‘sponsored content’. Optimally utilizing these features is one of the key successes of @khimar.yumnaa marketing strategy. Of all the Instagram features used by @khimar.yumnaa, it is found that the Instagram paid advertising is the most effective feature to attract new customers. It is due to the fact that upon using this feature, the followers increased rapidly in a constant. During the interview, the owner stated that ‘After I paid for the Instagram sponsored feature, usually @khimar.yumnaa will gain around 100-150 new followers on the same day. So I would say this feature is very effective to attract new followers and expand the market.’
It is also supported by the fact that 2 out of the 3 customers of @khimar.yumnaa that were interviewed stated that they found the platform through a sponsored content feature on their personal Instagram account, while the other 1 found the platform through electronic word-of-mouth. The Instagram paid advertising is a paid feature offered by Instagram, where Instagram as an application helps to automatically suggest the business account through Instagram of the potential target market suitable for the business.
The data retrieved from Instagram analytics of @khimar.yumnaa shows that the platform has approximately 50 new followers every day, which is quite a significant number for a small business that only uses Instagram as their marketing platform. This shows that @khimar.yumnaa has good followers growth. Figure 1 below shows the comparison of the numbers of @khimar.yumnaa Instagram followers from 21st of May 2023 to 26th of May 2023.
Figure 1: Instagram followers growth of @khimar.yumnaa (Source: @khimar.yumnaa).
@khimar.yumnaa also utilizes the Instagram story feature for updating new coming products and ready stock products to the customers. According to the owner, Instagram story is the feature that @khimar.yumnaa uses on a daily basis. The owner stated that posting instagram stories can help @khimar.yumnaa as a platform to give regular updates to the customers. Unlike instagram posts which can sunk and being overlooked by the customers, Instagram story will always appear on the top page of the customers’ Instagram surface if they hasn’t seen the story. One of the customers being interviewed stated that ‘I’m always waiting for @khimar.yumnaa to post Instagram stories, because I want to see the upcoming products and available products, in case I want to buy.’
The owner of @khimar.yumnaa stated that posting contents on Instagram stories can be more varied compared to Instagram post as they already have the specified theme for the content of Instagram post to make it more neat and professional to look at as a business page. Through Instagram story, it can also enhance the interaction with the customers which then will lead to increased engagement. Other than using the features offered by Instagram to market their product, the owner of @khimar.yumnaa also uses an influencer marketing strategy to reach more followers. One of the followers being interviewed stated that she found @khimar.yumnaa through one of the influencer’s Instagram stories. ‘I’m one of the followers of Laudya Cinthya Bella (one of Indonesian macro-influencer), and I happened to found the Instagram of @khimar.yumnaa through her story when she was reviewing the products that she bought from @khimar.yumnaa.’
While usually other businesses need to pay a certain amount of money for the influencer to promote their product, @khimar.yumnaa faced different case multiple times. There were times when suddenly influencers reached out to @khimar.yumnaa through Instagram direct message because they want to buy some products. Afterwards they freely gave reviews about the product thorugh their personal Instagram account and tagged @khimar.yumnaa Instagram, which then became free marketing for them. This proves that @khimar.yumnaa is able to even convince special customers, which are celebrities to buy their product through their marketing effort.
Moreover, to make it easier for the customers to access informations about the products being sold, @khimar.yumnaa also optimally utilizes the Instagram post caption feature. They put all of the necessary informations in the post’s caption such as size available, detailed materials of the product, variety of colors, features and also price of the products. Providing all of these important informations in the caption under the post ease the customers to find which products fit their interest or need the most. This is proven by the fact that one of the customers being interviewed stated that ‘Whenever I want to buy something online, I need to see if the seller put all necessary information about the product under their post. Sometimes, if the informations are not enough, I will shift to other sellers which provide adequate informations of the product on their post, so that I don’t have to text and wait for answer only for general informations about the product.’
The owner of @khimar.yumnaa also highlighted that the choice of words being used when posting a content on instagram must be taken into consideration. As a business platform, they need to make sure all of the customers will understand what they wrote in order to prevent misinformations and miscommunications, as the customer segment of @khimar.yumnaa varied starting from woman from age 20 until 55 years old. This will help to reduce the workloads of @khimar.yumnaa owner who managed the social media alone.
Customer Interaction and Engagement
Customer interaction is a key success for the establishment of an engagement. If a company successfully interacting with customers through their marketing platform, it is most likely that they will have a good engagement rate. In effort to engage with the customers, @khimar.yumnaa interact frequently with the followers through the features offered by Instagram. Overall, currently @khimar.yumnaa has a total engagement rate of 0.82% on their Instagram account. According to an article published by Hootsuite, the average engagement rate for an Instagram account with more than 10.000 followers is 0.67% [12]. This can be said that the engagement rate of @khimar.yumnaa Instagram platform can be considered as above the average (Figure 2).
Figure 2: Engagement rate of @khimar.yumnaa.
As for now, the owner of @khimar.yumnaa is the only one who manages the Instagram account on a daily basis. According to the owner of @khimar.yumnaa, the platform usually receives more than 10 messages of Instagram direct message on a daily basis, especially after they posted something about the product on Instagram story. In regard to this, the owner of @khimar.yumnaa always tries to respond quickly to the customers’ messages during office hours. According to the owner, when interacting with customers, a casual style of conversation is used. The purpose of this is to make the customers become comfortable and feel more like a friend instead of just a customer. During the interview, the owner stated that ‘Establishing bonds with customers for me is very important. I took the advantage of being the only Instagram admin for @khimar.yumnaa to develop a relationship with the customers. As for some of the customers, because they are already feel comfortable talking to me, sometimes our conversation even goes beyond than just about ordering product.’
All of the customers being interviewed also stated that they feel comfortable and trust @khimar.yumnaa more than the other online shops who sell similar products because the owner of @khimar.yumnaa is very friendly and also responsive especially during office hours. In addition, as they already develop a close relationship with the owner, and are always satisfied with the products they purchased, therefore every time they purchased a product from @khimar.yumnaa they will make a post via their personal Instagram story and tagged @khimar.yumnaa Instagram due to the fact that they want others to know about @khimar.yumnaa. The 3 customers also said that they had recommended @khimar.yumnaa products to their closest friends. All of these things were done by the customers without being told or lured a reward in return whether in the form of free products or discounts by the owner of @khimar.yumnaa.
In order to appreciate the effort of the customers in giving reviews through their personal Instagram, @khimar.yumnaa decided to implement a campaign called #IWearYumna where they reposted the Instagram stories uploaded by the customers and put it into the Instagram highlight. The owner stated that not only this will make the customers feel appreciated, but this also can serve as proof that @khimar.yumnaa is a trusted online shop to other potential customers that just found their Instagram account. According to the owner, Instagram stories is a really effective and good feature to encourage interaction with customers. @khimar.yumnaa also do a giveaway once in a while and encourages customers to participate by posting their best ‘outfit of the day’ picture while wearing @khimar.yumnaa product.
Other than direct message and Instagram story, the other feature that allows the owner of @khimar.yumnaa to interact more with the followers is through instagram post’s comment section. Usually, when they are about to release new products, they will post a ‘sneak peak’ content on their Instagram. The purpose of this is to increase the curiosity of the customers and will make the customers stay updated with the contents posted by @khimar.yumnaa through Instagram. One of their post with a good engagement rate of 1.30% is the post about the sneak peak of the new product that was posted on 8th of April 2023 as can be seen in Figure 3 and 4 below.
Figure 3: Overall survival, autologous stem cell transplant (ASCT) versus no ASCT (p=0.12).
Upon 6 years of operating, the owner of @khimar.yumnaa stated that so far they never had negative feedbacks that were being posted on social media account. Indeed they received some complaints, but they handled it very quickly and gave options for customers. For instance, the product received by the customer has small dents in it, after giving the proof, usually the owner of @khimar.yumnaa will offer 2 choices. Either the customer can return it and get full-refund, or the customers can keep the product but for the next purchase they will get a discount. The owner stated that most of the times the customers will choose the second option rather than the first one. This shows that a matter of communication is very important.
Figure 4: Posting statistics of the past with the highest engagement rate (Source: @khimar.yumnaa).
Content Planning Process
The content planning process of @khimar.yumnaa includes photo-shooting, the timing for posting content, and the theme of the post including the design. In the process of content planning, the owner of @khimar.yumnaa is being helped by a family member, which is her husband. Most of the time, the owner of @khimar.yumnaa is the model for the product catalog photos, but sometimes, they also hire someone else to become a model. They did most of the photoshoot at home, to save time and cost. Upon finishing with the photo shoot, the editing process will start. During this process, her husband helped her again in graphic designing and photo-editing, the both of them worked together on deciding the theme and color grading for the photos (Figure 5).
Figure 5: @khimar.yumnaa instagram posts (Source: @khimar.yumnaa).
As for now, @khimar.yumnaa has a nude darker shades nuances with a very simple design, but pleasant to look at. The theme color is adjusted to the colors of the products sold by khimar.yumnaa which make it fits perfectly. One of the customers being interviewed also stated that the contents posted by @khimar.yumnaa on their Instagram feed is very modern and not too tacky so it's nice to look at. The popular term for this kind of contents amongst younger generation is ‘aesthetic’.
As for the timing for post, the owner of @khimar.yumnaa is adjusting the time that is believed to be suitable for the followers. Learning from past experiences, the owner stated that during workdays, the best optimal time to post is around 12.00-13.00 PM in the afternoon or 16.00-17.00 PM in the evening. During weekends, they usually post the content in the morning at 09.00-10.00 AM or around evening time at 20.00-21.00 PM. According to the owner, these times are the most optimal and effective times to post the content on Instagram feed. Meanwhile, for Instagram story, the owner usually uploads in the afternoon.
Other than post about the product catalogs, sometimes @khimar.yumnaa also uploaded some unrelated posts other than the product. They uploaded posts such as Islamic quotes or pictures consisting Islamic places. Even though the purpose of the owner of doing this is just to fill in the gap between posts, turned out the customers actually also favor this kind of post. According to all of the customers being interviewed, they like to see posts like Islamic quotes so that they can also learn more about Islam. One of the customers stated that, ‘it is good that @khimar,yumnaa posts something other than just the product catalogs so its not boring. Also me as a follower will be able to learn something new about my religion.’
Discussion
Based on the interview results, it is found that optimally utilizing Instagram features, building connection and interaction with customers, and also planning the content is very much important for a business. During the interview, it is found that the most effective feature to attract new potential customers is the sponsored content advertising offered by Instagram. This is in accordance with the research conducted by Alfaruq [9], which has found that Instagram advertising has a significant influence on brand awareness.
It is also found that the content posted by @khimar.yumnaa through Instagram stories can help to build the purchase interest of the customers, as the customers will be able to see detailed photos and videos of the product being sold. However, this finding is in contrast with the research that has been done by Amalia and Lubis [13], which has found that Instagram stories have a low impact on the purchase interest of the customers. The difference between industry sectors of the 2 research might be the reason for the different results. The research conducted by Amalia and Lubis [13] is analyzing the food industry, meanwhile, @khimar.yumnaa is from the clothing industry.
Interaction can build engagement with the customers. After an engagement is built, the customer will act as an advocate for the brand by generating content and freely promoting their product. This finding is in accordance with the research conducted by Shawky et al. [14], which has found that advocacy represents the highest level of engagement in a business. In addition, the content planning process is one of the most crucial parts also in a business marketing strategy [15]. Considering the post timing suitable for the targeted market is also necessary as it will impact the overall results from the marketing.
Conclusion
This research aims to describe the marketing strategy of @khimar.yumnaa and its effectiveness towards their business by doing an analysis on the usage of Instagram features by @khimar.yumnaa. The results of the interview successfully fill the aims, by providing insightful answers to the strategies used by @khimar.yumnaa to market their product effectively through instagram. As a small and medium enterprise that sells clothes and hijab for Muslim women, @khimar.yumnaa fully utilizing the Instagram features offered by the application such as direct message, story, highlight, post and its caption, reel, biodata to put necessary information on the profile surface and also paid advertising which is known as ‘sponsored content’. Furthermore, out of all of these Instagram features, it is found that Instagram advertising is the most effective feature to attract new potential customers and contribute in developing the followers growth, it is also found that Instagram stories are effective in building purchase interest of the followers.
Moreover, @khimar.yumnaa as a business also develops a relationship with the customers by interacting with them through the platform [16]. This interaction and communication is important for a business in order to build an engagement. It is believed that the more engagement a business has with its customers, the more sustainable the business can be for the longer term. Interacting with the customers can be done through different features, it can be done through interacting via direct message or comment section.
Lastly, it is very important for a business to do content planning. As for @khimar.yumnaa, they planned the content accordingly and decide which theme is suitable the most with the product they sell to make sure the Instagram profile of @khimar.yumnaa is good and professional to look at as a business platform. Considering the post timing suitable for the targeted market is also necessary as it will impact the overall results from the marketing. Therefore, it is best for a small business to fully and optimally utilize all of the features that Instagram offered as it will help the business to grow and sustain itself for a longer time.
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