Activity-Based Costing for Marketing Cost Allocation: A Driver of Market Penetration Strategy in Yogyakarta’s Batik Small and Medium Enterprises
Abstract
This study aims to examine the effect of Activity-Based Costing (ABC)-based marketing cost allocation on the market penetration strategy of batik small and medium enterprises (SMEs) in Yogyakarta, a research relationship that has received little empirical attention despite the growing pressure these enterprises face from cheaper imported batik-motif textiles. This study uses a quantitative approach, employing simple linear regression analysis to examine the relationship between the two variables. The population comprised 100 batik business actors in Yogyakarta, and a sample of 80 respondents was determined using the Slovin formula and analyzed with IBM SPSS. The results show that ABC-based marketing cost has a positive and significant effect on market penetration strategy (t = 8.305; sig. = 0.000), with an R² of 0.469, meaning ABC-based marketing cost explains 46.9% of the variation in market penetration strategy, while the remaining 53.1% is explained by factors outside the model. Therefore, batik business actors and policymakers in the creative-economy sector need to adopt activity-based cost allocation as a strategic tool, not merely an accounting exercise, to design more targeted and cost-efficient market penetration efforts. This study contributes originality by shifting the application of ABC from its conventional focus on production/product costing toward the marketing-cost domain, and by situating this relationship within Indonesia’s batik creative industry, a context that remains largely absent from the management-accounting literature.
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