Value-Based Innovative Image to Increase Consumer Preferences in MSMEs Product Purchase Decisions

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of Indonesia's economy, yet their competitiveness remains constrained by weak brand identity and limited consumer insight. Only 0.016% of Indonesia’s 64.1 million MSMEs have formally registered their brand, reflecting a lack of strategic branding capacity. This study addresses the gap by investigating how brand name and Values-Based Innovative Image (VABII) influence consumer preferences and purchasing decisions in the culinary and fashion MSME sectors in West Java. Drawing on Service-Dominant Logic and Value-Based Innovation theory, the research applies Structural Equation Modeling (SEM) to analyze 181 consumer responses. Findings reveal that brand name significantly influences consumer preference, which in turn affects purchasing decisions. Importantly, VABII enhances the brand name’s effect by acting as both a mediator and moderator, suggesting that aligning brand identity with consumer values and innovation strengthens brand impact. Theoretically, the study offers a novel framework integrating consumer values and innovation into MSME branding strategy. Practically, the results imply that MSMEs should not rely solely on product quality or affordability but also prioritize value-driven branding and innovation to shape consumer perception. This has policy implications for government and business support programs: capacity-building initiatives, trademark registration facilitation, and innovation-driven branding training must be promoted to help MSMEs develop emotionally resonant, value-oriented brands. Such efforts are crucial to increase competitiveness, consumer trust, and long-term sustainability in the digital and globalized market.