The Impact of Online Marketing on the Performance of Small and Medium Scale Enterprises (SMEs) in Nigeria
Chapter One
OBJECTIVES OF THE STUDY
The objectives of this study are:
The general objective of this study is to determine the impact of online marketing on the performance of SMEs in Nigeria. The specific objectives are:
- To determine how search engine Marketing influences the performance of a SME.
- To determine how email marketing influences the performance of a SME.
- To determine how blog marketing influences the performance of a SME.
- To determine how online advertising influences the performance of a SME.
CHAPTER TWO
LITERATURE REVIEW
Industry defines a small business as one that has fewer than 100 employees (if the business is a goods-producing business) or fewer than 50 employees (if the business is a service-based business), and a medium-sized business as fewer than 500 (Statistics Canada SEPH, 2008). Statistics Canada’s Survey of Employment, Payrolls and Hours (SEPH) covers employer businesses in Canada and reports the number of employees at the enterprise level. According to SEPH data, on average in 2007, “just over 5.1 million employees on payroll, or 48 percent of the total private sector labour force, worked for small enterprises (those with fewer than 100 employees)… More than 1.7 million, or 16 percent, worked for medium-sized enterprises (those with 100 to 499 employees). In total, SMEs employed just over 6.8 million (64 percent) of private sector employees covered by SEPH” (Statistics Canada SEPH, 2008). The statistics quoted above show that SME’s make a substantial contribution to the economy of Canada.
Even with the magnitude of this contribution, SME’s throughout the country and worldwide (estimated to account for 80 per cent of global economic growth) (Jutla, Bodorik, & Dhaliiqal, 2002) do not consider marketing of their businesses as a strategic component of their day to day operations. While marketing in the small firm context has not been extensively researched, the studies conducted in this area have shown that marketing forms one of the biggest problems that small business owners face while still being one of the most important business activities that are essential for the survival and growth of the small enterprises (Simpson & Taylor, 2002).
Researchers in this area of marketing widely agree that marketing in small enterprises differs from that in large firms. Small firm marketing has been characterised as “haphazard, informal, loose, unstructured, spontaneous, reactive, and built upon as well as conforming to industry norms” (Gilmore, Carson, & Grant, 2001). In small enterprises, marketing is used for the needs of the moment and only little attention is paid to plans, strategies and analysis. This contrasts to marketing in large firms which is seen as formal, planned and well structured (Stokes, 2002).
Adding to the complexity for the SME has been the shift from traditional marketing methodologies (e.g. The Marketing Mix) to more refined models and a subsequent massive shift of marketing effort from traditional channels (radio, newspapers, etc.) to online channels (websites and other social media). As early as 2006, the Internet assumed a significant role in marketing as it represented the number one source of media for consumers at work and the number two source of media at home, reaching more than 60% of all United States consumers for an average weekly usage rate of more than 100 minutes (Rashtchy, Kessler, Bieber, Shindler, & Tzeng, 2007)
Over the next five years, it can be easily argued that social media has exploded in the consumer consciousness. The following statistics speak to this:
- In the US, there are 149M active Facebook users, 70% log in once a day (Rao, 2010)
- Social media accounts for ~ 25% of all time spent online – over 35 minutes per hour (Keane, 2011)
- $4.26 billion will be spent on social media marketing globally in 2011 (Williamson, 2011)
- Facebook revealed it has more than 955 million monthly active users, as of end of June 2012 (Yung-Hui, 2012)
As the above statistics on internet usage and social media adoption point out, growth in both areas have significantly shifted the marketing paradigm away from traditional marketing practices. As SME’s already were lagging behind their large enterprise competitors in this area, what does this shift to online marketing via social media leave the SME? The answer to this question may not be as straight forward as you think.
Traditional and Evolving Marketing Models
Marketing the way most textbooks treat it today was introduced around 1960. The concept of the marketing mix and the Four P’s of marketing – product, price, place and promotion – entered the marketing textbooks at that time (McCarthy, 1960). Over time, this traditional model was deemed to be outdated. Much of the reason for this was that the marketing mix worked in isolation to other parts of the business and to the customers themselves.
Many scholars agree that the marketing department concept “is obsolete and has to be replaced by some other way of organizing the marketing function, so that the organization will have a chance to become market-oriented” (Grönroos, 1982). Psychologically, the effect on the rest of the organization of a separate marketing department is, “… in the long run, often devastating to the development of a customer orientation or market orientation in a firm” (Grönroos, 1982). As these deficiencies of the marketing mix became more and more evident, the focus moved to integrated network and relationship-based models.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
In this chapter, we would describe how the study was carried out.
Research design
Research design is the blueprint that enables the investigator to come up with solutions to problems and guides him in the various stages of the research (Nachmias and Nachmias, 2004). Cooper and Schindler (2008) summarizes the essentials of research design as an activity and time based plan; always based on the research questions; guides the selection of sources and types of information; a framework for specifying the relationship among the study variables and outlines the procedures for every research activity. The study used a correlational and descriptive survey research design, which explains the relationship that exists between the independent variables and dependent variable (Sekaran and Bougie, 2010). This design was chosen because it examines the present status and extent of adoption of online marketing by SMEs in Nigeria. This design is considered appropriate for this study because it saves time, expenses and the amount of quality information yielded is valid, while interviewer bias is reduced because participants complete identically worded self-reported measures (Ade`r, Mellenbergh and Hand, 2008).
Sources of Data
The data for this study were generated from two main sources; Primary sources and secondary sources. The primary sources include questionnaire, interviews and observation. The secondary sources include journals, bulletins, textbooks and the internet.
Population of the study
A study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitute of individuals or elements that are homogeneous in description (Prince Udoyen: 2019). In this study the study population constitute of five hundred (500) SMEs in Nigeria.
CHAPTER FOUR
PRESENTATION OF DATA AND ANALYSIS
Gender distribution
CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATIONS
Search Engine Marketing, email marketing, blog marketing and online advertising are all key elements of e-marketing which enhance the performance of SMEs that are keen on realizing the benefits of online marketing. These online marketing elements provide SMEs with the potential to reach more customers, steadily link the products’ brands and customers and enhance their market share, drive new business for them and guide them on how to improve their products with reference to customers’ feedback, mitigate increased competition, and creating avenue to access new markets. This research study has shown that those SMEs in Nigeria who are keen in adopting e-marketing and integrating it into their business strategies, have achieved above average business performance and sustainably transformed their businesses by synchronizing their customers, business processes and technology to profitably achieve growth in the dynamic, competitive business environment.
The market ultimately drives e-commerce development, but it is the private sector that fuels it and SMEs form a substantial part of the private sector. The government of Nigeria and private sector partnerships can engage in a campaign to disseminate information to SMEs about e-marketing framework and policies, best practices, success stories, and opportunities and obstacles relating to the use of ICTs and online marketing. These awareness campaigns could include affordable training courses and workshops on online marketing, security and privacy, awards programs, and information centers to assist SMEs. Ultimately, this information campaign should come in the form of an overall e-marketing development strategy for the economy, focusing on its various innovative applications for SMEs.
REFERENCES
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- Chaffey, D. (2003). Internet Marketing-Strategy, Implementation and Practice, 2nd Edition. Harlow: Prentice Hall.
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- Cooper, D. R. and Schindler, P. S. (2008). Business Research Methods. London: Mcgraw Hill Higher Education.Cooper and Emory (2008). Information Systems Research.Informs, Volume 12.
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