AN ASSESSMENT OF THE IMPACT OF ONLINE MARKETING ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES
This study investigated the impact of online marketing on small and medium enterprises in Lagos metropolis. A descriptive quantitative survey research design was adopted in the study. The population of the research was all the Small and Medium Enterprises in Lagos metropolis which are using online marketing applications and own internet website which is estimated to be 395 units. Out of 395 units, a sample of 200 SME units is to be taking to obtain the primary data. Therefore, 200 subjects were randomly selected for the study. In this study, stratified random sampling technique was used to collect necessary data. A well-structured Likert-scale instrument was used to assess the impact of online marketing applications (internet marketing, advertising, order and delivery, costumer support service and payment system) on business processes in the small and medium sized enterprises. While Pearson product moment correlation statistical method was used to test the hypotheses in the study at 0.05 level of significance. Based on the analysis of the data, the results obtained showed that:
- Online marketing applications have a significant positive impact on business process in small and medium enterprises.
- There is a significant relationship between online marketing and small and medium- sized businesses productivity.
- Online marketing order and delivery has a significant positive impact on business process in small and medium enterprises.
- Online marketing customer support service has a significant positive impact on business process in small and medium enterprises.
- Online advertising has a significant positive impact on business process in small and medium enterprises.
- Online payment system has a significant positive impact on business process in small and medium enterprises.
From the findings of this study, it can be concluded that there is the need for SMEs to reexamine the way they use of the Internet and the website, increase the awareness of the importance of the Internet integration into their business, and get some useful information on how other SMEs conduct their Internet business, as well get some concentrative literature on Internet applying to SMEs international business, which might highlight their future development.
1.1 BACKGROUND TO THE STUDY
Businesses are looking to new technologies to meet their unique business requirements and position themselves to take advantage of global changes in business activities. Businesses both large and small need information to succeed in today’s rapid changing environment, they need to be able to process data and use information effectively when conducting their day-to-day operations. The growth of the Internet has opened up a vast arena, providing more opportunities for businesses, particularly small to medium-sized enterprises (SMEs) to sell their products and services to a global audience than they would have been able to afford to reach using the traditional methods.
A search of literature reveals that many changes in organization today have been technology driven Clarke (2001) notes that information technology (IT) is really changing the whole nature of business transaction between consumers and suppliers of goods and services. Pigneur (1996) points out that companies especially SMEs are confronted with a number of changes that require innovative answers. These challenges include the emergence of a competitive global economy; the trend towards an information based economy, and the shift from mass production to a customer-driven economy. He adds that to compete in today’s global information-based and customer-driven economy, SMEs must be efficient, innovative and competitive: able to respond just in time, focus on quality, and implement mass-customization. He suggests that in order to do this today, they must also be able to leverage the new information and communication technologies (ICTs) to fit better in their environment, establish more co-operative inter-organizational relationships and compete on the international markets (Pigneur, 2006).
There have been many studies and reports published in UK and overseas in the last few years on the Internet usage in business in general. This study is not another examination of the general usage of Internet in business, rather it builds and summarizes the extensive and valuable research already completed in these areas and extracts the essential themes and messages being expressed by most SMEs. The study aims to examine the perceived opportunities and benefits that Internet usage can offer to SMEs.
Barnes et al., (2008) asserted that SMEs make significant contribution to most economies of the World, they are socially and economically important, since they represent 99 % of all enterprises in the EU and provide around 65 million jobs and contribute to entrepreneurship and innovation. SMEs have been shown to contribute significantly to country and regional economic growth, increased employment levels and locally relevant product and service. SMEs are very important to the UK economy; they accounted for 99% of all enterprises and provide over 59% of private sector employment (BERR, 2008). They are also the source of future growth and innovation. Barnes et al., (2008) argue that the advent of the digital economy has made the adoption and use of Internet a significant issue for most SMEs. Yet, many SMEs find themselves in a difficult situation. They may be too small to be able to employ a dedicated IT expert and lack the resources to buy consultancy advice. They often have limited experience in selecting, implementing and evaluating suggested IT solutions (Barnes et al., 2008). Barnes et al., (2008) noted that SMEs find themselves caught in a trap, lack of resources means that while there may be an aggregate demand for IT service and advice, individually, the varying nature of that demand makes it uneconomical for other firms to provide a service meeting that demand.
According to Bili and Raymond (2003), Small and Medium Business Enterprises (SMEs) are considered to represent the driving forces of sustainable local economic development throughout the world. They form the base of economies, stimulate private property and entrepreneurial capabilities which, due to their flexibility, can quickly adjust to market changes, generate employment, create diversified economic activity, and contribute to exports and trade.