IMPACT OF ONLINE MARKETING ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN NIGERIA
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IMPACT OF ONLINE MARKETING ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN NIGERIA
Chapter one
INTRODUCTION
1.1 Background of the Study
Businesses are seeking to new technology to fulfil their specific business needs and position themselves to capitalise on global shifts in business operations. Businesses, large and small, require information to operate in today’s rapidly changing world;
they must be able to analyse and use data effectively when conducting day-to-day operations. The expansion of the Internet has created a huge arena, allowing firms,
particularly small and medium-sized organisations (SMEs), to offer their products and services to a global audience that they would not have been able to reach via old techniques.
A literature search suggests that many developments in organisations today have been driven by technology. According to Clarke (2001), information technology (IT) is fundamentally changing the character of economic transactions between customers and suppliers of goods and services.
Pigneur (1996) observes that businesses, particularly SMEs, are challenged with a number of developments that necessitate inventive responses. These problems include the rise of a competitive global economy, the move towards an information-based economy, and the transition from mass production to a customer-driven economy.
He adds that in today’s global information-based and customer-driven economy, SMEs must be efficient, innovative, and competitive, with the ability to adapt quickly, focus on quality, and execute mass customisation.
He proposes that in order to do so today, businesses must be able to use modern information and communication technologies (ICTs) to better fit into their environment, build more cooperative inter-organizational ties, and compete in worldwide markets (Pigneur 2006).
In recent years, many research and publications on Internet usage in business have been published in the UK and around the world. This study is not another assessment of the general use of the Internet in business;
rather, it builds on and summarises previous substantial and significant research in these areas, identifying the key themes and messages conveyed by the majority of SMEs. The study’s goal is to look into the perceived opportunities and benefits that SMEs can gain from using the Internet.
Barnes et al. (2008) said that SMEs contribute significantly to most economies throughout the world; they are socially and economically vital because they account for 99% of all firms in the EU, provide approximately 65 million employment, and promote entrepreneurship and innovation.
Small and medium-sized enterprises (SMEs) have been proved to make important contributions to national and regional economic growth, greater employment, and locally relevant products and services. SMEs are critical to the UK economy; they account for 99% of all businesses and provide more than 59% of private sector employment (BERR, 2008).
They are also the drivers of future growth and innovation. Barnes et al. (2008) claim that the development of the digital economy has made Internet adoption and use a serious concern for the majority of SMEs.
Nonetheless, many SMEs face a challenging scenario. They may be too tiny to hire a professional IT specialist and lack the funds to purchase consulting services.
They frequently lack experience in selecting, implementing, and assessing proposed IT solutions (Barnes et al., 2008). Barnes et al. (2008) observed that SMEs are locked in a trap; a lack of resources means that, while there may be an aggregate need for IT services and advice, the variable nature of that demand makes it uneconomical for other enterprises to supply that demand.
According to Bili and Raymond (2003), small and medium-sized businesses (SMEs) are regarded as the driving factors of long-term local economic development around the world.
They serve as the foundation of economies, promoting private property and entrepreneurial capacities that, due to their flexibility, can quickly adapt to market changes, provide employment, diversify economic activity, and contribute to exports and trade.
In light of this background, the purpose of this research is to investigate the impact of online marketing on the performance of SMEs in Nigeria, with a focus on Jumia Nigeria.
1.2 Statement of the Problem
Online marketing has and continues to transform the way businesses are done around the world. With the commercialization of the Internet, online marketing has emerged as one of the most promising avenues for inter-organizational business activities. Online marketing has grown into a variety of business-related interaction models.
In Nigeria, numerous small and medium-sized businesses are increasing their investments in the Internet/online marketing industry. In order to thrive in today’s tough economy, SMEs must be competitive and resilient.
So, the primary goal of this research is to determine the impact of online marketing applications on the success of small and medium-sized businesses.
It suffices to say that online advertising or marketing is significant among Nigeria’s major sites; the efficiency of online advertising is determined by whether consumers are willing to click and watch, but the reality is that most internet users disregard online advertising. How to capture the attention of consumers has become a critical issue.
In actuality, various types of advertising can be used to attract customers, including pop-up ads, button ads, advertising couplets, floating ads, full-page advertisements, and so on. Due to limitations on marketing resources, news, advertising, and wide-scale promotional activities,
SMEs have less opportunities for publicity, so website promotion via the Internet is far more crucial for them than for major corporations. Thus, this study looks into the relationship between online marketing and the performance of small and medium-sized enterprises in Nigeria.
1.3 Objectives of the Study
The study’s aims are:
1. Determine whether online marketing apps have a significant and beneficial impact on business performance in small and medium-sized firms.
2. To look into the relationship between online marketing and productivity in small and medium-sized businesses.
3. To determine whether online marketing order and delivery has a significant and favourable impact on the performance of small and medium-sized businesses.
4. Determine whether an online marketing customer support service has a significant and beneficial impact on the performance of small and medium-sized businesses.
5. To determine whether online advertising has a significant and beneficial impact on the performance of small and medium-sized businesses.
6. Determine whether online payment systems have a significant and beneficial impact on the performance of small and medium-sized businesses.
1.4 RESEARCH QUESTIONS
The research questions listed below will guide the project.
1. Will online marketing apps significantly improve the performance of small and medium-sized businesses?
2. How does online marketing affect the productivity of small and medium-sized businesses?
3. Determine whether online marketing order and delivery has a large and beneficial impact on the performance of small and medium-sized businesses.
4. Does internet marketing customer support have a major and favourable impact on the performance of small and medium-sized businesses?
5. Will online advertising have a big positive impact on the performance of small and medium-sized businesses?
6. Do online payment systems have a significant and positive impact on the performance of small and medium-sized businesses?
1.5 Research Hypothesis
The following research theories will guide the investigation.
1. Online marketing applications have no significant and positive impact on the performance of small and medium-sized businesses.
2. There is no significant link between online marketing and small and medium-sized firm efficiency.
3. Online marketing order and delivery has no significant and favourable impact on the performance of small and medium-sized businesses.
4. Online marketing customer support services have no significant and favourable impact on small and medium-sized businesses’ performance.
5. Small and medium-sized businesses do not benefit significantly from online advertising.
6. The online payment system has no significant and favourable impact on the functioning of small and medium-sized businesses.
1.6 Significance of the Study
The study’s conclusions will benefit both organisations and enterprises, particularly in terms of the need to focus on online/internet marketing, individual, group/team, and organisational innovation.
Furthermore, the findings of this study will serve as a channel of awareness and enlightenment on the numerous environmental issues that have impacted organisations in recent years, as well as present potential solutions to such problems as they arise.
Not only that, but its findings will serve as a platform for professional managers, CEOs, and other workers involved in staff training, administration, and management to learn how to motivate their employees for maximum human creativity and invention.
By doing so, several organisations would be better equipped to develop a repertoire of techniques (management control systems) for improving average employee performance while also increasing management efficiency by enforcing worker cooperation and standardisation of work methods, particularly in creative organisations.
In conclusion, the findings of this study will contribute to the management of national culture in terms of cultural individualism, collectivism, uncertainty avoidance,
and multiple cultural dimensions that may influence an individual employee’s preferences for and reactions to management control systems in interactive ways; and it will serve as a systematic knowledge base for researchers.
1.7 SCOPE OF THE STUDY
The scope of this study will include all Small and Medium Enterprises in Nigeria that use online marketing programmes and possess internet websites, particularly Jumia Nigeria.
1.8 Definition of Terms
Medium-sized firms are defined as those that employ fewer than 250 people and have an annual sales of no more than N50 million or an annual balance-sheet total of less than N43 million.
Small enterprises are defined as those that employ fewer than 50 people and have an annual turnover and/or balance sheet total of less than N10 million.
Micro enterprises are defined as those that employ less than ten people and have an annual turnover and/or balance sheet total of less than N2 million.
Online Marketing: This term encompasses all forms of internet advertising, internet payment systems, internet marketing, internet customer assistance, and internet ordering and delivery.
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