The purpose of this research paper is to examine the influence of online marketing on SMEs. Small and Medium Scale Enterprises that are on their start-up phase of operations experience many challenges from various issues that exist in the market. One of the challenges that most of these enterprises face is the emergence of new and diverse marketing methods developed by other businesses that fight for the same market. Understanding the degree of influence online marketing has on SMEs in their start-up phase can help them develop better marketing strategies to maximize all available opportunities. Therefore, this study’s research question (RQ) is: What are the most effective online marketing tools and strategies that the start-up SMEs can use to enhance their business operations and boost their position on the market? This is a practical study that will develop advice for SMEs on how to strengthen their businesses by using online marketing tools. The researcher will analyze two types of questionnaires filled in by 15 representatives of the start-up SMEs and 15 representatives of successfully operating SMEs. The study findings will provide a broader perspective on which marketing tools are in the greatest demand among the start-up SMEs and which online marketing tools and strategies proved to be most effective in successfully operating businesses.
Online Marketing and Emerging SMEs
Scholars study the integration of online marketing strategies by SMEs from several major perspectives: how do the SMEs on emerging markets apply online marketing strategies, what are the most practical online marketing tools for SMEs, the benefits of online marketing for SMEs in emerging markets in terms of e-commerce and Industry 4.0, and the impact of e-commerce on internationalization. These are important spheres of application, and they all deserve particular attention from the researcher to determine the most effective and competitive online marketing strategies and tools used by SMEs worldwide. Unfortunately, the issue of start-up SMEs’ using online marketing to enhance their businesses has not recently received enough attention from scholars. Like start-up SMEs in developed markets, SMEs acting on emerging markets can use creative ways to gain competitive advantage by integrating online marketing strategies and are presented in the literature review from this perspective. Understanding the degree of influence online marketing has on SMEs in their start-up phase can help them develop better marketing strategies to maximize all available opportunities.
Problem Statement
Many SMEs on the start-up phase of the operations overlook the potential of the immediate boost for their businesses that the effective use of online marketing tools and strategies can provide. There are plenty of online marketing tools approbated by many functioning SMEs’ businesses that the SMEs can adopt on their start-up phase of operation. Moreover, SMEs who are launching their businesses can take advantage of comprehensive online marketing strategies based on sound theoretical foundations and are already practically tested by the established SMEs’ businesses. Therefore, this research will study the most actual issues the start-up SMEs face that can be solved using practical online marketing tools and strategies.
Literature Review
Louw and Nieuwenhuizen (2020) discuss how to design and manage websites, presenting a website development model that would be in demand among SMEs. Combined Cost and Technical Skill Model for Website Development offers a web development strategy for SMEs in resource-limited settings. Scientists believe since business websites are still a key part of online marketing, building a quality website should strengthen the company’s position among competitors and increase the maturity of its online presence. Moreover, scientists are confident a good website will enable SMEs to enter international markets and compete internationally. As part of this research, it is vital to understand the need for a quality company website and its effective use of other online marketing tools to increase sales and increase market share.
According to Basri (2020), artificial intelligence-assisted social media marketing (AISMM) has an extremely positive impact on business outcomes. This tool allows expanding the customer base, contributing to increased profitability. Basri (2020) also emphasizes that AISMM improves business management or SME performance. Decision-making is an integral part of developing online marketing strategies. Therefore, practices such as AISMM can be beneficial for emerging SMEs in their start-up phase of operations. This study also looks at other techniques that can be applied to guide decision-making regarding online marketing strategies. According to scholars, artificial intelligence-assisted social media marketing is a unique tool that has been proven effective for many SMEs in Saudi Arabia (Basri, 2020).
Cloud Computing Utilization (CCU) can mitigate information and marketing barriers for SMEs in Turkey and Iran’s emerging markets (Hosseini, Fallon, Weerakkody, and Sivarajah, 2019). This finding can also be applicable to other countries with emerging markets and SMEs in the start-up phase of operations in developed countries. Scientists discovered that SMEs face many barriers to internationalization, which are not typical for bigger enterprises. They present cloud computing as a handy tool that can enhance the SMEs’ online marketing strategy, especially if the SME has plans to enter the international market. Since this research focuses on finding optimal online marketing solutions to improve SMEs’ competitiveness, the CCU tool can be perceived as an essential item in the list of online marketing tools.
Guha, Harrigan, and Soutar (2018) discuss the opportunities provided by linking social media to customer relationship management (CRM). Scholars have studied the factors that underlie CRM and social CRM and have explored this management tool as an opportunity for dynamic customer interactions. Guha et al. (2018) concluded that streamlined and sustainable social data collection processes through CRM should be carried out regularly. According to scientists, linking social media marketing to CRM will help create an additional resource for SMEs that lack resources or have limited resources. The conclusion of scientists can be considered as sound advice for emerging SMEs that are on the start-up phase of operations. Sharing the online marketing tools discussed in this review should bring even more benefits to SMEs.
Virtanen, Björk, and Sjöström (2017) point out that Instagram is a reliable platform for attracting first customers. There is not enough research yet that discusses online marketing platforms used by SMEs, according to academics. Therefore, the scholars present the strategic model or base for using Instagram by emerging SMEs and start-up IT projects. The presented study was focused on one start-up that developed an app for young mothers. The management used Instagram to attract and support their first clients, which proved to be a reasonable decision. In the framework of this research, Instagram can be suggested as a successful choice among other platforms. Interestingly, there are also studies saying that Twitter seems to be less effective than Facebook in customer attraction.
Konstantopoulou, Rizomyliotis, Konstantoulaki, and Badahdah (2019) admit the power of Instagram and Electronic Word of Mouth (eWOM) marketing tools to improve small and medium-sized businesses’ competitiveness. According to scientists, SMEs’ segment in Saudi Arabia reached 35% of the market share. The scholars found that using Instagram and eWOM is highly effective among SMEs selling cosmetics. The level of customer loyalty was determined by the trust in the influencer’s capability and sincerity and depended on the previous positive experience of interaction. Therefore, Konstantopoulou et al. (2019) suggest SMEs should use Instagram and eWOM to attract and retain customers due to their informative function that raises product awareness. SMEs should also pay attention to influencers’ positive reputations since they proved to be a determining factor in customers’ choices.
Most SMEs in Kenya use social media and other platforms as their primary online marketing tool (Wilson and Makau, 2018). The most common platforms are OLX.co.ke, Cheki.co.ke, and Jumia.co.ke. Scientists have found that most businesses are not using these platforms’ full potential due to limited resources. Most SMEs do not have enough budgets to invest in IT, cannot accommodate IT personnel, and face a lack of access to constructed IT structures. Other restrictions include that SMEs do not know if there are customers online, are unsure, how to gain the legal status to sell online (for online payments), and are concerned with the registration issues. As part of our study, these findings present common reasons for barriers to online sales or e-commerce. Therefore, governments and SMEs should look for ways to overcome the listed obstacles to reach their goals.
E-commerce helps SMEs in emerging markets and emerging economies to integrate into the world economy (Raharja, Kostini, Muhyi, and Rivani, 2019). The scholars say that Indonesian SMEs from Bandung mostly use technologies and e-commerce tools (Raharja, Kostini, Muhyi, and Rivani, 2019). The study was based on data from 2300 SMEs and presents the benefits of e-commerce use. The scientists also stated that SMEs use websites and marketplaces for trading activities (Raharja, Kostini, Muhyi, and Rivani, 2019). For our research, the study is important since it provides data on Indonesian SMEs and proves the unchanging success of websites and trade platforms in online marketing. Besides social media, websites and trade platforms are the most widespread online marketing tools which can be handy for emerging SMEs and SMEs in emerging markets.
Online marketing and e-commerce are tightly connected with Industry 4.0, or the industry used to enhance the Internet of Things practices (Chen, 2020). The scholars found several tendencies in how industry 4.0 integration improves business outcomes. Chen (2020) states there are four types of interdisciplinary strategies for creating value with technology, based on Industry 4.0: “enhancing digital product display capabilities, integrating cultural content design and online marketing, creative brand marketing with cyber-physical channel integration and emotional marketing incorporated with smart services” (p. 2). In the research framework, these findings are helpful as they prove excellent opportunities for integration between e-commerce, Industry 4.0, and online marketing techniques.
Finally, Effendi, Sugandini, and Istanto (2020) explored how social media adoption in SMEs was affected by the COVID-19 crisis. Scientists note that COVID-19 has destroyed many businesses, necessitating recovery using social media – one of the most widespread online marketing tools. Effendi et al. (2020) say social media “helped SMEs to rise from adversity” (p. 915). The study used the data provided by 250 SMEs from Indonesia; the results showed SMEs are ready and eager to use social media to attract customers, market their products, and overcome the COVID-19 crisis. The scholars also noticed the intention to use social media as a marketing tool was impacted by social media awareness and organizational attitudes. Therefore, this study proves the incredible opportunities provided by online marketing and points to SMEs’ barriers when adopting online marketing tools.
Importance/Benefits of the Study
This study has plenty of potential benefits for start-up SMEs. By learning how to effectively use the online marketing tools the start-up SMEs can improve the transparency of business operations, improve communication with the existing customers, attract more new customers, improve the understanding of the customers’ needs, and prepare the ground for meeting the customers’ needs using online marketing tools (for example, by introducing the customer segmentation based on their preferences and needs). High-profile marketing is a decisive indicator of the success of start-up businesses. Therefore, the implementation of helpful online marketing strategies can boost sales, level up the SME’s market position, increase its market share, boost profits, and improve the overall public image of the business.
Research Design
The study will consist of four phases; the first phase will include the analysis of the existing scientific literature regarding the topic and the development of the research question. The second phase will feature the development of the study design and methodology. The study will use the qualitative research methodology, and the data will be collected through the online questionnaires posted in the form of web links on popular online platforms for business employees. This will guarantee the study will attract a specific group of participants who will meet the sampling requirements. During the second phase, the researcher will develop two questionnaires with ten questions to collect the data that will help answer the research question.
More specifically, the second phase will include the development of the sampling design. The researcher will prepare two questionnaires to receive the answers from 30 participants, 15 of whom will be the employees of the SMEs on the start-up phase of the operations, and 15 will be the employees of successfully operating SMEs. The participants will be men and women from 21 to 65 years old working on managing positions in SMEs that operate businesses in the US or other markets. The study does not limit itself to the US market solely as it aims to get as much as possible helpful information on the effective use of online marketing tools and strategies by SMEs. The researcher will develop ethically acceptable questions for the questionnaires to meet the ethical requirements for scientific research.
The third phase will focus on collecting the data for further analysis. The participants’ answers will be sorted into two groups and analyzed in the framework of the research question; this information will constitute the results section. The fourth phase will include the discussion of results and helpful advice for the start-up SMEs based on the data analyzed; the discussion will be followed by the conclusion and implications for future studies. During the fourth phase, the researcher will also make the self-evaluation, and if necessary, will develop more questions that could be used in future research.
Nature and Form of Results
The researcher anticipates the results will be obtained in the form of the answers to the open questions, like Which online marketing tools do you use in your business daily? What online strategies proved to be the most effective for your SME? The questionnaires will also contain the answers to multiple-choice questions, like What type of online marketing tools do you prefer to use in your business: Social Media, eWOM, Industry 2.0, CRM tools. Based on the answers, the researcher will prepare the list of the online marketing tools used by SMEs that are perceived as the most effective, and a list of the online marketing tools that are perceived as the most common or must-have techniques. The researcher will present the opinions of the representatives of the start-up SMEs regarding which results do they anticipate reaching by using the online marketing tools. The research will also consider the participants’ geographical location and ask them to determine particular local online marketing tools and techniques used by other players in their markets. Therefore, the researcher will present the broader picture featuring the most exciting and effective ways to reach particular business goals of the start-up SMEs.
Budget
The study will have a low budget, mainly based on the time spend developing the questionnaires and analyze the results. If there will be a low level of interest in the study, and the researcher will have problems with finding the participants, the researcher will probably opt for some paid platforms to gather the answers from the representatives of SMEs. However, this outcome is improbable since the researcher will use the media platforms crowded with people who run businesses and will be interested in spending some 5-10 minutes of their time participating in the study.
Schedule
The research process will be divided into several major phases. During the first phase, two questionnaires will be developed by May 15, which will feature the questions regarding the online marketing tools used by SMEs. Then, during the second phase, the researcher will find the appropriate platforms to place the web links to online questionnaires by May 31. The third phase will include gathering the answers from participants and will last until June 30. During the fourth phase, the researcher will interpret the results and develop the advice for the start-up SMEs; this phase will last until July 31. Finally, during the fifth phase, the researcher will present the study in the appropriate academic form by August 31.
Ethical Considerations
During the data collection, the participants will be informed that their answers will be used in the research. The researcher will approve the research proposal in the University Ethics Committee to protect the rights of participants and ensure that no unethical practices will be used in the research. The participants will share their personal data, like their names and names of their companies, but these data will not be published and will not reach the general public in any other way.
Implications and Considerations
This research is important for start-up SMEs as it will help them introduce the best existing online marketing practices. Therefore, the first implication of this study will be that the start-up SMEs will receive a comprehensive list of online marketing tools and strategies which they would apply to enhance their business operations, attract new customers, and boost profits. The second implication will be that the study participants will receive gratifying letters after the study will be published and will gain more interest in online marketing tools; they will probably agree to participate in future similar studies. The possible limitations may be related to the data collection process. The first potential limitation can be the lack of interest in the research and challenges in finding the proper participants. A considerable volume of questionnaires should be analyzed to choose the best 30 ones presented in the study. Therefore, the researcher will need a particular interest from participants. The second possible limitation is the researcher will need to reformulate or add some questions to the questionnaire, which could be done during the data collection phase since this study is qualitative research (Roger et al., 2018).
References
Basri, W. (2020). Examining the impact of artificial intelligence (AI)-assisted social media marketing on the performance of small and medium enterprises: Toward effective business management in the Saudi Arabian context. International Journal of Computational Intelligence Systems, 13(1), 142-152.
Chen, C. L. (2020). Cross-disciplinary innovations by Taiwanese manufacturing SMEs in the context of Industry 4.0. Journal of Manufacturing Technology Management, 31(6), 1-10.
Effendi, M. I., Sugandini, D., & Istanto, Y. (2020). Social Media Adoption in SMEs Impacted by COVID-19: The TOE Model. The Journal of Asian Finance, Economics, and Business, 7(11), 915-925.
Guha, S., Harrigan, P., & Soutar, G. (2018). Linking social media to customer relationship management (CRM): A qualitative study on SMEs. Journal of Small Business & Entrepreneurship, 30(3), 193-214.
Hosseini, S., Fallon, G., Weerakkody, V., & Sivarajah, U. (2019). Cloud computing utilization and mitigation of informational and marketing barriers of the SMEs from the emerging markets: Evidence from Iran and Turkey. International Journal of Information Management, 46, 54-69.
Konstantopoulou, A., Rizomyliotis, I., Konstantoulaki, K., & Badahdah, R. (2019). Improving SMEs’ competitiveness with the use of Instagram influencer advertising and eWOM. International Journal of Organizational Analysis, 27(2), 1-10.
Louw, C., & Nieuwenhuizen, C. (2020). Digitalization strategies for SMEs: A cost vs. skill approach for website development. African Journal of Science, Technology, Innovation and Development, 12(2), 195-202.
Raharja, S. U. J., Kostini, N., Muhyi, H. A., & Rivani. (2019). Utilization analysis and increasing strategy: e-commerce use of SMEs in Bandung, Indonesia. International Journal of Trade and Global Markets, 12(3-4), 287-299.
Roger, K., Bone, T., Heinonen, T., Schwartz, K., Slater, J., & Thakrar, S. (2018). Exploring identity: what we do as qualitative researchers. Qualitative Report, 23(3), 1-10.
Virtanen, H., Björk, P., & Sjöström, E. (2017). Follow for follow: Marketing of a start-up company on Instagram. Journal of Small Business and Enterprise Development, 24(3), 1-13.
Wilson, V., & Makau, C. (2018). Online marketing use: small and medium enterprises (SMEs) experience from Kenya. Orsea Journal, 7(2), 1-10.