CHAPTER ONE

GENERAL INTRODUCTION

1.1. Background of the Study

Online marketing strategy between the buyers’ needs and providers’ offers throughout the buying process has not changed much from the early beginnings. But progress has always been evolutionary and it has affected marketing as a whole, the way customer value is created and the way the return on investment is achieved. Kotler and Armstrong (2018) define marketing as the activity of “engaging customers and managing profitable customer relationships.”

Keegan and Green (2016) see the first most fundamental change in the emergence of global markets. Technology and the Internet simply spurred activities even further. Nevertheless, there are two process stages in the marketing supply chain that have not changed and that should never be omitted: (a) a good research of initiatives, customers’ wants and needs and (b) profound planning of marketing activities. Mathieson (2010) adds that the goal is to maximize benefits for all sides, and this is best done with innovation, not duplication. Many companies are already aware of that. Indeed, Gartner proved that in 2018 every $6 spent by marketing departments is invested in innovation.

In today’s competitive environment online marketing plays an important role since they are to differentiate them from those already present on the market. McIntyre and Virzi (2018) however warn that small retail business owners favouring online marketing as their preferred strategic measure might be dangerous. “The modern marketing era is driven by the self-educated buyer who marketers must engage to achieve a relevant, targeted, and value-based customer experience” (Oracle, 2016). This indicates that there should be a smart mix of traditional and digital strategies to influence the buyer so that he can make the most informed purchase decision. Presented content should be fact-based and credible. Murton Beets and Handley (2018) are convinced that content of higher quality and efficient product presentation surpass any strategy. Neither can this be improved much with best content distribution, targeting or content marketing technologies.

This thesis will focus on online marketing and its impact on profitability of small retail business in Bambili.

1.2. Statement of the Problem

Nowadays online marketing becomes part of a person’s life. Online marketing such as Facebook, Twitter, Instagram or LinkedIn has a numeral number of the user and keeps growing every day users growing have attracted marketers and managers.  Keeping up with the changing technological market trends is a great issue to some of the business owners.

Secondly, some small business owners don’t know how to use the various online marketing venues like whatsapp, Facebook, Pinterest, LinkedIn and Twitter. This makes it difficult for them to market their products and services they by reducing their markets and consequently affecting their profits margins.

Also, online marketing helps small retail business to interact with their customers. These interactions help marketers determine customer needs and understand what their market might look like.  But they face a great challenge of segmenting their customers online so as to do target marketing and give a particular product offering to a particular set of customers.

Furthermore, key business factors of online marketing allow consumers to estimate products, make recommendations to contacts or friends, and share any of the purchases through their online marketing. Bambili is a student area where many business owners have the same target population this poses the problem of market lead.

Lastly, online marketing is very important but small business faces the issue of network problems and electricity problems which makes their devices to be down there by limiting communication. Again, their customers must be online or have a digital device to be part of the market they by limiting sales.

1.3. Research Questions

1.3.1. Main Research Question

What is the impact of online marketing on profitability of small retail business in Bambili?

1.3.2. Specific Research Questions

1. What are the different types of online marketing used by small retail businesses in Bambili?
2. To what extend does online marketing affect the profitability of small retail businesses in Bambili?
3. Which online marketing platform could effectively maximize profits in small retail in businesses in Bambili?

1.4. Research Objective

1.4.1. Main Research Objective

The main objective of this study is to examine the impact of online marketing on profitability of small retail businesses in Bambili.

1.4.2. Specific Research Objective

1. To investigate the different types of online marketing used by small retail businesses in Bambili.
2. To examine the effects of the different online marketing platforms on profitability small retail businesses in Bambili.
3. To design an alternative marketing plan for profit optimization by small retail businesses in Bambili.

1.4.3. Research Hypothesis

H₀: Online marketing has a significant impact on profitability of small retail businesses in Bambili.

H₁: Online marketing does not have a significant impact on profitability of small retail businesses in Bambili.

H₀: There is a direct relationship between the types of online marketing used by small retail businesses and profitability in Bambili.

H₂: There is no direct relationship between the types of online marketing used by small retail businesses and profitability in Bambili.

H₀: Online marketing strategies significantly affect the profitability of small retail businesses in Bambili.

H₃: Online marketing strategies does not significantly affect the profitability of small retail businesses in Bambili.