CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The advancement in technology especially in the mobile industry and the changing dynamics of consumer demographics in today‟s business environment is affecting every business including the small and medium-size enterprises. The increase use of the mobile smart phone by many consumers to search the internet from one digital channel to the other in order to buy what they need and want, has shifted their attention from traditional shops where most businesses especially small and medium size enterprises are concentrated. Given that the aim of marketing is to meet consumers where they are and to cultivate a long-lasting customer relationship, research has shown that digital channels with the use of digital technologies have proven more successful in creating and maintaining customer relationships.

Recently, companies of different industries in virtually all industrial sectors are constantly enriching their domain with digital tools (Boksa, Saroch & Boksova, 2020).Digitalization is perceived to be a major topic in all aspects of the society, with a keynote on the effects it poses on political, economic and social elements (Isensee,Teuteberg, Griese & Topi, 2020). According to Li, Su, Zhang, and Mao, (2017). The introduction of the internet since the 1960s has propelled many firms to network via multiple computers, reaching out to each for sole purposes of expansion and growth. In this regard, virtually all management domains and employees in both large and medium firms, now access the computers via the internet to constantly create awareness. Digital marketing involves the use of interactive channels both online and offline including, social media, search engines, mobile devices, interactive television marketing, display advertising and other channels to reach consumers, so the maxim is, if an enterprise cannot be found in social media or other digital channels, then it does not exist, seems to depict consumer behaviour nowadays. It should be clear that the utilization of digital channels is imperative for brands, and it should be advanced in to Small and Medium Enterprises (SMEs) if they want to stay viable and grow. However,it seems that many SMEs do not use the full potential of these new digital tools (Gilmore 2007). SMEs are a substantial part of the world econo2 Europe 99% of companies are SMEs (of which 92% are micro-enterprises) and thosecompanies provide more than 75% of private sector jobs (European Commission 2012); In the United States (US) economy, SMEs represent 99.7% of all employer firms and employ half of U.S. workers (Small Business Administration 2014). The importance of these companies cannot be un-heeded.

Businesses generally aim to grow in terms of market share, assets and to ensure that they attract and retain customers to remain profitable while having durable competitive advantages over competitors. It is noted that concepts of marketing are based on the basic principles of implementation which are very vital for business development (Jobber & Ellis 2013). They also stated clearly that marketing is not an abstract concept, but rather a decisive test that has on the corporate indices such as profitability andmarket share. SMEs need to grow in order to ensure that they survive and be able to compete in the global market. According to Ayyagari et al. (2007) stated that in bothdeveloped and less developed countries, SMEs contribute roughly 75 % of the manufacturing sector‟s formal employment. The growth of SMEs in any country is, therefore, very imperatives as it implies an economic growth. One of the major factors in the growth of SMEs is sales which generate income. This can be attained by marketing their products and services to create awareness and make their products and services most preferred as compared to those of competitors. Therefore, the size, availability of resources and life cycle of the company, and marketing objectives will always differ hence different marketing methods and strategies.

Jain (2014) explained that large corporations usually have huge openings due to their available marketing budgets, permitting them to create awareness and increase customer reach through multi-channel marketing effort. On the contrary, SME lack enough resources which makes them highly limited to the marketing possibilities on the large market size. SMEs are to an extend rotating around limited avenues due to mouth marketing and hence, no potentials for growth. Equally, SMEs do implement informal marketing strategies which are not planned, and employ a bottom-up approach.

A company without a good digital marketing strategy in the web economy is like a bus without tires. Its efficiency and essence is bound to be limited. The turn of the century experienced lots of business firms ditch the Analog medium of conducting business and embrace diverse digital tools, to solidify their presence in the business environment and project their brands with a view of increasing their customer base, making a significant impact on small and medium-sized companies and large companies Lee et al., (2011). The application of digital tools on business activities has been found to improve business competitiveness and opportunity base for Small and Medium Enterprises to compete on closer terms with larger organisations (Chapman et al., 2000). Bearing special significance on the projection of business activities through effective digital marketing strategies with the most prevalent method of marketing in the modern technological era (Kamal, 2016). The purpose is not only to sell products and services, but also to build relationships with customers. A perquisite for Small and Medium Enterprises to explore the digital space vial sustainable digital marketing practices which help access and communicate to a wider range of customers for a better productive output (Mazzarol., 2015).

Digital marketing should be the top priority of every marketing campaign in every business in today‟s business environment. Organizations have continued to priorities the need to boost their brand productivity, increase customer base and realise more return on investment by applying effective digital marketing strategies (Kamal, 2016). Research into Small and Medium Enterprises and entrepreneurship has grown immensely at some point in the last decade and studies may have greatly increased focus on the various economy of the world. Digital platforms provide an excellent ability to grow a Small and Medium Enterprises brand (Castells, 2010). A large majority of corporations compete in various parts of the world as Small and Medium Enterprises, even though the performance level of Small and Medium Enterprises varies, they play a significant role in the overall performance of the whole economy, despite the challenge of sustained performance in the long term (Ates et al., 2013). Digital marketing for Small and Medium Enterprises needs to align with the target audience marketing plans and through digital platforms involves the application of digital marketing techniques, ensuring a move from traditional marketing methods (Eggers et al., (2020). There is a drastic need for Small strategies in adhering to evolving complexity customer behaviour (Dwivedi et al., 2020).

The development of  corporate identity in recent times is an important strategic requirement for Small and Medium Enterprises to grow their own brand marketing strategies and processes (Safeer et al, 2020). Small and Medium-Sized Enterprises operate in a complex and unpredictable business environment, faced with the constant challenge of competing and providing value to customers, against well-known and large business organisations due to their size and economic capacity (Lee et al., 2011). Small and Medium Enterprises Brand building and projection through digital platforms involves the application of digital marketing techniques, ensuring a move from traditional marketing methods (Eggers et al., (2020). There is a drastic need for Small and Medium Enterprises to apply social networks, online advertising campaigns and different virtual approaches to improve their companies‟ developmental growth, which is in cognisance with adapting to new and innovative ways to improve and adapt to a rapid transformational growth (Mohsen et al., 2020). Business has proven to be essential to economic growth and in the last two decades Small and Medium Enterprises are becoming more important around the world (Mingione & Abratt., 2020). It becomes very important for governments and industry players around the globe to encourage the growth of Small and Medium Enterprises for a sustainable impact in the economy, in doing so maintain a competitive advantage. (Glaser et al., 2010).

It is crucial for business organisations to position their brand in a manner that ensures continued growth and maintain competitive advantage in the market, thus not creating an avenue for its competitors to grow more to gain a massive edge in the market. Small and Medium Enterprises must improve or maintain a healthy sales and profit level to ensure they survive in the market place. Claver et al., (2006) management literature provides a platform for entrepreneurs to enhance their Small and Medium Enterprises brand value and bolding through the digital space, as a guaranteed way of increasingsales, creating new customers and ensuring customer retention. (Bianchi & Bivona, 2002). This is in line with governmental efforts, which aim at investing in solid internet infrastructure, as a way of encouraging S Small and Medium Enterprises’ digital business operations (Beckinsale & Levy, 2004). Small and Medium Enterprises have been generally viewed as an integral part of significant economic growth and development both on a national and international pedestal (Smallbone & Wyer, 2000). On that basis, the researchers is interested in proving whether digital marketing and its effective implementation can grow customer relationship and increase the sales growth of small and medium size enterprises in Bamenda town.

1.2 Statement of the problem

According to (Montgomery, 2018). 17% of failed SMEs is related to lack of comprehensive digital marketing strategy leading to poor performance and inability toapply customer-centric marketing, predict buying behaviour and increase global competition.

Given that the marketing aspect of SMEs is different to that of large corporations, it is therefore making the adoption of digital marketing to be a greater challenge for them (Lipiäinen and Karjaluoto, 2013). Adoption of digital channels is likely to be more successful in large businesses since they are more likely to have the necessary resources and knowledge compared to small businesses (Barnes et al., 2012). Currently, a numberof SMEs have embraced digital marketing and it would be important to know its  impact in terms of performance which translates to profitability. Research has shown that large companies have embraced digital marketing to compliment traditional marketing, but SMEs have limited adoption and implementation of digital marketing strategy to complement their traditional marketing strategy.

The adoption and effective implementation of digital marketing strategy can improve business performance, enable new customers reach at a lower cost, increasing brand awareness and improve global competition, but most small and medium size enterprises in Bamenda town turn to concentrate mostly on traditional marketing strategy without considering the value digital marketing could create if adopted to complement their traditional marketing strategy.

The SMEs in Bamenda town faces the challenge of creating new markets, increasing brand awareness, maintaining customer relationship and competing in the global market. Business performance have to be improved upon on traditional marketing channels and digital channels. Furthermore, SMEs in Bamenda town are affected significantly when they cannot reach the right customers on the right channels, compete with others in the global market, and reach new customers on digital channels to increase sales. The mentioned challenges appear to affect sales, annual revenue, customer relationship and consequently affecting the performance of small and medium size enterprises in the Bamenda town.

Equally, digital marketing provide channels and tools that facilitate customer interaction, immediate customer feedback, analytics and tracking tools that helps to improve business performance. But the communication channels put in place by small and medium size enterprises in Bamenda town are traditional and one way in nature which makes it difficult for customers to relate with the business before and after a purchase, limiting customer interaction with the business and customer relationship building which affect the ability to obtain feedback, create brand loyalty, follow up customers, thus affecting business performance.

In addition to the above problems, most consumers in Bamenda town area makes buying decisions on the basis of information gathered on the internet from one digital channel or the other using their mobile smart phone. But unfortunately, most small and medium size enterprises turn to focus their strategies and communication on traditional channels and retail outlets around the area limiting digital marketing adoption and usage, consequently affecting customer reach, sales, customer relationship and overall performance.

This study is aimed at evaluating the effect of digital marketing on the performance of small and medium size enterprises using digital marketing channels such as (Email Marketing, Online Advertising, Social Media Marketing, search engine optimisation) and fill the gap of the limited research conducted on the influence of this platforms on small and medium size enterprises. All these make up reasons the researcher wants to carry out the research to know what really limits the adoption and implementation of digital marketing strategy by small and medium size enterprises in Bamenda town, and how it can affect the performance of small and medium size enterprises in Bamenda town, evaluate it, present a whole picture of the study and provide possible recommendations.

1.3 Research Questions

1.3.1. Main research question

What is the effect of digital marketing on the performance of small and medium-sized

enterprises in Bamenda?

1.3.2 Specific research Questions

The following are research questions to help guide the researcher in the study;

1. What effect does email marketing has on the performance of small and medium-

sized enterprises in Bamenda?

1. To what extent does online advertising affect the performance of small and

medium-sized enterprises in Bamenda?

iii. What effect does social media marketing has on the performance of small and

medium-sized enterprises in Bamenda?

1. To what extent does search engine optimization (SEO) affect the performance of

small and medium-sized enterprises in Bamenda?

1.4 Research Objectives

The objectives of this study are divided into main and specific objectives;

1.4.1 Main Objective

The main objective of this study is to examine the effect of digital marketing on the performance of small and medium-size enterprises in Bamenda.

1.4.2 Specific Objectives

1. To investigate the effect of email marketing on the performance of small and medium-size enterprises in Bamenda.
2. To assess the effect of online advertising on the performance of small and medium- size enterprises in Bamenda?

iii. To examine the effect of social media marketing on the performance of small and medium-size enterprises in Bamenda?

1. To assess the effect of search engine optimization (SEO) on the performance of small and medium-size enterprises in Bamenda?