E-Marketing and Small Enterprise Threats and Opportunities

E-Marketing and Small Enterprise Threats and Opportunities

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

The last two decades have witnessed enormous and explosive growth in the use of internet technologies especially the WWW for business purposes by a huge number of small and medium scale businesses. E-marketing has not only reshaped the existing small and medium scale businesses but also created tremendous opportunities for new businesses. Most of the small and medium scale businesses in the developing countries are conducting business conventionally, yet in the recent past the trend has been changed and they are now doing business via Internet (Travica, 2002). Business organizations, regardless of their size, have applied internet technological tools in a wide range of their business activities including advertising, online delivery of goods and services, etc via online business and e-marketing services (Ang et al., 2003). Both public and private sector organizations are spending heavily on digitization in the hope of getting a competitive edge in the market. Developing successful e-marketing has become a major issue in the internet age, despite its benefits, there are also threats; studies have indicated that the rate of adoption of e-marketing is slow among organizations around the globe (Mukti, 2002). The main reasons impeding the growth of e-marketing include the lack of financial resources, lack of government support, and lack of IT know-how on the part of management (Bakry and Bakry, 2001). Literature is scarce on this innovative technology in Nigeria, though a few studies were conducted in Ghana, India, Iran, and Mauritius (Sharma and Gupta, 2003). In the past, Seyal (2004) have conducted studies on e-marketing but they were limited to large and industrial businesses only, unfortunately, very limited information is available about the impediments and opportunities of e-marketing in Nigeria. Nigeria is on its way to digital modes of governance. E-marketing is a new concept to the Nigerian psyche and market as compared to other regional countries like Asia; while in the developed world like the USA, 50% of the population is online (Singh et al., 2001). Despite these statistics, the online population of the world is expected to increase dramatically shortly; yet, this growth will come primarily in developed countries. The global economy has reached $70 trillion, but less than 2% of that is online. By 2017 the figure may exceed $110 trillion, of which 8 to 10% will be online (Hayden, 2015), likewise, 90% of the organizations in the US are marketing, buying, and selling online (Bingi et-al., 2000). This represents a significant shift not only in size but also in the nature and magnitude of e-marketing. The political and geographical borders will be less significant to the mobility of capital and time differences for businesses as IT is shrinking the borders and expanding the markets. Researchers seem to agree that in the digital economy, successful e-marketing will employ a more collaborative business model instead of an old mindset; and successful online marketing will likely be those that have both physical stores and websites “clicks and bricks” (McKinsey 2001). Small and medium-scale businesses in Nigeria play a very vital role in the development of its economy. Over the years various policies both from the government and some of the private sector actors have been developed to create enabling environments for these small-scale businesses to thrive. However, the challenges linger. Some of these challenges have been highlighted by many authors to be, poor managerial skills, small capital, wasteful spending by small scale business owners, poor marketing strategies, etc. the is not the negligence of the fact that those few SMEs that have thrived over the years have contributed immensely to the growth of Nigeria economy through the following significant ways, utilization of Nigeria’s resources, increase employment, etc. income generation and redistribution, etc. Noteworthy at this point is the fact that small-scale business especially in the sub-Saharan region appears to be lagging in the global trends concerning small-scale businesses. In Japan, for example, small-scale businesses now engage an international business due to their ability to create products according to the taste of the market and can use available marketing to ensure they gain and return a reasonable market share. This has been made possible despite the many obvious and general challenges that are inherent in small-scale businesses.

1.2 STATEMENT OF THE PROBLEM

E-marketing in Nigeria is facing many challenges to grow as it is still an infant child in the country. The people in Nigeria are economically poor and illiterate which is why the number of users transacting online is limited. The number of organizations offering online business that will necessitate e-marketing is also limited and few of them are generating sufficient revenues. Moreover, globalization is increasingly dominating the minds of progressive business executives in the country to opt for e-marketing. E-marketing as a marketing tool could help the small-scale business in Nigeria reach a wider local market, make gain through competitive advantage while serving a better part of the market. Also, E-marketing allows the small scale business to access new export markets This study focuses on e-marketing and small and medium scale businesses concerning opportunities and threats.

1.3 OBJECTIVES OF THE STUDY

The following are the objectives of this study: 1. To examine the opportunities that e-marketing will bring for small and medium scale businesses in Nigeria.

2. To examine the threats of e-marketing to small and medium scale businesses in Nigeria.

3. To examine the level of awareness of e-marketing as a strategic marketing tool by small and medium scale businesses in Nigeria.