E-marketing and SMEs: operational lessons for the future Essay Example

Further, studies also point to additional factors such as marketing orientation and learning orientation of he organization as potential indicators of intention to adopt the internet (Unguent and Barrett, 2006).

However, due to the lack of actual research on Seems and the internet no such framework can be found when studying Seems in a regional economy (Chining and Ellis, 2004; Mecum, 1999; Balloonist and Ukrainian, 2000). Marketing in the small firm is different to marketing in the larger organization (Carson et al. , 1995). It is considered to be more intuitive, competency based, revolving around networking and operating under financial and human resource/ time constraints.

Whilst the traditional strengths of Seems are their ability to serve ache markets and develop strong relationships with customers, these are (to some extent) diluted by internet enabled businesses of any size. The threat of entry from larger regional, national and international firms is greater because of the lower transaction costs involved in entering markets dominated by Seems.

This poses the dilemma of either Jumping on the bandwagon of internet marketing adoption, and perhaps not fully understanding all the implications, or waiting and being left behind by competing businesses that are already using the internet and e-marketing (Herbing and Hale, 1997). Earlier studies indicated that Seems, could benefit from implementing the internet into their marketing mix, for example, marketing products and services by providing online quotes, advertising in more markets with less expense, using e- mail as a marketing tool and decreasing the costs of printing materials such as catalogues and glossy brochures.

They could also enhance their credibility by creating a professional image through the presence of an efficient

web site, answer questions about products and services in several languages and conduct research in foreign markets (Mecum, 1999; Kulak and Tattoos, 2003). A study of Seems in 2000 indicated that despite the opportunities that it offers and the benefits predicted from employing an e-marketing strategy, Seems were slow to respond to the changes brought about by the internet and were not yet making effective use of it (Gallagher and Gilmore, 2004).

Findings (in 2000) indicated that Seems see the internet as a distinct and separate entity as opposed to integrating it within the whole organization. They introduced it in an ad hoc manner, mainly as an additional promotional tool, instead of developing plans for its future use. Thus, they ere failing to use it to create real competitive advantage and simply made do with the direct operational benefits that it had to offer in terms of marketing to whether the internet and e-marketing will ever replace or devalue traditional marketing activities and tools particularly for Seems (Egan et al. 2003; Windrow and Bargainer, 2003; Gallagher and Gilmore, 2004). Drivers to internet and e-marketing adoption amongst Seems From the literature several pro-active and reactive drivers have been identified as motivations for Seems to adopt the internet and e-marketing activities. Proactive seasons include the chance to eliminate competitive disadvantages of Seems in peripheral areas, the chance to lower operating and marketing costs, the opportunity to promote their company better and enrich their overall marketing communications mix.

Other reasons include the enthusiasm from management, the chance to increase sales or perform market research Factored et al. , 2002; Downier, 2002; Danna and Danna, 2001; Upon and Eastman,

1997). The reactive reasons include increased competition from local competitors as well as larger firms, shrinkage in domestic markets, the fear of competitive disadvantage, as ell as simply Jumping on the bandwagon (Karakas and Pathogenesis, 2000; Premium and Roberts, 1999; Chining and Ellis, 2004).

Barriers to internet/e-marketing adoption for Seems These include the impact of the generic SEEM characteristics on business activity, practical implementation and maintenance issues and organizational obstacles. Generic characteristics of Seems A consistent theme throughout much of the literature is that many of the factors that effect the adoption of new technologies by Seems are a direct result of generic characteristics (Windrow and Bearing, 2003). The financial constraints generic to

Seems mean that they are highly selective in using e-marketing and web site design due to the fact that they need to see the real tangible advantages, compared to traditional marketing communication tools, before they will consider adopting it. Human resource issues often mean that staff workloads are overstretched, resulting in work being priorities, and inevitably other activities being seen as more important than web site development or e-marketing (Windflower and Houghton, 2004). This can be further compounded by the endemic SEEM problem of a lack of specialist skills or know-how of marketing on the web (Chapman et al. 000). The generalist nature of managers and employees within Seems' results in limited knowledge about how various computer technologies could contribute to an overall e-marketing strategy Factored et al. , 2002). Many Seems often become frustrated by their dependence on external service providers. And SEEMS 237 Practical implementation and maintenance issues A number of day-to-day operational practicalities regarding implementation and maintenance of e-marketing

and related technologies create potential problems for Seems that could result in disastrous consequences (Merrier, 2003).

The creation of a web presence, and its maintenance, is very costly for Seems (Hormone and Harding, 1998). Costs and challenges include the size of the web site, how often it needs updating, should the company buy the hardware and software to create it themselves, or should they contract professionals to provide the services. The disadvantage of creating it themselves lies in their inability to keep it updated due to the stretching of staff resources and lack of specialist skills associated with most Seems.

Poor customer service in the form of irregular updating and maintenance and lack of staff training and awareness of the web presence will provide little incentive for repeat visits by a customer and have serious financial implications for that company (Herbing and Hale, 1997; Downier, 2002). During implementation many Seems have experienced "information overload" SPAM, inappropriate web design, poor measurement of effectiveness and inappropriate links and banners that have all been shown to have had deleterious effects (Downier, 2002).

Many Seems whose site content had been created by an IT department were dissatisfied with the way the site was structured. Also, whilst the adoption of a web tie among Seems is widespread there is a notable lack of knowledge on web site sophistication post-adoption and this subsequently questions the degree to which e- marketing can be considered to offer a genuine replacement or supplement to traditional marketing activities and tools (Windflower and Houghton, 2004). The internet's low cost communication permits firms with limited capital like Seems to become global marketers at the early stages of

development.

However, it can be considered potentially harmful for an SEEM to open up to a global market if the company is not ready (Burns, 2003) and so the value of e-marketing for Seems has en questioned (Downier, 2002). Also, the small nature of Seems and the close proximity of employees mean that they cannot benefit to the same extent from the advantages or internal communication via e-mail that the workforces of many large companies experience due to their size (Chapman et al. , 2000). Organizational obstacles A common problem of Seems who have adopted the internet appears in its cost effectiveness.

A recent study found that many Seems complained that whilst they had received many online enquiries, very few of these had actually turned into completed orders (Chining and Ellis, 2004). This finding is similar to that of Upon and Eastman (1997) who suggested that online sales are one of the most disappointing and De- motivating issues amongst Seems adopting the internet, e-commerce and using e- marketing. In addition, the multi-task role of the managers means they have little or no time to measure the effectiveness of the results.

Indeed, one of the biggest sources of frustration among Seems attempting to use the internet and e-marketing as a strategic tool is that their partners, suppliers or even their customers are not up to date or competent in using the internet, e-mails or genealogy, fast connections or widespread internet use prevents e-marketing from reaching its full potential and thus many attempts at e-marketing are wasted upon some segments of potential customers (Danna and Danna, 2001; Nonce, 2002).

Poorly thought out online activities based upon poorly

designed web sites in response for a desire to have any sort of internet presence will often result in an expensive and embarrassing experience for the under-prepared company (Chining and Ellis, 2004; Adman, 2000). Purpose of this research Given all the issues discussed above an in-depth study of Seems use of e-marketing as carried out in a regional economy (Northern Ireland).

An earlier study in 2000 revealed that the use of the internet was widespread but its benefits were questionable, with little sales being generated directly as a result of online marketing activities; though many predicted that there would be a positive impact in the future. The purpose of the research reported here is to re-examine the impact that the internet has had on SEEM marketing activities in the four years since 2000 to examine whether a positive impact had occurred.

The research investigated the issues that Seems experience when trying to implement e-marketing. The aims were to: . Marketing by Seems in a regional economy (Northern Ireland); . Identify the consequences that implementing e-marketing has had on the SEEM businesses within the region, in order to see if the predicted positive impact had occurred; and make suggestions to enable Seems within regional economies to gain a better understanding of e-marketing and thus facilitate better implementation in the future.

Methodology Given the nature of the research objectives it was determined that qualitative research techniques would contribute to an in-depth understanding of SEEM owner/ managers perceptions and decision-making and would be most appropriate for this research. SEEM researchers have been urged to conduct studies that are sensitive to the unique characteristics of small firms (O'Donnell et

al. , 2001).

A qualitative approach where the aim is to explain rather than predict phenomena (Law, 1994) and to understand things rather than measure them (Gordon and Languid, 1988) is more suitable for understanding the business activities of Seems (Gilmore et al. , 2001). One-to-one, in-depth semi-structured interviews were conducted with the marketing managers or IT professionals of ten companies who were directly involved in introducing the internet and e-marketing activities within their respective company.

In depth interviews are an efficient means of interviewing busy managers and to elicit detailed responses regarding their perceptions and experiences of using e- marketing for their business activities. It also allowed for the content and sequence of the data to vary and for questions to be adapted to suit the individual detailed discussion and focus on understanding the driving forces behind, implementation issues and consequences of adopting the internet and e-marketing.

They also allowed flexibility to go into detail about various unexpected aspects of the research findings. Each interview 239 240 lasted approximately between 30-40 minutes and was conducted at the Seems premises. The interviews were taped and then transcribed to facilitate in-depth analysis. Analysis of the data focused on identifying the: specific barriers and the implementation issues each SEEM encountered while adopting and adapting e-marketing within their businesses; and . Uniqueness that implementing e-marketing has had on each SEEM business, in order to see if the predicted positive impact (of 2000) had occurred. The consequences are defined in terms of business performance, that is, sales, working practices, customer relations, marketing activities, corporate image, competitive advantage or costs of exchanging information.

Companies that had been using the internet

for e-marketing for more than five years were specifically chosen so that the company would have experienced a wide variety of issues with regards to e-marketing and had time for its consequences to be noted. Findings The findings are described in relation to the key themes of this study and identified room the literature; the impact of the generic characteristics of Seems, practical and implementation issues and organizational obstacles.

A summary of the key findings in the context of the literature themes is illustrated in Table l. Literature themes Generic characteristics Limited time, people, expertise Practical/implementation issues Cost of creation and maintenance of web site Create weapon in-house or use external expertise Cost effectiveness Customers, partners, suppliers not online Table l. Literature themes and findings from this study compared Spam Findings from this study Limitations exist, but are not insurmountable

Could be overcome by: Staff sharing knowledge and willing to learn Using "technology minded" staff Employing a full-time IT professional Staff training Economic costs not off-putting, but necessary Lack of professionalism in web site design All had experienced inappropriate web design and web sites had been redesigned recently Lack of multi-lingual features In-house - lack of time to update regularly External - difficulty in keeping up-dated, interesting, offering added value and good design No systems in place to measure effectiveness of e-marketing, not sophisticated enough to identify f sales derived from web site Seems frustrated that many customers, suppliers, partners still lacked skills in electronic business activities Increase in spam and Junk-mail effect staff attitude to e-marketing Impact of generic characteristics of Seems In the 2000 study, all the generic issues faced by Seems in

this region were mentioned by respondents, but were stated as being problems associated with the everyday running of a business and were not seen as being insurmountable in terms of achieving success. The difficulties that the Seems in the second (2004) study encountered were similar to hose reported in the earlier study and in the literature especially those related to the generic SEEM characteristics of limited time, resources and expertise (Windrow and Bearing, 2003). The overwhelming majority of the respondents reported that their characteristics of lack of time, human resources or finance were major stumbling blocks to their use of the internet and e-marketing (Windflower and respondents noted financial constraints.

For example, one marketing manager stated: "we don't want to spend an extortionate amount of money or time on e-marketing ND web site development, as an SEEM we don't have an extraordinary amount". Nine of the Seems cited human resource constraints as having a direct impact upon their use of e-marketing activities. Some of these companies outsourced their requirements by employing professionals to implement, create and maintain their web sites. A common theme amongst the respondents was the frustration that they did not have one person to whom they could specifically dedicate to e-marketing or the maintenance of their web site and frequently noted that they were distracted by other more immediate and important business issues. However, some companies dealt with technological constraints by sharing knowledge and each other's experience.

For example, some had technologically minded members of staff so that their web presence could be maintained in-house, some employed full-time information technology systems professionals who had purchased computer software packages for the companies and

were skilled in using them, or staff that who had undergone some form of basic training. This study found a disparity with the literature that indicates the economic costs of setting up an online presence creates a significant barrier to internet marketing activities. The Seems in this study indicated that the costs were by no means insurmountable or off-putting. Indeed, there was evidence that the Seems generalist nature and willingness to learn and "muck in" enabled the Seems to adopt internet usage and perform e-marketing at some level.