Barriers to eMarketing Adoption Essay Example
Barriers to eMarketing Adoption Essay Example

Barriers to eMarketing Adoption Essay Example

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  • Pages: 10 (2573 words)
  • Published: January 2, 2018
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The methodology involved collecting primary data through a quantitative research technique using a structured questionnaire as the survey instrument. A total of 168 businesses in the Oval Triangle municipal areas were randomly selected and visited between August and November 2008. Out of these, 123 usable questionnaires were obtained after 32 small, medium, and medium enterprises declined to participate.

To examine the factor structure's robustness, factor analysis was conducted using principal component analysis. The findings revealed a five-dimensional structure consisting of a 16-item scale. The major barriers hindering the use of e-marketing included technology incompatibility with target markets, lack of knowledge, stakeholder unawareness, technology disorientation, and technology perception.

Reliability analysis showed coefficient values ranging from 0.70 to 0.8, indicating satisfactory internal consistency within each dimension. These findings have

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implications for marketers aiming to adopt e-marketing strategies. The study provides recommended strategies and insights on how to address the challenges posed by advancements in internet technology.

Nurturing e-marketing awareness and providing adequate information tools through diverse Internet Marketing training programmer may strengthen the internet capacities of Seems. By overcoming the challenges of adopting advanced marketing practices, Seems can become a major source of economic growth for many African countries. The small and medium-sized business sector, including Seems, plays a critical role in economic growth due to the low growth rate of global economies, high unemployment, and a high level of poverty in countries. In South Africa, the Seems sector contributes approximately 30% of the gross domestic product (GAP) and over 80% in global economies, supporting growth and development in various sectors such as the arts, human resources, manufacturing, and sport. Efficient Seems can also facilitate the government's

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plans to create about half a million jobs for South Africans by the end of 2009. According to the August report from the Parliamentary Monitoring Group, fostering the growth of Seems is essential for achieving these goals.

The SEEM sector has the potential for exponential growth through the uptake of Internet marketing strategies. However, the actual utilization of e-marketing has not lived up to expectations. Marketers can meet customer needs by monitoring website visits, emails, surveys, and chat rooms. This enables businesses to develop custom-made products and services that result in high returns. The adoption of e-marketing allows businesses to promote their offerings through advertisements, emails, banners, and mobile phone competitions. It also improves their ability to serve global markets and distribute goods and services worldwide. This article examines the importance of the SEEM sector, e-marketing, and the barriers to its adoption. It also highlights the generic problems associated with e-marketing adoption. Small enterprises in the SEEM sector typically employ between five and 100 people.

Employees are employed on a full-time basis. According to the Department of Trade and Industry, a small business is owner-managed; registered with local authorities; and conducts business activities from fixed premises (RASA, 2005:5).

Medium enterprises consist of between 100 and 200 formal employees (Crone et al., 2004:5). These businesses have the potential to grow into large businesses if they obtain capital injections. They often have a decentralization of power to a new management layer (Fallen, 2000:25-27) between the SEEM operator and employees.

SEEMs are considered the "lifeblood of modern economies" (Raw, Meets & Bing, 003:13), providing more jobs than large businesses and contributing 37 percent to employment in South Africa (Sanctions, 2002:712;Barry &

Miller, 2002:316).

SEEMs offer a variety of goods and services in sectors such as agriculture, arts, human resources, manufacturing, and sports (Crone et al., 2004:6). Moodily's studies (2002:37) have shown that SEEMs are important for job creation and wealth distribution, resulting in a multiplier effect on a country's socio-economic activities. This in turn creates a multiplier effect on socio-economic development (Wrack & Gad, 2007).

Seems are flexible and can also act as subcontractors to most large enterprises in the economy, ultimately leading to equitable distribution of income (Lloyd 2002:8). The Department of Trade and Industry report (RASA:1995) indicates that Seems provide personalized services and also make a positive contribution to wealth creation in the South African economy. They are breeding incubators for entrepreneurial talent and testing ground for new products (Chasten, 2000:74). They are agents of change, widely facilitating innovation and competition within various national economies (Barry &Miller, 2002:317). This sector tends to differ from large enterprises in that they stimulate competition, bring about a diversity of products and services, have less formality in their internal and external systems and possess hands-on managerial style, which facilitates faster decision-making times (Kendall, Tune, Chug, Dennis &-ran, 2001:225). Despite the concerted efforts by the South African government to eliminate potential arises to technology adoption through the liberation's in the telecommunications sector, this growth has not significantly filtered down to the SEEM sector (Upon ;Eastman, 1999:9). 65 The generic barriers to e-marketing adoption are discussed in the next section.

The E-Marketing Association defines e-marketing as the use of electronic data and applications for planning and executing the conception, distribution, promotion, and pricing of ideas, goods, and services to create exchanges that

satisfy individual and organizational objectives. Burgess and Bottom define e-marketing as a business's efforts to inform, converse, promote, and sell products and services over the Internet.

In knowledge economies, competition among profit-making businesses is crucial for attracting customers. Decision-making times and sales cycles are becoming shorter. Additionally, it is important to keep up with contemporary business requirements to ensure that marketing explains why integrating internet-driven marketing principles into mainstream business practices is necessary.

A review of literature suggests that the adoption of e-marketing varies by industry type. Public, education, and charity organizations are the lowest adopters of internet technology. The agricultural sector has seen the slowest global adoption of e-marketing.The findings of Too and Tan (1998:342) are contradicted by this research, as it reveals a significant relationship between industry sector and the adoption of marketing. Businesses in the services sector, especially consultancy and professional services, have shown a strong interest in adopting Internet technologies. This is because their type of business integration requires the use of computer technologies as a core activity (Cowbell, Broodier, Brooked & Palmer, 2004:15). Various industries, such as airlines, hospitality, software, and electronics, have extensively adopted the Internet for their operations (Kalmia & McIntyre, 2002:468). However, manufacturing companies are less likely to adopt Internet technologies compared to knowledge-intensive service organizations like consultancies (Martin & Madly, 2001:403; Shadow's, Maintain & Dongle, 2001:90). The majority of manufacturing firms are still in the early stages of e-business adoption due to perceiving low levels of benefit from it (Ramsey & Abbots 2006:317). Distinctive industries have already benefited from Internet technology, while traditional marketers are yet to experience these advantages (Chant & Eastman, 2000:72). High-tech firms are considered

early adopters of Internet technologies (Fillip, Johansson & Wagner, 2004:182).Contrary to the research conducted by Madly and Addis (2003:323), who argue that there is no link between Internet utilization and the technological aspect of a business environment, it can be potentially harmful to customers' trust in the Internet as a trading platform if a company lacks proper security measures or has an unfamiliar brand name (Durban, Durbin & Dilled, 2003:101).

This is because customers rely heavily on trust when making online research and purchasing decisions (Wagoner 2004:39). The adoption of the Internet as a business tool is hindered by insufficient security measures, lack of expertise, and insufficient funds to protect against unauthorized access from both employees and external hackers (Khan 2007:24-25; Wallach, Braver & Lundeberg, 2000:566). E-marketing contributes to standardization of products and prices as it diminishes the differences between competitors' offerings (Porter, 2001:73).

Additionally, large companies can now enter markets that were typically served by smaller businesses due to the reduced transaction costs brought about by e-marketing (Facto, Chapel & Feint, 166 2002:124). It is these limitations on the part of smaller businesses that have contributed to their low level of adoption of marketing strategies. However, a turning point occurs when marketers surpass each other in terms of information and service quality (Hamlin, 1997:306; Elliot & Sewer, 2006:43).Drew (2003:86) argues that the costs of infrastructure, access, and adoption of e-marketing have decreased to the point where they are no longer a barrier. However, adoption is often hindered by information barriers, such as uncertainties about the Internet's performance and future development, particularly within the SEEM context (Holstein, 2004:321). Some SEEMs operate in small niches in local markets

where "word of mouth" serves as a guarantee for quality, leading them to view the adoption of Internet for marketing purposes as a hindrance to their business communications (Taylor & Murphy, 2004:285).

PROBLEM STATEMENT: The internet is the fastest-growing technology globally, reaching a 25% market share in approximately seven years, compared to the telephone's 35 years and television's 26 years (Sings, 2002:3). However, there is little evidence of long-term strategic development of e-marketing technologies within SEEMs (Fillip et al., 2004:180). Only 17 percent of SEEMs in South Africa consider electronic business transactions critical to their operations (Cayman, 2003:2). Among current users, there are still significant variations in the adoption of e-marketing.

Some small business owners may choose to use e-marketing casually and ad hoc to maintain their independence (Gilmore, Gallagher & Henry, 2007:234). However, there is plenty of evidence suggesting that e-marketing can enhance business practices, especially for small and medium-sized businesses (Whitely, 2000:217). The literature identifies various barriers that prevent the adoption of e-marketing strategies.

Concerns about privacy and security issues can deter small businesses from embracing online technologies (Liebermann & Stashes, 2002:291). A study conducted in Asia revealed that the limited acceptance of online selling by consumers worldwide hinders the adoption of e-marketing as a serious business concept (Lane et al., 2004:10). Additionally, customers' reluctance to shop online is attributed to their limited knowledge and trust in credit card usage, as well as concerns about the delivery of online purchases (Sings, 2002:6).

However, information barriers, such as uncertainties regarding the Internet's performance and the future development of these technologies on a global scale, often hinder adoption (Holstein, 2004:321).

The study conducted by Johnston and Wright

(2004:228) revealed that barriers to the implementation of Internet systems and procedures in different countries are ranked as follows: high cost of installing infrastructure, high price of technology, uncertain return on investment (ROI), limited worker expertise, lack of management vision and support, inability to outsource IT expertise, and bad past experiences. However, these rankings vary across countries. Additional research has identified lack of training, capital, and understanding of the potential benefits as key barriers to e-marketing adoption (Seems, Micro & Adagio, 2005:70). Other studies also point out the lack of knowledge leading to a lack of awareness, advice, and support or having a staff without the necessary IT skills as inhibitors (Standstill & Grant, 2003:23; Cohn & Hushing, 2006:993). Unclear business strategies pursued by SEEM owners often result in their businesses neglecting the value of adopting Internet technology (Micro & Adagio, 2005:70).

Other researchers have noted that the lack of national and international regulations regarding privacy and security is a major concern in regards to the adoption of the Internet (Lewis & Cockerel, 2002:199). The purpose of this study is to build on previous research on barriers to e-marketing among Seems by identifying specific barriers using a factor analytical approach. To achieve an objective perspective, a literature review was conducted on barriers that hinder the systematic adoption of e-marketing, along with an empirical investigation. Primary data was collected through a quantitative research technique, using a structured questionnaire as the survey instrument. The choice of a quantitative study was based on its cost-effectiveness, flexibility, and ability to replicate the research procedure, which enhances the validity of the findings. Quantitative studies provide the rigor and coherence necessary

for addressing the issues and problems (Malory, 2004:137) related to the anticipation of e-marketing by Seems. The sample size for this research was determined using a historical evidence approach (Sigmund, 1999:320), with a set size of 150 deemed appropriate and feasible for this study.

The figures obtained in this study align with previous surveys conducted by Uphold and Sewer (2006:5) and focused on small and medium-sized businesses in the Oval Triangle. The target population was limited to Managers, SEEM owners, IT specialists, or Heads of Marketing Departments.
An appropriate sampling frame was created using various lists from sources such as the Sauteing Enterprise Propeller (GAP), the Oval Triangle business directory, and SEEM databases from relevant municipalities. The Seems were selected randomly to ensure that each unit of the population had an equal and nonzero chance of being chosen, allowing for strategic inferences to be made (Bradley, 2007:172).
Data collection was carried out by three fieldworkers who were chosen based on their understanding of e-marketing. These individuals were selected from a Marketing Research 4 class at a university and were trained in different aspects of questionnaire administration. A pre-test was conducted with five academics specializing in marketing and IT to ensure questionnaire accuracy and assess respondent comprehension. Additionally, a pilot study involving 20 Seems (10 small enterprises and 10 medium enterprises) was conducted.The technique used was an indispensable aid in developing the final questionnaire (68). The views of SEEM operators and other researchers were considered before conducting the main survey, resulting in the compilation of the final measuring instrument. The survey method was used because it is a satisfactory means of assessing information about a population with ease of

administration (Sigmund, 2000:220). A total of 168 businesses within various municipal areas in the Oval Triangle were randomly selected and visited between August and November 2008. Thirty-two Seems refused to participate, resulting in 123 usable questionnaires for analysis (

). The results are described considering the composition of the sample in terms of small and medium enterprises, demographic analysis of the data, and descriptive statistics related to the barriers of e-marketing adoption. Furthermore, the factor analytical procedure and extraction of factors is explained.The composition provided presents information about the sample size and composition of businesses surveyed. A total of 115 businesses (93%) were classified as small enterprises, while only eight firms (7%) qualified as medium enterprises. The composition is further detailed in Table 1, which provides information on the number of employees and annual turnover for each enterprise size category. Additionally, demographic data was collected, including gender, age, and education levels. Out of the 123 businesses included in the survey, 77 respondents (63%) were males and 46 respondents were females (37%). The largest age group among the respondents was between 40 to 49 years, accounting for 39 percent of the sample (n=48). This was followed by the 30 to 39 years age group, representing 34% of the sample (n=39). Respondents under 30 years of age accounted for 15 percent, while those aged 50 years and older comprised 12 percent. The sample included seven out of ten standard industry classification (SIC) sectors. The industry representation is shown in Figure 1, with the community, social, and personal services sectors being the largest category, accounting for 32 respondents (26%). This sector primarily includes hairdressing, medical care, and recreational

services.The sample consisted of 169 respondents from various industries. The wholesale, retail, clothing, hotel, and restaurant sectors accounted for 21 respondents (17%). The manufacturing and financial services sectors each had 18 respondents (15%). The transport, storage, and communication sector had 14 respondents (11%). Figure 1 shows the industry representation of the sample, with agriculture, hunting, forestry, and fishing accounting for 32%, manufacturing and construction for 35%, and wholesale and retail, clothing, communication, hotels, and restaurants for 25%. The remaining 5% comprised financial intermediaries, personal, and other activities.

Descriptive analysis was conducted on barriers to e-marketing adoption. The data was initially analyzed using descriptive statistics. Table 2 presents the barriers to e-marketing adoption as perceived by the respondents. They were asked to list the top five inhibitive factors of e-marketing adoption. The most critical challenge identified was the lack of resources to implement e-marketing systems.

When asked about the affordability of e-marketing implementation, 23% strongly agreed and 62% agreed that it was too expensive. Additionally, 29% somewhat agreed that e-marketing posed a security threat to their business.The adoption process is greatly affected by a lack of knowledge, training, advice, and support. Around 54% (67 respondents) of the Seems stated that they have limited understanding of e-marketing.

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