ABSTRACT
This study investigated the impact of
online marketing on small and medium enterprises in Lagos metropolis. A
descriptive quantitative survey research design was adopted in the study. The
population of the research was all the Small and Medium Enterprises in Lagos
metropolis which are using online marketing applications and own internet
website which is estimated to be 395 units. Out of 395 units, a sample of 200
SME units is to be taking to obtain the primary data. Therefore, 200 subjects
were randomly selected for the study. In this study, stratified random sampling technique was used to collect
necessary data. A well-structured
Likert-scale instrument was used to assess the impact of online
marketing applications (internet marketing, advertising, order and delivery,
costumer support service and payment system) on business processes in the small
and medium sized enterprises. While
Pearson product moment correlation statistical method was used to test the
hypotheses in the study at 0.05 level of significance. Based on the analysis of
the data, the results obtained showed that:
- Online marketing applications have a significant positive impact
on business process in small and medium enterprises.
- There is a significant relationship
between online marketing and small and medium- sized businesses
productivity.
- Online marketing order
and delivery has a significant positive impact on business process in
small and medium enterprises.
- Online marketing customer
support service has a significant positive impact on business process in
small and medium enterprises.
- Online advertising
has a significant positive impact on business process in small and medium
enterprises.
- Online payment
system has a significant positive impact on business process in small and
medium enterprises.
From the findings of this
study, it can be concluded that there is the need for SMEs to reexamine the way
they use of the Internet and the website, increase the awareness of the importance
of the Internet integration into their business, and get some useful
information on how other SMEs conduct their Internet business, as well get some
concentrative literature on Internet applying to SMEs international business,
which might highlight their future development.
TABLE OF CONTENTS
Title Page i
CERTIFICATION ii
DECLARATION iii
ACKNOWLEDGEMENT iv
DEDICATION vi
TABLE OF CONTENTS vii
LIST OF TABLES x
ABSTRACT xi
CHAPTER
ONE
INTRODUCTION
1.1.Background to the
Study 1
1.2.Statement of the
Problems 3
1.3.Objectives of the
Study 4
1.4.Research Questions 5
1.5.Research Hypotheses 5
1.6.Significance of the
Study 6
1.7.Scope of the Study 7
1.8.Operational Definition of Terms 7
CHAPTER
TWO
REVIEW OF RELATED
LITERATURE
2.1. Introduction 8
2.2. Definition and Characteristics of SMEs 9
2.3. Characteristics of Small to Medium-sized Enterprises 11
2.4. Internet and network relationship 15
2.5.
Internet and transaction cost 16
2.6. Internet
and Entry barriers 17
2.7. Small to medium-sized enterprises and
information technology 17
2.8. Small to
Medium-sized Enterprises (SMEs) 18
2.9. Small to
Medium-sized Enterprises and information technology usage 22
2.10. Small to
Medium-sized Enterprises and Internet usage 23
2.11. The opportunities and benefits available to Small to Medium-sized
Enterprises 26
2.12. Advertising and Marketing of SMEs
online as a competitive tool 28
2.13. Research
and Development ideas 31
2.14. Internet as a Medium of Communication 31
2.15. Geographic Reach/General Accessibility 33
2.16. Internet as Competitive Tool 33
2.17. Summary of the Review 36
CHAPTER THREE
RESEARCH METHODOLOGY
3.1. Research Design 40
3.2. Population and Sample 40
3.3. Research Instruments 40
3.4. Validity and Reliability 41
3.5. Methods of Data Administration 42
3.6. Method of Data Analysis 42
CHAPTER FOUR
RESULTS AND DISCUSSIONS
4.1. Introduction 44
4.2. Hypotheses Testing 44
4.3. Hypothesis one 44
4.4. Hypothesis two 46
4.5. Hypothesis three 47
4.6. Hypothesis four 48
4.7. Hypothesis five 50
4.7. Discussion of the Findings 52
CHAPTER FIVE
SUMMARY,
CONCLUSION AND RECOMMENDATION
5.1.
Introduction 55
5.2.
Summary of the Study 55
5.3. Conclusions 57
5.4. Recommendations 59
REFERENCES 62
APPENDICES 63
CHAPTER
ONE
INTRODUCTION
1.1. BACKGROUND TO THE STUDY
Businesses are looking to new technologies
to meet their unique business requirements and
position themselves to take advantage of
global changes in business activities. Businesses both
large and small need information to
succeed in today's rapid changing environment, they need to
be able to process data and use
information effectively when conducting their day-to-day operations. The growth
of the Internet has opened up a vast arena, providing more opportunities for
businesses, particularly small to medium-sized enterprises (SMEs) to sell their
products and services to a global audience than they would have been able to
afford to reach using the traditional methods.
A search of literature reveals that many
changes in organization today have been technology
driven Clarke (2001) notes that
information technology (IT) is really changing the whole nature
of business transaction between consumers
and suppliers of goods and services. Pigneur (1996)
points out that companies especially SMEs
are confronted with a number of changes that require
innovative answers. These challenges
include the emergence of a competitive global economy;
the trend towards an information based
economy, and the shift from mass production to a customer-driven economy. He
adds that to compete in today's global information-based and
customer-driven economy, SMEs must be
efficient, innovative and competitive: able to respond
just in time, focus on quality, and
implement mass-customization. He suggests that in order to do
this today, they must also be able to
leverage the new information and communication= technologies (ICTs) to fit
better in their environment, establish more co-operative inter-organizational
relationships and compete on the international markets (Pigneur, 2006).
There have been many studies and reports
published in UK and overseas in the last few years on
the Internet usage in business in general.
This study is not another examination of the general
usage of Internet in business, rather it
builds and summarizes the extensive and valuable research
already completed
in these areas and extracts the essential themes and messages being expressed
by most SMEs. The
study aims to examine the perceived opportunities and benefits that Internet
usage can offer to SMEs.
Barnes et al., (2008) asserted that SMEs
make significant contribution to most economies of the World, they are socially
and economically important, since they represent 99 % of all enterprises in the
EU and provide around 65 million jobs and contribute to entrepreneurship and
innovation. SMEs have been shown to contribute significantly to country and
regional economic growth, increased employment levels and locally relevant
product and service. SMEs are very important to the UK economy; they accounted
for 99% of all enterprises and provide over 59% of private sector employment
(BERR, 2008). They are also the source of future growth and innovation. Barnes
et al., (2008) argue that the advent of the digital economy has made the
adoption and use of Internet a significant issue for most SMEs. Yet, many SMEs
find themselves in a difficult situation. They may be too small to be able to
employ a dedicated IT expert and lack the resources to buy consultancy advice.
They often have limited experience in selecting, implementing and evaluating
suggested IT solutions (Barnes et al., 2008). Barnes et al., (2008) noted that SMEs find
themselves caught in a trap, lack of resources means that while there may be an
aggregate demand for IT service and advice, individually, the varying nature of
that demand makes it uneconomical for other firms to provide a service meeting
that demand.
According to Bili and Raymond (2003),
Small and Medium
Business Enterprises (SMEs) are considered to represent the driving forces of
sustainable local economic development throughout the world. They form the base
of economies, stimulate private property and entrepreneurial capabilities
which, due to their flexibility, can quickly adjust to market changes, generate
employment, create diversified economic activity, and contribute to exports and
trade.
1.2.
STATEMENT OF THE PROBLEM
Online marketing has
changed and is still changing the way business is conducted around the world.
The commercialization of the Internet has driven online marketing to become one
of the most promising channels for inter-organizational business processes.
Online marketing evolved in various means of relationship within the business
processes. In Nigeria, many small and medium enterprises are investing more and
more in the Internet/online marketing business. In order to survive in today’s
challenging environment, it is imperative that SMEs be competitive and
resilient. So, the main problem of this study is to determine the effect of
online marketing applications on the business processes in the small and medium
enterprises.
Suffice to say that online advertising or marketing in
the major sites in Nigeria occupy prominent position, the effectiveness of
online advertising comes from whether consumers are willing to click and watch,
but the reality is that most net consumers ignore online advertising. How to
attract the attention of consumers has become a very important issue. In
practice, different forms of advertising can be designed to attract consumers,
such as pop-up ads, button ads, advertising couplet, floating ads, full-page
advertising, and so on.
Especially for SMEs, due to restrictions
on marketing resources, news, advertising, large-scale promotional activities,
they have less chance of publicity, so website promotion via the Internet means
is much more important for them than big ones. Thus, this study investigates relationship
between online marketing and small and medium sized businesses productivity in
Lagos metropolis.
1.3. OBJECTIVES
OF THE STUDY
The objectives of this study are:
1.
To determine if online marketing applications has a significant and
positive impact on business process in small and medium enterprises
2.
To investigate the nature of the
relationship between online marketing and small and medium sized businesses’ productivity.
3.
To examine if online marketing order
and delivery has a significant and positive impact on business process in small
and medium enterprises.
4.
To determine whether online marketing customer support service has a significant and positive impact on
business process in small and medium enterprises.
5.
To investigate if online advertising
has a significant and positive impact on business process in small and medium
enterprises.
6.
To find out whether online
payment system has a significant and positive impact on business process in
small and medium enterprises.
1.4.
RESEARCH QUESTIONS
The following research
questions will guide the study.
1.
Will online marketing applications has a significant and positive
impact on business process in small and medium enterprises?
2.
What is the nature of the relationship
between online marketing and small and medium- sized businesses’ productivity?
3.
Examine if online marketing order
and delivery has a significant and positive impact on business process in small
and medium enterprises?
4.
Is online marketing customer
support service has a significant and positive impact on business process in
small and medium enterprises?
5.
Will online advertising has
a significant and positive impact on business process in small and medium
enterprises?
6.
Is online payment system
has a significant and positive impact on business process in small and medium
enterprises?
1.5. RESEARCH HYPOTHESES
The following research
hypotheses will guide the study.
1.
Online marketing applications have no significant and positive impact
on business process in small and medium enterprises.
2.
There is no significant relationship
between online marketing and small and medium- sized businesses productivity.
3.
Online marketing order and
delivery has no significant and positive impact on business process in small
and medium enterprises.
4.
Online marketing customer
support service has no significant and positive impact on business process in
small and medium enterprises.
5.
Online advertising has
no significant and positive impact on business process in small and medium
enterprises.
6.
Online payment system has no
significant and positive impact on business process in small and medium
enterprises.
1.6.
SIGNIFICANCE OF THE STUDY
The findings of this study will be beneficial to organizations
as well as firms especially on the need to focus generally on online/internet
marketing, individual, group/team and organizational creativity. Also, the
findings of this study will serve as a medium of awareness and enlightenment on
the many environmental trends affecting organizations in recent years and
proffer possible panacea to such problems as they rear heads. Not only this,
but also, its findings will serve as platform mostly for professional manager,
chief executives and all personnel involved in the staff training,
administration and management on how to drive their staff for maximum human creativity
and innovation. By so doing, several organizations would be better equipped to
develop a repertoire of techniques (management control systems) to improving
performances of average employees and at the same time improving the efficiency
in management by enforcing cooperation of workers and standardization of work
methods especially in creative organizations.
In conclusion, the outcome of this study will provide
a contribution to the management of national culture as regards cultural
individualism, collectivism, uncertainty avoidance, multiple cultural
dimensions as may affect an individual employee’s preferences for, and reaction
to management control systems in interactive ways; and it will be a systematic
knowledge base for researchers.
1.7.
SCOPE OF THE STUDY
The scope of this study will be all the
Small and Medium Enterprises in Lagos metropolis which are using online
marketing applications and own internet websites.
1.8.
DEFINITION OF TERMS
Medium-sized
Enterprises: These are defined as enterprises which employ fewer than 250
persons, and whose annual turnover does not exceed N50 million or whose annual
balance-sheet total does not exceed N43 million.
Small Enterprises : These are defined
as enterprises which employ fewer than 50 persons and whose annual turnover
and/or annual balance sheet total does not exceed N10 million.
Micro Enterprises : These are defined
as enterprises which employ fewer than 10 persons and whose annual turnover
and/or annual balance sheet total does not exceed N2 million.
Online Marketing: This
refers to all forms of internet advertising, internet payment system, internet
marketing, internet customer support service and internet order and delivery.
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