The Influence of Internet Marketing on the Effectiveness - Dissertation Example

?The Influence of Internet Marketing on the Marketing Effectiveness of Small and Medium Enterprises: A Proposal Introduction Background of the Study The Internet has transformed into a fundamental medium that provides access to a wide range of applications suited for organisations. For instance, basic information exchange can be obtained through electronic mail and company presentations are accessible in websites. The process with which firms invest in the Internet and utilize its potential as a business resource has often been reported as a process that sequentially develops over time through a number of steps. As companies gain experience through the use of basic electronic commerce activities, they are able to continue on with the more advanced stages of development. They are able to increase their Internet use with which applications for businesses reach a more highly developed level (Jones and Coviello 2005). While applying the Internet for business purposes may not necessarily require substantial amounts of investment, the market channel may call for certain changes in the current channels for routines and distributions. Companies may also experience short-term losses and risks, and be driven to utilize human competencies and financial resources alike (Barnir, Gallaugher, and Auger 2003). The use of the Internet to carry out marketing activities can also have a significant impact in the way organisations interact with their customers as well as sales force operations and existing relationships with customers (Eyuboglu and Kabadayi 2005). Through this perspective, Internet usage for marketing and management activities can bring about challenges and risks for any business company, thus the need to further examine the relationship between the Internet and such organisational activities. Research Questions Due to the issues that have been brought about by Internet usage in marketing, the current study aims to answer the following questions: 1. What are the ways with which small and medium-sized enterprises (SMEs) use the Internet for marketing activities? 2. How does Internet usage affect marketing of SMEs? Research Objectives In relation to the research questions, the study also intends to address the following objectives: 1. To identify the common Internet tools that SMEs use to support their marketing operations; and 2. To determine the impact of Internet usage on marketing activities of SMEs. Review of Related Literature Introduction One of the most relevant developments over the past years has been the progress exemplified by the Internet with which Internet adoption has significantly increased for marketing activities and opportunities. The Internet allows individuals to exchange ideas, send e-mails, shop for products, have access to news, and obtain business information (Armstrong and Kotler 2000). Internet usage for marketing increases the availability of information compared to conventional forms of media (e.g. TV, radio, print) with a moderately low cost for entry. Consumers are able to access the Internet and search for products, and purchase these at any given time, thus increased convenience. When companies are capable of offering convenience to its customers, such as through certain individualized customer services, they will eventually result to the increase of value offered by businesses and enable customers to experienced increased levels of satisfaction (Tsiotsou and Vlachopoulou 2010). Internet usage is also a cost-effective means of carrying out marketing operations as it can result to a reduced requirement for sales force members. On the whole, using the Internet to support marketing activities can lead to the expansion of businesses, from local to national/international markets, thus increased opportunities for growth. The following sections will then look into SMEs and their experience with the integration of Internet in their marketing operations. Internet and Marketing Activities in SMEs The technologies that the Internet has integrated into businesses have enhanced the effectiveness of marketing activities; Internet usage has provided various companies, such as the SMEs, with a wide range of opportunities that may not be available to them if Internet tools and resources were not utilized (Palmer and McCole 2000). Numerous studies have been carried out with regards to the adoption of the Internet particularly in large organisations. For instance, the technology adoption model has been used to determine the underlying motives for computer acceptance, such as its perceived usefulness, cognitive contributions, and social influence (Venkatesh and Davis 2000). Other studies have also identified learning orientation and marketing orientation as factors that can influence the intentions of companies to make use of the Internet for their businesses (Nguyen and Barrett 2006). However, there has been limited evidence regarding Internet usage among SMEs (Ching and Ellis 2004). Marketing activities in smaller firms can be perceived to be somehow different from that of large organisations in such a way that these involve greater intuition and more competencies. They also focus more on networking and are carried out in the presence of human resource, time, and financial constraints. Although SMEs demonstrate their strengths through their ability to establish strong relations with customers, to some extent, they can find themselves pressured by the competition brought about by companies of any size who have utilized the Internet for business operations. Moreover, there is a greater threat of entry particularly from large national and international firms due to the fact that there are lower costs for transaction when entering the markets that are led by SMEs (Houghton and Winklhofer 2004). Such concerns have driven SMEs to begin their adoption of the Internet, although they may not yet have understood the implications of this usage, for them to maintain a strong competitive advantage. Nonetheless, studies have pointed out that Internet usage can bring about certain benefits for SMEs including inexpensive advertising in markets, the use of online quotes, the use of e-mail in marketing activities, and reducing the costs for print materials (Daniel, Wilson, and Myers 2002). An improved credibility and professional image through the establishment of a reliable web site can also be attained with which these firms can answer questions regarding their products and services in a consistent manner. Moreover, Internet usage can also allow SMEs to conduct research and learn more of foreign markets (Kula and Tatoglu 2003). However, according to the study of Gallagher and Gilmore (2004), although internet marketing provided a wide range of opportunities and benefits for SMEs, these smaller firms were unable to effectively respond to the changes that were brought about by their Internet adoption. Moreover, they were not yet capable of taking full advantage of Internet usage. Other studies pointed out that SMEs perceived the Internet as a separate component as opposed to incorporating it into the organisation. For instance, they primarily use Internet tools for promotional purposes rather than including its usage for planning and development for future uses. Furthermore, this suggests their inability to produce long-term competitive advantage in terms of integrating the Internet into their marketing activities. Due to such occurrences, it has become a critical issue to determine whether the use of Internet marketing can devalue or replace traditional operations for marketing (Windrum and Barranger 2003). Effects of Internet on Marketing Activities Drawing on previous studies on Internet usage in businesses, it has been strongly suggested that Internet services can facilitate marketing operations. For example, the use of the World Wide Web (WWW) can be used for customer classification while the USENET service can determine market segments with which industrial customers can be identified. Such services can also be applied in business discussion groups (Sadowski, Maitland, and van Dongen 2002). The file transfer protocol (FTP) can also manage the progress for accessing and managing online customer databases with which the files of current and potential customers are stored and organised. Target promotion activities can also be carried out while the online transmission of product specifications can provide more detailed information in relation to the preferences and interests of customers (Wu 2002). Due to the interactive information exchange, salespersons become more capable of customizing their product and price offerings. Internet tools and resources can also enhance the communication between companies and markets in such a way that their capabilities are increased, including the accurate transmission of infomercials and online catalogues, carrying out of audio-visual presentations, and gaining access to various databases by means of online connections (O’ Connor, Galvin, and Evans 2004). It has been therefore implied that improved capabilities for interactive communication can lead to a wide spectrum of marketing trends and opportunities. Thus, the greater usage of the Internet can create a more significant impact on marketing activities. Aside from managing information, the Internet has also allowed business-to-business organisations to create new value for their customers by addressing a broader range of needs. The ease of interaction and communication among organisations can also result to an increase in information exchanges between these firms, hence supporting a more rapid process of identifying customer needs and creating new developments and innovations (Brodie, Winklhofer, Coviello, and Johnston 2007). The Internet has also been considered as an effective means of improving the cooperation efforts among customers and suppliers, which can result to product customization to address customer needs and preferences that are constantly changing. On the whole, Internet usage in marketing activities can allow firms to expand into new markets, strengthen relationships with customers, and improve cooperation across the organisation. With regards to sales management, the Internet has been referred to as a relevant tool for increase sales productivity and efficiency. It can greatly reduce the costs required for traditional exchange transactions; for instance, it can reduce the costs associated with the recruitment and training of sales employees, identification of potential buyers, and assessment of buyers’ capacity (Lages, Lages, and Rita 2004). Because the Internet has been shown to provide more efficient and individualized services to customers, it can also reduce the travel time of sales persons as well as the time allocated for face-to-face service jobs that are carried out with customers. The role of professional salespersons in service and production will also be minimized as they will not be constantly required to create solutions for customer problems owing to the capabilities of the Internet. Thus, the need for salespeople and the costs allocated for these individuals will be greatly reduced (Avlonitis and Karayanni 2000). Due to such findings, it has become an important issue to further examine the outcomes of Internet usage, particularly on marketing activities and its consequential effects on sales performance. Methodology This chapter involves the methodological techniques this study will be applying in identifying the effects of Internet usage on marketing activities and sales performance. If research outcomes should possess reliability and consistency, then there is a need for research procedures to be completely explained and understood. The following sections will explain the research approach and design along with the data gathering procedures and ethical considerations that will be used for the research process. Research Approach The study shall make use of a quantitative approach in addressing the research problem. Quantitative research allows the researcher to conduct empirical investigations regarding quantitative phenomena and the relationships that may exist among them. Hence, quantitative research helps develop and apply theories, hypotheses, and models that are relevant to a certain phenomena. Quantitative research methods primarily include the use of statistics, tables, and graphs to express the relationships of the variables in a mathematical form. This research approach is an appropriate means of concluding the results as well as proving or disproving any given hypotheses. Research Design The research design shall be descriptive-correlational with which the researcher will determine how Internet usage can be related to marketing and sales performance of SMEs. This can also allow the researcher to predict future events based on current knowledge and findings. Data Gathering Procedures Aside from the study’s primary data, secondary data will be collected through online journals books, and libraries along with the use of search engines with which keywords, such as “effects of Internet on marketing” and “Internet usage and marketing in SMEs” will be used. To collect the target sample, purposive sampling shall be used to select the participants who shall be involved in the study. The inclusion criteria are as follows: 1) must be employed at a SME; 2) have a minimum tenure of 1 year; and 3) must be in the marketing department and have had experience in the company’s marketing activities. Survey questionnaires based on an instrument created by Avlonitis and Karayanni (2000) will be distributed among these participants to determine the effects of Internet usage on marketing activities and sales performance. Once responses have been gathered, all statistical analyses, mainly composed of descriptive statistics and the Pearson correlation coefficient, shall be carried out through the Statistical Package for the Social Sciences (SPSS) version 17.0. Ethical Considerations To incorporate ethical procedures into the study, the research project will be planned in such a way that it will meet ethical responsibility. Certain steps should be taken to ensure that the welfare of participants is protected along with those who can be affected by the outcomes of the research. Protection from mental and physical discomfort and other factors that are viewed as threats should be demonstrated in the research procedures. During the process, the targeted participants will be informed regarding the aims and objectives of the research; a consent letter will be distributed among the individuals who will be possibly participating in the study to make sure that they are willing to participate in the study. They will also be ensured that their privacy and anonymity will be kept. Conclusion The current study will be making use of a quantitative approach to research along with a descriptive-correlational research design. Secondary data will be collected through the use of online resources such as books and journals. Purposive sampling procedures will also be applied in order to come up with the targeted sample from the SMEs while survey questionnaires are to be distributed in order to gather responses. These results will be encoded into the Statistical Package for the Social Sciences (SPSS) version 17.0. Ethical considerations will also be applied order to address the researcher’s ethical responsibilities in the research process. References Armstrong, G, and Kotler, P 2000, Marketing, Paper presented at the 5th ed., Prentice-Hall, Englewood Cliffs. 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