E-MARKETING AND SMALL ENTERPRISE THREATS AND OPPURTUNITES

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CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

The last two decades have witnessed an enormous and explosive growth in the use of internet technologies especially the WWW for business purposes by 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 a 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 the organizations round 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). There is a scarcity of literature of 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 business 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 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 in the near future; 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 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 are 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 old mind set; and successful online marketing will likely be those that have both physical stores and web sites “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 skill, 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 an employment etc. income generation and redistribution etc. Noteworthy at this point in the fact the small scale business especially in the sub-Saharan region appear to be lagging behind in the global trends with respect to small scale businesses. In Japan for example, small scale businesses now engage an international business due to their ability to create product according the taste of the market and are able 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 is 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 that is why the number of users transacting online are 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 gives the small scale business an opportunity to access new export markets This study focuses on e-marketing and small and medium scale businesses with reference to 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.

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