Internet Marketing and SMEs

By Downie, George | Management Services, July 2003 | Go to article overview

Internet Marketing and SMEs


Downie, George, Management Services


The following paper represents the current state of research into the use and usage of the Internet for marketing purposes by small & medium sized enterprises (SMEs). The paper discusses how the research was established, its design and development, and sets out the operational parameters addressed. It also identifies the factors that SMEs view as critical to the success or otherwise of their development of a web presence.

The explosion in both content and usage of the Internet has in no small way been fueled by the business community. This paper represents the current state of 'work in progress', at Bournemouth University Business School researching the use and usage of the Internet for marketing purposes by small and medium sized enterprises (SMEs). It seeks to identify the answer to three key questions:

* What is the main driver for an SME to develop a web site

* What are the main, identifiable marketing benefits and drawbacks of a Web presence for an SME

* Does the development of a web presence represent a worthwhile investment for all SMEs

Before launching into the various aspects of the debate, it is perhaps worthwhile to establish a few definitions.

First of all, this research is geared towards traditional SMEs who would fall into the category of 'bricks and clicks' ie those who would aim to maintain a physical presence in the marketplace rather than become truly 'virtual'.

It is also worthwhile to consider what is understood be the term SME. In Australia for example, an SME is defined as an enterprise employing fewer than 20 individuals. In the USA, on the other hand, 'Small' businesses are defined as employing fewer than 250. For the purposes of this research, the definition of SME used is that given in the Companies Act 1985 (and subsequent) as shown in the table below.

The main body of this paper discusses the initial research undertaken in developing a conceptual framework, the piloting of a research methodology on a representative sub group, and the conclusions reached from the initial responses. An outline of the ongoing research with a wider, statistically significant population is also presented and the potential widening of the study is explored.

Development of the Research Framework and Methodology

The conceptual framework

This section discusses the conceptual framework that has been developed in order to analyse, explain and interpret the reasons for and logic behind the answers to the three research questions identified above. This essentially inductive platform is then used as a foundation for the development of an empirical approach to be used to test the efficacy of a representative sample of SMEs' web presence against a range of key business and marketing drivers.

The conceptual framework has been developed to address the research questions across a range of SME business types, namely B2C retail offerings, B2B enterprises and professional services. This latter group was chosen as it provides an insight into the effectiveness of the web for SME marketing where a single enterprise is active in both the B2C and B2B arenas. The development of the framework has been founded on a literature review that addressed areas that informed the choice of the business together with marketing drivers - specifically: entrepreneurship, buyer behaviour, corporate strategy, marketing communications, data mining, relationship marketing, CRM, customer loyalty and e-commerce.

Framework parameters

There is a wide discussion in the extant literature regarding the importance of 'The Web' in marketing businesses, both small and large, although much appears to be based on generalisation and received wisdom, rather on empirical observation. The Internet has introduced a range of innovative behaviours, both from the business and the customer perspective, with the degree and ease of analysis relating to these ranging from the in depth to the superficial.

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