[MG 3123] [0941757]

BRUNEL BUSINESS SCHOOL

COVERSHEET FOR ONLINE COURSEWORK SUBMISSIONS Module Code MG3123

Module Title

Issues and Controversies in Marketing Project

Module leader

Dr Geraldine Cohen

Student ID number

0941757

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E-Marketing for Small and Medium Enterprises (SME), Why Is It Important To Them?

Supervisor: Submission:

Weifeng Chen 24 November 2011

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Contents 1. Introduction:1.1 Introduction..4 1.2 Objectives......5 1.3 Structure...5

2. Literature Review:2.1 Marketing Evolution....5 2.2 Benefits of Internet Marketing....6 2.3 Small and Medium Enterprises............................................................................7

3. Methodology:3.1 Research Methodology........................................................................................8 3.2 Research Structure..............................................................................................9 3.3 Data Collection...................................................................................................9 3.4 Limitations.........................................................................................................9

4. Bibliography........................................................................................................10 5. Gantt Chart.........................................................................................................12

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(1.1) Introduction
Marketing in todays modern world is playing a pivotal role in shaping the life cycle of the product. It can help to reach out to a wider number of customers. Attracting the customers to the new business and making them aware of the availability of a new product is known as the art of marketing. Technological evolution has changed the medium of marketing too. Traditional sources of marketing like the print and electronic media are widely used but electronic medium has a lot more additions to it now. The introduction of internet to our lives and the increased reliance on internet as a source of knowledge has made it one of the most important source of marketing as well. Targeting clients through the internet is on the rise and the number of customers using the internet to search the products is increasing. Office for National Statistics (2006) indicates that the number of people using internet are increasing dramatically, particularly the young generation. Advertising through the internet is becoming a key tool for businesses. This medium of advertising leads to improvement in the business cycle, attractive prices for the clients, reaching out to a greater number of customers, global access, operations around the clock and a reduction in the costs of the business. The most important aspect here is that marketing through the internet helps in improved targeting of the product. Only those people who are interested in the product are accessed through the internet and therefore have a better response rate as compared to all other mediums of advertising. The most common form of the advertising on the internet is through the search engines, the social networking websites like Facebook and twitter and the websites of the products and the companies. According to Facebook (2010), XPLANE (2009) and Qualman (2010), there are approximately 800 million active users, and about 50% of those active users are using Facebook every day. The internet and the different modes of marketing on the digital media are making a standout reputation among all the sources of media and are generating more value for the businesses. It is not necessary that digital marketing will benefit all the businesses but a general trend that has been observed in the last decade is that it has benefitted the masses and the costs of this benefit has been on a reducing trend. It is up to the business to decide the most effective form of advertising but for the small and medium enterprises operating in the retail sector this has proven to be a very useful source of reaching out to the clients and the results from the internet marketing have helped many businesses to grow many folds. Start preparing today by, among other steps, focusing on high-potential customers, assessing your brands, and developing scenarios. (Quelch, 2011)

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(1.2) Objectives
The aim of this research is to shed some light on the importance of the internet marketing on the small and medium enterprises. The question that will be addressed in this paper is that Why internet marketing is important to the small and medium enterprises? The hypothesis which I will be carrying out in the research paper is Digital Marketing is an effective marketing tool for SME, which will increase brand awareness and recognition, leading to an increase of purchasing volume of the company. The main focus of this paper is to research on the role of the internet marketing on retail sector of the small and medium businesses. The output of this research can be further used by businesses and marketing agencies in designing effective strategies for the retailers especially in the small and medium size of the business.

(1.3) Structure
This project proposal is divided into the following parts: 1) Marketing Evolution 2) Advantages of Internet Marketing 3) Small and Medium Enterprises

(2.1) Marketing Evolution

Traces of traditional marketing through the print and the broadcasting media go all the way back to the 1850s (Weber, 2007). With the evolution of the mediums of communication the internet developed to be a very convenient and a relatively cheap method of advertisement. Business activities are now more conveniently carried out through the internet. These changes in the modes of communication have forced the businesses to change from the conventional methods of advertisement to the new and more advanced methods of technology. Buyers are given more freedom and liberty to choose the products through the internet and they secondly they have the ease of comparing products online and easily see which one is the most useful and affordable. This has made shopping more easy and affordable for the buyers. Organizations at smaller scale can use the internet marketing to expand their operations and target their product to a greater number of customers. The numbers of users on the internet is on the rise and it is growing at a steady rate implying that everyday new users are accessing the internet and some of them are potential customers for the business. According to the Office for National Statistics (2006), the number of internet users, age 16 and over, increased from 48% of the UK population (2001/2) to 60% of UK

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population (2006), and approximately 44% of internet users purchase products or services online. According to Qualman (2010) Advertising on the social media is on the rise. Social networking avenues like twitter and Facebook are being used by businesses to market their products.. The introduction of smart phones in the market has made it even more convenient for the users to use the internet even when they are on the move. This implies that when people are travelling from one place to another they are using their hand held devices and getting access to new products and services even when they are on the move. Small and medium businesses can attract customers which are on the move and are bypassing their outlet stores or shops. This will open a completely new avenue of customers for the retail businesses. Retailers can offer great product selection and value, but those who lack empathy for their customers are at risk of losing them. (Nobel, 2011) The most common form of marketing is called the direct marketing and this mostly ignored by customers as it generally targets a very wide audience and most of the people accessing the forms of advertising usually do not use the product. Mass marketing or direct marketing is also available through the internet; an example of this is the email. Softwares are in place which sends bulk emails to potential clients but this source of direct marketing is much cheaper and gets access to a lot more potential clients (Rogers,

1990). Role of specialized marketing companies is therefore decreasing as the companies use internet as
a medium of communication to their clients and use internet as a tool for direct marketing to their clients. When planning marketing campaigns, brand managers have a wide portfolio of weapons to draw on, including in-store merchandising, advertising, coupons and sweepstakes, trade promotions, prices, and deployment of a direct sales force. The key is crafting the right mix between themthe ideal brew needed to achieve sales and market share goals. (Gerdeman, 2011)

(2.2) Benefits of Internet Marketing

The benefits associated with internet marketing are many folds. The businesses can even manage the supply chain of their companies through the internet and this will help the companies to better keep track of their inventories. Internet can help businesses develop and manage the customer relations on a higher level. The relatively lower costs of internet advertising companies can cater to the individual needs of the customers and develop marketing strategies based to cater the needs of individual customers. Internet also acts as a medium of managing the Public and Investor relations of the company (OConnor and

Gavin, 2001). Aldrich (1999) showed posting about new products and services on the internet will gain
more attention from clients as they frequently visit specific web sites and something new posted on the

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website will be eye catching and will quickly grasp the attention of the customers. This is a convenient way than the print media as people might ignore the print outs or might not notice them at all. A major advantage of using the internet media is that it can help to track the customers. Customers who are accessing the product can be approached again by the company with the new products. Customer feedback is another positive aspect of internet marketing. Customers are more willing to give a feedback through the internet as it is more convenient and it can be submitted immediately and there is no hassle of posting it back to the business. Managing investor relations has become more convenient now as companies can easily have their financial statements on the website for the potential investors to go through them. It has not only made it convenient for the investors to access the information but it has also made it easier for the companies to post the financials on the website rather than printing out hard copies and making it available for every potential investor (OConnor and Gavin, 2001). This has also reduced the costs of circulating the company financials and making it available to the public. The stakes for advertisers are huge. Americans were exposed to over 5.3 billion online video ads in July 2011 alone, (Nobel, 2011) Internet is also a very reliable medium of customer service and relationship. It provides a medium of communication with the clients through the electronic mail and internet telephone. As evidence from Cardell (2010) Customers are usually encouraged to leave their contact details such as their email address and then the company can use this address to communicate with the client and make the client aware of their new products and developments. Euromoniter (2011) states nearly 70% of homes in the UK had an internet-enabled PC, with the number of internet users rising from 39 million to 52 million between 2005 and 2009 Social media has become a very common way of advertising products and services to the clients. The companies can use two different ways of accessing the clients using the internet. One method is the direct sales through the internet and the other is using the social media like Facebook and twitter to communicate the product to the client and make the client aware of the new developments regarding the product, Twitter has about 50 million tweets per day (Social Media Energy, 2010). Both these methods if used effectively can reap benefits for the company in terms of lower costs of marketing and greater number of customers being targeted through the internet.

(2.3) Small and Medium Enterprises

There is still controversy about how to identify small and medium businesses, due to the many factors involved in businesses. According to Kenny and Dyson (1989) the two factors, business growth and 7

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number of employees, indicate many things about organizations, such as performance, production, finances and sales. They also represent the ability to acquire companies supporting resources. Once new businesses have been established, and while they are still in the early stages of formation and growth, their main concern is normally financial capital and business expertise. Moreover, it is very common that one person takes responsibility for two or more functions in the business. That person could be in charge of operations and sales, or production and administration. When companies grow bigger, they will have more factors and uncertainties with which to be concerned. Moreover, the enterprises will have a larger customer base, leading to more responsibilities to satisfy their needs. In addition, they must maintain good relationships by taking into account customer services. Freser (2004) reveals that there are over 5 million small and medium organizations registered in UK, and this is predicted to increase dramatically. In 1987, there were about 1.4 million of them registered and operating in UK. SMEs, categorized base on number of employees and turnover, and by regions, is presented below (Bytestart.co.uk, 2005; Fraser, 2004). Size of small and medium businesses, based on number of employees and turnover - 2.2 million businesses have no employees, accounted as approximately 61% of total number of SME around UK. - 1.4 million businesses have turn over less than 50,000 pounds. - 1.35 million businesses have less than 10,000 worth asset. Small and medium businesses by region - 1.4 million businesses (38% of SMEs) are located in London and South East of England - 3.15 million businesses (87% of SMEs) are located in other region in England. - 5% of SMEs are in Scotland. - 5% of SMEs are in Wales. - 3% of SMEs are in Northern Ireland.

(3.1) Research Methodology

The research of Why digital marketing is very important to SMEs will be conducted by using Multiple Case Study Research Design, Moreover research will be based on surveys and reaching out to the retails small and medium businesses and carrying out a detailed research with them and analyzing their market 8

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strategies. I will take into account retail sector small and medium enterprises from the UK and will conduct research on them. Furthermore, the benefit of digital marketing will be researched to understand the effect of digital to business world, and also to find case studies and surveys results supporting information.

(3.2) Research Structure

I will divide the research into the following criteria and will proceed from there. My primary research will include interviewing the companies and their management. In addition I will conduct the secondary research and data analysis as well. The research will be used to answer the question why Electronic marketing is important for Small and Medium Enterprises in the retail sector?

(3.3) Data Collection

For the purpose of my research I selected SMEs from different sectors in the market. One of them is the Paul Thomas flowers. This is a small scale florist shop operating on the Shepherd Street. The business operates in the retail sector and uses the internet to market itself. The Internet has created a daunting situation for category killers, one that will eventually impact almost all of retail. (Lal & Alvarez2011). Another small and medium level retailer is Buccellati Jewelry. The company is using the digital media effectively to reap the benefits associated with the internet and social media advertisement. The third small and medium level business is Swift Signs. The company provides custom made signs and identities to corporate and individual level clients.

(3.4) Limitations
There are many limitations because the research results may not be 100% accurate due to the problem of the views/opinions does affect answers, In addition on the other hand it also depends on the interviewer how skilful he is in conducting interviews and research. Moreover time restriction will not allow me to conduct a thorough research as that would provide me with a more clear data for critical analysis, for e.g. larger survey which currently might face restriction to a few companies and most participants would be students and locals. Furthermore the quality and questionnaire sample needs to be tested and tested again before conducting survey.

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BIBLIOGRAPHY
1. Aldrich, D. F. (1999), Marketing The Digital Market Place, John Wiley and Sons Inc., Canada. 2. Bytestart (2005), Small Businesses in the UK - Key Statistics. Available from: http://www.bytestart.co.uk/content/news/statistics/small-businesses-in-the-uk.shtml [Accessed: Nov 21, 2011]. 3. Bush, M. (2010), Are major marketers training John Q. Public to whine on web?, Advertising Age, vol. 81, no. 25, pp. 2-30. 4. Facebook (2008), Facebook Factsheet. Available from: http://www.facebook.com/press/info.php?factsheet [Accessed: Nov 15, 2011]. 5. Facebook (2008), Statistics. Available from: http://www.facebook.com/press/info.php? statistics [Accessed: Nov 15, 2011]. 6. Fraser, S. (2004), "Finance for Small and Medium-Sized Enterprises", Warwick Business School, University of Warwick. 7. Gerdeman, Dina; Getting the Marketing Mix Right. October 20, 2011 http://hbswk.hbs.edu/item/6828.html 8. Lal, Ravi & Alvarez, B. Jose; Retailing Revolution: Category Killers on the Brink, October 10, 2011. http://hbswk.hbs.edu/item/6813.html 9. Marketing Minefield (2008), Internet Marketing. Available from: http://www.marketingminefield.co.uk/internet-marketing/ [Accessed: Nov 19, 2011]. 10. Nobel, Carmen; Creating Online Ads We Want to Watch, October 12, 2011 http://hbswk.hbs.edu/item/6807.html 11. Nobel, Carmen; Empathy: The Brand Equity of Retail, May 19, 2011. http://hbswk.hbs.edu/item/6722.html 12.OConnor, J. & Galvin, E.(2001), Marketing in the Digital Age, 2nd ed, Pearson Education Ltd, Essex.

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13.Office for National Statistic (2010), Use of the Internet. Available from: http://www.statistics.gov.uk/CCI/nugget.asp?ID=1711&Pos=&ColRank=2&Rank=672 [Accessed: Nov 23, 2010] 14. Quelch, John; Marketing After the Recession, March 18, 2009. http://hbswk.hbs.edu/item/6139.html 15.Qualman, E. (2010), Social Media Revolution 2 (Refresh). Available from: http://www.youtube.com/watch?v=lFZ0z5Fm-Ng [Accessed: Nov 15, 2011]. 16.Roger, L. (1990), Marketing for the small business, Basil Blackwell Ltd, Oxford. 17.Social Media Energy (2010), Social Media Revolution 2010. Available from: http://www.youtube.com/watch?v=NB_P-_NUdLw&feature=related [Accessed: Nov 22, 2011]. 18.Socialmediatrader (2008), Social Media Marketing for Small Businesses. Available from: http://socialmediatrader.com/social-media-marketing-for-small-businesses/ [Accessed: Nov 22, 2011]. 19.Weber, L (2007), Marketing to the social web: how digital customer communities build your business, John Wiley and Sons, New Jersey. 20.Xplane (2010), Did You Know 4.0. Available from: http://www.youtube.com/watch? v=6ILQrUrEWe8&feature=related [Accessed: Nov 19, 2011]. 21.Euromoniter. (2011). Internet Retailing in the United Kingdom. Available: http://www.portal.euromonitor.com/Portal/Pages/Analysis/AnalysisPage.aspx. [ Accessed: 23rd Nov 2011].

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Gantt Chart
Mid Nov Conducting research on Done topic for proposal 1)Submission of the Done proposal 2)Ethics form Wait for the approval and organize data and find relevant journals and arrange interviews Start writing( draft ) / literature review Finalize the draft End of Nov Mid of Decem ber End of Dec Janua ry Febru ary End of Feb mar ch

Carrying out the questionnaires and surveys Add all the data collection for the final copy(primary research) Final Print

Editing And Proof Reading Submission

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