The Relevance of online marketing on the performance of small and medium scale enterprises (SMEs) in Nigeria

TABLE OF CONTENTS

Title page       –           –           –           –           –           –           –          –           –           –           i

Declaration                –           –           –           –           –           –           –           –           –           ii

Certification   –           –           –           –           –           –          –           –          –           –           iii

Dedication                  –           –           –           –           –           –           –           –           –           iv

Acknowledgement     –           –           –           –           –           –          –           –           –           v

Table of content        –           –           –           –           –           –          –          –           –           vii

List of tables  –           –           –           –           –           –           –           –           –           –           x

Abstract         –           –           –           –           –           –           –           –          –           –           xi

 

CHAPTER ONE: INTRODUCTION

1.1. Background to the study –           –           –           –          –          –           –           –           1

1.2. Statement of problem   –  –           –           –           –          –          –           –           –           4

1.3. Objectives of the study    –           –           –           –           –          –           –           –           5

1.4. Research questions           –           –           –           –           –            –          –           –           5

1.5. Research hypothesis         –           –           –           –           –           –           –           –           6

1.6. Significance of the study –           –           –           –           –          –           –           –           6

1.7. Scope of the study           –           –           –           –           –           –           –           –           8

1.8. Operational definition of terms   –           –           –           –            –          –           –           8

1.9. Organization of the Study           –           –           –           –           –           –           –           9

 

CHAPTER TWO: LITERATURE REVIEW

2.1.   Introduction                   –           –           –           –           –           –           –           –           10

2.2.   Conceptual Literature                –           –           –           –           —                      –           10

2.2.1. Online Marketing          –           –           –           –           –           –           –           –           10

2.2.2. Small business enterprise          –           –           –           –           –           –           –           12

2.2.3.   Problems of small business enterprises           –           –           –           –           –           13

2.2.4.   Structure and Characteristics of the Nigerian SMEs  –           –           –           –           14

2.5.    Reviews of Empirical Studies   –           –           –           –           –           –           –           16

2.3.1. Peace & Obikeze (2017); The Extent of Utilization of E-Marketing Application by

Small and Medium Enterprises in South Eastern States of Nigeria   –           –           16

2.3.2. Jacqueline Nyawira & Winnie (2013); Influence Of E-Marketing On The Performance

Of Small And Medium Enterprises In Kenya: Survey Of Small And Medium

Enterprises In The Manufacturing Industry In Kenya           –           –           –           17

2.3.3. Ade Oyedijo, Adekunle A. Idris and Adekunle A. Aliu (2012); Impact of Marketing

Practices on the Performance of Small Business Enterprises: Empirical Evidence

from Nigeria   –           –           –           –           –           –           –           –           –           18

2.3.4. Ebitu and Ezekiel Tom (2016); Marketing Strategies and the Performance of Small

and Medium Enterprises in Akwa Ibom State, Nigeria          –           –           –           19

2.6.   Theoretical Review        –           –           –           –           –           –           –           –           20

22.4.1. Theory of the Firm                  –           –           –           –           –           –           –           20

2.4.2 Three Sigma’s Theory of the Business Model                           –           –           –           21

2.4.3. Contingency Management Theory        –           –           –           –           –           –           23

2.5. Theoretical Framework                –           –           –           –           –           –           –           24

 

CHAPTER THREE: RESEARCH METHODOLOGY

3.1.   Introduction –     –           –           –           –           –           –           –           –           –           27

3.2.   Research Design –          –           –           –           –           –           –           –           –           27

3.3.   Population of the Study –           –           –           –           –           –           –           –           28

3.4.   Sampling Size    –           –           –           –           –           –           –           –           –           28

3.5.   Sampling Technique       –           –           –           –           –           –           –           –           28

3.6.   Instrument for Data Collection  –           –           –           –           –           –           –           29

3.7.   Method of Data Collection        –           –           –           –           –           –           –           30

3.8.   Validity/Reliability of Instrument         –           –           –           –           –           –           30

3.8.1. Reliability test   –           –           –           –           –           –           –           –           –           31

3.9.    Method of Data Analysis         –           –           –           –           –           –           –           33

 

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1.   Introduction       –           –           –           –           –           –           –           –           –           34

4.2.   Data Presentation/Analysis        –           –           –           –           –           –           –           34

4.3. Testing of hypothesis       –           –           –           –           –           –           –           –           44

4.3.   Discussion of Findings  –           –           –           –           –           –           –           –           51

 

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1.   Introduction       –           –           –           –           –           –           –           –           –           55

5.2.   Summary            –           –           –           –           –           –           –           –           –           55

5.3.   Conclusion         –           –           –           –           –           –           –           –           –           56

5.4.   Recommendations         –           –           –           –           –           –           –           –           57

5.5.   Limitations to the Study                        –           –           –           –           –           –           –           58

5.6.   Suggestions for Further Studies                        –           –           –           –           –           –           58

 

REFERENCES        –           –           –           –           –           –           –           –           –           59

 

APPENDIX   –          –           –           –           –           –           –           –           –           –           61

 

LIST OF TABLES

Table 1 Sex of Respondents   –           –           –           –           –           –           –           –           34

Table 2: Category of Business of Respondents          –           –           –           –           –           35

Table 3 Age distribution of Respondents       –           –           –           –           –           –           35

Table 4 Marital status of respondents             –           –           –           –           –           –           36

Table 5: Business experience of Respondents            –           –           –           –           –           36

Table 6: Respondents views on whether online marketing is important to small and medium

scale business in Nigeria                   –           –           –           –           –           –           37

Table 7: Respondents views on online marketing helps increase exposure to global

markets          –           –           –           –           –           –           –           –           –           38

Table 8: Respondents views on online marketing strategies adopted for business    –           39

Table 9: Respondents views on online marketing help reduce transaction cost  –      –           40

Table 10: Respondents views on online marketing help mitigate increased competition       41

Table 11: Respondents views on online marketing help in the expansion capacity of small

and medium scale business  –           –           –           –           –           –           –           41

Table 12: Respondents views on whether online marketing has been effective in

the introduction of new products   –           –           –           –           —          –           42

Table 13: Respondents views on whether online marketing is positively associated

with customer acquisition    –           –           –           —          –           –           –           43

Table 14: Respondents views on online marketing has created an avenue to new markets   44

Table 15: Test of Hypothesis I            –           –           –           –           –           –           –           46

 

Table 16: Test of Hypothesis II          –           –           –           –           –           –           –           48

 

Table 17: Test of Hypothesis II          –           –           –           –           –           –           –           50

ABSTRACT

This research work empirically explored the relevance of online marketing on the performance of small and medium scale enterprises (SMEs) in Nigeria. The purpose of which is to investigate the impact of online marketing on small and medium scale enterprises (SMEs) in Nigeria. The objectives of this study were to find out the importance of online marketing on small and medium scale business in Nigeria, find out the online marketing strategies used by small and medium scale business in Nigeria, investigate the impact of online marketing on small and medium scale business in Nigeria, establish the relationship between online marketing and small and medium sized business productivity in Nigeria.. The scope of the study is Lagos state in 2019 making use of business owners, contingency management theory was used as a framework. The research design used for this study is survey, the population targeted for this study consists of all business owners.  400 business owners were used as sample size and cluster sampling technique was applied. Instrument used for this study is the questionnaire. Data collected were collected from primary sources. From the analysis of the data, the findings shows that online marketing on small and medium scale business in Nigeria is important, online marketing impact on small and medium scale business in Nigeria, there is a relationship between online marketing and small and medium sized business productivity in Nigeria. Following the findings, it was recommended that online marketing techniques should be adopted in businesses, online marketing help improve productivity thus managers of small and medium scale business should make use of online market.

Keywords: small and medium scale business enterprise, online marketing, business performance, Lagos state.

CHAPTER ONE

INTRODUCTION

 

1.1. Background to the Study

Small and medium scale business enterprise are no doubt the engine room for economic growth, poverty alleviation, job creation and means of crime reduction. They constitute a large proportion of businesses worldwide and play significant role in any economy. Small and medium scale business enterprises go through series of obstacles that inhibit their long-term survival if not marketed effectively. Researchers have shown that the rate of failure of small and medium scale business in developing countries is higher than in developed world (Marlow, 2009).

For a business to realise its objectives, it depends greatly on the ability of the enterprise to accomplish its key performance indicator in a sustainable manner (Simerly and Mingfanf, 2000; Wan and Yiu, 2009). Online marketing is the practice of leveraging web-based channels to spread a message about a company’s brand, products or services to its potential buyers.

Business both large and small needs to be marketed effectively to succeed in this global rapid changing world. The role of internet to the world at large and businesses in particular cannot be overemphasized. The internet has served as a means of creating awareness and sales promotion. The use of social media by business owners has become an important platform for marketing their products and services to consumers in recent times (Paquette, 2013). Online marketing is a reality in Nigeria as a study by Mathew, Ogedebe and Ogedebe (2013) shows that Nigerians who used the internet as one form of communication or another are bombarded daily with advertisement of products and services from industries in the country.

Government in Nigeria has in the past initiated series of programmes and policies targeted at the development of small and medium scale business. The Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) was established in 2003, National Credit Guarantee Scheme was also established in 2003. The Microfinance Policy Regulatory and Supervisory Framework (MPRSF) was launched to address the problem of lack of access to credit by small business operators, the Small Scale Industrial Credit Schemes (SSICS), the Nigeria Industrial Development Bank (NIDB), the World Bank-Assisted SME II loan project, International Financial assistance, National Economic Reconstruction Fund (NERFUND) among others. Although several programmes and policies have been implemented in Nigeria; poverty, unemployment, stunted economic growth are still prevalent in the country (Lawson 2007; Owenubiugie and Igbinedion, 2015; Obadeyi, 2015).

In spite of the major role, significance and contribution of small business enterprises to the nation’s economy, small business enterprises are still battling with many problems. They are faced with significant challenges that compromises their ability to function and to contribute optimally to the economy. Scholars such as Cromie (1991) study have revealed that marketing has consistently been either the most critical or the second most critical of survival problem with other problems being accounting, finance, owner(s) behaviour and of external origin.

It is evident in Nigeria that operations of small and medium scale business enterprises are still bedevilled by a number of problems such as difficulty in accessing credit, short loan repayment period, marketing, digitalizing among others. Online marketing for small and medium scale businesses has an advantage of lesser capital demand as marketing messages are disseminated across an unlimited geographical space at very reasonable costs.

In Nigeria, small business enterprise constitute about 90% of the industrial sector, they also account for 70% of national industrial employment and 10% of manufacturing output (Ajayi, 2002). Anwatu (2006) opined that 75% of the private sector in Nigeria is dominated by small scale enterprises. Developing the private sector is an engine of growth and creation of wealth and employment in Nigeria.

The performance of small business enterprise in Nigeria falls below expectation (Basil, 2005 and Abiodun, 2011). Thus this study assess the relevance of online marketing on the performance of small and medium scale enterprises (SMEs) in Nigeria.

 

 

1.2. Statement of the Research Problem

The survival of small and medium scale business enterprise is considered crucial in any economy in solving the problem of poverty, unemployment, crime and ensuring economic growth. There is inadequacy in the performance of small and medium scale business enterprise in performing its role of economic growth, employment creation, poverty alleviation, thus there exist difficulty of small businesses achieving its desired goals.

Most business enterprise fail to consider proper marketing techniques that affect their chances of long-term survival as a result experience a progressive decline in their ability. Improper marketing is one of the major problems facing small and medium scale business enterprise. Most small and medium scale business enterprises in Nigeria do not make use of the opportunity granted to them through online marketing in Nigeria as they still face the problem of low capacity as compared to big corporation.

It is disheartening to note that government of Nigeria over the years have not been able to adequately help the poor grow small and medium scale business. In Nigeria, the ability of small and medium scale business enterprises to achieve and sustain competitive advantage lies within the availability of suitable strategies that would preserve its operations. It is against this backdrop that the researcher considered the relevance of online marketing on the performance of small and medium scale enterprises (SMEs) in Nigeria.

 

1.3. Objectives of the study

The aim of this study was the assessment of the relevance of online marketing on the performance of small and medium scale enterprises (SMEs) in Nigeria. The specific objectives are to:

1. find out the importance of online marketing on small and medium scale business in Nigeria.
2. find out the online marketing strategies used by small and medium scale business in Nigeria.
3. investigate the impact of online marketing on small and medium scale business in Nigeria.
4. establish the relationship between online marketing and small and medium sized business productivity in Nigeria.

 

1.4. Research Questions

This study will be guided by the following research questions:

1. What is the importance of online marketing on small and medium scale business in Nigeria?
2. What are the online marketing strategies used by small and medium scale business in Nigeria?
3. What is the impact of online marketing on small and medium scale business in Nigeria?
4. What is the relationship between online marketing and small and medium sized business productivity in Nigeria?

 

1.5 Research Hypotheses

The study is guided by the following hypotheses:

1. H₀: online marketing has no importance on small and medium scale

business in Nigeria.

2. H₀: online marketing has no impact on small and medium scale business

in Nigeria.

3. H₀: there is no relationship between online marketing and small and

medium sized business productivity in Nigeria

 

1.6. Significance of the Study

The critical nature of small and medium scale business to the success or growth of any country is given. This is because availability of marketing skills affect the ability of small and medium scale business in achieving its desired goals. As lack of proper marketing affect the level of productivity thereby preventing the attainment of such significant goals small business play in an economy.

Empirically, this study is carried out to assess the relevance of online marketing on the performance of small and medium scale enterprises (SMEs) in Nigeria so as to ameliorate the problem of low productivity faced by small and medium scale businesses.

This study will be important to small and medium business as it will help guide it on how it should operate. It will teach it the importance of online marketing and the necessary guide of successful online marketing for business. It will also help owners of small and medium businesses get maximum value from the business.

This study will be of utmost importance to investors, government and the researchers because it will provide policy recommendations to the various Nigeria stakeholders taking adequate measures in small and medium scale enterprise for rapid capacity investment.  It is hoped that the exploration of small and medium scale business in Nigeria will provide a broad view of the operations of small and medium scale businesses to investors and government. It will contribute to existing literature on the subject matter by investigating empirically the role online marketing play in small and medium business enterprises of the country. This study will be of benefit to;

The Academia: members of the academia will find the study relevant as it will also form basis for further research and a reference tool for academic works.

Government: this study will reveal to the government happenings in small and medium scale business enterprises. Formulation and implementation of policies based on this findings would ensure development in the area.

Investors: this study shall also be valuable to the investors especially those who may have research interest as it shall guide their private investment decisions.

 

1.7. Scope of the Study

This study is intended to assess the assess the relevance of online marketing on the performance of small and medium scale enterprises (SMEs) in Nigeria in 2019 using owners of small and medium scale businesses in Lagos state.

 

1.8. Operational Definition of Terms

The following terms have been defined operationally.

• Small and medium-sized business enterprise: small and medium-sized business enterprise is an enterprise marked by limited number of employees and a limited flow of finances and materials.
• Business performance: efficiency and effectiveness of an organization reflected in the business objectives set by management.
• Online marketing: online marketing is the practice of leveraging web-based channels to spread a message about a company’s brand, products or services to its potential customers.

1.9. Organization of the Study

This study is divided into five chapters. Chapter one is introduction which consists of the background to the study, statement of problem, research questions, research  hypotheses,  objectives  of  the study, the  significance  of  the  study,   the scope  and  limitations  of  the  study  and  finally the  organization of the study. Chapter two deals with the literature review which consists of the conceptual literature, theoretical literature, empirical literature, theoretical framework. Chapter three gives the research methodology including research design, population of study, sample size, sampling technique, method of data collection, instrument of data analysis, method of data analysis, validity/reliability of instrument.  Chapter four is presentation and analysis of data, discussion of findings. Chapter five gives the summary, conclusion and recommendations.

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