E-MARKETING AND SMALL ENTERPRISE THREATS AND OPPORTUNITIES (A CASE STUDY OF YOLA METROPOLIS)

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 retune 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.

1.4   RESEARCH
QUESTIONS

1.  What
are the opportunities that e-marketing will bring for small and
medium scale businesses in Nigeria?

2.  What are
the threats of e-marketing to small and medium scale businesses in Nigeria?

3.  What is
the level of awareness of e-marketing as a strategic marketing tool by small
and medium scale businesses in Nigeria?

1.5 RESEARCH HYPOTHESIS

H0:
there is no significant relationship between E-marketing and small enterprise

H1:
there is significant relationship between E-marketing and small enterprise

1.6   SIGNIFICANCE
OF THE STUDY

The
following are the significance of this study:

1.  This
study will educate business managers and the general public on how e-marketing
will affect small and medium scale businesses in Nigeria with reference to threats
and opportunities.

2.  This
research will be a contribution to the body of literature in the area of the
effect of personality trait on student’s academic performance, thereby
constituting the empirical literature for future research in the subject area

1.7   SCOPE/LIMITATIONS
OF THE STUDY

This
study will cover the threats and opportunities of e-marketing to small and
medium scale businesses in Nigeria.

LIMITATION OF STUDY

Financial constraint– Insufficient fund tends to impede the efficiency of the
researcher in sourcing for the relevant materials, literature or information
and in the process of data collection (internet, questionnaire and interview).

Time constraint– The researcher will simultaneously engage in this study
with other academic work. This consequently will cut down on the time devoted
for the research work.

REFERENCES

Ang, C., Tahar, RM. and Murat, R.
(2003). An empirical study on electronic commerce diffusion in the Malaysian
shipping industry. Electronic Journal of Information Systems in Developing
Countries, 14(1), pp. 1-9.

Bakry, SH. and Bakry, FH. (2001).
A strategic view for the development of eBusiness. International Journal of
Network Management, Vol. 11, pp. 103-112

Bingi, P., Ali, M. and Joseph, K.
(2000). The challenges facing global eCommerce. Information Systems Management,
17 (4), pp. 26-34

Hayden, D. (2000). The Internet
is a domain of thinking and acting: Leadership in the eCommerce revolution.
Vital Speeches of the Day. 66 (16), pp. 496-500. June.

McKinsey, K. (2001). Asians miss
the eBiz mark. Far Eastern Economic Review, March 15,
http://www.feer.com/_0103_15/p042innov.html, accessed on April 26, 2007.

Mukti, NA. (2002). Barriers to
putting businesses on the Internet in Malaysia, Electronic Journal of
Information Systems in Developing Countries, 2(6), pp. 1-6.

Seyal, AH. (2004). An
investigation of eCommerce adoption in micro business enterprises: Bruneian
evidence. Proceedings of 4rth International Conference on working with
eBusiness (We-B03), Perth Western Australia, 24-25 November.

Sharma, SK. and Gupta, JND.
(2003). eCommerce adoption and socio-economic influences: A study in India.
Proceedings of 4rth Annual Global Information Technology Management World
Conference, Calgary, Canada, 8-10 June.

Singh, T., Jay, VJ. and Singh, J.
(2001). eCommerce in the US and Europe: Is Europe ready to compete? Business
Horizons, 44 (22), pp. 6-16. March-April

Travica, B. (2002) Diffusion of
electronic commerce in developing countries: The case of Costa Rica. Journal of
Global Information Technology Management, 5(1), pp. 4-24