Publication Email Marketing Definitions

Quite a few different definitions of e-marketing are documented in the literature. Stokes (2011:20) describes e-marketing as applying digital channels to undertake brand marketing. Furthermore, Molenaar (2012:24) explains e-marketing as “an integral strategy based on customer behavior”. However, Gilmore, Gallagher and Henry (2007:2) in their study define e-marketing as utilising both the internet and those technologies which are associated with the internet to assist in the achievement of marketing objectives in combination with other marketing communication techniques. The current research employs the following definition: “e-marketing explains company undertakings to notify buyers, communicate, promote and sell its products through means of the Internet”.

Numerous phrases such as digital marketing, internet marketing and e-commerce are applied throughout the literature to include and often expand on the concept of internet and e-marketing.

Bharadwaj and Soni (2007:4) in their study offer the following definition: various business actions through the use of the internet including selling, purchasing, advertising services and products, are incorporated within e-commerce. However, du Plessis, Strydom and Jooste (2012:423) relate how information technology digital channels including mobile phone, the internet and emails have changed how businesses communicate.

Through these means, an organization can interact in an individual way with the consumer. Two-way communication is established through “social media channels”, for example, Facebook, Myspace, and Twitter further creating, plus building excellent relationship opportunities within businesses.

A recent study undertaken by Xiaoming  suggests that the definitions for “e-commerce and e-marketing” be combined and this “new concept e-commerce e-marketing” be defined, examined and considered. The study further asserts that “e-commerce e-marketing” should be developed so that they are gradually integrated.

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An early study by Harridge-March (2004:297), asserts that e-marketing will not substitute conventional marketing but observes that it is a helpful and supportive activity. Harridge-March (2004:297) further suggests that the new technology must be included by managers with the intention that customers will then receive superior value.

Extent of SMEs Use of Online Marketing

Marketing theories drawn from conventional textbooks continue to focus primarily on marketing planning, marketing research and the implementation of marketing mix such the 4Ps (price, place, product, promotion) which are more appropriate for large organizations is different to that of SMEs. SME marketing takes into account the unique business environment, characteristics of owner/managers (such as skills and abilities) and resources. Marketing in SMEs is identified as engagement with customers, matching customer needs, networking (Gilmore, Carson and Grant, 2011) relationships with customers  and through the self-marketing of the SME owners. SMEs therefore, are practicing marketing but in their own unique style reflecting their ability to offer products and services that exactly suit their customers, by having in-depth knowledge of their customers’ needs and being able to communicate with their customers on a personal basis.

This marketing approach resonates with service dominant logic where goods are seen as a mechanism for service, defined as the application of competencies such as knowledge and skills for the benefit of a party. The service is co-produced and value co-created. Added to this is the importance of self-marketing by the business owner in which they can create a personal brand for the business, which cannot be replicated, meaning that, SMEs do engage in marketing but their ‘4 Ps’ marketing model is based around four different attributes that include: Personal; Practice; (Co)Production; and Perseverance. The personal brand of the owner who personifies the business with a unique set of skills, which cannot be replicated. SMEs co-produce their business with their customers with much of their work shaped to exact customer requirements such as bespoke Information and Technology (IT) systems or specific ranges of goods. SMEs focus on the execution of the business in hand rather than spend time planning or strategizing and SMEs persevere with their businesses and build long-term customer relationships.

According to Harrigan et al. (2012), online marketing involves the use of Internet technologies to reach out to customers. Online marketing is a combination of using the Internet and marketing to sell products and advertise the company. The same basic principles as traditional marketing applies, except that everything happens at a much greater speed, and the company has to contend with others all over the world and not necessarily only with those in its direct business area (Lloyd and Kroeze, 2008). Internet marketing can be used to enhance personalization. Personalization raises the value of a user’s online experience, improving customer loyalty and leading to more customer contacts. Having realized the astonishing growth and importance of the Internet, marketers are challenged with its effective integration into their marketing communication mix .

Online Marketing Use by SMEs

Online marketing use may facilitate external knowledge acquisition and intra-firm knowledge dissemination to improve a firm’s learning capacity (Liao, Welsch and Stocia, 2013). Online marketing usage for communication (with both customers and suppliers) is one potentially important component of SMEs’ market-sensing activity. Johnson, Lee, Saini, and Grohman (2013) noted the importance of market-sensing activities in SMEs’ responses to environmental demands. Suppliers as a source of information are particularly critical for SMEs, given their lack of Research and Development (R&D) and marketing-research resources.

In contrast to online marketing usage for communication, using the Internet for transactions is not as likely to serve as a critical market-sensing activity for SMEs. Prior research has shown that SMEs use the Internet more for marketing communications and customer relationship management than to advance business processes such as automating transactions. A relatively low percentage of SMEs use the Internet to complete businesses transactions compared to those that use it for communications. In cases where the Internet is used for transaction purposes, the typical order taking and processing of SMEs is more routine and static in nature (Adams and Deans, 2011).

While large firms may convert this relatively static process into a more dynamic process of discovery through data mining, SMEs typically lack the resources and capabilities required to transform transaction information into a more dynamic market-sensing ability (Bhandari et al., 2014). Acquiring resources and capabilities needed to convert routine transaction data into dynamic information entails at least two substantial and potentially prohibitive costs. First, development and maintenance costs are much higher if carefully detailed and formatted back-end data-base management features are required. The second major cost is greater than the first: acquiring the human-resource expertise needed to use and interpret advanced data-mining software effectively can be very expensive (Bhandari et al., 2014). As a result of these costs, the more dynamic online marketing function (that is, facilitating external and internal dialogues regarding current and future scenarios) is more likely than online transactions to be implicated in strategic flexibility for SMEs.

MAJOR MARKETING STRATEGIES USED BY SMEs

There are a number of marketing strategies used by SMEs in the world in promoting the products and services provided by the company at large. Brick and mortar establishments, streets, or malls are just some of the places where printed catalogues and brochures can come in handy. These are still the most widely preferred methods for special discounts and offers. Consider the value of business cards that directly introduce a business to the client. Traditional marketing that is face-to-face is way more connective and interactive. Don’t underestimate the power of hand-outs to bring your business new growth opportunities. Direct mail and business cards also elicit emotional reactions and are more easily absorbed than words on a screen. Message mediums like these evoke strong responses and greater reach for marketers.

 Television and radio

Advances in TV and radio advertising technology now allow for much more cost effective advertising investments and performance models. Many companies are successfully integrating digital marketing strategies with direct response TV advertising, print, and radio. Multi-channel analytics then ties it all together which makes the decision making scenario for marketing executives much easier.This infographic provides an excellent comparison of TV advertising and digital marketing and media buying. It walks you through some interesting statistics, shows the values of each advertising strategy and where the overlap can provide opportunity for a powerful integrated campaign. (Adams and Deans, 2011)

Mobile phone marketing

Mobile marketing involves reaching customers through mobile devices. Marketing to mobile devices can include text messages, multimedia messages (MMS), push notifications, in-game marketing, QR codes, and other strategies. Given the widespread adoption of mobile phones, the future of mobile marketing looks very bright. To learn more about mobile marketing, take a look at this slide share presentation offering 50 stats on the future of mobile marketing. (Vargo and Lusch, 2012)

Word of mouth

Traditional marketing has been around for ages. People are used to it. Traditional methods from signage to networking at events, cold calls and referrals harness the power of human interaction. This really works well, to close a sale. Tangible, physical canvas, paper, and traditional marketing mediums evoke a sensation and a lasting memory. These are also easier to retrieve than logging onto a visual storefront or a digital calling card online.

 Social media platforms

Social media marketing attempts to leverage the power of social networks (Facebook, Twitter, Instagram, YouTube and others) to promote a product or service. These efforts can be paid (buying ads on those networks) or free (engaging and sharing great content). Social media marketing can be a great waste of time because it’s not for all businesses and requires careful planning and execution. But, small businesses are spending more and more money on social media marketing. There’s a good reason – potential customers are more likely to buy a company’s products or services if they follow that company on Twitter or are a fan on Facebook. (Adams and Deans, 2011)

 FACTORS INFLUENCING THE USE OF ONLINE MARKETING IN SMEs

Organizational Factors

Various studies have reported that SMEs are generally lagging behind to large organizations as far as the adoption and usage of online marketing is concerned. Recent research work by Kapurubandara (2009) identified a variety of factors that could be grouped into several categories. Chau and Turner (2001) and Organization for Economic Cooperation and Development (OECD) (2002) identified factors relating to three major categories: owner/manager characteristics, firm characteristics and costs and return on investment (Akkeren and Caraye, 2010). Some of these inhibitors are discussed in some detail in the next sections.

Owner / Manager Characteristics

The adoption of online marketing by SMEs is a decision made by the business owner and the manager. Successful companies that embrace IT and online marketing are often those whose owners take on the role as innovation champion. SMEs owner perceive online marketing as an important function for their business (Ramsey and McCole, 2013). However, many SMEs prefer the comfort of what they perceive as familiar over indulging into any new venture. They are reluctant to “think outside the box” in order to seek new business solutions (Cyert and March, 2012). Some SMEs do not perceive (or are not convinced by) the potential strategic benefits of being the first to utilize new technologies and marketing platforms. Some do not perceive the relevance of using new technologies to their business, although they understand the online buying and selling functions offered by online marketing facilitated by new technologies. Gary (2013) argues that whether