The study examined digital marketing as a key driver of
sales improvement among small and medium scale enterprises in Lagos state. The
study succinctly explored the effect of digital marketing on sales improvement.
150 small and medium scale enterprises (SMEs) was purposively selected in in
The study made use of primary data via the administration of
a questionnaire to generate data from the respondents. The data were analyzed
using the descriptive statistical analysis and the Pearson correlation
revealed that a positive and significant relationship exists between online
advertisement and sales improvement (r=0.772; p<0.05). Also, a positive and
significant relationship exists between E-Mail Marketing and Sales Improvement
(r=.896; p<0.05). Furthermore, a positive and significant relationship exist
between Blog Marketing and Sales Improvement (r=0.772; p<0.05). And Lastly, a positive and significant
relationship exists between Search Engine Marketing and sales Improvement (r=.896; p<0.05).
study suggests that digital marketing should be employed by every SMES, to
ensure that sales improvement is guaranteed. this will go a long way in
reducing expenses to the barest minimum and ensuring effectiveness in it going
1.1 BACKGROND OF THE STUDY
whether small or big, simple or complex, private or public, etc is created to provide
competitive prices. Business in Nigeria has been classified as small, medium
and large. However, a small scale industry can be explained by the criteria of
project costs, capital, number of employees, sales volume, annual business
turnover and the financial strength. The federal and state ministries of
Industry and Commerce have adopted the criterion of value of installed fixed
capital to determine what a small scale industry is. The fixed capital had
varied from as little as N60, 000 in 1972; N159, 000 in 1975; N250.000 in 1979;
N500, 000 in 1986, up to the tune of N2, 000,000 in 1992 and N5, 000,000 by
2003. Due to this fact, there may be a need to classify the small scale
industry into micro and super-micro business, with a
view to providing adequate incentives and protection for the former. In the
meantime, any business or enterprise below the upper limit of N250, 000 and
whose annual turnover exceeds that of a cottage industry currently put at N5,
000 per annum is a small scale industry. The National Directorate of Employment
(NDE) concept of a small scale industry has been fixed to a maximum of N35,
medium-sized enterprises (SMEs) are non-subsidiary, independent firms which
employ less than a given number of employees. This number varies across
countries. The most frequent upper limit designating an SME is 250 employees,
as in the European Union. However, some countries set the limit at 200
employees, while the United States considers SMEs to include firms with fewer
than 500 employees. Small firms are generally those with fewer than 50
employees, while micro-enterprises have at most 10, or in some cases 5,
workers. Financial assets are also used to define SMEs. In the European Union,
a new definition came into force on 1 January, 2007 applying to all Community
acts and funding programmes as well as in the field of State aid where SMEs can
be granted higher intensity of national and regional aid than large companies.
The new definition provides for an increase in the financial ceilings: the
turnover of medium-sized enterprises (50-249 employees) should not exceed EUR
50 million; that of small enterprises (10-49 employees) should not exceed EUR
10 million while that of micro firms (less than 10 employees) should not exceed
EUR 2 million. Alternatively, balance sheets for medium, small and micro
enterprises should not exceed EUR 43 million, EUR 10 million and EUR 2 million,
respectively (OECD, 2007).
The emergence of
Modern Information and Communication Technology (ICT) has tremendously affected
the practice of marketing and other professions in recent years. Modern ICT has
necessitated a paradigm shift from analogue or primitive mode of transaction to
a system where virtually all marketing activities are performed electronically.
Although the digital marketing is most times misconstrued for E-commerce and
E-business. Digital Marketing involves getting closer to customers and
understanding them better, adding value to products, widening distribution
channels and boosting sales using digital media channels while E-commerce is
primarily about selling online or ability to transact online. However,
E-business refers to the process of using digital technology to enable
organizations to know what their customers want and to produce only those
products and so do away with guesswork and avoid waste of unsold stock, to
enjoy increased productivity, profit and growth (Slywotzky and Morrison, 2008).
It is also called digital business.
Cunningham (2010) notes that e-business through
digital marketing is the glue that keeps employees, customers, and partners
communicating and informed. It involves the use of self-service applications
that delivers relevant information to those that need it, leading to tremendous
values in business transactions. The development on the internet of transaction
tools which affected a greater number of phases compared with traditional
transaction systems, have impacted tremendously on the procurement and selling life
cycles (Cunningham, 2010). This shows that both digital marketing and
E-commerce are subsets of E-business, which means that E-business is the
umbrella where the duo hides.
Email Marketing is one of the easiest, most
effective and affordable ways to grow any business. This is because it keeps
the customers and prospects coming back, in terms of more product demand and
feedback on products already bought. Thus the business owner or entrepreneur
can make amends as at when due and satisfy its customers more. By using
attractive, professional-looking email communications to stay in regular touch
with customers and prospects, you build strong relationships. Email is the most
personal advertising medium amongst all other forms of digital marketing tools
in history (Babalola & Babalola, 2013).
1.2 STATEMENT OF
Small and Medium
Enterprises (SMEs) in Nigeria have not performed creditably well and hence have
not played the expected vital and vibrant role in the economic growth and
development of Nigeria. This situation has been of great concern to the
government, citizenry, operators, practitioners and the organized private
sector groups. Year in year out, the governments at federal, state and even
local levels through budgetary allocations, policies and pronouncements have
signified interest and acknowledgement of the crucial role of the SME
sub-sector of the economy and hence made policies for energizing the same. Just
as it has been a great concern to all and sundry to promote the welfare of
SMEs, it has also been a great cause of concern to all, the fact that the vital
sub-sector has fallen short of expectation. The situation is more disturbing
and worrying when compared with what other developing and developed countries
have been able to achieve with their SMEs (Basil, 2011).
However with all
the problems above which plaque the SME sub-sector in Nigeria, there is need
for a good marketing skill. This is due to the fact that the world is become a
global village. The appearance on the scene of the Internet, especially Web
2.0, and the social networks is challenging the levels of power and influence
of the agents who build brand image. With the extraordinary power of
propagation of these messages on the Web, customer opinions, recommendations
and complaints are increasingly the determining factor in creating brand
images. The result is that brands are clearly been built bi-directionally.
Decisions are made based not only on messages sent by companies to their
customers, but technology is making it easier for people to converse. Thus a
transfer of power is witness from companies to their consumers. Consumers‟
final decisions to buy are therefore largely based on recommendations from
others who have already bought or used the products or service in question, and
who share their buying and consumption experiences on the Internet. This
phenomenon is taking off at a phenomenal rate, and for many consumers pages
like Tripadvisor and Ciao have already become essential
pre-purchase references. In this kind of environment, a skilful management of
the brand experience seems to be one of the key factors for brand success. Only
satisfied customers will give us positive recommendations in these virtual
environments, which then favorably influence the decision to buy of our customers
who consult these platforms.
At the same
time, another key success factor in this cut-throat environment is the
development of effective strategies for influence and communication on Web 2.0
and the social networks. Unfortunately, many companies are clearly still in
denial and failing to adopt pro-active strategies for an Internet presence.
Some earmark a percentage of their communications investment for the Internet,
but with no overall idea of what the medium can offer them, or of how a web
presence must be integrated with other brand communications. Too many companies
are still trying to control public network conversations on their brands, and
too few are dedicating.
OBJECTIVES OF THE STUDY
objective of the study is to examine digital marketing as a key driver of sales
improvement in small and medium scale enterprises (SMEs) in Lagos Metropolis.
sub-objectives of the study are to:
the relationship between the forms of digital marketing (email, search engine,
online advertising and blog) and sales improvement in SMEs in Lagos metropolis.
the effects of the implementation of digital marketing on the performance of
SMEs in Lagos.
1.4 RESEARCH QUESTIONS
The study is
targeted to providing meaningful answers to the following research questions:
is the relationship between the forms of digital marketing (email, search
engine, online advertising and blog) and sales improvement in SMEs in Lagos
are the effects of the implementation of digital marketing on the performance
of SMEs in Lagos Metropolis?
with the objectives of the study, four hypotheses were developed and they are
stated as follows.
Online advertising has no significant influence on sales improvement of SMEs in
E-mail marketing has no significant influence on sales improvement of SMEs in
Blog marketing has no significant influence on sales improvement of SMEs in
Search engine marketing has no significant influence on sales improvement of
SMEs in Lagos metropolis.
FOR THE STUDY
Small and medium
scale enterprises play a vital role in the economy of Lagos State in particular
and to the Nigerian economy in entirety. SMEs contribute to the gross domestic
product of the state, and also serve as the platform of minimizing the rates of
unemployment in the land, as it allows individuals to be job owners and
conducted in Nigeria and Diaspora has assessed the determinants of sales
improvement in the context of performance. Studies done by Rondon (2007) and
Bitton (2011) showed that the major variables focused on were environmental
factors, size of the company, pricing policy, competition, firm’s marketing
strategy, field salesperson characteristics, territory/location, and size of
customers. Furthermore, studies carried out by Babalola and Babalola (2013);
Njau and Karugu (2014) and Agwu and Murray (2014) examined the impact of
digital or electronic marketing adoption on the overall performance of SMEs. In
the light of this, the study was necessitated by scanty empirical studies on
the influence of digital marketing on sales improvement in SMEs particularly in
It is highly
believed that this study through its findings and policy recommendations would
be useful to micro, small and medium scale enterprises, investors, business
analysts, financial institutions, non-financial institutions, stakeholders in
the corporate world and government through its agencies such as ministry of
trade, industry, investment and commerce. It will also be beneficial to future
researchers that intend carrying out studies in this regard.
1.7 SCOPE AND
LIMITATIONS OF THE STUDY
The study examined
digital marketing as a key driver of sales improvement in SMEs with strong
emphasis in Lagos metropolis. The limitations encountered during the course of
carrying out the study include control limitation, time limitation and
Limitation- The researcher was limited to carrying
out the study in Lagos metropolis based on the directives of the project
Limitation- The time allocated to the researcher to
carrying out this study was relatively short, given other academic commitments.
Limitation- As a result of paucity of fund, the
researcher was unable to sample SMEs across the length and breadth of the
Inspite of these
stated limitations, a robust, quality and fact-finding research was carried
adopted the descriptive survey research design in addition to the multi-stage
sampling technique in order to select suitable sample for the study. At the
first stage, the stratified sampling technique was adopted to divide Lagos
Metropolis into two strata – Lagos Island and Lagos Mainland. At the second
stage, the purposive sampling technique was adopted to select 75 SMEs per
stratum to give an aggregate sample size of 150 respondents. A standardized
questionnaire was used to collect data for the study and the data obtained were
analyzed using the descriptive statistics technique, Pearson correlation
analysis and analysis of variance (ANOVA).
KEY DEFINITION OF TERMS
It refers to the communication between a person (sales person) and his actual
or prospective customers with the aim of selling ones product or service to
Marketing: it refers to the use of electronic devices and
tools to create to communicate to actual or prospective customers of a firm
with the aim of selling ones product or service to them.
exchange of a commodity or money as the price of a good and services.
Improvement: This refers to a significant increase
in the level of firm’s sales.
and Medium Scale Enterprise: An enterprise which
has less than 100 workforce and have an annual turnover not exceeding N1