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The Importance of Digital Marketing Strategy to Small Scale Enterprises

 

CHAPTER TWO

LITERATURE REVIEW

2.1 Theoretical Review

The study was anchored on several theories that are captured hereunder:

2.1.1 Network/Social Network Theory

The network approach’s concept originates from several of the structural concepts brought forward by sociological thinkers such as Emile Durkheim, Georg Simmel and anthropologist Radcliffe-Brown whose research were largely based on comprehending the structure and impact of relational webs or “networks” of social associations between and among individuals. Network theory analyses all kinds of relationships, whether it is between people, animals or things. Social network analysis is an overlapping instrument used for learning about patterns that manifest within social networks and their influence on behaviour. Digital marketing channels are important in this respect since they allow marketers to listen and understand what is said by consumers, and also enable them to take advantage of the power of influential users so as to be able to spread the messages to other people in their networks. Research indicates that the very powerful users are those with the most impact across a number of differentiated networks.

The network theory sees social relationships in terms of nodes and ties. The nodes are the players within the networks, and ties are the relationships amongst the players. Various types of ties are present between the nodes, and in its basic form, a social network outlines all the relevant ties between the nodes being analysed. The network can also be used to “determine the social capital of individual players”. These ideas are usually exhibited in a social network diagram, where nodes represent the points while ties are the lines. This theory is useful in the study since it analyses how SMEs can maximize their ‘networks’, in this case their customers.

2.1.2 Theory of Collective Intelligence

Collective intelligence refers to a process where large numbers of people can converge simultaneously upon the same point(s) of knowledge, while at the same time achieving intellectual performance. The theory of collective intelligence postulates that groups are generally smarter and more productive than the sum of the individuals. Crowdsourcing is an internet phenomenon in which projects are broken down into small, individual tasks that are distributed to a large number of individuals for completion, and is known to have collective intelligence characteristics. According to Tapscott and Williams (2008), for collective intelligence to exist, it requires four principles. These principles are openness, peering, sharing, and acting globally.

Openness: for collective intelligence to work to its full potential, it requires people and companies to present and be candid about their ideas to the people on the internet so that their products can be improved. Peering: taking old information or products and modifying them to match yours and others’ personal needs before releasing it to the public so that people can take utilize them. Sharing: it explains how intellectual property is required to be shared with others in the group. It is essential to allow for the constant exchange of ideas and critiques around which productivity is enhanced. Acting globally principle is based on communications technologies advancement that allows organizations to reach out across their entire collaborators’ network and to engage everyone. This concept overcomes challenges such as department and branch borders in an effort to capture and utilize new ideas, new talents, and new markets. This theory is useful in the study since it indicates how digital marketing is able to bring SMEs and its consumers together to interact and be able to exchange ideas to come up with products or services that improve the whole experience.

2.1.3 Generational Theory

Generation theory explains that the era in which a person was born impacts their perception of the world. It also indicates that our value systems are shaped in the formative years of our lives through our families, friends, communities, significant events and the general era in which we are born (Jurkiewicz & Brown, 1998). Initiated by Strauss and Howe in 1991, generational marketing theory stipulates that consumers born during the same era, usually a 20-year period, have similar attitudes and behaviours due to shared experiences that influenced their childhood and  moulded their world views. This current era can be defined as that of digital information which can be defined by the use of digital media. Generational theory is relevant to digital marketing based mainly on how each generation communicates and the online places where they can be accessed easily by marketers. This theory is useful to the study since assists SMEs to identify customer generations and homogenous groups and formulate appropriate marketing content for them using digital media.

2.1.4 Forms of Digital Marketing

Digital technologies have the ability to copy almost all aspects of traditional media channels and marketing communications and, in the process, cover the marketing mix. Digital promotions are, however, more specific and are a marketing communication mix component. Digital marketing involves the use of digital media in the process of carrying out the marketing practices. The forms of digital marketing include emails, mobile marketing, search engine optimization (SEO), social media, pay-per-click (PPC), online advertising, and viral marketing.

Email marketing is one of the digital marketing techniques earliest used and it involves providing personalized or targeted messages to specific people at the correct time. With the emails, businesses will deliver emails that meet the user’s requirements. Mobile marketing is defined as the use of a wireless medium to provide consumers with time and location-specific, tailored information that promotes products, services and ideas (Scharl, Dickinger & Murphy, 2005). It therefore improves the interaction between consumers and their mobile phones, the consumer- brand relationship, together with the mobile advertising capability to control the viewing environment, giving advertisers with the opportunity to create more meaningful brand relationships (Aaker, Benet-Martinez & Garolera, 2001).

Search engine optimization (SEO) is the process of designing the contents of the website to fit what the business prospects are looking for, and presenting it in a way which is easily accessible to both people and search engines. If a business wants to increase its targeted traffic to the website, the organic or natural search results (the results in the middle of the search engine results page) are the place to be (Ryan & Jones, 2009). Pay-per-click marketing provides businesses an opportunity to be highly ranked in a search pages for specific keywords and phrases through payment. It is viewed as an effective way to rapidly generate search engine traffic depending on the type of business and the specific keywords they want to rank for. Although pay-per- click continues to grow in popularity and competitiveness, keywords are becoming increasingly expensive for smaller businesses (Ryan & Jones, 2009).

Online advertising is when advertisement is done on the internet and consists of advertisements placed on search engine results pages, advertisements embedded in e- mails, and other ways in which advertisers use the internet. The primary aim is to acquire a prospective customer to act immediately by clicking on the advert (The Saylor Foundation, 2020). These advertisements are used to prompt various actions from potential customer and meet several marketing communications objectives such as increasing action, changing opinions, and increasing recall.

Affiliate marketing is a form of online advertising where a digital user or website promotes an online retailer and, depending on the sales or leads is generated for that online retailer, earns a commission (IAB Australia, 2016). In this case, the third party earns revenue every time a potential customer clicks on the link provided by the originator of the advert website. Viral marketing is a mixture of the several elements of digital marketing and it involves publicizing the message content through multiple channels. It may include Youtube videos, email marketing, blogs, and also some traditional components, all with a purpose of ensuring that the content captures the market attention and automatically spreads to other online communities.

2.1.5 Digital Marketing and Sales

Several studies and literature have indicated a relationship between digital marketing and sales. Digital marketing is able to reach new customers and provide personalized communication to the customers, hence increasing awareness and sales (Jain, 2014; Jagongo & Kinyua, 2016). Small businesses could be able to use digital media such as social media, e-mails which are known to be very cheap to access potential customers to create product awareness, while medium enterprises have some revenue to use digital tools such as pay-per-click (PPC), search engine optimization (SEO), online advertising, and viral marketing.

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