The Development of B2B E-marketing Strategy for SMEs in Jiangsu Province

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Introduction

In recent two decades, with the rapid development and popularization of the world Internet and computer technology, Internet has been an integral part of human daily life. According to the World Internet Stats (2010), the number of Internet users around the world totalled 1.97 billion by June 2010, increased 444.8 percent over the last decade. The use of Internet as a platform and media becomes the mainstream under business environment, which resulted from the unprecedented increase of the Internet users (Liang et al., 2004). The broad reach of the Internet provides businesses an opportunity to expand markets with excessively low cost (Fulford, 2001). Gilmore et al. (2007) stated that adopting Internet and electronic marketing (e-marketing) strategy within business provide small and medium sized enterprises (SMEs) an opportunity to reduce cost, improve competiveness and expand businesses. Since e-marketing adoption may bring potential distinct economic benefits, there is a growing number of businesses are implementing e-marketing strategies to improve business performances. With the improving awareness of the importance of e-marketing adoption among enterprises, e-marketing is growing rapidly and is significantly impacting the market behaviour of customers and businesses (Sheth and Sharma, 2005). In simple terms, e-marketing refers to achieving business goals by using world wide web (WWW), instant messaging, emails, online payment and other forms of Internet related technologies (Gilmore et al., 2007). An e-marketing strategy includes the actions taken in order to promote a brand via the Internet and a good e-marketing strategy plays a most significant role in the success of a business (Rampur, 2010).

In China, SMEs have shown their strong abilities in grabbing the opportunities provided by e-commerce and its contribution to economy growth should not be neglected (Payne, 2002). SMEs are concentrated on in this research paper for three main reasons. First, SMEs play an important role in developing countries' economy (Singh et al., 2009). Second, SMEs have distinct advantage in adapting to new technology compared to large-scale enterprises. Since the existence of bureaucracy and hierarchy amongst SMEs is few, new technologies can be adopted faster and easier by SMEs than large businesses (Payne, 2002). Finally, SMEs frequently found the difficulties in operating businesses and competing in the market. For some reasons, SMEs are prevented from maintaining high qualified staff, reaching high level of technology or advanced management skills (Singh et al., 2009). As a consequence, strategically adopting e-marketing became an important business skill for SMEs managers. E-marketing provides SMEs an opportunity to develop market without geographical restriction. In order to improve competition ability for SMEs, the explanation of e-marketing strategy for SMEs seems especially important.

It is believed that SMEs are developing rapidly and quantities of SMEs are undertaking e-marketing activities via Internet. However, a number of SMEs are implementing marketing strategies in traditional ways for some reasons. The lack of resources and skills prevents SMEs from improving competitiveness when e-marketing strategy is introduced (Maguire et al., 2007). SMEs prefer to focus on the products and services from the suppliers' viewpoint instead of customers (Sheth and Sharma, 2005). The fact is that SMEs who are adopting new advanced technologies have enjoyed benefits provided by e-marketing and achieved advantageous position (Chong et al., 2009). For example, email is applied amongst SMEs as an important medium to realize the communication with customers, share products and services information with customers and enhance customer loyalty (Merisavo and Raulas, 2004). Furthermore, quantities of SMEs employed B2B e-market such as Alibaba to negotiate and reach an agreement on transactions. Suppliers and buyers prefer to undertake market activities on Alibaba.com for low requirement, reliable online payment and large market share (Zhao et al., 2008).The benefits and opportunities provided by e-marketing adoption should be profoundly recognized by SMEs. Under this situation, it is a great opportunity for SMEs in Jiangsu to follow the world trend and adopt e-marketing to operate businesses.

Our emphasis in this study is to provide an overall understanding of the B2B e-marketing development of SMEs in China, especially in Jiangsu Province. A clear insight of the B2B e-marketing adoption amongst SMEs in Jiangsu province will be provided, which will be resulted from emailed questionnaires and interviews. Moreover, the strategy for SMEs in Jiangsu province will be discussed, which can be used as guidelines and suggestions for marketers. The report begins with the background of e-marketing and related information which will be used in this research. Second, academic literatures concentrated on the existing literatures that related to the B2B e-marketing and SMEs in China and Jiangsu. The final section presents and discusses the findings of this study and future prospects will be discussed.

Literature Review

Literature review in this study mainly consists of two sections: literature review on

SMEs and literature review on B2B e-marketing adoption. The first section includes the definition and characteristics of SMEs, development of SMEs in China and Jiangsu Province, importance of SMEs, challenges ahead and strategies for SMEs. The second section concentrates on the definition of the e-marketing, characteristics of B2B and the benefits provided by B2B solution, reasons, barriers and benefits of e-marketing adoption. Besides, a number of B2B e-market models and frameworks will be presented.

Literature Review on SMEs

With the popularization of the Internet and website, there appears a trend that a large number of SMEs prefer to undertake marketing activities via Internet. In this research, the definition of SMEs is defined according to the National Bureau of Statistics of China (NBSC, 2003), which is shown in Table 1.

Industry branch

Employees

Sales (unit: 10,000 RMB)

Total assets (unit: 10,000 RMB)

Memo

Industrial

300-2,000

3,000-30,000

4,000-40,000

Medium enterprise must simultaneously meet the three indexes, otherwise are small enterprises

Construction

600-3,000

3,000-30,000

4,000-40,000

Wholesale

100-200

3,000-30,000

Medium enterprise must simultaneously meet the two indexes, otherwise are small enterprises

Retail

100-500

1,000-15,000

Transport

500-3,000

3,000-30,000

Post

400-1,000

3,000-30,000

Hotels and restaurants

400-800

3,000-15,000

Table 1 Division standard of SMEs

Source: NBSC

The development of SMEs in China was described in previous studies. Chen (2006) concluded that the development of China's SMEs can be divided into three phases. During the first phase from 1978 to 1992, due to the government support and along with the China's reform and opening-up, there appeared great development of SMEs in amount and size. The second development phase was from 1992 to 2002, the establishment of socialist market economy and the incentive measures taken by the government enabled SMEs to enjoy high rates of growth. The third phase started from 2002 with China's entry into World Trade Organization (WTO), SMEs in China entered a new era. The government has shown the ambitious to accelerate the development of SMEs. SME Promotion Law of the People's Republic of China, which came into effect in 2003, was promulgated to support and encourage the development of SMEs in China. Similarly, Hong (2010) illustrated the advantages of SMEs in Jiangsu province, which has strong competitive strength not only in per-capital GDP, but also in Internet penetration. In order to promote the development of SMEs and improve international competitiveness, Jiangsu province also carried out policies such as Promotion Rules of SMES in Jiangsu Province (SMEJS, 2006). Singh et al. (2009) concluded some promotional policies for SMEs by the Chinese Government, which gave us a comprehensive understanding of the contribution that the government made for steady and fast development of SMEs in China. Shi and Li (2006) suggested that the government should actively stimulate the development of SMEs, create an open and fair competitive environment and improve the service quality for SMEs. Furthermore, effective policies should be carried out to encourage the sustainable development of SMEs, especially policies in finance and taxation. Chen (2006) pointed out that the effective implementation of Chinese SMEs Promotion Law positively supported the development of SMEs, removed potential barriers, improved competition abilities of SMEs, optimized industrial structures and promoted scientific innovations. Hence, SMEs in China achieved great development during that period. Some initiatives that recently carried out by the Chinese government were conclude by Singh et al. (2009), which were income tax policies for small enterprises, taxation policies for promoting employment, taxation policies for high-tech enterprise and service industries and financial policies.

A number of researchers have discussed the important role that SMEs played in economic growth. Jutla et al. (2002) held the opinion that SMEs accounted 80 percent of the economy growth worldwide and are regarded as the economic backbone of each country throughout the world. Payne (2002) held an opinion that SMEs play an important role in developing economy and providing job opportunities in developing countries. Singh et al. (2009) indicated that in some regions, private SMEs have become an important pillar of the local economy. Chen (2006) thought highly of SMEs since they are not only an important revenue contributor, but also a great job opportunities provider. Liu (2004) argued that SMEs development and economic development are mutually dependent. Furthermore, SMEs play a significant role in the domain of increasing exports and promoting transformation of scientific and technological achievements. Singh et al. (2009) presented detailed data: SMEs in China account for 98.9 percent of total number of businesses, 77.3 percent of employed people, 65.6 percent of gross industrial output value, 63.3 percent of sales revenues and 54 percent of total profits. The above statements are supported by Yang (2003), who gave similar statistical data of SME shares of economy in China.

Challenges ahead for SMEs have been observed by a number of researchers. Denis and Bourgault (2003) indicated that the ability of an enterprise to persistently improve business performance is crucial for SMEs in the demanding market. Similarly, Vos (2005) suggested that the management ability of SMEs managers still need to be improved to strategically manage the enterprises. Moreover, SMEs are frequently facing the pressures of low level of technologies adoption (Gunasekaran et al., 2001), huge cost in developing products (Chorda et al., 2002), ineffective marketing skills and researches (Hashim and Wafa, 2002). Narula (2004) indicated that the main constraint of SMEs is that technical requirements could not be easily satisfied. Xiong et al. (2006) agreed with Narula since SMEs are lack of funds to employ advanced business software. Singh et al. (2009) made a conclusion on the constraints of SMEs in China, which are low technical level, lack of skilled employees, inefficiency of management team, narrow domestic market and lack of funds. Zhao et al. (2008) conclude three main problems that may block the development of B2B e-markets in China. First, problems presented by business infrastructure such as legal, financial and logistic infrastructures have been a bottleneck for China to develop B2B e-market. The basic services that provided by the markets and society could not meet the requirements of building B2B e-market. For example, electronic payment systems and transportation systems still needed to be developed to improve transaction velocity. Second, SMEs managers are lack of thorough understanding about e-commerce. Current business culture among SMEs did not actively support scientific and technological innovations. Hence, managers of SMEs could not decisively and appropriately apply e-commerce strategies. Third, the low level of trust and security system limited the development of e-commerce in China, which increased possibilities of credit frauds, online frauds and contract frauds. On the contrary, strategies that may improve competitive ability of SMEs in China were presented by Singh et al. (2009). The first strategy is to make the best of reform and opening-up policies of Chinese government to expand potential global markets. The second strategy suggested that SMEs should uniquely define their nature and circumstances to operate businesses. The third strategy indicated that SMEs in China should make the best of guanxi, which is the soul of Chinese-style business.

Literature Review on B2B E-marketing

Since the literature on e-marketing is limited and the relative youth of e-marketing, there are not widely accepted or agreed definitions of e-marketing. Nagi (2003) stated that e-marketing involves the use of electronic method or media to realize the communication between sellers and buyers. Gilmore et al. (2007) pointed out that e-marketing is the action of taking advantage of digital technologies to create value to customer and communicate with them. Coupey (2001) suggested that e-marketing can be used synonymously with internet marketing. In spite of the fact that the internet plays an important role in e-marketing, provides timely information and email services for users worldwide, it is merely part of e-marketing activities (Gilmore et al., 2007). Strauss and Frost (2001) emphasize that the most important elements of e-marketing strategy are sales, advertising, public relations, direct marketing and marketing communication. Gloor (2000) stated that the main components of e-marketing strategies and Rampur (2010) listed five components of a good e-marketing strategy, which are search engine optimization (SEO), email marketing strategy, online advertising, online newsletters and medium news rooms. Based on the findings resulted from the survey conducted by Chong et al. (2009), three major components of e-marketing adoption are identified as people, information/resources and technology.

Zeng et al. (2003) discussed the characteristics of B2B and the benefits provided by B2B solution. It is argued that externalities and exponential growth, critical mass, customer "cohesion" and disintermediation are four main characteristics of B2B. Zeng et al. also indicated that CRM-B2B integration strategies can assist enterprises pursue benefits and obtain business advantages. The first strategy is that CRM embedded under B2B, which can shift attention of the firms from products to customers. The second strategy emphasized that B2B module and CRM module are separated, which have the following benefits: easy and rapid to develop, low maintenance fee and high performance and scalability. Yang and Papazoglou (2000) documented the potential benefits that provided by B2B solution, which may include the increase in productivity, the reduction in salary payment and explicit record of auditing. Zhao et al. (2008) indicated that Alibaba is the typical and dominant B2B e-market in China. Alibaba.com provides SMEs an opportunity to compete in an open environment with the lowest requirement. Moreover, B2B e-market model was presented in Table 2, which involves factors: transactional process and controlling complexity.

Transaction

process

Controlling

complexity

Information

Negotiation

Payment

Delivery

Low

Providing quality information to potential users

Medium

Matching buyers with sellers and delivering exchange mechanisms

High

Controlling the risk for secure and reliable transactions

Managing collaboration

Table 2 B2B e-market model

Source: Zhao et al. (2008)

In recent years, a lot of issues on B2B e-marketing adoption have been discussed in academic papers. Zhao et al. (2008) introduced a practical perspective of the value creation process in Chinese B2B E-markets. Carson et al. (1995) suggested that marketing in SMEs and large-scale enterprises ought to be different. One of the advantages of SMEs is the ability to serve appropriate markets and maintain good customer relationship. Daniel and Wilson (2002) conducted a study on the e-commerce adoption by SMEs in the UK. Simpson and Docherty (2004) focused on e-commerce adoption support and advice for UK SMEs. Gebauer et al. (2007) argued that in China, B2B marketing adoption contributed a lot for the increase of service revenue.

Gilmore et al. (2007) made a conclusion of the drivers and barriers of e-marketing adoption amongst SMEs. Drivers to e-marketing adoption can be divided into two categories: proactive drivers and reactive drivers. The former one included the opportunity to gain competitive advantages, the chance to reduce marketing and operating costs and increase sales, the chance to improve business performance, the chance to enhance communication efficiency of marketing. The latter one included improve competitive advantages against large-scale enterprises and other local competitors and follow the industry trend. Barriers to e-marketing adoption could be demonstrated from three main aspects, which are generic characteristics of SMEs, practical implementation and maintenance issues and organizational obstacles. Similarly, Stockdale and Standing (2004) pointed out the benefits and barriers of e-marketing adoption. Chong et al. (2009) made a conclusion about the reasons, benefits and challenges of e-marketing adoption in China, Malaysia and Singapore. Reasons for applying e-marketing demonstrated by Chong et al. are competition in the marketplace, it is part of my marketing strategies, globalisation, follow the industry trend, demanded/instructed/advised by senior management, customer satisfaction and other reasons. Problems of e-marketing adoption are security, implementation, expertise and lack of resources, senior management and time. Chong et al. indicated that benefits of e-marketing adoption are better relationship with customers, improve sales, increased web traffic, reduced marketing costs, competitive advantages and improved products/services quality. Robeiro and Love (2003) discussed three categories of e-business benefits which are business value, technical value and market value. Robeiro and Love also emphasize that those benefits are distinct with the return-on-investment (ROI) benefits.

Daniel et al. (2002) concluded four clusters of SMEs regarding the different levels and stages of e-marketing applied by SMEs, which are developers, communicators, web presence and transactors. The first clusters of companies are those who operate businesses with the lowest level of e-marketing behaviours. Communicators are those firms who generally use e-mail to realize the communication between customers, employees and suppliers. Firms at third level of adoption not only undertake activities that firms in cluster 2 are currently engaging in, but also convey company information, products and services through websites. The characteristics of SMEs at the highest level of e-marketing adoption are that they prefer to balance the account and delivery digital products and services on-line. E-business adoption and knowledge management within SMEs was identified by Koh and Maguire (2004). The main findings of Koh and Maguire revealed that SMEs tend to employed enterprise resource planning (ERP), supply chain management (SCM) and customer relationship management (CRM) independently.

Authors

Findings

Chen (2006)

Three development phases of SMEs in China

Hong (2010)

Advantages of SMEs in Jiangsu Province

SMEJS (2006)

Singh et al. (2010)

Promotional policy for SMEs

Julta et al. (2002) Yang (2003)

Chen (2006) Gary (2010)

The importance of SMEs to Chinese economy

Nagi (2003)

Gilmore et al. (2007)

Definition of e-marketing

Gloor (2000)

Strauss and Frost (2001)

Rampur (2010)

Components of e-marketing strategy

Daniel and Wilson (2002)

Simpson and Docherty (2004)

E-marketing adoption amongst SMEs in the UK

Stockdale and Standing (2004)

Benefits and barriers of e-marketing adoption

Gilmore et al. (2007)

Drivers and barriers of e-marketing adoption amongst SMEs

Chong et al. (2009)

Reasons, benefits and challenges of e-marketing adoption

Daniel et al. (2002)

Four levels of e-marketing adoption

Zeng et al. (2003)

Characteristics of B2B

Yang and Papazoglou (2000)

Zeng et al. (2003)

Benefits of B2B solution

Zhao et al. (2008)

Case study of Alibaba

Table 3

Summary of existing literature

The above existing literatures are important to this research, which were summarized in Table 3. To conclude, a large quantity of previous researches and studies have been made to explore e-marketing and SMEs, of which some studies may based on the Chinese economy. Nevertheless, few studies focused on B2B e-marketing strategy for SMEs located in Jiangsu province. The problem of B2B e-marketing suggestion for SMEs in Jiangsu still remains unsolved. In order to address the gap and set a guideline for SMEs marketers, this paper will provide a deeper study on the topic relating to B2B e-marketing strategy for SMEs especially in Jiangsu province.

Research questions

Some questions arise before and during the process of the research. This research seeks to answer the following questions:

What is the current situation of the development of the e-marketing technology in Jiangsu province?

What is the current B2B e-marketing adoption amongst SMEs in Jiangsu province?

What are the components of B2B e-marketing strategy for SMEs in Jiangsu?

Research Objectives

The purpose of this study is to provide an overall understanding of the development of B2B e-marketing strategy for SMEs in Jiangsu Provinces. Several objectives are listed as follows:

Provide an overall understanding of the development of e-marketing technology in Jiangsu province.

Understand the current situation of the B2B e-marketing adoption amongst SMEs in Jiangsu province.

Critically review the role that internet plays in B2B e-marketing strategy.

Explore the components of B2B e-marketing strategy for SMEs in Jiangsu province.

Research Methodology

The philosophy of realism was reflected in this research, in which a scientific approach was assumed to develop knowledge (Saunders, et al., 2009). Realism supports data collection and help to understand data. As a scientific research, inductive approach will be applied in order to analyze qualitative data, which will be resulted from the face-to-face interview.

Analysing Quantitative Data

The term quantitative data refer to all types of data that can be counted or expressed numerically, which can be represented in graphs, tables and charts. The reason of collecting quantitative data is that those data could be quantified to answer questions of the research and reach research goals (Saunders, et al., 2009). Quantitative data in this study are collected from the questionnaire conducted, which range from descriptive data, ranked data and discrete data. Quantitative data were analysed mainly by manpower before the invention of powerful computers, which not only wasted huge financial, material and human resources but also may lead to unscientific results. Nowadays, quantitative data can be analysed by varieties of analysis software such as ExcelTM, MinitabTM, SASTM and SPSSTM. In this research, advanced statistical software SPSS 17.0 was used to analyse the quantitative data collected from the survey. In order to assess the reliability of some types of data, Cronbach's É‘ value was calculated using SPSS 17.0. Besides, multiple-response method was applied to analyse the multiple-response questions to obtain scientific results. Descriptive tables and pie charts are presented to provide readers a straightforward sight and a clear understanding of the quantitative data collected in this study.

Analysing Qualitative Data

The term qualitative data refer to non-numeric or non-standardized data that should be summarized, restructured and categorised by researchers (Saunders, et al., 2009). The reason of collecting qualitative data is that analysing qualitative data help to develop theory by both deductive and inductive approaches. Word processing software, content analysis and text retrieval software can be employed to effectively analyse qualitative data (Catterall, 1996).Software such as NVivoTM and ATLAS.tiTM can be applied to assist qualitative data analysis. Since there are limited questions designed in the interview and answers of interviewees are obvious and simple, the data were analysed by hand instead of software. Inductive approach was employed to analyze the qualitative data collected in this study. The reasons of adopting inductive approach are that the data analyzed was not predetermined and non-standardised. Furthermore, it allows the researchers to obtain the understandings of the results in a flexible structure.

Survey Instrument

Both quantitative analysis techniques and qualitative analysis techniques will be employed in this research. Johnson et al. (2007) indicated that mixed methods that combining qualitative and quantitative data are widely used by researchers. The definition of mixed methods has been defined by a large number of leaders in the field of mixed methods research. However, definition that used in this study was defined by Johnson et al., who are the leading authorities on mixed method research:

Mixed methods research is the type of research in which a researcher or team of researchers combines elements of qualitative and quantitative research approaches (e.g. use of qualitative and quantitative viewpoints, data collection, analysis, inference techniques) for the broad purpose of breadth and depth of understanding and corroboration (Johnson et al., 2007, p. 123).

Questionnaire is frequently used when explanatory and descriptive researches are conducted. Questionnaire aims at collecting data resulted from the answers of the same questions by different respondents. Questionnaire can be divided into two types, which are self-administered questionnaires and interviewer-administered questionnaires. The former one was applied in this research since questionnaires are independently completely by the respondents. The main reasons of applying online questionnaire method are:

The cost is low,

Time saving for both researchers and respondents,

Results can be more precise and easier to collect.

An online questionnaire was designed on a professional survey website named http://www.sojump.com/. One of the advantages of this website is that once the questionnaire was completely designed, a link will be automatically created for administer. The link can be sent to the selected samples through email to finish the questionnaire. In order to obtain good response rate and higher validity and reliability, the questionnaire was carefully designed from individual questions to the layout of the questionnaire. Opinion questions, behaviour questions and attribute questions are designed in the questionnaire. There are two sections contained in the questionnaire. The first section involves the current situation of e-marketing adoption amongst SMEs in Jiangsu province. Questions in the first section asked respondents to demonstrate whether they did or did not undertake e-marketing activities. If they did, respondents were asked to indicate the reasons and benefits of e-marketing adoption and vice versa. For example, for a question "Do you implement e-marketing strategy within your business", if 60 respondents answered "yes", one descriptive conclusion can be made that three tenth of the SMEs in Jiangsu Province have applied e-marketing. The second section is designed to collect general information about the respondents such as name and email address, which can be used to confirm the answers of the respondents and send the final report to respondents who have interest in. Once the answers of the respondents are collected, the validity and reliability will be assessed.

The use of interview is another important method to answer questions of a research and realize research objectives. According to Kahn and Cannell (1957), the term interview refers to the discussion between at least two people with some certain objectives. Face-to-face interview with general managers, professional marketers and experts will be carried out to collect qualitative data. The main purpose of the interviews is to explore answers of the interviewees and assist quantitative data analysis. Five open questions were designed in the interview which asked interviewees to state their opinions on e-marketing adoption.

Sample Selection

A database contained 200 names and email addresses of SMEs in Jiangsu province were obtained from a commercial website. Companies in this database are ensured to conform to the definition of SMEs in China. It is believed that these samples not only covered a wide range of industry branches, but also evenly distributed throughout Jiangsu province. The current situation of e-marketing adoption amongst these samples was unknown. However, due to the widespread concern and high degree of interest in e-marketing adoption, it is expected that a majority of SMEs have applied e-marketing. The emailed questionnaire will be conducted in early December 2010 and the responses collection will finish in late January 2011. The responses of SMEs will then be analyzed for the finding of this research. Furthermore, in order to collect open questions to richen the result of questionnaire, ten interviewees who are believed to have a good knowledge about both e-marketing and SMEs were chosen.

Response Rate

The total number of response received was 52 (total response rate 26%). However, 11 of these were rejected because of the repetitive IP addresses of respondents, which may indicate that some respondents may answer more than one questionnaire. As a result, the number of usable responses was 41, resulting in an effective response rate of 20.5%. The finding of this study will be achieved through these valid responses. The response rate in this study is acceptable compared with other similar survey response rates, such as 34% in Chong et al. (2010) and 10.4% in Daniel et al. (2002).

Results of the Survey

The results of the survey are mainly divided into four sections. The first section displays the characteristics and basic information of SMEs who participated in the survey. The second part explores the e-marketing strategies implemented by the respondents. The third section discusses the reasons of adopting and against adopting e-marketing. The last section displays the benefits brought by applying e-marketing and the disadvantages and shortcoming of e-marketing adoption.

Characteristics of SMEs

Business domain of the individual SMEs participating in the survey is presented in Figure 1. It can be easily found that IT companies and finance/banking companies were the largest group, which accounted for 17.1 percent for both. Education companies ranked in the second place (14.6 percent), and then construction companies (12.2 percent). 9.8 percent of the respondents are manufacturer, advertisement and travel companies and 2.4 percent were others companies. In addition, there were no communication companies among the respondents.

Figure 1

Business domain of the respondents'' SMEs

Figure 2 measures company size by number of employees. From Figure 2 we can find that the number of employees between 1 and 50 accounted for 39 percent and 51-100 employees accounted for 24.4 percent. Employee size of 101-150, 151-200 and 201-300 respectively accounted for 14.6, 12.2 and 7.3 percent. The other 2.4 percent were companies with number of employees above 500. Table 4 demonstrates annual sales revenue of the SMEs. The largest sales turnover is above ten million RMB, which is 7.3 percent. Sales between five million and ten million (7.3 percent), one million to five million (14.6 percent), 0.5 million to one million (22 percent), 100,000 to 500,000 (31.7 percent) and the remaining 17.1 percent were sales volume less than 100,000.

Figure 2

Number of employees in respondents' SMEs

Annual sales (unit: RMB)

Frequency

%

Cumulative percent

Less than 100,000

7

17.1

17.1

100,000-500,000

13

31.7

48.8

500,001-1,000,000

9

22

70.8

1,000,001-5,000,000

6

14.6

85.4

5,000,001-10,000,000

3

7.3

92.7

Above 10,000,000

3

7.3

100

Total

41

100

Table 4

Annual turnover of respondents' SMEs

Current e-marketing adoption/strategies

This section is designed to provide the current situation of e-marketing adoption among the respondents. Companies who have adopted e-marketing accounted for 56.1 percent, which is consistent with the authors' expectations. E-marketing strategies applied by those SMEs are presented in Table 5. SMEs stated that corporate website (26.4 percent), online advertisement (19.4 percent), email marketing (12.5 percent), online payment (13.9 percent), third-party platform (8.3 percent), search engine marketing (6.9 percent) and link exchange (11.1 percent) were frequently applied when adopting e-marketing. Another 1.4 percent used other types of e-marketing such as blogs and other social networking sites. Out of 41 respondents, 18 companies have not applied e-marketing to develop business. Among the 18 companies who have not applied e-marketing, simply 5 companies indicated that they are considering adopting e-marketing. The reasons of and against adopting e-marketing will be discussed in next section.

$e-marketing strategies applied Frequencies

Responses

Percent of Cases

N

Percent

MCa

Corporate website

19

26.4%

86.4%

Online advertisement

14

19.4%

63.6%

Email marketing

9

12.5%

40.9%

Online payment

10

13.9%

45.5%

Third-party platform (eg. Alibaba)

6

8.3%

27.3%

Search engine marketing

5

6.9%

22.7%

Link exchange

8

11.1%

36.4%

Others

1

1.4%

4.5%

Total

72

100.0%

327.3%

Table 5

Frequencies analysis of multiple responses

Reasons of/against e-marketing adoption

Based on the theories associated with e-marketing adoption and results of other similar studies, six main reasons of adopting e-marketing are considered: (1) follow the industry trend; (2) it is part of marketing strategies; (3) improve competition ability; (4) improve customer satisfaction; (5) globalization; (6) SCM. In order to appropriately rank these reasons, Likert Scale was applied with "1= strongly disagree, 2= disagree, 3= neutral, 4=agree, 5= strongly agree".

Cronbach's alpha is the most widely used tool to assess the reliability of Likert-style rating scale. George and Mallery (2003) suggested that results of scales can be acceptable when Cronbach's ɑ value is larger than 0.7. The survey results may be questionable with ɑ>0.6. In this study, Cronbach's ɑ value of reasons of e-marketing adoption was reported to be 0.643 (shown in Table 6), which demonstrated that the reliability of the results is between questionable and acceptable. The results of the variables considered in the survey are as follows: follow the industry trend (mean=4.48, SD= 0.79), it is part of marketing strategies (mean=4.61, SD= 0.58), improve competition ability (mean=4.57, SD= 0.51), improve customer satisfaction (mean=4.57, SD= 0.59), globalization (mean=4.13, SD= 0.92) and SCM (mean=4.13, SD= 0.76). As a consequence, it is part of marketing strategies ranked the first position of the reasons of e-marketing adoption followed by improve customer satisfaction. The above results demonstrated that e-marketing adoption has been one of the most important components of SMEs' marketing strategies. Besides, SMEs are more focusing on the products and services from the customers' viewpoint instead of the suppliers'.

Descriptive Statistics

N

Mean

Std. Deviation

Rank

It is part of marketing strategies

23

4.6087

.58303

1

Improve customer satisfaction

23

4.5652

.58977

2

Improve competition ability

23

4.5652

.50687

3

Follow the industry trend

23

4.4783

.79026

4

SCM

23

4.1304

.75705

5

Globalization

23

4.1304

.91970

6

Valid N

23

Note: Cronbach's a value= 0.643

Table 6

Likert scales of reasons of e-marketing adoption

In spite the fact that there are varieties of reasons to adopt e-marketing, some SMEs refused to embrace e-marketing. The fundamental reason of this phenomenon is probably because the costs of applying e-marketing exceed the potential benefits provided by e-marketing adoption. Several reasons that prevent SMEs from adopting e-marketing are listed:

R1): High cost;

R2): Internet advertising is not effective;

R3): Lack of technologies and securities;

R4): Unnecessary;

R5): Lack of time.

As shown in Table 7, the most important barriers of e-marketing adoption are high cost and ineffective Internet advertisement, which accounted for 24 percent for both. This is followed by lack of technologies and securities (20 percent), unnecessary (16 percent) and lack of time (16 percent). Considering the results of the interviews, the results were reasonable since interviewees indicated that the main reasons that prevent SMEs from applying e-marketing are: lack of time, funds, expertise and technologies.

$Reasons of e-marketing Frequencies

Responses

Percent of Cases

N

Percent

$Reasonsa

R1

6

24.0%

46.2%

R2

6

24.0%

46.2%

R3

5

20.0%

38.5%

R4

4

16.0%

30.8%

R5

4

16.0%

30.8%

Total

25

100.0%

192.3%

Table 7

Frequencies analysis of multiple responses

E-marketing benefits and disadvantages

This section concentrates on the benefits provided by e-marketing adoptions and disadvantages facing the B2B SMEs. In the same manner, Likert Scale was employed to analyze the benefits of e-marketing adoption with "1= strongly disagree, 2= disagree, 3= neutral, 4=agree, 5= strongly agree". As shown in Table 8, the Cronbach's É‘ value was calculated to be 0.622. Among the benefits of e-marketing adoption, increase sales ranked the first position (mean= 4.47, SD= 0.59), followed by enhance popularity (mean= 4.43, SD=0.66), improve competition ability (mean= 4.39, SD= 0.66), better customer relationship (mean= 4.22, SD= 0.85), increase product and service quality (mean= 4.17, SD= 0.72) and reduce cost and increase profit (mean= 4.09, SD=0.67). Though large quantities of SMEs have enjoyed benefits provided by e-marketing adoption, it is not suggested every individual SMEs should quickly adopt e-marketing. A majority of interviewees indicated that SMEs should depend on their unique nature and circumstances to determine whether to apply e-marketing or not. Moreover, interviewees suggested that a secured network environment should be created when applying e-marketing and SMEs should fully utilize Internet advertisement.

Descriptive Statistics

N

Mean

Std. Deviation

Rank

Increase sales

23

4.5652

.58977

1

Enhance popularity

23

4.4348

.66237

2

Improve competition

23

4.3913

.65638

3

Better customer relationship

23

4.2174

.85048

4

Increase product/service quality

23

4.1739

.71682

5

Reduce cost, increase profit

23

4.0870

.66831

6

Valid N

Note: Cronbach's a value= 0.622

23

Table 8

E-marketing benefits analysis

The disadvantages and shortcomings of e-marketing adoption are analyzed in the same method (shown in Table 9). It can be easily discovered that security (mean= 4.61, SD= 0.58) was the main problem during the implementation of e-marketing, followed by high cost and maintain fee (mean= 4.26, SD= 0.69), implementation difficulties (mean= 3.96, SD= 0.82) and lack of technologies and customers (mean= 3.63, SD= 0.71).

Descriptive Statistics

N

Mean

Std. Deviation

Rank

Security concern

23

4.6087

.58303

1

High cost and maintain fee

23

4.2609

.68870

2

Implementation difficulties

23

3.9565

.82453

3

Lack of technologies and customers

23

3.6522

.71406

4

Valid N

23

Table 9

E-marketing disadvantages analysis

Conclusions/Recommendations

There is a trend among SMEs to embrace e-marketing and take advantages of e-marketing to obtain further development. As our study shown that a variety of reasons may prevent SMEs from adopting e-marketing, a majority of SMEs are positively applying e-marketing in different ways. Since the benefits provided by e-marketing adoption became extremely attractive in recent decades, many SMEs made substantial investment in e-marketing adoption without clear aims. However, the sustainable benefits of e-marketing adoption could not be achieved simply by investing. Having a clear understand of "e" is more important. Combining the reasons against e-marketing adoption and the limitations of SMEs, it is not suggested that e-marketing will be applied to every individual SMEs. The findings of the paper demonstrate that network securities and professional marketers should be paid special attention to during the process of implementing e-marketing.

The paper has a number of implications for B2B SMEs managers, technicians and the government. First, managers in the market should be able to grab the opportunities provided e-marketing adoption to expand business and be aware of the potential problems of applying e-marketing. In this sense, managers should create a marketing team with high qualification and professional experience to implement e-marketing. Second, technicians should help SMEs set up efficient management network and reduce the losses suffered from unsecured Internet environment. For example, professional software should be developed for B2B SMEs to efficiently manage their businesses such as ERP software. Besides, in order to avoid the threats from unsecured network environment, advanced system-protection software should be developed for SMEs. Third, the government should expand the construction of Internet and business infrastructure and establish credit system in the whole society. In addition, the government should make every effort to improve the legal system and carry out policies to:

Create a fair/open competitive environment for SMEs;

Protect the interests of SMEs;

Severely punish those crimes on credit fraud and online fraud;

Stimulate and support the development of SMEs.

To conclude, there is still a long way to go for e-marketing adoption among B2B SMEs in Jiangsu Province. Under the joint effort of B2B SMEs managers, technicians and the government, the future development of B2B SMEs in Jiangsu Province will and should be bright.

Research limitations and future research

The main limitation of this study is that the results were reached by a small number of SMEs. Considering the effective response rate (20.5 percent) resulted from a sample with 200 SMEs, the findings of the study may be questionable. The survey was not scientifically designed, which may lead to the low reliability of the survey results such as the low Cronbach's É‘ value. Furthermore, the study was restricted to the SMEs in Jiangsu Province and may not be applicable for other provinces in China.

Future studies could explore the same topic in this study with larger sample. Moreover, ranges of the study could be extended to Provinces throughout China.

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