Social Media SM Is Todays Trend Commerce Essay

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Social media is todays trend. It exceeds traditional trader and connects with customers. Every business from large companies like Starbucks and IBM to smaller ones is exploring social media marketing initiatives (Neti, 2011). Previously, many businesses were unsure with the success of SM but now they are adopting more of social media marketing (SMM).

SMM is marketing using online communities, blog marketing, social networks among others (Neti, 2011). India was among the first promoters of SMM. Nowadays, organisational structure has been replaced by social cause since businesses prefer to deal directly with their targeted audience through online platforms.

SMM tools help entrepreneurs to build a strong relationship with customers and create public awareness. In Mauritius, SMM was introduced for business to better integrate marketing communication plans with target markets. Similarly, with the introduction of Web 2.0, internet users can construct business contacts by sharing business information to team up with online projects (Andharia, 2012).

Employees who are involved in small and medium enterprise (SME) use informal word-of-mouth (WOM) marketing techniques to communicate in business and socially. Equally, it is important for SMEs to remain close to their customers to practice network marketing in relation to their staff and customers.

BACKGROUND TO THE STUDY

Internet has become part of everyday life. People communicate, read emails, search for information, contact friends and do business at independent time and place (Flinck, 2011). Hence, SM plays an essential role allowing the interaction with people. Firms are responding positively to social media services among customers.

Moreover, online marketing has become a popular marketing tool among entrepreneurs. Similarly, SM represents a great challenge for marketing through traditional media channels and communications (Gillin, 2009). The popularity among online shopping is due to transparency, good communication, referrals (Urban, 2004) and WOM (Eikelmann et al., 2008). Likewise, social media tool is easy and it acts as an effective solution for any business with tight budget. Henceforth, the integrated marketing communications achieves promotional elements such as personal selling, sales promotion, advertising, direct and sales promotion.

Generally, SME approach to marketing activities is designed by the characteristics of SMEs restricted to resources, size of enterprise and has an impact on the market (Gilmore et al., 2007). These activities can be in a marginal function which results randomly to marketing decisions (O'Dwyer et al., 2009). In other terms, SME's approaches are new and unplanned, and they agreed on the basis that customers are interested to give market conditions (Gilmore & Carson, 1999). Marketing within SME is seen as an evolutionary process which includes marketing activities through product life cycle or service. Nevertheless, this process has an effect to external market outside the SME sector (Scanlon, 2009).

PROBLEM STATEMENT

From Fullerton master's thesis (2011), Sekaran defined problem as a precise statement that exists between actual and desired ideal states. Manik (2011) argued that impact of social media "does not matter whether you have a Billboard, a magazine advertising, an online banner or a social media channel. Impressions are impressions". Furthermore, SMEs are somewhat confused on deciding which promotional elements to choose in order to remain competitive on the market. They are using any communication means among which are the social networking websites. Is SMM a good choice to boost up SMEs in the modern Mauritius where computers are affordable for middle income earners? Thus, this is what has triggered the research whether SMM is a good choice to boost up SMEs in the modern Mauritius where computers are affordable for middle income earners.

AIM OF STUDY

The main aim of this study is to investigate on the impact of SMM for SMEs in Mauritius. This study is based on answering research questions about the importance of SMM and its impact on SMEs in Mauritius. It is equally important to stress on social media strategy, characteristics, benefits and pitfalls of specific social media tools. Moreover, it will help to advise SMEs about how to optimise the effectiveness of social media in marketing and make timely recommendations to SMEs on how to review their marketing strategies.

RESEARCH OBJECTIVES

The study aims at achieving the following research objectives:

1. To establish the demographic profile of SM users in SMEs.

2. To determine the awareness and perception levels of SM of SMEs.

3. To investigate the SM preferences of SMEs from a business perspective.

4. To investigate the reasons for and purposes of using SM by SMEs.

5. To identify underlying business aspects in SMEs that could be affected by SMM.

6. To determine the importance of underlying aspects in impacting on the success of a business.

7. To determine the relationship between business success and

i. Awareness of SM.

ii. Amount of time since using SMM.

iii. Frequency of use of SMM.

8. To determine the impact of frequency of use of SMM on customer purchase.

RESEARCH QUESTIONS

Which type of business sector is involved in SM among SMEs?

What is the importance of SMM among SMEs?

Does SMEs involve in SMM in Mauritius?

Can social media enable SMEs to influence buyer behaviour or bring any changes?

What are the media channels small entrepreneurs often use to promote their products or services?

Had SMM has a positive impact on SMEs?

Can SM offer a competitive advantage to SMEs?

How can SMM help SMEs to boost up on the market?

What are the motivational factors for SMEs to start using SM in their business?

What improvement should SMEs undertake to get involved in SM?

RATIONALE OF STUDY

The characteristics of social media had lead marketers to gather plenty information (Strategic Direction, 2010) and thus, consumer who now has the power (Constantinides and Fountain, 2008). Positively, SM creates relationship with customers and brands and has a clear defined guidance to enter the market for a newly launch product for SMEs. Furthermore, customers are having conversations about their preferred brands which are forcing the brands to listen to them (Weinberg, 2009).

This study intends to introduce the subject of SMM for SMEs in Mauritius and stresses on finding its impact. Additionally, the main idea behind is to gain a greater understanding on the awareness and new challenges of SMM. In this connection, small entrepreneurs can adopt some strategies to emphasis on sales with SMM. By identifying causes, they can associate themselves to keep proposition simple which can impact on sales at a later process. Finally, academics can also benefit from this study where social media and SMEs have been linked and examined together.

STRUCTURE OF DISSERTATION

Chapter 1: The chapter consists of a general introductory of SMM. It also discusses on the background of study, problem statement, aim of study, research objectives, research questions and the rationale of study. Lastly, it gives an overview of the different chapters.

Chapter 2: This constitutes the critical literature review divided into three parts namely the theoretical review, empirical review and overview of the study. It also explains the characteristics, importance, benefits, challenges of SMM and promotional strategies which small entrepreneurs adopted. It then constitutes to how SM influence buying behaviour.

Chapter 3: This section presents the methodological perspectives of this research. It explains how research objectives will be achieved. Finally, it describes the data collection methods, analysis methods and limitations of the study.

Chapter 4: This chapter reveals the findings and results analysis of the survey carried out by SMEs. Analysis of each question were made using bar charts, pie charts, tables, hypothesis testing and cross tabulations.

Chapter 5: This chapter recommends SMEs on the effectiveness of using SMM and constitutes the conclusion of the study.

CHAPTER TWO

LITERATURE REVIEW

Word: 4337 - 235

INTRODUCTION

This chapter comprises of three parts namely; theoretical review, empirical review and overview of the study. The fundamental aim of this dissertation is to explore the impact of social media marketing (SMM) among small and medium enterprises (SMEs) sectors in Mauritius. The outcome of this dissertation will provide the reader with a theoretical and practical understanding of how these SMEs can use SMM to their advantage.

THEORETICAL REVIEW

In this section, the theoretical framework is presented. The term social media will be introduced along with its different types. The marketing tools, opportunities, challenges of SMM for SMEs and the promotional strategies that they adopt will be discussed and how it affects the purchase decision.

What is Social Media?

Media: is what influence and reflect public views and is considered as a dialectical basis for the research done on media and movements (Doris, 2011). In addition, Neti (2011) referred to media as advertising and communication of ideas through journals or channels.

Social: This involves communication among people in a group (Neti, 2011).

Social Media (SM): a useful media to communicate socially into an interactive dialogue through reachable and scalable communication techniques. Business concerns may also be referred to as consumer generated media (Bengs, 2009). Hence, SM is a combination of both social interaction and technology to create value.

Moreover, Karahasonović & Folstad defined SM as the systems sharing and creating online environment (Bengs, 2009). They also argued that SM can include technology platforms like mobile phones and interactive television. Additionally, SM is a word-of-mouth (WOM) communication connecting friends, relatives and acts as an effective way in doing business and practising law (Randy, 2010).

Furthermore, the design for social media platforms is mainly to make people interact socially and make it a user-friendly tool for everyone. According to Mayfield (2006), SM is a generated new way for online media categorised as community, connectedness, conversation, openness and user participation.

Besides, Neti (2011) stated that SM helps businesses to cut down cost by reducing hours worked by employees to remain profitable on the market. Likewise, enterprises can keep good interpersonal relationship with its customers and create brand awareness.

On the other hand, from a research by Neti (2011), Kaplan and Haenlein defined social media tool as Internet-based applications for Web 2.0 to create user-generated content. Undesirably, SM has been used as an online tool for drug marketers and has recorded 25% of spam email messages directed to advertisements medicines (Sass, 2010).

The Need for Innovation: Piercy highlights that there should be consistent innovations in the long term and not to focus only on the product development (Fullerton, 2011). In an organisation, the successful innovation is vital characterised by its originality and the extent to which customer value is formed (Cravens and Piercy, 2009). Besides, promotion pushes consumers to get invoke into the marketing funnel metaphor (Fullerton, 2011) as illustrated in Figure 2.1 below. Similarly, the marketing funnel manages the complexity of social media into buying behaviour. Hence, it leads to a good customer service.

Figure 2.1: Marketing Funnel

Source: Li and Bernoff, 2008

Social Media Tools

It is difficult to predict which social media tools consumers would be involved in the next five years. The use of SM should be integrated with other marketing practices to gain the most value (Brodie et al., 2007). Therefore, the question of which particular tools are used to achieve the goals is not that meaningful (Flinck, 2011).

Social media tools can be divided into different categories based on the purpose of use. According to Constantinides and Fountain (2008), the Web 2.0 is classified into five different categories such as blogs and podcasts, social networks, communities, forum/bulletin boards and content aggregators. Moreover, social media platforms contain video sharing sites like Flickr and YouTube to manage photos and social directories consisting of business podcasts (iBizRadio), podcasts (iTunes), business blogs (iBlogBusiness) and blogging (Del Monte, 2009). Merchante Circle and LinkedIn are good example of networking sites to strengthen and extend professional networks and contacts (Horowitz, 2009). Furthermore, the central SM comprises of Really Simple Syndication (RSS), chat rooms, widgets, photo sharing among others (McCann, 2008). Today, there exist elements of social networks for social media platforms like Facebook, Twitter, MySpace and Classmates (Holzapfel, 2008).

However, Ball (2011) stated that in social media strategy, content is given more importance than the tools.

Use of Social Media

Social media sites allowed users to connect with individuals, groups and bands without charging any additional cost (Boyd and Ellison, 2008). A survey on the student perceptions' of companies adopting SM was conducted in 2008 and it revealed that small businesses make profit if they are regular on online channels (Vorvoreanu, 2009). Moreover, SM allows customer to align themselves with brands, but it can also has a negative impact as well (Butler et al., 2011). The potential harm can be that enterprises do not have control over the posts.

Furthermore, it is equally important to create a good customer relationship for any businesses success. There is now a new measure to the bottom line, not only volume and profit, but also customer relationship and quality (Butler et al., 2011).

Besides, firm normally measures the cost of marketing by return on investment (ROI). In other terms, how much money is gained or lost relative to the investment being made. In a research of Butler et al. (2011), Fisher cited that many businesses have changed the use of the term ROI so as to better measure the success with social media. Rather than "Return on Investment‟ some are indicating that the new way to determine marketing success in SM would be "Return on Influence" or "Return on Engagement". Both of these terms are examples of how social networking sites have influenced marketing. The emphasis has turned to the relationship and communication with the consumer.

In addition to evidence of the accelerating popularity of online platforms such as Facebook, Twitter and YouTube, businesses can increase feelings of trust and loyalty through the use of SM. According to Moran and Gossieaux, communication can have a positive impact on the products and create a competitive edge in the market (Butler et al., 2011). When using this forum, businesses must participate and be alerted of what is going on the communities.

According to Duboff and Wilkerson (2010), marketers can easily connect with their target customers with the use of SM. Additionally, they also pointed out that social networking site is an effective and cheap way to market a product and make it attractive to the marketing bottom-line. Since it is an inexpensive way, this gives chance to better experiment new marketing practices.

When using social media sites to attract potential customers, businesses have several opportunities to engage and promote their products or services. By encouraging a connection with consumers, they support an environment in which consumers talk about businesses amongst themselves. Moran and Gossieaux indicate that this word-of-mouth, peer-to-peer communication in a community formed on an online forum can generate more first-time and return customers than those attracted by traditional marketing (Butler et al., 2011).

Social Media v/s Traditional Media

Experts have classified media as being traditional and new one (Cutlip et al., 2006; Higgins, 1999). Social media from traditional media includes television, newspapers and films (Benoit, 2011). While, considering traditional media skills along with identifying new media, this leads to a connection by both media as illustrated in Table 2.1 below.

Table 2.1: Four types of skills for different media

Source: Dijk, 2005

Conventional to Industrial and Social Media

Nowadays, information can be accessible over electronic media or print media. The common characteristics among the industrial media and SM remain appealing to be the targeted audience. Moreover, industrial media and social media can be effective in describing variances and these properties are presented in Table 2.2 below:

Table 2.2: Properties of Industrial Media and Social Media

Source: COMPUTED

Benkler (2006) had used network information economy to describe the social, economic and technological characteristics for social media. However, Keen criticizes social media as "a tool which was governing the infinite monkeys now in putting away on the Internet was the law of digital Darwinism, the survival of the loudest and most opinionated" (Gupta, 2011).

Social Media as a Marketing Channel

Lazer and Kelley argued that social marketing involved marketing concepts, knowledge and techniques that help to improve economically and socially (Neti, 2011). Moreover, this deals with the analysis of the social consequences of marketing activities, decisions and policies.

Social Media is becoming a powerful marketing channel for many organisations. Moreover, SMM is a process that allows individuals to promote their websites or products through online social channels to better communicate with large audience that may not be accessible via traditional advertising channels. Besides, Weber (2009) claimed that SMM is not only for largest multinational companies. In this regards, it might be even easier and effective for SME businesses to take advantage of it (Ahlberg, 2010).

Opportunities for involvement in Social Media: Weber (2007) suggests that firms adopting SM gain value to make partnership, enhance employee communication, target brand awareness and do research and development. According to Jones et al. (2009) businesses can use SM to build relationship with shareholders, protect their reputation and enhance brand image and value. Nowadays, people are generating word-of-mouth (WOM) marketing. Cheema and Kaikati (2009) argued that people's want for uniqueness affects the amount of WOM.

Obstacles of adopting Social Media: Common threats while using social media technologies are security issues, fear of using unverified technologies, senior management apathy and negative impact on productivity (Flinck, 2011). Culnan et al. (2010) also highlighted a few internal threats; leaks of intellectual property, destruction of company's policies or codes of conduct, security breaches and breaches of client confidentiality.

Promotional strategies for SMEs: With limited resources and budgets small businesses must also make strategies choices on promotion; advertising, direct marketing, sales promotions and personal selling. Moreover, for SMEs owners, local advertising such as radio, newspaper or community website can have an impact if the messages are controlled and targeted to a specific group. Additionally, many SMEs prefer to use direct marketing to better reach their targeted markets. By using emails, businesses can also provide individuals with opportunities to take up sales promotions or other calls-to-action (Olson, 2011).

Sales promotions inspire consumers to buy a series of prompts within deadlines and which are frequently emotional. They can be offers like gifts, Buy One Get One Free (BOGOF), free samples and discount coupons. Furthermore, SMEs also offered sales promotions to attract customers or sustain with their competitors without even considering the impact on their margins. On the other hand, the sales promotion messages are spread in variety of channels and formats from point-of-sale displays, advertising or direct marketing and used in personal selling. Personal selling or 1:1 selling relies on face-to-face communication as opposed to indirect methods of advertising (Olson, 2011). Furthermore, many marketing experts agree that WOM is an effective element of promotion. Trusov et al. (2010) found that the elasticity of WOM referrals is 20 and 30 times higher than that of marketing events and media publicity, respectively.

Some factors need to be considered while selecting promotional elements are type of product or services, available resources and skills, perceptions of consumers, size of market, demographics and life-style of target market. Henceforth, larger businesses can find it affordable to consider national advertising whereas small ones have limited resources. Hence, they prefer to advertise on local papers or local radios, use door-to-door leaflet drops, posters and social media platforms to promote their products or services (Olson, 2011).

Successful of Social Media: The main characteristic of any successful business is its ability to connect to a target audience and persuade consumers to buy products.

Characteristics of Social Media Marketing (SMM)

Similarly to multi-media advertising campaign using radio, television, internet, print media or public relations, SMM must also perform in a systematic way. Companies like Frito-Lay and Disney are using a combination of SMM with other traditional and online marketing trusts (Del Monte, 2009). However, the key elements still remained the same while designing the SMM plan as illustrated in Table 2.3 below.

Table 2.3: Elements while designing SMM plan

Source: Del Monte, 2009

Importance of Social Media Marketing

According to Woodall and Colby (2011), they examined and categorised four essentials of social media over traditional media. These elements satisfy needs and wants of consumers as they remain connected, due to rapid connections and do not require enormous effort to be applied. Furthermore, experience sharing is another essential element of SM as everyone's opinion differs and through internet information can be shared easily (Patino et al., 2012). Besides, firm can promote new products and keep good relation with online customers through SMM (Horowitz, 2009).

Moreover, users are perceived as been unbiased since they have trustworthy and original information. Marketers agreed and argued that it can be a bonanza of useful information for researchers (Woodall and Colby, 2011). Typically, community's knowledge shows a progress with the awareness of individuals and internet (Pitta and Fowler, 2005). Hence, this is resulted as vast information flow.

SM offers a faster and more cost-effective way to reach targeted markets than marketing through traditional media like television, newspaper and websites. It can be seen as an opportunity for the research and development department to have immediate feedback on the product and take corrective actions, then see the next challenge.

Importance of Social Media Marketing for SMEs

SMM can help small businesses to complete in their niche on general leads and internet. Furthermore, SMEs are engaging online to build their identity and manage reputation (Horowitz, 2009). Similarly, users are emerging on a new consumer behaviour known as "Shop Online, purchase Offline" (Choithani, 2011). Moreover, consumers need to be aware of the presence of existing and new SMEs forming up. Equally, it is important to have social media strategies like internet and mobile tools to ease conversations and interactions between SMEs on which ever platforms they are using Flickr, Facebook, LinkedIn, Google Buzz, YouTube, Vimeo or Twitter (Choithani, 2011).

Thus, it is important to manage the legal and ethical challenges to better understand the conversation about the communities, learn how to integrate the traditional marketing tactics with SMM strategy (Choithani, 2011). Hence, anyone share their ideas directly through social media to help their customers. Social media also helps customers to solve common problems and have a direct interaction with the customers so that they can express themselves freely.

Influence of Social Media on Purchasing Decision

Customers are not only influenced by the traditional marketing (A) but they are also uncontrollable personal influencer (B). Today, Internet as a communication channel improves the online marketing mix (C) and the social media experiences (D) (Constantinides and Fountain, 2008). Figure 2.2 below shows the factors that influenced the decision-making process in an information based marketplace adapted from Kotler 1994 (Constantinides and Fountain, 2008). Moreover, it emphasises on the difficulty in the decision-making process in the new social media environment. However, marketers found that influencing the consumer behaviour by traditional marketing media and practices becomes less effective.

Figure 2.2: Factors influencing Buying Process

Source: Constantinides and Fountain, 2008

Constantinides and Fountain (2008) pointed out that customer experiences and favourites about products and services offered either in traditional or electronic outlets is not based any more exclusively on information made available through traditional mass media or corporate websites. Furthermore, their decisions come from referrals, peer reviews, tagging, blogging, other forms of user-generated content, online forums, and social networks. Vollmer and Percourt claimed that more and more consumers are using various types of social media to search for information and make purchasing decisions (Mangold & Faulds, 2009).

EMPIRICAL REVIEW

Importance of SMM

Small business success is based on a measurable scale of 0 to 100. Moreover, it depends on the following six areas such as capital access, marketing and innovation, workforce, compliance, customer service and technology (Small Business Success, 2011). Similarly, Small Business Success Index (SBSI) varied within these dimensions such that capital access is totalled one-third on the competitiveness score and marketing and innovation contributes to one-quarter of score. Figure 2.3 has a better illustration of these factors which aimed to grow, build wealth and provide an attractive income improving lifestyles for owners.

Figure 2.3: Sub-Index Importance to Small Business Success Index

Source: Small Business Success, 2011

Small entrepreneurs are trying to make more investments with capital access and they are involved on daily operations for their business. They also struggle to get financial advice for improving their businesses. Figure 2.4 shows a comparative success factors for small business between the year 2009 and 2011.

Figure 2.4: Competitive Success for Small Business

Source: Small Business Success, 2011

Furthermore, small businesses are categorised as being highly competitive, marginally competitive, marginally failing and failing. According to statistics of SBSI distribution as at 2011, the SBSI distribution for small business can be illustrated in Figure 2.5 below.

Figure 2.5: SBSI Distribution for Small Business

Source: Small Business Success, 2011

According to the Small Business Report, there had been an increased in number of SM among small business (Small Business Success, 2011). Statistics in 2011 revealed that 12% to 24% of small enterprises were using social media as compared to only 23% in year 2009. Figure 2.6 below shows the activities that those small businesses were getting involved with.

Figure 2.6: Various Activities involved by Small Businesses

Source: Computed

Importance of SMEs

The small business sector is familiar in economies world-wide, irrespective of the economy's developmental stage. Moreover, contribution towards job creation, social progress and growth is extremely essential and small business is a vital element to achieve economic growth (Vosloo, 1994). SMEs employed about 22% of the adult population in developing countries (Daniels, 1994; Daniels & Ngwira, 1992; Daniels & Fisseha, 1992; Fisseha, 1992; Fisseha & McPherson, 1991; Gallagher & Robson). UNIDO (1999) estimated that 90% of private business represent SMEs represent and comprised to more than 50% of employment and of GDP in most African countries.

Challenges of Social Media Marketing

According to Awareness (2012), the greatest challenges by respondents were mainly there was lack of sufficient resources and the measuring of ROI. On the other hand, iContacts revealed that the challenges among most respondents were lack of time and lack of knowledge about SM (Ghali, 2011). Figure 2.7 illustrates the SM challenges.

Figure 2.7: Challenges for Social Media

Source: Awareness, 2012

Marketing in Small and Medium Size Businesses (SMB)

Generally, SMEs used common marketing techniques to open their way to social media including WOM, radio, television, billboards or roadside, internet, networking, yellow pages directories, email marketing and customer referrals.

The most efficient way to create public awareness is to use an Electronic media such as television but it can be very expensive for small businesses to get involved through this type promotional tool. For this reason, they prefer to use internet marketing in order to promote their products or services which are more affordable and reachable to everyone through web searches like Yahoo Search Marketing and Google Ad Words.

Besides, small businesses are having a marketing exposure with customized and personalized website such as Squarespace, Joomla and WordPress. Among the popular social media platforms, Facebook and Twitter are commonly used by small business owners to reach and communicate with a greater targeted audience. In addition, Facebook advertising is important for SMEs as less advertising need to be done.

Additionally, small businesses are positioned as an effective way with the social networking sites. With the aid of a proprietary blog, the marketer can comment on other blogs as well and prompting the latter to leave a link to the small business' website. Finally, keeping a strong connection with the public, small businesses can maintain customer relationship by featuring recent stories with updated events and sponsorships, press releases and engagement.

OVERVIEW

SME Sector in Mauritius and Abroad

Defining SMEs

Small Enterprises and Handicraft Development (SEHDA) stated that for a firm to be categorised as small units production, it must be employing less than 10 employees and having an annual turnover less than Rs10 million. SEHDA considered the micro firms and does not take into account the medium sized enterprise which is one employing between 10 to 50 staffs and an annual turnover starting from Rs10 million but not exceeding Rs50 million.

Evolution of SME Sector

Table 2.4 gives a clear idea of the evolution of SMEs in time and the establishment of regulatory bodies that are of crucial to small and medium firms.

Table 2.4: Evolution of SME Sector

Source: Computed

Impact of Social Media Marketing on SME's

SMM is an inventive tool, well-known for its result-oriented and also cost effective technique used in marketing. It is mainly used by SMEs to increase brand awareness and gain more in terms of profitability within their enterprises (Manik, 2011). Blanchard argued that magazine ad, Billboard, social media channel or online banner does not have an impact of SMM while according to Thomas impressions what matters (Swallow, 2011).

With new technology, small business strategy has flourished as compared to in the past. Previously more emphasis was put on searching for customer in small area coverage but, today, there has been an expansion in local regions as well. Nowadays, small businesses also formed strategies to compete with larger ones. One potential strategy that SMEs can adopt is to create a successful plan to be used for SM. SMM focuses on finding regular customers who are adequate to social network. In other words, SM helps create customers' awareness, boost brand image and for business partners to stay in touch with their coordinated customers.

Today, SM emphasises only on the promotional aspect of a product or service but less attention is put on the marketing or public relations. It is equally important for businesses to consider all factors so as to survive in this competitive world. Conversely, SM can prove to be bad as well since it has an impact on business processes and has the possibility to turn communication into an interactive dialogue. Small enterprises can achieve success but they must consider some essential elements as shown in Table 2.5:

Table 2.5: Successful Factors for SMEs

Source: Ranade, 2011.

Legal and Political Environment

Small business owners who want to start up their own business must seek for licenses and should be granted permits before launching their business. Moreover, a proceed need to be followed before the SMEDA issue the permits to the end users and this includes different government parties such as Ministry of Health, Ministry of Labour and Industrial Relations, Ministry of Environment, Fire Services sector and the Police Department. According to the data of World Bank Doing Business (2012), Mauritius is ranked 23rd among the 183 countries doing business and following all procedures normally required to set up a well-established business framework.

Nevertheless, it is highly imperative to note that normally there are several legislations that govern the SME industry which are listed as follows:

Labour Act

SMEDA Act

Companies Act

Remuneration Act

Local Government Act

Business Facilitation Act

Business Registration Act

Employment Relations Act

Pondering over the political environment in Mauritius, the government is dedicated to provide a helpful environment for the small businesses being formed. Government bodies are giving appropriate support to modernize and strengthen the SME sector within the Mauritians economy. Ranking at the international level, Mauritian SME sector normally abides by the trading ethics of COMESA and SADC. Generally, this put emphasis on the gradual removal of tariffs and custom duties on the traded goods among the state members.

Social Media Marketing Facts

SMEs had gained a significant economic growth worldwide during these past few years. Statistics revealed that 90% of the total establishment in Singapore constitutes to SMEs from a working population of 44% and 16% engaging in export strategies. Additionally, in Mauritius, 96,000 institutions had already been registered to start small businesses and government bodies are making tremendous effort to promote these sectors. Figure 2.8 illustrates 7900 SMEs from SMEDA who are licenced and registered in different sectors.

Source: Computed

Figure 2.8: Pie Chart SMEs Sectors registered to Regulatory Institution

Social Media Facts in Mauritius

Facebook (FB) is leading many businesses towards success and making them adopt SMM strategy. According to the statistics of Social Bakers, this shows that Mauritius had already attained a total number of 308620 Facebook users by 2012 as illustrated in Figure 2.9 showing the report for the last 6 months. Moreover, the social networking statistics reveals 23.82% of Facebook penetration in Mauritius as compared to its population and for the internet users it is 106.3%.

Figure 2.9: FB users for last 6 month from 2012 in Mauritius

Source: Socialbakers

FB users in Mauritius had witnessed a significant growth in the demographics age group with a total of 110974 users in the range 18-24 years old. Concerning the gender group it has been noted 55 males compared to female.

SME Employment and Establishments

Statistics showed that in December 2007, there were 76,320 small enterprises as compared to 2,227 from large one. From a survey carried out by Central Statistics Office (CSO), figures revealed that small businesses had a significant increase between 1990 and 2002 showing 177,659 jobs which was created as opposed to large firms 11,750. The Table 2.6 shows the employment rate from year 2006 to 2008.

Table 2.6: Employment Rate from year 2006 to 2008

Source: CSO

Small Units by industry group

The census economic activities 2007 report indicates that small units were mainly involved in the following activities: "Wholesale and retail trade" (38.2%), "Transport, storage and communication" (16.9%), "Manufacturing" (13.9%), "Construction" (10.3%) and "Hotels and restaurants" (8.4%) (CEA, 2007). Figure 2.10 below illustrates the distribution of small units by the different industry group for Mauritius.

Figure 2.10: Distribution of small units by industry group

Source: Census of Economic Activities, 2007.

CHAPTER THREE

RESEARCH METHODOLOGY

Word: 3021

INTRODUCTION

This chapter gives an explanation of the research approach used to fulfil the purpose of this thesis and justifies the decisions that have been made. Firstly, the research design was described, followed by the research strategy, techniques and analysis applied to meet the aims and objectives of this study. Secondly, a description of how the investigation was designed and the theoretical frameworks that were used to test the hypotheses will be mentioned. Finally, emphasis was laid on scope, ethical issues and limitations. The survey was conducted during the month of August 2012 and a continuous correspondence had been maintained with all respondents till the end of the research.

THE RESEARCH DESIGN

Research Type

A research design can be defined as a basic plan which guides data collection and analysis phases of the research project. There are basically three types of research activity namely explanatory, exploratory and descriptive (Sarma, 2012). In broad terms, Robson (2002) suggests that explanatory research is required for a problem or situation and it aimed at finding relationships among variables from theory based expectations. On the other hand, exploratory research is carried out when little knowledge is known about the subject and it is keen to become familiar with the topic. Lastly, descriptive research is undertaken when an accurate profile of persons, events or situations is required. Hence, a blend of descriptive and explanatory techniques research was used for this study since these are more appropriate for addressing the current objectives of this research.

For this study, information is required about the awareness and perception of small entrepreneurs in Mauritius who are adopting SMM in their business, hence the research being partly descriptive. Additionally, it entails questions related to research objectives and is integral to the testing of the hypotheses and other inferential statistics.

The collection of data through questionnaires has both advantages and disadvantages. Drawbacks include respondents not being encouraged to give honest answers or the difficulty in seeing whether respondents are having problems in interpreting questions. Conversely, questionnaire surveys can be less expensive and enable a wider geographic reach for the data collection as compared to face-face interview (see Section B1 of Appendix 2 for a detailed explanation).

The Research Strategy

According to Neuman (2003) and Robson (2002), three research strategies were identified namely experiment, survey and case study strategies. Table 3.1 shows the following characteristics.

Table 3.1: Research Strategy

Primary Data

Primary data is usually collected to solve a current problem. No information was previously collected concerning users of social media among SMEs at SMEDA. So, it was extremely important to gather primary data before proceeding further. Data was collected with the intention of being used directly in the actual study by small entrepreneurs through questionnaire surveys, interviews and unstructured interviews.

3.1.4 Secondary Data

Secondary data is pre-existing and collected for another purpose. A common way is to combine two types of data; secondary data may be used to analyse gathered primary data.

Furthermore, the theoretical review in this thesis are based foremost of a literature study from previous published literature. In addition, materials from academic articles, reference to books, websites, Internet search for online journals, books, web pages and online thesis were used. Finally, to broaden knowledge on the problem and the topic, a conversational interview with the Business Development Officer at SMEDA was conducted.

RESEARCH AIMS & OBJECTIVES

3.2.1 Aims

To advise SMEs about how to optimise the effectiveness of social media in marketing.

To make timely recommendations to SMEs on how to review their marketing strategies.

3.2.2 Objectives

To establish the demographic profile of SM users in SMEs.

To determine the awareness and perception levels of SM of SMEs.

To investigate the SM preferences of SMEs from a business perspective.

To investigate the reasons for and purposes of using SM by SMEs.

To identify business aspects in SMEs that could be affected by SMM.

To determine the importance of underlying factors in impacting on the success of a business.

To determine the relationship between business success and

Awareness of SM

Amount of time since using SMM

Frequency of use of SMM

To determine the impact of frequency of use of SMM on customer purchase.

DETERMINING DATA COLLECTION METHODS

The next step of the study involves the data collection method. The main purpose of collecting data is to obtain information, keep record and make decisions about important issues. There are many factors that affect the choice of data collection method such as rapidity, costs, quality and quantity of data and response rate, to name a few.

Research Approach

Creswell (2003) inferred that research approach does not simply inform research design but also gives opportunity to critically consider how each various approaches may contribute to satisfy the objectives and design an approach which best satisfies the requirement. Normally, research approach is either qualitative versus quantitative or deductive versus inductive. For this project, a quantitative research approach was chosen given the design of the survey questionnaire used.

Qualitative and Quantitative Research

A research is described as qualitative if its objective requires information to be generated about how people think and feel about a particular issue or why they take certain decision and behave as they do. The techniques normally used in qualitative research are focus group discussions and projective techniques.

However, quantitative researches are usually conducted if objectives require data to be collected about how many people hold similar views or display particular characteristics.

Before any data collection methods were taken into consideration, it was necessary to ponder over which collection method would be the most appropriate for this study. After critically evaluating the advantages and disadvantages of the various methods, a quantitative research via questionnaire was finally used.

Moreover, telephone interviews were used to contact participants to find out the proportion of SMEs adopting SMM as it offers potential advantage related to access, speed and low cost. This method eliminates face-to-face interview due to distances, costs involved and time constrain.

With social media, small business owners better experience new tools that shape an active role in the research and influence the outcome of process (Bryman & Bell, 2007).

Questionnaire Approach

A questionnaire was designed to collect information on the perception about social media marketing and determine its impact among SMEs in Mauritius. This method was deemed most appropriate because of the type of information required and due to the fact that respondents were small entrepreneurs. It is worth noting that, for this study, personal interviews, telephone interviews and emails were also used as reinforcement.

Types of Questions used

The types of questions used can be shown in Table 3.1 as follows:

Table 3.2: Types of Questions

Source: COMPUTED

Questionnaire content

The questionnaire used for this study mainly deals with the following:

Table 3.3: Sections and Variables in Questionnaire

Pilot Testing

The pilot survey consists of a rehearsal of all survey procedure on a small number of respondents. This process allows the identification of any flaws or weaknesses in the questionnaire, which can be remedies. It also provides lots of information about the field procedure; whether the method of approaching the respondent is satisfactory, how long it takes to administer the questionnaire among others. This information also helps to organize the full scale survey. Ten persons were chosen at random for the pilot testing. On the basis of doubts raised by the respondents, the following inadequate questions were missing:

Most of the questions were dichotomous.

Questions like ranking order were missing.

There were duplicate answers with same meaning for Qu. 24 (refer to Appendix 1) and needed to be merged.

No proper instructions were given to respondents where they need to give multiple answers.

Some general questions were removed concerning SMM among SMEs.

SAMPLE DESIGN

Once the research problem had clearly been specified, an appropriate research design was developed and the data collection instrument. The next step in the research process is to select those elements from which information will be collected. Moreover, information can be either collected from:

Each member of the population of interest or

A portion of the population.

As in nearly all studies, it is not possible to carry out censuses. For this, the sample was chosen from the targeted population via simple random sampling, mixed with convenience sampling.

Target population

The population of interest for this study consisted of small entrepreneurs who were registered with SMEDA. The targeted SMEs were users and non-users of SMM. A list of these SMEs can be found in Appendix 4.

Benefits of using a sample

Time-saving

Less costly

Accurate, if selection is carried out with great care

Determination of sample size

In this present study, the level of confidence was set at 99% and the assumed confidence interval at 10. These figures, including the target population of 349 registered small businesses, were input in the sample size calculator found on the Creative Research Systems (1982) website and it was found that a minimum of 113 respondents would need to be sampled.

Nevertheless, to reduce cases of missing values in questionnaires (despite a close follow-up), minimise bias and maximise sample representativeness, 136 questionnaires were collected. It is never harmful to collect more questionnaires than is required but, on the contrary, more variation in responses help measure the validity of the measuring instrument as well as the reliability of these responses (Section 3.4).

Furthermore, sophisticated statistical techniques like factor analysis (see Section 3.6.1 below) are based on wider variations in responses and a maximum number of questionnaires.

DATA TESTING

3.5.1 Validity

Validity is defined as the extent to which a measuring instrument indicates what we are interested in measuring. For the purpose of this research, content and construct validity were considered. Content validity is the extent to which it provides adequate coverage of the topic under study. If the instrument contains a representative sample, then content validity is appropriate. Construct validity infers the presence of abstract characteristics for which no empirical validations seems possible. Although this situation is much more difficult, some assurance is still needed that the measurement has an acceptable degree of validity. A more detailed explanation of validity is given in Section B2 of Appendix 2.

3.5.2 Reliability

Reliability refers to the consistency of the results on different items in a test. Whenever attributes or opinions of people are measured, it is necessary to consider the reliability of the measuring instrument as well as its validity. There are a number of types of reliability: test-retest, inter-scorer, split-half and so on. The aspect of reliability, which will be relevant for this research, is, in a certain sense, split-half reliability, measured by the Cronbach Alpha coefficient (See Section B3 of Appendix 2).

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