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The effect of E-marketing on the marketing performance of Small Business Enterprise:


Small Business Enterprises (SBE's) play a major role in the world economy, and their contribution to economic and employment growth is widely recognized. Based on the SBE role as an economic engine to drive global development, this research seeks to understand the practices and activities of these enterprises in terms of electronic marketing (Achieving marketing objectives and functions through the use of electronic communication technology), marketing performance and the effectiveness of industrial

and trade SBEs. In order to do this a comparative study is made between SBEs in Egypt (developing) and the UK (developed). The main aim of this work is to identify links between the conceptual framework and empirical analysis in this field because they appear to be highly integrated, and if reviewed separately may present distorted results. A triangulation approach will be used in which quantitative and qualitative data will be collected through structured mailed questionnaires and semi-structured interviews to address different levels of investigation, test the hypotheses and address the central research questions.

Key words: E-Marketing, Small Business Enterprises, Marketing performance, Egypt, UK.

1. Introduction:-

Small Business Enterprises (SBE's) do play a major role in the world economy, and they are recognized as one of the main contributors to economic, development and employment growth. According to Mulhern (1995) 99% of all European companies are small and medium sized (SME) and from 1985-1995 it provided 66% of the employment in Europe. That is also true in Less Developing Countries (LDCs) since small businesses do represent a high percentage of the total number of enterprises.

On the other hand, the revolution in information technology (IT) and communications changed the way people conduct business today. In recent years, increasing numbers of businesses have been using the Internet and other electronic media in their marketing efforts, giving the chance for Electronic marketing (as a new marketing phenomenon and philosophy) to grow in a very dramatic and dynamic way. From the researcher point of view, implementing E-marketing by small business enterprise can change the shape and nature of SBEs business all over the world. Because the rapid proliferation of the Internet, the World Wide Web (WWW) and electronic communication has created a fast growing new electronic channels for marketing. For that, the internet and other electronic media are playing now a very important role in conducting marketing activities due to its unique characteristics as a market and as a medium. Depending on that the researcher is seeking to add to the body of knowledge by investigating and understanding the practices and activities of small business enterprises through conducting a research about the effect of implementing E-marketing on marketing performance of industrial and trade SBE's, it is a comparative study between the Egyptian and British SBEs to gain a better understanding of the SBEs role in developing countries since they are less well represented in the literature.

1.1 Background:-

1.1.1 Small Business Enterprises:-

Despite of the powerful position held by small businesses, defining it has always been difficult and there is a little agreement on what defines a small business because the

term covers a variety of firms. As a result small businesses have been defined in a perplexing number of different ways in different parts of the world according to national and local needs (Theng and Boon 1996; Watson and Everrett 1996). Table 1 summarizes the official or most common definitions of SBE's used in some countries around the world.

Table 1: Criteria of defining SBEs adapted by some countries Country USA European Union No. of employees Under 100 Under 50 Other criteria Less than $ 5 million annual sales Annual turnover or global balance less than 10 million euros + Independence Australia Canada Under 20 Under 500 in mfg and 50 in services India None Total investment(not exceeding 10 million Indian Rupees in industrial enterprises and 1 million in service enterprises) Mexico Thailand Under 50 Under 200 in labour intensive Turkey 10 to 49 None None None None Less than $ 5 million annual sales

Source: El-Gohary (2006) From table 1 it is noticed that the number of employees is the most often used element in determining the category of SBE's in most countries. Furthermore,. It also noticed that there is a lack of agreement on what defines a small business, for that a standard definition for Small Business Enterprises is needed. Accordingly and due to the absence of an Egyptian official definition for SBEs, the researcher will depend on the following definition for SBEs for the purpose of conducting the research study: a small business enterprise is that enterprise that employs from ten to forty-nine employees.

1.1.2 E-Marketing:-

Electronic marketing (E-marketing) can be viewed as a new modern business practice associated with buying and selling goods, services, information and ideas via the Internet and other electronic means. A review of relevant literature revealed that definitions of electronic marketing vary according to each author's point of view, background and specialization. While Smith and Chaffey (2005) defines it as: Achieving marketing objectives through applying digital technologies, Strauss and Frost (2001) define it as: The use of electronic data and applications for planning and executing the conception, distribution and pricing of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. The researcher will depend on Strauss and Frost definition in conducting the current research because: it takes into consideration all the element of E-marketing, all types of products, it illustrate the main objective of E-marking which is creating the

exchanges that satisfy individual and organizational needs. Moreover it is the official definition for E-marketing adopted by the E-Marketing Association.

1.1.3 Marketing performance:-

Given the fact that a firm survival depends on its capacity to create value, and value is defined by customers (Day, 1990), marketing makes a fundamental contribution to long-term business success. But despite of the importance of measuring business performance there is a little research on the measures used to evaluate marketing performance and effectiveness. On the other hand, when looking to the marketing performance and success measures it is noticed that there are many measures. Recently, in an attempt to organize performance measures Kokkinaki and Ambler (1999) have summarized it and established six categories for marketing performance and success measures which are: Financial measures / Competitive market measures / Consumer behaviour measures / Consumer intermediate measures / Direct costumer measures / Innovativeness measures. E-Marketing Performance Measures:-

Standardised measures for E-marketing performance are both needed and necessary. The discussion of most of the researchers has centred on the following measures (beside the traditional marketing performance measures): Traffic/ Visit duration / Conversion rate (visit to purchase) / Catalogue size / Sales value / Number of transactions / Number of users (as measured by the number of registered user accounts). In conducting the proposed research the researcher will depend on both traditional

marketing and E-marketing performance measures. Namely: Financial measures / Competitive market measures / Consumer behaviour measures /E-marketing measures (such as: Conversion rate / Traffic / Visit duration / Number of transactions / Number of users).

2. The Literature Review:-

The researcher had identified a wide range of the literature review (in its wider broad sense which include: Journals, Academic Books, theses and dissertations, short articles, E-databases, conference papers,). The literature time period starts from 1990 to presence. The research studies investigated and covered a wide rang of E-marketing areas, such as: Internet-marketing / E-mail marketing / Intranet marketing / SMS marketing / Extranet marketing. On the other hand, it is noticed that the literature in Internet-marketing (IM) covers five main areas which are: Internet marketing (IM) environment, IM functions, IM applications and IM research. Regarding the literature of E-marketing in SBEs, it was found that it covers the following areas illustrated in figure 1.

E-Bay and SBEs E-Business adoption by SBEs

The concept of E-Marketing in SBEs

The use of internet by SBEs

SBEs Competencies

The literature of emarketing in SBEs

Virtual Market

The internet as a distribution channel for SBEs Figure 1: The literature of e-marketing in SBEs Source: El-Gohary (2006).

B2B in SBEs

Export performance

2.1 The research Gap:-

By reviewing this literature its noticed that:Almost all of the researches on E-marketing in SBEs had been conducted in Europe (UK, Northern Ireland, the Republic of Ireland, Austria and Switzerland), Australia and New Zealand. Only 2 studies were conducted in developing countries. The literature was concentrated on some research areas, and (up to the knowledge of the researcher) there is no single research on the SBEs E- Marketing Performance or in SBEs marketing in Egypt.

Obviously this is a major gap in the contemporary research on SBEs E-Marketing Therefore a contribution to the literature is needed.

3. Research Problem:-

As a conclusion of the literature survey, the fundamental problem motivating this research study is the urgent need to understand the relationship between using Emarketing by the Egyptian and British small business enterprises and the marketing performance of these enterprises. As well as the effect that E-marketing has on marketing activities for small business enterprises. The study attempts to have full-scale research that is statistically significant that could answer the following main question: what are the relationship between using E-marketing and the marketing performance of the Egyptian and British small business enterprises.

4. Research Objectives:-

The main objectives of this research is to: develop a theoretical model to understand and interpret the use of the E-marketing by small business enterprises in the UK and Egypt, explore and analyze the level and form of e-marketing used by the Egyptian and British SBEs and its contribution to marketing performance as measured by financial and operational performance measures. To achieve these objectives a series of hypotheses have been constructed to be tested during the research process.

5. Research Hypotheses:

In the light of the previous discussion and the literature review, the following hypotheses have been constructed. Both the conceptual framework and empirical study are linked to test these hypotheses:Hypothesis (1): The level of e-marketing used by SBEs is significantly related to the firms marketing performance. Hypothesis (2): The form of e-marketing used by SBEs is not significantly related to the firms marketing performance. Hypotheses (3): Implementing E-marketing by the SBEs is dependent on the SBE internal related factors.

6. Contribution To The Current Knowledge:We make a living by what we get, but we make a life by what we give Sir Winston Churchill The primary benefit of this study is as a contribution to knowledge in the areas of small business enterprises and E-marketing. The research will contributes to the limited number of empirical researches on marketing goods, services, ideas and information depending on the Internet and other electronic marketing means. Moreover, it contributes to the limited number of empirical evidences to explore the effect of E-marketing on the marketing performance of small business enterprises. Many researchers (Sheth, J. N., Sharma, A., 2005; Sandeep K., Singh, N., 2005; Adam, S., et al., 2002; Teo, T., Tan, J. S., 2002; Darby, R., Jones, J., Al Madani, G., 2003 and Goldsmith, R., Lafferty, B., 2002) had suggested the need for such kind of research. Those authors agree that a serious


marketing practitioners and academic researchers are now aware that more systematic research is required to reveal the true nature of E-marketing.

7. Research Process:-

The research process will be conducted through five basic stages (as illustrated in Figure2) these stages are: Identification of the research problem and objectives, The development of the research framework, Research methodology, Quantitative and qualitative data analysis, and Discussion and conclusion.

Topic Selection Process Electronic Marketing Identification of the:- Research Problem - Research objectives -Research Importance

Small Business Enterprises

The Research Questions, Model and Hypotheses Research Strategy Research Methods Research Design

Research Methodology

Data, Method and Methodological triangulation

Sampling Process survey

Questionnaire Design and Administration Reliability/ pilot study

Data Collection
11 case study
Descriptive Statistics,

Figure 2: The research process Source: El-Gohary (2006). The researcher had done his best to arrange the organisation of the study in such a way that it allows the readers to follow the process easily and smoothly.

7.1 Research Methodology:-

From the researcher point of view, generally there is no optimal research methodology or method. Because each methodology or method have some drawbacks or


limitations, but a researcher must employ the most appropriate research methodology and methods to his research in the light of his research questions, aims and by taking into consideration the methodologies and methods employed in other studies in the field. Based on that, when determining the most suitable methodology for the research the researcher take into consideration the research questions and aims as well as the methodologies used in the contemporary E-marketing research. To investigate the methodologies and methods used in contemporary E-marketing research, the researcher constructed a representative un-probability sample from the literature. From this sample it was found that the majority of researchers in the literature depended on Quantitative methodology with a percentage of 33.3% of the sample size and as illustrated in figure 3: 27.6% of the researchers applied Qualitative methodology, 8.6% applied Triangulation methodology, 29% conducted Conceptual and theoretical studies and 1.5% (One researcher) conducted Literature Review. (Table 2 illustrate a classification for this literature according to the methodology employed).

Regarding the research strategies adopted by the researchers it was found that the majority of researchers depended on Survey strategy with a percentage of 41.7 % and as illustrated in figure 4: 18.8 % of the researchers applied Case Study strategy, 6 % applied Exploratory strategy and 3 % applied Experiment strategy.

On the other hand, regarding the research methods it was found that the majority of researchers depended on Questionnaires with a percentage of 60.4 % and as illustrated in figure 5: 29.6 % applied Interviews, 6 % applied observation and 4 % applied Focus Groups.





Quantitative Quantitative Theoretical Conceptual

Qualitative Qualitative
Triangulation Triangulation Literature review Literature review



Figure 3: Research Methodologies used in E-marketing Source: El-Gohary (2006).

Table 2 Classification for some of the literature according to the methodology employed
Methodology Quantitative Literature Flavin and Guinalu (2006), Lin et. al. (2006), Kuhlmeier and Knight (2005), Wong (2005), Flavin et al.(2005), Lymperopoulos and Chaniotakis (2005), McCole and Ramsey (2004),Kim and Kim (2004), Lee-Kelley et al.(2004), Merisavo and Raulas (2004). Taylor and England (2006), Hackney et al. (2006), Park (2005), Lagrosen (2005), Ryan and Valverde (2005), Warnaby and Yip (2005), Rowley (2004 a), Smith, C. (2004), Darby et al. (2003), Martin and Matlay (2003), Siddiqui et. al. (2003). Weischedel et al (2005), Christodoulides and Chernatony (2004), Fillis et al (2004), Yang et al. (2003), Chaston and Mangles (2003), Adam et al (2002), Kapoulas (2002). De Kervenoael et al (2006), Sheth and Sharma (2005), Sandeep and Singh (2005), McCole (2004), Smith and Manna (2004), Smith, A (2004 a, b ), Kulviwat, et al (2004),Rowley (2004 b), Lindgreen et al (2004).



Conceptual and theoretical studies

Source: El-Gohary (2006).


1.5% 29%

41.7% Survey Case study Exploratory Experiment Conceptual



Literature 18.8%


Figure 4: Research strategies used in E-Marketing Source: El-Gohary (2006).





Questionnaire Interviews Observation Focus groups


Figure 5: Research Methods used in E-marketing Source: El-Gohary (2006).

By reviewing the methodologies in the literature it was found that most of the studies conducted have some critique points regarding the methodologies and methods used in it, for example:-

* Among the things that can be taken against Collins, et al (2003):- The research was conducted in 4 European countries, 2 of these countries do not speak English and have a different culture which might affect the reliability of the study. Especially that many of the questions were designed for academics rather to small hotels. - Depending on the telephone in data collection have some drawbacks, one of it is the danger that respondents might answer the question in the way that they believe the researchers would like to hear (socially desirable answer). - They didnt provide any valid arguments for choosing the 4 countries investigated, especially that there are other famous tourism European countries like: Greece, Italy and France. Not only the comparability of those countries is questionable, but also applicability of the findings to other countries cant be guaranteed.


The same point of critique is valid on the methodology applied by McCole and Ramsey (2004); they didnt provide any valid arguments for choosing the 3 countries investigated in their study.

* The main point of critique on the methodology applied by: Ramsey and McCole (2005); Hinson and Sorensen (2006); Chaston and Mangles (2003); Ng (2005) is the Lack of applicability and generalisation of the findings to the population at large.

* For Poon and Swatman (1997) the major points of critique is that they depend on a multiple-case design, Although these designs are desirable when the intent of the research is description, theory building, or theory testing and it allows a cross-case analysis and the extension of theory (Benbasat et al., 1987, p. 373), BUT (from the researcher point of view) it have the following drawbacks: lack of quantitative evidence provided (such as the additional revenue generated by using the Internet) / there is no guaranty that the interviewees were honest in their responses /)

* Most of the Qualitative researches in the literature depend solely on Case studies and that could make it have some problems such as: the accusation of limited generalisability; the question of external validity and Lack of rigour (where biased views of the researcher have been allowed to influence the findings) (Yin, 1994). Also it is noticed that most of the Quantitative researches depend solely on survey strategy and it also have some serious criticisms (Inherently positivistic, Incapable of getting at the meaningful aspect of social behaviour, inherently atomistic ).


* Regarding conceptual studies, although it adds a lot to the field of E-marketing, but all of it has a main point of critique which is: it lacks quantitative evidences to support its findings.

Based on the previous discussion, a triangulation approach will be used in the research, the researcher will make a: data, method and methodological triangulation, in which quantitative and qualitative data will be collected depending on a combined research strategy based on survey and case study strategies through questionnaires and interviews to address different levels of the study.

The survey strategy will allow the answer of the 'WHAT' question of the research, such as: what is the relationship between using E-marketing by the SBEs and its marketing performance. On the other hand, the case study strategy will give in-depth information and answer the 'HOW' and WHY questions (for example: why the relationship is taking one direction instead of anther direction).

Why triangulation?

The logic of triangulation is based on the premise that: no single method ever adequately solves the problem (Denzin, 1978: 28) and using only one method is more vulnerable to error linked to that particular method (Patton, 1990: 188); for that the use of different methods in studying the same phenomenon should lead to a greater validity and reliability than a single methodological approach, because any bias inherent in a particular method would be neutralised when in conjunction with other methods. Beside that, each technique has its advantages and disadvantages, strengthens and weaknesses,


for that combining the methods will be helpful and useful to benefit from the advantages and strengthens and avoid the disadvantages and weaknesses.

So, although triangulation entails a commitment to greater amounts of effort, time and money, it has the advantage of removing the bias that is often associated with the use of a single technique. For that the researcher will use triangulation to increase the validity and credibility of the research conclusion, to be more confident about the findings, to increase the ability of generalization, to answer the research questions and to meet the research objectives effectively and professionally. Especially that according to the knowledge of the researcher there is no previous studies were conducted in the field of Emarketing practices in SBEs in Egypt, also there is lack in scientific studies in this filed in general. For that the researcher: believes that combining of methods in this research is indispensable, and will depend on a combined research approach based on survey and case study analysis.

7.2 Data Collection and Analysis:-

The backbone of this research is to establish and sustain a clear link between conceptual framework and empirical analysis. The main importance of this consideration comes from the belief that unless the conceptual framework and empirical study are highly integrated, each one of them individually would present a partitioned and distorted image of the research points. For that this study will depend on: Conceptual framework: depending mostly on the secondary data. Empirical study : depending mostly on the primary data.


A combined research strategy based on survey and case study strategies will be carried out in the research by using structured mailed questionnaires and interviews as a primary data collection methods.Then, many statistical analysis techniques will be used to analyse the data and test the research hypotheses.

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