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Harnessing Digital Marketing To Access Markets: Opportunities For Africa’s

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 Harnessing Digital Marketing To Access Markets:
Opportunities For Africa’s SMEs
Dr. Nathalie Beatrice Chinje
Wits Business School
ABSTRACT
Several public and private sector-led initiatives have been
implemented to help unleash SMEs’ potential as the engine of
Africa’s socio-economic prosperity and sustainability. Notwith-
standing the potential benefits of these initiatives, SMEs failure
rates, in most parts of sub-Saharan Africa, remain unacceptably
high as evidenced by prior studies that reveal that 70% to 90%
of SMEs fail within their first year of operations, primarily due
to lack of finance and market access. Technological advancements
and their swift diffusion amongst companies in Africa have cre-
ated several business opportunities for SMEs to access markets at
a low cost and, hence, to increase their competitiveness as well as
generate enduring profits for themselves. This paper explores how
digital marketing channels can be harnessed by Africa’s SMEs
in order for them to access local, national, regional and global
market opportunities.
INTRODUCTION
Small and medium-sized enterprises (SMEs) in Africa face con-
stant constraints that inhibit their competitiveness and the sustain-
ability of their operations. One of the most significant constraints
these SMEs encounter is the limited or lack of access to markets.
Whilst public and private led initiatives have mushroomed across
many African countries (mainly on the basis of compliance with
existing laws and regulations) to bridge this gap by providing train-
ing to SMEs, creating a database of potential SME vendors that
can service corporations, as well as designing policies that encour-
age the sourcing of goods and services from these targeted groups,
these initiatives have resulted to decreased entrepreneurial activities
in such countries as South Africa (Singer, Amoros & Moska, 2014),
and a low improvement on the success of newly created ventures in
Africa.
It is imperative that the conversation on SMEs accessing mar-
kets is shifted towards proactive, entrepreneur-led activities that
can enhance the opportunities for market access by harnessing new
technologies. As indicated in the extant literature, the technologi-
cal developments that have taken place over the past decade have
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brought along not just “potential backlashes” (Dahl, 2015:1), but
also myriad of business opportunities for forward thinking compa-
nies, across industries, sizes as well as product and service offerings.
Whilst a few success stories are being reported in some parts of
Africa ( Jagongo & Kinyua, 2013), a considerable number of Afri-
ca’s SMEs are yet to fully harness the power of technology (Urban,
2010) which has the possibility to proactively enable SMEs to ac-
cess markets as well as to realise their goals of customer acquisition
and retention (Stelzner, 2015; Tuten & Solomon, 2015; Goldstuck,
2012). By building the required level of internal digital marketing
capability, SMEs can speedily broaden their market reach, continu-
ously connect and engage with their customers, generate faster rev-
enues and deepen their brand equity across various markets.
This paper explores how digital marketing channels can be har-
nessed by Africa’s SMEs in order for them to access local, national,
regional and global market opportunities.
SMEs IN AFRICA
The definition of SMEs varies across countries and development
finance institutions. In Ghana, SMEs have been defined as enter-
prises comprising 10 or less employees for small companies, and
more than 10 employees for medium-sized companies (Ocloo,
Akaba & Worwui-Brown, 2014), with an annual turnover of
USD 23 700.00 and USD 2 370 000 respectively (Gibson & van
der Vaart, 2008). Such SMEs represent 90% of businesses regis-
tered in Ghana. Similarly, in South Africa, SMEs represent 91%
of the total number of registered businesses (Kongolo, 2010; they
are defined as enterprises employing between 21 to 50 for small
companies), and 51 to 200 people for medium-sized companies
(Abor & Quartey, 2010). As depicted in table 1, the disparities in
the definition of SMEs amongst development finance institutions
are quite wide.
Despite these variations, there is growing evidence that
SMEs represent the hearbeat of Africa’s economies thanks main-
ly to their total contribution towards Gross Domestic Product
(GDP) as well as the number of jobs that they are able to create
(Ocloo et al., 2014; Abor & Quartey, 2010; Kongolo, 2010). In
Table 1: Definition of SMEs by development finance institutions
Institutions Maximum number of employees Maximum sales revenues (US DOLLAR)
African Development Bank 50 None
MIF-IADB 100 3 000 000
World Bank 300 15 000 000
Source: Gibson & van der Vaart (2008)

Table 2: Integrated Marketing Communications mix

Year Author Integrated Marketing Communication elements
2015 Egan, J. Advertising, direct and digital marketing, public relations, personal selling, sales promotion
2014 Copley, P. Advertising, exhibitions/trade shows, direct marketing, digital media, personal selling, public
relations, sales promotions, sponsorship
2011 Belch & Belch Advertising, sales promotion, publicity/public relations, personal selling, direct marketing,
interactive/internet marketing
2010 Shimp Mass media advertising, online advertising, sales promotion, store signage (point-of-sale),
packaging, direct mail, opt-in email, publicity, event and cause sponsorship, personal selling
Sources: adapted from Egan (2015)

In Africa, digital marketing is not yet a full component of an
SME’s over-arching integrated marketing communications strat-
egy that aims to blend traditional and new media to drive sales
revenues and customer acquisition and retention.
UNDERSTANDING INTEGRATED MARKETING
COMMUNICATIONS (IMC)
Effective marketing communication has become an imperative for
businesses that want to thrive in today’s cluttered market envi-
ronment. To cut through this clutter, marketing communication
efforts and messages have to be integrated across all channels.
Copley (2014:445) defines integrated marketing communication
(IMC) as “the cohesive mix of marketing communications activi-
ties, tools and techniques that deliver a coordinated and consist-
ent message to target customers and consumers synergistically in
order to achieve organisational goals”. IMC applies a unified mes-
sage across many media platforms to inform, remind, persuade
and entertain existing and potential customers. Whilst IMC has
been around for many years, SMEs in Africa have not fully lever-
aged the opportunities associated with it.
In today’s age of interactivity, SMEs have a suite of media
platforms they can tap in to disseminate relevant messages per-
taining to their products, services and brands. Through such me-
dia, known as traditional (e.g. television, billboards, radio, news-
papers, magazines, outdoor signage) and new (e.g. SMS, website,
blogs, whatsapp, youtube etc.), a seamless message can be con-
veyed across such platforms with the intent to create and sustain
brand awareness. IMC mix is a blend of promotional elements
such as advertising, direct marketing, public relations, personal
selling, sales promotions, sponsorship and digital marketing. Table
2 provides a list of IMC components by sources.
The drive towards cost rationalization in marketing and commu-
nication has further strengthened the case for IMC, and is also
compelling SMEs to re-think where, how and when they should
spend their allocated marketing budget. In addition, human and
time constraints, coupled with fast technological improvements
and the rapid diffusion of technology devices in Africa are increas-
ingly strengthening the business case for SMEs to harness digital
marketing channels to deliver messages at a faster and cheaper
rate than other players in their markets. These channels can be
turned into sustained competitive advantage if they are embod-
ied in the SMEs’s marketing and communication strategy. SMEs
need to realise that one of their most important organisational
drivers is their ability to harness technology to deliver compelling
messages that create and sustain their brand equities; and similarly
provide them with the leverage to enter markets.
DIGITAL MARKETING: WHAT IT IS
Also referred to as e-marketing, web marketing, online marketing
or social marketing, digital marketing uses web-based technolo-
gies to build brands, scale businesses and help companies create
and satisfy customer needs. The digital marketing ecosystem is
driven by: High quality IT systems which enable information
sharing on digital platforms, a dyadic relationship between com-
munity members as they engage continuously on the platforms,
relevant content and sound analytics which facilitate the deep
analysis of data captured.
CHANNEL TYPES & BENEFITS OF DIGITAL
MARKETING
Digital marketing channels range from search marketing, social
media, email marketing and display advertising (Octane, 2011).
The Octane (2011) report also suggests that leading digital mar-

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keting channels in 2011 with positive impact on Return on In-
vestment (ROI) have included: social media, email, and search
marketing, and that the integration of these three media in a sin-
gle campaign leads to higher conversion rates. Gupta, Tyagi and
Sharma (2013) break down social media into six types: 1) col-
laborative projects (e.g. Wikipedia); 2) blogs and microblogs (e.g.
twitter); content communities (e.g. youtube); social networking
sites (e.g. facebook); virtual game worlds (e.g. world of Warcraft),
and virtual social worlds (e.g. second life).
Whilst all these digital channels are available to SMEs,
The Octane (2011) report reveals that marketers in an emerging
market context, such as India, are generating only 30% of their
sales through digital marketing efforts. Although this may still
be slow when compared to traditional media, SMEs are increas-
ingly realising the important contribution of digital marketing
to their IMC strategy. To substantiate this, Centeno and Hart
(2012) contend, in a study conducted with 30 SMEs in Mexico,
that e-marketing creates business opportunities for SMEs. Their
study reveals that all 30 SMEs that participated in the research
had a website and according to these SMEs, “the websites open
opportunities for new communication and distribution channels
not available in the physical marketplace” (Centeno and Hart
2012: 258). This finding is aligned with the results from a study
conducted in 2012 by World Wide Worx in South Africa, which
indicates that 63% of SMEs in South Africa have a website. In
addition, the study found that those SMEs with a website are
more likely to be profitable than those without a website (Gold-
stuck, 2012).
The 2014 Webdam report outlines that in developed mar-
kets, internet advertising will make more than 25% of total mar-
keting budget spend by 2015 (Wilson, 2013). This report also
purports that 43% and 51% of marketers are able to find new
customers on social media platforms such as linkedin and face-
book, respectively. These emerging trends in developed markets
highlight the full force with which digital marketing has been
embraced by companies operating in that context.
The extant literature on technology adoption in Africa indicates
that there is an upsurge of people in Africa who are now accessing
information through mobile platforms. Undoubtedly, digital mar-
keting can provide a strong avenue for SMEs to achieve a com-
petitive edge using mobile platforms. A study conducted amongst
SMEs in South Africa shows that only 20% of SMEs are on
social media (Admin, 2014). Further, only 69% of the 20% have
linked their websites to their social media activities, highlight-
ing lots of missed opportunities. In Kenya, where it is estimated
that SMEs represent 75% of total businesses, 95% of these SMEs
use mobile phones as their preferred ICT tool (Kiveu & Ofafa,
2013). In a more recent study conducted by Pew Research (2015),
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it was found that accessing social network sites was one of the
top five activities amongst cellphone owners in seven sub-Saha-
ran African countries, namely Ghana, Kenya, Nigeria, Senegal,
South Africa, Tanzania and Uganda. This number is anticipated
to increase based on the high mobile uptake and improved inter-
net connectivity in Africa. This will reinforce the importance of
digital marketing for SMEs as it enables them to access a wider
audience through their mobile devices.
As an important component of digital marketing, social me-
dia offers tangible benefits to SMEs as suggested below:
1. It provides a vital platform for ongoing engagement with
customers (Kim, Jeong & Lee, 2010).
2. It helps SMEs scale up their businesses by facilitating their
growth and the expansion of their current capacity “without neg-
atively affecting the contribution margin of the business” (Tuten
& Solomon, 2015:15).
3. It facilitates market access (Kiveu & Ofafa, 2013).
4. It offers greater market accessibility and the ability to cul-
tivate strategic partnerships and relationship with customers and
suppliers ( Jagongo & Kinyua, 2013).
In addition to the above mentioned benefits gathered from the
literature, this paper suggests that SMEs can derive the following
benefits through digital marketing:
1. Co-create solutions with customers that will provide the
competitive edge to SMEs as they become innovative and are able
to develop products and services that address customers’ needs.
2. Generate faster revenues and facilitate the measurement of
the effectiveness of SM campaigns.
3. Generate voluminous, ongoing and real-time qualitative and
quantitative data that can be mined for precision target marketing
and deep customer insights.
4. Obtain timely feedback from their current and potential
customers put in the customer’s own voice through verbatim
quotes.
DIGITAL MARKETING AS A GAME-CHANGER
FOR SMES: WHERE TO START?
To harness digital marketing, SMEs can adopt the proposed four
stage process exhibited in Figure 1.
Figure 1: ISIE Digital Marketing Process
Source: Author’s compilation based on data from the literature
CONCLUSION
The digital transformation that is currently taking place can be
adopted by SMEs as a way of accessing markets at a faster and
more competitive rate than other market players. Through the four
stage process of insights, strategy, implementation, and evaluation,
SMEs can embark upon a journey of scaling up their businesses
with the view to increasing their top and bottom lines. In addi-
tion, SMEs can benefit from their ongoing engagement with cus-
tomers by co-creating solutions that are relevant to these targeted
customers, customize their offerings as well as leverage off data
and sound analytics to make informed decisions. Africa-based
SMEs digital marketing imperatives should include website de-
sign, mobi-sites creation, email marketing, an active presence on
social media and harnessing the power of mobile platforms to ac-
cess new markets.
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