COPPERSTONE UNIVERSITY

SCHOOL OF BUSINESS
THE EFFECTS OF DIGITAL MARKETING ON THE PROFITS OF SME’s IN
LUSAKA. A CASE STUDY OF POLARIS COPORATE SERVICES LTD, LUSAKA,
ZAMBIA.

A DISSERTATION SUBMITTED TO COPPERSTONE UNIVERSITY IN PARTIAL FULFILMENT OF THE

REQUIREMENT QUALIFICATIONS FOR THE AWARD OF A DIPLOMA IN HUMAN RESOURCE
MANAGEMENT.

Mutale Mbebeta

CU-BBA-70-6777

2021

Supervisor; Mrs. Nyimbili

DECLARATION

I, Mutale Mbebeta, Student Number; CU-BBA-70-6777 have submitted this project report to The
Copperstone University in partial fulfilment of the requirements for the award of Degree in Business
Administration. This project report is an original piece of work and has not been submitted in part or in
full for any degree or diploma in this University or any other institution.

Mutale Mbebeta Signature: _______________

Date: _______________

We certify that this project has been successfully accepted for the award of a program in Business
Administration.

Mrs. Nyimbili (Project supervisor) Signature: _______________

Date: _______________
 DEDICATION
This work is dedicated to my late mother Virginia Monze who is my greatest inspiration. She taught me
the importance of education and having the virtues of truth, honesty, integrity, fairness and love. Finally,
am grateful to the Almighty God, the creator of all human kind, for granting me health, wisdom and
strength to complete my studies.

ACKNOWLEDGMENTS
I am indebted to many people for their assistance in planning and conducting this study. For this study to
be successful, I would like to thank my supervisor, Madam Nyimbili who guided me with wisdom,
experience and enthusiasm. Her recommendations, suggestions and incisive comments were insightful
and inspiring. Madam Nyimbili for advice, guidance on the choice of the title and the provision of
material support. This work would not have not been a success without your assistance. To my sponsors,
who are my Dad Mr Mbebeta , My mother Beatrice Mulenga, My uncles Allan Monze ,Cornelius
Monze, Kelvin Monze , My Mentor Chewe Mulenga, My sister Patricia Mulenga and everyone that
contributed to achieving this dream , I would like to thank you for the financial support that you have
rendered to me since I started my education. I also dedicate this work to all those who supported me
during the challenging period, Mr. Gabriel Chitumbo, Dr Mary Mandiringana and Mrs Olipa .N.
Gonyuie, Madam Nyimbilli, Mr Amukena and all of my academic friends (George Mwabi , Lyness
Zimba and Nachilima Nayame ) , without their support, this work would have been difficult to complete.
TABLE OF CONTENTS
Chapter One: Introduction…………………………...……...
…………………………………………………1
1.0 Background………………………………….……………………………………………….1
1.1 Problem Statement……………………………………...……………………………………1
1.2 Purpose of Study………..……………………………………………………………………2

1.3 Research Questions…………………………………..……….……………………………….3

1.4 Research Objectives…………………………....………..……………………………………….3

1.5 Significance of Study………………………………..……………………………………….3

1.6 Definition of Key Terms………………………………..……………………………………3

1.7 Delimitation of study……………………………………………………….………………...4

1.8 Study Limitation……………………………………………….………….……….………….4

1.9 Basic Assumption of Study……………….………………….……………………………….4

1.10 Organization of Study………………………………..…………………………………………..4

1.11 Chapter Overview……………………………………………..……………………………..4

Chapter Two: Literature Review……………………………………………………………...5

2.0 Introduction…………………………………………………………………………………..5
2.1 Rationale…………………………………………………………….……………………….8

Chapter Three: Theoretical & Conceptual Framework…………………………….……….9

3.0 Introduction…………………………………………………………………………………..9

3.1Theoretical & Conceptual Framework………………………………………………………..9

Chapter Four: Research Methodology……..………………………………………….……..12

4.0 Introduction………………………………………………………………………………....12

4.1Research Design…………………………………………………………………………..…12

4.2 Research Site………………………………………………………………………………..12

4.3Study Population………………………………………………………………..……..…….13

4.4 Data Collection Procedure…………………………………..……………………………….13

4.5 Data Analysis…………………………………………………………..……………..…….13

4.6 Sampling Techniques………………………………………………………………….……....14

4.7 Ethical Consideration……………………………………….…………………………..………....14

4.8 Data Reliability & Validity…………………………………………………………………14

Chapter Five: Data Analysis, Presentation and Findings…………………………………..15

5.0 Introduction………………………………………………………………………………....15

5.1 Role of digital marketing on the profits of SMEs…………………………………………..15

5.2 Benefits of utilizing digital marketing for SMEs……………………………….…………..18

5.3 Role of digital marketing for profit maximization for SMEs………………………………18

5.4 Discussion………………………….………………………………………………………….18

5.5 Chapter Summary…………………………………………………………………………..21

Chapter Six: Summary, Conclusions and Recommendations……………………………...23

6.0 Introduction……………………….…………………………………………………….…………23

6.1 Summary of Study……………………………………………………………………….….23

6.2 Conclusions…………………………………………...……………………………….……24

6.3 Recommendations…………………………………………………………………………..24

6.4 Suggestions for further Study…………………………………………………………….....24

References………………………………………………………………………………………25

Appendix…………………………………………………………………………………]……28
CHAPTER ONE: INTRODUCTION

1.0 BACKGROUND

Digital marketing has in the recent past gained momentum globally and has so far proved to be
the fastest and easiest mode of marketing. Digital marketing has mainly been characterized by
the use of electronic gadgets such as smart phones and computers.

Digital marketing first began by the invention of radio by Marconi. The term digital marketing
was first coined in 1990. In about 1993, the first clickable Ad banner was aired. Shortly after the
first Ad, the world saw the debut of Yahoo and Google respectively. After 2000, the world saw
the de-but of social media sites such as Facebook, YouTube, WhatsApp and Instagram
(Umamaheswari, 2021).

In Africa and Zambia, digital marketing has mainly been characterized by social media
marketing. Social media marketing is a form of digital marketing that occurs on social media

platforms. Firms, especially the small medium sized entrepreneurs’ have taken advantage of
social media platforms. This is because they are cost effective and are able to reach millions of
people across the globe in a short time frame (Afolabi, 2016).

Small and medium sized Enterprises (SMEs) play a very vital role in the economy of any nation.
They contribute to employment creation, poverty alleviation and contribute to the revenue of a
country. This small but fast growing industry employs about 20% of the population and has more
than 50% of women working in this sector. Reports further suggest that if adequately supported
this sector has capacity to employ more people as many individuals are getting into
entrepreneurship (Nuwagaba, 2015).

In Zambia, about 80% of the economy is driven by Small Medium Sized Enterprises. However,
most SMEs have inadequate knowledge on Digital Marketing. This proposed study will therefore
investigate the effects of digital marketing on the profits of SMEs in Lusaka, A case study of
Polaris Cooperation Limited.
1.1 PROBLEM STATEMENT

Digital marketing has in the recent past gained momentum globally and has so far proved to be
the fastest and easiest mode of marketing. Digital marketing has been mainly characterized by
the use of electronic gadgets such as smart phones and computers. Digital marketing which is
also referred to as online marketing is defined as “a projection of conventional marketing, its
tools and strategies”. It takes many forms and has graduated from using radio and television to
using the internet especially through various social media platforms (Davim, 2016).

The role that digital marketing plays cannot be overemphasized especially during this digital era.
The benefits are numerous and include: access to the global market, saves on cost and time and
builds brand royalty (Digital Marketing Institute, 2018). It is therefore important that SMEs in
Zambia invest in digital marketing so as to increase their market share and build brand loyalty
which is necessary for profit maximization in this era.

According to a recent research, most SMEs face financial challenges and inadequate knowledge
on the benefits of digital marketing. Most SMEs argue that digital marketing is costly and would
rather adopt the traditional way of marketing (Ng'andwe, 2019). A pre-research carried out in the
Central business center in Lusaka district by this researcher, revealed that about 65% of SMEs
still resort to traditional marketing as they feel digital marketing does not bring much desired
results. However, this negative attitude is due to lack of adequate knowledge on the importance
of digital marketing.

In order to promote digital marketing especially among SMEs, the “new dawn” government has
established the Ministry of Science and Technology and Ministry of Small Medium Enterprises.
These ministries’ will look into the affairs of SMEs in order to increase their contribution to the
revenue in the country.

SMEs need to invest in digital marketing if they are to maximize profits and business growth
especially during this digital era. This research therefore hopes to breach the gap by contributing
to the existing knowledge on Digital Marketing and its effects on the profits’ of SMEs in
Zambia.
1.2 PURPOSE OF STUDY

The purpose of this proposed study is to investigate the effects of Digital Marketing on the
Profits of Small Medium Enterprises (SMEs) in Lusaka district.

1.3 RESEARCH QUESTIONS

 What role does Digital Marketing play on the profit of Small Medium Enterprises
(SMEs)?
 What are the benefits of utilizing Digital Marketing for SMEs?
 How does Digital Marketing contribute to profit maximization of SMEs?
1.4 RESEARCH OBJECTIVES

The major objective of this proposed study is to investigate the effects of Digital Marketing
on the profits of SMEs in Lusaka. The specific objectives of this proposed study are:

 To find out the role of Digital Marketing in the profit maximization of Small medium
Enterprises (SMEs).
 To find out the benefits of utilizing Digital Marketing for SMEs.
 To find out how Digital Marketing Contributes to the profit of SMEs.

1.5 SIGNIFICANCE OF STUDY

This proposed study will be significant in that it will investigate the effects of Digital
Marketing on the profit of SMEs in Lusaka District.

1.6 DEFINITION OF KEY TERMS

The key terms of this proposed study are: Digital Marketing and Small Medium Enterprises

Digital Marketing

Digital marketing which is also referred to as online marketing is defined as “a projection of

conventional marketing, its tools and strategies”. It takes many forms and has graduated
from using radio and television to using the internet especially through various social media
platforms (Davim, 2016).

Small Medium Enterprises (SMEs)

Small and Medium sized enterprises (SMEs) refer to non-subsidiary, independent firms
which employ fewer employees than usual. These employees can range from 0-50 in most
cases (OECD, 2005).

1.7 STUDY LIMITATION

This study will encounter foreseen challenges such as limited time, resources and limited
available information. This will be attributed to limited time the researcher will be accorded
in order to carry out this study, inadequate financial resources are also likely to hinder this
proposed study and lack of available data will unlikely contribute to the findings of the
study.

1.8 DELIMITATION OF STUDY

This proposed study will be carried out in Lusaka city of Lusaka district in Zambia. Lusaka
city has an estimated population of 3,360,183 people (Knoema, 2020).

1.9 BASIC ASSUMPTIONS OF THE SUDY

According to Paul Vogt, “An assumption refers to a statement that is presumed true, often
temporarily or for a specific purpose, such as building a theory.” This therefore means that
an assumption is literally a presumption that is perceived as truth and is not scientifically
proven.

To avert presumptions, this researcher will conduct in-depth interviews’ with about 100
participants within Lusaka city in Lusaka district.

1.10 ORGANIZATION OF THE STUDY

The first chapter will introduce the topic of study, chapter two will review relevant literature
review and chapter three will discuss the methodology to be used in this proposed study.
1.11 OVERVIEW OF CHAPTER

This chapter gave a brief background on the proposed topic of investigation by outlining the
background, problem statement, purpose of study, study scope, study limitations and operational
definitions.

CHAPTER TWO: LITREATURE REVIEW

2.0 INTRODUCTION

This chapter will review literature from various studies relevant to the topic of study. This
chapter presents an empirical review which contains pieces of literature from various studies
relating to the effects of digital marketing to the profits of SMEs in Zambia. The literature
review will be divided into three sections, namely:

 The effects of Digital Marketing on the profits of SMEs- Global Perspective

 The effects of Digital Marketing on the profits of SMEs- African Perspective
 The effects of Digital Marketing on the profits of SMEs- Zambian Perspective

GLOBAL PERSPECTIVE- THE EFFECTS OF DIGITAL MARKETING ON THE

PROFITS OF SMEs

Digital marketing which is also referred to as online marketing is defined as “a projection of

conventional marketing, its tools and strategies”. It takes many forms and has graduated from
using radio and television to using the internet especially through various social media platforms
(Davim, 2016). The role that digital marketing plays in business growth cannot be
overemphasized. Studies reveal that digital marketing has the ability to increase business by at
least 70% because it increases brand loyalty which in turns increases client retention and
increases a business’s profit.

Asia has improved its connectivity in science and technology. In Malaysia majority of SMEs
have invested into online buying and selling. This is because the returns using online platforms
are about $1 trillion. Online marketing in Malaysia has also proved to be time and resource
saving (Hamed Armesh, 2010).

Pakistan has recently experienced technological change and innovation in the recent past. A
recent study however reveals that despite these technological changes, most SMEs do not utilize
e-marketing or digital marketing. However, studies reveal that digital marketing has the potential
to increase business performance in Pakistan (Adhan Ahmed Sheikh, 2017).

In Scotland, small business also known as Home-based Businesses(HBBs) conduct most of their
activities using e-commerce as it reduces the significance of the economies of scale and the
economic size of operation, hence enabling profitability with a small turnover (Mason, 2020).

A recent research conducted in Chaozhou, a city in China revealed that about 40% of the SMEs
had challenges in utilizing digital marketing despite digital marketing being an affordable means
of marketing and only consumes about 4% of their total marketing budget. However, despite
digital marketing having huge returns on investment, many SMEs in Chaozhou face numerous
challenges in adopting Digital Marketing. These challenges’ include: Lack of Company
resources and shortage of multi-channel digital marketing (Caiyong Zhuang, 2017).

AFRICAN PERSPECTIVE: EFFECTS OF DIGITAL MARKETING ON PROFITS OF

SMEs

Digital marketing which is also referred to as online marketing is defined as “a projection of

conventional marketing, its tools and strategies”. It takes many forms and has graduated from
using radio and television to using the internet especially through various social media platforms
(Davim, 2016). The role that digital marketing plays in business growth cannot be
overemphasized. Studies reveal that digital marketing has the ability to increase business by at
least 70% because it increases brand loyalty which in turns increases client retention and
increases a business’s profit.

A recent study revealed that while entrepreneurship was on the rise in Ethiopia, infrastructure
that enables smooth running of digital marketing was not available. This has made it difficult for
majority of SMEs to engage in digital marketing. This is because the country only has one single
network provider. SMEs face other challenges in adopting digital marketing such as: Poorly
developed tele-communication systems, disengage between obtainable funding and funding
required, strategy and planning, uncertain markets and lack of appropriate legal and regulatory
framework (Essayas Tye Lemma & Proffesor(Dr)., 2019).

A recent study carried out in South Africa revealed that about 8.5 million people were internet
users at the end of 2011. This was mainly attributed to the proliferation of smart phones on the
South African market. Despite many internet users in South Africa, the study revealed that SMEs
had challenges in adopting digital marketing. These challenges included: high start-up
investments in digital marketing, the return on investment was uncertain, majority of SMEs still
preferred the traditional methods of marketing and limited market research (Louise Van Scheers,
2015)

A recent study carried out in Nigeria revealed that social media marketing and online advertising
affects and influences customer satisfaction and competitiveness for SMEs. This is because
social media applications such as Facebook, WhatsApp and Instagram help SMEs reach their
targeted audiences, and provides cost effective communication with customers. The study also
revealed that online advertising provides more benefits than traditional marketing through
customized ads and content creation which help meet customers’ needs (Ola Olusegun Oyedele,
2020).

In Kenya, SMEs constitute 75% of the businesses, has 4.6 million people employed, accounts for
87% of newly created jobs and contributes to about 18.4% of the national revenue. Recent
studies further indicate that digital marketing has positive effect on SME’s sales growth
(Omondi, 2017).

Finally, studies carried out in Zimbabwe revealed that majority of SMEs do not have websites.
The study further revealed that e-commerce has a positive influence on immediate market
performance of SME’s (Phiri, 2020).

ZAMBIAN PERSPECTIVE: EFFECTS OF DIGITAL MARKETING ON THE PROFITS

OF SMEs

Digital marketing which is also referred to as online marketing is defined as “a projection of

conventional marketing, its tools and strategies”. It takes many forms and has graduated from
using radio and television to using the internet especially through various social media platforms
(Davim, 2016). The role that digital marketing plays in business growth cannot be
overemphasized. Studies reveal that digital marketing has the ability to increase business by at
least 70% because it increases brand loyalty which in turns increases client retention and
increases a business’s profit.

A recent study carried out in Zambia revealed that digital marketing increased the productivity of
businesses and led to increased competitive advantage. However, despite the numerous benefits
of digital marketing, SMEs continue to face challenges in adopting digital marketing. These
challenges include: lack of proper infrastructure and lack of start-up capital by SMEs (Ngoyi,
2019).

2.1 RATIONALE

Digital marketing which is also referred to as online marketing is defined as “a projection of

conventional marketing, its tools and strategies”. It takes many forms and has graduated from
using radio and television to using the internet especially through various social media platforms
(Davim, 2016).

The role that digital marketing plays in business growth cannot be overemphasized. Studies
reveal that digital marketing has the ability to increase business by at least 70% because it
increases brand loyalty which in turns increases client retention and increases a business’s profit.
This study will therefore investigate the effects of digital marketing on the profits of SMEs in
Lusaka district.
CHAPTER THREE: THEORETICAL AND CONCEPTUAL FRAMEWORK

3.0 INTRODUCTION

The previous chapter reviewed the literature relevant to this study. This chapter will discuss the
theoretical and conceptual framework related to this study.

3.1THEORETICAL AND CONCEPTUAL FRAMEWORK

The role that digital marketing in any business cannot be overemphasized. Digital marketing
does not only contribute to the profit of the business but increases the market share of the
business. This write up adopted the theory of Berry. This theory is referred to as the relationship
marketing theory. The relationship marketing theory was created on the basis of creating long
sustainable relationships which lead to increased brand loyalty and high client retention. This
relationship marketing can only be achievable if a business is able to connect with clients
constantly. This theory is client based unlike the traditional method of marketing that has not
been client based. By putting customers or clients at the center of marketing, many businesses
are able to maximize their profits by prioritizing customer needs (Assoc.Prof. Dr.Rashad
Yazdanifard, 2012).

The conceptual framework shows the relationship between the dependent and independent
variables in this proposed study. The conceptual framework indicates the effects of digital
marketing on the profits of SMEs in Zambia. The relationship is demonstrated in the diagram
below.
The diagram above shows the independent and dependent variables. The independent variable is
Digital Marketing while the dependent variables are: increased audience engagement, high
return on investment on higher profit, efficient tracking of campaigns and builds brand
loyalty.
CHAPTER FOUR: RESEARCH METHODOLOGY

4.0 INTRODUCTION

The previous chapter reviewed literature review related to this proposed case study. In order to
guide the development of this study, this study will review the necessary research methodology
to be adopted in this proposed case study.

In-depth interviews will be adopted in this study. The study will be carried out in Lusaka city in
Lusaka province in which respondents will be both female and male aged between 18 and 45
years old. The study will also adopt the qualitative method of data collection through both
primary and secondary data.

4.1 RESEARCH DESIGN

This proposed study will adopt a descriptive mixed method in the investigation of the effects of
Digital Marketing on the profits of the Small Medium Sized Enterprises in Lusaka. It will adopt
a case study approach in an attempt to investigate the effects of Digital Marketing on the profits
of the Small Medium Sized Enterprises in Lusaka district.

A case study refers to an intensive, systematic investigation of a single, individual, group,

community or small other unit in which the researcher examines in depth data relating to several
variables (McGee, 2015). A case study is often seen as being problem-centered, small-scaled
and manageable. Additionally, a case study has the ability to use and apply a lot of different
empirical evidence.

4.2 RESEARCH SITE

The research site is a place where the study is to be conducted. The selection of the research is
essential because it contributes to the relevance of the topic of study (Charles E.Metcalf, 1996).
This study will therefore be carried out at Polaris Limited in Lusaka, Zambia. Polaris Limited is
a Small Medium Sized Enterprise based in Marshlands, Lusaka. Lusaka city has an estimated
population of 3,360,183 people (Knoema, 2020).
4.3 POPULATION

The study will focus on employees of Polaris Limited who will highlight the benefits of Digital
Marketing on their firm. Furthermore, the study hopes to engage the officials at the Ministry of
Science and Technology who are responsible for the promotion of technology in service delivery
and as one of the drivers of the economy.

In addition, the research will conduct in-depth interviews with proprietors of Small Medium
sized Enterprises around the city of Lusaka.

4.4 DATA COLLECTION PROCEEDURE

Data collection procedure will adopt self-administered questionnaires’ which will be for both the
employees of Polaris Limited and officials at the Ministry of Science and Technology. A self-
administered questionnaire will be used because it saves both on time and resources’, permits
anonymity and eliminates biasedness’.

When conducting in-depth interviews, the study will employ a loose structured interview as most
SMEs are illiterate and might not be able to answer the self-administered questionnaire. The
interviews will be conducted face to face and have a high probability that the responses can be
influenced by external factors.

4.5 DATA ANALYSIS

Returned questionnaires’ will undergo editing in order to correct errors and avert
misconceptions. This will guarantee accuracy and completeness of the questionnaires’. The
questionnaires’ will be coded and will be given unique identifiers. The data will be entered into
the Statistical Package for Social Science (SPPS 21) for further scrutiny and analysis. This study
will further adopt descriptive analysis in responding to the research questions. The results of the
SSPS will be transferred to Microsoft Excel for presentation.

Content analysis will be used to analyze qualitative data. The researcher will initiate codes based
on the responses from the interview and the codes will further be presented as themes. Content
analysis is defined as the detailed and systematic examination of the contents of a particular body
of materials for the purpose of identifying patterns, themes or biasness’ (Showkat, 2017).
4.6 SAMPLING TECHNIQUES

Purposeful sampling will be used in the selection of respondents at both Ministry of Science and
Technology and Polaris Cooperation Limited. Purposeful sampling is a non-probability sampling
technique in which the choice of the respondents is entirely up to the researcher based on their
knowledge, experience and expertise on this topic of study. This technique is selected because
the sample size at both institutions is small and only represents a total of 60 people selected from
both institutions.

Proprietors’ of SMEs will be selected using the systematic random sampling. This is type of
probability counseling is where a subset of participants is randomly selected to be part of the
study from a population, but with a fixed, periodic interval nth term (Bellhouse, 2005). This type
of sampling ensures that each member of the population has an equal opportunity of being
selected.

4.7 ETHICAL CONSIDERATION

Ethics are standards that a research needs to adhere to. It can also be defined as a system of
moral values that is concerned with the degree to which the research procedures adhere to
professional, social and legal obligations to the study participants (Kaewkungwal J, 2019).

Therefore the study will be conducted with permission from Ethics committee board and with
consent from the respondents.

4.8 DATA VALIDITY AND RELIABILITY

Reliability and validity refers to whether the results are replicable; the extent to which results are
consistent and accurate, a representation of the data collected (Otieno-Odawa, 2014). This study
will therefore adopt content validity and Cronbahs alph reliability test. This is because the two
methods will be able to adequately measure and represent accurate findings obtained during data
collection and will be able to check consistency internally.
CHAPTER FIVE: DATA ANALYSIS PRESENTATION AND FINDINGS

5.0 INTRODUCTION

This study used a descriptive research design aimed at investigating the effects of digital
marketing on the profits of SMEs in Lusaka district. The raw data will be collected, edited and
checked for completeness and accuracy then coded. Response to closed ended questions will be
entered in the data master sheet for easy analysis, whereas data from open ended questions will
be categorized into different themes and entered into the data master sheet. Data analysis will be
done manually using a scientific calculator, Microsoft excel and SPSS for cross tabulation and
significance. This chapter presents the findings of the study using themes derived from the
research questions. These research questions included:

 What role does Digital Marketing play on the profit of Small Medium Enterprises
(SMEs)?

 What are the benefits of utilizing Digital Marketing for SMEs?

 How does Digital Marketing contribute to profit maximization of SMEs?

5.1 ROLE OF DIGITAL MARKETING ON THE PROFIT OF SMALL

MEDUIM ENTERPRISES (SMEs)
Selected SMEs in Lusaka, including Polaris Cooperate Services Limited were asked what role
digital marketing played on the profit of SMEs. All the SMEs acknowledged the importance of
marketing in the profit maximization of any business. About 70% of the SMEs however, did not
fully understand what digital marketing entails and how to adopt digital marketing for their
businesses. Summing up their point, one SME had this to say:

“Marketing without a reasonable doubt plays a significant role in increasing our profits.
However I feel that traditional marketing methods are better as compared to “digital
marketing”. This is because there is a face to face interaction with clients as compared to online
marketing. This is because with Online Marketing I don’t really know the type of customers Iam
dealing with”.

Another proprietor of an SME further adds:

“online marketing is somehow tricky because we don’t know who we are talking to and
sometimes we don’t receive feedback after advertising, so that makes us wonder whether our
products have reached the desired population”.

Another SME added that

“The challenge with advertising on social media platforms is that we don’t know how to turn
reactions to posts to money. We would get the reactions but will not get sales. This is the reason
we prefer traditional marketing as compared to digital marketing”.

Another SME also remarked that

“Most SMEs will want to invest in digital marketing but lack the resources and knowledge that
will increase the return on investment. In addition, he added that the internet connectivity is still
poor and there is need to improve the connection system. The poor internet has led to a hike in
the cost of internet services which are mainly available in the city and disadvantage other SMEs
in rural areas”.

The pie chart below shows the response of various SMEs on the role of digital marketing on the
profits of SMEs. As revealed in the pie-chart below, about 70% of the SMEs affirm that digital
marketing has a high effect on the profits of SMEs as it reduces economies of scales and
increases the market share of SMEs.
 ROLE OF DIGITAL MARKETING ON THE PROF-
ITS OF SMEs
3rd Qtr
10%

2nd Qtr
15% 4th Qtr
5%

1st Qtr
70%

5.2 BENEFITS OF UTLIZING DIGITAL MARKETING FOR SMEs

SMEs play a vital role in that they contribute to the national revenue, employment creation and
poverty alleviation. Economists are of the view that if this sector is developed, it is able to
contribute about 70% to employment creation and hence reduce poverty in the country. It is
therefore very important for SMEs to adopt digital marketing if their profits are to increase. The
following table shows tabulated data on the benefits of utilizing digital marketing for SMEs.

Benefits Frequency
Increased Audience Engagement 14
High return on Investment on Higher Profit 9
Efficient Tracking of Campaigns 4
Builds Brand Loyalty 3
Total 30

The table above shows the views of SMEs on the benefits of utilizing digital marketing for
SMEs.

The table reveals that about 14 SMEs experienced a very high audience engagement after
adopting digital marketing. The high audience engagement led to increased sales for their
businesses. The table further indicates that 9 out of 30 SMEs that adopted digital marketing
experienced a high return on investment on higher profits, 4 out of 30 SMEs had been able to
track their campaigns as these campaigns led to an increased audience engagement and increased
sales. The table finally revealed that 3 out of 30 SMEs experienced high client retention which
was as a result of consistent audience engagement through high quality campaigns. These factors
therefore increased the profits of SMEs.

5.4 THE ROLE OF DIGITAL MARKETING IN PROFIT MAXIMAIZATION OF SMEs

Digital marketing plays a major role in increasing the profits of SMEs. It has the potential of
expanding the growth of SMEs. It is therefore very crucial that SMEs invest in digital marketing
if they are to reap desired results. The following paragraphs will further explain the role of
digital marketing in the profit maximization for SMEs as explained by SMEs interviewed.

An official at Polaris Cooperate Services limited says:

“Polaris cooperate services invested in web designing and services of an IT specialist. This is
because a research we conducted revealed that we could increase our clientele portfolio through
digital marketing. After launching our website, we invested in utilizing in Google ads and digital
campaigns. This has not only increased our client base, but digital marketing has also opened
our business to partners from around the globe”.

Another SME remarks:

“Having launched my website and a software application is the best investment I have made.
Indeed when digital marketing is applied right it brings an increase to the profit. I say this
because my business has experienced increased sales through a wider audience engagement
through consistent campaigns which has maximized my profits”.

Another SME added:

“Digital marketing maximizes profits of SMEs because products and services of SMEs have a
wider global audience which can be accessed at any given time. Small businesses like mine have
also reduced our economies of scale by 60%”.

The pie chart below reveals that 60% of the SMEs utilizing digital marketing correctly have
reduced their economies of scale by about 60%, while other SMEs who have not accurately
utilized digital marketing experienced a lower reduction on their economies of scale by 20%,
15% and 5% respectively.

5%

15%

20% 60%

5.3 DISCUSSION

ROLE OF DIGITAL MARKETING ON THE PROFITS OF SMEs

The findings of this study revealed that SMEs acknowledged the role that digital marketing plays
in the maximization of profits. They also recognize that digital marketing leads to a reduction of
economies of scale. To this effect one of the SMEs submitted that “Marketing without a
reasonable doubt plays a significant role in increasing our profits. However I feel that
traditional marketing methods are better as compared to “digital marketing”. This is because
there is a face to face interaction with clients as compared to online marketing. This is because
with Online Marketing I don’t really know the type of customers I am dealing with”. This is in
agreement with Sharp, Riebe et al (2002) whose findings reveal that digital marketing reduces
the economies of scale for SMEs and has the ability to increase their market share on the global
market. Their research further revealed that digital marketing is able to increase their competitive
advantage over firms in the same industry and increase their market share which is the effect for
increased profits for SMEs (Bryon Sharp, 2002).
An analysis of the response from the SMEs showed that all SMEs were in agreement of the role
digital marketing played on the profits of SMEs. This is in agreement with officials at Polaris
Cooperate Services Limited who confirmed that since the adoption and investment of digital
marketing, its client portfolio increased by 60% hence, its profit increased and it eventually
gained competitive advantage over its competitors through increased market share. from this
analysis the researcher deduced that digital marketing not only increases the profits of SMEs but
is able to increase competitive advantage through an increased market share.

Further findings revealed that about 70% of SMEs lack start up investment. This hinders them
from adopting digital marketing. A research carried out confirmed that digital marketing is
becoming more convenient in this era. However, despite its convenience, the study further
attributed poor internet infrastructure and the high cost of startup investment of digital marketing
as the major hindrances’ to SMEs adopting digital marketing (Mwila, 2019).

BENEFITS OF UTILIZING DIGITAL MARKETING FOR SMEs

Findings of the study revealed that about 14 SMEs experienced a very high audience engagement
after adopting digital marketing. The high audience engagement led to increased sales for their
businesses. The study further found out that 9 out of 30 SMEs that adopted digital marketing
experienced a high return on investment on higher profits, 4 out of 30 SMEs had been able to
track their campaigns as these campaigns led to an increased audience engagement and increased
sales. The study finally revealed that 3 out of 30 SMEs experienced high client retention which
was as a result of consistent audience engagement through high quality campaigns. These factors
therefore increased the profits of SMEs.

Further submissions from SMEs revealed that digital marketing enables SMEs access global
markets. This is because one single investment in digital marketing can reach over one billion
people in a space of one minute. Aztek agrees that this is possible if the firm puts in place a good
digital marketing strategy. A good digital marketing strategy is able to generate between 50,000
to 100,000 leads (Aztek, 2019).

With regards to investing in a good digital marketing strategy, most SMEs attributed major
challenges. These challenges included poor internet connection and lack of start-up investment
resources.
THE ROLE OF DIGITAL MARKETING IN PROFIT MAXIMAIZATION OF SMEs

As regards to the role of digital marketing in profit maximization of SMEs, the study found out
that digital marketing improves the business strategy and has the ability to reduce on economies
of scale while gaining competitive advantage over its competitors. An official from Polaris
Corporate Services confirmed this by adding his remarks; “Polaris cooperate services invested in
web designing and services of an IT specialist. This is because a research we conducted revealed
that we could increase our clientele portfolio through digital marketing. After launching our
website, we invested in utilizing in Google ads and digital campaigns. This has not only
increased our client base, but digital marketing has also opened our business to partners from
around the globe”. This is in agreement with a recent study carried out that revealed that digital
marketing plays a huge role in the profit maximization of small firms. The study further views
digital marketing as a platform to implement successful strategies for increased sales and brand
loyalty (Lockett, 2018).

5.4 CHAPTER SUMMARY

The chapter collected raw data, edited and checked for complete accuracy and coded the data.
The chapter presented the findings of the study using themes derived from the research
questions.

The study found out that about 70% of the SMEs interviewed did not understand digital
marketing, despite its numerous benefits. As a result, they preferred traditional marketing as
compared to digital marketing.

The study also found out the benefits of utilizing digital marketing for SMEs. The benefits
include: increased audience engagement, high return on investment for higher profit, efficient
tracking of campaigns and increased brand loyalty. The study revealed that 14 out of 30 SMEs
experienced a high audience engagement, 9 out of 30 SMEs experienced high return on
investments for higher profits, 4 out of 30 SMEs were able to efficiently track their campaign’s
and 3 out of 30 SMEs were able to return their clientele and increase their clientele portfolio.
Finally the study found out that investment in digital marketing is likely to increase the profit of
SMEs through access to global audience, consistent campaigns and this subsequently reduces the
economies of scale, hence increasing the profit of the SMEs.
CHAPTER SIX: SUMMARY CONCLUSION AND RECOMMENDATIONS

6.0 INTRODUCTION

This chapter will present the summary of the research findings, after which the conclusion,
recommendations and suggestions for further investigations will be drawn. The major objective
of this study was to investigate the effects of digital marketing on the profits of SMEs in Lusaka
district.

6.2 SUMMARY OF STUDY

This study aimed at investigating the effects of digital marketing on the profits of SMEs in
Lusaka district. The specific objectives of this study were:

 To find out the role of digital marketing in the profit maximization of SMEs
 To find out the benefits of utilizing digital marketing for SMEs
 To find out how digital marketing contributes to the profits of SMEs

The target population for this study was comprised of both male and female aged between 18 and
45. Among the target population a sample size was selected, from which about 30 SMEs from
Lusaka and 30 officials from Polaris Cooperate Services and Ministry of Science and
Technology were selected using the purposeful sampling technique.

This study implored two research instruments, namely: Self-administered questionnaires ‘and in-
depth interviews. Data was collected using the qualitative method. Data was analyzed using
descriptive frequencies’. The results were presented in frequency tables.

The study found out that about 70% of the SMEs interviewed did not understand digital
marketing, despite its numerous benefits. As a result, they preferred traditional marketing as
compared to digital marketing.

The study also found out the benefits of utilizing digital marketing for SMEs. The benefits
include: increased audience engagement, high return on investment for higher profit, efficient
tracking of campaigns and increased brand loyalty. The study revealed that 14 out of 30 SMEs
experienced a high audience engagement, 9 out of 30 SMEs experienced high return on
investments for higher profits, 4 out of 30 SMEs were able to efficiently track their campaign’s
and 3 out of 30 SMEs were able to return their clientele and increase their clientele portfolio.

Finally the study found out that investment in digital marketing is likely to increase the profit of
SMEs through access to global audience, consistent campaigns and this subsequently reduces the
economies of scale, hence increasing the profit of the SMEs.

6.3 CONCLUSION

Based on the findings of this study, the study has drawn up the following conclusions:

 The study is of the view that inadequate knowledge, high start-up investment and poor
internet connection has contributed to some SMEs not utilizing digital marketing
 The study is of the view that there are numerous effects of digital marketing in the profits

of SMEs. These include: efficient tracking of campaigns and increased brand loyalty

 Finally, the study is of the view that digital marketing increases competitive advantage
while reducing economies of scale and is a cost effective marketing tool as compared to
traditional marketing.

6.4 RECOMMENDATIONS

Having drawn this conclusion, this study recommends the following:

 The study recommends that there should be more investment in internet connectivity and
knowledge in digital marketing.
 The study also recommends that SMEs should invest in digital marketing strategies for
sales increase.
 Finally, the study recommends that the government of the republic of Zambia through the
Ministry of Science and Technology must put up policies that favor SMEs and invest in
good internet infrastructure for SMEs to thrive.
6.5 SUGGESTIONS FOR FURTHER STUDY

1. This study was carried out in Lusaka district. Therefore, the findings of this study doesn’t
represent the entire country but is only limited to Lusaka district. This study therefore
suggests more research to be conducted in other parts of the country.

2. The study was limited to time and resources. We therefore suggest that a more
comprehensive study be carried out.
3. The study discovered the gap in research of the effects of digital marketing on the profits of
SMEs. Therefore a further study must be carried out in other parts of the country so as to
ascertain the effects of digital marketing on SMEs in other parts of the country.
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APPENDIX

1. QUESTIONAIRE

SECTION A.

Please DO NOT indicates your name on this questionnaires.

NRC: ………………………………………………

OCCUPATION:…………………………………..

SECTION B

Kindly respond with either Yes or No.

1. Do you understand what Digital Marketing means? ……………………………

2. Have you adopted Digital Marketing in your business? ………………………..
3. If yes, what are the Benefits of adopting Digital Marketing?
……………………………………………………………………………………
4. Have you experienced challenges in Digital Marketing? ……………………………….
5. Do you prefer Digital Marketing or the traditional
Marketing?..............................................
6. Give a reason to your answer above. …………………………………………….
7. Has digital marketing affected your profits? ………………………………………..

2. BUDGET

DESCRIPTION COST(ZMK)
Data Collection Field Trip 3,500
Data Analysis 3,000
Administration Cost 5,000
Total 11,500
 3. TIMELINE

ACTIVITY PERIOD(MONTH)
Proposal Submission July
Ethical Approval August
Data Collection September
Data Analysis and Presentation October
Write up and Submission of Report