e-MD in SME's of Pakistan

A Conceptualization of the opportunities and barriers to e-marketing development in SME's of Pakistan

Abstract

Small & Medium Enterprises has been remarked as strong industrial development access point in any nation contribution. Pakistan has also embarked itself as one of potential resource activist opportunity for SME's functions.The contribution of SMEs in GDP of Pakistan is mere 15 percent and The Government of Pakistan, realizing the potential of SMEs has very rightly turned its attention toward the uplift of this sector.

Apart from different issues faced by SME'S in Pakistan one such issue is addressed in our research that is the fixed costs usually absorb a higher level of sales revenue, leaving proportionally less or no budget for marketing expenditures and hence these small firms are unable to promote themselves.

It will be suggested through our research that, internet will bring significant new marketing opportunities and Pakistani SME's will have ability to generate more business opportunities through internet, blogging, podcasting, creating YouTube videos , lesson over Skype etc. Although there has been widespread acceptance of internet use in corporate environments, the extent to which it is used by SMEs varies widely. It will also provide wide-reaching economic benefits through an alternative channel for companies.

The specific aims were to identify and gain an understanding of the specific barriers to and the implementation issues faced when attempting to effectively adopt the internet and e-marketing by SMEs , identify the consequences that implementing e-marketing will have on the SME businesses , in order to see if the predicted positive impact will occurre and make suggestions to enable SMEs to gain a better understanding of e-marketing and thus facilitate better implementation in the future.

Description

Small enterprises are generally started by hard working and highly motivated individuals, with vision and ambition, attributes which if integrated with a marketing orientation should increase the firms' chance of success (Kenny and Dyson, 1989). Initially, the small and young firm faces marketing challenges, which can and will ultimately determine its future (Romano and Ratnatunga, 1995). Small business success is dependent not only on the presence of products and markets, but also on the efficacious marketing of those products within those markets (Smith, 1990). While the underlying principles of marketing are equally applicable to large and small firms alike, a lack of sophisticated marketing is perceived to be problematic for smaller firms (Cromie, 1991).

A further difficulty for the smaller firm is that fixed costs usually absorb a higher level of sales revenue, leaving proportionally less for marketing expenditures (Stokes, 1994). Evidence suggests that small firm owner/managers rarely rely on formal training to negate a deficiency in marketing expertise (Hankinson, 1991). Small firms typically spend modestly on marketing expenditures, and utilise few of the available marketing techniques (Stokes, 1995). Many owners/managers rely on previous experience and common sense (Lilien, Kotler and Moorthy, 1992), adopting a marketing orientation without the trappings through staying close enough to their customers to identify changing needs, and flexible enough to adapt to those changing needs (Stokes, 1994).

Given the constrained resources of the small firm, marketing tools suitable for utilisation by smaller firms must be welcomed if they can be effectively used to enhance marketing practice of these smaller organisations.

The internet is currently considered by some to be one of the few marketing tools that can be used to enable small firms to effectively compete with larger organisations “on the same ground” (Hsieh and Lin, 1998), creating significant opportunity for affordable and effective dynamism and versatility (Poon and Jevons, 1997). Others view it as a mechanism through which small firms trying to operate within specific niche markets will be able to access the “critical mass of customers necessary for success” (Hamill and Gregory, 1997).

While there have been increasing numbers of studies on the use of the internet, there is a lack of actual research on such issues as constraints, successful e-marketing techniques, the role of the internet in relation to organisations marketing activities; and indeed the viability of e-marketing for SMEs specifically in Pakistani Context.

Research Objective(s)

Thus base on the previous findings it is assumed that SMEs, could benefit from implementing the internet into their marketing mix, for example, marketing products and services by providing online quotes, advertising in more markets with less expense, using e-mail as a marketing tool and decreasing the costs of printing materials such as catalogues and glossy brochures. They could also enhance their credibility by creating a professional image through the presence of an efficient web site, answer questions about products and services in several languages and conduct research in foreign markets. This study will help us in full filling the following objectives

* Identify and gain an understanding of the specific barriers to and the implementation issues faced when attempting to effectively adopt the internet and e-marketing by SMEs in Pakistan ;

* Identify the consequences that implementing e-marketing will have on the SME businesses, in order to see if the predicted positive impact will occurre; and

* Make suggestions to enable SMEs in Pakistan to gain a better understanding of e-marketing and thus facilitate better implementation in the future.

Research Methdology

A qualitative approach where the aim is to explain rather than predict phenomena (Leavy, 1994) and to understand things rather than measure them (Gordon and Langmaid, 1988) is more suitable for understanding the business activities of SMEs (Gilmore et al., 2001).

Given the nature of the research objectives, a qualitative research technique will contribute to an in-depth understanding of SME owner/managers perceptions and decision-making and will be most appropriate for this research. This will be done by using one-to-one, in-depth semi-structured interviews with the managers or IT professionals of 50 small and medium sized enterprises (SMEs) in Pakistan

In-depth interviews allowed for detailed discussion and focus on understanding the driving forces behind, implementation issues and consequences of adopting the internet and e-marketing. They also allowed flexibility to go into detail about various unexpected aspects of the research findings.

Benefits

This research will help the SME'S in Pakistan to better represent themselves with minimal cost and with trackable and measurable results This will also help the small firms to identify new market and better business options and all this will ultimately help to boost up the economy of Pakistan.

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