Research Methods in Business (PG-19)

(A study of challenges faced by small companies in adopting social media marketing)

Submitted to:- Submitted by:-

Dr. Harsh Pratap Puja Mishra(GM18166)
(Associate Professor) Rupali Sharma(GM18191)
Nidhi Singh (GM18278)
Noman Ahmed (GM18
Prasanjit Mukherjee (GM18
Raushan Jha (GM18

G.L BAJAJ Institute of

Management and Research
Approved by A.I.C.T.E, Ministry of HRD, Govt. of India
Index

S No. Topic Page No.

1. Introduction

2. Literature review

i) Theoretical Literature

ii) Conceptual Framework

3. Research Methodology

i) Research Design

ii) Sample Design

iii) Data collection Method

Annexure

References
Introduction
1.1 Social media is a great platform for small businesses to promote their brand and build a solid
consumer base. As with any other marketing strategy, there are a few challenges and pain points that tag
along with social media marketing. But, if these challenges are properly dealt with, you can be well on
your way to promoting your brand with a lot of confidence.
Social media such as Facebook, Twitter, Google Plus, YouTube and blogs have been widely adopted by
various industries. Many large companies were early adopters of social media and integrated social
media marketing as a key part of their comprehensive marketing strategies. For example, Dell, Domino’s
Pizza, Starwood Hotels, and Starbucks adopted social media before 2010 and have been using social
media to increase customer loyalty and retention, to increase sales and revenues, to improve customer
satisfaction, to create brand awareness, and to build reputation
1.2 Why this topic is important
Small medium enterprises (SMEs) is recognized as one of the main contributors to economic,
development and employment growth. Despite it play a major role in today’s world economy, SMEs is
well known having limitation and acceptance barriers in adopting a new technology although the
revolution of internet and communication channel has changed the way people conduct business today.
In recent years, social media has became a new marketing communication tool in rapid and dynamic
pace. Increasing numbers of businesses leveraging the social media and other electronic media in
conducting their marketing efforts, giving the chance for electronic based marketing researchers to study
more in this area. While having the adoption barriers, implementing social media marketing by SMEs
might create not only a lot of opportunity but can change the shape and nature of its business all over the
world.
It is noticed that the trend of utilizing social media offers a research opportunity. Thus, it is essential to
understand the factors that contribute the adoption of social media marketing among SMEs in
conducting marketing activities within business enterprises. This paper review related studies on SMEs
barriers to adopt technology, the emerging social media-marketing concept and the factors that related to
adoption.
1.2.1 Social media marketing: a subset of -marketing
Social media marketing can be viewed as a new field and a new business practice involved with the
marketing of goods, services, information and ideas via the online social media. However, there is also
confusion between the discipline called social marketing and social media marketing. Numerous
references on internet have mislabelled social media marketing as simply social marketing. Social
media offer a unique marketing communication method (Eagleman, 2013). Social media marketing
makes use of these social media applications as a extension to fulfil the traditional marketing. Marketing
activities via online applications that allow the production of information and being collaborate among
users (Kaplan and Haenlein, 2010) and leverage mobile and web-based technologies to create interactive
medium where users and groups member sharing, co-creating, discussing, and modifying known as
user-generated content (Kietzmann et al., 2011). By manipulating the user generated content has enable
businesses to forecast the future purchasing behavior of their customers more accurately (Kim and Ko,
2011), enhances brand post popularity (Vries et al., 2012), attract new customers (Michaelidou et al.,
2011), build awareness, increase sales and build loyalty (Castronovo, 2012). The rapid use of users and
the intensity of user-generated content might create not only a lot of opportunities for small business
enterprises but also can eliminate a lot of its threats. As Michaelidou et al. (2011) noted that using social
media does not require a great financial investment relatively low cost. In this paper, the terms social
media marketing and Internet marketing will be used interchangeably and will be taken to include the
activities of e-marketing. The definition of social media marketing includes using the social media
platforms and its related technologies and features to help achieve marketing objectives in conjunction
with other marketing communication tools.
1.2.2 SMEs and technology adoption barriers
SMEs have a significant contribution to many countries. Literature regarding the contribution of SMEs
to economy covered vast and wide facet. It has been found that the new job creation, contribution to
gross national production (GDP) and production of innovation in technology are some of the major
SME contribution in every country. SMEs raise the standards of living for their families and also play a
crucial task in contributing towards a stable and sustainable social and economic community
environment (Samujh, 2011). Over the past few decades, numerous studies have been conducted by
policy makers, academicians, and business consultants to investigate the types of business problems
encountered by SMEs. Many of the studies have been able to identify not only the types of problems
small business face, but also the relative significance of these problems. In Malaysia, the problems faced
by SMEs are the lack of sales and marketing to the use out-of-date technology in their operation. SMEs
has uniqueness with limited resources, capital, human and technology.
1.3 Objectives
1. To know the barriers in technology in Small companies
2. To study the marketing strategies adopted by Small companies
3. To enquire the level of education of their employees
4. To know the types of advertisement done in SMEs to promote their products/services
5. To know the barriers in finance in adopting Social media marketing
2.Literature Review
2.1.1 According to Inf Technol Manag (2017), the main objective of this study was to understand why
and how small businesses adopt social media for business purposes. Therefore, the interviews focused
on the drivers of small businesses to adopt social media and on the impact of social media adoption on
business performance.. After the interviews, we carefully analyzed the transcripts using content analysis
as a main method. Two researchers experienced in qualitative content analysis coded the content
independently. Differences and inconsistencies in coding were later compared, discussed, and resolved
to reach a specific level of consistency and interrater reliability (90 %). A third researcher also reviewed
the coding results for the purpose of accuracy and validation. Overall, we found that 20 out of the 27
small businesses adopted social media; two small businesses had adopted Facebook previously, but had
stopped using it at the time.
2.1.2 According to Journal of Small Business, 2013, the purpose of this paper is to address the current
deficit in the literature on social media adoption within a small to medium-sized enterprise (SME)
context. The authors adopt an action research methodology and through in-depth case analysis of eight
SME cases aim to develop a theoretical model through which more effective social media adoption by
SMEs can be better understood. Design/methodology/approach – In this study a deep and enduring
engagement between the research team and eight small to medium-sized firms over a period of two
years, from 2009-2011, informed the emergence and development of a theoretical model. In this
research, using an action research methodology, the authors examine the nature and character of the
challenges being faced by SME owner/managers as they consider adopting and utilising social media for
commercial advantage and the evolution of the model through this engagement. Findings – The insights
gained from the case companies indicated a variety of different approaches to social media adoption
which often varied by organisational context and staff competency level. A universally common
motivator for thinking about social media adoption was that the case companies shared an anxiety were
they not to adopt what was perceived to be a new essential tool for business growth. Little evidence was
found in the cases of such adoption behaviour being driven by a purposeful or thoughtful agenda through
which value could be added to the customer experience. Research limitations/implications – Implications
cluster around issues of customer orientation in the case companies under study and the extent to which
owner/managers are seduced by the capability of new technology without thinking through the way in
which such new technology might add value to customers. This raises an imperative for further research
in the specific area of social media adoption behaviours in SMEs and more generally at the
marketing/technology interface. Limitations of this study include the relatively small sample and the
locus of the study being confined to Ireland.
2.1.3 According to Levent Calli and Lillian Clark(2015), Large scale Enterprises(LSEs) successfully
adopt social media to gain competitive advantage through creation of brand awareness, promotion of
customer satisfaction and loyalty, and increased website traffic and sales. SMEs on the other hand are
often hampered by financial and other resource constraints, which potentially limits their ability to gain
to successfully integrate social media into their business practices, particularly in their marketing
activities. However given the significant role of SMEs to adopt in order to gain competitive advantage,
and how SMEs can overcome the factors that limit their ability to deploy their strategies. In developing
this understanding, it must be recognisedthat SMEs are highly heterogenous in nature, while business
practices dependent not only on industry but also on the size of the enterprise. The barriers to adopting
social media by SMEs needs to be identified so that relevant and specific initiatives can be developed to
assist these enterprises in identifying and exploiting the opportunities Social Media can bring to their
business.
2.1.4 According to Christian Meske and Stefan Stieglitz in recent years, social media have been
increasingly adopted in enterprises. Enterprises use social media as an additional way to get in contact
with their customers and support internal communication and collaboration. The purpose of this paper is
to examine the adoption, usage, and benefits of social media in SMEs as well as potential concerns that
may prevent a wider adoption of social media in SMEs. Therefore, a survey of decision-makers in
German SMEs was conducted. Findings based on 190 responses indicate that SMEs started to use
internal social media (e.g., wikis, blogs) in order to support collaboration among employees and to
improve knowledge management. Various definitions were given for social media. Social media are
often defined as an entity that ‘‘consists of online technologies, practices or communities that people use
to generate content and share opinions, insights, experiences and perspectives with each other’’. In
general, social media is mainly about participation, sharing, interaction, and collaboration using online
technologies. However, to engage people in social media activities such as discussion, sharing, and
collaboration on an ongoing basis, the content found on social media needs to be refreshed quite
frequently. Common types of social media include collaborative projects (e.g., Wikipedia), blogs and
microblogs (e.g., Twitter), content communities (e.g., YouTube), social networking (e.g., Facebook),
virtual game worlds, and virtual social worlds. Among various social media tools, Facebook and Twitter
are the most widely used by businesses.
2.1.5 According to Wu He, Feng-Kwei Wang, Yong Chen1,Shenghua Zha Social media has become an
online platform for businesses to market products/services and to manage customer relationships.The
main objective of this study is to understand why and how small businesses (i.e., small non-
manufacturing enterprises) in the U.S. adopt social media, and for which business purposes.Among all
social media networks, Facebook is dominant in attracting and retaining customers in the retailing
industry . Small businesses often have to rely on word of mouth in order to attract new customers. A
study by Stokes and Lomax indicated that the most important sources of gaining new customers for
small businesses are recommendations from existing customers. A recent survey found that the biggest
challenge for small business owners is to reach customers effectively with limited resources. Since small
businesses often face resource constraints, the use of social media can be an attractive tool to enhance
marketing and customer outreach at little cost. Also, small businesses usually have ‘‘a flat structure and
an organic, free-floating management style that encourages entrepreneurship and innovation’’ , which
makes small businesses more informal and flexible in decision-making and more responsive to new
technology adoption. However, while more and more small businesses are exploring and exploiting
social media for business purposes , there is inadequate understanding on effective social media adoption
strategies for small businesses.
2.1.6 According to MICHAELIDOU, N., SIAMAGKA, N.T. and CHRISTODOULIDES social media
use in corporate context has been subject to considerable attention. There are a growing number of
studies focusing on the use of social media by companies. In this section, we review relevant literature
on the internal use in corporate context. The adoption and use of internal social media applications in
corporate context, widely termed as “Enterprise 2.0”, has recently generated a lot of research interest.
Several case studies on social media adoption and use in enterprises show a diverse area of application in
Enterprise 2.0 implementations. However, the majority of previous works, focused on studying specific
social media applications in enterprise context. Among others, enterprise microblogging has attracted a
lot of research attention recently. In a case study about the early adoption and use of Yammer - an
enterprise microblogging platform - in a Fortune 500 company, Zhang et al.found that users vary in their
posting activities, reading behaviors, and perceived benefits. The study also identified barriers for
adoption, such as the noise-to-value ratio paradoxes. Companies have recently started to use internal
social networking platforms. Richter and Riemer studied three cases of large, knowledge-intensive
organizations, which introduced corporate social networking sites. They identified three modes of use of
64 C. Meske and S. Stieglitz corporate SNS including identifying experts, building personal context and
fostering existing relationships. Another important social media application, which has been adopted by
an increasing number of companies are enterprise weblogs. For example, enterprise weblogs are often
used as project logs or for communication between the CEO or head of marketing and the company’s
customers. Efimova and Grudin examined the use of blogs as personal communication and knowledge
management tools within Microsoft and identified the benefits to both individuals and organizations. As
SMEs face new challenges in a complex and dynamic competitive environment, they need to cooperate
due to their restricted resources and limited capacities.
2.1.7 According to Burim Prenaj(2016), The aim of his research paper was to improve the
understanding of the benefits and challenges of Social Media Marketing usage by SMEs through
examining and
Structuring existing knowledge on social media marketing and its application, but
in this paper it is discussed from SMEs point of view. Another goal of this study is
to research how SMEs can use social media to benefits their businesses and also to
Explore challenges and benefits that SMEs face when they decide to use social media
as a marketing ton this paper, we have analyzed Social Media Marketing benefits and challenges. The
qualitative approach is a method used widely in social sciences; it enables us to study the phenomenon
by using qualitative data expressed in words and theory (Pa$ on & Cochran, 2002). Therefore, pursuant
to this, it is evident that the paper applies the qualitative approach as a method to realize the study, as it
compares and analyses the work of many authors to reach the objectives of the research
2.1.8 According to Blerta Rugova (Faculty of Economics at ‘Farma ’College, Pristine): In 1978, before
the World Wide Web (WWW) technology came, for the first time has been presented social media in the
so called BBS (Bulletin Board Systems), which was an application that has made possible the change of
information within the already existing networks and has been developed by Ward Chrisensen and
Randy Suess for the Department of Defense of the United States.Until the discovery of social media we
have had a chance to see an advertising on TV for example and get informed about the product, but we
never had the chance to express our opinion on that product and change information between ourselves
about that product. So, we can say that the term “social media” has to do with how all the participants
change their information between themselves via the Internet.
2.1.9 According to Sisira Neti et al (2011) when you can share your opinion, photos, content, views and
when people can communicate with each other is known as ‘social media’. She defines the social media
by dividing into 2 parts, “social” which has to do with the communication people do with each other and
the “media” is defined as the way how we send information into different channels.
According to the her, Facebook is seen by small companies as the best opportunity to communicate with
consumers (83%), 92% of Companies use the most of all available social media networks Facebook, and
based on the data from the second half of 2016, Facebook has 1.71 billion active users per Month
(statista.com). An active user is everyone who have accessed the site in the last 30 days for SMEs. We
have also defined the different types of Social Media channels and their role . Depending whether a
SME is developing its Social Media presence on a variety of channels channel or only on a couple of
them, the SME benefits can vary in terms of Value and volume where like opening a Facebook page or
creating a page on twi$er or other sites. . But these limitations and risks should not serve as hold back
for Social Media Marketing adoption, even though, those limitations and risks may seem scary and
challenging, they are only precautions to be taken on time in order to achieve complete notable success
in the Social Media strategy.
2.2 Theoretical foundations for social media
Our literature review identifies several theories including ‘‘word of mouth’’, social exchange theory, and
social capital theory that pave the way for social media research and applications. For example, social
capital theory is often used to understand social media adoption by businesses. First, traditional
communications theory considers ‘‘word of mouth’’ (WOM) as having a powerful influence on
consumer behavior. The WOM theory suggests that the information communicated by friends and
relatives is construed as more credible, honest, and trustworthy than that generated by marketers because
the communicators are not compensated for the referral. Social media allow consumers to access
personally meaningful critiques, not only from friends and relatives, but also from strangers. The
messages posted on social media by consumers are perceived to be more reliable, credible, and
trustworthy than firm-initiated communications. Second, social exchange theory states that individuals
engage in social behaviors based on each actor’s subjective cost-benefit assessment. They communicate
or exchange with each other contingent upon reciprocal actions from the other communicating party.
This theory mainly applies a cost-benefit framework for comparing behavioral alternatives in order to
explain how individuals communicate with each other, how they form relationships, and how they
develop communities through communications and exchanges. Social media networks such as Facebook
or Twitter in this regard become an ideal platforms for social exchanges. The cost-benefit assessment of
a user determines what and how the user will participate in social media activities. Third, social capital
theory holds that social capital affects a venture’s performance and ability to accumulate financial
capital. Social capital has three main components: the resources embedded in a social structure, the
accessibility of these resources, and the ability to summon these resources when needed state that social
capital ‘‘lies in the connections between people and the potential for individuals to access resources
embedded in their network of social ties, as opposed to the resources directly held by those individuals’’
(p. 7). Social capital is also regarded as a competitive advantage of a firm. Therefore, firms are motivated
to build their own social media sites using Facebook or Twitter to facilitate the creation and exploitation
of their social capital
Conceptual Framework

Management Barriers
.

IT Barriers

Finance Barriers Intent to use Social Media

Staff Barriers

Environment Barriers

Industry Sectors
Research Methodology
3.1Research Design-
The research design used is Descriptive design because it can be statistically tested and it is more
structured. Descriptive studies are used to describe various aspects of the phenomenon. It is used to
describe characteristics and/or behaviour of sample population.
3.2 Sample Design
3.2.1 Population- For conducting this research and getting accurate scenario of small companies, we
need to survey all types of SMEs. We take a population of 200 people from various Small different
companies.
3.2.2 Sample Frame
The research will be conducted through random sampling. In this technique, each member of the
population has an equal chance of being selected as subject. The entire process of sampling is done in a
single step with each subject selected independently of the other members of the population.
3.2.3 Size
There will be random sampling with 100 selected out of population.
3.3 Data Collection Method
Data will be collected through a questionnaire which is a primary source of data collection. A
questionnaire is a research instrument consisting of a series of questions for the purpose of gathering
information from respondents. we would also like to conduct interviews with various small businesses to
find out why and how small businesses adopt social media, and for what purposes.
References
1.He, W., Wang, F. K., Chen, Y., & Zha, S. (2017). An exploratory investigation of social media
adoption by small businesses. Information Technology and Management, 18(2), 149-160
2.Durkin, M., McGowan, P., & McKeown, N. (2013). Exploring social media adoption in small to
medium-sized enterprises in Ireland. Journal of Small Business and Enterprise Development, 20(4), 716-
734.
3.Çalli, L., & Clark, L. (2015, July). Overcoming SME barriers to gaining competitive advantage
through social media. In Proceedings of the 2nd European Conference on Social Media (p. 59).
4.Bharadwaj A, El Sawy OA, Pavlou PA, Venkatraman N (2013) Digital business strategy: toward a
next generation of insights. MIS Q 37(2):471–482
5.Boyd DM, Ellison NB (2007) Social network sites: Definition, history, and scholarship. J Comput
Mediat Commun 13(1):210–230
6.Seebach, C.: Searching for Answers - Knowledge Exchange through Social Media in Organizations.
In: Proceedings of the 45th Hawaii International Conference on System Sciences, pp. 3908–3917 (2012)
7. Kaplan, A., Haenlein, M.: Users of the world, unite! The challenges and opportunities of Social
Media. Business Horizons 53(1), 59–68 (2010)
8. McDonald, M.P., Aron, D.: Gartner: Amplifying the Enterprise: 2012 CIO Agenda (2012)
9. Parveen, F.: Impact of Social Media Usage on Organizations (2012). In: Proceedings of PACIS 2012,
paper 192 (2012)
10. Bughin, J., Byers, A.H., Chui, M.: How social technologies are extending the organization. The
McKinsey Quarterly (2011), http://www.mckinseyquarterly.com/
How_social_technologies_are_extending_the_organization~2888 (accessed June 10, 2012)
11.Barber, P. a. (2009). The Power of Word-Of-Mouth marketing. American Libraries.
Barclays Bank. (1997). Barclays Review. (1997) Marketing and the small fi rm. Barclays Review.
12. He, W., Wang, F.-K., Chen, Y., & Zha, S. (2015). An exploratory investigation of social media
adoption by small businesses. Information Technology and Management, 18(2), 149–160.
doi:10.1007/s10799-015-0243-3