THE EFFECT OF USING SOCIAL MEDIA NETWORKS

FOR MARKETING ON SALES GROWTH IN SMALL AND

MEDIUM ENTERPRISES IN NAIROBI KENYA:

A CASE OF LUXE AND ALLURE EVENTS

BY

KINUTHIA SHARON WAKONYO

UNITED STATES INTERNATIONAL UNIVERSITY-

AFRICA

SUMMER 2019
THE EFFECT OF USING SOCIAL MEDIA NETWORKS
FOR MARKETING ON SALES GROWTH IN SMALL AND
MEDIUM ENTERPRISES IN NAIROBI KENYA:

A CASE OF LUXE AND ALLURE EVENTS

BY

KINUTHUA SHARON WAKONYO

A Project Report Submitted to the Chandaria School of Business in Partial

Fulfillment of the Requirement for the Degree of Masters of Business
Administration (MBA)

UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA

SUMMER 2019
 STUDENT’S DECLARATION

I, the undersigned, declare that this is my original work and has not been submitted to any
other college, institution or university other than the United States International
University - Africa in Nairobi for academic credit.

Signed: ____________________________ Date: ____________________

Kinuthia Sharon Wakonyo – (ID: - 641354)

This research project has been presented for examination with my approval as the
appointed supervisor.

Signed: ____________________________ Date: ____________________

Dr. Peter Kiriri

Signed: _____________________________ Date: ____________________

Dean, Chandaria School of Business

ii
 COPYRIGHT
©Copyright 2019 Kinuthia Sharon Wakonyo

All Rights Reserved

iii
 DEDICATION

I dedicate this paper to the Almighty God, my mother Joyce Wangari Kinuthia and to my
sister Georgina Wambui Kinuthia, for their continued support during my study and in
preparation of this project.

iv
 ACKNOWLEDGEMENT
I acknowledge the presence of God the Almighty in my life and for his mercy for giving
me the strength and wisdom to have been able to prepare for the execution of this
research proposal and seeing me through my academic life.

In addition, my sincere gratitude goes to my academic mentor and project supervisor, Dr.
Peter Kiriri for his guidance, advice and effective timely response at each stage in the
preparation and execution of this research paper for examination. Thank you for your
support and inspiration.

I would also like to thank my loved ones, my dear family and friends for their
understanding, resource input, endless love and backing during the course of the Research
Proposal accomplishment to the end.

Not to forget the directors, managers, business owners, staff members and customers I
interacted with during this research for without their concern, the achievement of this
research would not have been possible.

Last but not least my classmates for the all the support and understanding and for giving
me time to study the course. Thank you once again.

May God bless you All.

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 ABSTRACT
This study aimed to establish the effect of using social media networks for marketing and
how it affects the growth of sales in small and medium enterprises (SMEs) in Nairobi,
Kenya. The study below used three variables which were Cultivation of Customer
Relations, Marketing Exposure given to the Business and Increase in sales growth. The
study sought its information from Luxe and Allure Events.

The study used descriptive research design and data collection was by use of
questionnaire. The study’s target population was 699 businesses, ranging between small
and medium enterprises in Nairobi, where respondents were selected using stratified
random sampling techniques. The sample size included 330 respondents. The findings of
this study were analyzed and presented through tables and with the use of qualitative and
quantitative techniques.

The findings of this study showed that the use of social media platforms for
creating/cultivation customer relationships, the exposure given to businesses by the use of
social media networks and marketing through social media, has led to an increase in sales
growth. It has a positive relation with growth in sales for the SMEs. Social Media
marketing has become an important player in the marketing mix as an effective way to
improve on customer relations and has led to improved customer satisfaction, better
professional relationships and increased effectiveness to getting customer feedback and
increasing customer satisfaction.

Marketing has been a challenge for small and medium enterprises (SMEs) around the
world due to its cost. The study shows how using Social Media networks as a key
marketing too has exposed SMEs and given them in a global platform for them to market
to their current and potential customers. It has provided an effective inter-organizational
integration between businesses and suppliers and consumers with minimal costs.

Businesses that neglect social media networks in marketing their products and services
and stick to what they know risk losing their market share to competitors. Social media
being an untapped source of potential platform to deliver sales, business need to target the
right audience and get them highly engaged with their message. Businesses that best
prioritize their social media marketing strategy excel in their online sales.

Amongst the number of questions this research aimed to answer, the questions adopted
for the study were: the effect of social media marketing and the impact it has had in

vi
businesses and the challenges faced by business when it comes to social media marketing.
To assist in answering these research questions, the study used a list compiled from the
Nairobi small-business which comprised of 399 small-sized companies. This research
looked closely at Luxe and Allure Events, located within Nairobi, Kenya and how it has
benefited in terms of sales growth and the impact at which Social Media marketing has
contributed to in creating awareness of their business.

It was concluded that proper utilization of social media networks to market a business
product as services results to an increase in sales growth. Business owners, managers and
their marketing team should first and foremost develop a strategy and identify their long-
term and short-term goals on how they would like their potential consumers to understand
their products and buy it via social media avenues. By utilizing social media boosts for
marketing purposes and to have a greater reach; such as Facebook campaigns and
Instagram promotions, businesses are able to successfully track everything relevant that
matters, from the cost per sale to the total revenue.

It was recommended that management should fully maximize on using social media
networks as the most cost-effective mode of marketing and increasing customer reach
hence increasing sales growth in the businesses. By using different social media
platforms, managers can incrementally boost sales without spending too much money. To
reap the rewards of social media advertising, one needs to be active on more than one
social media networks, and has to be constantly engaging with prospects, and push out the
right messages to communicate with current and potential clients.

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 TABLE OF CONTENTS
STUDENT’S DECLARATION ........................................................................................ii
COPYRIGHT ....................................................................................................................iii
DEDICATION................................................................................................................... iv
ACKNOWLEDGEMENT ................................................................................................. v
ABSTRACT ....................................................................................................................... vi
LIST OF TABLES ............................................................................................................. x
ACRONYMS AND ABBREVIATIONS ......................................................................... xi
CHAPTER ONE ................................................................................................................ 1
1.0 INTRODUCTION .................................................................................................... 1
1.1 Background of the Study ............................................................................................ 1
1.2 Statement of the Problem ........................................................................................... 5
1.3 General Objectives ..................................................................................................... 7
1.4 Specific Objectives ..................................................................................................... 7
1.5 Significance of the Study ........................................................................................... 7
1.6 Scope of Study ........................................................................................................... 8
1.7 Definition of Terms .................................................................................................... 9
1.8 Chapter Summery ..................................................................................................... 10
CHAPTER TWO ............................................................................................................. 12
2.0 LITERATURE REVIEW ...................................................................................... 12
2.1 Introduction .............................................................................................................. 12
2.2 Usage of Social Media Networks to Cultivate Customer Relationships .................. 12
2.3 Exposure given to Small and Medium Enterprises by use of Social Media in
Nairobi, Kenya. .............................................................................................................. 19
2.4 Social Media Marketing and its Effect in Sales Growth .......................................... 24
2.5 Chapter Summary ..................................................................................................... 30
CHAPTER THREE ......................................................................................................... 31
3.0 RESEARCH METHODOLOGY ......................................................................... 31
3.1 Introduction .............................................................................................................. 31
3.2 Research Design ....................................................................................................... 31
3.3 Population and Sampling Design ............................................................................. 31
3.4 Data Collection Methods.......................................................................................... 33
3.5 Research Procedures ................................................................................................ 34
3.6 Data Analysis and Methods...................................................................................... 35
3.7 Chapter Summary ..................................................................................................... 36

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CHAPTER FOUR ............................................................................................................ 37
4.0 RESULTS AND FINDINGS ................................................................................. 37
4.1 Introduction .............................................................................................................. 37
4.2 General Information ................................................................................................. 37
4.3 Usage of Social Media Marketing to build Customer Relationships and Exposing
and Creating Awareness for SMEs. ............................................................................... 40
4.4 Extent to which Social Media Marketing has brought about an Increase in Sales
Growth for SMEs in Nairobi, Kenya. ............................................................................ 46
4.5 Correlation Test ........................................................................................................ 51
4.6 Challenges of Social Media Marketing Adoption by SMEs .................................... 54
4.7 Chapter summary ..................................................................................................... 56
CHAPTER FIVE ............................................................................................................. 57
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS ....................... 57
5.1 Introduction .............................................................................................................. 57
5.2 Summary .................................................................................................................. 57
5.4 Conclusion................................................................................................................ 64
5.5 Recommendations .................................................................................................... 65
REFERENCES................................................................................................................. 68
APPENDICES .................................................................................................................. 74
APPENDIX I: NACOSTI LETTER ........................................................................... 74
APPENDIX 11: INTRODUCTORY LETTER ......................................................... 75
APPENDIX III: QUESTIONNAIRE ......................................................................... 76

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 LIST OF TABLES

Table 4.1: Business Distribution .......................................................................................... 36

Table 4.2: Number of Employees’ Distribution ................................................................... 37

Table 4.3: Annual Turnover Distribution ............................................................................ 37

Table 4.4: Operational Duration .......................................................................................... 38

Table 4.5: Presence of Marketing Department ................................................................... 38

Table 4.6: Extent to which SMEs Engage Customers via Social Media Marketing ............ 39

Table 4.7: Extent Social Media Marketing is Used to Obtain Feedback from Customers .. 40

Table 4.8: Extent of Social Media Marketing Usage as a Source of Information for

Customers ............................................................................................................................. 41

Table 4.9: Extent to which the Usage of Social Media Marketing Gives SMEs a

Global Reach......................................................................................................................... 42

Table 4.10: SMEs Activity on the Same Social Media Platforms as their Customers......... 42

Table 4.11: Extent Personalized Content is Used to Create Awareness for SMEs .............. 43

Table 4.12: Impact of Social Media Marketing in Cultivating Customer Relationships

and the Marketing Exposure it Gives SMEs ......................................................................... 44

Table 4.13: Impact of Promotions and Discounts Displayed on Social Media on Sales

Increase ................................................................................................................................ 45

Table 4.14: Impact of Social Media Marketing Campaigns on Sales Growth ..................... 46

Table 4.15 Impact of Social Media Marketing on the Increase in Revenue in SMEs.......... 47

Table 4.16: Measuring Performance of SM Marketing Campaigns to Improve Sales ....... 48

Table 4.17: Impact of SM Marketing in Providing Greater Access and Effective Way

To Reach Customers for SMEs in Improving Sales Growth ................................................ 50

Table 4.18: New Arena/Platform for SMEs to Grow Their Sales........................................ 51

Table 4.19: Correlation Test ................................................................................................ 52

Table 4.20: Social Media Marketing Adoption Challenges ................................................. 53

Table 4.21: Challenges in Social Media Marketing on Increasing Sales Growth ................ 54

x
 ACRONYMS AND ABBREVIATIONS

CRM - Customer Relationship Management

ICT - Information and Communication Technology

IT - Information Technology

KEPSA - Kenya Private Sector Alliance

KNBS - Kenya National Bureau of Statistics

OBCs - Online Brand Communities

OECD - The Organisation for Economic Co-operation and Development

PPC - Pay Per Click

ROI - Return on Investment

SEO - Search Engine Optimization

SME - Small and Medium Enterprise

SMM - Social Media Marketing

SPSS - Statistical Package for Social Science

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 CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
For every business that exists, their main goal or aim is to grow in terms of market size
and assets. In a competitive market, businesses have to ensure they attract and retain
customers in order to remain profitable. Jobber and Ellis-Chadwick (2013) noted that the
marketing concept is based on the basic principle that its implementation helps in
business performance. They also stated that marketing is not an abstract concept, but
rather, an acid test to the impact that its use has on important corporate indices such as
profitability and market share. Small and medium enterprises as business entities need to
grow to ensure survival and be able to compete in the market, especially where they are
competing with large enterprises. Ayyagari, Beck and Demirgüç- Kunt (2007) in their
study stated that in both developing countries and advanced economies, small and
medium enterprises contribute roughly 60 percent of the manufacturing sector’s formal
employment.

The growth of small and medium enterprises in any country is just as important as the
larger enterprises since it implies a growth in economy and therefore more incentives
need to be made to grow the sector. One of the factors that are important in the growth of
SMEs is sales of good and services, which generates revenue. This can be attained by
SMEs marketing their products and services so as to create awareness and make their
products and services preferred, as compared to that of competitors. Therefore, depending
on the size, resource availability and life-cycle stage of a company, marketing objectives
will differ, hence different marketing strategies used by different businesses.

Jain (2014) stated that large enterprises usually have huge opportunities due to their large
marketing budgets, enabling them to be easily visible through multi-channel marketing
effort. On the other hand, due to limited cash resources, small and medium enterprises are
hugely limited with the marketing possibilities on how they can gain visibility. SMEs are
very much reliant on the word of mouth marketing and maintain their efforts rotating
around limited avenues which they can afford, hence restraining their potential for
growth. Also, small business owners implement tailor-made marketing practices to
achieve their business goals and as O’Donnell (2011) indicated, the process used in
engaging marketing activities by small business owners is usually unplanned, informal,

1
and employ a bottom-up approach. Studies indicate that the size of a firm or business is
likely to affect the implementation of digital marketing channels, with small businesses
being the slowest adopters (Bordanaba-Juste, Lucia & Polo, 2012). Large businesses are
more likely to have the necessary resources and knowledge to implement new digital
channels and tools successfully (Barnes, 2012).

Many small and medium enterprises are usually in the growth stage of the life cycle and it
is at this stage that customer attraction and retention is important and therefore there is
need to have a marketing objective of having effective reach to customers. For a long
time, successful small businesses have succeeded via word-of-mouth in order to market
their products and services, but with the growth of digital marketing, the main logic of
marketing has shifted from exchange of goods, and has moved towards service provision,
interactivity, connectivity and client relationships (Vargo & Lusch 2004). This shift has
been enabled by innovations in technology, new marketing channels, and constant media
environment changes (Bhattacharya & Bolton, 2000).

According to the Communications Authority of Kenya (CAK) (2016) report, the number
of internet users in Kenya has grown from 29.6 million in the fourth quarter of 2017 to
31.9 million in the first quarter of 2018. Consequently, the section of the Kenyan
population who access the internet services reached 74.2 percent up from 69.0 percent
that was recorded in the fourth quarter in 2016. Also, towards the end of the first quarter
of 2017, mobile phone penetration stood at 88.1 percent with 37.8 million subscribers up
from 36.1 million users in the fourth quarter of 2016. These statistics show a great
potential in customer reach by marketers purely through digital means here in Nairobi,
Kenya.

There exist various definitions of marketing. The American Marketing Association

defines marketing as the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large. Coping with these exchange processes calls for a
considerable amount of work and skill. It is involved in ten kinds of entities which are:
goods, services, experiences, events, persons, places, properties, organizations,
information, and ideas.

Over the years, the concept of marketing has evolved from the production concept, to the
product concept. This was followed by the selling concept which holds that consumers, if

2
left alone, will not adequately buy an organization’s products. This concept evolved to the
marketing concept that has been practiced for many years, and currently, companies have
embraced the holistic marketing concept which is based on the development, design, and
implementation of marketing programs, processes, and activities that recognize their
breadth and interdependencies (Kotler & Keller, 2012). The growth of internet and digital
channels has made marketing grow in leaps and bounds in terms of customer reach, the
speed with which it reaches the customer, and how a business can interact with its
potential customers on a global platform bringing about rapid marketing.

There have been various concepts and definitions have come up in previous studies with
regards to digital marketing, especially those focusing on social media marketing. One
definition according to Gregorio (2016) is that it is marketing that utilizes electronic
devices (computers) such as personal computers, smartphones, mobile phones, and game
consoles to involve the stakeholders to be part of the process. Digital marketing
techniques have the ability of copying many marketing communications aspects and
traditional media channels and, in so doing; they are able to extend the marketing mix.
Digital campaigns are more specific and are an element of the marketing communication
mix. However, the boundaries are blurred since digital technology is not only a way of
communication but it is also a technique of distribution. The flexibility provided by the
technology implies that it is highly complex. Most businesses today operate online
(Jobber & Ellis-Chadwick, 2013).

Digital technologies are being more and more significant in defining many economic
activity sectors. Because of the high interconnectivity levels, the internet has been
compared to the wheel and the airplane in terms of its ability to impact the future of
business operations and development. The internet, consequently, has given many
companies an incentive to rethink the role of technology. Findings already indicate the
extent of its global impact (Jobber & Ellis-Chadwick, 2013). Social media channels are
also able to provide ways and means to personalize the media content; through the use of
social media networks and customers are able to create or shape the form of brand
communication, such as through stating their network/channel and content preference.

Digital technology is seen to impact business models, the type of marketing tools and
media usage, which all communication agencies must be able to deliver. There has,
therefore, been a major move away from previously traditional communication tools and

3
businesses are looking for ways in which service providers are able to adequately
articulate their digital marketing plans (Singh, 2011). This change in emphasis indicates
that marketers should have customer expectations and how they can use the technology to
achieve their marketing goals.

Small and medium enterprises (SMEs) have been defined based on various aspects,
mostly turnover and number of employees. The Organization for Economic Co-operation
and Development (OECD) (2005) indicated that small and medium-sized enterprises
(SMEs) are non-subsidiary, independent firms that employ less than 250 employees,
although the figure varies across countries. According to Ayyagari et al. (2007), majority
of jobs are provided by SMEs in many economies globally. SMEs in OECD countries
which have less than 250 employees employ more than 60 percent of the formal work
force (Dietrich, 2010). With specific reference to Kenya, the Micro and Small Enterprises
(MSE) Brush (2009) defines small enterprises as those firms, trade, service, industry or
business activities that have an annual turnover ranging between Ksh.500,000 and Ksh.5
million, and have employed between 10 and 50 people. In the manufacturing sector,
investment in plant and machinery ranges between Ksh.10 million and Ksh.50 million
and, the farming and service sectors have registered capital of the enterprise ranging
between Ksh.5 million and Ksh.25 million.

In Kenya, SMEs that constitute about 75 percent of the businesses, have 4.6 million
people employed, accounts for 87 percent of newly-created jobs, and contributes around
18.4 percent of the Gross Domestic Product (KNBS, 2013). Prior studies from
industrialized and developing countries indicate that SMEs provide an important
contribution to economic development, since they are a huge channel for employment and
income creation (OLECD, 2004). The small and medium enterprise (SME) sector is
considered important to the economic structure in many developed and developing
countries. They are essential to the impetus of both regional and national economic
growth since they generate employment, contribute to growth of the economy and are
usually transitional towards becoming larger businesses.

In the wake of globalization and trade liberalization, there are increased opportunities to
access new markets and this provides an opportunity for SMEs to expand their market,
but also a challenge since they are exposed to large multinationals in their own market

4
(OECD, 2004). This provides an opportunity for SMEs to also access the new markets
through marketing their products and services thanks to the enhancement of global reach.

Large organizations, also referred to as business firms or big business or corporates,

involve a large-scale corporate-controlled financial or business activities (Ryan & Jones,
2006). In order to continue to stay competitive in today’s electronically savvy world,
most corporates have created and maintained a solid online presence and have a digital
and social media marketing team.

This requires much more than launching a website and profiles on social media platforms,
because competition in the online world is fierce. As managers of a firm, one must be
aware that nearly every single one of their competitors has added online marketing to
their marketing strategy, many of whom turn to digital marketing companies for
assistance. Dietrich (2010) indicated that there are at least 30 recognized digital marketing
agencies in Kenya, quite a number of digital and social media marketing companies that
assist a number of large organizations who have outsourced their services. Some large
organizations have an in-house digital and social media marketing team. Managers must
determine which part of their digital marketing strategies the employees have the skill set
to successfully accomplish.

1.2 Statement of the Problem

Large enterprises/organizations have certain inherent advantages over smaller companies.
They are usually more established and have greater amounts of funds and resources.
Larger companies also have more established customers. Hence, they can enjoy more
repeat business, which produces higher sales and profits. The importance of SMEs in both
developed and developing countries cannot be overemphasized as it provides the highest
employment in an economy.

The sustainability of the SMEs in the economy can be achieved when they make sales
and become profitable as they are in the same competitive market as large organizations.
Making consumers aware of their products and services requires marketing and the
traditional methods of marketing have been seen to be beyond the reach of SMEs.
Therefore, social media marketing has been seen as an alternative for the SMEs to reach
the market to provide awareness about their goods and services. However, SMEs need to
know the digital techniques to use, how to maximize their customer reach and also know

5
how to measure the impact of their social media marketing, as it is the most effective of
all digital marketing platforms.

Large organizations have an advantage on the other hand when it comes to traditional
marketing, however, as every organization enthusiastically pursues social media
marketing agenda in Kenya, what is apparent is that there are some serious short-comings
to how this is being done, at the moment. Indeed, the use of social media networks as part
of digital marketing does promise a whole lot of value and a solid return on investment
(ROI) goes the thinking of many of Kenya’s marketing cognoscenti – but this research
goes on to question if social media marketing really works as well as it could amongst the
SMEs in Nairobi, Kenya.

The marketing aspect of SMEs is different to that of large corporations, therefore making
the adoption of social media marketing to be a greater challenge for them (Lipiäinen &
Karjaluoto, 2013). The adoption of social network channels is likely to be more
successful in large businesses since they are more likely to have the necessary resources
and knowledge compared to small businesses (Barnes et al., 2012). Ochieng’ (2016)
through a Facebook research, it indicated that Kenyan entrepreneurs are some of the most
active small businesses that generate revenue through advertisements and product/service
promotions on Facebook.

The research continued and singled out businesses that, through Facebook advertising,
have expanded in East Africa. They include children furniture brand, FunKidz and an
online restaurant guide by the name Eat Out. Currently, a number of both large and small
businesses have embraced social media marketing and it would be important to know its
impact in terms of sales growth which translates to profitability. Large companies have
embraced social media marketing as an essential part of digital marketing to compliment
traditional marketing, but no accurate information is present with regards to social media
usage by SMEs in Nairobi, Kenya.

The impact of social media marketing on SMEs in Kenya is what this study focused on.
Various studies have been done in regards to digital marketing and how they have an
effect on companies. This study narrowed down to the usage of social platforms such as
Facebook, Instagram and Twitter. Onyango (2016) analyzed the impact of social media
marketing strategies on the performance of flowers exporting firms in Kenya, while
Wanjuki (2014) did a study on impact of digital marketing on customer service at

6
Barclays Bank of Kenya. The study done by Onyango (2016) analyzed the horticulture
industry and also used multiple linear regression for analysis, while the study done by
Wanjiku (2014) used case study of a bank and analyzed using content analysis. This study
used descriptive cross-sectional research design of SMEs using Kruskal-Wallis test
analysis since the data was ordinal in nature. The gap in the identified research problem
and the previous research done has led the study to formulate the following research
question: what is the effect of using social media networks for marketing on the sales
growth of SMEs in Nairobi, Kenya? The study also looked to see if the utilization of
these social networks were being used by the SMEs.

1.3 General Objectives

The study aimed to determine the effect of using social media networks for marketing on
the growth of sales in both Small and Medium Enterprises in Nairobi, Kenya.

1.4 Specific Objectives

The specific objectives of the study were to:

1.4.1 The impact of using of social media networks to build customer relations in SMEs
within Nairobi, Kenya.
1.4.2 To identify the level of marketing exposure SMEs, receive through social media
marketing in Nairobi, Kenya.
1.4.3 To examine the extent social media marketing has brought about the increase in
sales growth for SMEs in Nairobi, Kenya.

1.5 Significance of the Study

1.5.1 Stakeholders

This study would be of relevance to several stakeholders and groups. The study is
valuable to SMEs in Kenya and also outside Kenya. Managers and owners are able to
identify social media networks/platforms as part of digital marketing methods to use and
to figure out how potential customers can be reached and be able to maximize on their
social media marketing strategies. This in turn maximizes their sales and businesses will
be able to grow and become more competitive.

1.5.2 Market Researchers and Academics

The study could be valuable to marketers who are thereby able to know how they can be
able to integrate Social Media Networks as part of digital marketing to the existing

7
traditional marketing in their organizations. The impact of social media marketing in
SMEs will be similar to that of large organizations and therefore the marketing
departments are also able to know how they can incorporate digital marketing. The study
would also be of relevance to market researchers who would want to know the changes
and trends in e-marketplaces. This study would enable them to advise their clients
accurately in order to adopt the most effective marketing mix. The study would also be
significant to policy makers in government and other institutions such as KEPSA who
would want to know how to improve business opportunities for the SMEs and large
organizations. With this the government would provide an enabling environment with
regards to I.T infrastructure, and laws and policies guiding digital and social media
networks when it comes to marketing and also e-marketplaces.

1.5.3 Business Managers and Owners of SMEs

Business managers would be able to know what social networks to engage in for
marketing purposes, how to use them effectively and how potential customers can be
reached and be able to maximize on social media marketing. This in turn maximizes their
sales and businesses will be able to grow and become more competitive. The study would
be valuable to marketers who are thereby able to know how they can be able to integrate
digital marketing to the existing traditional marketing in their organizations. The impact
of social media marketing on SMEs will be similar to that of large organizations and
therefore the marketing departments are also able to know how they can incorporate
online social networks/platforms as part of digital marketing.

1.6 Scope of Study

This study was carried out amongst entrepreneurs who owned either small or medium
enterprises located along Waiyaki Way, in Westland’s area in Nairobi. The targeted
entrepreneurs were those that were engaged in the delivery and sale of common goods
and services for instance clothes, electronic gadget, groceries, foods and shoes among
others. The main requirement for the firms to have qualified as part of the sample was
that they had to be real SMEs with less than 100 employees. This study focused solely on
those enterprises that have been in business for the past four years.

Secondly, the study covered both international and national companies that are also
located along Waiyaki Way; from hotels and restaurants, banks, corporates amongst
others. The enterprises and organizations chosen were those that have been active in the

8
past four years, and therefore only information from 2014-2018 was considered as
relevant and helpful to the study. The data was collected and analyzed as from June of
2019 to August of 2019.

1.6.1 Limitations of the study

The researcher experienced lack of cooperation from some business owners in that they
did not want or rather allow the research team to conduct this research in their offices or
work places. This was however greatly solved the situation when an introduction letter
indicating that it was for academic purposes was given hence, permission was granted to
distribute questionnaires to the targeted respondents.

1.7 Definition of Terms

1.7.1 Small and Medium Enterprises

An SME is an abbreviation for small and medium enterprise. SMEs are therefore small or
medium businesses that have between 0-100 employees. According to Rijkers (2014),
SMEs can also be defined in terms of annual turnover. Most SMEs in Kenya record an
annual turnover of between KSH 500, 000-800,000.

1.7.2 Large Enterprises

Neuborne (2003) defined large enterprises as a large business or organization that checks
at least one of the following two conditions; has at least 5000 employees and has an
annual turnover greater than a billion Kenya shillings and a balance sheet total of more
than a billion Kenya shillings.

1.7.3 Digital Marketing

This is the marketing of products or services using digital technologies, mainly on the
Internet, but also including mobile phones, display advertising, and any other digital
medium (Fill, 2006). It has changed the way brands and businesses use technology today
for marketing purposes.

1.7.4 Social Media Networks

Social media is an interactive computer-mediated technology that facilitates the creation

and sharing of information, ideas, career interests and other forms of expression via
virtual communities and networks. Aichner and Jacob (2015) explained it as an online
platform used to build social networks or social relationship with people who share

9
similar personal or career interests, activities, and backgrounds. The social network is
distributed across various computer networks.

1.7.5 Social Media Marketing

It is the use of social media sites to raise visibility on the Internet and to promote products
and services. Felix, Rauschnabel and Hinsch (2016) explain it as a more interactive and
user-driven way to help users participate and collaborate over the Web through open
applications and services.

1.7.6 Customer Relations

According to Zeng, Yun and David (2003) customer relations refers to the approach used
to manage a business’s interaction with current and potential customers. It uses data
analysis about customers' history with a business to improve business relationships with
its customers, specifically focusing on customer retention and ultimately driving sales
growth.

1.7.7 Marketing Exposure

Marketing exposure is the amount of funds invested in a particular type of security and/or
market sector or industry and usually expressed as a percentage of total portfolio
holdings. It is also simply known as "exposure". Smith (2013) explains it as the degree to
which an audience such as readers, listeners, viewers, visitors to a website is in receipt of
a promotional message laid out by a business. Marketing exposure is a major part that
determines a business's success in their market. Although it is never directly identified or
defined, it crucial for helping a business progress, creating competition for other
companies, making the company more credible with consumers, and overall benefit both
the business while satisfying consumers.

1.8 Chapter Summery

This chapter began with an introduction that provided background information needed to
understand the direction that the research was going to take. This was followed by the
statement of the problem section, the purpose/General objective, the specific objectives
and significance of the study of this research. The research developed three objectives
that formed the central themes of focus in the study. The final section in the chapter was a
definition of key terms that have been used throughout the paper. An understanding of

10
these terms is to enable easy comprehension of key concepts even as the paper transitions
to the literature review section.

Chapter two will discuss literature review based on existing works and research carried
out prior to this study. Chapter three will discuss and present the research methodology
adopted for this study and the acquisition of data. Chapter four shall present the study
results and its findings. Chapter five is the final chapter which will detail the findings and
conclusions together with the recommendations the study arrived at.

11
 CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
The chapter reviews the theoretical framework together with empirical literature in
relation to the impact of Social Media Marketing on a company’s performance. In
particular, it explores the theories informing the study, general review of literature on
study variables, empirical review as a conceptual framework with a model. Finally, the
chapter provides a conceptual framework to identify the variables and operationalize
them.

2.2 Usage of Social Media Networks to Cultivate Customer Relationships

Vroom’s (1964), as cited by Parijat and Bagga (2014) emphasized on the integration of
social media with customer relationship management (CRM) strategies-as the next
frontier for organizations that want to optimize the power of social interactions to get
closer to customers. With the worldwide explosion of social media usage, businesses are
feeling extreme pressure to be where their customers are in terms or customer reaches
(Parijat & Bagga, 2014). The social CRM from a technological standpoint bridges social
media with the traditional CRM.

Customer relationship marketing is achieved through a variety of marketing strategies.

The goals include acquiring new customers and cultivating loyalty amongst existing ones.
As mentioned by Vargo and Lusch (2004), rather than marketing for short-term success,
customer relationship marketing should aim to create long-term relationships and deep
bonds between customers and businesses.

Suitable for both customers and businesses, social media networks allow SMEs to build
long-lasting relationships. This was proposed by Dekmar (2003), whereby entrepreneurs
should know that it is going to take time before they fetch desired results. Building long-
lasting relationships is only possible when you invest time to research, create and share
engaging content. It's not enough to just send to your customers a message with a pitch
and a link to your website when trying to build more of a relationship with them, they will
be uninterested. But try to point out to some problems of theirs that your product or
service can solve (Fernandez & Bharathi, 2015).

Ryan and Jones, (2009) explained that one common misconception about social media
marketing is that it’s only useful for B2C companies that want to speak directly to

12
customers. And while they may have the advantage of marketing to consumers who don’t
have to get their purchases approved by an entire team of decision makers, it’s important
for B2B marketers to keep in mind that all businesses are made up of individual people.
Because of that, building relationships with social media is feasible for all companies.

Dobbs and Hamilton (2015) carried out a study to instigate whether the social network
approach’s concept originates from several of the structural concepts brought forward by
sociological thinkers such as Emile Durkheim, Georg Simmel and anthropologist
Radcliffe-Brown, whose research were largely based on comprehending the structure and
impact of relational webs or “networks” of social associations between and among
individuals.

Network theory analyses all kinds of relationships, whether it is between people, animals
or things. Social network analysis is an overlapping instrument used for learning about
patterns that manifest within social networks and their influence on behavior. Digital
marketing channels are important in this respect since they allow marketers to listen and
understand what is said by consumers, and also enable them to take advantage of the
power of influential users so as to be able to spread the messages to other people in their
networks. Research indicates that the very powerful users are those with the most impact
across a number of differentiated networks (Teruel-Carrizosa, 2010).

2.2.1 Social Customer Service through Social Media Marketing

Social customer service is the practice of providing consumer support through social
media channels such as Facebook and Twitter to quickly answer questions from potential
consumers. 69% of customers believe fast resolution of the problem is vital to good
service, making social consumer support invaluable. Clearly, social media sites such as
Facebook and Twitter have evolved to become more than emergent platforms for
marketing and advertising. Increasingly, they are also valid and important channels
through which consumers solicit and receive customer service (Teruel-Carrizosa, 2010).

Customers know when they’re being sold to, and on social media, they don’t particularly
like it. As a social media marketer, resist the temptation to treat your social media pages
for the business, such as Facebook page or Twitter account like a billboard, and avoid any
persuasive, sales language. According to Aaker and Garolera (2001), casual interaction is
great for building a loyal and interested following. Potential customers who comment on

13
the various social media pages appreciate brands that take the time to answer and respond
to their queries; it shows the company cares about its customers.

Keller (2012) explained that social care is not a new concept, yet providing multi-channel
support that includes social media can present real challenges for companies both large
and small, as well as opportunities to positively impact sales and most of all customer
loyalty. The reality is that customer service expectations are rising year over year and
consumers are looking to brands to create a seamless relationship with during their
experience that spans the showroom floor to the Facebook timeline.

Simply having a social media presence is no longer enough; your job is to be a social
media rock star. One of the first challenges to providing great social customer service and
having a good relationship with your clients is determining where to focus time and
resources (Delmar & Gartner, 2003). While marketing efforts may drive traffic to targeted
social sites, customer service teams must meet their customers where they're already
socializing. For most SMEs, Facebook and Twitter will be the primary focus for social
care, but some brands may find that their customers also frequent Google+, LinkedIn,
Pinterest, Instagram, or other social sites (Ryan & Jones, 2009).

2.2.2 Opening Feedback Channels for Customers via Social Media

Customer feedback is a major key to discovering and solving customer problems as one’s
customers and product evolves, and social media is a potent ingredient of the feedback
cocktail. Social media has been broadly defined to refer to the many relatively
inexpensive and widely accessible electronic tools that enable anyone to publish and
access information, collaborate on a common effort, or build relationships (Jain, 2014).

Taiminen and Heikki (2015) did a study on the SMEs’ usage of social media marketing
channels. The study collected data comprising of semi-structured interviews for SMEs
comprising of 16 managers and 421 respondents in Central Finland. The study results
indicated that SMEs have not been maximizing the full capability of digital tools
available in obtaining feedback from their clients, and therefore not gaining benefits from
the opportunities they present. From the study results, queries were raised on whether
SMEs understand how social media marketing brings about essential changes in the
nature of communication between businesses and their target markets.

14
A study that was conducted by Yoo, Donthu and Lee (2010) to see whether the two
distinguishing features of social media networks are that they are centered on user-
generated content, and that it is a dialogic transmission system, referring to many sources
accessing many receivers. Individuals can use social media to share and amplify their
opinions with a broad audience, and anyone can initiate and participate in that
conversation (Jain, 2014). The real strength of social media is that SMEs are able to have
a more direct relationship and conversations with the people actively using your products.

According to Lange and Smith (2010), one of the main strengths and also a weakness of
gathering feedback through social media channels is that it is often unstructured and
anecdote-based. While a good way to gather feedback, look for trends, and create stories,
it may be more challenging to turn this into hard data. Businesses are now hearing
directly from customers. It’s unfiltered. It is not coming to you sanitized by Sales or Tech
Support. You can quickly understand what your customers are thinking or dealing with in
the moment and infer the trends by creating an online relationship with them.

2.2.3 Collective Intelligence and Networking

Coad, Frankish and Storey (2013) carried out a study explaining that collective
intelligence refers to a process where large numbers of people can converge
simultaneously upon the same point(s) of knowledge, while at the same time achieving
intellectual performance. The theory of collective intelligence postulates that groups are
generally smarter and more productive than the sum of the individuals (Coad, Frankish
and Storey, 2013). Crowdsourcing is an internet phenomenon in which projects are
broken down into small, individual tasks that are distributed to a large number of
individuals for completion, and is known to have collective intelligence characteristics.
According to Tapscott and Williams (2008), for collective intelligence to exist, it requires
four principles. These principles are openness, peering, sharing, and acting globally.

Openness: for collective intelligence to work to its full potential, it requires people and
companies to present and be candid about their ideas to the people on the internet so that
their products can be improved. Peering: taking old information or products and
modifying them to match yours and others’ personal needs before releasing it to the
public so that people can take utilize them. Sharing: it explains how intellectual property
is required to be shared with others in the group. It is essential to allow for the constant
exchange of ideas and critiques around which productivity is enhanced.

15
Acting globally: the principle is based on communications technologies advancement that
allows organizations to reach out across their entire collaborators’ network and to engage
everyone. This concept overcomes challenges such as department and branch borders in
an effort to capture and utilize new ideas, new talents, and new markets. This theory is
useful in the study since it indicates how social media marketing is able to bring SMEs
and its consumers together to interact and be able to exchange ideas to come up with
products or services that improve the whole experience.

A study carried out by Yoo, Donthu and Lee (2010), based on a literature review
evaluated the network theory, that sees social relationships in terms of nodes and ties. The
nodes are the players within the networks, and ties are the relationships amongst the
players. Various types of ties are present between the nodes, and in its basic form, a social
network outlines all the relevant ties between the nodes being analyzed. The network can
also be used to “determine the social capital of individual players”. These ideas are
usually exhibited in a social network diagram, where nodes represent the point while ties
are the lines. This theory is useful in the study since it analyses how SMEs can maximize
their ‘networks’, in this case their customers (Singh, 2011).

Hill and Sullivan (2012) indicated that with social media, businesses are no longer
confined to the town they are located in, city, or even country. Enterprises can reach
thousands of people around the world in an instant. Now even entrepreneurs in the
smallest towns around the world can build a business without spending all of their money
and time travelling to other places. You can think bigger and expand your business to
reach places previously unattainable by networking (Jain, 2014). Managers should travel
to visit the places where they expand their business so that they can meet with team
members face-to-face. But with social media, that initial reach can be online.

When you do expand your business, it is important that you maintain connections and
relationships with your long-distant team members. Managers should make a point of
meeting with those team members face-to-face on occasion. However, social media
provides you with a way to nurture those relationships on a more consistent basis. You
can keep in touch with your team members with social media through messages of
encouragement or tips on best practices. Of course, that type of interaction can also be
easily accomplished through an email or phone call. But with social media you can go a

16
step further. Through simply liking a post, making a comment, you are fostering that
relationship and strengthening it (Teo, 2007).

Dietrich (2010) indicated that one of the best advantages of using social media is how you
can actually have the prospects come to you. Your brand of whom you are, what you
stand for, your interests can attract like-minded people to you and suddenly your prospect
list builds itself. Instead of desperately searching for prospects yourself, people will find
you through their similar interests or ideals that are portrayed in your brand. Your brand
will help to introduce you to more people than you’ll know what to do with. You’ll attract
fans, followers, and friends and be able to build rapport with them.

Social media allows you to do this and so much more. The old-school strategies of in-
person meetings will still be a strong and effective way to recruit more prospects, but now
social media can help you build an even stronger and larger team than ever before by
networking with those with similar interests (LinkedIn Site, 2013).

2.2.4 Generational Theory with Relation to Potential Consumers

Generation theory explains that the era in which a person was born impacts their
perception of the world. It also indicates that our value systems are shaped in the
formative years of our lives through our families, friends, communities, significant events
and the general era in which we are born (Jurkiewicz & Brown, 1998). Initiated by
Strauss and Howe in 1991, generational marketing theory stipulates that consumers born
during the same era, usually a 20-year period, have similar attitudes and behaviors due to
shared experiences that influenced their childhood and molded their world views. This
current era can be defined as that of digital information which can be defined by the use
of digital media. Generational theory is relevant to social media marketing based mainly
on how each generation communicates and the online places where they can be accessed
easily by marketers. This theory is useful to the study since assists SMEs to identify
customer generations and homogenous groups and formulate appropriate marketing
content for them using digital media.

The diversity of members within social networks affects their behaviors within these
informational environments (Wang & Fesenmaier, 2003). One of the characteristics that
SMEs need to be aware that significantly affect their behaviors is personality and, in
particular, these traits related with sociability, selflessness or extroversion. Online users
tend to be expressive, with common sense, high self-esteem, competent, with a low need

17
for approval and high moral development (Straub, 1978; Rushton, 1981; Aronoff &
Wilson, 1984). Also, they often need to feel useful, help others, have responsibilities, and
earn a place where they belong, among other things (Wang & Fesenmaier, 2003). The
target markets for these SMEs are very sociable, enjoy helping others, are fun and
creative, and have high self-esteem (Wilson & Petruska, 1984). It is to be expected that
members who are active and generous in their offline life will also be so in their online
activities.

Campbell et al. (2014) analyses how consumers may be segmented with respect to their
attitudes and reactions toward social network marketing, including psychological,
economic, and socio-demographic covariates in a latent-class analysis. They identify five
segments -Passive, Talkers, Hesitant, Active, and Averse along with significant
covariates, such as information search, convenience, entertainment, age and gender that
predict membership. From supply perspective, Chung et al. (2015) obtain four distinct
segments of consumers who support social ventures (social observers, active contributors,
social connectors, and moderate contributors) based on three dimensions of social media
site usage: creating content, connecting with others, and control over the user experience.
Four segments of consumers show significant differences in supporting behaviors to
create social ventures.

Despite the increasing importance of international market segmentation for marketing as

a discipline (in particular, for international marketing), the relative importance as research
topic in marketing literature remains low. Of course, a series or papers devoted to
international market segmentation have appeared during the last three decades (e.g.,
Luqmani et al., 1994; Hofstede, 2001). Nevertheless, their number and scope are still
astonishingly small in comparison to publications devoted to issues in domestic market
segmentation (Bauer, 2000; Steenkamp & Hofstede, 2002; Larsson & Moe, 2012).

An international segmentation study carried out by Bastian et al. (2008) supports the
opinion of Kale and Sudharshan (1987) and Bauer (2000) who pointed out some
disadvantages of integral market segmentation, such as the impossibility of providing
information on regional/national segments and of describing national peculiarities in the
media usage and point of purchase choice behavior of consumers, as well as estimating
national sizes of transnational segments in a biased way. The authors were convinced of
that additive international market segmentation can overcome these issues. In general

18
terms, it can be concluded that conducting additive international market segmentation
should be preferred when identifying transnational segments. Hofstede et al. (2010) also
carried out a cultural clustering of states that closely followed the administrative division
of the Brazil country into five regions, obtaining remarkable differences between regions
including other specific characteristics more meaningful to the analyzed region.

2.3 Exposure given to Small and Medium Enterprises by use of Social Media in
Nairobi, Kenya.
Social media marketing provides a whole new dimension to advertising and exposing
businesses as its offer’s interactivity to the users especially on social media sites such as
Facebook which is the dominant social media (Logan, K., Bright, L.F & Gangadharbatla,
H. 2012). Social media offers users or consumers the opportunity to interact actively with
the adverts on SMEs pages allowing them to ‘like’ and ‘share’ adverts and also view who
else or which friends liked or shared the same adverts. While there are increasing
advantages in advertising on social media networks, there exists the evolving conviction
that aligning the relationships between users or customers’ online and generating graphs
for these social relationships can be invaluable for predicting the response of customers to
various online marketing strategies and messages.

According to Constantinides and Fountain (2008), the power structure has changed due to
fact that customers have access to information which previously was not available for
them. As a result, the consumer attitudes changes leading to new consumer needs values
and buying behavior. Also, Hearn, Foth and Grey (2009) acknowledge that the
participatory culture, enabled by recent technological innovations, shifts the
communication flows away from a central business-to consumer model. The development
is towards consumer-to-consumer flows of 41 communications as customers start to
create content on their own by using new media applications and services (Hearn, Foth &
Grey 2009, p. 49).

The internet has become a mass media vehicle for consumer sponsored communication. It
now represents the number one source of media for customers at work and the number
two source of media at home. Customers are turning away from the traditional sources of
advertising: radio, television, magazines, and newspapers. Customers also consistently
demand more control over their media consumption. They require on-demand and
immediate access to information at their own convenience. Customers are turning more

19
frequently to various types of social media to conduct their information searches and to
make their purchasing decisions (Lempert, 2006; Vollmer & Precourt, 2008).

2.3.1 Creating Brand Awareness and Advertising through Social Media Marketing

Search engine optimization (SEO) is the process of designing the contents of the website
to fit what the business prospects are looking for, and presenting it in a way which is
easily accessible to both people and search engines. If a business wants to increase its
targeted traffic to the website, the organic or natural search results (the results in the
middle of the search engine results page) are the place to be (Ryan & Jones, 2009). Pay-
per-click marketing provides businesses an opportunity to be highly ranked in a search
pages for specific keywords and phrases through payment. It is viewed as an effective
way to rapidly generate search engine traffic depending on the type of business and the
specific keywords they want to rank for. Although pay-per- click continues to grow in
popularity and competitiveness, keywords are becoming increasingly expensive for
smaller businesses (Ryan & Jones, 2009).

Wanjuki (2014) did a study to determine the impact of social media and digital marketing
growth on customer service in Barclays Bank of Kenya. The study adopted a case study
approach analyzing Barclays Bank branch in Meru. The data collected was analyzed
using content analysis. The study results showed that 59% of the respondents indicated
that digital marketing enhances the brand visibility of the bank, 26% felt that social media
and digital marketing increasing awareness about the product that a bank offers to its
customers, while 12% indicated that the digital marketing creates psychological believe
that the bank services are the best compared to all others in the market.

The effectiveness of advertising is in away related to its credibility, which is the way
customers express what the feel about the reliability is increasingly becoming a great
concern for consumers with regard to the credulity and general message of the adverts.
This is because consumers do consider some specific kinds of adverts as more reliable
than the rest (Johnson & Kaye, 1998). According to some research viewpoints, social
media could be considered as being a check for the credulity of initiators who spread
brand attractions and in accord with the findings of Lee et al. (2011), consumers view
consumer generated messages on social media as being motivated by altruism than
marketer generated messages. Continued but particularly researched the factors driving
product referral action on social media and observed that customers easily accept

20
products or brands recommended by the consumers rather than products or brands
recommended by the producer or marketing agencies (Chatterjee, 2011). Muntinga et al.
(2011) discovered the atmosphere promoting user participation in recommending product
brands differ according to the particular social media in consideration. Researchers
generated classifications for checking the extent of the customer’s participation and with
the aid of this classification they discovered that customers who used social media played
a great role in building up the product brand image as they like or share ideas relating to
the product online.

This shows that an activity on social media, which relates to the products of a particular
organization, builds up. Calder et al. (2009) supports the idea that social media
advertising contributes to the various user participation online through their evidence that
customers who access various social media exhibited interactive attitudes which therefore
enable their engaging in communication with other users.

It would have been certainly interesting to mention that traditional measures supply
inadequate measurement of social media advertising effectiveness due to their affirmation
on outcomes (Pavlou & Steward, 2000). Although an online advertising offers some
interactive advantage and change consumer’s perceptions from marketers, the nature
online advertising dictates that the process should include some features such as
participation, realization, personalization and feedback. Moreover, the consequence of
advertising result should be included consumers’ evaluations of interest indicated by the
ads. Previous empirical findings suggested that the confirmation of advertising on social
media is affected by the degree of amusements and information awareness, which it offers
the consumers.

2.3.2 Protection of Brand Image and Creating Trust with Customers

Social media marketing is one of the cornerstones of online brand building. It doesn't
matter if you run a blog, own an e-commerce store, or manage a brick and mortar
business. If you value your brand's online identity and authority, then building a social
media presence is a worthwhile endeavor.

Brand image according to Keller (1993) refers to a group of brand associations which the
customers picture in their minds as the identity of a brand. Brand image could be
associated with features of specialty, strength and likeness and these interpret what the

21
brand stands for to the consumer, in relation to the goods and services it provides,
therefore highlighting the advantages of using that brand of product (Keller, 2008).

Brand image is made available for costumers’ evaluation and to determine the quality of
goods and services prompting consumer behavior. When Park, Jaworski, and MacInnis
(1986) elaborated on several suppositions of brand images, they divided it into 3 sections
namely: functional, symbolic, and experiential areas. Subsequently, Meenaghan (1995)
noted that brand image could be viewed as a product or service intelligence that enables
consumers to categorize a particular brand. Similarly, in another related study Bhat and
Reddy (1998), found out that brand image is used as an alert for information, alternatively
brand image could have real and virtual associations in the client's mind (Blackwell,
Miniard, & Engel, 2005). Based on the extant literature, consumers try to access tangible
and intangible product and/or service associations through the brand image, as such they
tend to gather some market intelligence through social media.

As mentioned by Vargo, and Lusch (2012), in this digital era, everyone is becoming
social media savvy and businesses can no longer afford to overlook threats such as brand
impersonation, brand fraud and counterfeit goods. The digital channels are rapidly
evolving and with marketing ROI at risk, marketing executives must make social and
mobile essential components of their brand protection strategy.

The many benefits of social media are already being exploited by organizations looking
to increase opportunities to engage with audiences, keep abreast of emerging trends,
conduct real-time market research and identify and address changing customer needs. As
a result, companies are dedicating more budgets to online marketing endeavors and to
developing concrete social media strategies that support them (Johnston & Marshall
2010).

2.3.3 Selecting Social Media and Digital Marketing Platforms

Social media is comprised of different platforms, and when choosing the right social
media platform for their business, SMEs should start by learning the preferences of their
client base. Social media can be used intelligently only if the business is active on the
same online platform as its customers. It is a waste of time to engage on one social media
platform if your clients are spending the majority of their time on another. One of the best
social media platforms is Facebook, especially for B2C businesses, as it provides the
opportunity to publish ads.

22
Digital technologies have the ability to copy almost all aspects of traditional media
channels and marketing communications and, in the process, cover the marketing mix.
Digital promotions are, however, more specific and are a marketing communication mix
component. Digital marketing involves the use of digital media in the process of carrying
out the marketing practices. The forms of digital marketing include emails, mobile
marketing, search engine optimization (SEO), social media, pay-per-click (PPC), online
advertising, and viral marketing.

Email marketing is one of the digital marketing techniques earliest used and it involves
providing personalized or targeted messages to specific people at the correct time. With
the emails, businesses will deliver emails that meet the user’s requirements. Mobile
marketing is defined as the use of a wireless medium to provide consumers with time and
location-specific, tailored information that promotes products, services and ideas (Scharl,
Dickinger & Murphy, 2005). It therefore improves the interaction between consumers and
their mobile phones, the consumer- brand relationship, together with the mobile
advertising capability to control the viewing environment, giving advertisers with the
opportunity to create more meaningful brand relationships (Aaker, Benet-Martinez &
Garolera, 2001).

Online advertising is when advertisement is done on the internet and consists of

advertisements placed on search engine results pages, advertisements embedded in e-
mails, and other ways in which advertisers use the internet. The primary aim is to acquire
a prospective customer to act immediately by clicking on the advert (The Saylor
Foundation, 2017). These advertisements are used to prompt various actions from
potential customer and meet several marketing communications objectives such as
increasing action, changing opinions, and increasing recall.

Affiliate marketing is a form of online advertising where a digital user or website

promotes an online retailer and, depending on the sales or leads is generated for that
online retailer, earns a commission (IAB Australia, 2016). In this case, the third party
earns revenue every time a potential customer clicks on the link provided by the
originator of the advert website. Viral marketing is a mixture of the several elements of
digital marketing and it involves publicizing the message content through multiple
channels. It may include YouTube videos, email marketing, blogs, and also some

23
traditional components, all with a purpose of ensuring that the content captures the market
attention and automatically spreads to other online communities.

Njau and Karugu (2014) did a study to determine how e-marketing has an impact on the
performance of SMEs in the Kenyan manufacturing industry. In particular, the study
sought to analyze how email marketing, online marketing, search engine marketing, and
blog marketing had an impact on the performance of an SME. A survey research design
was conducted for the study, where the target population consisted of 500 small and
medium enterprises in the manufacturing industry. A random sampling technique was
used to select a sample to represent the target population and from the sample data was
collected from them. The study findings indicated their email marketing, online
marketing, search engine marketing, and blog marketing as digital marketing techniques
had a significant influence on business performance. The study findings also indicated
that SMEs in Kenya which are keen in adopting e-marketing as a marketing strategy since
they achieved above average business performance. Teo (2007) carried out a study that
recommended that the government should partner with the private sector partnerships to
engage in a campaign and provide relevant information about e-marketing framework and
policies to SMEs, the success stories, the best practices, and opportunities and challenges
encountered with regards to ICTs and e-marketing usage.

2.4 Social Media Marketing and its Effect in Sales Growth

Over the years a wide array of articles has looked at specific aspects and applications of
technology in personal selling. Focal topics have included technology acceptance by
Robinson, Marshall, and Stamps (2005), sales force automation (SFA) by Rapp,
Agnihotri, and Forbes (2008), customer relationship management (CRM) and relationship
selling by Ahearne et al. (2008), telemarketing by Moncrief, Lamb, and Dielman (1986),
B2C sales technology usage by Ahearne and Rapp (2010), and many others. Growing
interest in technology issues in sales led JPSSM in 1984 to create an “experimental new
section” of the journal called “Microcomputer Applications in Selling and Sales
Management,” with its own section editor, Professor Robert Collins and regular
publication of columns and peer-reviewed articles Collins (1984).

This section later was renamed “Sales Technology Applications,” ultimately operating for
18 years. A decade ago, Widmier, Jackson and McCabe (2002, p.190) made the following
observation, many business owners and marketers mistakenly believe that every single

24
component of their marketing strategy should have a direct and immediate impact on
sales. Unsurprisingly, they do not see success with social media. This isn’t to say that
social media can’t drive sales. It certainly can, but its potential for building relationships
is much more important. Long-term customers will do much more for your business than
the ones who make a single purchase and never return, and if you want those kinds of
customers, you need to put time and energy into earning their trust.

Several studies and literature have indicated a relationship between digital marketing and
sales. Digital marketing is able to reach new customers and provide personalized
communication to the customers, hence increasing awareness and sales (Jain, 2014;
Jagongo & Kinyua, 2016). Small businesses could be able to use digital media such as
social media, e-mails which are known to be very cheap to access potential customers to
create product awareness, while medium enterprises have some revenue to use digital
tools such as pay-per-click (PPC), search engine optimization (SEO), online advertising,
and viral marketing.

Dobbs and Hamilton (2007) conducted a study on the impact of various forms of digital
marketing on a firm’s sales. The study used primary data examining a sample of 150
companies and 50 managers who were selected randomly to determine digital marketing
effectiveness. The data collected was analyzed using various statistical tools and
techniques including correlation tests. The study results indicated that there is a positive
relationship between digital marketing and sales increase. It also indicated that all digital
marketing elements such as online advertising, search engine optimization, email
marketing, and social media have positive effect on firm’s sales.

2.4.1 Measurement of Social Media Marketing Effectiveness

There has been an increased importance to measure social media marketing success as
efficiently as possible in a dynamic business landscape, as is currently the case, more than
ever before. Digital marketing tools have some ways available to measure success
through various metrics that business owners can obtain (Gregorio, 2016). One of the
methods used to measure digital marketing effectiveness is through analytics which is in-
built in most digital marketing tools. According to a white paper presented by Fernandez
and Bharathi (2015), the insights derived from big data analytics helps a business to
precisely drive future decisions through provision of the right message to the consumers
at the right time, and for the right price. There has been a rapid growth in intuition-driven

25
marketing and there has, therefore, big data analytics and digital marketing are getting
tightly interwoven.

Data availability and insights make digital platforms complete and therefore provides
great opportunity to make inferences by marketers from this data and make the right
decisions (Jain, 2014). By being able to measure the performance of each campaign,
SMEs would continuously learn how to improve their campaigns and therefore
understand the relationship of the target audience with the various touch points and
messages broadcasted. Tracking online behavior and visitors has been made much easier
by the digital world as marketers try to understand where online visitors come from,
which pages they were viewing, the time they spent on the website, the sources which are
sending quality traffic, and most importantly, whether the website visits turn into leads or
conversions.

Jagongo and Kinyua (2013) in another study sought to establish the impact of social
media on SME growth in Nairobi, Kenya. The study applied descriptive research design
and questionnaires were administered to 246 small and medium enterprises in Nairobi,
having either the business owners or managers as the respondents. The study used cluster
sampling to separate the target population and thereafter used simple random sampling
technique in order to identify the specific businesses that were used for the study. The
study findings indicated that social media tools provide greater accessibility to the market
and Customer Relationship Management - CRM which subsequently have a significant
effect on SMEs growth. Additionally, businesses through social media experience fast
and cheap communication with customers and also allow them to create a database which
the business may then use to generate leads which might eventually lead to increased
sales which grows the SMEs. The study recommended that policy makers should keep
monitoring the current technological adoption trends by SMEs to come up with policies
which encourage best practices for the SME sector growth.

2.4.2 Online Marketing

Online marketing is today seen by many practitioners as the new arena for market
communication and on top of the list of users of the different mediums is Facebook,
Blogs, Twitter, YouTube and LinkedIn (Janssen (2009)). Srinivasan, Bajaj and Bhanot
(2016) define social media as a group of Internet-based applications that build on the
ideological and technological foundations of Web 2.0, which facilitates the creation and

26
exchange of user-generated content. It consists of different Internet applications such as
blogs, social networking sites, content communities, collaborative projects, virtual game
worlds and social worlds. Janssen (2009) affirms that many companies today are using
some or all of the new media to develop targeted campaigns that reach specific segments
and engage their customers to a much greater extent than traditional media. Brogi and
Pillo (2013) argue that marketing managers should comprise social media in the
communication mix when developing and executing their Integrated Marketing
Communication strategies and they presented the social media as a new hybrid element of
promotion mix.

According to Janssen (2009) social media is both a major opportunity and a great
challenge for businesses when it comes to product marketing. It can be a quick and easy
way to communicate information on new products to a large group, but businesses have
to be careful to attract customers rather than talk down to them. Businesses should look at
social media as technology that enables the age-old marketing technique of word of
mouth. Create a compelling social media experience, interact with customers and
encourage them to share your product information with others.

Onyango (2016) takes social media as a complex marriage of sociology and technology
that cannot be underestimated in its impact to an organization marketing communication,
choice as to when to engage, how to manage and measure, and whether to lead or to
follow is complex but not an impossible task. These cannot be answered simply by one
formula because the context and the market dynamics are strong variables in these
decisions. Even though the interest for social media is huge, few companies understand
what the term social media can mean to their businesses. But how much it has been given
importance, as an IMC tool, varies from region to region (PricewaterhouseCoopers
(PwC), 2009; BuddeComm & Chiltern Magazine Services Ltd. (BCMSL), 2009).

2.4.3 Social Selling

A study conducted by Erdoğmuş and Çiçek (2012) explains social selling as the scenario
when business owners and sales people use social media to find and engage with new
prospects. Medium and small enterprises can use social media to provide value to
prospects by answering questions, responding to comments and by sharing content
throughout the buying process – from awareness to consideration, until a prospect is
ready to buy. Thanks to the Internet, sales promotions such as competitions or price

27
reductions can be provided to visitors of the company’s website in a cost reduced way.
Not only encourage the customers to visit the company website again, this also provides
the means for the company to build a long-term relationship with their customers
(Chaffey, 2006, pp. 243-245). While the old sales model used to be about cold calling,
sales demos and qualifying leads, the new way of B2B sales means using social media
networks to reach new prospects, educate them on how your company can help them
grow their business, and nurture them through content.

Jangongo and Kinyua (2014) explain the growth of social media usage has been a huge
factor in why social selling has been adopted and several studies point toward the B2B
buyer using social media as an important part of their research process. A study by
Google and Millard Brown Digital found that 46% of decision makers are now aged
between 18 and 34 years old (up from 27% in 2012), which coincidentally, is the largest
social media user demographic.

Erdoğmuş and Çiçek (2012) found that sales reps who use social selling find on average
45% more opportunities. In addition, social selling helps best-in-class companies achieve
a 16% gain in year-over-year revenue. That’s four times better than companies that don’t
use social selling! The key findings are clear: Sales reps sell more when they use social
networks. And this is why social selling is the third most important priority for sales
teams.

2.4.4 Creating Consumer Brand Loyalty

Dietrich (2010) suggests Social media is perceived by customers as a more trustworthy

source of information regarding products and services than communication generated by
organizations transmitted via the traditional elements of the promotion mix. Erdoğmuş
and Çiçek (2012) explain that desires and different hopes from different clients can
sometime require certain unique information and contact strategies. Communication
channels and strategies now differ broadly from the ones in former times or offline times.

Srinivasan, Bajaj and Bhanot (2016) did a study to understand social media marketing
concept and its role in the micro, small and medium enterprises sector. The study used
exploratory research to identify the social media marketing techniques used to acquire
and retain customers by MSMEs. Judgmental sampling was used to collect data from
about fifty micros, small and medium enterprises (MSMEs). The study results indicated
that participation in social media creates a strong impact on brand awareness and brand

28
trust, which results in a strong influence on customer acquisition and retention. The study
also indicated a positive relationship between the time spent on social media and amount
of sales made. It concluded by stating that social media marketing strategies have a
positive impact on customer acquisition and retention which results to market share
increase.

Sales play a vital role in the growth of any business (Keller, 2012). The sales process is
comprised of different practices, and one of them is getting to know your customers and
establishing strong relationships with them. Social media, as we all know, connects
people and can help businesses get more information about their customers. It enables
entrepreneurs to find out how their business is perceived by their customers, including
what their customers think of their competitors, allowing them to make the necessary
changes in their products or services and to initiate conversations to cultivate a prospect
or sales lead.

Erdoğmuş and Çiçek (2012) did a study on how social media marketing has an effect on
consumer brand loyalty. The scope of the study consisted of customers who followed at
least one brand using social media in Turkey. The relevant data was collected by
administering a questionnaire which was structured, with a sample size of 338
respondents and the collected data analyzed through multiple regression analysis. The
study results indicated that social media marketing has a positive effect on consumer
brand loyalty when the media provides advantageous campaigns, offers relevant and
popular contents, and also appears on various platforms and provides applications on
social media.

Onyango (2016) did a study on the influence that digital marketing strategies have on the
performance of cut flowers exporting firms in Kenya. The study conducted qualitative
and quantitative research using semi-structured interviews targeting 30 cut flowers
exporting firms in Kenya. From the analysis, the results indicated that digital marketing
significantly improved revenue, improved market share, and increased profitability. Firms
using digital marketing showed better performance than their counter parts using
conventional marketing strategies. It also noted that digital marketing’s major benefit
emanates in its exceptional capability to give personalized and interactive information
without the restriction of time and place.

29
Jagongo and Kinyua (2013) did a study examining how social media marketing affects
the performance of small-scale businesses. They study administered one hundred and fifty
copies of questionnaire to owner-managers and employees of selected SME’s in Ota
Metropolis. The data was analyzed using descriptive statistics, ANOVA and correlation
test. The study results indicated that relationship creation and networking with other
businesses increases brand exposure. A business may reciprocate to promote your
business when you promote their business or product. The study also indicated that social
engagement with others makes businesses visible to their audience and this creates
potential to reach many potential customers.

In another study, Jain (2014) showed how social media marketing has an impact on SME
businesses in India. The study results indicated that small and medium enterprises can
achieve the following through digital marketing: create leads and drive sales, reach new
customer groups, improve brand awareness, drive customer engagements, gain customer
insights, and improve productivity.

Kithinji (2014) also did a study to determine the impact of internet marketing use on
SMEs performance in Nairobi County. This was done using a descriptive survey research
design and used a sample size of 90 SMEs. Primary data was collected using
questionnaires from the top management of the SMEs. The collected data was analyzed
factor analysis and regression analysis.

According to Jobber and Ellis-Chadwick (2013), he indicated that a large number of

SMEs stated that their biggest challenge in the usage of internet marketing was the fear of
losing their current customers who could not access internet. With regards to impact of
internet marketing on SMEs performance, the study indicated that there was increased
profitability, market share increase and the ability to expand their market growth.

2.5 Chapter Summary

This chapter introduced us to the literature review where relevant theories were given
regarding the subject of the study, on the effect on using Social Media networks for
marketing and the impact it has of the sales growths of a business have been presented on
this chapter. Forms of Social Media marketing and measurement of Social Media and
Digital marketing and its effectiveness have been presented. The next chapter will discuss
and present the research methodology adopted for the study and the acquisition of data.

30
 CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This chapter provides the methodology that was used to conduct the research. The section
began by indicating the overall research design used, followed in section 3.3 which
discusses the target population which will be relevant in providing information for the
study. Section 3.4 provides the sampling design which was used in the study, while
section 3.5 presents the data collection instrument to be used, the justification for the
choice. Finally, data analysis and presentation together with diagnostic tests was provided
in section 3.6.

3.2 Research Design

According to Bryman and Bell (2007), research design can be defined as a general plan
that gives an outline on how data will be collected and data analysis procedures. This is
an arrangement of conditions for collection and analysis of data in a manner that aims to
combine relevance to the research purpose with economy in procedure (Kothari & Garg,
2014). The study used descriptive research design. The descriptive study is one where
information is gathered without changing the environment while a cross sectional study is
one where there is a one-time interaction (snapshot) with the unit of analysis. The results
from descriptive research helped a researcher capture interesting naturally occurring
behavior.

3.3 Population and Sampling Design

3.3.1 Population
Target population comprises the whole group of specimens or individuals or unit of
analysis to which a researcher is interested in studying in order to come up with
conclusions. It is basically a theoretical population that may or may not be as accurate.
The study targeted population was all the enterprises, mainly small and medium, in
Nairobi, Kenya which comprises of thousands of businesses in Nairobi.

The study used a list compiled from Nairobi business list which comprised of 399 small-
sized companies. The study also used the list of Kenya Top 100 companies in the last 5
years between 2013 and 2017, which has an average of 25 new entrants in a year giving a
total of 200 medium-sized companies. In total, the study had a target population of 699
businesses ranging between small and medium enterprises in Nairobi, Kenya.

31
3.3.2 Sampling Design
3.3.2.1 Sampling Frame
Sampling refers to the selection of a number of units of analysis for a study so that the
findings of the representatives represent the population from which they are selected
(Mugenda & Mugenda, 2008). The study used a random sampling technique to select the
businesses used for gathering information. According to Israel (2013), a sample size is
determined by the level of precision, the confidence level, and the degree of variability.

Sampling frame refers to the list of items or set of elements from which a researcher
draws a study sample (Turner, 2003). In this study, the sampling frame consists of
managers of 44 businesses, in Kenya located in Nairobi County. The list was drawn from
the Soko Directory where a total of 330 members were being drawn.

3.3.2.2 Sampling Technique

This is the identification of the specific process by which the entities of the sample have
been selected. It is the method used by a researcher to select from a main population to be
used in a study (Turner, 2003). A sample allows for generalization about the populations
(Cooper & Shindler, 2014). The study used a sample of the population of the enterprises,
especially SME’S industry since the individual who takes the survey should be a
representative of the population. Random sampling technique was used to select the
subset of population because the population is large. Random Sampling is also economic
and allows application of statistical methods to the data, including identifying the degree
of error due to the sampling.

3.3.2.3 Sample Size

This refers to the count of the individual samples or observations in a statistical setting. It
is defined as the smallest set that represents the entire population (Cooper & Schindler,
2006). For this study, the sample size was determined using Yamane (1967) formula:

n = N / [1 + N (e)]

Where;

N -Desired Sample Size,

N -Target Population

32
e -The degree of accuracy/acceptable sampling error expressed as a proportion at 0.05

n = 330 / [1 + 330(0.05)2]

n = 180.82≈ 181

According to the above calculation, a sample size of 181 managers was selected from a
total population of 330 respondents which was sufficient and representative of the whole
population.

3.4 Data Collection Methods

Data collection is the means used by a researcher to gather information that was used for
investigation (Creswell, 2002). The data collection stage indicates the kind of data that is
being collected for the research, whether it is primary or secondary, the data collection
instrument used, and the duration of data collection. Morris (2001), A data collection
instrument is a tool used to gather information in a planned manner for the sole purpose
of research. These instruments can vary from interviews, to questionnaires, and even
records that were available. This study collected primary data by use of questionnaires, to
collect data from respondents. Sekaran (2002) defines primary data as information that is
obtained first hand. Questionnaires are also considered as an effective method used to
collect data due to it being very practical and inexpensive and also offers a quick way to
get results (Sekaran, 2002). The questionnaire was seen as the most preferable collection
tool because of its accuracy and also it ensured privacy of the respondents.

The Likert format was made, because of its ability to yield equal-interval data. It ranges
from; Strongly Disagree, Disagree, Neutral, Agree and Strongly Agree. The questionnaire
had both open-ended and closed-ended questions. The questionnaire is structured in four
different sections. Section (A) Containing questions of personal information, section (B)
questioning on consumer relations, Section (C) questioning on market exposure and
question (D) questioning on increase in growth of sales.

Primary data was used by the study to provide information that was used to analyze the
data. A questionnaire was used as the primary data collection instrument, and was semi-
structured with the structured part enabling uniform response for easier data analysis,
while the open- ended section gave information not provided in the structured sections.
Questionnaires were therefore important data collection instruments as they gave
information important to the study and therefore gave researchers first-hand information

33
for analysis. Mugenda and Mugenda (2003) stated that questionnaires provide
comprehensive response to problems being analyzed. Also, due to their relative ease of
preparation, administration and cost-effectiveness, questionnaires have become a popular
method for data collection.

3.5 Research Procedures

A Pilot study was carried out to clarify instructions, determine appropriate levels of
independent variables, and determine the reliability and validity of the observational
methods (Bodens, 2008). The study handed out questionnaires to 5 employees of Sensory
Experience Limited, who were not to be included in the final sample. This was for the
purposes of validation of the questionnaires so as to achieve accuracy on the main
intention of this questionnaire (Mugenda & Mugenda 2003).

The validity of the questionnaire was done using pre-test and face validity so as to ensure
it actually measured what it was intended for. An introductory letter from the university
was used so as to create that confidence among respondents. The questionnaires were not
interpreted due to the assumption that the target population was literate. The researcher
issued the questionnaire to the respondents on one on one interaction and guidance was
offered where it was needed.

According to Wallen (2000), validity relates to the quality attributed to the degree to
which they conform to establish knowledge or truth. The research supervisor overseeing
this study went through the questionnaire to make sure that it was good enough to
proceed with to the field for the process.

This is the extent to which a research instrument measures what it is designed to measure.
A reliability measure is achieved by estimating how well the items checking a similar
concept yield the same results. An instrument’s reliability is enhanced through the
identification of data required and multiple usage of this instrument in a field test. Five
questionnaires were given out to the respondents prior to determine whether the questions
were clear and concise enough for the respondents. Revision was however done
accordingly for those questions that seemed unclear.

Once the research questionnaire was approved by the supervisor, an introductory letter
from Unites States International University was sent to Luxe and Allure Events and other
enterprises within Nairobi County, seeking approvals to carry out the study. Once the
approval was granted, the questionnaire was piloted using 12 questionnaires with
34
respondents not taking part in the actual study. The findings from the pre-testing was used
to correct areas that needed clarifications, while simplify other questions so they could be
understood by respondents. The questionnaires were sent to respondents via email and
shared WhatsApp links, with a cover letter explaining the purpose of the study, and
confidentiality of the respondent’s views, and the findings. Respondents were given three
days to fill in the questionnaire and submit it back to the researcher via email. During the
three days, a constant reminder was sent to the respondents to have them finalize the
questionnaire. This was done to ensure a higher response rate.

3.6 Data Analysis and Methods

Returned questionnaires were checked for completeness, and those found with missing
data were returned to respective respondents and who were then requested to provide the
missing data. All questionnaires were coded and entered into SPSS software for analysis.

At the data analysis stage, the data that was collected, coded then processed cleaned and
tabulation was done. At this point, the study analyzed data to answer the research
questions using both quantitative and qualitative data analysis techniques. Quantitative
analysis methods comprised of descriptive statistics for the univariate variables (which
was in the form of means and standard deviation) and bivariate analysis was done through
Pearson’s correlation test and Kruskal-Wallis test.

The Kruskal Wallis test is a non-parametric test that is used when there is an ordinal
dependent variable and an independent research variable with two or more levels. The
analysis of both the univariate and bivariate statistics was done using SPSS software
package v.21. Quantitative technique data was expressed in numerical form that was
measured with standard scale. Qualitative techniques; the results were provided in form
of explanatory notes or measurements with non-standard scale. The final data will later on
be presented in form of tables.

A two-way ANOVA was also used to determine whether significant differences existed
between the means of the variables. SPSS version 22 was used to analyze data. The
results were presented using tables.

35
3.7 Chapter Summary
This study has presented the methodology adopted for the study. The research design was
presented first, followed by population and sample and sampling design, then data
collection methods, pilot study, research and data collection procedures, and data analysis
methods and ways of protecting the respondents through ethical consideration. Chapter
four shall present the study results and findings.

36
 CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
The objective of the study was to determine the impact of social media marketing on sales
growth of SMEs in Nairobi, Kenya. This chapter contains the summary statistics from the
small and medium enterprise responses in section 4.2, while the analysis of the impact of
digital marketing on SMEs’ sales growth was contained in section 4.3. Section 4.4
contained the discussions of the study findings, and chapter 4.5 summarized the data
analysis findings, results and discussions.

4.2 General Information

With the objective of the study being to analyze the impact of using social media
networks in marketing on growth of sales of SMEs in Nairobi, questionnaires were sent to
255 SMEs in Nairobi, Kenya and 190 SMEs responded by sending back the
questionnaires. This gave the study a response rate of 74.5% with the other 25.5% not
responding either because they were not in a position to give their SME marketing
information or could not answer the questionnaire in time required for the study.

4.2.1 Response Rate

The information on the response rate is illustrated in Table 4.1.

4.2.2 Type of Business

Table 4.1 indicates the distribution of the type of SME businesses that the study sampled
in Nairobi, Kenya. From the total of the 190 SMEs that responded, the findings indicated
that 39.5% (N=75) of them were sole proprietorship, 17.4% (N=33) of them were
partnerships, while 43.2% (N=82) of them were limited liability companies.

Table 4.1: Business Distribution

Frequency Percent

Sole Proprietorship 75 39.5

Partnership 33 17.4

Limited Liability Company 82 43.2

Total 190 100.0

37
4.2.3 Number of Employees by SMEs

Table 4.2 indicated the distribution of the number of employees by the SMEs in Nairobi,
Kenya. The study findings indicated that 31.6% (N=60) of the SMEs have less than 5
employees, 45.3% (N=86) of them indicated that they have between 5 and 20 employees,
while 21.5% (N=41) have employees between 21 and 50 employees.

Table 4.2: Number of Employees’ Distribution

Frequency Percent

Less than 5 60 31.6

Between 5 and 20 86 45.3

Between 21 and 50 41 21.5

More than 50 3 1.6

Total 190 100.0

4.2.4 Annual Turnover by SMEs

Table 4.3 above provided the distribution of annual turnover of the SMEs in Nairobi,
Kenya. From the study findings, 11% (N=21) of the SMEs that responded indicated that
they earn less than 1 million in a year while 23.7% (N=45) indicated that they earn
between 1 million and 3 million in a year. The table also shows that 33.7% (N=64) of the
SMEs earn between 3 million and 5 million, while 31.6% (N=60) of them indicated that
they earn more than 5 million.

Table 4.3: Annual Turnover Distribution

Frequency Percent

Less than 1 million 21 11.0

Between 1 million and 3 million 45 23.7
Between 3 million and 5 million 64 33.7
More than 5 million 60 31.6
Total 190 100.0

38
4.2.5 Operational Duration by SMEs

The period in which the SMEs in Nairobi have been in operation was provided in Table
4.4 above. From the study findings, 30% (N=57) of the SMEs are young having been in
operation for less than 3 years, 41.6% (N=79) of the SMEs have been in operation
between 3 and 6 years, while 28.4% (N=54) of the SMEs have been in operation for more
than 6 years.

Table 4.4: Operational Duration

Frequency Percent

Less than 3 years 57 30.0

Between 3 and 6 years 79 41.6

More than 6 years 54 28.4

Total 190 100.0

4.2.6 Presence of a Formal Marketing Department

Table 4.5 above indicated whether the SMEs have a formal marketing department in their
organization. The study results indicated that only16.8% (N=32) of the SMEs in Nairobi
had a functional marketing department in their organization, while the other SMEs
(83.2%) do not have a formal marketing department.

Table 4.5: Presence of Marketing Department

Frequency Percent

No 158 83.2

Yes 32 16.8

Total 190 100.0

39
4.2.7 Capacity for Growth of More Clients

The study also inquired from the SMEs whether they have capacity for growth for more
clients. The study indicated that all the SMEs that were sampled indicated having the
capacity to grow and have more clients if the situation arises.

4.3 Usage of Social Media Marketing to build Customer Relationships and Exposing
and Creating Awareness for SMEs.
4.3.1 Engaging with Customers to Build Customer Relationships Using Social Media
The extent to which SMEs engage with their customers via social media marketing in
Nairobi, Kenya was provided in Table 4.6. From the table, 51.1% (N=97) of the
respondents agree to have used social media networks as a way for engaging with their
customers, while 13.2% (N=25) of the SMEs strongly agree to have used social media
marketing to engage with their customers. Only 22.1% (N=42) of the SMEs are neutral in
using social media marketing tools to engage with their customers and 10.5% (N=20)
disagreed to have used social media marketing to engage their customers. For the overall
usage, the mean usage of social media marketing by SMEs in Nairobi to engage with their
customers was 3.61 which implied that social media marketing usage was done to a great
extent by the SMEs to cultivate relationships with their customers and a tool to engage
with them.

Table 4.6: Extent to Which SMEs Engage Customers Via Social Media Marketing

Frequency Percent

Strongly disagree 6 3.2

Disagree 20 10.5

Neutral 42 22.1

Agree 97 51.1

Strongly Agree 25 13.2

Total 190 100.0

40
4.3.2 Obtaining Feedback from Social Media Marketing and Responding To
Customers.
Table 4.7 indicates the extent Social Media Marketing is used to obtain Feedback from
customers by SMEs in Nairobi, Kenya. From the responses given, 49.5% (N=94) of the
SMEs in Nairobi indicated that they do not use social media marketing at to obtain
feedback from their customers about their products/services, 25.3% (N=48) of the SMEs
disagree to use social media marketing, 10.5% (N=20) use social marketing to a moderate
extent to obtain feedback, while 12.6% (N=24) of SMEs in Nairobi agree to have used
social media marketing as a means to collect feedback from their customers. The overall
mean of the responses indicated a mean of 1.92 which implied that SMEs in Nairobi use
social media marketing to a little extent as a form of getting customer feedback.

Table 4.7: Extent Social Media Marketing Is Used to Obtain Feedback and Respond
to Customers

Frequency Percent

Strongly disagree 94 49.5

Disagree 48 25.3

Neutral 20 10.5

Agree 24 12.6

Strongly agree 4 2.1

Total 190 100.0

4.3.3 Social Media Marketing Perceived as A Trustworthy Source on Information by

Customers.
The extent to which Social Media Marketing is used as a Trustworthy Source on
Information for customers on products/services marketed by SMEs in Nairobi was
presented in Table 4.8. The study results indicated that 17.9% (N=34) of the SMEs in
Nairobi use social media platforms as a form of marketing their products/services to a
moderate extent, 43.2% (N=82) of the SMEs agree to have used social media marketing
to a great extent as a trustworthy platform to market their products and services, and
23.7% (N=45) of the SMEs strongly agree use social media marketing to a very great
41
extent. From the mean calculation of the responses, the overall mean was 3.71 which
implied that social media marketing is used by SMEs in Nairobi to a great extent as a
trustworthy platform to market their products and services to their customers.

Table 4.8: Extent of Social Media Marketing Usage as a Source of Information for
Customers

Frequency Percent

Strongly disagree 9 4.7

Disagree 20 10.5

Neutral 34 17.9

Agree 82 43.2

Strongly agree 45 23.7

Total 190 100.0

4.3.4 Social Media Marketing Having A Global Reach to Potential Customers,

Exposing SMEs.
Table 4.9 above provided the extent of social media usage as a form of marketing to reach
a global scale by SMEs in Nairobi, Kenya. From the responses, the results indicated that
47.9% (N=91) of the SMEs in Nairobi strongly disagreed and not use social media
marketing to obtain a global reach to potential customers, while 23.7% (N=45) of them
indicated that they disagree use social media networks to market their good globally.
Another 18.9% (N=36) of the SMEs indicated that they are neutral and 8.4% (N=16) of
the SMEs agree to use Social Media marketing to reach a global scale. The mean
responses indicated a value of 1.91 which implied that Social Media networks are used by
SMEs in Nairobi to a little extent to reach potential customers globally.

42
Table 4.9: Extent to Which the Usage of Social Media Marketing Gives SMEs a
Global Reach

Frequency Percent

Strongly disagree 91 47.9

Disagree 45 23.7

Neutral 36 18.9

Agree 16 8.4

Strongly agree 2 1.1

Total 190 100.0

4.3.5 SMEs Activeness on the Same Social Media Platforms as Its Customers.
Table 4.10 provides the extent of the level of activeness on the same Social Media
platforms as their customers by SMEs in Nairobi, Kenya. The study findings showed that
40% (N=76) of the SMEs indicated that they are not actively present on their same social
media platforms as their customers are. Another 32.6% (N=62) of the SMEs indicated
that they disagree to be on the same social platforms as their target customers, 15.3%
(N=29) of them are neutral on being on the same social media pages as their customers,
while 12.1% (N=23) agree to an extent to be active on the same pages as their customers
are. The mean responses indicated a value of 1.99 which implied that there is less activity
on social media used by SMEs that match that of their customers in Nairobi.

43
Table 4.10: Extent of SMEs Activeness to The Same Social Media Platforms As
Their Customers

Frequency Percent

Strongly disagree 76 40.0

Disagree 62 32.6

Neutral 29 15.3

Agree 23 12.1

Total 190 100.0

4.3.6 SM Marketing Used to Create Personalized/Targeted Content for Customers

to Create Awareness.
Analysis retrieved from Social Media platforms/posts are some of the social media
marketing techniques analyzed by the study and the results on how SMEs interpret this
feedback to target their customers were presented in Table 4.11. From the responses
provided, the results indicated that 30.5% (N=58) did not use the feedback they get from
Social Media posts to better target their customers, 33.2% (N=63) of the SMEs disagree
to use the demographic feedback, 23.2 (N=44) of the SMEs are neutral, while 13.2%
(N=25) of the SMEs use the demographic feedback they obtain from their Social media
analytics of their pages/posts as a way of marketing to their targeted customers. The mean
responses calculated indicated a mean of 2.19 which implied that in general, demographic
feedback from Social Media (SM) platforms are not used to better target their customers
by SMEs in Nairobi.

44
Table 4.11: Extent Personalized Content Is Used to Target Customers for SMEs

Frequency Percent

Strongly disagree 58 30.5

Disagree 63 33.2

Neutral 44 23.2

Agree 25 13.2

Total 190 100.0

4.3.7 Impact of Social Media Marketing Usage In Cultivating Customer

Relationships And The Exposure It Gives To SMEs.
The effect of social media marketing on sales growth in SMEs was done by analyzing
each social media platform/channel and its impact on creating customer relationship and
the results are indicated in Table 4.12. The SMEs responded by indicating how each of
the social media marketing technique impacts their sales by creating a relationship with
their customers and the responses averaged so as to infer to all the SMEs in Nairobi. The
first social media marketing technique was customer engagement which the study
indicated a mean value of 3.29. This implied that social media marketing had an impact
on increased sales by being able to engage with customers. Getting feedback from
customer via Social Media had a mean of 2.39 which implied it increased sales for SMEs
by a moderate extent. The study also indicated that social media marketing had an effect
on SMEs sales growth to a great extent with a mean of 3.67 by being a reliable platform
used by both customers and businesses as a trustworthy source marketing products and
services. The extent to which social media marketing is used to give SMEs a Global
reach, same active space as Customers and gaining demographic feedback to better target
customers all had a moderate effect on SMEs’ sales growth with means of 2.27, 2.22 and
2.35 respectively.

45
Table 4.12: Impact of Social Media Marketing In Cultivating Customer
Relationships And The Exposure It Gives To SMEs

Mean Std. Coefficient of

score variation.
N Deviation
(CV%)

1. Social Media marketing assists in 190 3.29 .877 26.65%

customer’s engagement to Cultivate
Customer Relationships.

2. Extent Social Media Marketing is used to 190 2.39 .958 40.08%

Obtain Feedback and Respond to customers.

3. Extent of Social Media Marketing usage as 190 3.67 1.008 27.46%

a Trustworthy source of relaying information
to customers.

4. Extent of Social Media marketing is used 190 2.27 .953 41.98%

to give SMEs a global reach.

5. Extent of SMEs activeness to the same 190 2.22 1.003 45.18%

Social Media Platforms as their customers

6. Extent to which Personalized Content on 190 2.35 1.121 45.70%

Social Media posts is used to better target
customers

The study also tested the effect of social media marketing on sales growth using Kruskall-
Wallis test which analyzed whether a unit ordinal change in extent of social media
marketing adoption had an effect on sales.

4.4 Extent to Which Social Media Marketing Has Brought About an Increase In
Sales Growth For SMEs In Nairobi, Kenya.
Table 4.13 indicated the effect of posting promotions and discounts of products and
services on Social Media in the annual turnover with respect to the increase in sales for
SMEs. The Kruskal-Wallis test showed there is a statistically significant difference in

46
annual turnover based on the extent of posting promotions and discounts on social media
platforms and its adoption by SMEs (χ2=28.176, p=0.002). The mean ranks showed an
increase in annual sales based on the extent of social media marketing adoption.

Table 4.13: Promotions and Discounts Displayed on Social Media Pages Impact
Increase In Sales.

Promotions and Discounts used in SM Marketing N Mean Rank

Annual Turnover Strongly disagree 6 10.00

Disagree 20 72.25
Neutral 42 80.36
Agree 97 102.98
Strongly agree 25 124.30
Total 190

Test Statisticsa,b

Annual Turnover

Chi-Square 28.176

df 4

Asymp. Sig. .002

Kruskal Wallis Test

Grouping Variable: Promotions and Discounts: Research data (2019)

4.4.1 Relationship between Campaigns and Sales Increase.

Table 4.14 provided the effect of Campaigns ran by SMEs on Social Media on change in
annual turnover with respect to the extent of its adoption. Kruskal-Wallis test indicated
that there is a statistically significant difference in annual turnover based on the extent of
Social Media marketing adoption by SMEs (χ2=37.199, p=0.001). The mean ranks
showed an increase in annual turnover based on the extent of using Social Media
Marketing Campaigns adoption by SMEs.

47
 Table 4.14: Impact of Social Media Marketing Campaigns on Growth of Sales

SM usage of Marketing Campaigns N Mean Rank

Annual Turnover Strongly disagree 34 59.46

Disagree 108 89.48

Neutral 20 119.35

Agree 24 143.13

Strongly agree 4 149.50

Total 190

Test Statisticsa,b

Annual Turnover

Chi-Square 37.199

Df 4

Asymp. Sig. .001

Kruskal Wallis Test

Grouping Variable: Social Media Marketing Campaigns: Research data (2019)

4.4.2 Social Media Marketing Increases Revenue in SMEs

The effect of social media marketing on annual turnover with respect to the extent of its
adoption was provided in Table 4.15. The findings from Kruskal-Wallis test indicated that
there is a statistically significant difference in the annual turnover based on the extent of
social media marketing adoption by SMEs (χ2=47.191, p=0.000). The mean ranks also
showed an increase in the overall revenue turnover for the SMEs based on the extent of
social media marketing adoption.

48
 Table 4.15 Impact of Social Media Marketing on the Increase In Revenue In SMEs

SM Increases Revenue in SMEs N Mean Rank

Annual Turnover Strongly disagree 9 23.17

Disagree 20 32.73

Neutral 34 56.79

Agree 82 88.43

Strongly agree 45 106.66

Total 190

Test Statisticsa,b

Annual Turnover

Chi-Square 47.191

df 4

Asymp. Sig. .000

Kruskal Wallis Test

Grouping Variable: Increase in Revenue: Research data (2019)

4.4.3 Measuring Performance of Each Social Media Marketing Campaign to

Improve Sales.
Table 4.16 provided the effect of measuring the feedback SMEs get from their social
media marketing campaigns and the adoption of that information to improve on their
sales. Kruskal-Wallis test indicated that there is a significant difference in the increase of
sales by using media marketing to measure the performance of campaigns by SMEs
(χ2=50.033, p=0.006). The mean ranks showed a significant increase in annual turnover
based measuring performance of Social Media marketing adoption.

49
 Table 4.16: Measuring Performance of SM Marketing Campaigns to Improve Sales

Measuring Performance to Improve Sales N Mean Rank

Annual Turnover Strongly disagree 45 68.70

Disagree 91 75.29

Neutral 36 94.56

Agree 16 105.56

Strongly agree 2 109.50

Total 190

Test Statisticsa,b

Annual Turnover

Chi-Square 50.033

df 4

Asymp. Sig. .006

Kruskal Wallis Test

Grouping Variable: Measuring Performance to Improve Sales: Research data (2019)

4.4.4 Effect of Social Media Marketing In Providing A Greater Access And Effective
Way To Reach Customers For SMEs Hence Increasing Sales Growth.
Table 4.17 provided the effect of using Social Media marketing tools on change in annual
turnover with respect to the extent of its adoption in SMEs in Nairobi, Kenya. Kruskal-
Wallis test indicated that statistically, there is a significant difference in annual turnover
based on the extent in which SMEs have adopted in using Social Media marketing to
increase their sales growth (χ2=48.646, p=0.000). The mean ranks showed an increase in
annual turnover based on the extent of adoption of using Social Media marketing tools.

50
Table 4.17: Impact of SM Marketing in Providing A Greater Access and Effective
Way to Reach Customers for SMEs Improving Sales Growth

SM Marketing Reach on SMEs sales growth N Mean Rank

Annual Turnover Strongly disagree 56 64.24

Disagree 62 88.69

Neutral 49 117.17

Agree 23 143.80

Total 190

Test Statisticsa,b

Annual Turnover

Chi-Square 48.646

df 3

Asymp. Sig. .000

Kruskal Wallis Test

Grouping Variable: Social Media Marketing Reach on SMEs sales growth

4.4.5 Social Media Marketing is the New Arena/Platform for SMEs to Grow Their
Sales.
Table 4.18 provided the effect on the annual turnover of SMEs with respect to using
Social Media platforms as the new arena for marketing and the extent of its adoption
amongst SMEs. Kruskal-Wallis test indicated that there is a statistically significant
difference in annual turnover based on the extent of the adoption by SMEs in using Social
Media Marketing (χ2=55.87, p=0.002). The mean ranks showed an increase in annual
turnover based on the adoption of Social Media platforms as the new arena for marketing
products and services.

51
Table 4.18: The New Arena/Platform for SMEs To Grow Their Sales

New Arena/Platform for SMEs to grow their sales N Mean Rank

Annual Turnover Strongly disagree 58 58.48

Disagree 63 89.81

Agree 44 93.05

Strongly Agree 25 107.24

Total 190

Test Statisticsa,b

Annual Turnover

Chi-Square 55.870

df 3

Asymp. Sig. .002

Kruskal Wallis Test

Grouping Variable: SM Marketing as the new Platform for Business Growth Source:

4.5 Correlation Test

Pearson’s correlation test was done on SMEs annual turnover and the extent of adoption
of social media marketing techniques. From the tests that were done, the results indicate
that there was a mild correlation between annual turnover and the extent to which social
media marketing is used to bring about an increase in sales growth amongst SMEs in
Nairobi, Kenya. These Social Media marketing techniques had correlation values of
0.419, 0.484, 0.492, 0.51, and 0.586 respectively. It was only the use of social media
marketing bringing about an increase in business revenues that had a moderately high
correlation with annual turnover, with a value of 0.616 indicating a positive relationship
between annual turnover and extent of social media adoption amongst SMEs in Nairobi
Kenya. The inter-relation tests indicated low correlation values which implied there was
no multi-collinearity among the independent variables.

52
Table 4.19: The Correlation Test

Annual Promo SM Market Increase in Mea. of SM Effective New arena for

Turnover &Discount Campaigns SME Campaigns Customer SME Growth
s Revenue Reach

Annual Pearson Correlation 1 .419** .484** .616** .492** .510** .586**

Turnover
Sig. (2-tailed) .000 .000 .000 .000 .000 .000

Promotions Pearson Correlation .419** 1 .232** .250** .312** .302** .291**

&Discounts

Sig. (2-tailed) .000 .001 .001 .000 .000 .000

Marketing Pearson Correlation .484** .232** 1 .296** .240** .317** .321**

Campaigns
Sig. (2-tailed) .000 .001 .000 .001 .000 .000

Increased Pearson Correlation .616** .250** .296** 1 .231** .304** .338**

Revenues
Sig. (2-tailed) .000 .001 .000 .001 .000 .000

Measuring Pearson Correlation .492** .312** .240** .231** 1 .555** .412**

Performance

Sig. (2-tailed) .000 .000 .001 .001 .000 .000

Easy and Pearson Correlation .510** .302** .317** .304** .555** 1 .670**
Effective
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
Customer
Reach

New Pearson Correlation .586** .291** .321** .338** .412** .670** 1

Platform
Sig. (2-tailed) .000 .000 .000 .000 .000 .000

**. Correlation is significant at the 0.01 level (2-tailed).

53
4.6 Challenges of Social Media Marketing Adoption by SMEs
4.6.1 Factors That Affect Social Media Marketing Adoption
The challenges that were encountered by majority of SMEs that hindered social media
marketing adoption were provided as shown in Table 4.20 above. The findings indicated
that lack of knowledge on how to use social media networks as a key marketing tool was
the biggest challenge for SMEs to adopt Social Media marketing techniques.

This was indicated with a 31.8% (N=55) of the responses. Lack of suitable social media
marketing techniques was the other challenge that was experienced by SMEs in adoption
of social media marketing.

This meant that the social media marketing techniques available were not suitable for
their type of business. This was shown by 28.9% (N=50) of the SMEs that responded.
Lack of finances was the third largest challenge experienced by SMEs to adopt social
media marketing. This was shown by a 22.5% (N=39) of the total responses, and would
be because some of the businesses are still new and do not have the financial capacity to
carry out a team to handle the social media networks for marketing purposes.

The fourth challenge that hindered social media marketing by SMEs in Nairobi is lack of
time for planning and implementing the social media marketing strategy. This was
presented by 11.6% (N=20) of the responses given by SMEs. Most of the SMEs do not
have a formal marketing department and lack of time would therefore arise in the case
where there are few staff with a lot to do.

Table 4.20: Social Media Marketing Adoption Challenges

Responses Percent of
Cases
N Percent
Lack of Finances 39 22.5% 25.0%
Lack of Social Media Knowledge 55 31.8% 35.3%
Lack of Suitable Social Media Marketing Techniques 50 28.9% 32.1%
Lack of Time for Planning and Implementation 20 11.6% 12.8%
Laws and Policies on Digital Marketing 7 4.0% 4.5%
Other Challenges 2 1.2% 1.3%
Total 173 100.0% 110.9%
a. Dichotomy group tabulated at value 1.
54
4.6.2 Extent of Challenges On Using Social Media Marketing To Grow Sales In
SMEs.
Table 4.21 shows the extent to which the challenges affected the adoption of the use of
social media marketing. The results indicated that lack of social media
networks/platforms knowledge was a challenge to social media marketing adoption to a
great extent with a mean of 3.12. This was followed by the lack of suitable social media
marketing techniques which indicated a mean of 2.79 implying that it was a challenge on
social media marketing adoption to a moderate extent.

This challenge was followed by lack of finances by the SMEs which had a mean of 2.56
implying it was a challenge to social media marketing adoption by SMEs to a moderate
extent. Lack of time for planning and execution was another challenge that had a mean of
2.15 implying it was a challenge to social media marketing adoption to a moderate extent.
Finally, laws and policies on digital marketing, which govern social media marketing as
well, had the least impact on social media marketing adoption with a mean of 1.88 which
implied that it was a challenge to social media adoption by SMEs in Nairobi, Kenya to a
little extent.

Table 4.21: The Challenges of Social Media Marketing on Increasing Sales Growth

N Mean Std. Deviation

Lack of Finances 190 2.56 1.005

Lack of Social Media Networks Knowledge 190 3.12 .757

Lack of Suitable SM Marketing Techniques 190 2.79 1.048

Lack of Time for Planning and Implementation 190 2.15 .893

Laws and Policies on Digital Marketing 190 1.88 .802

55
4.7 Chapter Summary
The above section gave a detailed summary of the findings based on the questionnaire
that was constructed mainly to test hypothesis for the study. Usage of social media
networks in cultivation customer relationships, the level of exposure given through the
use of social media marketing and the extent to which social media has brought about an
increase in sales growth, were the variables that were being tested. The qualitative data
were present by use of tables. The next chapter will detail the findings and conclusions
together with the recommendations arrived at.

56
 CHAPTER FIVE
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction

This final chapter contains the summary and conclusion of the study with regards to the
impact of using Social Media networks for marketing purposes on the growth of sales in
small and medium enterprises in Nairobi, Kenya. The chapter gives a summary of the
findings of the previous chapter, conclusion based on the findings, recommendations and
later suggestions for further research.

5.2 Summary

The study sought to determine the effect of using social media networks for marketing
techniques on sales growth of both small and medium enterprises, with the scope of the
study being in Nairobi, Kenya. The study also set to find out the challenges that SMEs
encounter which hinder their social media marketing adoption. The study used three
variables which were the impact of using social media networks to build customer
relations, identifying the level of marketing exposure given to the business through social
media and the extent to which social media has brought about an increase in sales growth.
The study sought its information from Luxe and Allure Events.

The use questionnaires seemed as the most preferable instrument or data collection tool to
use because of its accuracy, relative ease of preparation, administration and cost-
effectiveness and it also ensured privacy of the respondent’s business owners and
marketers who participated in this study. The Likert format was used because of its ability
to yield equal-interval data. It ranged from; Strongly Disagree, Disagree, Neutral, Agree
and Strongly Agree. The questionnaire had both open-ended and closed-ended questions.
The questionnaire was structured in four different sections. Section (A) containing
questions of personal information, section (B) questioning on consumer relations, Section
(C) questioning on marketing exposure and question (D) questioning on increase in
growth of sales. Primary data was used in this study to provide information that was used
to analyze the data.

From the data analysis on the first specific objective, the findings indicated that social
media marketing has had an impact and an effect on SMEs’ in cultivating and building
customer relationships by extensive use of social media networks for marketing and it has

57
an effect on SMEs’ sales growth to a moderate extent. SMEs have utilized these social
platforms as a valuable tool to build and maintain professional relationships with current
and potential consumers. The social networks have been used to interact with customers
and have created a platform that enables businesses to respond quickly to their customer’s
queries. The communication channel created has enabled a cost-effective means for the
interaction to occur and helps business to get feedback from their clients.

From the study’s second objective, the study findings indicate the importance of using
social media networks as a digital marketing tool which gives businesses maximum
exposure and great marketing mileage for any brand or product or service. It proves that
social media is now one of the most powerful marketing and advertising tools used today.
Many of the businesses acknowledge the necessity of using social media networks in
providing maximum exposure for their business, however they acknowledge that they still
have a lot to learn about using social tactics and what strategies they should use for
effective engagement with their target audience in order to create brand awareness. Lack
of knowledge on the proper utilization of social media and the effective use of social
media networks was the greatest challenge for SMEs in the adoption of social media
marketing. This was followed by lack of suitable social media marketing techniques
which was also a challenge experienced by SMEs in the adoption of social media
marketing. The SMEs also experienced a challenge in the adoption of social media
marketing due to lack of resources such as finances to have someone running the
businesses social media pages and do promotions, followed by the lack of time for
planning and implementation.

The findings from the third specific objective indicate that the utilization of social media
networks for marketing purposes can bring about an overall increase sales growth.
However, this was not the case for majority of the respondents. Most of the SMEs have
not yet harnessed the capability to reach properly reach their target market and haven’t
been able to control how their brand is viewed online. A few of o businesses seemed to
have understood how to make the most out of social media platforms to generate more
sales effectively. For most SMEs they are yet to establish the appropriate platforms they
should be using in order to establish a strong online presence with their target customers.
They should also prioritize on their social media strategy on how often and how
consistent they should be with their posts and learn to monetize the posts and check their
analytics pages provided by the various social networks so as to track their performance.
58
5.3 Discussion
5.3.1 Impact of Using Social Media Networks to Build Customer Relations in SMEs
Social media networks are viewed as customer service channels. The study shows that
social media networks have provided a platform for potential and existing customers to
reach out to businesses and seek help when they have queries, issues or concerns on
products they see being advertised to them and those that they have already purchased.

Through social media marketing, the SMEs have now been able to interact with existing
and potential customers up to a global scale which was indicated by Hill & Sullivan
(2012). More often than not, when customers use social media to complain, it’s because
the business has failed to assist them through conventional customer service channels. If
an immediate solution or assistance cannot be offered via the businesses’ social media
platforms, ensure the customer that you are working on it and follow up as soon as you
have an answer. It’s advisable to point the complainant to a phone number or email
address where the customer can reach the business operators directly. This makes it easier
to communicate, and keeps members of the social media community from interjecting.

Before social media networks existed, consumers might have shared a poor customer
service experience with a few family members, close friends, and co-workers. However,
once social media platforms such as Instagram Twitter and Facebook became prevalent
platforms, pleased and also angry customers gained the ability to broadcast tales of
terrible customer service to an almost infinite audience that exist on social media.

Because of digital tools and channels, customers now have more power and influence
than they ever have before when it comes to expressing how they view a business’s
products and services. Today customers believe fast resolution of the problem is vital to
good service, making social consumer support invaluable. Due to this, social media sites
such as Instagram, Facebook and Twitter have evolved to become more than emergent
platforms for marketing and advertising. Increasingly, they are also valid and important
channels through which consumers solicit and receive customer service as businesses
market their products and services to them using the same social media networks.

While social media marketing efforts may drive traffic to targeted social sites, business
managers and their customer service team must meet customers where they're already on
the various social media networks. For most companies, Facebook and Twitter will be the
primary focus for cultivating and building relationships with customers, but some brands
59
may find that their customers also frequent Google+, LinkedIn, Pinterest, Instagram, or
other social media networks.

Social media marketing helps in creating a social media presence. Business should look
for ways to include themselves in conversations relevant to their respective industry. As
pointed out by Lange & Smith (2010), marketers are now familiar with social media
monitoring tools that automate the process of searching for mentions of a brand name, or
combing social media pages for specific keywords, but listening is equally important in
order to build and cultivate and maintain customer relations. It's an important part of the
job to collect and analyze activity so that you understand the kind of issues being raised
over social media. SMEs need to collect a week or months’ worth of activity compared to
large enterprises.

SMEs will find that the majority of their social media contacts are direct requests for
customer service. Depending on the volume of social interactions the business brand
generates, and the size staff in the business that works in marketing, the business’ ability
to keep track of social inquiries may be made easier by a customer service platform that
can integrate with social media and turn posts, tweets, and direct or private messages, this
way, it provides the business with an easy platform for customer interaction hence
cultivating customer relationships (Wang & Fesenmaier, 2003).

In the fast-paced world created by social media networks, speed of response is critical,
although speed isn't everything if you're not able to resolve the customer's issue. As a
general guideline, businesses are encouraged that if they can easily answer a question
posed over the various social media networks in the space of a comment or tweet, and the
answer can be public, then they should do it. The success of the effort put in cultivating
customer relations on social media networks will depend, as ever, on the quality of care
you provide.

5.3.2 The Level of Marketing Exposure SMEs, Receive Through Social Media
Marketing

Conventional marketing has been used by companies for many years and with the growth
of technology, digital marketing channels have become greatly used by companies. In the
recent years, Social Media networks and sites such as Facebook, Twitter and Instagram to

60
name a few, are some of the digital avenues used by businesses of late to acquire, retain
and satisfy its customers and boost their growth of sales (Ryan & Jones, 2009).

Marketing in an organization helps to create awareness of products and services sold to

the market by a business. As Johnson and Kaye (1998) explained, one of the main reason
companies create this awareness is to increase sales for both the short run and long run.
Conventional marketing has been used by companies for many years and with the growth
of technology, digital marketing channels have become greatly used by companies. In the
recent years, Social Media sites such as Facebook, Twitter and Instagram to name a few,
are some of the digital avenues used by businesses of late to acquire, retain and satisfy its
customers. As large companies have been able to adapt with the technological changes in
marketing, the extent of adoption and impact of social media marketing as part of digital
marketing in small and medium enterprises is not yet certain. The study therefore sought
to determine the effect of social media marketing techniques on sales growth of SMEs,
with the scope of the study being Nairobi, Kenya. The study also set to find out the
challenges that SMEs encounter which hinder their social media marketing adoption.

With the objective, the study analyzed theories relevant to the study and conducted a
literature review of similar studies. As pointed out by Yasin, Tasneem and Fatema (2015)
in their research, the online marketing techniques used by businesses today to
operationalize digital marketing are email marketing, mobile marketing, social media
marketing, search engine optimization, pay-per-click marketing, and online marketing.
These techniques were used to assess the extent to which social media marketing affects
SMEs’ sales growth in Nairobi, Kenya. The study conducted a descriptive cross-sectional
research design by analyzing different SMEs in Nairobi, Kenya at the same time.

The objective of the study was to identify the extent at which the use of social media
marketing has brought about an increase in the growth of sales experienced by SMEs in
Nairobi, Kenya. From the study results, it was found that lack of knowledge for the use
social media networks as a key marketing tool was the biggest challenge hindering SMEs
to adopt social media marketing techniques. Similar to the findings from Jangongo and
Kinyua (2013), are that many small enterprises are not aware of social media platforms
being adapted as a marketing option and how they work, therefore limiting them on the
usage. The other challenge faced by SMEs was lack of which network to be used for
social media marketing that is suitable for them. The SMEs may want to market using

61
digital and online platforms but they may not have the best technique that suits them
when it comes to suing Social Media networks to market to their current or potential
customer.

As pointed out by Lewis, K (2009) in his findings, SMEs may want to market using
digital and online platforms but they may not have the best technique that suits them
when it comes to suing Social Media networks to market to their current or potential
customer. This challenge may also be as a result of lack of knowledge indicated earlier.
Lack of finances was another challenge faced by SMEs to implement social media
marketing techniques besides it being a low-costing alternative platform to market a
business. This is especially for small enterprises that are starting and cannot afford to hire
or have an employee to run their various social media accounts and use some of the social
media marketing techniques available.

This challenge was followed by lack of time for planning and execution of the social
marketing. Small business does not have formal structures and relevant personnel for
marketing and therefore may not have time to come up with a social media marketing
strategy and execution since they also require time. Finally, the laws and policies on
digital marketing had the least effect on the use of Social Media Networks and poses as a
challenge on social media marketing adoption with a mean of 1.88. It was therefore not a
major challenge to SMEs as there are no policies provided that hinder the use of social
media networks/platforms as a marketing arena. The only issue may be certain lines of
professions or businesses not allowed to market themselves in general on Social Media or
on any online platform.

5.3.3 The Extent Social Media Marketing Has Brought About Sales Growth for
SMEs

The objective of the study was to assess the effect of using Social Media networks in
marketing on the growth of sales of SMEs in Nairobi, Kenya. The study analyzed the
various social media marketing techniques and how each of the techniques affects SMEs
sales growth. The first social media marketing technique to be analyzed was the use of
Promotions and Discounts displayed by the SMEs on their social media platforms. From
the results, the adoption of promotions and discount displays is done to a great extent by
SMEs in Nairobi and it has a positive impact on the growth sales to a great extent, which
goes in line with the findings from Hartshorn (2010) study that agrees to the same. More
62
companies have started using Facebook and Instagram promotions for instance to attract
and reach their current and potential clients. The results are consistent with that done by
Onyango (2016) and that of Yasmin et al. (2015) who indicated a positive relationship
and increase in sales as a result of social media marketing promotions, Facebook Pages
promotions being one of them. The other social media marketing technique analyzed was
Social Media marketing Campaigns and its effect on SMEs’ sales growth. The study
findings indicated that SM marketing Campaigns are used to a little extent by SMEs in
Nairobi and impacts sales growth to a moderate extent. The usage by SMEs may be low
due to costs associated with Social Media Campaigns. This makes it expensive compared
to other social media marketing techniques.

Social media marketing tools used as digital marketing technique indicated a great usage
by SMEs that helps to increase their overall business revenues and also results indicated
its impact on SMEs growth of sales to a great extent. The adoption of social media is high
because it is a cheap and low-cost marketing technique, and can also reach many current
and potential customers who are in social media networks. The results are consistent with
the studies done by Srinivasan et al. (2016), Adegbuyi et al. (2015), and Jagongo and
Kinyua (2013) who indicated that social media marketing creates brand awareness that
results in strong influence on customer acquisition and retention.

Measuring of Social Media analytics as a social media marketing technique indicated

usage to a little extent by SMEs and its effects on growth of sales of SMEs to a moderate
extent. The extent of use may be low due to its technicality and lack of understanding of
interpreting the analytics provided by social media networks by the SMEs. The results
findings are not consistent with that done by Yasmin et al. (2015) who indicated that
analyzing posts on social media networks have a great impact on the growth of sales.

The other social marketing technique whose effect on sales growth was analyzed in the
study was the effective ease in accessing and reaching customers to carry our sales on the
social media platforms. The study findings indicated that it is used by SMEs in Nairobi to
a little extent and it has an impact on sales to a moderate extent. The usage may be low
also due to its technicality and SMEs do not understand how to make massive sales via
social media. A study done by Taiminen and Heikki (2015) raised queries whether SMEs
understand how social media marketing operates to bring about essential changes in
implications for managing communications. The final social media marketing technique
63
used by SMEs was SM networks being used as the new arena/platform for marketing.
The study findings indicated that it was used to a moderate extent by SMEs and it had an
impact on the growth of sales to a moderate extent. The findings were similar to study
findings by Njau and Karugu (2014), Yasmin et al. (2015) and also that done by Kithinji
(2014).

The study was to identify the extent at which the use of social media marketing has
brought about an increase in the growth of sales experienced by SMEs in Nairobi, Kenya.
From the study results, it was found that lack of knowledge for the use social media
networks as a key marketing tool was the biggest challenge hindering SMEs to adopt
social media marketing techniques. Many small enterprises are not aware of social media
platforms being adapted as a marketing option and how they work, therefore limiting
them on the usage. The other challenge faced by SMEs was lack of which network to be
used for social media marketing that is suitable for them.

5.4 Conclusion

5.4.1 Conclusion on Using Social Media Networks to Build Customer Relations

The study findings with regards to the use of social media in Cultivation Customer
Relationships indicated that it was significant on SMEs sales with a moderate extent. The
study findings led to the conclusion that cultivating customer relationships is significant
to SMEs’ sales growth but to a moderate extent. The last digital marketing technique to
be analyzed as a social media marketing tool was online marketing whose results
indicated that it was significant on SMEs sales but also to a moderate extent. The study
findings led to the conclusion that online marketing is significant to SMEs’ sales growth
but to a moderate extent.

5.4.2 Conclusion of The Level of Marketing Exposure Given to SMEs Through

Social Media Marketing
With regards to the exposure given to the business by the use of social media marketing,
the study indicated that it is used by SMEs to a great extent and the effect on sales was
significant. The study therefore concludes that social media marketing is important and
should be used more by SMEs to improve their sales. More SMEs should start using
personalized accounts on social networks, which would be cheaper compared to niche
marketing using traditional media. The challenges experienced by SMEs with regards to
the implementation of social media marketing were analyzed and rated on the extent to
64
which they affect adoption. From the study findings, the study concluded that lack of
knowledge of the use of social media as a key marketing tool, lack of suitable social
media marketing techniques, lack of finances and lack of time for planning and
implementation were the biggest challenges that should be focused on so as to improve
social media marketing adoption

5.4.3 Conclusion on the Extent to Which Social Media Marketing Had Increased
Growth of Sales for SMEs
From the study findings, conclusions were made in regards to use of social media
networks in marketing and its adoption by SMEs and its effect on sales growth. From the
study results, it can be concluded that the benefits and use of social media marketing has
a positive effect on SMEs sales growth in Nairobi, Kenya. The study findings also
indicated that mobile and email marketing is used to a little extent by SMEs and had a
moderate effect on sales and the study concluded that it has not achieved greater sales for
SMEs as would be expected.

5.5 Recommendations

5.5.1 Recommendations for Implementation

From the research findings and conclusions, the study made recommendations on the way
forward on using social media networks in marketing and its adoption by SMEs. The first
recommendation is that there should be proper sensitization and training to SMEs on the
available social media networks and marketing options and how it can be done. The
government and institutions such as KEPSA should come up with programs to help grow
SMEs which would help the economy grow. The following recommendations are made in
light of this study.

5.5.1.1 Recommendations for Using SM Networks to Build Customer Relationships

Social media is where customers basically live these days. Customers don't want to be
waiting on hold for answers. They want to be attended to immediately and social media is
the ideal avenue to make that happen. There is huge opportunity with using social media
to build customer relationships, including building brand loyalty and increasing your
bottom line. 87% of customers said that their online interactions with a business have
made a positive impact on that customer's likelihood of making a purchase from that
company. That is enough reason alone to move much of customer relationship

65
management to social media networks. Using social media networks for marketing can be
highly fruitful if businesses don’t forget that no social media channel is a broadcast
platform; It’s a conversation medium. Rather than just posting updates on social media
profile, the better approach for SMEs would be to engage in conversations with your user
base.

5.5.1.2 Recommendations for Using SM Networks to Give Exposure to SMEs

Social media marketing is no longer optional for small businesses only. Facebook leads
the way for small businesses as platform used to advertise business products and services.
Majority of small businesses use Instagram, YouTube, and Twitter to market their brands.
Some business owners are taking advantage of networks such as LinkedIn and Snapchat
to reach their target market. I’d recommend businesses to define their marketing goals.
While lead generation, brand awareness, and customer engagement are all good reasons
to use social media, it doesn’t mean all three should be used all at once with every
business. Post content on a daily basis and form relationships with social media
influencers to help expose the business to potential customers. A proactive social media
approach will strengthen your marketing strategy and with the best practices, you can
easily entice your social media followers to buy because of your social media posts.

5.5.1.3 Recommendations on How SM Networks Increases Sales Growth for SMEs

The fact of the matter is that 86% of the people on social media follow brands they want
to associate with. Customers in this day and age are tech savvy. They want to stay
updated with latest offerings of the brand and in return want good support for their
grievances. This makes social media presence critical for all businesses. Social media
marketing is highly essential for businesses and brands: 75% people buy a product after
they see it in their social media feeds, 57% people are more likely to buy from a brand
they follow on social media. Social media marketing has above 100% leads-closing rate
as compared to any other form of outbound marketing.

From the study findings, one of the recommendations for further research is, more
research should be done for other counties outside Nairobi as this would provide
comparison and reinforcement or disapproval of this study’s findings with regards to
social media marketing. Further research should also look at how the use of social media
networks in marketing affects other aspects of a business such as brand loyalty and
customer relationship management since the organization is more than sales and profits.

66
Also, other factors that affect sales growth and profitability of SMEs should also be
analyzed since it is known that sales are not affected only by marketing or the use of
social media networks as part of digital marketing, but a combination of both internal and
external factors to an organization. The government should also come up with favorable
policies to social media marketing so as not to restrict business when they use the
available networks. Finally, other analytical techniques apart from that used by the study
should be done by researchers to determine how social media marketing affect sales
growth in an organization.

67
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 APPENDICES
APPENDIX I: NACOSTI LETTER

74
APPENDIX 11: INTRODUCTORY LETTER

Sharon Kinuthia,
Phone Number: +254722166405
Email: sharonkinuthia@gmail.com
P.O.BOX 1381, 00618 NAIROBI
5th August, 2019

Dear respondent,

RE: RESEARCH QUESTIONNAIRE

I am a graduate at United States International University – Africa pursuing a Masters of

Business Administration (MBA). I am currently conducting a research proposal on the Effect
of Social Media Marketing and the impact it has on the growth of business sales in Nairobi,
Kenya. This is an agreement in partial fulfillment of the Masters of Business Administration
(MBA) degree program at USIU- Africa.
The research will be based on small and medium enterprises (SMEs) in Nairobi, and you
have been selected as one of the respondents to participate in the survey. The results of this
survey will be instrumental for the business industry in Kenya, focusing on how technology
has helped in marketing and advertising and how to manage it.
This is an academic research and will be highly treated with strict confidentiality and be
adhered to. Your name will not appear in the report. I humbly request you to spare 15
minutes to complete the questionnaire attached, constituting of five sections.
Thank you for your time and cooperation.

Warm regards,
Sharon Kinuthia.

75
APPENDIX III: QUESTIONNAIRE

THE EFFECT OF USING SOCIAL MEDIA NETWORKS FOR MARKETING ON

SALES GROWTH IN SMALL AND MEDIUM ENTREPRISES IN NAIROBI,
KENYA

SECTION A: Personal Information (Kindly circle where appropriate)

1. Gender: Male ○ Female ○

2. Marital Status: Single ○ Married ○

3. What is your age range?

21-25 yrs. ○ 36-40 yrs. ○

26-30 yrs. ○ 41-45 yrs. ○

31-35 yrs. ○ Above 46 yrs. ○

4. Education Level: Primary ○ Secondary ○ Diploma ○

Undergraduate ○ Graduates ○ Post graduate ○
None ○

5. Type of Business:

Sole Proprietorship ○

Partnership ○

Limited Liability Company ○

76
6. Number of employees in your business?

Less than 5 ○ Between 21 and 50 ○

Between 5 and 20 ○ More than 50 ○

7. What is your business’ annual turnover in Kshs?

Less than 1 million ○

Between 1 million – 3 million ○

Between 3 million - 5 million ○

More than 5 million ○

8. What is the operational duration for your business?

Less than 3 years ○

Between 3 and 6 years ○

More than 6 years ○

9. Does your business have a formal marketing department?

Yes ○ No ○

10. Do you use social media networks to market your business?

Yes ○ No ○

11. What is your business’ capacity growth of more Clients?

Low ○

Moderate ○

High ○

12. Would you like to expand your business in future and operate via social media
marketing tools?

Yes ○ No ○

77
SECTION B: Use of Social Media Networks to build Customer Relations in SMEs.

Extent to which Social Media Marketing assists in Cultivating Customer relationship in

SMEs within Nairobi, Kenya. Indicate the extent to which you agree with the following
statements by using a scale of 1 to 5; where 1= Strongly Disagree and 5 = Strongly
Agree.

Strongly Disagree Neutral Agree Strongly

disagree Agree

1. Good customer service is provided through

social media marketing on our social media
networks.
2. My business uses social media marketing to
identify with the prospective customers.

3. We engage our customers through frequent

posts on our social media pages.

4. My business uses social media marketing to

obtain and respond to feedback from
customer’s experience after using our
products/services
5. Customer feedback on our social media
pages is a major key to discovering and
solving our customer problems.
6. Feedback and summaries from our Social
Media pages have enabled us to understand
our customer trends.
7. Demographic feedback has enabled us to
formulate appropriate and targeted content
for our customers on social media.
8. My business uses social media to obtain
innovative ideas from customers.

9. Social media is perceived by our customers

as a trustworthy source of information
regarding our products and services.

78
 SECTION C: The Level at which Marketing Exposure given to SMEs by using of Social
Media Networks for marketing purposes in SMEs.

To what extent does the level of exposure SMEs receive through social media marketing
in Nairobi, Kenya? Indicate the extent to which you agree with the following statements
by using a scale of 1 to 5; where 1= Strongly Disagree and 5 = Strongly Agree.

Strongly Disagree Neutral Agree Strongly

disagree Agree

1. Social Media marketing has been helpful in creating

brand awareness for my business.

2. Social Media marketing has helped in protecting

my brand image.

3. My business uses social media to develop our

desired brand image.

4. Our Social Media interactions helps our customer

identify with our product brand.

5. Customers inquire on our product/service through

our Social Media pages before purchase.

6. Social Media marketing has enabled us to reach our

customers effectively.

7. Social Media has helped my business reach

potential customers around the world instantly.

8. Our business is dependent and selectively active on

the same Social Media platforms as our customers
for effective Social Media marketing.
9. Social media marketing is able to provide
personalized communication, increasing awareness
of our products/services.

79
 SECTION D: The extent to which Social Media Marketing has brought about an
Increase in Sales Growth for SMEs.

What is the extent to which social media has brought about the increase in sales for
SMEs in Nairobi, Kenya, indicate the extent to which you agree with the following
statements by using a scale of 1 to 5; where 1= strongly disagree and 5 = strongly agree.

Strongly Disagree Neutral Agree Strongly

disagree Agree

1.
Promotions and discounts displayed on the
business social media pages help increases our
sales.
2.
There is a positive relationship between our social
media marketing campaigns and our sales
increase.

3.
Low-cost social media marketing has increased
revenues in my business.

4.
The ability to measure performance of each social
media campaign helps our business, as it
continuously learns how to improve our sales.
5.
Social Media tools have provided greater
accessibility to our customers which subsequently
have had a significant effect on our business
growth.
6.
Social Media marketing is the best and most
effective way to reach and sell to our potential
customers.
7.
Social Media marketing is currently seen as the
new arena/platform for businesses to grow.

80
In your own opinion, what recommendations would you give to the management to enhance
the use of Social Media Marketing on the growth on sales in your business?

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

81