DIGITAL MARKETING CHALLENGES AND OPPORTUNITIES: SMEs INSIGHTSMark Anthony L. Pelegrin* and Rommel R. Mansueto, DBA**markpelegrin**[email protected] the advancement of modern technology in this day and age, one can conclude that we are practically living in a digital world. Digital marketing, as one of the latest trend in today’s business world, has been utilizing by small businesses in order to promote their business online, reach new markets, added exposure and compete with other businesses. The study aimed to gain a greater understanding of small and medium-sized enterprises’ perception regarding the challenges and opportunities in the use of digital marketing.

The data gathered used 50 respondents from small and medium-sized enterprise business owners/managers mostly from food and beverages business sector using non-probability, quota, and convenience sampling. The research instrument used was survey questionnaires distributed to SME entrepreneurs along Brgy. Marulas, Valenzuela City. Findings showed that there is a significant difference in the monthly income, benefits of digital marketing tools, perceived risks and specific limitations when grouped according to age and gender.

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The researchers recommend that SME owners should be given in-depth education about Digital Marketing business potential through seminars and training provided either by the private sector or by their local municipality, for the government could boost SMEs economy by supporting them and giving them appropriate funds to enhance their business, society embrace the opportunities and improve challenges that usage of digital marketing offers and future researchers could go deeper into an understanding of digital marketing, technological readiness and internet/technology adoption for other sector or a variety of small and medium-sized businesses or other fields. Keywords: SMEs, digital marketing, social media, challenges, opportunitiesIntroductionNowadays, a large number of small businesses use various social media platforms for marketing digitally. Digital Marketing is defined as the marketing of products and services using digital channels to reach consumers (Financial Times Lexian, 2018). For rural entrepreneurs and small business owners, this internet revolution, and general “flattening” of the global economic context represents a double-edged sword (Friedman, 2009; Spoto, 2010). Few businesses, whether a corporation or sole proprietorship expect to compete successfully with maximize and effective use of digital media. However, Jelfs and Hilary (2016) argued that the digital revolution has had the greatest impact on small and medium-sized enterprises (SMEs).SMEs are known to be the heart of strong economies, as well as being the backbone of development in rural areas and small towns. Moreover, (SMEs) play a key role in the national, regional and global economy, and provide outsourcing products and services (Stojanovska et al., 2015). On the other hand, SMEs appear to face substantial and unique challenges in adopting new technologies. The technology readiness of each individual SME is not the same, although there is a growing awareness about the potential of e-commerce (Novika and Nasution, 2014). Compared to large enterprises, small businesses have much less financial resources to access in adopting various technologies (Olson and Staley 2012). Scheers and Botha (2015) stated that SMEs fail to utilize marketing tools available for internet/digital marketing purposes. They also indicate that the benefits of internet marketing seem to be ignored by most SMEs. It seems that digital marketing challenges prevent SME owners from using these tools effectively.Literature ReviewThe review of related literature and studies present that digital marketing can be defined as the use of the internet and related digital technologies to achieve marketing objectives and support the modern marketing concept. These technologies include the Internet media and other digital media such as wireless mobile, cable, and satellite media. In practice, digital marketing will include the use of a company web site in conjunction with online promotional techniques such as search engines, banner advertising, direct email and links or services from other web sites to acquire new customers and provide services to existing customers that help develop the customer relationship. The leap from traditional marketing to going digital was also because of the improvements and developments of technology in the 21st century. In fact, in the past years, there have been some interrelated studies and analysis indicating and measuring the capacity of small and medium-sized enterprises to take advantage of the flourishing digital marketing as well as reasons why some could not fully develop it into actuality. And one of them is Parasuraman’s study on the Technology Readiness Index (TRI). With its detailed captions and variables provided, it measures the business firms’ internet preparedness by how it will embrace various technological tools and eventually get used to it. It also investigates the extent of internet adoption among entrepreneurs. It can also be said then, that digital marketing has been used by small businesses in terms of promotion and advertising in digital channels while some are still, not fully integrated into its other functions and actual use. A number of opportunities it offered were listed developed from the existing literature. However, it also has some barriers or risks and limitations perceived by owners and entrepreneurs in the usage of digital marketing for their products and/or services. The demographics such as the owner or entrepreneurs’ age, gender, income, and educational level, believed to have contributed to the factors affecting digital marketing adoption and usage.Problem StatementThis study aims to analyze the perceptions of small and medium-sized enterprise business owners in terms of the challenges and opportunities in using digital marketing. Specifically, it will answer the following questions:What is the profile of the respondents in terms of Age, Gender, Educational Background, Business Industry/Sector, and Monthly Income?What are the benefits of using digital marketing in terms of Usage, Ranking, and Purpose?What are the Barriers to using Digital Marketing?What are the Limitations of using Digital Marketing?What is the general opportunity that digital marketing offer?Is there a significant difference among respondents according to age, digital marketing tools, potential risks, and limitations when grouped according to age and gender?Conceptual FrameworkInputThe Input frame consists of five-part that sums up the respondents’ demographics, the benefits of using digital marketing tools, ranking of these tools in terms of importance and as to purpose, the barriers or potential risks, the limitations, and whether the aforementioned tools facilitate the desired function to deliver success and to remain competitive.ProcessThe Process frame specifies how the data collection and gathering will be conducted. It will be done by conducting survey questionnaires, unstructured interviews, observation, and data analysis along with interpretation.OutputThe Output frame answers the perceptions of small and medium enterprises with regards to the challenges and opportunities in the usage of digital marketing.HypothesisThere is a significant difference as regards income, digital marketing tools, potential risks, and limitationsMethodologyThe non-probability sampling was employed. The samples used in the study were 50 business establishments in Brgy. Marulas, Valenzuela City. The questionnaire was a tool of research divided into 5 parts which include: Part 1 Respondent’s Profile; Part 2 Benefits of Digital Marketing; Part 3 Barriers of Digital Marketing; Part 4 Limitation of Digital Marketing and Part 5 General Opportunity of Digital MarketingResultsThis chapter shows the data gathered through the use of a survey questionnaire in a tabulated manner.Part 1 Profile of the RespondentsMost of the business owners belong to the age of 20-30, mostly males, are college graduates having an average monthly income of P 10,001-P30,000.Table 1. According to Age, n=50Age N Percentage20-30 18 36%31-40 19 38%41-50 13 26%51-60 0 0%61 and above 0 0%Total 50 100%Part 2 Benefits of Digital MarketingTable 2. Usage of Social Media Tools, n=109Social Media N PercentageLinkedIn 2 4%E-mail marketing 4 8%Google Ads 6 12%Twitter 11 22%Own website 17 34%Instagram19 38%Facebook50 100%Total 109 Part 3 Barriers of Digital MarketingTable 3. Potential Risks, n=50Potential Risks Yes NoReviews that damage reputation 44 6Confidence in promoting message online 43 7Hacking 28 22Fraud 32 18Part 4 Limitations of Digital MarketingTable 4. Limitations, n=50Limitations Yes NoKnowledge and Skill 40 10Cost 39 11Time Management 39 11Creating New Content 35 15Table 5. Chi-Square Test ” Profile of RespondentsVariable Computed ValueX2 Critical Value X2 Decision InterpretationAge 35.4 11.1433 Reject Null Hypothesis SignificantGender 0.08 5.02389 Accept the Null Hypothesis Not SignificantIncome 6.48 9.3484 Accept the Null Hypothesis Not SignificantTable 6. Chi-Square Test ” Benefits of Digital MarketingVariable Computed Value X2 Critical Value X2 Decision InterpretationSocial Media Tools 104.66 14.4494 Reject Null Hypothesis SignificantTable 7. Chi-Square Test ” Barriers to Digital MarketingVariable Computed ValueX2 Critical Value X2 Decision InterpretationReviews that damage reputation 28.88 5.02389 Reject Null Hypothesis SignificantConfidence in promoting message online 25.92 5.02389 Reject Null Hypothesis SignificantHacking 0.72 5.02389 Accept the Null Hypothesis Not SignificantFraud 3.92 5.02389 Accept the Null Hypothesis Not SignificantTable 8. Chi-Square Test ” Limitations of Digital MarketingVariable Computed Value X2 Critical Value X2 Decision InterpretationKnowledge and Skill 18 5.02389 Reject Null Hypothesis SignificantCost 15.68 5.02389 Reject Null Hypothesis SignificantTime Management 15.68 5.02389 Reject Null Hypothesis SignificantCreating New Content 8 5.02389 Reject Null Hypothesis SignificantConclusionBased on the significant findings of the study, the following conclusions were established.The findings revealed that majority of the business owners have age bracket of 20-30 years old in which 68% are college graduate, having an income range of P 10,001-P30,000 with 18 respondents or 36% and have a Facebook account as digital media tools with 50 respondents or 100%.Barriers to Digital Marketing showed that 44 (88%) believed reviews that damage to reputation to be a risk. Forty-three (86%) agreed that they did not have confidence in promoting their message on an online platform.Limitations of Using Digital Marketing revealed a total of 40 (80%) respondents believe their knowledge and skill of digital marketing to be a limitation, while 10 (20%) did not. Of the 50 respondents who answered whether the cost and time management of digital marketing is a limitation, 39 (78%) said yes and eleven (22%) did not.We likewise recommend that SME owners should be given in-depth education about Digital Marketing business potential through seminars and training provided either by the private sector or by their local municipality, for the government could boost SMEs economy by supporting them and giving them appropriate funds to enhance their business, society embrace the opportunities and improve challenges that usage of digital marketing offers and future researchers could go deeper into an understanding of digital marketing, technological readiness and internet/technology adoption for other sector or a variety of small and medium-sized businesses or other fieldsReferences Andrew T. Stephen, The role of digital and social media marketing in consumer behavior, Current Opinion in Psychology, October 12, 2015Calderon, Jose F., Gonzales Expectacion C. Methods of Research and Thesis Writing ISBN 971-08-5508-5Cesaroni FM, Consil D. Are small businesses really able to take advantage of social media? Electronic Journal of Knowledge Management. 2015;13(4):257-268Cofie, Alfred Addotei The Chalennges of Financing Small and Medium Scale Enterprises (SMEs) in the Ashanti Region [ A Case Study of Stanbic Bank (GH) LTD] April 2012Dave Chaffey, Richard Meyer, Kevin Johnston, Fionas Ellis Chadwick, Prentice Hall ” 2nd Edition Internet Marketing, Strategy, Implementation, and practiceDino Michael Joseph et. al., (2014) Common Manual for Publication and Scientific Studies(COMPASS) Our Lady of Fatima University, Research, and Development Innovation Center Grant K, Edgar D, Sukumar A. Meyer M. Risky business’: perceptions of e-business Risk by UK small and medium enterprises (SMEs). International Journal of Information Management. 2014;34(2):99-122. Org/I0.I0I6/j.ijinfomgt.2013.II.00IHe W, Wang F-K, Zha S. Enhancing social media Competitiveness of small businesses: insights From small pizzerias. The new review of Hypermedia And Multimedia. 2014;20(3):225-250. Org/I0.I080/13614568.2014.889225Jacunski Michal, Measuring and Analysis of Digital Marketing. Research Gate (2018)Jones P, Simmons G, Packham G, Beynon-Davies P, Pickernell D. An exploration of the attitudes and strategic responses of sole-proprietor Micro-enterprises in adopting information and Communication technology. International Small Business Journal.2014;32(3):285-306Kabango, C.M. & Asa, A.R. (2015). Factors Influencing E-commerce Development: Implications for the Developing Countries. International Journal of Innovation and Economic Development, 1(1), 59-66.Lamie DR, Barkley DL, Markley, DM. Positive Examples and lessons learned from rural small Business adoption of e-commerce strategies. Journal of extension. 20II;49(6):8Novika AC, Nasution RA. Technology readiness and e-commerce adoption among entrepreneurs of SMEs in Bandung City, Indonesia. Gadjah Mada International Journal of Business. 2014;I6(t):6988. Foroudi, Suraksha Gupta, Alireza Nazarian, Marta Duda, (2017) “Digital technology and marketing management capability: achieving growth in SMEs”, Qualitative Market Research: An International Journal, Vol. 20 Issue: 2, pp.230-246, Kannan, Alice Li, Digital Marketing: A framework, review and research agendaArticle In International Journal of Research in Marketing March 2017 DOI: 10.1016/j.ijresmar.2016.11.006 Sarah Grand-Clement, Digital Learning, Education and Skills in the Digital Age (2017) Scheers Louise van, Botha Johan, Scheers Jacques van, Small and medium enterprise (SME) internet marketing challenges in the Tshwane Area, South Africa Journal of Governance and Regulation / Volume 4, Issue 4, 2015, Continued ” 5Shri. Sivagnanam et al., Digital Marketing using Google Services LocSea, (2015)Smith V, Wiggins N. The perks of customer Feedback: how even bad reviews can benefit your practice. Journal of Aesthetic Nursing. 2017;6(6):320-321. Makedonka et., al, (2015)Challenges and Opportunities in the Use of Marketing Tools and the Promotion of Non-Wood Forest Products-Based Small and Medium Enterprises in South East Europe. South-east Eur for 6 (1): 97-106. DOI: Published online: 24 Feb 2015Warren Griffith, Upstate Business Journal, An Article on A New Necessity: Digital Marketing is critical to business success in 2018(and beyond) January 2018

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