ABERDEEN BUSINESS SCHOOLA dissertation submitted in partial fulfilment of    the requirements for the MSc degree in       ...
ABSTRACTBritain has the most developed online advertising market in the world whichthe     report   by      the    Interne...
Declaration & AcknowledgementThis dissertation is my own work and all sources have been acknowledged. Iwould like to exten...
Table of ContentsTable of contentsAbstract………………………………………………………………………………………………………………………..Declaration & Acknowledgement ………...
Table of Contents            5.3     Reasons for Growth………………………………………………………………….........25                       5.3.1 Ke...
Table of Contents            2.5 Data collection method……………………………………………………………………….50              2.5.1 Secondary method…...
Table of Contents       3.   Discussion…………………………………………………………………………………………………68Section 5: Conclusion and Recommendations   ...
List of Figure                                   List of Figure     Fig 1: Overview of the literature                     ...
List of Tables                                   List of TablesTable 1: Requirements for financial years ending before 30 ...
I. PrefaceInternet advertising is registered to be worth of £1.97 billion in first half of2010, up 10% on like for like in...
advertising campaigns. These are the opportunities Internet has for thoselooking forward to increase their range and commu...
II. The ResearchAim of the study:The study aims at fulfilling the gap in the literature by developing a modelof effective ...
III. RationaleInternet medium is gaining popularity among the marketers which can beseen from the year over year increasin...
(2002) in his study states three factors that effects internet adoption bySMEs such as Perceived benefits, Organisational ...
IV. Significance of the studyThe study intends to determine and examine the factor responsible for theeffectiveness of the...
Section 2:                   Literature ReviewMSc. International Business            Page 7
1. IntroductionLiterature review is a vital part of a dissertation. It helps to acquire theunderstanding of the topic, emp...
2. Small Businesses2.1. Introduction:Small and medium sized enterprises (SME) are 99% of UK’s 4.3 millionbusinesses formin...
as one until it satisfies the requirements for two successive years. (HMRevenue & Customs, 2010)”                        T...
3. Marketing in SmallBusinesses:3.1. Introduction:To understand the behaviour of Small Businesses towards online advertisi...
Some empirical studies have proved that marketing as a function is equallyrelevant to small firms just as it is to large f...
•   Lack of formalized planning of marketing: Most of the marketing       activities are reactions to the activity in mark...
indicate certain amount of strategic marketing awareness in areas such asMarket segmentation and targeting; Market researc...
4. Integrated,       Proactive   marketing:   With   further   increase   in       business the owner managers of small bu...
Fig 2: The role and relevance of marketing.Fig 3: The role and relevance of marketing with strategies.“Marketing independe...
department, active business plan, marketing database and representativeat board level (Simpson, M. et al., 2006)Although t...
4. Advertising and SmallBusinesses:Now that we have explored the empirical studies available on the widerrange i.e. market...
any other form of media this process offers two advantages. Firstly, theunbiased recommendation from an un-incentivised th...
forget to consider this fact while choosing the medium for advertising.Small businesses are cash poor they cannot afford t...
5. Internet advertising5.1. Definition:Vurro, M (2009) in his essay quotes Pleil and Zerfaβ, (2007:511) to defineinternet ...
advertising... gives advertisers the opportunity to precisely target anaudience, enabling them to deliver advertisements t...
Fig 4: UK Online AD spend. (Source: Paidcontent:UK, 2010)Studies show that online advertising expenditure has recorded gro...
£2 billion mark, and online video advertising experienced spectaculargrowth. And with sectors such as Retail and Consumer ...
saw 1% like for like decline between 2008 and 2009 which can besupported by the fact that revenue by Yahoo from display ad...
ebay. Recession also accelerated the migration of adspend from traditionalto   online    advertising    (BBC   News,   200...
population; availability of broadband facility to more and more people (90%of UK online population) development of web 2.0...
businesses have shifted their marketing budget from traditional to onlineadvertising. For those small businesses, who are ...
access customer’s browser history and target appropriate customer.        The website can be used for 24/7 technical suppo...
without the expertise (Hoffman, Novak and chatterjee, 1995 and       Sussman & Pollack, 1995).   3. Branding: Due to the s...
impulse buying behaviour among the consumers (Hoffman, Novak        and Chatterjee, 1995).Apart from these benefits there ...
charges them per click or per impression depending on the option selectedby the advertisers (Google Adwords, 2011). Advert...
6. Problems in InternetCommunication and theirsolutionsAbell and Limm, (1996) and Purao and Campbell, (1998:61) conducted ...
2. New communication paradigms;           3. Non-integrated marketing communication;           4. company involvement in t...
Tapscott (1998) contradicts to Vescovi’s statement by suggesting that newgeneration is growing up in a digital age with mo...
enthusiasm followed by fast disappointment which can ultimately lead tofatal errors, abandoning the site and giving up con...
7. Measuring effectiveness ofInternet AdvertisingThere are various ways to reach to the customers through internet but it ...
base. The participants of the survey confront that ROI based performancetracking gives positive outcomes. The participants...
7.2. Standardised Measures:Apart from measuring the effectiveness of the marketing in financial termsthere are other metri...
ISP provided dynamic IP allocation than for every new session a new IPaddress is assigned. Also if an ISP uses proxy serve...
4. Measurement tools:The   Google    analytics,    Google   Adwords,   Optaumum,   AlTerianS2   andBrandwatch are some of ...
unique tracking image back to the advertising service provider’s serverwhich is then recorder and presented in form of met...
Section 3:                          MethodologyMSc. International Business             Page 43
1. IntroductionThe aim of this chapter is to describe and summarize the researchmethodology used in this study. The chapte...
2. Methodology2.1. Research Philosophy:The research philosophy depends on the way that we think about thedevelopment of kn...
Unlike Constructivism, post-positivism inquiries verifies theories and do notgenerate new ones. It is deterministic, asses...
result of data analysis. These different terminologies by different authorsshow that there exist discrepancies in the lite...
2.2.2. Inductive:       The paper adopts inductive approach to understand why some thingis happening rather than being abl...
2.3.1. Case study:The current study adopts case study as its strategy of inquiry. According tostake (1995) a researcher ex...
2.5. Data collection method:2.5.1. Secondary method:Ghauri and Gronhaug (2002) state that, the researcher should first loo...
(Internet Advertising Bureau, UK online measurement, Department forBusiness, Enterprise and Regulatory Reform, Advertising...
activities at the research site. The qualitative observer may also engage inroles varying from a non-participant to a comp...
Structured interview use questionnaire based on predetermined set ofquestion. Questions are read out and answers are recor...
2.6.2. Formulating research design:Authors such as Creswell (2003), Saunders, et al., (2000), Frey, J. & Oishi,S., (1995),...
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES
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CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES

  1. 1. ABERDEEN BUSINESS SCHOOLA dissertation submitted in partial fulfilment of the requirements for the MSc degree in International Business CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES Supervisor: Dr. Robert Newton.By Tushar T. DalviStudent No: 0915557MSc. International Business (Full-time)Word Count: 18750Submission date: 18th January, 2012
  2. 2. ABSTRACTBritain has the most developed online advertising market in the world whichthe report by the Internet Advertising Bureau (IAB),PricewaterhouseCoopers and the World Advertising Research Centre saidwas worth 2.8 billion pounds ($5.6 billion) in 2007 (Reuters, 2008). Yetsmall businesses are left away from the fruits of these flourishing trees.The aim of the study is to develop a model of effective online advertising forSmall Businesses by critically analysing the marketing activities of Indianrestaurants involved in online advertising activity and located in Aberdeencity.A qualitative research approach was adopted with a constructivist researchphilosophy using one-to-one, in-depth interviews with the marketingmanager’s of ten Indian restaurants respectively. The data analysis wascarried out by using SPSS. The interpretation of the data is presented inSection 4.The study successfully developed a model of effective online advertising tofacilitate its better implementation by Small Businesses. The model includesthree key elements of online advertising. Such as format of advertising;Support in form of marketing integration and Performance managementsystem.The outcomes of the study illustrate the specific barriers encountered bysome Small Businesses in adopting online advertising; identify how someSmall Businesses in regional economies could do better by using onlineadvertising and develop a model to facilitate better implementation infuture for other Small Businesses.The recommendations are purely based on the study conducted on the 10selected restaurants which may or may not be applicable to somerestaurants doing business in other parts of United Kingdom. Thus there isa need to carry out this study on a wide scale throughout United Kingdom.MSc. International Business
  3. 3. Declaration & AcknowledgementThis dissertation is my own work and all sources have been acknowledged. Iwould like to extend my sincere thanks towards my supervisor, Dr. RobertNewton for his insightful advice, time, encouragement and assisting with myresearch.My sincere gratitude is extended towards the members of The Robert GordonUniversity for their time, ideas and assistance with the research process.Special thanks are extended to all of my friends and family for their supportthroughout the year.MSc. International Business
  4. 4. Table of ContentsTable of contentsAbstract………………………………………………………………………………………………………………………..Declaration & Acknowledgement ……….……………………………………………………………………..List of Contents……………………………………………………………………………………………………………List of Figures………………………………………………………………………………………………………………List of Tables………………………………………………………………………………………………………………..Section 1: Introduction of Research 1. Preface………………………………………………………………………………………………………….1 2. Research……………………………………………………………………………………………………….3 3. Rationale……………………………………………………………………………………………………….4 4. Significance…………………………………………………………………………………………………..6Section 2: Literature Review 1. Introduction………………………………………………………………………………………………….8 2. Small Businesses………………………………………………………………………………………….9 2.1 Introduction….…………………………………………………………………………………….....9 2.2 Definition of SME………………………………………………………..........................9 2.3 Small Businesses….....................................................................10 3. Marketing in Small Businesses………………………………………………………………….11 3.1 Introduction………………………………………………………………………………..………..11 3.2 Approach towards marketing….……………………………………………………………11 3.3 Evolution in Small Business Marketing…………………………………….………….14 3.3.1. Carson’s four stages of evolution..………………………………………….14 3.3.2. Role and Relevance of marketing model………………………………….15 4. Advertising and Small Businesses…………………………………………………………..18 5. Internet Advertising…………………………………………………………………………………21 5.1Definition…………………………………………………………………………………........21 5.2Growth in Internet Advertising………………………………………………........22 5.2.1 Advertising Formats………………………………………………………..24MSc. International Business
  5. 5. Table of Contents 5.3 Reasons for Growth………………………………………………………………….........25 5.3.1 Key drivers for growth in ad spend………………………………….26 5.4 Benefits of advertising online…………………………………………………………….28 5.5 Internet Advertising and Small Businesses……………………………………….31 6. Problems in Internet Communication and their solutions ……………………33 6.1 Five Problems of Internet Communications………………………………..33 6.1.1. Unclear communication strategy……………………………………34 6.1.2. New Communication Paradigms…………………………………...34 6.1.3. Non-Integrated marketing communication……………………35 6.1.4. Company involvement in the internet challenge……………35 6.1.5. People for Internet communication………………………………..36 7. Measuring effectiveness of Internet Advertising……………………………………….37 7.1. Financial Measures………………………………………………………………………………37 7.1.1. Importance of financial measure…………………………………..38 7.2. Standardised Measures………………………………………………………………………39 7.3. Measurement Problem……………………………………………………………………….39Sections 3: Research Methodology 1. Introduction………………………………………………………………………………………………..44 2. Methodology……………………………………………………………………………………………….45 2.1 Research Philosophy……………………………………………………………………………45 2.2 Research Approach……………………………………………………………………………..46 2.2.1 Qualitative………………………………………………………………………………….47 2.2.2 Inductive…………………………………………………………………………………….48 2.3 Research Strategy……………………………………………………………………………….48 2.3.1 Case study………………………………………………………………………………….49 2.4 Time Horizon (Cross-sectional)………………………………………………………….49MSc. International Business
  6. 6. Table of Contents 2.5 Data collection method……………………………………………………………………….50 2.5.1 Secondary method……………………………………………………………………50 2.5.2 Primary method………………………………………………………………………….51 2.6 Narrative Structure of the study………………………………………………………..53 2.6.1 Drafting a proposal……………………………………………………………………53 2.6.2 Formulating research design……………………………………………………..54 2.6.3 Conducting research………………………………………………………………….55 2.7 Validating, Reliability and Generalisation……………………………………………56 2.8 Ethical consideration……………………………………………………………………………57 2.9 Limitation of the study…………………………………………………………………………57Section 4: Findings & Analysis, and Discussion 1. Introduction…………………………………………………………………………………………….59 2. Findings and Analysis………………………………………………………………………………60 2.1 Demographics…………………………………………………………………………………….60 2.2 Classification……………………………………………………………………………………….61 2.3 Planning………………………………………………………………………………………………67 2.4 Preparedness………………………………………………………………………………………68 2.5 Use of Performance Management System on Marketing Strategies…70 2.6 Modifications based on PMS and Information gathered……………………71 2.7 Owner/Managers Understanding of External Market………………………..72 2. 8 Marketing VS Categories…………………………………………………………………..73 2.9 Understanding the Marketing activities of Outperformers………………..74 2.10 Model of effective online advertising……………………………………………….77MSc. International Business
  7. 7. Table of Contents 3. Discussion…………………………………………………………………………………………………68Section 5: Conclusion and Recommendations 1. Conclusion and Recommendations ……………………………………………………….93 1.1 Conclusion……………………………………………………………………………………..93 1.2 Effective model of online advertising strategy for small businesses……………………………………………………………………………………………….96 1.3 Recommendations…………………………………………………………………….97References………………………………………………………………………………………………………………………Appendix…………………………………………………………………………………………………………………………MSc. International Business
  8. 8. List of Figure List of Figure Fig 1: Overview of the literature 8 Fig 2: The role and relevance of marketing. 16 Fig 3: The role and relevance of marketing with strategies: 16 Fig 4: UK Online AD spend. 23 Fig 5: The Digital Media Mix: % Share of revenues generated by different Advertising formats during 2008 and 2009. 24 Fig 6: Research Design 54 Fig 7: Relation between years of online experience and percentage increase in sale for 2009. 64 Fig 8: Planning: Time and efforts spend on Business planning and developing marketing strategies. 67 Fig 9: Preparedness: The chart explains three elements representing the preparedness of the participants against external forces. 68 Fig 10: PMS on Marketing Strategies: the chart explains amount of time spend on conducting Performance Management System (PMS) on Marketing strategies. 70 Fig 11: Extent of modification based on PMS and information gathered: the chart explains the extent of time spend by participants on modifying their business activities based on the PMS results and information gathered. 71 Fig 12: Understanding of external market: the chart explains the owner managers understanding of their external market. 72 Fig 13: Increase in sales for each participants. 81MSc. International Business
  9. 9. List of Tables List of TablesTable 1: Requirements for financial years ending before 30 January 2004 10Table2: Benefits of Internet Medium for small businesses. 31Table 3: Company details 60Table 4: Comparison of annual sales turnover between 2008 and 2009. 62Table 5: Categorisation of respondents based on performance in market 62Table 6: Classification of participants based on online experience. 63Table 7: Analysis by age. 65Table 8: Marketing activities performed by different categories: 73Table 9: Marketing activity performed by Outperformers: 74-75Table 10: Model of effective online advertising 77Table 11: Commonalities between R1, R2 and R3. 85Table 12: Advantages of important channels of advertising online. 90MSc. International Business
  10. 10. I. PrefaceInternet advertising is registered to be worth of £1.97 billion in first half of2010, up 10% on like for like increase compared to last year (IAB, 2010)while overall UK marketing ad spend registered budget cuts at the end of2010 (Sweney, M., 2011). The catalysts maintaining the growth of onlineadvertising expenditure are increasing online population, increasedbroadband network, increasing social network fever, connectivity throughdifferent devices and other benefits associated with the medium. Accordingto Weberg and Ljunberg (2001) as more people have adopted internet andtechnology world has become smaller and inter connected “global village”(Precce, 1994).According to UK online measurement company (UKOMC, 2010) the Britons38.8 million people are connected to 1.8 billion people from around theworld (Internet world statistic, 2010) to communicate with each other.Internet has made our day to day activities so simple that fromentertainment to education and socialising to shopping everything isaccessible only from a click of a mouse. Advertisers believe that internet isa cost effective and measurable medium for advertising. The Pay per Clickand Pay per Impression methods of payment makes advertising costeffective as advertisers only pay for advertising to potential customers.Internet advertisings are interactive which makes lasting impression on theuser. Paid search providers such as Google and Yahoo assist advertisers byproviding performance reports which increases the efficiency of theMSc. International Business Page 1
  11. 11. advertising campaigns. These are the opportunities Internet has for thoselooking forward to increase their range and communicate to large audience.Although, internet has all this to offer small businesses shy away from itdue to fear of expense, lack of expertise and other such reasons. Whereas,around 99% of UK’s business market is shared by SME’s which employaround 50% of UK’s population alone. Also the key feature of internet ofbeing vast and available worldwide becomes a limitation in itself for smallbusinesses. With the increase of user population the population ofbusinesses online is also increasing thus exposing the small business to thedanger of getting lost in a virtual jungle without being noticed (Morgan,1996 and Vescovi, T. 2002). Hence considering the necessity this researchwill explore the marketing practice of small businesses to understand andcritically evaluate their use of internet for advertising purpose. In thiscontext small business refers to those businesses with no more than 30employees and balance sheet turnover not more than £2.8 million.MSc. International Business Page 2
  12. 12. II. The ResearchAim of the study:The study aims at fulfilling the gap in the literature by developing a modelof effective internet advertising strategy for small businesses. The studyintends to accomplish its aim by exploring, analysing and criticizing theavailable information to devise an answer for question which is at the heartof this research i.e.What are the key factors responsible for the effectiveness of internetadvertising done by outperforming Small Businesses?Research Objectives: • To criticize and appraise the role of marketing function in small businesses. • To comprehend, analyse and criticize the role and importance of advertising in marketing activities of small businesses. • To study and slate the internet advertising and its types adopted by small businesses in general. • To criticize and analyse the barriers faced by Small Businesses in adopting online advertising. • To examine and discuss the available source and techniques for Small Businesses to overcome the barriers faced. • To develop and understand the marketing activities of participating sample case studies. • To build up a model of effective internet advertising for Small Businesses.MSc. International Business Page 3
  13. 13. III. RationaleInternet medium is gaining popularity among the marketers which can beseen from the year over year increasing internet advertising expenditure.The medium has huge range of benefits to offer which unfortunately onlyhuge marketers are able to gain while small businesses have been leftaway. Small and medium size enterprises (SME) form about 99% of theoverall UK business market employing 50% of the UK working population(DBERR, 2007). The marketers are moving away from tradition medium tointernet medium for advertising while most of the Small Businesses are stillmore reliant on traditional forms rather than online medium for advertising.Perhaps there are few misconceptions among Small Businesses such asonline advertising is expensive only for big marketers with big budgetedcampaign’s (Dietrich, L., 2010) and uncertainty of benefits for the business(Dyerson, R., et al., 2009). These misconceptions pull out most of the Smallbusinesses away from enjoying the benefits of online advertising, whereasout of others which adopt online advertising only some can use it efficiently(Walczuch, R. et al., 2000).The literature has various studies available which highlights the effectiveuse of internet by Small and Medium Enterprises (SMEs) for ecommerce;factors influencing adoption of internet by SMEs (Hill, J., 2001; Walczuch,R. et al., 2000; Vescovi, T., 2000) and nature and purpose of adoption ofinternet by SMEs (Sadowski, B. M., et al., 2002; Grandon, E. E. andPearson, J. M., 2004; Damaskopoulos, P. and Evgeniou, T., 2003). HillMSc. International Business Page 4
  14. 14. (2002) in his study states three factors that effects internet adoption bySMEs such as Perceived benefits, Organisational readiness and externalpressure. Sadowski`s (2002) exploratory study concludes that SMEs areopportunistic rather than strategic in adopting internet. He believes thatinternet has a strategic advantage which only small fractions of SMEs havemanaged to gain. The study also points out the key influencing factor foradoption of internet as communication need. Perhaps some other authorsfocus on explaining the factors of strategic value and adoption of internetfor different purposes such as e-commerce, communication, e-business, etc(Grandon, E. E. and Pearson, J. M., 2004; Damaskopoulos, P. andEvgeniou, T., 2003; Gilmore et al., 2007). Hence literature covers range oftopics around the online medium while focusing on SME’s rather thanexplaining internet advertising strategy specifically targeting SmallBusinesses.MSc. International Business Page 5
  15. 15. IV. Significance of the studyThe study intends to determine and examine the factor responsible for theeffectiveness of the internet advertising done by Small Businesses.Currently there is a gap in the literature regarding the effective adoption ofinternet medium by small businesses for advertising purpose. The internetadvertising expenditure is gaining a momentum in its field. Also the socialnetwork craze has made the internet a part of our daily social life.Although, large businesses are taking benefit of the increasing popularity ofthe internet it is unfortunate on part of small businesses that they are nottaking the complete advantage of the benefits on offer. Therefore, it isnecessary to study the internet advertising strategy of the small businessesand present a model of effective online advertising for Small Businesses.This model will help Small Businesses to develop their internet marketingstrategy which will ensure possibility of effective results. This evaluation willhelp the Small Businesses to identify the reasons for underperformance orover performance and take required remedial decisions. Also it will help thesociety at large by making available the product information of local smallbusinesses as it recommends the use of internet medium to smallbusinesses for advertising purpose.MSc. International Business Page 6
  16. 16. Section 2: Literature ReviewMSc. International Business Page 7
  17. 17. 1. IntroductionLiterature review is a vital part of a dissertation. It helps to acquire theunderstanding of the topic, empirical studies already conducted on it, howthe research was conducted and what were the key findings (Hart, C.1998). The review is sourced from a wide range of empirical literaturemade available from university Library, Online Database, Officialgovernment websites and Company websites and Annual reports.This Literature review is divided in four chapters discussing the findingsderived from the intensive secondary research conducted by the author.Fig 1: Overview of the literature (Source: Author).MSc. International Business Page 8
  18. 18. 2. Small Businesses2.1. Introduction:Small and medium sized enterprises (SME) are 99% of UK’s 4.3 millionbusinesses forming the important part of UK’s economy. The SMEs acrossUK provide over half of the employment (58.9%) in the nation (DBERR,2007). Encouraging and promoting growth among SMEs is at the heart ofpolicy making UK government and European Union. The SMEs help to boostthe national economy and encourage competition at both, domestic andinternational level (Dyerson, G. et. al., 2009). To better understand Smallas a term it is necessary to first understand the official definition of theSME.2.2. Definition of SMEThe companies Act 2006 define SMEs as a company or a business which isof small or medium size and not a member of large group (HM Revenue &Customs, 2010). A small or medium-sized company/business is defined inSection 382 and 465 Companies Act 2006. “ A company/business qualifiesas a small or medium-sized for its first financial year if it satisfies two ormore of the requirements (Table 2 & 3) for being a small or medium-sizedcompany/business in that financial year. Once a company/business hasqualified as a small or medium-sized you should keep on treating it as asmall or medium-sized company/business unless it fails to meet therequirements for two years in a row. Where a large company/businessreduces in size to become a small or medium-sized you should not treat itMSc. International Business Page 9
  19. 19. as one until it satisfies the requirements for two successive years. (HMRevenue & Customs, 2010)” Turnover Balance Sheet Total no of (not more than) Employees (not more than) (not more than)Small Company £5.6 million £2.8 million 50Medium-Sized £22.8 million £11.4 million 250CompanySource: HM Revenue & Customs, 2010.Table 1: Eligibility requirements for financial years ending on or after 30 January 20042.3. Small Businesses:A business can be an individually owned proprietary business; a partnershipbusiness; a registered friendly society or a corporate body which is undercorporation tax. Base on these definitions Small Business which is thesubject of the study can be defined as “A business with actual turnover notmore than £5.6 million; balance sheet turnover not more than £2.8 millionand not more than 50 employees can be classified as Small Business. (HMRevenue & Customs, 2010)”MSc. International Business Page 10
  20. 20. 3. Marketing in SmallBusinesses:3.1. Introduction:To understand the behaviour of Small Businesses towards online advertisingit is necessary to first look at the role and relevance of marketing to theSmall businesses (Simpson and Taylor, 2000; 2002). Marketing in smallbusinesses has been a long subject of study among researchers andacademics (Simpson, M. et al., 2006 and Gilmore et. al. 2001). Accordingto Siu and Kirby (1998) knowledge about marketing in small business stillremains insufficient and a small business marketing theory and knowledgeof strategic marketing is needed. This chapter critically evaluates anddiscusses work of some of the authors on the concern topic.3.2. Approach towards marketing:Waterworth, D. (1987) in his book cites that the important differentiatingcharacteristic of a small firm is that it is often established and handled in allits aspect by a single owner manager. On the contrary some small firmsare managed and handled by a group of people often a family business or apartnership firm between friends. However, Stokes, D & Wilson, N. (2006)suggest that it is the owner manager or one of the owner managers who isresponsible and controls the critical function of marketing that determinesthe success or failure of the business.MSc. International Business Page 11
  21. 21. Some empirical studies have proved that marketing as a function is equallyrelevant to small firms just as it is to large firms (Hogarth-Scott, S. et. al.,1996). Whereas Carson (1985) observed that small businesses face someoperation constraints which set them apart from large business suggestinga need for different less strategic approach. This is very much justifiabledue to the characteristics of small businesses such as small customer base;resources constraints; owner mangers knowledge of marketing; uncertaintyand evolution are the factors which give rise to marketing issues andproblems (Stokes, D & Wilson, N., 2006).Kenny and Dyson, (1989) in their research found that in practice the ownermanagers of the small firm give little but no importance to the sophisticatedmarketing theories as they do not feel any necessity to adopt them. Kennyand Dyson (1989) even go to the extent of stating that these ownermanagers are always unreceptive to any type of marketing activities unlessthere is growth in revenues, expansion in business, depletion in profits andsaturation or increased competition in market. So Small business ownerslater in their business lifecycle adapt to marketing but do not perceivemarketing in its classical form. However small businesses carefully considerthe cost of marketing activities against the possible consequences ofleaving with uncertainty and risk, and adopt marketing activities merelyunder the pressure of increased need for planning and information (Kennyand Dyson, 1989). Further Carson suggests that the non-strategic approachhas number of characteristics:MSc. International Business Page 12
  22. 22. • Lack of formalized planning of marketing: Most of the marketing activities are reactions to the activity in market place. • Restricted scope and activity: due to the financial resource constraints small businesses shy away from huge and expensive marketing campaigns. • Simplistic and haphazard: The owner manager lacks marketing expertise thus implement random and basic marketing activities. • Product and price oriented: the marketing mix only focuses on providing products at competitive prices and overshadows promotional activities, channels of distribution and potential new markets. • Owner-managers involvement: the knowledge and skill of owner manager is reflected in the marketing activities conducted by those small businesses.Hence, Patten (1989) states that small businesses see marketing as purelytactics and techniques to attract new businesses and to win new customersrather than adopting a strategic approach of classical marketing whichinvolves four elements of customer orientation, marketing strategy,marketing method and market intelligence. This can be easily identified inpractice where owner managers rather than identifying customer needs, tryto identify customers for their products on offer. Also easily ignore othernon-promotional aspects of marketing such as product development,distribution and identification of new market. Some small businesses aremerely dependent on hard earned word of mouth recommendations andtherefore do not feel need to do any marketing. However their marketingMSc. International Business Page 13
  23. 23. indicate certain amount of strategic marketing awareness in areas such asMarket segmentation and targeting; Market research and monitoring andemphasizing on customer service and relationship building Stokes, D.(2000).3.3. Evolution in Small Business Marketing:During the life span of a business the experience and knowledge of ownermanager and needs of business reflect the evolution in marketing activities.The marketing activities evolve from non-strategic approach to strategicapproach which according to Carson (1985) is reflected in four stages ofevolution. Whereas, Simpson and his colleagues (2006) explain thisevolution with their two dimensional matrix model called Role andRelevance of Marketing Model. 3.3.1. Carson’s four stages of evolution: 1. Initial marketing activity: During the establishment of the small business the considerable amount of marketing activity based on the product, pricing and its delivery is conducted. 2. Reactive selling: Small businesses are opportunistic they react to increasing demand by customers rather than proactively using marketing for its products. 3. DIY Marketing approach: The owner managers develop a positive perception towards marketing as the business starts growing. Although their efforts result into disjoint and sporadic campaigns.MSc. International Business Page 14
  24. 24. 4. Integrated, Proactive marketing: With further increase in business the owner managers of small businesses are forced to deviate to more strategic planning of marketing activities for which they appoint or consult specialist marketing management. Further Stokes, D. (2000) contradicts by stating that although owner managers in initial stage adopt non – strategic approach to effectively fit around their capabilities and the environment; if an owner manager possesses the marketing expertise, then strategic approach can be adopted at an early stage. 3.3.2. Role and Relevance of Marketing model: The role and relevance of marketing in SME model is a two-dimensional matrix model which helps to explain the marketing in the SME based on the internal organisation and external competitive factor of the small business. The model suggests three strategies (Strategy A, B & C) which small businesses can adopt for its journey from “Marketing independent” to “Marketing led”. Strategy A is a proactive strategy where “Marketing independent” business would strive to increase market share or greater market penetration or develop new product to complete its journey as “Marketing led” via “Marketing dominated”. Strategy B is a reactive strategy to become “Marketing led” via “Marketing week”. While strategy C is an incremental approach due to increased competition.MSc. International Business Page 15
  25. 25. Fig 2: The role and relevance of marketing.Fig 3: The role and relevance of marketing with strategies.“Marketing independent” category can be defined as companies which cansurvive without marketing activity as they have stable market and lack ofenthusiasm towards marketing. On the other hand “Marketing led” categorycan be defined as business which is marketing oriented with a marketingMSc. International Business Page 16
  26. 26. department, active business plan, marketing database and representativeat board level (Simpson, M. et al., 2006)Although the Role and Relevance of marketing model provides insight intothe behaviour of small businesses towards marketing it has certaindrawbacks criticised by authors such as Sekaran (20000), Oskoui-Jones,(2002), Brodie et al., (1997). The model was developed in a hypothetico-deductive way. The model ignored the effect of entrepreneurial behaviour ofowner/manager. The model relies on traditional and classical marketinginstead of modern.There are only six exploratory models available through the empiricalresearch available on the topic (Carson, 1990). These models areconsidered as descriptive as they have not been formally proven or tested.The initial marketing capability framework devised by Moller and Anttila,(1987) was the only similar model to role and relevance model as it focuseson internal and external field of marketing capabilities of the firm althoughthe final matrix is different in structure (Simpson, M. et al., 2006).MSc. International Business Page 17
  27. 27. 4. Advertising and SmallBusinesses:Now that we have explored the empirical studies available on the widerrange i.e. marketing in small businesses, it is necessary to narrow ourexploration to advertising and finally to internet advertising practice insmall businesses.Small businesses primarily base their decision to advertise on factors suchas financial strength of the firm to afford different media vehicles and thedemand of the target market. Hence, due to the financial exigencies andthe need to produce results within a reasonable period of time, theappropriate use of media vehicles is of paramount importance for smallretail outlets (Vaccaro, J. & Kassaye, W., 1988). The empirical studies haveconfirmed that most small businesses choose media ranging from cheapHandbills, posters, brochures and Sign boards to little expensive Mediassuch as local radio, newspapers, magazines, direct mails and websites(Patten, D., 2002). Rest still believe in word of mouth recommendationsand free publicities e.g. an article by a food critic in a local newspaper is afree advertising for the restaurant.Some of the successful small businesses understand the critical importanceof ‘Positive word of mouth’, ‘Customer referrals’ and ‘Recommendations’from existing clients to attract new clients. Thus they significantly invest incommunicating on personal level with their existing clients. With respect toMSc. International Business Page 18
  28. 28. any other form of media this process offers two advantages. Firstly, theunbiased recommendation from an un-incentivised third party is much morevalued than any form of marketing information. Secondly, the word ofmouth advertising is a free resource for the cash poor small businesses.Most of the small businesses choose to adopt advertising with a ‘me too’attitude to compete with their competitors. These small businessesadvertise without having decided the objective. Patten, D., (2002) in hiswork states that the effective advertising needs to have a clear idea of whatis intended to achieve. But the small business managers are so involvedwith their day to day responsibilities they underestimate the importance ofstrategic planning before advertising. Patten also suggests that every penneinvested in adverting will be worthy only if Advertising has an objective toachieve. A strategically planned advertising can achieve variety ofobjectives such as: 1. New product Launch, 2. Sales, 3. Change of premises, 4. Social responsibility advertisement, 5. Trade ads for wholesalers, 6. To promote websites.These and many other objectives can be achieved if advertisings arestrategically planned before investing in them.The choice of medium to advertise is the important principle in advertisingas it is essential to choose the medium which reaches as many targetaudience as possible. Although it sounds obvious many small businessesMSc. International Business Page 19
  29. 29. forget to consider this fact while choosing the medium for advertising.Small businesses are cash poor they cannot afford to have choice ofmedium which large businesses have. Hence, first they have to discovertheir potential customers and later identify the medium which givesmaximum result at economic cost.There is a vast range of medium available for small businesses to choosefrom, to advertise their message:Traditional Mediums: 1. Local newspaper, 2. Magazines, 3. Local Radio, 4. Cinema, 5. Yellow pages, 6. Posters, Hoardings, Sign boards, 7. Handbills, brochures, Leaflets, 8. Direct mails, 9. Sponsorship, 10.Point-of-sales MaterialModern mediums: 1. Websites, 2. Promotional SMS, 3. Emailer’s, 4. Banner ads, 5. Pop-up’s, 6. Search engines, 7. Blogs, 8. Social networking sitesMSc. International Business Page 20
  30. 30. 5. Internet advertising5.1. Definition:Vurro, M (2009) in his essay quotes Pleil and Zerfaβ, (2007:511) to defineinternet which is fundamental for online advertising. According to Pleil andZerfaβ, (2007:511) “internet is a virtual place, were people globally cometogether to interact and exchange information.” This statement along withthe fact that internet and technology associated with it is continuouslygrowing and developing implies that internet is a lucrative medium foradvertisers.In order to better understand Online advertising it is also necessary to knowtraditional “Advertising” which is underpinning to the core subject. Dibb etal. as stated by Janoschka, A. (2004) define advertising as formalcommunication between the organisation and its audience about theproduct, transferred through a mass medium such as T.V, radio,newspaper, etc.On the basis of above statements Internet advertising can be defined asfollows: According to Vurro, M (2009) “Internet medium (for advertising)provides a flow of information (to and fore between business and user)available to consumer on demand enabled through technological devices(Laptop, PC, Mobile, IPTV, etc) in an interactive and personalizedenvironment (personally targeted to user)”. Zeff, R and Aronson, B (1999pp11) puts forward their perspective in their book which defines onlineadvertising as medium which “enables consumers to interact withMSc. International Business Page 21
  31. 31. advertising... gives advertisers the opportunity to precisely target anaudience, enabling them to deliver advertisements that are customized toeach user’s particular interest and tastes.” Evans, D (2008) points out theunique feature of online advertising of targeting specific individuals by useof internet based technologies and data collection mechanism.Thus, it can be narrowed down to a conclusive statement that internetadvertising is a formal interactive communication between organisation andan individual consumer about its product through internet as mass medium.There are deferent forms of Internet advertising available due to constantadvancements in technology. Such as E-mails, Banners, videos, searchengines, affiliated advertising, social network advertising, etc.5.2. Growth in Internet advertising:To be able to understand the importance of internet advertising it isnecessary to understand its current state in the market. The statistical factswill help to do so. Also these facts will play a part in explaining reason forits growth.Even as the industries across the globe have gone through the recession inthe last 2008 and 2009, online advertising has continued to see growth andalso forecasted to increase further till 2012. The Online adspend studypublished by Internet Advertising Bureau (IAB) supports the reportstatistics published by AA/WARC. It states that online advertisingexpenditure had increased from £3,349m in 2008 to £3,541m, in 2009(IAB, 2009).MSc. International Business Page 22
  32. 32. Fig 4: UK Online AD spend. (Source: Paidcontent:UK, 2010)Studies show that online advertising expenditure has recorded growth year-on-year since 2001. It has reach £3.5 billion from £153 million in 2000, i.e.2200% increase in UK online advertising expenditure. This can be related tothe reformation of web 2.0 in 2004 which helped the industry to gainmomentum (Evans, D., 2008). The records show that in first half of 2009TV spending shrank by 16.1% to £1.639bn, while online spending grew4.6% to £1.752bn (BBC News, 2009). It also shows that the second half of2009 was better than first, when between July and December onlineadvertising spend registered increase by £25.6 million to £1.78 billion withmedium accounting for 23.5% of overall advertising expenditure leavingbehind the traditional forms such as Television, Radio and Print (Holton, K.,2009).Guy Phillipson, chief executive officer of the IAB, said: “In 2009 theadvertising industry was hit hard but Online has proved itself a winningmedium, capturing a greater share of marketing budgets.In the past year we’ve seen some real success stories as search passed theMSc. International Business Page 23
  33. 33. £2 billion mark, and online video advertising experienced spectaculargrowth. And with sectors such as Retail and Consumer Goods increasingtheir spending on the internet we can look forward to a healthier 2010”(IAB, 2010).5.2.1. Advertising Formats:Fig 5: The Digital Media Mix: % Share of revenues generated by different Advertising formatsduring 2008 and 2009. (Source: IAB, 2008 & 2009)During 2009 paid search showed 9.5% like-for-like increase to reach £2.15billion which was 60.7% of all online advertising expenditure from 59.3% in2008. This correlates with the fact that 97% of Google’s 2009 revenue wasearned from advertising (Google 2009 annual report, 2009: 37). DisplayMSc. International Business Page 24
  34. 34. saw 1% like for like decline between 2008 and 2009 which can besupported by the fact that revenue by Yahoo from display advertising on itsowned and operated sites faced a decline of 9% (Yahoo annual report 2009,2009: 34). Whereas classified ads saw a 2.3% like for like decline between2008 and 2009(IAB, 2009).5.3. Reasons for growth:First the continuously increasing popularity of internet among consumersand secondly the continuous development in technology increasing itspotential are the factors attracting the marketers to increase their online adspend.The key elements responsible for the popularity of internet are its featuressuch as availability of faster and cheaper internet; free contents andknowledge; free medium of entertainment and recession. The UK internetMarket review published by Keynote mentions TGI survey. It states that in2008, 98% internet users were using broadband which provide the speed ofdata transfer necessary to use advanced, interactive ‘Web 2.0’ applicationsat cheap rates. Internet makes news from all over the globe available forfree on websites like Google and yahoo, thus attracting large audiences andadvertising revenues (Berte, K. and De Bens, E., 2008). The UK economyis showing a small growth after six consecutive quarters of contraction. Therecession had lead UK into higher inflation, Unemployment and drop inhousehold disposable income. These factors lead consumers to spend moretime on internet, which is a free source of entertainment (Youtube, BBCiplayer, etc) and portal for cheap bargains for new and old product for e.g.MSc. International Business Page 25
  35. 35. ebay. Recession also accelerated the migration of adspend from traditionalto online advertising (BBC News, 2009). Eva Berg-Winters ofPricewaterhouseCoopers said. "Hence the continuing shift from moretraditional forms of advertising to online, which promises return oninvestment and measurability in a period of instability" (Holton, E., 2009).The continuous development in technology is the other factor that attractsmarketers towards online medium. The development of web 2.0 has madeonline advertising more interactive giving the opportunity to marketers todirectly interact with individual users and develop a relationship. This helpsmarketers to directly provide personalized information to its target audience(Keynote, 2009).5.3.1. Key drivers of growth in ad spend:More people online – According to the study conducted by UK OnlineMeasurement Company (UKOM) and Nielsen, the UK’s active online userbase has registered an increase of 4.4 million that is total of 39.7 million incomparison to 35.5 million in February 2009 this helps to target moreaudience (IAB, 2009).Web 2.0 - Development of web 2.0 has made personalised advertisingpossible thus increasing the targeting efficiency of the advertising. Websitescan access browser history of the user learn the likes and dislikes of theuser enabling it to display specific advertise to specific audience only.Faster broadband drives video advertising – The advertiser havemanaged to encash the opportunity put forward by the increasing onlineMSc. International Business Page 26
  36. 36. population; availability of broadband facility to more and more people (90%of UK online population) development of web 2.0 technology and increasedbroadband speed of over 2MB by providing increasingly dynamic video andrich media executions making advertisements interactive (Berte, K. and DeBens, E., 2008).Social media fever grips Britons – An average online user in UK spendsits 20% of online time socializing on Facebook. This social nature of the weboffers an opportunity for advertisers to directly target its relevant massaudience. The social networking sites such as Facebook and Myspace haverevitalized the online usage into a perfect environment for engaging ads.Advertising on such social networking sites is easy and also cheap incompared to the exposure it offers. The social networking sites also helpadvertisers to advertise more efficiently by providing reports on theiradvertising campaigns running on these social networking sites (Facebook,2011).Devices and connectivity - Development in technology has made possibleto connect every electronic device to internet contributing to increase ininternet population. Today not only mobiles and laptop can be connected tointernet but devices such as game consoles, digital readers, MP3 players etccan be connected to internet via 3G internet network allowing user fasterinternet experience wherever and whenever needed (IAB 2011).Thus these factors contribute towards growth of online advertising and shiftof advertising budget of Multinational companies from traditional medium toonline medium. Similarly due to the above factors some of the smallMSc. International Business Page 27
  37. 37. businesses have shifted their marketing budget from traditional to onlineadvertising. For those small businesses, who are still into traditionaladvertising can also consider these key factors of growth and shift theiradvertising budget from traditional to online advertising and take advantageof the benefits on offer.5.4. Benefits of advertising online:The empirical studies have described number of benefits internetadvertising has to offer to small businesses although, only few of thebenefits are perceived to be important by small businesses. Benefits suchas, direct and indirect advertising, easy access to potential customers, lowcost communication and effectiveness in information gathering (Abell andLimm, 1996 and Walczuch, et. al., 2000). Wang and Daniel R. Fesenmaier(2006) recognized three broad categories of opportunities in Internetmarketing: 1. ‘Information delivery opportunity’ by the use of internet, marketer’s are able to deliver their product and service information to huge audience at low cost. Thus small businesses can target customers not just from their local area but across city, county and around the globe. For example a Restaurant will not be limited to its own local customers but can also attract international tourists through providing information on the internet. 2. ‘The relationship-building opportunity’ by using the interactive media marketers can learn about the users and customize contents targeting their desired audience. Web 2.0 enables the advertiser toMSc. International Business Page 28
  38. 38. access customer’s browser history and target appropriate customer. The website can be used for 24/7 technical support by providing online, up-to-date and accurate technical product information; product trails and demonstrations and reduce sales lost by being available on demand (Corin, 1994). 3. ‘Disintermediation opportunity’ by using internet marketers can eliminate third party intermediates from their value chain. For example a manufacturer of a handcrafted item can sell directly to the customer throughout and across the country via Ebay, Amazon, etc. Yet the Small Businesses stay away from these opportunities put forward by online advertising.There are other benefits that internet advertising has for businesses suchas: 1. Information richness: Through online medium it is possible to advertise the product information without any constraints. Websites provides customer with substantial product information in content rich formats such as text, images and videos (Hoffman, Novak and chatterjee, 1995; Corin, 1994, Schlooser, A. E., and Kanfer, A., 1999). It also allows to link to different sites and multiple pages. Thus online medium is not just limited to short memorable message (Schumann, D., 1999 and Corin, 1994). 2. Ease of updating: Online advertising lacks the delays of other media and its maintenance can be cheaper than other media. Also online information is made user friendly thus can be easily updatedMSc. International Business Page 29
  39. 39. without the expertise (Hoffman, Novak and chatterjee, 1995 and Sussman & Pollack, 1995). 3. Branding: Due to the space limitation of traditional media it cannot be used for advertising branding related information. Whereas online medium can be used for building a brand as website can contain detail company information, Portfolio, corporate responsibility information and other Public relations materials (Sadikin, 1995). 4. Data collection: Through Online medium businesses can easily and inexpensively collect market information required for decision making. Also information required for tracking the performance of the website such as which page on the site was visited; how many times it was visited; how long and how the user came to that page and from where was the user directed. The recent development of web 2.0 allows the businesses to access the user’s browser history to learn about the user’s preferences (Corin, 1994 and Berte, K. and De Bens, E., 2008). 5. Global exposure: World Wide Web allows the local business to go global. The business can respond to its global market simply by have web pages in different languages. The global exposure gives the competitive advantage to the business (Krugman, Reid, Dunn, & Barban, 1994). 6. E-commerce: The website can facilitate purchase decision by providing detailed product and dealer information. But at the same time allows customers to buy from their own homes promotingMSc. International Business Page 30
  40. 40. impulse buying behaviour among the consumers (Hoffman, Novak and Chatterjee, 1995).Apart from these benefits there are benefits that impacts the othercomponents of the small businesses (see table 1). Components BenefitsNew Sales Channels On-line Sales and transactions Ability to reach out international market Increase in market share of product/servicesDirect Savings Savings in communication cost Savings in advertising cost Increase productivityCustomer satisfaction Greater customer satisfaction Better service and support to customersTable2: Benefits of Internet Medium for small businesses.(Source: Walczuch, et. al., 2000)5.5. Internet Advertising and Small Businesses:Small Businesses are perceived to be source of further growth andinnovation for the nation. Dyerson (2009) states that Small Businesses arecash poor and lack range of expertise. Small Businesses do not have to becash rich to invest in internet advertising on contrary internet medium isperceived to be cheap and also free through certain forms. Google Adwordsallows advertisers to have their website link on the search list but onlyMSc. International Business Page 31
  41. 41. charges them per click or per impression depending on the option selectedby the advertisers (Google Adwords, 2011). Advertising through networkingsites such as Facebook, twitter and Youtube is free of charge. Google offersrange of services such as Google Adwords; Google analytics and GoogleWebsite optimiser to manage and run advertising campaigns on Googlewhich are user friendly and specifically made for layman (Google, 2011).Although Small Businesses have limited recourses in terms of time, moneyand expertise (Wymer and Regan, 2005) it is the motivated owner-managerwho drives the business and shapes the nature of investment decision(Dyerson, R. et. al., 2009). Pool et al. (2006) suggests that SmallBusinesses lag behind the large firms in adopting the internet medium foradvertising. The study conducted by Dyerson et al. (2009) shows that over34% of the respondents replied that cost is the primary barrier forinvestment while other 25% said uncertainty over benefits to the business(Return on Investment) is the barrier.MSc. International Business Page 32
  42. 42. 6. Problems in InternetCommunication and theirsolutionsAbell and Limm, (1996) and Purao and Campbell, (1998:61) conducted astudy on the barriers to internet access for Small Businesses. Paurao andCampbell carried interviews with all small businesses some with onlinepresence and some were not. For those who didn’t have online presencePaurao and Campbell found that ‘start-up cost’, ‘unfamiliar with the web’and ‘lack of knowledge on how to start-up a business’ as main cause ofconcern. In contrary Hamill, Jim and Gregory, Karl (1997) found in theirresearch that cost and resource is not the major obstacle while lack ofknowledge is. The companies that are already online for them primaryconcern is security hazards (Purao and Campbell, 1998 pp.61). Here Abelland Limm‘s (1996) findings supports the Paurao and Campbell outcome ofconcern over security. Also according to Walczuch, R. et al. (2000) Attitudeis perceived to be another important factor behind non-adaption of theinternet among Small Businesses. Attitude here refers to owner-managersattitude towards online medium or personal belief about the medium.6.1. Five Problems of Internet Communications:Vescovi, T. (2000) in his research also puts forward five common problemsfaced by small businesses in introducing the internet communication. 1. Unclear communication strategy;MSc. International Business Page 33
  43. 43. 2. New communication paradigms; 3. Non-integrated marketing communication; 4. company involvement in the internet challenge; 5. people for internet communication;6.1.1. Unclear communication strategyCompanies those have their website are often present online with “me too”attitude passively waiting for the customer to approach. The internet offersan interactive marketing opportunity (Hoffman and Novak, 1996b).Interaction is a two way communication hence only being passively presenton internet is not sufficient. The marketers have to shift their attitude fromactive customers-passive company to active customers-active company.Thus it is necessary to develop a clear communication strategy supportedby continuous and proactive activities (Bishop 1998). The company shouldinteract with its customers, create a buzz, regularly update the contentsand become an active company so that it can attract traffic to its website.6.1.2. New Communication Paradigms:There are two approaches to overcome this problem while freshlyintroducing internet communication into business. First consider internetsimilar to any other medium when it was first implemented into businessbecause rules of the game remains the same. Second is to understand andaccept the fact that internet communication is new concept for the business(Hoffman and Novak 1996b). According to Vescovi (2000) competenciesand attitude required to enter internet is lacked by the marketers butMSc. International Business Page 34
  44. 44. Tapscott (1998) contradicts to Vescovi’s statement by suggesting that newgeneration is growing up in a digital age with more computer knowledge.Also technical aspect of the internet advertising can be outsourced such asdevelopment and maintenance of website and internet advertising material.The internet communication makes both one to many and one to onecommunication possible. This brings new rules of diffusion of messages.Thus it is necessary to develop new external and internal communicationstrategies.6.1.3. Non-Integrated marketing communication:Developing a website itself is not sufficient business has to developintegrated campaign targeted to customers making them aware of thewebsite (Walczuch, R. et al., 2000, Bayne, 1997; Zeff and Aronson, 1998).Different communication tools along with the internet are collected togetherunder in single format to coordinate with each other. Integration ofmarketing communication helps to improve the communicationperformance. Company should use traditional mediums (Television, Radio,outdoor (leaflets), newspaper and magazines); promotional campaignsalong with dealers and other online services to promote its internetadvertising and making users aware of it.6.1.4. Company involvement in the internet challenge:Introducing internet requires changing consolidating habits, learning newcompetencies, working with new perspective and increase in activeparticipation. The amount of commitment required can lead to quickMSc. International Business Page 35
  45. 45. enthusiasm followed by fast disappointment which can ultimately lead tofatal errors, abandoning the site and giving up constant updating. Thebusiness and its personals should get involved in the development of itswebsite (Vescovi, 2000).Following three elements of the business involvement are necessary for theinternet communication to be successful: • The champion • The strong project leader • The rigorous planning and process(Source: Vescovi, 2000)In a small business the role of a champion should be played by the ownerhimself he is most influential person in the organisation. The manager canbe a project leader always available to support the champion and work onthe project with dedication (Vescovi, 2000). Finally, according to Bayne(1997) “Defining a specific plan, that includes clear goals, defined timing,resources and evaluation systems, must be a condition that cannot beignored, if the company wants to reach a sufficiently good quality of theWeb site”.6.1.5. People for Internet communicationDeveloping a website is no doubt a job of a web developer but the web siteis a representation of strong market relationship, consistent with marketstrategies for which a marketing manager is required. Internet meanscontinuous change and development along with it entire organisation isaffected (Vescovi, 2000).MSc. International Business Page 36
  46. 46. 7. Measuring effectiveness ofInternet AdvertisingThere are various ways to reach to the customers through internet but it isnecessary to understand which way is effective and which isn’t. “It is allabout discovery; trial and error; and refinement. Be willing to try somethingand change it if it doesn’t work (Kooser, A. C., 2007).” There are differentmeasures used to gauge the effectiveness of internet advertising (Selnes,1992). On the other hand “Reach” and “Frequency” are used to determinepopularity of the advertising campaign.7.1. Financial Measures:Return on marketing or Return on Investment is a financial measure it isdefined as follows “the revenue or margin generated by a marketingprogram divided by the cost of that program at a given risk level (Powell,2002, p. 6).” There are various surveys conducted on marketingaccountability and measures. Such as, the survey conducted by theAmerican Productivity and Quality Centre (APQC) with Advertising ResearchFoundation (ARF) in 2001 and 2003; a survey carried out by the ChiefMarketing Officer (CMO) Council in 2004 (Stewart, D., 2009).The APQC/ARF (2001) survey states that there is a need for an econometricmarketing mix model to achieve competitive advantage and increaseprofitability because of continues increasing competition in the market. Themarketing activates should be gauged in terms of financial performance.The result of this model depends on the quality of the data that forms itsMSc. International Business Page 37
  47. 47. base. The participants of the survey confront that ROI based performancetracking gives positive outcomes. The participants also suggest that ROIbased performance tracking of the marketing activities develop knowledgeand enhances teamwork. On the contrary, the survey found generaldissatisfaction among participants for calculating return on marketingactivities in financial terms. The CMOs survey showed some most importantmetrics such as (1) ‘revenue’, (2) ‘qualified sales lead generation’, (3) ‘salesand channel feedback’, (4) ‘return on investment for marketing programs’,and (5) ‘customer retention’, ‘loyalty’, and ‘satisfaction’. Measures used togauge marketing outcomes in economic terms or the way in which it ismore convenient to relate (Stewart, D., 2009:637).7.1.1. Importance of financial measure:Powell proposed that effectiveness of internet advertising should be gaugedin terms of economic or financial measure because:(1) finance is the best evaluating measure for a business, (2) companiesare evaluated by the financial figure published in the financial statements ofannual reports of the business, (3) financial metrics acts as a standardmetric to compare alternative and otherwise non comparable actions acrossmarkets, products, and customers, (4) financial metrics provideaccountability, (5) financial metrics promote organizational learning andcross functional team work because they provide a common language, and(6) Financial metrics serve the purpose of a standard for dealing withdifferent marketing activities and intermediate marketing results (Stewart,D., 2009).MSc. International Business Page 38
  48. 48. 7.2. Standardised Measures:Apart from measuring the effectiveness of the marketing in financial termsthere are other metrics available. There are various ways to evaluate theeffectiveness of online advertising at least one measurement tool for oneadvertising channels. Such as, click through rate (banner ads); sentimentanalysis (social networks); traffic monitoring and impression (Websites);etc. These measures are developed from web log file records to access theeffectiveness of the advertising within the web based multimediaenvironment (Drèze, X., and Zufryden, F., 1998). The traditional memorybased measurement tools such as recall, reorganization and awareness arealso applied on online advertising (Dreze, X. and Hussherr, F. X., 1999internet advertising is anybody watching).7.3. Measurement Problem:1. Identification of unique visitor:Traditionally to measure the effective reach of an advertisement a survey isconducted where each participant is uniquely identified by its telephonenumber or address. In case of internet advertising to measure theeffectiveness of advertising whether it is display, paid search or website aweb log of the user and its activity is maintained. The individual user isidentified by its IP (Internet protocol) address which helps to measure thevisitor traffic, flow patterns to, from and within the website. Unfortunatelythis IP assigned by the internet service provider (ISP) is not unique. Forexample in multi-user system a same IP is provided to different users. If aMSc. International Business Page 39
  49. 49. ISP provided dynamic IP allocation than for every new session a new IPaddress is assigned. Also if an ISP uses proxy server a user can be assigneddifferent IP addresses in a single session (Drèze, X., and Zufryden, F.,1998).2. Problem of caching:In case of measuring the frequency of an internet advertising the number ofexposures is logged on the server. So when a user first sees theadvertisement one impression for that user is logged on the server. But ifthat same user after browsing for a while comes back to the advertisementby clicking the back button of the browser, to speed up the process browserdisplays the stored version of the web page. Hence this time even if theadvertisement is exposed second time server is unable to log it (Drèze, X.,and Zufryden, F., 1998).3. Reliability of reported measures:There is a difference in requesting a page and actually reading it orreceiving it. A user may request a page and change his mind and close thebrowser without actually viewing the advertisement. This type of problem iscommon in any medium. For example a television viewer can be distractedand miss the commercial. This problem tends to falsely increases themeasure (Drèze, X., and Zufryden, F., 1998).MSc. International Business Page 40
  50. 50. 4. Measurement tools:The Google analytics, Google Adwords, Optaumum, AlTerianS2 andBrandwatch are some of the effectiveness measurement applications thatare used to evaluate the effectiveness in terms of brand awareness createdwhereas the other studies evaluate effectiveness in terms of sales (Nail, J.,2005, Craver, Marc, 2007 and Thomas, J. W., 2006).There exists at least one measurement tool for every advertising format orchannel. The effectiveness of paid search can be gauged by click throughrate or impressions made. The search providers such as Google, Yahoo,MSN, Ask etc. provides there advertisers with performance trackingapplications which gives results in form of reports and statistics (GoogleAdword, 2010; Yahoo Advertising, 2010 and Microsoft advertising adCenter,2010). These reports can be used to understand how many people visitedthere website through the search, which key word if more effective andwhich isn’t. These providers charge on the basis of cost per click, cost perimpression or cost per action so advertiser only pays when advertisement isactually displayed or a business is gained from the provider. Thus smallbusinesses can afford to advertise through search engines without having tospend huge amount on printing the advertising materials and employingsomeone to distribute them.Email advertising uses the open rate and click through rate as the measuresto gauge the effectiveness of advertising campaign. Open rate is a record ofnumber of emails opened out of the number of emails send. Whenever auser opens an email on its email reader application a hidden code triggers aMSc. International Business Page 41
  51. 51. unique tracking image back to the advertising service provider’s serverwhich is then recorder and presented in form of metric report. Since aunique tracking image is recorded for every user it eliminates the uniqueidentity problem. But it has its own limitations such as some email readingapplications has a preview option which on selecting an email previews itand at the same time triggers the tracking image without actually seeingthe email. While some email reading applications do not displays HTML andfor the code to be triggered HTML has to be displayed. Hence even whenuser reads the email it is not registered on the server (Mark Brownlow,2006).Social media advertising are gauged by sentiment analysis along with clickthrough rate and impressions made. Facebook has partnered withmeasurement company Nielsen to provide its advertisers with targeted adsby using the user profile information which provides the requireddemographic information (Helen Coster, 2009).Website advertising can be gauged by measures such as number of visits,number of users registered and number of orders received or sale made.There are various intermediaries which provide the service of analysing thewebsite traffic and the business done by it and present the results in formof metric reports. These reports can help advertisers to understand theshortcomings and make required changes. Google analytics is one of theseintermediaries which not only gives detailed reports on visitors but alsoallows integrating the Google Adword and Ad sense (Google Analytics,2011).MSc. International Business Page 42
  52. 52. Section 3: MethodologyMSc. International Business Page 43
  53. 53. 1. IntroductionThe aim of this chapter is to describe and summarize the researchmethodology used in this study. The chapter begins with explainingresearch philosophy followed by research approach, strategy of inquiry,time horizon, the research process and data collection. The final sectionconsists of Validating, Reliability, Generalisation, Ethical consideration andlimitation. Data collection section explains the process of primary andsecondary data collection method used by the researcher to achieve aimand objective of the research.The research onion typology stated by Saunders, et al. (2003) is used as aguide to choose the data collection methods. Saunders and his colleaguesbelieve that the approach to the research can be related to “onion”. Thecentre of the research can be related to the centre of the onion whiledifferent stages in the research process can be related to different layers ofonion. The research process “onion” stated by Saunders, et al. (2003)includes following layers: 1. Research Philosophy: Constructivism 2. Research approach: Qualitative and Inductive 3. Research strategy: Case study 4. Time Horizon: Cross-sectional 5. Data collection method: Observation and InterviewMSc. International Business Page 44
  54. 54. 2. Methodology2.1. Research Philosophy:The research philosophy depends on the way that we think about thedevelopment of knowledge. The way we think about the development ofknowledge affects the way we do the research (Saunders, M., Lewis, P.,and Thronhill, A., 2000). Any given research starts with a knowledge claimwhere a researcher makes an assumption about what will be learnedthrough his project (ontology), how will it be learned (epistemology), andwhat is the importance of this project (axiology) (Creswell, 1994). The fourtypes of knowledge claims are: post-positivism, constructivism,advocacy/participatory and pragmatism (Creswell, 2003).The research philosophy of the current study is constructivist oftenassociated with interpretivism (Saunders, M. et al. 2000 and Creswell,2003). A constructivist study makes an assumption that individualsinterpret the meaning in the world they live and work. They developsubjective meanings from their experience. The study claims that it isimportant to understand the situation in detail in order to understand themotivating factor behind that situation (Saunders, M. et al., 2000).The researcher begins with the curiosity to comprehend the reason for thelack of interest and involvement in internet as medium for advertising,shown by the small businesses while the medium is booming with year overyear increasing ad-spends by large businesses. Thus the study relies asmuch as possible on the observation and investigation of the generalpractice implemented by participants for the use of internet as advertisingmedium. This helps to build some experience which later helps the study toconstruct its primary research question i.e. to determine the factorsresponsible for effectiveness of internet advertising undertaken byoutperforming small businesses. Hence the constructivist philosophy provesitself necessary for the research.MSc. International Business Page 45
  55. 55. Unlike Constructivism, post-positivism inquiries verifies theories and do notgenerate new ones. It is deterministic, assesses and experiments on thecause to determine the results (Phillips and Burbules, 2000) where as ourresearch needs to comprehend and evaluate the result to understand thecause behind it. The Advocacy/participatory philosophy focus on bringingchange in practice with collaborated efforts from participants. It takessupport of political debates and discussion for change to occur (Kemmis andWilkinson, 1998). But in case of the inquiry undertaken by the researcherwhere researcher is in a search of best practice among the participants theadvocacy/participatory philosophy can lead to biased inputs from theparticipants as they are competitors of each other and would want to provetheir dominance over other. Another philosophy named Pragmaticworldview arises out of action, situation and consequences rather thenantecedent conditions. This is similar to the approach required for theresearch perhaps pragmatic philosophy does not focuses on any onemethod of inquiry rather believes in adopting the best method that meetsthe need and purpose at that time (Morgan, 2007). This according toresearcher does not satisfy the purpose of the study since there is not muchliterature available to help researcher to deduce the intended model ofefficiency. Hence it is inevitable to undertake constructivist philosophyinstead of any other philosophy since researcher has no other option thanobservation to interpret, evaluate and formulate a new model of efficiency.2.2. Research Approach:The research approach is based on knowledge claim, strategy and researchmethod. The research approach is basically of three types Qualitative,Quantitative and Mixed (Creswell, 2003). While according to Saunders et al.(2003) the research approach can be differentiated into two types such asdeductive approach and inductive approach. The deductive approachmeans, where a researcher develops a theory and hypothesis and designs aresearch strategy to test the hypothesis. Whereas inductive approachmeans, where a researcher will collect data and then develop theory as aMSc. International Business Page 46
  56. 56. result of data analysis. These different terminologies by different authorsshow that there exist discrepancies in the literature. Hence, the confusioncaused by these discrepancies is avoided by explaining approaches laid byboth the authors, which are relevant to the current research study.2.2.1. Qualitative:The present study adopts a qualitative approach as its researchmethodology. The qualitative approach is adopted with constructivistresearch philosophy. The purpose of the qualitative approach is interpretingthe situation with focus to sought complete and holistic understanding thesituation. The qualitative approach uses strategies of inquiry such asnarratives, phenomenology’s, ethnographies, grounded theory studies orcase studies (Creswell, 2003 and Grady, M., 1998).The quantitative strategy involves true experiments, quasi – experimentsand correlational studies where a subject is tested against differentvariables and treatment (Neuman & McCormick, 1995). But the studyintends to identify the best practice among the participants via observationrather than experimenting and inventing a new one. The researcher alsobelieves that the participants would have to invest significant amount oftime and effort and also bare the risk of failure by learning new modelwhereas they can easily adopt the best practice from the experience of theircompetitor. The Mix method strategy is a concept of mixing differentmethods as it is believed to neutralize and cancel the biases in any singlemethod (Creswell, 2009). The Mix method strategy includes multiplemethods and is time consuming. The study merely depends on observationof facts and evidently visible practice of internet utilization for advertisingwithout involving participants in the research thus it minimizes the treat ofbiases. Hence it seems unnecessary to adopt Mix method strategy when asingle method strategy saves time and gives desired outcome.MSc. International Business Page 47
  57. 57. 2.2.2. Inductive: The paper adopts inductive approach to understand why some thingis happening rather than being able to understand what is happening. Theinductive approach is primarily concern about context in which the eventtakes place. The inductive approach to research emphasises on collection ofqualitative data; the researcher’s participation in the research to gaininsight of the situation through observation; maintaining a flexible structureto incorporate changes as the research progress (Saunders, et al., 2000).According to the practical criteria’s suggested by Creswell (1994) the natureof the research topic is most important. A topic on which there exists verylittle literature it is appropriate to use inductive approach where data iscollected and analysed and a theory is generated through the theoreticalthemes that data suggest (Saunders, et al., 2000).However there are some drawbacks of inductive approach. The result isgenerated gradually as data is collected on much longer period. Their alsoexist a high risk that no useful data patterns or theory will emerge(Saunders, et al. 2000).2.3. Research Strategy:Strategy of inquiry or research strategy provides specific direction forprocedures in research design. Like knowledge claims over the year’sstrategies have multiplied due to advancements in computer technologyenabling complex data analysing and individuals have articulated newprocedures for conducting research. These strategies of inquiry form a partof the research approach. The different strategies of inquiry are as followsPhenomenology; grounded theory; ethnography; case study; narrative;experiment; survey; sequential; concurrent; transformative; exploratory,descriptive and explanatory studies (Creswell, 2003).MSc. International Business Page 48
  58. 58. 2.3.1. Case study:The current study adopts case study as its strategy of inquiry. According tostake (1995) a researcher explores in depth a program, an event, anactivity, a process or one or more individuals. The cases are bounded bytime and activity, and researchers collect detailed information using avariety of data collection procedures over a sustained period of time.Robson (2002, pg 178) defines case study as “a strategy for doing researchwhich involves an empirical investigation of particular contemporaryphenomenon within its real life context using multiple source of evidence.”This strategy is used because it gives rich understanding of the context ofthe research and the process being enacted (Morris and Wood, 1991). Thedata collection method employed can be various which includequestionnaire, interview, documentary analysis and observation. Althoughcase study research is criticized by some researchers as an unscientificmethod of conducting a research some consider case study as an importantstrategy to explore existing theory and challenge them to provide new one(Saunders, et al. 2000).2.4. Time Horizon (Cross-sectional):Sunders et al. (2003) defines Cross-sectional study as “the study of aparticular phenomenon at a particular time.” The study has a limited timeconstraint thus cross-sectional time horizon become convenient for thepresent study. The cross-sectional study is also termed as “Snapshot”study.The study emphasises on the marketing strategy implemented in year 2009by the participants thus snapshot or cross-sectional time horizon for thestudy facilitates the purpose.MSc. International Business Page 49
  59. 59. 2.5. Data collection method:2.5.1. Secondary method:Ghauri and Gronhaug (2002) state that, the researcher should first look forsecondary data relevant to research problem before going out to collectprimary data. Sunders et al. (2007) states that secondary data is basicallyraw and published literature which can be further divided in three partsmultiple sourced secondary data, survey-based and documentary. Furtherthese sub groups are divided as the multiple-source secondary data isbased on either the survey-based or documentary secondary data or acombination of the two. The survey-based secondary data is a data collationusing a survey strategy which includes questionnaires that are analysed foran original purpose. The data can be composed from three major strategieswhich comprises a census, continuous and regular surveys and lastlythrough ad hoc surveys. This can also apply to the research study of aspecific organisation research that utilizes primary data collectiontechniques and can be used by itself or in combination with formersecondary data (Saunders et al. 2003). The documentary secondary dataincludes written data from organisations databases, communication such asletters, books, journals, e-mail, databases and unwritten materials such asvoice recordings, CD-ROMs and DVD-ROMs.Bryman (2008) identifies and states the importance of secondary data thatthey are reliable and adequate because they act as documented evidencefrom academic and professionals which helps to support the arguments.This proves the creditability as the findings; results and recommendationsare supported by the previously conducted empirical studies. This also helpsaudience to clearly understand the subject put forward by the researchconductor.The present study for secondary data source uses statistical data availablein form of Fact sheets, white papers, agenda papers, Press release andonline articles, available from government bodies (office of nationalstatistics and HM revenue & customs), institutions working in that fieldMSc. International Business Page 50
  60. 60. (Internet Advertising Bureau, UK online measurement, Department forBusiness, Enterprise and Regulatory Reform, Advertising Association, Worldadvertising research centre), and reliable news websites. The research alsosources some theories and definition from texts and journals available onthe subject. The main source of this information is the database madeavailable by the Robert Gordon University. The databases like such asEmerald, Business Source Premier, Mintel reports, Key note reports andScience direct both online and offline.The secondary data helps to strength the underpinning knowledge on thetopic. It also helps to determine the research approach and strategy ofinquiry. Since there was not much literature available on adoption ofinternet for advertising purpose by small businesses case study was used asresearch strategy. It also facilitate the selection of observation and face toface interview due to lack of available literature.2.5.2. Primary method:Clough and Nut-brown (2003) sates primary research as an investigationtool useful to answer the research questions. The researchers suggest thatprimary research compromises of qualitative, quantitative or both andeither can be used depending on the nature of the research beingconducted (Clough and Nutbrown 2003; Saunders et al. 2003; Saunders etal. 2007; Bryman 2008).A Small business suitable to the criteria previously mentioned and willing tocontribute to the research is used for the research purpose. The study usesobservation and interview as its research instrument to collect primarydata. I) Observation:According to Creswell (2003) the researcher takes field notes on thebehaviour and activities of the individuals at the research site. In these fieldnotes the researcher records, in an unstructured or structured way,MSc. International Business Page 51
  61. 61. activities at the research site. The qualitative observer may also engage inroles varying from a non-participant to a complete participant.According to Saunders, et al. (2003) there exist two type of observation.Participant observation has its roots in social anthropology since twentiethcentury. It emphasises on understanding the meaning that humans attachto their actions. In contrast structured observation is concerned withfrequency of those actions. In participant observation the researcherparticipates completely in the life of the subject and become the member ofthe organisation, business or community. The most popular example ofparticipant observation is that of Whyte (1955), he lived among poorAustralian–Italian community in order to understand “the street cornercommunity.”The study adopts the non-participating structured observation method toidentify and record the activities happening internal and external to theselected 10 Indian restaurants which have direct or indirect effect onenhancing the efficiency of its internet advertising. The author spends twohours to record the activities in the internal environment at each restaurantand uses internet research to record their external activities. II)Interview:The interview helps to gather reliable data relevant to research questionand objective (Saunders, et al., 2003). The researcher may conduct a faceto face interview with participant, interviews participant by telephone, orone-to-many participant interview. This interview may involve structured orunstructured open or close ended questions that intend to elicit views andopinions from participant (Creswell, 2003).One typology that is commonly used is the level of formality and structure,where by interview may be categorised as: structured, un-structured orsemi structured interview. Whereas another typology of Healey andRawlinson (1994) as stated by Saunders, et al. (2003) categorises asstandardised and non-standardised.MSc. International Business Page 52
  62. 62. Structured interview use questionnaire based on predetermined set ofquestion. Questions are read out and answers are recorded on standardisedschedule with pre-coded answers. A structures interview with the owner ofthe participant restaurants is conducted which gives an overview of thecompany, its business functioning, marketing activities and financial status.The interview conducted using pre set series of structured open and closedended question. The response from the interviewee is digitally recorded forfuture reference. An access to the company’s financial data is negotiatedduring the interview.The interviews were used to gain greater practical insights into marketingwithin the small businesses being studied. The interview gave insights intothe way marketing activities had changed and evolved (Brooksbank et al.,1999) within these companies over time.2.6. Narrative Structure of the study:The framework designed by Aaker (2001:71) and his collaborators is usedin modified form to systematically address the research problem. Theoverall research process goes through four stages form drafting a proposal;formulating a research design; conducting research and Data Analysis.2.6.1. Drafting a proposal:This stage begins with selecting a research area followed by literaturesearch to formulate the research topic. Marketing was chosen as a researcharea based on personal interest and professional development. Thepreliminary literature search helped to formulate the topic for the study. Aproposal was drafted which covered key issues such as Rationale, Researchapproach, Data collection techniques, Ethical issues, Participant andResearch site. Along with these key issues clearly drafted aim and objectiveof the research was also provided.MSc. International Business Page 53
  63. 63. 2.6.2. Formulating research design:Authors such as Creswell (2003), Saunders, et al., (2000), Frey, J. & Oishi,S., (1995), Yin (2003) along with few other were referred to develop anappropriate research design. The research onion typology stated bySaunders, et al. (2003) was used as a guide.Fig: 6: Research designThis flow chart explains the flow of research conducted. Research beganwith a literature review which helped to gain the understanding of thesubject and develop underpinning on the topic. After which 30 Indianrestaurants were identified in Aberdeen city. They were approached throughemail inviting them to take part in the research. The 25 restaurants thosereplied were interviewed over the telephone to create a appropriate sampleof 10 restaurants for the study. These 10 restaurants were subjected to aface to face interview to gain primary data. This data was then tabulatedusing SPSS. The SPSS was also used for formulating different charts andtables required for preliminary finding and final recommendation. Based onMSc. International Business Page 54

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