A Guide to developing an e-marketing strategy’ resource for SMEs

A Guide to developing an e-marketing strategy’ resource for SMEs

 Introduction

The UK is a popular tourist destination.The tourism industry is SMEs dominate the UK. According to Parliament (2017), SMEs account for 56.7 percent of all tourism businesses in the UK. Although e-marketing is making headways in the UK tourism sector, studies underscore the challenges of adopting by SMEs.  According to Leeflang et al. (2014), SMEs encounter employee resistance and of the technological know-how of developing an e-marketing strategy. Other challenges lack marketing expertise and other limitations facing SMEs due to their size, e.g., inadequate finances and business resources (Xiang and Gretzel2010). SMEs are reluctant to adopt advancement in digital communication.  As a result, most follow traditional marketing approaches, which involve the administration. With the increasing disruptive blue sea innovations such as Airbnb, SMEs have no choice rather than to embrace digital marketing. This work is a guide for developing an e-marketing strategy’s resource for SMEs in UK tourism.

The tourism industry in the UK Direct tourism serves inbound tourists (coming to the UK), outbound tourism (traveling), domestic overnight and day visitors, and travel booking customers. The product offered in this industry includes accommodation, transport, and booking services. Tourism is a vital contributor to the economic growth of the UK.  It contributes about 3.8% of the country’s gross value added (Parliament2017). The industry generated £62.4 billion in 2015. It projected to grow by 4 percent per annum through to 2025.  The tourism industry is that SMEs dominate the UK. According to Parliament (2017), SMEs account for 56.7 percent of all tourism businesses in the UK. Most have less than five employees compared to a small number of enterprises with more than 250 employees. Tourism businesses vary in size, location, and ownership and do not follow a specific business model.

There is no single accepted definition of e-marketing. It is used synonymously with the term digital marketing, internet marketing, or online marketing. Chaffey andEllis-Chadwick (2016) define e-marketing as the application of digital technologies and media to achieve marketing objectives. Digital marketing enables firms to serve five objects: sell, serve, speak, save, sizzle. SMEs in the hospitality industry achieve the selling objective by aiming at growing their sales to reach more customers at an affordable price. The serve objective adds value and extra benefits that are communicated to the customer (Chaffey andEllis-Chadwick 2016). Speak involves getting closer to the customer through dialogue and feedback. Digital communication saves time, effort, and money. Sizzle involves offering something extra. For instance, hotels can customize their experience to suit the customer’s needs..

Environmental scanning

The marketing environment is changing, thereby presenting opportunities and threats for existing businesses. Chaffey &Ellis-Chadwick (2016) argue that businesses should scan the macro (external) as well as micro (firm-specific) factors promoting or inhibiting the adoption of digital marketing. An external analysis of the UK business environment shows that digital marketing offers SMEs unlimited opportunities for growth. According to Hootsuite’s Digital 2019 overview report, the United Kingdom presents unlimited opportunities for e-marketing. The country has a population of 67 million citizens, most of whom live in urban areas. Smartphone penetration has reached 107%, with over 71.7 million gadgets being registered by various users. Ninety-five percent of the population uses the internet, and 67% are active on social media. Mobile social media users have also increased to 58% to reach 39 million users.  With the recent vote to leave the European Union, political leaders have started exploring the implications for various sectors of the economy.  Brexit is likely to redefine the UK tourism sector due to a new regulatory regime that did not exist when the UK was a member of the European Union. SMEs, who account for more than half of all tourism businesses, a likely to be the most affected (Parliament 2017). Such companies should, therefore, explore new opportunities for growth outside the EU. One such opportunity is the use of digital marketing.

The micro-environment contains firm-specific factors that can enable or bar digital marketing usage. Since SMEs are at the adoption stage, firm size and resources can significantly influence the success of the digital marketing strategy. Bordonaba-Juste et al. (2012) found that micro firms are the slowest adopter of e-marketing due to the resources required to adopt and implement digital channels successfully. These findings support the resource-based view (RBV) theory that argues that resources are the most significant determinants of SME strategic direction. Firm-specific such as capabilities, motivation, experience, and background have been found to influence business decisions (Chao and Chandra 2012). The technological know-how of SME owners, for instance, is likely to promote the adoption of IT solutions such as digital marketing.  SMEs are slow to adopt digital channels due to inadequate human, financial, and technological resource shortages (Taiminen and Karjaluoto 2015). The competitive environment also determines the success of digital marketing since some products or services are communicated through digital marketing channels. Besides, some marketing channels, such as social media, are popular with the youth.

Most of the studies on digital marketing has explored digital marketing in various SME industries. Only a few, however, have focused on the UK tourism industry, specifically in the UK. For instance, Komppula (2014) conduct a case study of Finland SMEs in the tourism sector. The study emphasizes the importance of the owner’s innovation, cooperation, and destination marketing organization for digital marketing success.  Jones et al. (2015) also found gaps in UK SME entrepreneur’s knowledge of using social media channels such as Facebook and Twitter. An employee in the hospitality sector is resistant due to a lack of skills and competencies related to e-marketing.  SMEs in the industry are also geographically dispersed, and thus traditional marketing approaches which involve administration (Xiang and Gretzel 2010). Jones et al. (2015) also found that SMEs have problems identifying who to target since digital channels are accessible to the global market.

Digital segmentation and targeting

Segmentation and targeting of digital customers differ from offline customers. Traditionally, segmentation involved dividing the market into various niches depending on the demographic, geographical, psychographic, or behavioral characteristics of the market (Baines et al., 2019). The second step involved selecting the desired niche that the company should pursue based on its attractiveness and business fit. However, the approach emphasizes the vertical relationship between a business and its customers. Customers would quickly become annoyed by the intrusion of marketing messages aimed at them by companies. They considered unnecessary messages as spam, raising ethical concerns (Kotler, Kartajaya and Setiawan 2017). Digital marketing is a departure from the traditional one-way communication. It emphasizes horizontal relationships that create a web of communities whose boundaries are customer-defined.

E-marketing segmentation considers the relationship between customers and the company.  The segmentation depends on prospective customers, existing customers,  or lapsed customers (Chaffey and Ellis-Chadwick 2016). Demographic segmentation can be used in both digital and traditional marketing. It involves subdividing the market by age, gender, and geographic characteristics for B2C and segmentation by firm size or industry served. Psychographic segmentation involves attitudes toward risk and value. Based on this classification, the company can divide the customers into early adopters, brand loyalties, or laggards. Digital segmentation also allows for the value and lifecycle stage. Unlike the traditional marketing approach, behavioral segmentation in digital marketing includes search terms, customer responsiveness to the offering, and channel preference (Chaffey and Ellis-Chadwick 2016). Lewis and Lewis (1997) developed the alternative perspective of segmentation, which classify customers into directed information seekers, undirected information seeks, buyers, bargain hunters, or entertainment seekers. Customers are continuously looking for information from digital sources. Kotler, Kartajaya, and Setiawan (2017) found that 84% of consumers trust recommendations from peers, while 68% trust online rations by strangers. The level of trust is higher than those attributed to traditional media such as radio ads, TV and radio ads,  print and banners, and outdoor advertising.

Digital marketing mix

Digital marketing has transformed how marketing plans are implemented. It has brought alternative marketing mixes. The 4Ps was developed in the 1960s and is still used in today’s digital environment. It involves price, place, promotion, and product strategies. The emergency has digital marketing has introduced alternative models such as the 4Cs that focus on the customer, cost,  channel, and communication (Fetherstonehaugh2009) and the 4Es that entails experience, everywhere, exchange, and evangelism. The marketing mix continues to morph as digital marketing brings together several elements of the traditional marketing mix. For instance, Festa et al. (2016) developed the 4Es (expertise, evaluation, experience, and education) as an alternative marketing mix for the wine market. Expertise replaces the traditional product while evaluation becomes an alternative for price, promotion is replaced by education, while experiences stand for a place, thereby remaking the traditional 4Ps. The wine marketing mix is relevant to the current study due to the growth of wine tourism that has seen higher evolution from the wine taster towards wine innovation through knowledge and experience.

The digital marketing mix requires that the new marketing mix version follows the six I’s: Interactivity (customer-initiated two-way dialogue); Intelligence (collection of cheap marketing research); Individualism (customized communication); Integration (for other aspects of IMC); Industry restructuring (disintermediation and similar impact on intermediaries); Independence of location (digital marketing communication should reach the global market) (Chaffey and Ellis-Chadwick 2012). Chaffey and Smith (2017) introduced new dimensions in the 7Ps as a result of the incorporation of digital marketing technologies. For the digital marketing mix, the product includes digital value and experiences of a brand, whileprice includes transparency and new pricing models. Place represents new channels of distribution, such as multi-channel distribution, and promotion integrates both online and offline strategies. In contrast, people represent resources and training and other contact techniques used to reach the customer. Physical evidence includes online physical evidence, while processes involve optimizing both internal and external business processes through the web (Chaffey and Smith2017).

Digital pricing

Digital development has transformed prices due to increased price comparison with competitors. Price determination is now moving from the company towards the customer in the B2C market.  Chaffey and Ellis-Chadwick (2012) found increased price complexity due to basic pay, discounts, add-ons, warranties, refunds, and product return policies, revoke, and order cancellation. Pricing for digital products now includes subscription, pay per view, bundling, ad-supported web content, as well as adding a second layer of pricing.  Advancement of technology has brought new digital payment systems. The number of non-cash transactions and e-wallet have increased. According to World Payment Report  (2019), e-wallet transactions were $539 bn in 2019, accounting for 12% of all non-cash transactions. Mobile wallets include both the NFC and QR codes. While QR made use of software thatinvolved opening and scanning, NFC uses chips pre-installed in smartphones. NFC allows customers to scan universally on contact, albeit with electricity.

Digital media channels

Digital channels come influences in many forms, formats, and structures such as search marketing, social media marketing, opt-in emails, interactive advertisement, online PR, and online partnerships (Chaffey and Ellis-Chadwick 2012). Search marketing involves the use of search engine optimization (SEO), paid search (PPC), and paid for inclusion feeds. It is the most excellent strategy for customer acquisition (Chaffey and Smith 2008). SEO has been studied by researchers in the field of information science and computing. Studies focusing on SME marketing have examined search engines based on usability (Visser and Weideman 2014), adverts (Kritzinger and Weideman 2013), and brand positioning (Dou et al. 2010). However, search marketing is understudied. Chaffey and Ellis-Chadwick (2016) argue that search engines can promote the achievement of organization objectives by delivering relevant content that directs customers to a destination page. The content is written using keywords that appear in search engine results pages (SERPS) (Chaffey and Smith2008). The user of a search engine types these keywords or phrases and directed to the company’s website through an automatic algorithm. SEO differs from other searches such a  pay-per-click (PPC) and Google AdWords since it is an organic search that does not involve pay. Pay per click is similar to traditional advertising since ads are paid depending on the number of clicks. It commonly appears in Social media accounts as sponsored results.  SEO can help SMEs to achieve the highest position in search engine rankings in the SERPS. Optimized pages have the best match for the webpage and critical phrases. Those with a high number of inbound and backlink are also ranked highly. Care must be taken for the quality of links since Google algorithms weak links.

Social media marketing is a popular area in the research area. Studies agree on the definition, characteristics, and tools used to communicate with customers (Durkin 2013; Clark and Melancon, 2013). Social media marketing examines audience participation, management of social presence, viral campaigns, and customer feedback (Chaffey &Ellis-Chadwick2016).  Another study usage, text mining techniques for the tourism industry (Leung et al. 2013).

Some studies examine the influence of a particular type of social media platform such as Facebook and Twitter ( He, Zha, and Li 2013).  Most researchers limit social media marketing to social networking channels such as Facebook, Twitter, and LinkedIn are considered narrowly for communication. However, these platforms extend to include blogs, chat rooms, dating sites, and video sharing forums. Social media can mean different things to different people (Chaffey and Smith 2017). However,  all definitions extend beyond social networking functions. When viewing social media from a marketing perspective, SMEs should consider it as a whole subject with different channels that can be used to achieve various strategic marketing.

Opt-in emails or email marketing is a tool used for outbound communication from the firm to the customer. Opt-in emails include house listing emails, cold emailing (rented), co-branding, and their party ads in newsletters. Chaffey and Ellis-Chadwick (2016) claim that email marketing can be used to encourage purchase. Research focusing on email marketing is limited compared to social media. The majority of the studies focus on email execution tactics, length, frequency, headlines, content, and illustrations. Email marketing is a useful tool for acquisition and customer retention (Chaffey and Smith 2008).  Email use raises ethical concerns, especially privacy concerns. SMEs should ask for customers’ permission to be sending them emails. Chaffey and Ellis-Chadwick (2016) argue that these emails could contain opt-in and opt-out options that allow the customer to subscribe or unsubscribe for receiving marketing newsletters and related company information. In today’s digital age, unsolicited emails are often considered spam, which can harm the company’s reputation.

Online PR is the use of online social networks and websites visited by the target audience to manage negative mentions. They include outracing publications, community participation, brand protection, and media releases (Chaffey and Ellis-Chadwick 2016). Online partnership, on the other hand, refers to the creation of relationships with third parties’websites and emails to promote online services. The partnership includes link building, affiliate or network marketing, online sponsorship, and co-branding.

Interactive ads or display advertising is the use of online advertising tools such as banners and reach media to create brand awareness or encourage clicks that link target sites.  Display ads use traditional publications that are displayed in rich media within a web page to increase awareness of the brand. Display ads are paid for in third-party websites. SMEs should advertise on various sites to traffic to their websites.  Chaffey and Ellis-Chadwick (2016) found that interactive ads are useful in creating awareness of a brand since it generally gets a response. However, online ads have low click-through, costly, and could damage brand reputation if they displayed in gambling or pornographic sites.

Digital media channels should not be used alone. Chaffey and Ellis-Chadwick (2016) recommend the incorporation of offline communications such as ads, sales promotion, personal selling, direct marketing, exhibitions, packaging, and word-of-mouth in websites and social sites. Digital media encourages more excellent dialogue, personalization, information sharing, and communities compared to traditional media (Fill and Turnbull 2013). It is cheaper and unlimited.  The time costs are left to the user, thereby saving expenses for organizations. Digital promotional mix has an extended reach, stresses the benefits of brands, reduces the need for TV ads and creates a lasting impression about the brand.

Selection of digital media channel

Since there are many digital media platforms, SMEs should know the criteria for selecting and evaluating digital communication. Coulter and Starkis (2005) developed a criterion for assessing the digital communication mix. Marketers should consider the quality of digital media, such as its attention-grabbing capabilities, clutter, stimulation of emotions, and information content. Secondly, they should consider the time whether they want a short lead time or long exposure time. Flexibility is also paramount. Digital channels should have multiple appeals, personalization, and interactivity. Marketing managers should also consider the coverage, especially selectivity, frequency of exposure, and media reach. Finally, the cost is paramount in the development or production and delivery of the digital promotional mix.

Digital experiences

Enhancing customer experience has become a significant marketing objective. Leading businesses such as Amazon and Google have a manager charged with customer experience (Lemon and Verhoef 2016). Businesses should enhance their experiences throughout all the customer touchpoints. Although e-marketing can enhance customer satisfaction, research has shown that technology should be infused with human interaction (Giebelhausen et al. 2014). SMEs in the UK tourism market should look for ways to enhance their digital experiences. One way of enhancing virtual reality to improve the interactive content used in the company’s digital marketing strategy. Virtual reality can present the company’s products and services more appealingly through 3D technologies and rich media that enhances virtual interactivity. For instance, SMEs in UK tourism can enhance booking by offering virtual tours in various destinations to assess whether the destination will be satisfactory.

Conclusion

Digital or e-marketing has grown as companies continue to embrace digital technologies and media to achieve marketing objectives. This work found that SMEs in the UK tourism sector are reluctant to implement digital marketing. Inadequate resources and geographical limitations are some of the factors hindering digital adoption for the SMEs. This work proposes a guide for the e-marketing strategy’s resource for SMEs in the UK tourism industry. It suggests scanning the digital business environment for opportunities and threats. It also suggests new models of segmentation and targeting necessitated by advancement in digital technology. Alternatives to the traditional marketing mix have also been explored. The new marketing mix framework includes the substitution of experience for products, evaluation for the price, new distribution channels, and digital promotional mix. It recommends enhancing customer experience through virtual reality.

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