Why SMEs have got it wrong: A comparative study of US and UK ...

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Why SMEs have got it wrong:

A comparative study of US and UK
online marketing practices

Project Proposal


David Towers
2008


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Contents
Contents .............................................................................................................................................................. 2
Introduction ......................................................................................................................................................... 3
Research objectives ............................................................................................................................................. 4
Hypothesis ....................................................................................................................................................... 4
Objective .......................................................................................................................................................... 4
Research parameters ....................................................................................................................................... 4
UK and USA .................................................................................................................................................. 4
SME .............................................................................................................................................................. 4
Online marketing ......................................................................................................................................... 5
Research methodology ........................................................................................................................................ 6
Primary research ............................................................................................................................................. 6
Secondary research ......................................................................................................................................... 6
Project plan.......................................................................................................................................................... 8
An interesting subject with meaningful deliverables ........................................................................................ 10
Personal objectives ............................................................................................................................................ 11
GoodWebPractices.com ................................................................................................................................ 11
Bibliography ....................................................................................................................................................... 12

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Introduction
According to Jutla et al. (2002) small and medium sized enterprises (SMEs) are estimated to account for 80
per cent of global economic growth. Could it be that many of these SMEs have got their online strategies
completely wrong? May it even be the case that many SMEs simply do not have an online strategy?
Ten years on from the popularisation of the internet, it is surprising that the majority of SMEs don’t seem to
understand online marketing and many fail to make the most of marketing opportunities that exist online
(Fisher 2007; Beckinsale & M. Levy 2004; Tetteh & Burn 2001).
New Age Media reported in November 2007 that within the UK over 96% of estate agents, IT firms and
recruitment consultants had a website. However, rather than simply measuring how many companies have a
website, the quality and strategies behind these websites need to be analysed. A significant number of these
websites are little more than brochureware (M. Levy & Powell 2005) and only a small number have a
predetermined online marketing strategy.
Although it is disputed whether the internet levels the playing field between SMEs and large multinationals
(Haig 2002; Griffith & Gray 2002; Shu-Ching Chan & Jin-Ying Lin 2007), it certainly is the case that the
internet brings significant new marketing opportunities (Kim, Nam, & Stimpert 2004; Tiu Wright, Ul-Haq, &
Oktemgil 2006). Some SMEs use these opportunities to dramatic effect (Loveday & Niehaus 2007) whereas
others neglect the opportunities presented to them with an online presence (Daniel, Wilson, & Myers 2002).
John Tuggle, a guitar teacher from Georgia, USA is one example of someone who has used the marketing
channels available through the internet to great effect (McGee 2008). Tuggle of LearningGuitarNow.com
embraced the opportunities presented to him by the internet and through blogging, podcasting and creating
YouTube videos, has been able to generate new business opportunities and now gives live guitar lessons via
Skype. Unfortunately, Tuggle’s success story is an exception rather than the rule, with the majority of SMEs
completely oblivious to the opportunities available to them through marketing online (Daniel, Wilson, &
Myers 2002).
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Research objectives
Hypothesis
In the UK and USA, SMEs rarely leverage the internet to its full potential.
Objective
The main overall research objective of this project is to:
Demonstrate that SMEs online marketing strategy is often ineffective and to develop tools and
frameworks to assist SMEs in implementing a successful online marketing strategy.
This overall research objective will be achieved through breaking down the research into four sections:
1. To what extent are SMEs using the internet to fulfil strategic objectives?
2. How do SMEs typically start implementing their online marketing strategy?
3. What are the best ways for SMEs to operate effectively online?
4. What tools and frameworks can help SMEs implement effective online marketing strategies?
These objectives are broken down into sub sections and discussed in more detail in the project plan section
of this proposal. It is worth noting however that the objective of this project is not simply to criticise the way
in which SMEs are approaching online marketing, but through analysing online marketing opportunities,
suggest practical ways in which SMEs can have effective marketing strategies. Furthermore, it is hoped that
through working with two SMEs and helping them develop their online marketing strategies, good practice
will be demonstrated.
Research parameters
UK and USA
It is evident that through focusing this research on the UK and US markets, this study has been limited to
analysing SMEs in wealthy developed countries where there is high internet penetration (Internet World
Stats 2007). This focus has been given because the US and UK markets are quite similar and because I have
had opportunity to work with both British and North American SMEs.
SME
An additional parameter in this research is that of the small and medium sized enterprise (SME) sector. This
project will use the European Commission’s definition (2003) of SMEs:
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“The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which
employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro,
and/or an annual balance sheet total not exceeding EUR 43 million.”
(European Commission 2003, p.5)
The SME sector is particularly interesting because it is very significant economically for the UK and US (Jutla,
Bodorik, & Dhaliwal 2002; Stockdale & Standing 2006) and it is a sector which can use the internet as a key
platform to implement strategic objectives (Tiu Wright, Ul-Haq, & Oktemgil 2006).

Online marketing
The term online marketing will be used within this research as an umbrella phrase that encompasses search
engine marketing (SEM): search engine optimisation (SEO) and pay per click (PPC), email marketing, social
media marketing (through web communities), web design and online branding. These are all areas that
Chaffey, Chadwick, Johnston and Mayer (2006) discuss in their book Internet Marketing: Strategy,
Implementation and Practice.

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Research methodology
In order to collect the appropriate information required for this project, my research will include both
primary and secondary research methods.
Primary research
The richest primary research method that I will be using is that of working with SMEs based in the USA and
the UK. In order to get a better understanding of the practical issues encountered with implementing an
online marketing strategy, I will be working with Kontz Landscaping, a landscape gardening company based
in Philadelphia, USA and Tantallon House; a family run Bed and Breakfast in Cumbria, England. Tantallon
House already has an online presence, however are reviewing their strategy whereas Kontz Landscaping is
looking at marketing their business online for the first time.
In addition to working with these two SMEs in online marketing strategy formation and implementation, I
will be carrying out interviews with marketing managers of other SMEs based in the UK and USA. I will also
be interviewing Steve Burge, CEO of Alledia Inc. a web design company based in Georgia, USA.
Furthermore, throughout the writing of this project, I will draw upon my own experience in online
marketing, which began in 2005 when working with Fingershield Safety. (Fingershield Safety is a SME based
in Manchester, England, which has a branch in the US at Ponta Vedra Beach, Florida).
I will also draw upon some of the work that has gone into building GoodWebPractices.Com, a website that I
have developed with the purpose of publishing this project’s research and conclusions.
Secondary research
The secondary research that I will be carrying out will include an academic literature review and the analysis
of quality online news feeds which deal with the latest issues in online marketing.
The academic literature I will review includes books and journals from prominent authors in the field
(Nielsen & Tahir 2001; Johnson 2003; Loveday & Niehaus 2007; Fisher 2007; Hotchkiss, Alston, & Edwards
2005; M. Levy & Powell 2005; Waller 2004). The following keywords have been used to find academic
articles on the appropriate online academic databases which include Proquest, Ebsco and Mintel:
SMEs, small business, medium business, web, web site, online, marketing, strategy, e-commerce,
internet, return on investment, ROI, usability
In addition to the conventional medium of books and research papers, during the course of this study, I have
subscribed to the following RSS news feeds which equate to around 10 articles a day relating to the research
topic in question. I have chosen these particular news feeds because they are from top quality blogs which
are leaders in their field, and deal with the subject matter in question:
• SEOMoz Daily SEO Blog, www.seo-moz.org
http://feeds.feedburner.com/seomoz
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• Search Engine Land, www.searchengineland.com
http://searchengineland.com/feeds.php
• Copyblogger, www.copyblogger.com,
http://feeds.copyblogger.com/copyblogger
• Official Google Webmaster blog, www.googlewebmastercentral.blogspot.com
http://googlewebmastercentral.blogspot.com/atom.xml
• Google Blogoscoped, www.blogoscoped.com
http://blogoscoped.com/rss.xml
• Alledia blog, www.alledia.com
http://feeds.feedburner.com/alledia
• The Joomlatools blog, http://blog.joomlatools.org
http://feeds.joomlatools.org/site/blog
These RSS feeds are very important as they will provide quality news articles that are up to date and deal
with changes and trends in marketing online. Due to the nature of the question being researched it is
essential that I understand the past, current and future online trends for businesses and consumers.

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Project plan
I intend breaking down the research topic into manageable sections by following this outline and using the
research methods indicated on the right:
Main question

Broad research questions

Specific subject areas

Research method

Why SMEs have got
it wrong: A
comparative study
of US and UK in
online marketing

1. To what extent are SMEs
using the internet to fulfil
strategic objectives?
Why is the internet an important
marketing channel?

Literature review
• Interviews

Do SMEs usually have specific online
strategies?
How effective are SMEs online
strategies?
2. How do SMEs
typically
start implementing their
online marketing strategy?
How do SMEs source development:
in-house vs. outsourcing?

Literature review
• Interviews
Do SMEs dedicate enough resources
to online marketing?
3. What are good ways for
SMEs to operate online?
Web development platform


Online literature
• Interviews
• Case studies
• Website analysis:
(Frameworks and
usability testing)
Website design

Search engine
optimisation

(SEO)

Pay per click advertising

(PPC)

Web 2.0: Creating communities

Measuring ROI

4. Provide tools and
frameworks to help SMEs
implement effective online
marketing strategies.

Online marketing strategy formation
framework

Literature review
• Case studies
• Online literature
Web platform development
framework
PPC
g
ood practice

SE
O

analysis framework

and guide

Table 1.0 - Project plan and question breakdown
Rather than explaining in more detail about each of these subject areas I have chosen to do this through the
use of a mind-map. As Harris notes in ‘Marketing the E-business’ (Harris 2002), a mind-map is very effective
in depicting the content of a project. The mind map below shows visually and in more detail how I will
answer the main research objective.
Mind map index
- Numbers show the 4 main research questions
- Flag symbol used to show when case studies will be used
- Star symbol notes the key tools this project aims to produce
1

Project plan mind

map

Why SMEs have got it wrong: A comparative study of US and UK online marketing practices 10 of 13

An interesting subject with meaningful deliverables
This project is particularly interesting because it is dealing with two specific topics that are not exclusive of
each other, however rarely discussed together:
• SME’s business strategy
• Good practices for online marketing
There is a wealth of academic articles and books discussing SME strategy, and within the past 5 years there
have been a notable number of academic articles specifically discussing SME’s strategy in the online context
(AHoughton & Winklhofer 2002; AlonsoMendo & Fitzgerald 2005; Beckinsale & M. Levy 2004; BMurphy,
Celuch, & KCallaway 2007; Bruce 2006; Daniel, Wilson, & Myers 2002; New Age Media 2007; Tiu Wright, Ul-
Haq, & Oktemgil 2006; Tetteh & Burn 2001). The weakness of the majority of these articles however is that
they are somewhat superficial, as they fail to truly consider the specific opportunities that exist in online
marketing.
I will review the current academic literature relating to SME business strategy and apply it practically to the
opportunities that exist in online marketing today. Through case studies and interviews with practitioners I
hope to gain insight into the problems that SMEs are facing, and through research, create frameworks and
guides that SMEs can use in developing and evaluating their online strategies.
As a result, my hope is that this project will fuse together the academic literature relating to strategy and
the latest opportunities in online marketing to create fundamental tools relevant useful to SMEs.
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Personal objectives
This research project combines two subjects of professional and personal interest: business and web
marketing.
My personal objective coming from this report is to contribute to both SMEs and the online marketing
community.
Having worked with a number of SMEs, my experience is that many SMEs fail to understand the potential
that exists for them online. I would like to help such companies by providing them with relevant tools and
frameworks.
GoodWebPractices.com
In order to be able to make my research and findings available to SMEs and the online marketing
community, I have created a website: www.GoodWebPractices.com. I have already started to publish
articles on GoodWebPractices.com which relate to my research.
GoodWebPractices.com is not only a way for me to contribute online and make my work available to others,
it is also a way that I can I have my work proof read by hundreds of people. GoodWebPractices.com has
been online since the beginning of February 2008 and it is already receiving over 150 visitors a day (see
Figure 1.0). People are reading and commenting on the articles which is great way for me to get feedback on
my report.
To conclude I view this research project as an opportunity to deepen my understanding of SME strategy and
web marketing, gain a reputation in the field and use my research as a springboard to start a career in web
marketing consultancy.
Figure 1.0 - Statistics from GoodWebPractices.com for February and March 2008



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