Exploring Social Media Marketing Strategies in SMEs Assignment

Assignment Task

Introduction

The internet has affected the way we interact socially. Through social media, people can exchange photos and videos and share news stories and participate in online discussions and post their thoughts on blogs (Dewing, 2010). The concept of social media has grown rapidly throughout the years, and businesses have adopted it to communicate and market to their potential customers. Therefore, this study investigates how social media can be used by restaurant based small, medium, and micro enterprises (SMMEs) and entrepreneurs to market and grow their businesses as well as the economy in South Africa. It is based on previous research studies on Social Media Marketing and SMMEs.

Broadband internet became popular in the late 1990s. Websites allowed users to create and upload content began to appear (OECD, 2007). In 1997, the first social network appeared (SixDegrees.com). From 2002 onward, numerous numbers of social network sites launched, such as MySpace and Friendster. According to Boyd and Ellison (2007), by the late 2000s, social media had gained a large popularity and acceptance and the number of users and engagements had increased. For example, in July 2012, Twitter had estimated several 517 million users (Thomas, 2012) and according to CBC News (2012), Facebook announced it had 1 billion users worldwide, in November 2012.

Dollarhide (2021) describes social media as a computer-based technology that advances the sharing of thoughts, ideas, and information through virtual networks.

Several factors have contributed to the rapid growth of social media such as technological factors (improvement of software tools, development of powerful computers and mobile devices), social factors (uptake of social media by younger age groups), and economic factors (growing interest in social media and increasing affordability of computers) (OECD, 2007) Through this, businesses have also taken an interest in social media by using it as an advertising/ marketing platform.

Research problem statement

Social media plays a vital role in the marketing of an enterprise and creating long-term relationships with customers. Previous reports affirm that social media is used in businesses as a marketing strategy that makes businesses easily reachable to potential customers (Neti, 2011). Small enterprises have started utilizing social media as means to market their enterprise but unfortunately, not all small enterprises. Some companies struggle to use social media and have no strategy going into it (Cox, 2012).

Although social media marketing is a well-researched topic, research has revealed that this research is mainly about large organisations that dominate the business environment. The use of social media by small enterprises is extremely low and knowledge on how to implement social media in business is largely lacking (Rambe et al. 2010). Small businesses do not have full knowledge of the tools for today’s technology, Vasquez and Escamila (2014) state. They are not fully innovative and creative to adopt and implement social media marketing. Though Oji et al. (2017) have proven progress, the usage of social media by restaurant based small businesses in the Western Cape is still limited.

Research aim

This research aims to:

• Explore the benefits of social media marketing in restaurant based SMMEs in Cape Town

Research objectives

• Examine the challenges faced by restaurant based SMMEs in Western Cape in implementing social media marketing
• Identify the various social media platforms available to restaurant based SMMEs in Western Cape
• Provide recommendations on how restaurant businesses could use social media as a marketing tool

Research Questions

i. Primary research question

• How can restaurant based SMMEs benefit from using social media as a marketing tool?

ii. Sub-research questions

• To what extent do SMMEs in Cape Town make use of social media?
• What are the challenges faced by restaurant based SMMEs in Cape Town in implementing social media marketing?
• What social media platforms are most effective when marketing a SMME in Cape Town, South Africa?

Literature Review

Research within social media and entrepreneurship is still very limited. This study includes a literature review of studies related to social media marketing in small, medium, and micro enterprises, specifically, the restaurant SMMEs. The rapid growth in the numbers of people using the internet has forced restaurant businesses to find ways that are efficient in managing their relevance in the social media space.

Small, Medium and Micro Enterprises (SMMEs) and Entrepreneurship

Small businesses in South Africa are defined as those that employ fewer than 50 employees, Van Scheers (2016) refers to the South African National Small Business Act of 1996. It further describes small businesses as those privately owned and where the business owners take over day-to-day activities and receives an annual turnover of less than R2 million.

Small businesses play an important role in countries such as USA ,Brazil and India. It was recognized that almost 99% of employers were small firms in USA, which makes the American economy evolve around small businesses. According to Groepe (2017), in South Africa, the government has raised the status of small businesses by investing in the budgeting of R1 billion in 2017 for small business development. 2.8 million small businesses were estimated by the Minister of Small Business Development, Lindiwe Zulu. She carried on and acknowledged that 57% of the country’s employment is created by these (Zulu, 2017).

Small businesses are regarded as driver of the employment as well as of the economic growth (Zulu, 2017). This has been proven well established countries such as USA, China, India, and Brazil. SMMEs vary in nature as they serve different purposes and needs in the population, since they operate formally and informally.

Social Media

Social media is a platform that focuses on communication media using web-based applications to transmit information easily (Safko and Brake, 2013). Research states that social media is going to change the business settings for many businesses, small or large. Social media platforms are essential as they allow interaction between businesses and customers and potential customers, as marketers build an effective communication channel.

With the growing numbers of people constantly being active on the internet, social media has managed to gain traction rapidly and a more significant increase in social media users across the global. It predicted that in 2020, the number of active users will be 2.96 billion, but it increased to 3.09 billion by the end of 2021. According to the latest reports, in 2022 when much of the world was in lockdown, the number of social media user grew at its fastest rate in recent years and reached 4.2 billion.

Social Media Background

Edosomwan (2011) believes that the fastest way to grow a business entity is through social media and networking. This study discusses the history of social media. Although there are many speculations of the birth of social networks, earlier discoveries found written information spread by telegraphs in the late 1700s. Telegraphs were created to convey and receive messages over long distances. Emile Durkheim, a French sociologist and Ferdinand Tonnies, a German sociologist, are regarded the pioneers of social networks during the late 1800s.

However, the internet was not created until the 1990s; social networking was developed through telephone and electronic mail (e-mail). An e-mail changed how modern society communicated on the computer, allowing one to send someone a message at any time of the day or night. E-mailing required computers that have online access and this early form of the “internet” made connecting online possible, although it was quite expensive for most (Morrow, 2014).

ARPANET, an early network of time-sharing computers that formed the basis of the internet, was created in 1969. Over several years, ARPANET was then developed into the World Wide Web (WWW), which opened the door for hundreds of viral communities. Along with the WWW, the 1980s introduced The WELL, GENIE, Listserv, and the IRC. Later, instant messaging (IM), which was similar to e-mail but instead used real time via the Internet, had gained popularity amongst the youth and became a distraction of many high school students who were IM’ing instead of studying (Morrow, 2014).

Many social media sites were established in the 1990s and in the early 2000s, the use of social media skyrocketed. Myspace (2006), Facebook (2004) and YouTube (2005) have become the most popular platforms for viral communication and networking globally and have integrated themselves into people’s everyday lives. Viral communities have created other communities such as Twitter and Instagram, which are used for leisure activities such as microblogging and pure entertainment. In recent times, social media has affected many aspects of human communication, thereby influencing business (Edosomwan, 2011).

Social Media Platforms

According to Lim (2010), Facebook is a networking site that gives users a platform for conversation; including sharing photos and videos and connect with friends using the same networking site. Lim (2010) further describes Twitter as a mini blog, where information is posted to keep people informed. In addition, Church, and Oliveira (2013) define WhatsApp as a mobile instant messaging application. It allows people who use smart phones to send and receive messages to individuals or group of people.

In the case of Facebook, with more than 2.74 billion users active monthly, it has proven that it is the most popular platform for marketing products, promoting brands, managing relationships, and communicating with customers. A business can use various types of posts and content on their Facebook page to inform customers about various products and offers that are available. Facebook is a two-way medium of communication; thus it proves beneficial in enabling (Chodak & Suchacka, 2017; Myers West, 2018).

Social Media impact SMMEs

The relationship between social media and SMMEs is beneficial because social media gives an ability to connect with potential customers at your own time, with less resources needed (therefore, low cost), and ease of use (Tajudeen et al, 2018). It is growing rapidly and is considered a major key to enhancing key performance in small businesses (Iankova et al, 2019).

The wide-spread generation and consumption of content has created an extremely competitive online environment where different types of content strive with each other for the scarce attention of the user community. Social media had first developed popularity due to the number of users interacting amongst themselves. Businesses soon took note of the amount of online attention social media sites began to attract and realized the potential of attention that social media can generate (Asur, 2012).

Thus, online traffic turned into monetary value. Social media marketing has since become a popular brand of online marketing. Businesses have taken advantage of the many marketing strategies that social media have to offer. One strategy is structuring their business model on ads that are like Google. When Google began to dominate online searches in the early 2000s, it did not take long for them to discern a then unique model of monetization of search, through online advertising (Asur, 2012).

This method is profitable because people on average spend ample amount of time searching the web. The number of users constantly on the internet has been amplified by the availability of social media platforms. Businesses have also created their own social media pages so that consumers can subscribe to their feeds and essentially be a forum for consumer-to-business communication. This can provide an opportunity for businesses to not only interact with their consumers, but to see what their competitors are doing, and how they are engaging with their customers (Asur, 2012).

Social Media Marketing

Social media marketing is relatively a new way of marketing that enables businesses to reach a huge number of markets at little to no costs. According to Hamound (2016), businesses have realized that they can increase their competitive edge through social media. The concept of social media marketing is all about the conversations built to create meaningful, long-term relationships with customers. Xiang and Gretzel (2010) emphasize that social media is not there to replace traditional ways of marketing but confirms that traditional ways of marketing are not the only form of marketing available.

Social media marketing is defined as “the process of gaining traffic or attention through social media sites”. For social media marketing to be effective, they claimed that marketing needs to be consistent and aligned with the different needs of social media users. Marketing objectives of social media marketing are awareness, brand values or reputation, development of relationships and sales. However, the most important objective that businesses should reflect within their social media campaigns is effective communication and engagement with their consumers (Zhu, 2015).

They analysed the importance of SMMEs incorporating social media into their marketing efforts. For businesses to sell products or services through social media effectively, they must build a relationship with their targeted audience. Effective customer relationship management starts with properly identifying, maintaining, and developing good relationships with customers and providing value to allocate marketing resources to relationship developing. To build brand loyalty, it is essential that businesses move from a product-oriented approach to a customer-oriented approach (Taneja, 2014).

Social media marketing can change restaurant based SMMEs in Cape Town

According to Morah and Omojola (2018), social media marketing has an increasing importance in SMMEs in South Africa, especially in Cape Town because more individuals are engaging in social media platforms and exploiting them efficiently and consistently. Every SMME must actively take advantage of the social media platforms available to them as it will help with things such as:

• Widespread reach - Comparing to the traditional ways of marketing channels like TV ads, billboards’, brochures etc. A well-planned social media strategy allows restaurants to market their brand to a much wider audience with minimum effort. If done correctly, a single post on the social media page can be able to reach thousands of potential customers and create widespread brand awareness.

• Cost-effectiveness – Having a social media account on any platform is completely free. As you continue using it, there will be additional costs like hiring manager, creating content, and running ads. However, the initial investment is zero. This makes social media the perfect platform for restaurants that may not have a very high marketing budget and want to make the most out of their resources.

• Attract more customers – A huge number of your target audience is likely to be on social media. By not being an active part of it, your restaurant is missing on the market share as a source of information before making dining decisions. This is especially applicable when your target audience consists of millennials and gen z customers, as they make up most social media users.

The impact social media marketing has on restaurant based SMMEs

Social media has given consumers the power to spread information to hundreds, if not thousands, of people in a matter of seconds. For the restaurants industry, which solely relies on reviews and recommendations, this means every customer now has the power of a well-acclaimed critic.

Instagram, blogs, and other social sharing platforms allow everyone to be a “foodie.” Publicists no longer control the reputation of a restaurant, customers do. Pictures that Instagram users post can be shared to other social networks and making dramatically amplifying word-of-mouth recommendations. Regarding of the type of cuisine, it’s important for chefs to create photogenic dishes.

Research Methodology

This study is derived from secondary data, which was collected mostly through previous research studies and primary data was collected through questionnaires that were designed and administered. The questionnaire was comprised of open-ended questions that provide space for respondents to give answers. The study conceptualizes the relationship between social media, social media marketing and small, medium, and micro enterprises (SMMEs) and highlights the power social media marketing has, for SMMEs to benefit from.

Study population is the aggregate or total of those confirming to a set of specifications (Polit & Beck, 24). The study population restaurant based SMME’s in Cape Town. The study used open-ended questions questionnaire. The study used a questionnaire to collect pertinent and helpful data using the positivist paradigm.

Research setting

The research setting refers to the location and environment in which data is collected. In this study, the setting is in the city of Cape Town in Western Cape, South Africa, at the library at Cape Peninsula University of Technology, District 6 campus. Given that there isn't a complete database of restaurants in Cape Town and after consulting Kapondoro, Iwu, and Darko (2015), the researchers thought of using a census as an alternative.

The three social media platforms that were the focus of the study, Facebook, Twitter, and WhatsApp, were taken into consideration when designing the questionnaire. The consent letter was included with the one-page questionnaire. The purpose of the consent letter was to tell the respondents about the study's objectives and to reassure them that any information they provided would be kept anonymous, private, and only utilised for the purposes of the study.

i. Procedures

There were 10 respondents within this study, each with similar backgrounds and social habits. Participants were administered a questionnaire to complete in depth. Part 1 focused on the participants’ attitudes toward businesses using social media marketing. This is to determine how these behaviours can affect business perceptions and purchasing decisions. For a higher response rate, the researcher administered the questionnaire to businesses. Prior to the questionnaire, the purpose and significance of the study was briefly explained. The business respondents took 20 minutes to complete the survey. After the questionnaires were completed, responses taken to be compiled, to be analysed.

Basically, this technique allowed the researchers to choose samples from the population's accessible subgroups that also possessed the necessary characteristics to fulfil the study's goal (Maree 2007:178).

Target Population

Target population is described as a whole group of people or events of interest to the researcher to use in the study (Kotler & Armstrong, 2013). The target population for this study was restaurant based small, medium, and micro enterprises in Cape Town that started in 2013 to 2021. These businesses spend ample amounts of time on social media. There were 10 participants in the study. Participants were chosen through random sampling. After the overview of the study was explained, the participants were given the option to accept or deny participation. All participants agreed to participate and answer each question truthfully. A maximum of 20 minutes was assigned for the participants to complete the questionnaire.

Sample and size

A sample is a subset of the larger population (Field, 2005). Studying the whole population may not be feasible, stated Sekaran and Bougie (2010), because of time and budget constraints; therefore, researchers use samples which are smaller and more practical, to achieve their research objectives. The sample of this study comprised of owners and managers of the SMME’s that use some sort of social media as a marketing tool.

The sample size is the exact number of participants chosen to participate in the study. The researchers engaged with five small business restaurants in Cape Town CBD, focusing on the owners and managers as they are the key drivers in company decisions. The sample size was considered adequate to address the aim of this small-scale research, which was to gain in-depth quantitative understanding of the power of social media marketing in small, medium, and micro enterprises in Cape Town.

Data collection methods

Data collection was done by using primary and secondary resources. Primary resources refer to data collected for the specific purpose of answering the research questions of the study and secondary data refers to existing data (such as literature, and statistics) which may become the subject of analysis (Moyo, 2018). In this study, the researchers mainly used data derived from secondary data and had a several amounts of individual interviews which were to collect primary data about the usage of social media marketing from owners and managers. To add- on the interviews, social media profiles of the small businesses were also analysed, standing as secondary data.

Interviews and Questionnaire

Interviews are a direct method of obtaining information in a face-to-face situation, according to Berg, 2004. Interviews resemble everyday conversation but are also conducted in a very rigorous way to ensure reliability and validity (Patton & Cochran, 2002). The researchers conducted the interviews to help understand the activities business owners use to engage with customers through social media marketing. The type of message portrayed by the business on social media profiles, the experiences, and challenges. The interviews helped with the researchers being able to gain more in-sight on the use of social media marketing in small business restaurants. (See Appendix A)

Analysis of social media platforms

In addition to conducting interviews, the researchers analysed five social media business profiles. The researchers analysed the interactions between the businesses and their customers on social media, through the content posted by the business and comments posted by the customers. Performance metrics used to analyse social media platforms are number of audiences, engagement, and content, according to Sponder (2012). These are useful in analysing the social media platforms of business profiles, to have a deeper understanding of how businesses use social media for marketing purposes. (See Appendix B)

Research Credibility, Reliability and Ethics

Credibility deals with the thrust of the research and refers to confidence in how effectively data and processes of analysis have been handled to reach the intended focus (Guba, 1981). Credibility is shown through data collection and through the way the researcher(s) choose who must participate in the research. The researchers chose participants through purposive. Participants with restaurant SMMEs, who have relevant experience in the industry and who was able to shine the light on the research questions.

Reliability is an important element in research that researchers must consider. Reliability is the examination of data consistency through several repeated studies/ research on the same/ similar topic, and it must be carried out by different researchers. It is important that the data collection process is replicable and transparent (Adenola, 2019). The researchers used questionnaires that have been developed in the past researcher to develop questionnaires given to participants. The result of this study is reliable as the questionnaire used was obtained from published research/ studies.

According to Patton and Cochran (2002), research ethics mainly deal with the relationship parameters between the researcher(s) and the participants in the study. When conducting a study, the welfare of the participants must be of importance to the researchers and researcher must adhere to certain core principles prescribed by Mark, Woodsong, MacQueen, Guest and Namey (2005):

• Respect for participants
• Beneficence
• Justice
• Respect for the community

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