Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2018 Vol: 24 Issue: 2

Digital Media Impact on SMEs Performance in the UAE

Mohammed T Nuseir, Al Ain University of Science and Technology

Keywords

Digital media, Small and medium-sized enterprises, Marketing, Business performance, Digitizing of activities and procedures, UAE scenario.

Introduction

According to The Business Dictionary (BD, 2017), “Digitized content (text, graphics, audio and video) are those that can be transmitted over internet or computer networks.” So, in strict terms, Digital Media (DM) denotes the audio, video and photo content that is in an encoded form which means digitally compressed. In the encoding process, content under process is converted into audio and video inputs which can be decoded again into the original form using devices like computer, internet, tape recorders, smartphones and so many complex types of equipment. In encoded form, the material can easily be delivered to distant places, manipulated, distributed and easily transmitted over computer networks. Smartphone applications, various types of audio and video games installed in game boxes or tablets, data saved in USB or CD, ultrasound investigations in a hospital are all examples of DM products. These are extending so rapidly and successfully that DM is broadening to all fields of life. Digital Media is a blend of technology, content and innovations which can save time, money, space for data storing and speed up the processes to happen the actions so quickly.

Today’s world has been captured by digital media products and these products have been spread enormously in almost all industries even including those which are not formally included with digital media such as health, government and education. The form of Digital media products can be E-commerce, Games (online and mobile), Websites and mobile applications, animation, social media, video, data visualization and location-based services. Digital media is now being used in almost all industries may be of any type: Film and entertainment, business, technologies, health and hospitals, learning, training and education, advertisements, marketing of products, all government departments, sports, environment, radio and television, publishing and printing and so many.

Another term used interchangeably with Digital Media is the Electronic Media. According to BD (Business Dictionary, 2017), “Electronic Media is the broadcast or storage media that take advantage of electronic technology”. Television, radio, Internet, fax, CD-ROMs, DVD and any other medium that requires electricity or digital encoding of information are included in the electronic media. The internet is the most important which has changed all the dimensions of the business world. Majority of consumers are going online for their purchases because these are easy, convenient and time and travel saving. The internet has revolutionized a lot of businesses and customers’ behavior and enabled customers and organizations to communicate easily (Hoffman & Novak, 2000). To stay competitive in businesses, enterprises need to use modern digital marketing techniques (Dinehart, 2011) of the internet. Companies can use the internet as a tool for advertisement, a listing of currently available stocks with detailed specifications, booking orders, promoting its identity and communicating with customers all over the world. The internet allows enterprises to identify new market opportunities leading to business expansion. Aral et al. (2013) advocated that a transforming is gradually occurring from traditional methodologies and techniques to digital media and innovations.

SMEs (Small & Medium Enterprises) play a fundamental role for current economies of developing countries and are having importance at levels, the micro and macro. SMEs are important even in developed countries because of major workforce employment and GDP contribution. It has been estimated that SME’s earned $3.5 billion in e-commerce sales and this value can grow to over $300 billion within the next few years (USSBA, 1999). SMEs are in a better position presently in accessing to the global market and sharing relevant information to identify needs of specific customers and tailoring their products and services to match with the changing needs of customers. Therefore, SMEs performance can be highly impacted positively with the introduction of digital media into their business proceedings. Apenteng and Doe (2014) shared his observation that more and more people are joining the social media forum on a personal level but unfortunately, however, SME in Ghana are failing to take an opportunity to present their products at these websites because they have no proper understanding of using social media as a means of marketing their products.

The objectives of the current review study were:

To thrash out the possibilities of digitizing their business proceedings and procedures by SMEs for improving business performance, increasing customer base and strengthening communication.

Evaluation of possibilities of finding new markets, strengthening advertising and marketing campaigns and converting speedily growing social media favour by SMEs.

Making comparison of advantages and disadvantages of DM for SMEs of UAE.

Identification of deficiencies of the knowledge base on the subject and proposing new studies to meet deficiencies.

The most appropriate and relevant published and online work has been collected and integrated to understand this field elaborately and publicizing to SMEs for employing practically in the interest of customers and companies. All the stakeholders could benefit from the study outcomes.

Problem Statement

The accelerating popularity and usage of Digital Media has paved the way in business in different forms and big corporates are reaping benefits of so many diverse types while the SMEs are still lagging far behind in adaptation of this innovative technology of the present century. It is an alarming issue that SMEs are held below the bottom in the competing world regarding earning of profits compared with multinational companies mainly because of not employing modern techniques like DM in the business activities, marketing and the advertising campaigns. Consequently, it is imperative that a study be undertaken to identify and highlight the probable benefits, attached deficiencies and managing options for the potential disadvantages of DM so that SMES could join the economic and business competition with the rapidly growing companies. The present study has been conducted to fill the existing gap of knowledge base of the subject.

Review Of Literature

Present age is an era of technology and innovations like computer, internet and the digital world. These have brought immense changes in all fields of life, entrepreneurs, business and marketing. Michael (2014) suggested that enterprises and industries must benefit from internet and E-Markets for more revenues, widening market base and advancing of their business. According to El-Gohary (2012) and Wang and Sharma (2012), the digital media and E-Marketing technique can help a lot in growing of SME and their performance can rise significantly which will also contribute to the economy of the country and consequently enhance job opportunities for the unemployed youth. The digital media can support businesses in a lot of ways like: Reaching and penetrating remote places, convenient, quicker and effective communication, use of social media, globalization and world-wide 24/7 presence, extending help to customers coupled with live chat, real time business, marketing automation, online sales and payments, follow up and after sales service, campaigns, displays and advertisement, high visibility and minimal capital requirements for start-up, etc. The status of digital media in SME of Arabian/GCC countries and UAE is being discussed. A detailed review under various subheadings is being presented as under.

Globalization OF SMEs’ Business and Worldwide 24/7 Presence

In the pre-digital media, awareness about a business or an industry was limited only to local boundaries or at the most spread within country. Mostly, print media supported by radio and TV was used for advertisements and creating acquaintance among communities and masses. However, at present any systematized business can be globalized within no time in every corner of the world wherever presence of digital media can be found. The customer of any place can reach business and industry of his choice just with one click. Hence, presence of SME’s business can be seen everywhere and at any time of the globe. The business activities remain alive and active 24/7. Internet has established very well in developed as well as developing countries and hardly any differentiation can be found in this regard. Not only for selling of products but for different purchases and procurements, digital media is ever ready for help of SMEs. They can find best and cheap procurements from any corner of the world. SMEs can also meet their technical and other staff requirements from any part of the world, which has been becoming an acute problem in the past. Even SMEs can hire online consultants for technical advice and guidance from where they find appropriate personnel. Even the faults, failures and problems of material, machinery and equipment can be shared within no time with their manufacturers and complaints can be placed with them immediately.

Modern techniques and innovations have revolutionized the world and no field of life has been left unaffected. The SMEs can find best technologies and innovation suiting their business and industry through digital media and improve their performance manifold. Cesaroni and Consoli (2015) found that the use of digital media is extending assistance and support to SMEs for increasing public awareness, opening new methods and procedures of business and sharing, collaborating and mutual creation of innovative concepts for increasing ultimate performance. Swarna (2015) pointed out that social media platform of free communications services like Skype, Facebook, WhatsApp, LinkedIn, Twitter and Messenger, etc., have globalized personal communication. The whole world has been converted into one community. Prior to these developments, only multinational companies were globalized but now, even the most modest micro-business can be a multinational enterprise because of presence on internet and online commerce. Swarna (2015) said, “On any given day, trillions of dollars’ worth of goods, services, commodities and financial instruments are traded across the globe via various online platforms.” The SMEs’ products and services have very high visibility on internet and can be noticed by the customers any time they use search engines on the internet. Thus, the presence and visibility of products is automatized when once placed and uploaded on the internet.

The multiple case study of Arnome and Deprince (2016) based on a two-year observation period showed that, besides the cost advantage in terms of advertising and communication, social networks extend support during crucial marketing efforts such as the identification of new business opportunities and fostering the development of professional and personal relationships with foreign partners. These tools can facilitate and sometimes, accelerate the internationalization of small businesses by lowering the perceived risks and the psychical distances which are characters of new foreign markets. Thus, the role of social networking sites in the globalization of small businesses is very peculiar and prominent.

Advertisement Campaigns, Marketing Automation And Penetration At Remote Places

The number of people using internet for daily searches of products and services across the globe has now reached to billions. El-Gohary et al. (2008) and Kocoglu (2012) have suggested to SMEs that going borderless in marketing through digital media is an extra edge to access and penetrate in massive markets over the whole world, especially rural and hard areas of less developed countries and regions which could not be even thought to reach before. Spending a fraction of costs of past era, the SMEs businesses can become a part of daily search results of millions of customers which can lead to highly better performance, new business and addition of potential customers in their current list. Compared to traditional marketing, this approach is highly accessible with unlimited reach and more deep penetration. According to (Blech & Blech (2012) and Clow & Back (2013), most of the digital marketing activities when performed online, businesses do not remain bound and limited to some specified customers of certain areas but are reaching out to a numerous audience. The world has just shrunk virtually and became smaller with digital marketing. Thus, businesses from one part of the world market to another can be committed as if these are just at a small distance away from each other. Geographical distances have no significance in digital media marketing because businesses can reach and interact with targeted customers present at any place of the globe, if internet is present there. This could never be possible in traditional marketing methods.

The business and web portals on internet can now serve as 24/7 virtual shops for the global customers and time zone variations have no significance in this regard. These are just like one stop shops for customers and give companies and SMEs’ products greater visibility around the clock and offer customer low cost but effective service facility in varying time zones. Internet marketing has been claimed to be less costly by Cohan (2014) in comparison to classical and conventional marketing methods. For instance, advertisement trough radio, television, promotional brochures, newspapers, journals and circulars can be very expensive and costly for SMEs whereas their reach could still be limited. Charlesworth (2009) described that digital media could assist local business to reach numerous customers through internet and save marketing costs simultaneously. It is convenient for the company's staff that they can initiate digital marketing activities as and when it suits to them.

Automation of marketing is not only convenient but also cost-saving, but it has only become possible due to digital media and internet. Now, only with one click, many hours of work can be saved whereas penetration to outlets is limitless. Charlesworth (2009) pointed out that SMEs’ sales and marketing teams can easily automatize the whole process resulting in saving of precious business time. Using digital media, marketing team can decide as and when to reach targeted customers and start digital marketing campaigns. Even automated replies to customers’ questions are generated at SMEs’ and companies’ business websites and customers have not to wait for personnel resuming duty, unless something special is to be asked. Even, establishing and running the “Call Centres”, is of very high cost and require extensive human resources twinned with good management. Internet marketing also does not require large amounts of investment as capital charges that have been in the past with mass media marketing (Bourn, 2014; Gilmore et al., 2001; Sharma, 2015). Internet marketing channels are comparatively cheaper than traditional electronic (Radio & TV) and print media, rather in certain cases websites can generate traffic even for free and SMEs and business may pay none. Therefore, digital marketing is a sort of gift of this century for the advertisers and market activists.

Internet marketing allows SMEs to keep a track record of their performance in relation to real time. Lee et al. (2013) suggested tools like: ROI (return on investments), CTR (click trough rate of ads), QS (Quality Score of Keywords), conversion rate and bounce rates etc. for analysing marketing performance and keeping records. These parameters may also be helpful to evaluate effectiveness of websites of companies, their promotional campaigns, ads and blog postings, etc. Habermann (2013) explained that real time analytical tools can help to monitor activities as these occur on their websites, blogs and landing pages. They can check how many people/customers are visiting their websites and interacting with their campaign and finally what goals have achieved in return of their website activities. Business may also become aware of customers’ behavior and time spent on website with details of their location, etc.

Quicker And Effective Communication And Live Chat

Quick, timely, relevant and effective communication with customers and suppliers is the backbone of a business and marketing. If the customers and other stakeholders can chat live and discuss their problems, complaints, questions and other matters with a company representative, it builds up the confidence and acceptance of quality services of a company. These sorts of activities are now possible via digital media. There is possibility for customers to contact live on internet with company officials till they are satisfied fully and get answers to their questions and complaints completely. A well designed and fully informative E-Commerce web portal or website of a company explaining and representing all relevant and possible details of products and services. Live chatting has no better competitive ways possible. It is an innovative tool of the modern era to reach out customers at a massive scale with all attributes they want to communicate and share with them. Tweeting and live chatting can be highly useful for SMEs (Barnes, 2010). The SMEs can benefit a lot by better and rapid communication, improving their income and significant expenditure saving (Marshal, 2009). Emails, Blogs, Ads and landing pages can prove effective communication means of reaching customers by business. SMEs can update customers on new stock arrivals, new products/services and launching offers and campaigns. The business communications through digital media are instant and effective and results in improving and extending contacts. A long-term sustainability of contacts is assured. Customers are always in reach and able to communicate with business as and when needed. The feedback, sharing problems and new demands are possible just easily and rapidly. Yurovskiy (2016) pointed out that reaching out to a wider targeted audience faces no limitations when digital media is employed. Due to effectiveness of communication, utilization of digital media is spreading at highly rapid rate and scale.

With the development of digital media and technologies, live help can be a great asset for new or existing SMEs. Any segment of business; may be sales, marketing or support after sales, one to one or group live chatting/interactions are easily possible now on business websites (Mona and Alfa, 2008). The customers are helped in getting answers to their queries and increases businesses chances in securing quick business deals. Post-sales activities can be rendered easily, timely and efficiently resulting in solving of customers' problems. This improves and enhances customers trust in the business (Chaffey, 2000; Melewar & Nichola, 2003). Live chat and help gives business edge over traditional businesses activities for approaching customers, increases sales and cuts down the costs (telephone calls, meeting and travelling, etc.,), while live chat and support is very convenient to customers.

Role Of Digital Media In Online Sales, Payments, Follow-Ups And After Sales Service

Increasing the sales of products and services of an enterprise has always remained a hot question. All efforts of companies’ personnel are surrounding around this single point which is the centre of all activities. Online sale is a new method of sales’ promotion in the last two decades which has proved not only highly useful but effective as well. The big enterprises and SMEs adapting online sales have gone up to the top compared with still sticking to conventional methods of sales’ promotions and marketing. The old-fashioned businesses are lagging far behind compared digitized entrepreneurs. Michael (2014) has explained that the impact of Blogs’ postings, Internet Websites and campaigns via social media relevant to marketing is very high and lasting far long. Search Engine Optimization (SEO) permits website contents to be presented to customers upon search for many years and each time they look as fresh as they were posted today. Social media is becoming highly popular among communities and is being used by progressive enterprises for increasing the sales of their products. This is highly good choice for the businesses (Kaplan & Haenlein, 2010; Logofatu, 2012; Omer, 2015) to fulfil their strong wish that their products should become viral. Whereas, in case of traditional media like daily newspapers and printed brochure, the effect can fade out in a day or so as and when these are replaced by the next edition. For example, FAQ (frequently asked questions) sections regarding sales, feedback, follow-ups, complaints and other relevant matters remain always available for customers, which can be updated as and when needed by business. After sales’ service remain available to customers which consequently builds confidence and good relations in between customers and the enterprise.

Online payments and placing orders of purchase is the easiest way for buying and paying. No cash or bank transfers may be needed if online payment modes are utilized, customers can make quick payments for buying of products/services by using online secure payment methods like PayPal, Payment Gateway, E Nets, credit cards, Google checkouts and other electronic payment methods. Thus, customers can enjoy quicker and convenient payments for products without going to banks and money transfer agencies while businesses can enhance their sales and receive payments instantly. Dinehart (2011) explained that trough digital media, sales’ teams can prepare effective data base of customers for their previous purchases and reach them again during new product launch. Keeping in touch with existing customers may prove highly useful because their choices and priorities are known to sales’ teams and personnel.

Disadvantages Of Digital Media In Smes Performance

The business and SMEs could face extended competition which becomes worldwide. Comparatively SMEs with lesser competitive capabilities can suffer and their sales may reduce because customers can find more choices on internet. Even they can compare prices of various enterprises and organizations and can select the products of similar attributes with the lowest prices. Thus, a scenario of price competition with other businesses may be created. There are also chances of losing customer to other companies (Hoffman & Novak, 2000). Therefore, the customers can avail the facility and possibility to search for the best products and services at the same or even lower price. In this way, not only competition increases but sometimes prices must be decreased to remain alive and competitive in the global market which could result in decreased profits consequently. Although the probability of disadvantages also exists but a good and competitive digital marketing plan can help a lot to overcome them. A vigilant and consistent review of the world digital market must be done and appropriate steps can be taken to enjoy the benefits of digital marketing and improving performance of SMEs.

Effect Of Digital Media On Smes Performance In Arabian Market

Arabian market, especially GCC (Gulf Cooperation Council) countries: Saudi Arabia, Oman, UAE, Qatar, Bahrain and Kuwait is a comparatively new and emerging but rapidly developing. The industry is also in a developing stage here. Many small and a few medium enterprises are being established. The national governments are encouraging and supporting through strategic plans and strategies to match the fast-growing world. The governments are highly welcoming investments and foreign investors. The investors of different nationals are finding special attraction of investment in these countries. Nevertheless, the enterprises in Arabian countries, especially Middle East are lagging in terms of technology, innovations and adaptation of digital media. The use of digital media in SMEs is not comparable with Western countries. Locke (2016) pointed out that digital marketing is an under-utilized opportunity in the Middle East region whether because of inability, reluctance or lack of interest. However, study of Samuel and Sarprasatha (2016) gave an encouragement and indicated that use of social media by various enterprises throughout the Arab region is increasing but the rate of enhancement is slow because major constraint is lack of digital skills of the companies’ personnel as well as the communities. This skill acts as a basic promoter in adaptation of digital media in SMEs activities and procedures and the search of customers on media channels and websites.

Many scholars and numerous researchers have already agreed that use of electronic media by SMEs is becoming prominent in the Arab region (Abed et al., 2015; Salem & Mourtada, 2012; Samuel & Sarprasatha, 2016; Shabbir, Ghazi & Mehmood, 2016). Basri (2016) reported that the impact of digital and social media across the Middle East is unique, significantly evident and progressively enhancing. He described that there is a unique relationship between the digital media in social, political, religious, cultural and economic spheres of the Arab world, consequently impacting the Arabian market by:

a) Providing a marketing platform.

b) An avenue and forum for increased sales.

c) An innovative edge for SMEs to reduce expenditure/cost and increase profitability.

d) A benchmark of direct client communication of modern public relations and reaching
customers.

In sales and marketing, social media is now playing very high role and being employed by various industries for attracting new clients and customers. The current market base can be extended significantly if social media is used (Berthon et al., 2012; Dilhan & Karakadiar, 2014). The rate of adaptation of social media among communities is so rapid which suggests that SMEs of the Arab region, should do their best to benefit through sales promotion and advertisement.

Impact Of Digital Media On Smes Performance In Uae

UAE is the leading country among MENA (Middle East and North Africa) region in adaptation of digital entrepreneurs. Dubai SME report “State of Digital Investments in MENA 2013-2016” confirmed that the UAE is a preferred global investment destination (Government of Dubai, 2017). This report indicated that UAE remained as the top destination for Arab digital entrepreneurs and investors.

UAE is having respectable number of SMEs and regional offices of many big companies. The study of Nelson (2016) revealed that UAE possess more than 94 per cent of businesses as SME in the country. Hence, there is enormous potential for the digital media, online brands, marketing and on-net advertising. Small businesses which have gone online are witnessing the tremendous success as compared with their counterparts still using traditional methods. The new applications and digital media use have now become within the reach of most businesses, regardless of size. This author also reported a recent research conducted by Google ranking the UAE at number one in global smartphone penetration at a rate of 73.8 percent. This is one of requirements of SMEs that communities possess the devices for going business digital. Locke (2016) also presented that though very high levels of internet and smartphone penetration and Facebook use are available in UAE but digitizing by SMEs is not up to its potential. Despite that traditional marketing (through newspaper and TV adverts, billboards and sponsorship) is very expensive for the SME but still dominates. The research of Gundala and Khawaja (2014) found that many Small and Medium Enterprises do not practice branding strategies and most of the respondents believe that incorporating branding strategies is insignificant for the success of Small and Medium Enterprises (SME).

Therefore, generation of awareness among SMEs is extremely required. Locke (2016) pointed out that the fundamentals of marketing stay the same for SMEs as well as for corporates. However, SMEs are to prioritize what is their target market and why should people buy from them and not someone else? With the enormous uptake of smartphones in this country the growth in the use of mobile applications is expected to continue. However, probably a new twist in local small businesses might be required to take advantage.

Discussion In The Light Of Literature Cited

Globalization of business, effective communication with all stakeholders including customers, enhancing marketing and advertising campaigns, online payments, 24/7 presence on website portals, live chat with customers and answering their questions and complaints, penetration into remote masses and strengthening after-sales service could only be possible through digital media adaptation by SMEs (Cesaroni and Consoli, 2015; El-Gohary, 2012; Swarna, 2015; Wang and Sharma, 2012). DM can greatly support SMEs to enhance their business, promote sales and earning more revenues (Charlesworth, 2009; Yurovskiy, 2016) which will improve their overall performance (Barnes, 2010; Kaplan & Haenlein, 2010; Logofatu, 2012; Omer, 2015). The SMEs can promote their sales through digitized marketing and advertisements which is highly low in price compared with conventional advertisements through electronic and print media (Arnome and Deprince, 2016; Bourn, 2014; Cohan, 2014; Marshal, 2009). The automation of business procedures and activities provide large facilities to companies and comparatively lesser staff can perform most of the functions (Charlesworth, 2009; Dinehart, 2011). The SMEs which have adapted digital media are strongly in a better position compared those which are still lagging in this regard (Michael, 2014). Nevertheless, digital media optimization also has some potential risks and disadvantages. The business competition of SMEs may extend and their sales may reduce because customers can find more choices on internet. A scenario of price competition with other businesses may be created leading to price reduction decision. The customers can be lost to other companies. There are also chances of losing customer to other companies (Hoffman & Novak, 2000). Thus, a vigilant and consistent review of the world digital market must be done.

Digital media adaptation has been assessed as lower in UAE and Middle East Region compared with other regions of the world. Although, devices like smartphones, laptops and computers are present extensively among customers and they use Facebook and other social media extensively as well but the SMEs of the region neither have trained staff and expertise nor they are motivated yet to adapt DM for their business activities (Abed et al., 2015; Locke, 2016; Nelson, 2016; Samuel and Sarprasatha, 2016; Salem & Mourtada, 2012; Shabbir, Ghazi & Mehmood, 2016). However, governments, especially UAE state are prioritizing the adaptation of this innovative technology by the SMEs (Government of Dubai, 2017).

Conclusion

Digital Media (DM) is the use of all the electronic media for processing, decoding and transmitting the encoded digital material like audio, video and photo content that are in encoded form. The uses of digital media are countless, popular and spreading rapidly because these are fun, engaging and easy and delivery of results is speedy. The Digital Media is a combination of technology and innovations which can save time, money and space for data storing and speeding up the processes to happen so quickly. The SMEs (Small and Medium enterprises) can digitize major activities and procedures through internet media and improve their business performance by increasing their customer base, effective and instant communication, finding new markets, strengthening advertising and marketing campaigns and converting speedily growing social media in their favour.

SMEs can now go borderless and can penetrate in to massive markets over the entire world, especially hard and inaccessible areas because millions of customers are using digital media across the globe. Comparing to traditional marketing, digital approach is highly accessible with unlimited reach and more deep penetration. Consistent contact with customers and suppliers has become extremely quick and timely. The companies can build up confidence of customers through live chat for addressing problems, complaints, questions and other relevant matters.

A well planned and designed E Commerce web portal or website could explain and represent all relevant and possible details of products and services. Online sales, payments and feedbacks are now possible through digital media. The big enterprises and SMEs adapting online sales are in a far better position compared with those still sticking to conventional methods of sales’ promotions and marketing.

The use of digital media is lagging in Middle East as well as UAE. It has not gone to the level it could raise, keeping in view the sales of smartphones and other digital devices in the region. There are also a few disadvantages of digitizing SMEs business activities like increased competition, more options for the customers to purchase less costly and good quality product by visiting various websites and chances of decreasing product’s prices due to open and large competition.

The reason of lower digitization in GCC is lack of skills and lesser readiness of SMEs to adapt this rapidly growing innovation because they neither have trained staff and skills nor the zeal for this adaptation because many SMEs are still not convinced and motivated.

This study was limited to UAE and Middle East, though general findings are applicable everywhere. However, it could prove useful to narrow the gap of existing information on the subject and could help a lot to strengthen the knowledge base.

Some subsequent studies like regional and global level SMEs and quantitative benefits in comparison to traditional business activities may be required to escalate the data and information of digitization.

References