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The Impact of ecommerce on the Marketing Performance of Businesses in

ECOMMERCE RESEARCH PROPOSAL 12

TheImpact of ecommerce on the Marketing Performance of Businesses inSaudi Arabia

TheImpact of ecommerce on the Marketing Performance of Businesses inSaudi Arabia

Theadvancements in technology and the establishment of the internet as aglobal technological tool have created more opportunities for peopleand businesses. Of these opportunities is the ability to transactbusiness transactions on the internet with customers and suppliersthrough e-commerce. Globally, many countries have boosted theirbusiness and economic performance through the embrace of e-commerce.For a business, the internet market is a potential that should beexploited for better performance. In Saudi Arabia, many businesseshave adopted e-commerce as a means of expanding their reach to globalmarkets. However, the impact of e-commerce is not well established inthe country. Therefore, this research seeks to explore the SaudiArabian e-commerce and establish the impact of the advancement inbusiness marketing in the country.

Studyobjectives and research questions

Thisproject examines the impact of e-commerce on the marketingperformance of businesses in Saudi Arabia. With reference to this,the objectives of the research include:

  • Analyzing the impact of ecommerce on sales volumes of private companies in Saudi Arabia.

  • Analyzing the impact of e-commerce on Marketing Performance of Businesses in Saudi Arabia.

Theresearch will adopt the following questions:

  • What the impact of e-commerce on sales volumes of businesses in Saudi Arabia?

  • What the impact of e-commerce on the marketing performance of businesses in Saudi Arabia?

Justificationof the study

SaudiArabia has a limitation of size and population to consume itproduction thereby necessitation international trade through allchannels. The influence of the internet in the Saudi Arabian businessindustry has far-reaching implications especially in the applicationof ecommerce. The use of ecommerce in marketing is made valid by theemphasis that several countries have established to develop theinfrastructure. Despite the kingdom of Saudi Arabia havingconventionally given emphasis on religious, local and regionalpractices, full exploitation of e-commerce has not been hindered. Thekingdom has taken forward measures to influence the use of theinternet on business systems and ecommerce marketing models.Therefore, it is relevant to study the impact that ecommerce has onthe business practice of marketing in the kingdom.

PreliminaryLiterature Review

Ecommercehas impacted on the marketing function by providing extendedmarketing platform of businesses in the kingdom of Saudi Arabia. Inparticular the marketing reach of the Small and Medium Enterprises(SMEs) has been enhanced by the implementation of ecommerce in thekingdom. This is because ecommerce provides a large world market thata business in Saudi Arabia can engage in to reach national andinternational clientele. This has led to the use of the internet bythe business community to increase drastically from the year ofintroduction of internet in the country in 1999 and now. This is inline with the increasing internet usage in the country as listed bythe World Bank from the year 2002 to 2012 (InternetStatistics,2012).

Inaddition, ecommerce has expanded the marketing potential ofbusinesses by providing capacities for higher sales. The onlinecommunity provides additional market reach for businesses in SaudiArabia. This is enabled by the introduction of marketing tools by theadapted ecommerce applications. This means that the companiesinvolved in ecommerce have higher potential for growth and increasedsales. Therefore, their marketing function is effective due to theefficiency that the ecommerce presents to the business community.Laudonand Guercio (2014) arguethat ecommerce leads to increased sales and boosts the morale of themarketing teams in the firm.

Ecommercereduces the burden of the sales and marketing teams to deal with thecomplex processes of interacting with the customers before a sale isclosed. Through an online ordering and sales platform, the marketingteams are left with the task of the directing the customer to theonline portals. This means that the marketing of the product isreduced to the marketing of the selling portal where customers canbrowse and buy products online. Laudonand Guercio (2014) arguesthat ecommerce with online payments gives the customer all thenecessities of a business transaction including a marketing practiceof giving the customer assurance of the quality of the product.

Themodern business developments in Saudi Arabia represent a longdevelopment of the country that spans for over 50 years. According toTawil(2001), theadoption of the internet in business was initiated in 1999 when acentral proxy internet server was established in the capital city atKingAbdul-Aziz City for Science and Technology (KACST). The kingdom hastaken a number of steps to develop the information technology sectorwhich is a core part of the success of e-commerce. The introductionof ecommerce in the country is based on lateral business-to businessmarketing and business-to-customer market systems. Currently, thesemarketing initiatives are in use and are also being established tocover the economy.

SaudiArabia ecommerce environment

Thegovernment of Saudi Arabia has established effective measures topromote the responsiveness of the country’s business environment toe-commerce. Chaudhuryand Kuilboer (2002) argue that throughincreased connectivity to the internet and enhanced transactionsecurity, the infrastructure in the country are favorable forecommerce and it integration in marketing. Another variables thathave promoted the responsiveness of the country’s businessenvironment is the social and market factors. The general society inthe kingdom is shifting it attention from the conventional markets toonline transactions. This trend is unique and favorable for a countrywithy a record of conservative approach to social and businesspractice. According to a KACST research done between 2001 and 2003 bythe KingFahd University Of Petroleum &amp Minerals (KFUPM), the country’suse of the internet was found to incline to new ecommerce practices(Tawil,2001).

Thestrength of the country’s business environment and e-marketingpotential is founded in the fact that Saudi Arabia is a centre of theIslamic and Arab world. According to the last research done by KACSTin 2003, the kingdom had over 584,000 internet subscribers with 2.5%per subscriber. In 2003, the users of the internet were estimated bythe World Bank to be 1,462,000 representing 8.0% of the population(InternetStatistics,2012). However, this internet consumption rate has been on theincrease from the beginning o the decade to the end of the decade.According to the World Bank report of 2012, the average population inSaudi Arabia that were using the internet was 54% in that period often years (InternetStatistics,2012).Currently, the number of internet users in the country isincreasing with a number of them being subscribed to the social mediaplatforms. According to Internet Statistics (2012), there were around5,536,280Facebook users in the country in 2012 that at the time had anestimated 26,534,504 people in population.

Despitethe growth of the rate of access of internet, the main influence ofthe market’s responsiveness on the growth of ecommerce is the levelof security in the cyber space. This is because security awarenessand measures among people and businesses increases the level ofconfidence that people have on the infrastructure. According toLaudonand Guercio (2014), ecommerce marketingis more robust in countries and economies that have established thehighest level of cyber security. This is because secure payments andsharing o protected information is made possible and the confidenceinspires the growth of online transactions.

Accordingto Internet Statistics (2012), the Saudi Arabia internet communitywas served by four servers that were encrypted well enough to handleecommerce transactions in 2002. However, the country has developed inthe infrastructural platforms for ecommerce with many encryptedservers that are able to handle online transactions. Currently, theKACST is establishing more measures to ensure secure businessenvironment in the cyber space for ecommerce and online meeting.

Theneed for ecommerce has sparked the necessity for establishing secureenvironments in the online platforms to enable business community tomarket online. This is by creating the need for development of newonline security infrastructure. The country is establishing onlinepayment systems through the SAUDI ARABIAN MONETARY AGENCY (SAMA) soas to facilitate both B2B and B2C ecommerce platforms (Tawil,2001).Thesecurity of the payment system will be based on the Societyfor Worldwide Interbank Financial Telecommunication (SWIFT)Technology (Tawil,2001). Through the establishment of new electronic security measures,the online environment will not only be favourable but also securefor people to transact online and boost business marketing.

Ecommercehas also influenced the increase of the Saudi Arabian marketpotential by expanding the country’s business environment. Thisdevelopment has been able to position the country as a regionalbusiness leader. However, the country needs to increase affordabilityof internet and accessibility of the population to the internet. Inaddition, the country needs to establish strong measures onlinesecurity of the country for the online business transactions to beeffective. According to Chaudhuryand Kuilboer (2002), toincrease the level of growth of marketing potential by businesses,the government must improve the level of money transfer systems thatwill handle online payments in ecommerce.

Theoreticalframework

Thisproject employs a descriptive methodology which is the generalresearch strategy. The main aim of this is to present relevantinformation on the nature and status of the research topic. The keyfocus is the relationships, connections, in addition to differentprocedures, practices, as well as impact of ecommerce on marketingfunction of businesses in Saudi Arabia. For this reason, it hasillustrated the present conditions, different systems, and viewpointsof the study participants. Zikmund and Babin (2012) state thatdescriptive methodology is employed to acquire information whichexplicates present practices, needs or conditions and offersinformation that assist in the generation of research questions(Zikmund &amp Babin, 2012).

Asa result, the design will assist the researcher to acquireinformation regarding the level of impact of ecommerce on businessperformance in Saudi Arabia. The research will adapt a crosssectional research design with both secondary and primary sources ofdata collection. Primary sources will encompass the use ofquestionnaires with an aim of describing the impact of ecommerce inSaudi Arabia. This is because primary sources offer first handinformation, and combining them with secondary information will offerefficient results.

Contributionof the Research

Dueto the developments in the field of ecommerce in the world, manycountries have advanced in the use of the technology and have gainedcompetitive advantage. This has reflected on the business environmentin these countries where businesses have recorded increased growthand globalised operations. This research is therefore essential inorder to establish the impact ecommerce has had on the Saudi Arabianbusiness marketing by analyzing sales volumes. In addition, thisresearch will review the impact of tools of ecommerce and onlinebusiness applications on the business outcomes of the marketingfunction.

Thisresearch is essential in analyzing the impact of e-commerce not onlyon the marketing function but also on general business performance inSaudi Arabia. To achieve this, the research will evaluate differentoutcomes of ecommerce as compared to the input that the governmenthas established to enable ecommerce environment. This research willexplore the nature of ecommerce environment in terms of security andonline transaction infrastructures.

ProposedResearch Methodology

Theresearch methodologies that are included in the study are researchdesign, target population, sampling procedures, sample size, datacollection instruments, data collection procedures and data analysismethods.

Researchdesign

Thestudy was descriptive type of research survey. Therefore the currentstatus of the problem in which the existing facts and information wasgathered for the purpose of drawing general conclusions. The purposeof the descriptive research was to determine and report things theway they are, (Zikmund&amp Babin, 2012).

Targetpopulation

Thetarget population will be corporate employees, corporate managers andgovernment staff who were targeted as follows:

&nbsp

Target population

Accessible number

Percentage

1

Corporate Sales employees

28

7

2

Corporate managers

68

17

3

Marketing Managers

304

76

&nbsp

Totals

400

100

&nbsp

Samplingprocedures and sample size

Theresearcher will interview fifty corporate managers while the rest ofthe respondents will fill questionnaire. Therefore the total numberof people who were interviewed was forty. The researcher usedstratified random sampling method to identify the respondents andthere was a balance between the genders. This was 76% which of thepopulation which is adequate according to Zikmund&amp Babin (2012).&nbsp

Researchinstruments

Dueto the nature of the respondents, there will be a need to use thefollowing data gathering methods.

Questionnaires

Questionnaireswill be issued to respondents who will fill them as directed and thequestions will be close headed to simplify the responses.

Interviewschedule

Theresearcher will conduct interview with corporate leaders and managersat their office. The researcher prepared the interview schedules andalso interviewed the participants. Every category of the respondentswas interviewed separately and every answer indicated by therespondent will be recorded by the researcher for analysis.

Theinterview process will not to take long since the respondents were toresume their duties especially the managers and the supervisors. Thequestions will be made easy to understand because of the varyingacademic levels of some respondents which are low and not uniformamong all of them. The information gathered through the interviewmethod is the data that will not be captured by the questionnaires.

Dataanalysis

Informationgathered from the field will be used to in the analysis to makeconclusion from the data. Items from the response will be recorded inan ally sheet that the researcher used for analysis.

References

Chaudhury,A., &amp Kuilboer, J. (2002). e-Businessand e-Commerce Infrastructure.McGraw-Hill

InternetStatistics, 2012.Retrieved From, &lthttp://www.internetworldstats.com/me/sa.htm&gt

March12, 2014

Laudon,C., &amp Guercio T. (2014). E-commerce.business. technology. society. 10th edition.

NewYork: Pearson Publishing

Tawil,K. M. (2001), “The Internet in Saudi Arabia”, TelecommunicationsPolicy,Elsevier

Publications,Vol 25, Issue 8-9, pp. 625-632.

Zikmund,W,. &amp Babin, B. (2012). Essentials of Marketing Research. CengageLearning