Internet Marketing Adoption by Iranian Distribution Industry: An Attempt to Understand the Reality

Internet Marketing Adoption by Iranian Distribution Industry: An Attempt to Understand the Reality

Sepideh Zahiri (Birmingham City University, Birmingham, UK), Hatem El-Gohary (Faculty of Business, Law and Social Sciences, Birmingham City University, UK & College of Business and Economics, Qatar University, Qatar & Cairo University Business School, Cairo University, Egypt) and Javed Hussain (Birmingham City Business School, Birmingham City University, Birmingham, UK)
DOI: 10.4018/IJCRMM.2018040103

Abstract

This article describes how although the internet has become a significant platform for the advancement of marketing strategies and developments, there have been inadequate empirical research efforts concerning its adoption for conducting internet marketing in developing countries, specifically in the Middle East area, and more particularly in Iran. Previous studies investigated internet marketing adoption and acceptance extensively, by employing different theories of new technology adoption in developed countries, while there have been inadequate empirical research efforts concerning its adoption in developing countries. It is widely recognised that the adoption of internet marketing can offer substantial opportunities for Small and Medium Sized Enterprises (SMEs). In developing countries, internet marketing opportunities can be a meaningful approach for SMEs to be able to compete with large businesses and to access, with lowest possible costs, targeted customers.
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1. Introduction

Small medium enterprises (SMEs) is recognised as one of the main contributors to economic, development and employment growth. Despite it play a major role in today’s world economy, SMEs is well known having limitation and acceptance barriers in adopting a new technology although the revolution of internet and communication channel has changed the way people conduct business today. It is widely known that the industries and businesses of today's new economy evolve and change rapidly, mainly as a result of the wide diffusion of Information and Communication Technologies (ICT) within organisations. New technologies enable and facilitate a broad range of business activities related to the storage, processing, distribution, transmission and reproduction of information (Fabiani, Schivardi, and Trento, 2005; Ongori and Migiro, 2013). In addition, ICTs may induce dramatic changes in businesses' internal processes, radically altering firms' structure, organisation and operations (Spanos, Prastacos, and Poulymenakou, 2002), with organisational and output changes sometimes considered as spillover or indirect effects from investing in new technologies (Black and Lynch, 2004).

A significant volume of research highlights the fundamental role of internet for productivity and economic growth at the macroeconomic level (Bart Van Ark, O'Mahony, and Timmer, 2008), the industry level (Inklaar, O'Mahony, and Timmer, 2005) as well as the firm level (Arvanitis, 2005; Black and Lynch, 2004). At the firm level, there is empirical evidence of the substantial contribution of internet to firm performance in terms of labor productivity (Arvanitis, 2005) as well as multifactor productivity and output growth (Brynjolfsson and Hitt, 2003). Indeed, the gains of integrating and using internet are multiple and touch upon diverse aspects of intra- and inter-firm business operations and transactions, being in turn reflected in firm performance. Focusing on SMEs, relevant literature underlines the benefits of adopting internet in terms of cost savings, organisational effectiveness, improvement of services to customers and suppliers, access to new business opportunities and market information, competitiveness (Ghobakhloo, Sadegh Sabouri, Sai Hong, and Zulkifli, 2011; Ongori and Migiro, 2013) and, more generally, productivity and growth (Barba-Sánchez, Martínez Ruiz, and Jiménez-Zarco, 2007; Ongori and Migiro, 2013). In addition, internet marketing implementation usually entails additional costs (e.g., employee training, licensing, organisational restructuring and upgrading existing facilities), which also need to be taken into consideration, especially in the case of SMEs (Ghobakhloo et al., 2011). From a policy perspective, promoting the acquisition of new technologies within SMEs has been given high priority to firms. However, due to various resource limitations and a lack of understanding of the internet related opportunities, SMEs face increased difficulty in adopting the new technologies (Nasco, Toledo, and Mykytyn, 2008) in many developing as well as developed countries. In the case of Iran, where the overall economic activity is traditionally dominated by SMEs, which, despite the progress they have made in recent years, still appear to lag behind the average in assimilating new technologies and engaging in e-business activities (European Commission, 2016). At a turning point on its way to rebalancing, growth in Iran must be inextricably linked to the new technological priorities established in light of the digital and ICT revolutions. To this end, the successful design and implementation of appropriate policy plans and schemes require adequate knowledge on the factors that affect business decisions with respect to the adoption and use of internet marketing within SMEs.

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