See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/322488201

The Social Media and Marketing Strategies: How it Impacts the

Small-and Medium-sized Enterprises' Business Performance?

Article · October 2017

CITATIONS READS

3 9,841

5 authors, including:

Noor Fadhiha Mokhtar Zuha rosufila Abu Hasan

Universiti Malaysia Terengganu Universiti Malaysia Terengganu
10 PUBLICATIONS   16 CITATIONS    6 PUBLICATIONS   14 CITATIONS   

SEE PROFILE SEE PROFILE

Masa Halim Muhammad Abi Sofian Masa Halim Abdul Halim

Universiti Malaysia Terengganu Brunel University London
67 PUBLICATIONS   172 CITATIONS    191 PUBLICATIONS   549 CITATIONS   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Viscosity index improvers for Lubricating Oil View project

Entrepreneurship in Malaysian Craft Industry View project

All content following this page was uploaded by Masa Halim Muhammad Abi Sofian Masa Halim on 14 January 2018.

The user has requested enhancement of the downloaded file.

Australasian Journal of Business, Social Science and Information Technology (AJBSSIT)

Volume 3 • Issue 4 • October 2017

ISSN 2206-4451
www. ajbssit.net.au

The Social Media and Marketing Strategies: How it

Impacts the Small- and Medium-sized Enterprises’ Business
Performance?
Noor Fadhiha Mokhtar, Zuha Rosufila Abu Hasan, Muhammad Abi Sofian Abdul Halim

Department of Marketing, School of Maritime Business and Management, Universiti Malaysia Terengganu,
Terengganu, Malaysia

Abstract

The purpose of this paper is to identify the social media marketing strategies adopted by the small- and medium-
sized enterprises (SMEs) in Malaysia. In addition, it also investigates the impacts of the implemented social media
marketing strategies on the business performance. The social media comes with a new marketing platform and
create more opportunities for business practitioners. However, most of the SMEs faced challenges in developing
their marketing strategies. For this study, the technology, organization, and environment model by Tornatzky and
Fleischer (1990) are used as a theoretical framework with some minor alterations. Thirty-six interviews were
conducted with SME owners in Malaysia. The thematic and content analyses were used in analyzing the data.
Findings from the study revealed that social media marketing has positive impacts on business performance; both in
the financial and the non-financial aspects. It was also found that the SMEs have different marketing strategies for
each of the social media platforms that they use, namely, the Facebook and the Instagram. Nevertheless, a few of
the SMEs faced difficulties in maintaining the same marketing efforts for both platforms equally. As this study only
focuses on the SMEs in Malaysia, it is, therefore, possible to explore the same on the SMEs from other developing
countries for future studies. This will consequently support the generalization of findings in term of marketing
strategies and practices particularly for the SMEs in developing countries. Finally, in-depth interviews with SME
owners and managers have contributed to a greater understanding and new literature in related areas.

Keywords: Social Media; Marketing Strategies; Small- and Medium-sized Enterprises; Business Performance

1. Introduction
The social media has become an advanced marketing platform in the world (Coremetrics, 2010). Its
potential can be seen in Malaysia as the country has almost 19,000 Facebook users (Internet World
Stats, 2016) and Facebook is becoming a popular choice of promoting businesses nowadays. Facebook
allows communication to go beyond a private one-to-one conversation to a more public many-to-many
conversation (Atanassova and Clark, 2015; Derham et al., 2011). According to Barnes (2010), the
social media becomes an essential platform to derive marketing strategy due to its interactive nature
(Kaplan and Haenlein, 2010) that allows for collaborations (Prohaska, 2011) as well as its fast and
efficient way in gathering information (Wright et al., 2010).
Tsimonis and Dimitriadis (2014) have stated that through the use of social media, business
organizations are able to have good customer relationship management either with the existing or
prospective customers, while identifying issues and solutions through collaborative interactions between
online communities. Apart from that, the social media may require new lines of communication and
responsibilities due to the challenges that exist in social media marketing strategy (Denning, 2010;
Kaplan and Haenlein, 2010).

184
Australasian Journal of Business, Social Science and Information Technology (AJBSSIT)

2. Literature Review
The small- and medium-sized enterprises (SMEs) play a significant role in economic development
and employment for a majority of countries in the world (Karanasios and Burgess, 2006). The same
situation is evident in Malaysia, whereby the economic growth is contributed by the SMEs (Chelliah
et al., 2010; Hashim, 2015). According to the Malaysia Economic Planning Unit (2015), in the
Eleventh Malaysia Plan Report for the period of 2015-2020, it was signified that the SMEs contributed
to about 97.3% of the total business establishments and 33.1% of the country’s gross domestic product.
Nevertheless, the SMEs are often haphazard, informal, intuitive, and unstructured characterized
by change and flexibility (Carson et al., 1995; Hill and Wright, 2000). However, the social media
could potentially synergize valuable market intelligence to fill the SMEs resource gap and minimize
uncertainties by leveraging their real-time market knowledge, resource-matching ability, learning, and
market capability (Atanassova and Clark, 2015).
Social media is defined as “a group of internet-based applications built on the ideological and
technological foundations of Web 2.0 and that allows for the creation and exchange of user-generated
content” (Kaplan and Haenlein, 2010. p. 61). Social media platform includes social networking tools
(e.g., Facebook, Instagram, Twitter), professional networking sites (e.g., Linked In), media sharing
sites (e.g., Youtube), commerce communities (e.g., Amazon) as well as blogs, and discussion forums
(Agarwal and Yiliyasi, 2010).
The use of Facebook by the SMEs as a part of their business strategies has been a subject of study
in a number of prior research. As highlighted by Bhanot (2012), among the function of Facebook
includes but not limited to for selling and buying, communication, business transactions, promoting,
innovation, problem-solving, customer care, human capital, information technology as well as for
leading the shifts in business culture. Apart from that, Facebook is also used for promotions through
the social network (Beloff and Pandya, 2010; Handayani and Lisdianingrum, 2011), as well as online
marketing (Cheng et al., 2010). Facebook is not only used for external communication with the
customers but it is also used for internal communication and communication as stated by Meske and
Stieglitz (2013).
Word-of-mouth (WOM) is one method of promotion that should not be underestimated in telling
customers of the arrivals of new products and services. This is due to the fact that a shared experience
is important when it comes to making decisions by the customers (Gil-Or, 2010). Sometimes, the WOM
expressed in the social media is more powerful in influencing people’s decision on whether to buy a
product or use a service as compared to the information disseminated by the enterprises themselves
(Hyllegard et al., 2011). These are part of the underlying factors for SMEs owner to use the social
media in promoting their business and services (Ainin et al., 2015).
Nobre and Silva (2014) in their study have mentioned that having an appropriate social network
strategy is vital for the SMEs as the social network is a mean for dissemination of information in
many different ways and for sociability to take a new direction. It is also beneficial to these business
owners due to its low costing in connecting these enterprises without any barrier to the current and
prospective customers (Hennig-Thurau et al., 2010). In the same study, it was also mentioned that the
social network could be seen as being the “gate-keepers” to transmit information, communicate, and
being accessible to the customers. As put forward by Becker et al. (2013), it has been widely accepted
SMEs business world that the social network is providing us with a new way of communicating with the
existing and prospective customers. This will lead to reputation building and business image branding
by these enterprises.

3. Research Approach
This study solely focuses on the qualitative approach in which in-depth interviews were conducted
with SME owners in Malaysia. In this study, a purposive sampling of SME owners was undertaken
to recruit participants who are the significant users of the social media (Shiell et al., 2009). In
total, 36 participants were involved in the interview sessions. The selection of participants was

185
Australasian Journal of Business, Social Science and Information Technology (AJBSSIT)

made through the SME directories and online search through the social media as well as business
websites. The participants were selected in accordance with these three criteria to be eligible for
this study:
• Number of employees between 5 and not more than 75. The definition of SME is based on the
definition by the SME Corporation Malaysia (2016).
• Independent management. Typically the owner is also a manager of the business;
• Adopt social media networking such as Facebook, Instagram, Pinterest, as well as others for
marketing.
The interviews were conducted from the end of February 2016 to early August 2016. The
participants were invited for the interview sessions through email, personal message, the Whatsapp
application, and phone calls. Introductory message was sent to all the selected participants to invite for
the interview session, explaining the aims of the study, the estimated duration of the interview session,
and the way the interview session will be conducted. A total of 72 invitation messages were sent
through emails, personal messages, the Whatsapp application, and phone calls to potential participants.
Of the 72 invitations, 41 invitees have responded positively to participate in the interview sessions.
However, 5 participants withdrawn at the last minute due to several factors. Thus, the actual interview
sessions were conducted with only 36 participants. Table 1 presents the summary of responses rate of
the participants involved in the interview sessions.
The selected SMEs were from around Malaysia. For this study, the participants were selected
according to the different zones within which they are based. The SMEs were divided into four zones,
namely, the East Coast, the West Coast, the North, and the South. This study mainly focuses only on
the SMEs in Peninsular Malaysia. Table 2 shows the profile of the SMEs.
The findings from this study were analyzed using the content and thematic analysis. They shed
light on the way the social media influenced the marketing strategies of these SMEs as well as the
impacts to business performance.

4. Results and Discussion

An appropriate marketing strategy is essential for the SMEs. Perhaps, the social media becomes a
competitive and fierce market among the SMEs which requires them to strategize their marketing
activities.
Of the 36 participants involved in these interview sessions, majorities of them were SME owners
of bakeries and apparels businesses. Each of the sectors, for example, the bakeries or the café operators,
has different marketing strategies as compared to SME owners who sell souvenirs or operates laundry
services. The geographical factor is also found to have a significant influence on the marketing
strategies implemented by these SMEs.

4.1. Marketing strategies

Renton et al. (2015) in their studies on entrepreneurial marketing have indicated that small business
owners would rather focus on their business practices particularly building the business and
communication identities. Nevertheless, the medium-sized businesses demonstrated relatively better
greater management skills by presenting positive brand associations, controlling brand identities,

Table 1: Summary of responses rate in Malaysia

Items Quantity
Number of invitation 72
Positive responses received 41
No response 24
Refused to participate 5
Actual interview performed 36

186
Australasian Journal of Business, Social Science and Information Technology (AJBSSIT)

leveraging alliances, and creating different brand identities for new products. The findings showed that
each of the SMEs has their own marketing strategies to gain wider market. Table 3 presents the theme
of marketing strategies implemented by the Malaysian SMEs in the social media.
The findings indicated that most of the SMEs in Malaysia prefer to collaborate with other online
vendors to market their products and services. Basically, they will provide spaces for vendors to place
the products in their stores. For example, participant P16_West_Cafe who runs a small café mentioned
that a few vendors place some of their products such as homemade cupcakes and soft drinks in his/her
café. The sales of the products were based on commission. Same goes to participant P20_West_Cafe
who collaborated with 32 vendors to supply products such as desserts, cakes, and snacks to his/her café.
Thus, it shows that the SMEs develop good business collaboration with other businesses to gain better
markets. According to participant P20_West_Cafe, the main reason for his/her collaboration with many
vendors is to offer more choices for the customers.

Table 2: Profile of Malaysia SMEs

East coast North
Beauty product P1_East_Beauty Apparel P21_North_ Apparel
Spa P2_East_Spa Cafe P22_North_Cafe
Cafe P3_East_Cafe Apparel P23_North_Apparel
Photography P4_East_Photo Cafe P24_North_Cafe
Craft P5_East_Craft Bakery P25_North_Bakery
Printing P6_East_Printing Photography P26_North_Photography
Bakery P7_East_Bakery Apparel P27_North_Apparel
Photography P8_East_Photo Beauty product P28_North_Beauty
Souvenir P9_East_Souvenir South
Boutique P10_East_Boutique Cafe P29_South_Cafe
Laundry P11_East_Laundry Bakery P30_South_Bakery
Bakery P12_East_Bakery Bakery P31_South_Bakery
Beauty product P13_East_Beauty Bakery P32_South_Bakery
West Coast Apparel P33_South_Apparel
Apparel P14_West_Apparel Cafe P34_South_Cafe
Apparel P15_West_Apparel Automobile P35_South_Automobile
Cafe P16_West_Cafe Bakery P36_South_Bakery
Souvenir P17_West_Souvenir
Apparel P18_West_Apparel
Cafe P19_West_Cafe
Cafe P20_West_Cafe

Table 3: Marketing strategies by Malaysian SMEs

Marketing strategies/theme East West North South
Tagging/like via Facebook/Instagram / / // //
Facebook advertising //// /// //// //
Collaborate with other vendors //// ///// ///// ///
Special discount/Coupon //// /
Drop‑ship agent /// // // //
Promotion via Whatsapp/WeChat/Line/SMS /// // /
Free gift /

187
Australasian Journal of Business, Social Science and Information Technology (AJBSSIT)

“I collaborate with almost 32 vendors who offer various choices of products particularly foods
and drinks. I share new information about my café on the Instagram. I normally update on new menus
or new products so that more customers are aware with the latest offers in my café.” - P20_West_Cafe.
The findings have also indicated that one of the most popular social media marketing strategies
used by the SMEs in Malaysia is Facebook advertising. Most participants are willing to pay a certain
amount of money to advertise their products and services on Facebook. They all agreed that Facebook
Advert is able to contribute in the promotion of their businesses. This is supported by Chan (2011)
in his study on the effectiveness of using online advertising on social networking site of Facebook
in encouraging university students to connect with their library’s page. The findings have shown that
Facebook Adverts contributed to over half of the new connections made to the library’s Facebook page
during the campaign. Therefore, it can be said that the positive marketing strategy of using Facebook
Adverts leads to a broader market for the SMEs.
Drop-ship agent is also another social media marketing strategy that is widely utilized by the
SMEs in Malaysia. The participants have also agreed that appointing drop-ship agents for their social
media marketing is a part of their marketing strategies. They believed that drop-ship agents are able
to promote their business well. This is due to the fact that the drop-ship agents do not have to carry
a bundle of stock but instead transfers customer orders and shipment details to business operators or
wholesalers, who then ship the orders directly to customers. Participant P1_East_Beauty claimed that
drop-ship agents have helped to boost his/her sales. Most of his/her drop-ship agents are university
students who do it on a part-time basis as a means to earn extra income. He/she receives orders from
the appointed drop-ship agents and then ships the products based on the orders received every Sunday,
Tuesday, and Thursday. He/she also stated that commissions are paid to the drop-ship agents based on
the sales made.
Apart from that, the SMEs in Malaysia have also made promotions of their products and services
through other networks such as the Whatsapp application, WeChat, Line, short-messaging systems, as
well as others to promote their online business. The participants have also offered special discounts and
given away coupons to their regular customers to boost their sales. However, tagging of customers or
sharing products or services on Facebook or the Instagram was found to be a less popular marketing
strategy. The participants claimed that sometimes they might lose their customers due to over-tagging
by the online retailers on Facebook or the Instagram.
“Nowadays, the trend of social media is changing. Some of the customers do not prefer to be
tagged too much in their Facebook or Instagram. There is a possibility for them to unfriend or block our
account. This marketing strategy may annoy them.” - P30_South_Bakery.
The participants have also indicated that there is a change of trend in the marketing strategies on
the social media, particularly in the tagging or sharing on Facebook or the Instagram. It is, therefore,
necessary for the SMEs to look for other marketing strategies as a way to get more customers to visit
their pages.

4.2. Business performance

Zhu and Kraemer (2005) posited that the use of ICT leads to a better business performance. This
is supported by Azam (2015) who revealed that the use of ICT may enhance an SMEs business
performance if the appropriate technology is integrated and properly utilized. The findings indicated
that social media marketing leads to a positive impact on business performance; either in terms of the
financial aspects or the non-financial aspects. Table 4 presents the impacts of adopting the social media
marketing on business performance.
The findings revealed that most participants agreed that social media marketing contributes to the
increase in their sales. A wider market coverage reached social media marketing is used to promote the
business. In general, all the participants either use the Facebook or the Instagram as their marketing
platform. Participant P31_South_Bakery who runs a bakery that specialized in layer cakes stated that
he/she prefers to use Facebook to promote his/her products. This is due to the fact that he/she could
share more details of his/her cakes on his/her Facebook page rather than in the Instagram. On the

188
Australasian Journal of Business, Social Science and Information Technology (AJBSSIT)

Table 4: Impacts of social media marketing toward business performance

Impact toward business performance East West North South
Increase in sales ///////// ///// ///// //////
More followers/customers //// / /// //
Wider market ///// // //
Customer loyalty /// / //
Feedback from customers /// / / ///
Number of likes/share/tag ///// / // //

contrary, participant P26_North_Photography has a different preference as he/she likes to promote

his/her services on the Instagram as compared to on Facebook. He/she mentioned that through the
Instagram, he/she is able to communicate with his/her clients more conveniently and gains more
followers. Overall, the social media marketing is proven to be of convenience for the SME owners
in marketing their products and services by minimizing the cost, increasing the sales, widening of the
market coverage while maintaining good customer relations.

5. Conclusion
The social media marketing strategies may vary according to the type of SMEs or sector. It is also very
much related to business objectives and the benefits that it offers the SMEs. The study has demonstrated
that social media marketing has a significant influence on the SMEs business performance. The social
media has become the medium that facilitates and expands communication between the SMEs and
their customers. The social media is able to create a unique environment to the SMEs which enables
businesses to increase their prospective market, reduce the marketing cost, increase sales, and offer
closer customer relationship management. Overall, social media can be a useful tool that is aligned with
business marketing strategies; inexpensive, interactive, dynamic, and collaborative.

References
Agarwal, N., Yiliyasi, Y. (2010), Information quality challenges in social media. Paper Presented at the
International Conference on Information Quality (ICIQ).
Ainin, S., Parveen, F., Moghavvemi, S., Jaafar, N.I., Mohammed Shuib, N.L. (2015), Factors influencing the use
of social media by SMEs and its performance outcomes. Industrial Management and Data Systems, 115(3),
570-588.
Atanassova, I., Clark, L. (2015), Social media practices in SME marketing activities: A theoretical framework and
research Agenda. Journal of Customer Behaviour, 14(2), 163-183.
Azam, M.S. (2015), Diffusion of ICT and SME performance. Advances in Business Marketing and Purchasing,
23A, 7-290.
Barnes, N.G. (2010), Tweeting and blogging to the top. Marketing Research, 22(1), 8-13.
Becker, K., Nobre, H., Kanabar, V. (2013), Monitoring and protecting company and brand reputation on social net-
works: When sites are not enough. Global Business and Economics Review, 15(2-3), 293-308.
Beloff, N., Pandya, P. (2010), Advertising models on social networks for smes - An advertising methodology. Paper
Presented at the Internet Technology and Applications, 2010 International Conference.
Bhanot, S. (2012), Use of social media by companies to reach their customers. SIES Journal of Management, 8(1), 47.
Carson, D., Cromie, S., McGowan, P., Hill, J. (1995), Marketing and Entrepreneurship in SMEs: An Innovative
Approach. Harlow, UK: Pearson Education.
Chan, C. (2011), Using online advertising to increase the impact of a library Facebook page. Library Management,
32(4/5), 361-370.
Chelliah, S., Sulaiman, M., Yusoff, Y.M. (2010), Internationalization and performance: Small and medium enter-
prises (SMEs) in Malaysia. International Journal of Business and Management, 5(6), 27.
Cheng, C., Xiang, L., Geng, P. (2010), Internet marketing and innovative strategies: A study of China’s travel agen-
cies. Paper Presented at the Management and Service Science (MASS), 2010 International Conference.

189
 Australasian Journal of Business, Social Science and Information Technology (AJBSSIT)

Coremetrics. (2010), Comprehensive Measurement: the Key to Social Media Marketing Success, White Paper.
Available from: http://www.coremetrics.com.
Denning, S. (2010), Managing the threats and opportunities of the open corporation. Strategy and Leadership, 38(6),
16-22.
Derham, R., Cragg, P., Morrish, S. (2011), Creating value: An SME and social media. Paper Presented at the PACIS.
Gil-Or, O. (2010), The potential of facebook in creating commercial value for service companies. Advances in
Management, 3(2), 20-25.
Handayani, P.W., Lisdianingrum, W. (2011), Impact analysis on free online marketing using social network face-
book: Case study SMEs in Indonesia. Paper Presented at the Advanced Computer Science and Information
System (ICACSIS), 2011 International Conference.
Hashim, J. (2015), Information communication technology (ICT) adoption among SME owners in Malaysia.
International Journal of Business and Information, 2(2), 221-240.
Hennig-Thurau, T., Malthouse, E.C., Friege, C., Gensler, S., Lobschat, L., Rangaswamy, A., Skiera, B. (2010), The
impact of new media on customer relationships. Journal of Service Research, 13(3), 311-330.
Hill, J., Wright, L.T. (2000), Defining the scope of entrepreneurial marketing: A qualitative approach. Journal of
Enterprising Culture, 8(1), 23-46.
Hyllegard, K.H., Ogle, J.P., Yan, R.N., Reitz, A.R. (2011), An exploratory study of college students’ fanning behav-
ior on facebook. College Student Journal, 45(3), 601.
Internet World Stats. (2016), Asia Marketing Research, Internet Usage, Population Statistics and Facebook
Information. Available from: http://www.internetworldstats.com/asia.htm#my. [Last retrieved on
2016 Aug 28].
Kaplan, A.M., Haenlein, M. (2010), Users of the world, unite! The challenges and opportunities of social media.
Business Horizons, 53(1), 59-68.
Karanasios, S., Burgess, S. (2006), Exploring the internet use of small tourism enterprises: Evidence from a devel-
oping country. The Electronic Journal on Information Systems in Developing Countries, 27(3), 1-21.
Malaysia Economic Planning Unit, editor. (2015), The Eleventh Malaysia Plan: Anchoring Growth on People.
Malaysia: Malaysia Economic Planning Unit.
Meske, C., Stieglitz, S. (2013), Adoption and use of social media in small and medium-sized enterprises. Paper
Presented at the Working Conference on Practice-Driven Research on Enterprise Transformation.
Nobre, H., Silva, D. (2014), Social network marketing strategy and SME strategy benefits. Journal of Transnational
Management, 19(2), 138-151.
Prohaska, B. (2011), Social media for the collaborative enterprise. IT Professional, 13(4), 64-66.
Renton, M., Daellenbach, U., Davenport, S., Richard, J. (2015), Small but sophisticated: Entrepreneurial marketing
and SME approaches to brand management. Journal of Research in Marketing and Entrepreneurship, 17(2),
149-164.
Shiell, A., Hawe, P., Perry, R., Matthias, S. (2009), How health managers think about risk and the implications for
portfolio theory in health systems. Health, Risk and Society, 11(1), 71-85.
SME Corporation Malaysia. (2016), SME Definitions. Available from: http://www.smecorp.gov.my/index.php/en/
policies/2015-12-21-09-09-49/sme-definition. [Last retrieved on 2016 Aug 28].
Tornatzky, L.G., Fleischer, M., Chakrabarti, A.K. (1990), Processes of Technological Innovation. Lexington, MA:
Lexington Books.
Tsimonis, G., Dimitriadis, S. (2014), Brand strategies in social media. Marketing Intelligence and Planning, 32(3),
328-344.
Wright, E., Khanfar, N.M., Harrington, C., Kizer, L.E. (2010), The lasting effects of social media trends on advertis-
ing. Journal of Business and Economics Research, 8(11), 73.
Zhu, K., Kraemer, K.L. (2005), Post-adoption variations in usage and value of e-business by organizations: Cross-
country evidence from the retail industry. Information Systems Research, 16(1), 61-84.

190

View publication stats