Determinants of mobile marketing adoption among SMEs in South Africa

351 Pages·2016·3.18 MB·English

by  Maduku, Daniel

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How to cite this thesis
Surname, Initial(s). (2012) Title of the thesis or dissertation. PhD. (Chemistry)/ M.Sc. (Physics)/
M.A. (Philosophy)/M.Com. (Finance) etc. [Unpublished]: University of Johannesburg. Retrieved
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Determinants of Mobile Marketing Adoption among
SMEs in South Africa

Daniel Kofi Maduku
200941923

Thesis
Submitted in fulfilment of the requirements
for the degree
Philosophiae Doctor (Ph.D.)
in Marketing Management
in the
Faculty of Management
at the
University of Johannesburg

JOHANNESBURG Promoter: Prof. Mercy Mpinganjira
Co-Promoter: Dr Helen Duh

November 2015
DECLARATION

I, Daniel Kofi Maduku, do hereby conscientiously declare that this thesis, entitled
Determinants of Mobile Marketing Adoption among SMEs in South African, submitted in
fulfilment of the requirements for the degree PhD (Marketing Management) at the University
of Johannesburg, is solely my own work, and that sources that I have used or quoted have
been indicated and accordingly acknowledged by means of complete references, and that this
thesis has not been submitted before for any other degree at any other institution.

November 2015

i
DEDICATION

This work is dedicated to my exceptional mother, Elizabeth Neiko Maduku (whom I
affectionately call Sister Lizzy), for her love, unflinching support, and belief in me. Sister
Lizzy, it is with your love, support, and prayers that I have come this far.

ii
ACKNOWLEDGEMENTS

“Saying, Amen: Blessing, and glory, and wisdom, and thanksgiving, and honour, and
power, and might, be unto our God for ever and ever. Amen (Revelation 7:12)

Unto the almighty God, the keeper of my soul do I ascribe all the praises for His gift of
wisdom, strength, and spirit of endurance that has enabled me to achieve this significant
milestone.

I wish to express my heartfelt and sincere appreciation to my thesis supervisors, Prof. Mercy
Mpinganjira and Dr Helen Duh for their unflinching support and ready guidance throughout
the course of my doctoral journey. Prof. Mpinganjira and Dr Duh, your sisterly love, attention
to detail, extensive knowledge, work ethic, dedication to duty and kindness were crucial
elements of the outstanding support systems that you made available to me to achieve this
momentous milestone of my career, and have set an example worthy of emulation.

To my dearest fiancée, Lady Monica, thank you for your prayers, your words of
encouragement and patience to bear with me in the challenges arising out of this study. To
my brother Eric, thanks a lot for taking care of the ‘house’ when I was busy with my study.
To Maame Vida Brenyah, you are instrumental in this feat, and I would forever be indebted
to you. To Dr Kweku Oppong Asante and Ms Awo Afi Kwapong: thanks for your
encouraging words and diverse forms of support that you offered.

My profound gratitude also goes to the Faculty of Management, University of Johannesburg
for providing funding to support my field work. I would also express my appreciation to the
South African Department of Higher Education and Training (DoHET) for awarding me the
DoHET Grant for lecturing relief that enabled me to take a semester-long break from
teaching to concentrate on my thesis. To Underhill Corporate Solutions: thanks for assisting
with obtaining the data for study. To Dr Richard Devey, Head of the Statkon Department of
the University of Johannesburg, I thank you for awesome help with designing the
measurement instrument and assistance with the preliminary analysis of the data. I also wish
to express my gratitude to the editors of WriteRight Editing, for their painstaking and
meticulous language editing of this thesis.
iii
To you, Auntie Agnes Amanor; words cannot express my gratitude to you. To my brothers
and friends: Stephen Blam, Amos Maduku, Obed Appiasah, Quao Joseph-Carl, Aaron Baba
Todd, Paul Matey Odehe, Joseph Agbavor, Gad Barasu, Alhaji Agorlesu, and Francis
Aniteye Larwer I say thanks a million for your diverse contributions and inspirational support
that have brought me this far.

This work is a celebration, not only of determination and willpower but also of the amazing
love of the special people around me!
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ABSTRACT

SMEs are widely regarded as important building blocks for economic prosperity and broader
social well-being for both developed and developing nations. However, SMEs face a number
of challenges that impede their ability to fully provide the much-needed boost to the socio-
economic development of countries. Besides financial constraints, the lack of marketing
skills and capability is often cited as one of the key challenges of most SMEs. Mobile
technology innovation has become the cutting edge for socio-economic development for most
developing economies. Significant competitive advantage is exploited when businesses use
mobile technology to streamline their operations and to initiate interactive communication
with their target market through the use of mobile marketing.

Thus, it is widely believed that mobile marketing applications hold a great deal of business
value, particularly for SMEs that have limited financial resources to invest in costly
traditional marketing practices to overcome their marketing challenges. However, SMEs have
been slow to adjust and rebalance their marketing media mix to reflect the unprecedented
mobile-centric world of consumers. It is therefore important to investigate the factors that
influence the adoption of mobile marketing among SMEs. It is against this background that
this study uses an integrated conceptual model that combines theories used to understand
innovation adoption at the individual level of adoption (theory of planned behaviour) and the
organisational level of adoption (Technology Organisation Environment framework).

Considering that models of innovation adoption at the individual and organisational levels
have been tested with samples drawn from large firms and in developed countries, this study
tested the integrated conceptual model with SMEs in South Africa. This was important,
because SMEs have peculiar characteristics that distinguish from large firms. More so,
findings from developed countries cannot be generalised to a cultural, socio-economically
diverse and developing country, such as South Africa.

Following a quantitative approach, data were sourced randomly from 511 SMEs in the
manufacturing, tourism, and wholesale/retail sectors of the South African economy.
Structural equation modelling was the main statistical technique employed to analyse the data
and test the hypotheses.
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The results of the testing of the integrated conceptual model show that the model provides a
reasonably good explanation not only of SMEs’ behavioural intention to use marketing, but
also of their adoption of the innovation; 68 per cent of the variance in behavioural intention
and 59 per cent of the variance in the adoption of mobile marketing are explained by the
integrated conceptual model. Perceived relative advantage/compatibility, perceived cost,
perceived competitive pressure, and perceived employee capability emerged as salient factors
that simultaneously drive behavioural intention towards mobile marketing use and mobile
marketing adoption among SMEs. While perceived relative advantage/compatibility emerged
as the strongest driver of behavioural intention towards mobile marketing use, behavioural
intention emerged as the strongest driver of adoption. Further analysis shows that significant
differences exist between adopters and non-adopters in relation to the drivers of their
behavioural intention towards mobile marketing use, as well as the adoption of the
innovation.

The findings of this study do not only have wider implications for efforts aimed at designing
and promoting a more enthusiastic adoption of mobile marketing by SMEs: they also serve to
add to the literature on the emerging body of knowledge about mobile marketing adoption
from the perspective of SMEs in developing countries – a topic that is largely under-
researched.

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TABLE OF CONTENTS
DECLARATION i
AFFIDAVIT ii
DEDICATION iii
ACKNOWLEDGEMENTS iv
ABSTRACT vi
LIST OF FIGURES viii
LIST OF TABLES xvi
LIST OF ACRONYMS xvii

CHAPTER ONE:
INTRODUCTION AND BACKGROUND TO THE STUDY
1.1 INTRODUCTION 1
1.2 STATEMENT OF PROBLEM AND RESEARCH QUESTION 3
1.3 AIM AND OBJECTIVES OF THE STUDY 6
1.3.1 AIM OF THE STUDY 6
1.3.2 OBJECTIVES OF THE STUDY 6
1.3.3 HYPOTHESES OF THE STUDY 6
1.4 PRELIMINARY LITERATURE REVIEW 8
1.4.1 THE CONCEPT OF A SME 8
1.4.2 OVERVIEW OF MOBILE MARKETING 9
1.4.3 THEORIES ON ADOPTION OF INNOVATIONS 9
1.4.4 DEVELOPMENT OF THIS STUDY’S CONCEPTUAL MODEL 10
1.5 OVERVIEW OF THE RESEARCH METHODOLOGY 11
1.5.1 RESEARCH PHILOSOPHY 11
1.5.2 RESEARCH DESIGN 12
1.6 CONTRIBUTIONS OF THE STUDY 17
1.7 STRUCTURE OF THE THESIS 18
1.8 DELIMITATIONS OF THE STUDY 20

CHAPTER TWO:
THE CONCEPT OF SMALL AND MEDIUM SIZED ENTERPRISES
2.1 INTRODUCTION 21
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2.2 THE DEFINITIONS OF SMEs 22
2.2.1 INTERNANTIONAL DEFINITIONS OF SMEs 23
2.2.2 DEFINITION OF SMEs IN SOUTH AFRICA 28
2.3 OVERVIEW OF THE SME SECTOR IN SOUTH AFRICA 33
2.3.1 SOUTH AFRICAN SME SECTORS OF INTEREST TO THIS
STUDY 33
2.4 ECONOMIC CONTRIBUTIONS OF SMEs 39
2.4.1 EMPLOYMENT CREATION 40
2.4.2 CONTRIBUTION TO GROSS DOMESTIC PRODUCT (GDP)
GROWTH 42
2.4.3 CONTRIBUTION TO EXPORT DEVELOPMENT AND 43
INVESTMENT
2.5 GENERAL CHALLENGES FACING SMEs 44
2.5.1 ACCESS TO FINANCE 44
2.5.2 MANAGEMENT CAPABILITIES 46
2.5.3 ACCESS TO INFORMATION 46
2.5.4 COMPLIANCE WITH REGULATIONS 47
2.5.5 CRIME AND CORRUPTION 48
2.2.6 INVESTMENT IN INFORMATION TECHNOLOGY (IT) 49
2.2.7 MARKETING SKILLS 49
2.6 CONCLUSION 50

CHAPTER THREE:
MOBILE MARKETING AND THEORIES ON INNOVATION ADOPTION
3.1 INTRODUCTION 52
3.2 THE CONCEPT OF MOBILE MARKETING 52
3.2.1 DEFINITIONS AND OVERVIEW OF MOBILE MARKETING 53
3.2.2 TRANSITIONS ON THE MOBILE MARKETING LANDSCAPE 55
3.2.3 MOBILE MARKETING METHODS AND APPROACHES 57
3.2.4 KEY ATTRIBUTES OF THE MOBILE DEVICE FOR
MARKETING 61
3.2.5 BENEFITS OF MOBILE MARKETING 63
3.2.6 TRENDS IN MOBILE MARKETING ADOPTION 66
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