CHAPTER I
INTRODUCTION
RATIONALE
Digital marketing is one type of marketing being widely use to promote products or services and to
reach consumers using digital channels. Digital marketing extends beyond internet marketing including
channels that do not require the use of internet. It includes mobile phones (both SMS and MMS), social
media marketing display advertising, search engine marketing and many other forms of digital media.
Digital marketing is a broad term the refers to various promotional techniques deployed to reach customers
via digital techniques.
According to Huge (1993), digital marketing is a transfer of goods or services from seller to buyer
involving one or more electronic methods or media. It began with the use of telegraphs in the nineteenth
century. With the invention and mass acceptance of the telephone, radio, television, and then cable
television, electronic media as become the dominant marketing force. McDonald’s uses online channel to
reinforce brand message and relationships. They have built online communities for children, such as the
Happy Meal websites with educative and entertaining games to keep customers always close to themselves
(Rowley 2004). Reinartz and Kumar (2003) found that the number of mailing efforts by the company is
positively linked with company profitability overtime. The primary advantages of digital media marketing is
reducing costs and enhancing the reach. The cost of a digital media is typically lower than other marketing
platforms such as face-to-face sales or sales with a help of middlemen or distributers. Generally, main
advantage of digital media is that it can enable companies to increase reach and reduce cost (Watson et al.
2002; Sheth & Sharma 2005).
According to Chaffey (2014), social media marketing involves encouraging costumer
communication on company’s own website or through its social presents; Social media marketing is one
important technique in digital marketing as companies can use social media form to distribute their
messages to their target audience without paying for the publishers or distributors that is characteristics for
traditional marketing. Digital marketing, electronic marketing, e-marketing and internet marketing are all
similar terms which simply put, refer to “marketing online whether via websites, online ads, opt-in emails,
interactive kiosks, interactive TV or mobiles” (Chaffey & Smith, 2008). Giese and Gote (2000) finds that
customer information satisfaction (CIS) for digital marketing can be conceptualized as a sum of sales
activities, information systems (websites), digital products /services, customer support, after sales service
and company culture.
In recent years, information and communication technology has immensely change consumer
behaviour, and this has greatly impacted on the way businesses communicate with their customers. Digital
marketing has not only become an effective marketing strategy, but also necessary in the light of the
changing consumer behaviour towards digitalization and online experiences. Today digital marketing are
becoming increasingly important in most sectors of economic activity. Using internet has been likened to the
wheel and the airplane in terms of its ability to affect the future development of business and society. Digital
marketing is an umbrella term for the targeted, measurable, and interactive marketing of products or services
using digital technologies to reach and convert leads into customers and retain them. So many companies
and businesses are jumping on the digital marketing train that the world business environment is now being
transformed into a huge network of firms running on digital technology and this in turn is increasingly
leading to more financial growth for businesses. It is embodied by an extensive selection of service, product,
and brand marketing tactics, which mainly use the internet as a core promotional medium, in additional to
small mobile TV and radio. The key objective is to promote brands, build preference, engage with customers
and increase sales through various digital marketing techniques.
CONCEPTUAL FRAMEWORK
The adaptive process enabled by the digital technologies creates value in new ways in new digital
environments. Institutions enabled by digital technologies build foundational capabilities to create such
value jointly for their customers and for themselves. Processes enabled by digital technologies create value
through new customer experiences and through interactions among customers. Digital marketing itself is
enabled by a series of adaptive digital touch points encompassing the marketing activity, institutions,
processes and customers. Significantly, the number of touch points is increasing by over 20% an annually as
more offline customers shift to digital technologies and “younger, digitally oriented consumers enter tne
ranks of buyers” (Bughin 2015).
In the figure below shows the IPO of having a productive local business.
INPUT PROCESS OUTPUT
Marketing Spend Taking customer service requests Customer referrals
System Spend Awareness Revenue
Relative Advantage Profit
THE PROBLEM
STATEMENT OF THE PROBLEM
This study will determine the effectiveness of digital marketing using statistical tools in local
businesses in Municipality of Bataraza.
1. Is there significant contribution of digital marketing to the development of local businesses?
2. How digital marketing helps the Business owner in managing their business?
3. Does digital marketing helps to promote the product of local businesses?
SCOPE AND DELIMITATION
This present study is delimitated in terms of problem, respondents of the study, research, locale and
time frame.
Problem: This study focuses on the effectiveness of the digital marketing to local businesses in
Bataraza.
Respondent of the study: Small business owners who use the digital marketing will be the
respondents in this study.
Locale: The study will be conducted at Municipality of Bataraza.
Time Frame: This study will start on ___________________ and will be completed on
____________.
SIGNIFICANCE OF STUDY
The output of this study would be very essential and beneficial to a person that interested of having a
profitable and successful business. Hence, this study is significant to the following:
For future businesses owner, the study might be valuable to small business by providing information
demonstrating the potential importance of digital marketing.
For business owners, the study serves as guide in the hope of creating relationship with consumers,
to generate a high sale and to have a productive and successful business.
For future researchers, the study will benefit and help the future researcher as their guide and could
be a medium to discover more marketing strategy that can make small businesses more profitable.
DEFINITION OF TERMS
1. CONSUMERS – a person who purchases goods and services for personal use.
2. CUSTOMERS- a person or organization that buys goods or services from a store or business.
- a person or thing of a specified kind that one has to deal with.
3. DIGITAL MARKETING- is the use of the internet to reach consumers.
-is a broad field including attracting customer via email, content marketing, search
platforms, social media and more.
4. EFFECTIVENESS- the degree to which something is successful in producing a desired result;
success.
5. LOCAL BUSINESSESS- any company that provides goods or services to local population.
6. PRODUCTS- an article or substance that is manufactured or refined for sale.
- a thing or person that is the result of an action or process.
7. SERVICES- the action of helping or doing work for someone.
- a system supplying a public need such as electricity and water.
CHAPTER II
REVIEW OF RELATED LITERATURE AND STUDIES
Marketing has been around for a long time. Business owners felt the need to spread the word about their
products or services through newspapers and word of mouth. Digital marketing on the other end is becoming
popular because it utilizes mass media devices like television, radio and the Internet. The most common
digital marketing tool used today is Search Engine Optimization (SEO). Its role is to maximize the way
search engines like Google find your website. Digital marketing concept originated from the Internet and
search engines ranking of websites. The first search engine was started in 1991 with a network protocol
called Gopher for query and search. After the launch of Yahoo in 1994 companies started to maximize their
ranking on the website (Smyth 2007). When the Internet bubble burst in 2001, market was dominated by
Google and Yahoo for search optimization. Internet search traffic grew in 2006; the rise of search engine
optimization grew for major companies like Google (Smyth 2007). In 2007, the usage of mobile devices
increased the Internet usage on the move drastically and people all over the world started connecting with
each other more conveniently through social media. In the developed world, companies have realized the
importance of digital marketing. In order for businesses to be successful they will have to merge online with
traditional methods for meeting the needs of customers more precisely (Parsons, Zeisser, Waitman 1996).
In order for digital marketing to deliver result for businesses, digital content such as accessibility,
navigation and speed are defined as the key characteristics for marketing (Kanttila, 2004). Other tried and
tested tool for achieving success through digital marketing is the use of word-of-mouth WOM on social
media and for making the site popular (Trusov, 2009). In addition, WOM is linked with creating new
members and increasing traffic on the website which in return increases the visibility in terms of marketing.
Social media with an extra ordinary example Facebook has opened the door for businesses to communicate
with millions of people about products and services and has opened new marketing opportunities in the
market. This is possible only if the managers are fully aware of using the communication strategies to
engage the customers and enhancing their experience (Mangold, 2009). Marketing professional must truly
understand online social marketing campaigns and programs and understand how to do it effectively with
performance measurement indicators. As the market dynamics all over the world are changing in relation to
the young audience accessibility to social media and usage. It is important that strategic integration
approaches are adopted in organization’s marketing communication plan (Rohm & Hanna, 2011). Blogs as a
tool for digital marketing have successfully created an impact for increasing sales revenue, especially for
products where customers can read reviews and write comments about personal experiences. For businesses,
online reviews have worked really well as part of their overall strategic marketing strategy (Zhang, 2013).
Online services tools are more influencing than traditional methods of communication ( Helm, Mauroner,
Conrad, 2013). As part of study, it is proven that users experience increases in self-esteem and enjoyment
when they adapt to social media which itself is a motivating sign for businesses and marketing professional
(Arnott, 2013). Web experiences affect the mental process of consumers and enhance their buying decision
online (Cetina, Cristiana, Radulescu, 2012). This study is very valuable for marketing professional as it
highlights the importance of digital marketing.
Roberts & Micken (2015) explained that society has experienced an economical shift, driven by
digital technology. Roberts & Micken (2015) cited Dean et al. (2012) discoveries of a 4.7% gross domestic
product contribution to the United States (U.S.) economy in 2010. The noted growth in 2010 is expected to
continue at more than 10% per year. Pineiro-Otero & Martinez-Rolan (2016) expressed that digital
marketing has become innovative phenomena. The new strategy helps organizations achieve their marketing
goals through establishing a link between customization and mass distribution. There are a considerable
number of professionals that hold to the ideology of McCarthy, which views marketing utilizing the 4P
model: product, place, promotion and price. The traditional marketing strategy used by McCarthy is a
powerful, credible and widely-recognized foundational strategy, but leaves no role to the consumer. Smith
(2011) cited Internet World Stats (2010), which pointed out that the world’s internet user population was
projected to exceed 2 billion by 2010. With the rapid advancement of technology in society, the adoption of
digital marketing strategy is more important than ever. Armitage (2015) explained that digital stratagem
should be the cornerstone of an organization “go to” market strategy. These thoughts are echoed by
González Romo, García-Medina & Plaza Romero (2017), which explained that new technologies have
forced companies to reconsider marketing strategies. The authors continued to explain that the
implementation of technology into marketing would help marketing professionals reach a younger audience
that heavily use mobile devices on a regular basis. The views of Slade (2016) regarding a link between the
implementation of innovative technology and marketing strategy concurred Armitage (2015) and González
Romo, García-Medina & Plaza Romero (2017), by proving insight that technology is rapidly developing and
will take businesses out of there comfort zone. A marketing strategy that use technology to enhance an
organization’s ability to obtain more exposure starts with a sound strategy. Longo (2016) concurred with
these thoughts by expressing that strategy in digital marketing must be prioritized. The President of
EDventure Holding Inc., Esther Dysan, explained that the internet is not just an additional sales or
advertising method, but has become a tool that has essentially revamped the way that an organization does
business. Digitalization is projected to have exponential growth in the future (Patrutiu Baltes, 2016). Client-
focused Strategy Maximization of organization-to-client exposure must by a primary marketing goal of an
organization that seeks to successfully make contact with prospective customers. Pineiro-Otero &
MartinezRolan (2016) explained that the traditional production focused paradigm was challenged some
years later by Lauterborn’s user-centered model. The new model made a shift in focus from the attention
being on production to the user. The thoughts regarding user-centered marketing strategy is resonated by
Patrutiu Baltes (2016), which further elaborated on digital marketing’s role in ensuring that the focus
remains on the consumer. The scholar of the Transylvania University of Brasov voiced similar concerns of
those expressed by Pineiro-Otero & Martínez-Rolan (2016), by elucidating that the attention given to the
customer essentially has been “dethroned” by excessive focused being placed on the product.
Patrutiu Baltes (2016) referenced a survey by Cretu & Gramada (2008), expressing that the main
motivation found in the U.K. for using Customer Relationship Management (CRM) applications was to
improve relationships with clients. The findings of Patrutiu Baltes (2016), concluded that CRM and digital
marketing are connected. The goal of CRM, using digital application, is to ensure that the strategy is client-
centered. Further benefits of CRM as a part of a digital marketing strategy is market research and retaining
clients. Content Marketing The body of research displayed several publications, supporting Content
Marketing as being a widely-accepted, trustworthy digital marketing practice (Gaikwad & Kate, 2016;
Kingsnorth, 2017). Most of the literature pointed to using blogs as being the main platform for content
marketing. Slade stated that “Engaging visual content means that a user is likely to spend more time on your
website (p.38).” Patrutiu Baltes (2016) expressed that blogs posted to an organization’s website has a
significant part in expressing the company’s image. The expressions of Slade (2016) and Vein (2015),
provided online articles, presentations, live streaming, pictures and videos as beneficial tools that companies
should include into their blogs on their business website.
The body of research pointed to engineering and implementation of a website and use of the internet
in digital marketing as being a key resource in digital marketing. Gould (2017) concurred that the internet is
a main venue that companies use to market products and services and noted the cost-to-benefit difference
between traditional and digital marketing (Gould, 2017 cited Alba et al, 1997 & Peterson, Balasubramanian
& Bronnenberg, 1997). Having a website and using the internet acts as a platform to a plethora of strategies
identified in the literature. These strategies include: SEM, SEO, E-mail Marketing, Online Ads, E-
Newsletters Digital Public Relations, Affiliate Marketing and Content Marketing. Kingsnorth (2017) shared
that digital marketing and business strategy are concepts that should be integrated and grow together.
Further research into specific digital marketing strategies, would be a valuable contribution to the field of
digital marketing and current body of work. In-depth, qualitative and quantitative analysis would provide
supporting evidence of the effectiveness or ineffectiveness of specific strategies. Further comparative studies
between traditional marketing and digital marketing would give researchers and companies a better
understanding of differences between the two approaches. Digital marketing is an innovative, influential
contribution to the field of marketing.
CHAPTER III
RESEARCH METHODOLOGY
This chapter presents how this study was conducted. This provides the discussion of the research
design to be used, the research environment, the respondents of the study, the instrumentation, and the
research procedures.
RESEARCH DESIGN
This study aims to identify and discuss how digital marketing affect the local businesses. The
researchers believed that innovating new online marketing techniques with digital marketing is the key to
running a productive and successful business.
This study employed descriptive research method utilizing quantitative means of interpreting and
analysing the closed sample population to ensure the questions are answered accurately. The aim of this data
is to determine the benefit of digital marketing. The researchers will begin the survey by giving
questionnaires to the respondents once the sample population has been established. Using this tool; the
researchers were able to classify and evaluate the opinions of respondents about the effect of digital
marketing in local businesses.
RESEARCH SUBJECTS
The research subjects of this study are the local business owners in Municipality of Bataraza. From
the different barangays we selected 30 local business owners who use digital marketing in promoting their
products in market and managing their business. An interview was conducted and a questionnaire
administered to the respondents.
RESEARCH ENVIRONMENT
This study was conducted in Municipality of Bataraza. It is one of the 1st class municipality in the
province of Palawan. It is located on the southern Mont tip of Palawan Island. According to the 2015 census
it has a population of 75,468 people, and consists of 22 barangays.
The main industry of Bataraza includes farming, fishing and nickel mining and processing. The
municipality of Bataraza has a thousand of local businesses which some of them used digital in operating
their business.
RESEARCH INSTRUMENT
In this study, the researchers used a questionnaire in providing a systematic information about a
phenomenon. The questionnaire was composed of 3o items that will extract data from the respondents.
An interview was conducted to the local businesses owners regarding with the effect of digital
marketing, using Diffusion of Innovation (DOI). Questionnaires towards DOI in business were another
instrument in this study to identify the benefit of having new ideas in managing and promoting a business
product using digital.
DATA GATHERING PROCEDURE
The researchers wrote a letter to the principal of Tarusan National High School asking the
permission to conduct the study. Upon approval, the researchers started conducting the based on the step-by-
step process with the proper guidance of the research adviser.
The respondents answered the questionnaires about the effect of digital in local businesses, and
interviewed on the other information that needed to accomplish the research main objectives. The
respondents answered a 30 items that is validated by the research adviser. The research was conducted on
the fourth quarter of the school year.
After the researchers gathered the data from the respondents, the results in the questionnaire will be
analysed and interpreted.
DATA ANALYSIS
According to Yin (2014), data analysis is examining, categorizing and tabulating the evidence to
produce empirical findings. Percentage is used to summarize, analyse and interpret the data in this study.
The statistics of the data was used to show the contribution of digital to the growth of local
businesses as well as the strategy that would fit for local businesses in promoting products through digital.
ETHICAL CONSIDERATION
For ethical consideration, the researchers ensured that the all statements and data are fair in order to
maintain the integrity of the research. There will be more data to gather are consolidated. The researchers
also considered seeking the contact from the concerned authorities or persons as regards the conduct of the
study. The confidentiality and privacy of the research respondents were also observed, as well as ensuring
that the participants would willingly engage in the study; and avoid harm to the participants; and
demonstrating that the research was unbiased and impartial.
