Effect of Digital Marketing on Competitiveness of Automobile Companies in Kenya

EFFECT OF DIGITAL MARKETING ON COMPETITIVENESS OF AUTOMOBILE COMPANIES IN KENYA

BY KIGUNDA EVA NKATHA

UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA

SUMMER 2017 EFFECT OF DIGITAL MARKETING ON COMPETITIVENESS OF AUTOMOBILE COMPANIES IN KENYA

KIGUNDA EVA NKATHA

A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA)

UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA

SUMMER 2017 STUDENT’S DECLARATION I, the undersigned, declare that this is my original work and has not been submitted to any other university or college institution or except the United States International University - Africa in Nairobi for academic credit.

Signed :______Date: ______Kigunda Eva Nkatha (ID No: 648325)

This research project report has been submitted for examination with my consent as the appointed supervisor.

Signed: ______Date: ______Dr. Peter Kiriri

Signed: ______Date: ______Dean, Chandaria School of Business

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ABSTRACT The study sought to examine the effect of digital marketing on competitiveness of automobile companies in Kenya. The objectives of the study were to assess the effect of search engine marketing, e-mail advertising, online advertising and social media advertising on the competitiveness of automobile companies in Kenya.

This study embraced the use of a descriptive research design. The target population of this study was 335 staff working in the marketing departments at the head offices of 11 major established motor vehicle dealers in Kenya. The study applied stratified random sampling in selecting 30% of the target population. The sample size of the study came to 101 respondents. The study utilized primary data that was gathered utilizing semi- structured questionnaires. Inferential and descriptive measurements of statistics were utilized to evaluate the quantitative data while making use of the Statistical Package for Social Sciences (SPSS version 20). Descriptive statistics utilized percentages, frequencies, means and standard deviations. Inferential statistics in the study included correlation analysis and regression analysis were used to determine the relationship between the study’s independent variable and the dependent variable. The study used figures and tables to present the analyzed data.

The study showed that Search Engine Marketing had allowed firms to create solutions and plans to attract consumers to their products and services, and was used in the organizations to increase the position of the companies and their products in the results listings for selected keywords and phrases. Search Engine Marketing had been used to increase links from other websites to the companies’ web pages, even though its factors were notoriously difficult to enumerate. The companies had good websites with a good design used to attract, and retain customers, and using SEM for advertisement had enabled the companies to gain more new customers, however, search engines’ revenues are typically lower when companies spend more on Search Engine Marketing.

iv the service provided consistent and better customer experience, thus maximizing the companies’ potential in enhancing their competitiveness.

The study concludes that search engines play a great role in linking firms when using the Internet to build company image and find target customers. Interactive e-mail responses to the company’s e-mail advertisements helped them to develop a strong relationship with their customers, and their e-mail marketing campaigns had produced twice the return on investment compared to other forms of online marketing.

The study recommends the management of the Kenyan automobile companies to secure a system that would facilitate their ability to enumerate SEM factors in their organizations. This would enable them to understand their ROI from SEM investment which would facilitate their ability to make it advantageous to the firm since search engines’ revenues are lowered by huge spending on SEM.

ACKNOWLEDGEMENT The procedure of this research study has been a brilliant learning experience in my scholarly life. It was loaded with difficulties and rewards. The fulfillment of my present research study prompts a fresh start and a step forward in my plans and endeavors.

I am appreciative to God for his boundless beauty and for empowering me to begin and finish my studies without hindrances. Am most obligated to my supervisor Dr. Kiriri for his unique supervision, support, patience, help, support and diligent assistance on matters relating to this study. Am also grateful to United States International University - Africa in Nairobi for allowing me to pursue my Master’s Degree in Business Administration.

Additionally, I wish to appreciate the help, support and encouragement that I received from my family and companions during my research period. They made it feasible for me to strike the balance between my family and academic obligations.

I am likewise appreciative of my manager/ supervisor and colleagues whom I may not mention because they are many for their constant encouragement that echoed throughout my coursework, and some of whom helped me source for materials to accomplish my MBA course successfully.

DEDICATION

This study is dedicated to my family for their generous sacrifice, understanding and support during the research and my study.

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TABLE OF CONTENTS STUDENT’S DECLARATION ...... ii COPYRIGHT ...... iii ABSTRACT ...... iv ACKNOWLEDGEMENT ...... vi DEDICATION...... vii LIST OF TABLES ...... x LIST OF FIGURES ...... xii LIST OF ABBREVIATIONS ...... xiii

CHAPTER ONE ...... 1 1.0 INTRODUCTION...... 1 1.1 Background of the Study ...... 1 1.2 Statement of the Problem ...... 4 1.3 Purpose of the Study ...... 4 1.4 Research Questions ...... 5 1.5 Significance of the Study ...... 5 1.6 Scope of the Study ...... 6 1.7 Definition of Terms...... 6 1.8 Chapter Summary ...... 7

CHAPTER TWO ...... 8 2.0 LITERATURE REVIEW ...... 8 2.1 Introduction ...... 8 2.2 SEM Marketing and Competitiveness of Automobile Companies ...... 8 2.3 E-mail Advertising and Competitiveness of Automobile Companies ...... 12 2.4 Online Advertising and Competitiveness of Automobile Companies ...... 17 2.5 Social Media Marketing and Competitiveness of Automobile Companies ...... 21 2.6 Chapter Summary ...... 25

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CHAPTER THREE ...... 26 3.0 RESEARCH METHODOLOGY ...... 26 3.1 Introduction ...... 26 3.2 Research Design...... 26 3.3 Population and Sampling Design ...... 26 3.4 Data Collection Methods ...... 29 3.5 Data Collection Procedures...... 29 3.6 Data Analysis Methods ...... 30 3.7 Chapter Summary ...... 31

CHAPTER FOUR ...... 32 4.0 RESULTS AND FINDINGS ...... 32 4.1 Introduction ...... 32 4.2 Response and Reliability Rate ...... 32 4.3 Demographic Information ...... 33 4.4 SEM and Competitiveness of Automobile Companies ...... 36 4.5 E-mail Advertising on Competitiveness of Automobile Companies ...... 42 4.6 Online Advertising on Competitiveness of Automobile Companies ...... 48 4.7 Social Media Marketing on Competitiveness of Automobile Companies...... 54 4.8 Chapter Summary ...... 61

CHAPTER FIVE ...... 62 5.0 DISCUSSIONS, CONCLUSIONS, AND RECOMMENDATIONS ...... 62 5.1 Introduction ...... 62 5.2 Summary ...... 62 5.3 Discussions ...... 64 5.4 Conclusions ...... 70 5.5 Recommendations ...... 72

REFERENCES ...... 74 APPENDICES ...... 82 APPENDIX I: QUESTIONNAIRE ...... 82 APPENDIX II: MAJOR MOTOR VEHICLE DEALERS IN KENYA ...... 88

LIST OF TABLES Table 3.1 Population Distribution ...... 27 Table 3.2 Sample Size Distribution ...... 28 Table 4.1 Cronbach Alpha Reliability Rate ...... 33 Table 4.2 Organization Worked For ...... 35 Table 4.3 SEM Solution Creation ...... 36 Table 4.4 SEM and Company Positioning ...... 37 Table 4.5 Difficult Enumeration of SEM Factors ...... 38 Table 4.6 SEM and Company Image ...... 38 Table 4.7 Use of SEM for Advertisement ...... 39 Table 4.8 SEM Revenues ...... 40 Table 4.9 Correlations for SEM and Competitiveness of Automobile Companies ...... 40 Table 4.10 Model Summary for SEM and Competitiveness of Automobile Companies .. 41 Table 4.11 Analysis of Variance for SEM & Competitiveness of Automobile Companies...... 41 Table 4.12 Regression Coefficients for SEM & Competitiveness of Automobile Companies...... 41 Table 4.13 Promotional Mail Software ...... 42 Table 4.14 E-Mail Recipients ...... 43 Table 4.15 Consistent Experience...... 43 Table 4.16 Information Distribution ...... 44 Table 4.17 Foster Strong Customer Relations ...... 45 Table 4.18 Return on Investments ...... 45 Table 4.19 Invasion of Privacy ...... 46 Table 4.20 Correlations for E-Mail Advertising and Competitiveness of Automobile Companies...... 47 Table 4.21 Model Summary for E-Mail Advertising and Competitiveness of Automobile Companies...... 47 Table 4.22 Analysis of Variance for E-Mail Advertising and Competitiveness of Automobile Companies ...... 47 Table 4.23 Regression Coefficients for E-Mail Advertising and Competitiveness of Automobile Companies ...... 48 Table 4.24 Correlations for Online Advertising and Competitiveness of Automobile Companies...... 52 x

Table 4.25 Model Summary for Online Advertising and Competitiveness of Automobile Companies...... 53 Table 4.26 Analysis of Variance for Online Advertising and Competitiveness of Automobile Companies ...... 53 Table 4.27 Regression Coefficients for Online Advertising and Competitiveness of Automobile Companies ...... 54 Table 4.28 Business Environment ...... 54 Table 4.29 Social Media Feedback ...... 56 Table 4.30 Correlations for Social Media Marketing and Competitiveness of Automobile Companies ...... 59 Table 4.31 Model Summary for Social Media Marketing and Competitiveness of Automobile Companies ...... 60 Table 4.32 Analysis of Variance for Social Media Marketing and Competitiveness of Automobile Companies ...... 60 Table 4.33 Regression Coefficients for Social Media Marketing and Competitiveness of Automobile Companies ...... 60

LIST OF FIGURES Figure 4.1 Response Rate ...... 32 Figure 4.2 Gender ...... 33 Figure 4.3 Age ...... 34 Figure 4.4 Education ...... 34 Figure 4.5 Years with the Organization ...... 36 Figure 4.6 SEM and Link Increment ...... 37 Figure 4.7 Good Company Website...... 39 Figure 4.8 E-Mail Marketing Model Development ...... 42 Figure 4.9 E-Mail Advertisements Guide ...... 44 Figure 4.10 Indiscriminate E-Mail Distribution ...... 46 Figure 4.11 Client Engagement ...... 48 Figure 4.12 Product and Service Update ...... 49 Figure 4.13 Online Advertising Coverage ...... 49 Figure 4.14 Online Advertising and Customer Relationship ...... 50 Figure 4.15 Online Advertising and Customer Convincing ...... 50 Figure 4.16 Online Advertising and Customer Awareness ...... 51 Figure 4.17 Online Advertising and Desire Arousal ...... 51 Figure 4.18 Persuasive Online Adverts ...... 52 Figure 4.19 Use of Twitter ...... 55 Figure 4.20 Social Media Effectiveness ...... 55 Figure 4.21 User-Generated Content ...... 56 Figure 4.22 Social Media Focus ...... 57 Figure 4.23 Social Media Tracking and Measuring...... 57 Figure 4.24 Social Media and Conventional Goals ...... 58 Figure 4.25 Social Media and Communication ...... 58 Figure 4.26 Social Media and Personalized Relationships ...... 59

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LIST OF ABBREVIATIONS

BCC: Blind Carbon Copy CR: Conversion Rate CTR: Click-Through Rate EA: East Africa ICT: Information and Communication Technology IDT: Innovation Diffusion Theory IT: Information Technology KMI: Kenya Motor Industry KMIA: Kenya Motor Industry Association KPI: Key Performance Indicators KVM: Kenya Vehicle Manufacturers OR: Opening Rate PPC: Pay-Per-Click ROI: Return on Investment SEA: Search Engine Advertisement SEM: Search Engine Marketing SEO: Search Engine Optimization SPSS: Statistical Package for Social Sciences TAM: Technology Acceptance Model VDP: Vehicle Details Page

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CHAPTER ONE 1.0 INTRODUCTION 1.1 Background of the Study Today’s customer is rapidly changing in terms of behavior and needs in the media industry (Wymbs, 2011). In the light of the changes, information technology (IT) has taken a central role in mediating the relationship between businesses and their customers (Schneider, 2010). The competitive arena also has largely been shaped by the degree of responsiveness of businesses to customer needs. The changes that firms in the automobile industry understand how communication with customers is negotiated rather than passively received. The internet and new digital technologies are transforming the practice of marketing in order to satisfy consumers who have more choices, more services, more media, more messages, and more digital conversations than ever (Weber & Henderson, 2014).

One of the outcome of new digital technologies that is transforming the practice of marketing is digital marketing (Weber & Henderson, 2014). Digital marketing is widely used to promote products or services and to reach consumers using digital channels. It extends beyond internet marketing including channels that do not require the use of Internet and includes mobile phones, social media marketing, display advertising, search engine marketing and many other forms of digital media (Kotler, 2011). The marketing industry is experiencing new growth that extends beyond traditional revenue streams. This is in regards to the inclusion of the online medium of the Internet or new media, which is taking content to mass audiences using digital media channels and devices (Wymbs, 2011). Across the world therefore, marketers increasingly bring brands closer to consumers’ everyday life and technology is playing a vital role in improving the quality of services provided by the business units (Vinerean et al., 2013).

The automobile industry, just like the other industries in Kenya is embracing digital marketing technology with its due advantages. Digital marketing in particular offers the traditional players in the industry the opportunity to add a low-cost advertising channel to their numerous platforms (Were, 2011). The industry plays a significant role in the growth of economies all over the world especially in Kenya amid challenges emanating from globalization, technological advancement and more enlightened customers. Due to these challenges, automobile companies have had to change tact in order to be 1 competitive. The advancement in technology has provided an opportunity for companies to advertise their products and services with ease through innovative ways. This study seeks to establish whether digital marketing in Kenya’s automobile companies boosts their competitiveness.

The 20th Century saw the dawn of another new advertising age. The advent of radio and television offered completely new medium through which advertisers could reach out to prospective clients. Towards the century a new force, the internet, began moving out of the realm of ‘techies’ and early adopters to become a valuable business and communication tool for the masses. The era of digital marketing was born with the availability of internet (Christensen, 2015). It is similar to the traditional marketing where people (marketers) connect with other people (consumers) to build relationships and ultimately drive sales and enhance business competitiveness (Thackery & Neiger, 2013).

Technology merely affords the marketer, new and exciting platforms that allow them to connect with their existing and prospective clients in increasingly diverse and relevant ways (Dahlen, 2010). Digital marketing thus does not entail understanding the underlying technology, but rather about understanding people, how they’re using that technology, and how you can leverage that to engage with them more effectively (Kumar et al., 2016). Digital marketing creates value for customers and enhances the development of communications network between the companies and individuals. It is a business effort to inform, converse, promote and sell products and services over digital platforms.

Increasing competition in the world has resulted to a growing interest in the organizational strategies to gain a competitive advantage (Christensen, 2015). The ability to adapt the company’s digital marketing strategy to fit the current marketplace is a mandatory skill. In the current market, change is different from past evolutions and adapting marketing strategies alone doesn’t guarantee company’s competitiveness. The digital marketing model has to be developed from the ground up because anything less puts a company in the position of playing catch up to the leaders. New digital marketing technologies like social media, mobile, and analytics are advancing rapidly on the economic landscape (Lee et al., 2013). These developments have not only posed threats to automobile companies operating on these markets, but also created new opportunities to engage in profitable new ventures and businesses. In 2 sustaining competitiveness, automobile companies face many pressures and constraints due to their limited resources of finance, skilled manpower and advanced technology that need to move with the changing environment and in particular markets and customers (Wright et al., 2012). The current business environment has compelled the companies to rethink digital marketing, not as an expense, but as opportunity to boost the bottom line in terms of competitive advantage.

The Kenyan Automotive industry is mainly concerned with the sell and supply of motor vehicles. There are various organizations whose business is motor vehicle dealership within the country, with the most recognized being Toyota (East Africa), General Motors (GM), DT Dobie, Cooper Motor Corporation (CMC), and Simba Colt (Statistical Abstract 2011). The industry also has three vehicle assembly plants that concentrate on the assembly of heavy commercial vehicles, and pick-up trucks.

According to Kenya Motor Industry (KMI) data and Statistical Abstract (2011), the reputable traders face strong rivalry from imported second-hand vehicles that are sourced from the United Arab Emirates (UAE), and Japan. Second-hand car imports in Kenya currently account for 70 percent of the market share. The last decade witnessed a significant decline in the number of new vehicles sold in the country. There has been a consistent recuperation over the most recent four years, yet the numbers accomplished still miss the mark concerning the numbers recorded 10 years prior. In 2004, the leading motor vehicle companies recorded sales of 9,979 units. Although 27% better than the previous year, this is still well below the levels achieved in the early 1990’s.

The Kenya Motor Industry Association (KMIA), the delegate body of the corporate members in the motor vehicle industry, has been campaigning hard to turn around this pattern. Some of these measures have helped the industry recover from its lowest point in 2000, when only 5,869 units were sold. On their part, the companies themselves have become more innovative in responding to customer needs. Some of the measures that KMI has been advocating include: Implementation of strict criteria on importation of second hand vehicles, Incentives to promote local assembling of commercial vehicles and Export incentives aimed at encouraging car manufacturers to expand operations in the region. Pressures in the highly competitive automotive manufacturing sector increase and over-capacity, particularly in vehicle assembly, mean that most suppliers face unrelenting 3 price pressure. The rapid development of the low-cost labor economies in Eastern Europe, South East Asia, China and India is putting enormous pressures on labor intensive suppliers.

1.2 Statement of the Problem In today’s dynamic global competitive business environment, technology-based marketing is a must for organizations to survive (Kotler, 2012). In particular, the emergence of Information and Communication Technology (ICT) has forced automobile companies to shift their operation from the traditional style to e-business and e- advertising philosophy for sustainability. Due to the increasing use of digital media by consumers and the tendency of more potential users joining the digital age, more companies are turning to digital marketing to reach their target markets (Christensen, 2015).

Automobile companies often need to overhaul their marketing strategies with the goal of maximizing profitability and increasing their market share. Past literature accentuated the need to relate a company’s performance to its marketing activities (Kotler, 2012). Other studies focused on organizational size and related that to performance (Dahlen, 2010; Thackery & Neiger, 2013). Dahlen (2010) notes that embracing digital marketing technology owing to the associated advantages which offers the traditional players in the sector the opportunity to add a low-cost advertising channel to their numerous platforms, and Weber and Henderson (2014) notes that, using the web, marketers are able to shift from the traditional one-to-one format to revolutionary one-to-many format. Despite the above mentioned advantages associated with digital marketing, very limited research has been undertaken regarding the effects of digital marketing on competitiveness in the automobile sector in Kenya, and this study sought to fill the knowledge gap by answering the question; what is the effect of digital marketing on competitiveness of automobile companies in Kenya?

1.3 Purpose of the Study The purpose of the study was to examine the effect of digital marketing on competitiveness of automobile companies in Kenya.

1.4 Research Questions The study was guided by the following research questions: 1.4.1 How does search engine marketing affect competitiveness of automobile companies in Kenya? 1.4.2 How does e-mail advertising affect competitiveness of automobile companies in Kenya? 1.4.3 How does online advertising affect competitiveness of automobile companies in Kenya? 1.4.4 How does social media advertising affect competitiveness of automobile companies in Kenya?

1.5 Significance of the Study It is expected that the findings of the study may be of significant to various parties

1.5.1 Automobile Industry It is anticipated that the data and study may trigger and guide discussions amongst investors and stakeholders in the automobile industry. This may enhance their formulation of appropriate strategies of channeling financial aid in digital marketing in a manner that may ensure that the investors get due profits ultimately.

1.5.2 Government The findings of the study are expected to be useful to the Government and the Kenya Motor Industry Association as they may provide better information on some of the digital marketing platforms and provide the required incentives and policies since the automobile industry plays an important role in Kenya.

1.5.3 Academicians Researchers who would wish to undertake further studies in this area may find the research more useful by gaining valuable background on digital marketing and competitive advantage in the automobile industry in Kenya. The study was expected to help researchers and academicians to expand their research into the industry in Kenya as literature review and contribute to the existing knowledge, address and provide the background information to research organizations, individual researchers and scholars who may want to carry out further research in this area. 5

1.6 Scope of the Study This study covered the automobile industry within Nairobi and its neighboring towns of Kiambu, Thika, Athi River and Rongai. The targeted auto firms were both locally owned and foreign. Data was collected in the month of June and July 2017. Although there are many more digital marketing platforms in Kenya, this study was limited to search engine marketing (SEM), E-mail advertising, online advertising and social-media marketing. The study had a limitation of respondents refusing to divulge the needed information, and to overcome this, the researcher got in touch with managing directors of the companies and explained the information sourced would be used for academic purposes, which facilitated data collection.

1.7 Definition of Terms 1.7.1 Digital Marketing According to Kaplan and Norton (2001), this is a business devise used to quantify the general performance of an organization. It gives a thorough perspective of a business in light of its goals and objectives. This approach of performance measurement supplements the traditional financial measures with non- financial measures. Balanced scorecard performance focuses on employees, business processes, and consumers as compared to to traditional financial processes which are insufficient. This is on account of Key Performance Indicators (KPI) for firms are diverse crosswise over firms, they rely upon the sort of firm, and they could likewise be subjective or potentially quantitative.

1.7.2 Search Engine Marketing Search engine marketing (SEM) is a term used for paid advertising in search engines where firms buy keywords and when a user makes a search query using that keyword, the firm’s advert appears next to the search result listings (Chong et al., 2010). Search engine marketing works on a pay-per-click basis (PPC) which means that firms only pay for their adverts if a user clicks on them.

1.7.3 E-mail Advertising E-mail advertising refers to the use of email for sending promotional messages to internet user and has been considered one of the more effective methods of online advertising and marketing (Kirkpatrick, 2012). In email advertising, firms use email marketing software’s

6 to send mailings to consumers. The recipients of email advertising need to have opted in to receive such emails.

1.7.4 Online Advertising This refers to commercials that are presented on the internet and are very important in creating awareness of an organization in terms of its products and services. Online advertising comprises several forms of marketable content ranging from electronic advertisements that are very similar to traditional advertisements to formats like the corporate web sites which are different from traditional advertisements. Schlosser et al. (2010) observe that online advertising consists of a variety of methods including web banner advertising, blog advertising, promotional advertising, and social network advertising among others.

1.7.5 Social Media Marketing Refers to communications on company’s own website or through its social presence (Smith & Chaffey, 2015). It 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 distributor that is characteristic for traditional marketing. 1.8 Chapter Summary This chapter looks at the background of the study, the research problem identified, research objective and value of the study. The background is based on the study topic which is to determine how digital marketing affects competitiveness automobile companies in Kenya. Chapter two deliberates on the literature review, chapter three deliberates on the research methodology, chapter four deliberates on the results and findings, and chapter five deliberates on the study discussions, conclusions, and recommendations.

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

The chapter presents literature reviews on the relationship between digital marketing and competitiveness. The dialog of the part is guided by the exploration inquiries as illustrated in Chapter One which incorporate: How does search engine marketing affect competitiveness of automobile companies in Kenya?; How does e-mail advertising affect competitiveness of automobile companies in Kenya?; How does online advertising affect competitiveness of automobile companies in Kenya?; and how does social media advertising affect competitiveness of automobile companies in Kenya?

2.2 SEM Marketing and Competitiveness of Automobile Companies

Increasing competition in the world has resulted to a growing interest in the organizational strategies to gain and maintain a competitive advantage. There are two different classical perspectives that try to define competitiveness. In general, macroeconomic perspective is known as the perspective that identifies what international competitiveness is in terms of price-based factors. Search engine marketing (SEM) is a term used for paid advertising in search engines where firms buy keywords and when a user makes a search query using that keyword, the firm’s advert appears next to the search result listings (Chong et al., 2010). Search engine marketing works on a pay-per- click basis (PPC) which means that firms only pay for their adverts if a user clicks on them (Cronin, 2014). Thus, if the ad appears but the user does not click it, the firm incurs no costs for the advertising. Classifieds, which includes sites that advertise property, recruitment, motoring and other forms of advertising that used to be the preserve of traditional media.

According to Chaffey and Smith (2010), Search Engine Marketing has been found to enable organizations to achieve better rankings in the Google search engine, build their businesses’ online presence, generate sales leads, and enhance the marketing performance. Market attractiveness epitomizes the desire of the firm to be present within a particular marketplace. The attractiveness dictate the nature of how and why there is a

8 need to develop and implement viable marketing strategy so as to impact on the firm’s competitiveness.

2.2.1 SEM and Competitive Advantage

SEM allows firms to create solutions and plans to attract consumers to their products and services, hence enable them gain a greater representation in the global industry market (Chaffey & Smith, 2010). Bharat and Louis (2014) and Chong et al. (2010) found that search engines enhance a firm’s competitive advantage by facilitating firms to reach more customers, convey the essence of their products’ brands and stimulate conversions while driving search performance and achieve above average performance.

Cheffey et al. (2006) search engine marketing (SEM) can be used to increase the position of a company or its products in search engine natural or organic results listings for selected keywords or phrase. According to Smithson et al. (2015), SEM gathers the techniques leading to a better indexing of one’s site by one or several targeted search engines and identifies factors in a webpage which would impact the accessibility to firms’ products and services. Its role is to achieve the highest position or ranking on search engines, such as Google, Yahoo! and MSN Search and so on, after a specific combination of keywords or key phrase that is typed in. The final goal is for the site to be better ranked by one or several targeted search engines and therefore appearing higher in their results lists for specified requests (Gandour and Regolini, 2011).

2.2.2 Company/ Organizational Ranking Search engine marketing helps in enhancing company website presence. Companies try hard to attain higher rankings for their websites because when a site appears at the beginning of the search results list or top of the page and more frequently, the greater the likelihood that users will visit the site (Enge et al., 2012). To achieve higher sales, SEM provides a variety of techniques, it includes increasing links from other websites to company web pages, editing the content of the website, reorganizing the structure and organization of company website, and coding changes (Shih et al., 2013). The additional interest in website ranking is attributed to the fact that 73 percent of search engine users never look beyond the first page of returned results.

SEM factors are notoriously difficult to enumerate, as search engines do not reveal the specific factors used when determining the ranking of a website (Lourdes and Paloma 2013). SEM factors can generally be categorized into two groups (Enge et al., 2012; Evans). The first group, known as on-page factors, includes those factors related to information that can be gathered directly from the pages of a website whose relevance is to be optimized, such as the existence and frequency of keywords. The second group, known as off-page factors, includes those factors related to information about the website being optimized that can be collected from other, external websites. The easiest way to optimize a web site is to enter appropriate text in the web site's title, Meta description, headings, and page content that search engines recognize (Shih et al., 2013).

According to Rainer et al. (2014), the primary advantage of SEM is that a company can be ranked in top 10 without any fuss. Users are most likely to choose from the addresses appearing on the first page of results. A successful search engine marketing strategy can generate steady levels of traffic to the website, a great return on investments, and enhance awareness of brands and vendors (Shih et al., 2013). If the firm’s site is designed and optimized properly, SEM is cost effective compared with conventional marketing, Search Engine Advertisement (SEA) and pay per click (PPC) advertising. Using SEM saves much time and money and can stay longer than other tools. SEM leads to the increased brand visibility for a firm’s your site, the more times a company’s website is visible in the search results, the better the company’s online visibility (Smithson et al., 2011). Increased accessibility leads to higher sales for a firm’s products and services (Lourdes and Paloma, 2013).

2.2.3 Company/ Organizational Image The search engine is also coming to play a greater role as a critical link between firms that use the Internet to build their image and find their target customers (Shih et al., 2013). To achieve excellent results, it is not enough to use SEM. The company needs to have a good website with a good design to attain the customer. The content on the website should be useful, usable, desirable, accessible, credible, and valuable. In general, if the company manages to achieve the above-mentioned points, this will result in improving the company image as well as growth in sales, market share, and credibility and referral businesses online.

Evans’ (2007) paper sought to identify the most popular techniques used to rank a web page highly in Google. The paper presents the results of a study into 50 highly optimized web pages that were created as part of a Search Engine Optimization (SEO) competition. The study focuses on the most popular techniques that were used to rank highest in this competition, and includes an analysis on the use of PageRank, number of pages, number of in-links, domain age and the use of third party sites such as directories and social bookmarking sites. A separate study was made into 50 non-optimized web pages for comparison. The paper provides insight into the techniques that successful SEM use to ensure a page ranks highly in Google. Recognizes the importance of Page Rank and links as well as directories and social bookmarking sites.

2.2.4 Customer Attraction and Satisfaction Singh et al. (2011) investigated the impact of SEM on Advertisement in IT companies of north India. The study used quantitative and qualitative research methodology. Google, Bing MSN, and Yahoo were found to be the most common search engines that consumers use when they search for product or services online. The majority or about 80 H. S. Khraim 90% of the customers select the product from first page only and out of that 90% more than 80% select the product or services from first three or four. The study concluded that companies using SEM for the purpose of advertisement are getting more new customer than the companies using traditional methods.

Berman and Katonay (2012) studied the impact of SEM on the competition between advertisers for organic and sponsored search results. They find that a positive level of search engine optimization improvement may enhance the search engine’s positioning quality and consequently the fulfillment of its visitors. Results imply that high quality sites have an advantage as they can always use sponsored links as a backup option if their organic link does not place well. In the deficiency of sponsored links, the organic ranking is enriched by SEM on the off chance that and just if the quality gave by a site is adequately decidedly corresponded with its valuation for purchasers. That is, if sites' valuations for consumers are correlated with their qualities then consumers are better off with some positive level of SEM than without. By contrast, if there are sites that extract high value from visitors yet provide them with low quality then SEM is generally detrimental to consumer welfare. Because of the high expected quality on the organic side, buyers start their pursuit with a natural snap. In spite of the fact that SEM can 11 enhance customer welfare and the result of quality sites, they find that the search engine’s incomes are ordinarily lower when promoters spend more on SEM and in this way less on sponsored links.

2.2.5 Accessibility Lourdes and Paloma (2013) conducted an interesting research on the relationship between SEM on page factors and web accessibility. Access to web content is the central link between SEM and accessibility. The research described arose from an investigation into the observed phenomenon that pages from accessible websites regularly appear near the top of search engine (such as Google) results, without any deliberate effort having been made through the application of SEM techniques to achieve this. The research provides firm evidence that the overlapping factors not only serve to ensure the accessibility of a website for all users, but are also useful for the optimization of the website’s search engine ranking. The paper demonstrates that any SEM project undertaken should include, as a prerequisite, the proper design of accessible web content, in as much as search engines will interpret the web accessibility achieved as an indicator of quality and will be able to better access and index the resulting web content.

The purpose of Madleňák et al. (2015) article is to find the suitable Internet marketing tools that increase the number of visitors at the business website. For the Analysis of website traffic, Google Analytics was used. While Facebook Insights tool and correlation analysis was used to find the degree of dependence between visitors’ streams at personal and official business website. Results of the research show a clear correlation between website traffic at business and personal websites as well as clear correlation between competition at social network and business websites traffic. The researchers suggested that the creation of primary website must be supported by additional activities as a social network activities, frequent actualization of website and creation secondary websites, which are connected with primary website.

2.3 E-mail Advertising and Competitiveness of Automobile Companies Microeconomic perspective tries to identify firm level competitiveness with non-price based factors investigating rivalry among companies (Anna & Ken, 2013). The ability to adapt the company’s digital marketing strategy to fit the current marketplace is a mandatory skill. In the current market, change is different from past evolutions and 12 adapting marketing strategies alone doesn’t guarantee company’s competitiveness. Email marketing model has to be developed from the ground up because anything less puts a company in the position of playing catch up to the leaders.

E-mail advertising refers to the use of email for sending promotional messages to internet user and has been considered one of the more effective methods of online advertising and marketing (Kirkpatrick, 2012). In email advertising, firms use email marketing software’s to send mailings to consumers. The recipients of email advertising need to have opted in to receive such emails. Firms also often buy lists of email addresses from third parties that have compiled email address data from for example competitions, surveys or registration to different kinds of services during which the consumer has given consent for the email addresses to be used for marketing purposes. The recipients of email advertising need to have opted in to receive such emails. To make this platform more effective, firms often buy lists of email addresses from third parties that have compiled email address data from for example competitions, surveys or registration to different kinds of services during which the consumer has given consent for the email addresses to be used for marketing purposes (Anna & Ken, 2013).

The success of e-mail marketing campaigns is usually evaluated on three dimensions – the number of people opening the e-mail, the number of these that read the message and click on it to go to the company’s campaign’s landing page, and the number of these who end up buying or registering as a result of the e-mail (Goliger, 2014). These dimensions are known as e-mails’ Opening Rate (OR), Click-Through Rate (CTR) and Conversion Rate (CR), respectively. Studies show that CTR is higher when using the company’s name in the subject line, as opposed to not mentioning it at all (Miller, 2013; Raad et al., 2010; Peppard, 2012).

Every e-mail marketing campaign should follow the basic set of rules in order to make the campaign more effective. Firstly, the company should have a clear vision of what the objective of the campaign is (Zhu, 2014). Secondly, ensuring that the company has the recipient’s permission to receive marketing related e-mails is crucial as the message may be considered as being unwanted junk mail otherwise. This can be achieved by asking potential customers to register for a marketing list. A marketing list can be divided into several categories in order to help making e-mails more personalized for certain customer 13 groups (Peppard, 2012). Lastly, e-mail messages including informative content are generally considered more valuable by clients than advertising messages (Miller, 2013).

All e-mail programs contain a Blind Carbon Copy (BCC) option which should be used in order to conceal each recipient’s e-mail address when the campaign requires contacting several different companies simultaneously (Goliger, 2014). Having permission to contact the client via e-mail does not mean that the message will automatically be opened. Therefore, the subject of the e-mail should indicate the content of the message clearly because emails with vague or suspicious subject lines are more likely to be considered junk mail. Furthermore, attaching files should be avoided as large files may lengthen the e-mail download time and attachments are rarely opened (Zhu, 2014).

Marketing e-mails are often used to promote company web sites and therefore a web site address should be added to each e-mail message to increase web site traffic. Following general guidelines for marketing e-mails may not be sufficient and many recipients may choose to unsubscribe even if the marketing campaign is professionally executed. To discover what is effective and what is not, response rates and un-subscriptions should be monitored closely (Anna & Ken, 2013). This allows the company to improve its future marketing campaigns. Successful campaigns often lead to an increase of incoming mail and the company can expect to receive feedback and enquiries regarding sent e-mails. Therefore, it should be ensured that the company is able to respond as quickly as possible to received enquiries (Goliger, 2014).

2.3.1 Awareness Increase Email marketing has significant impact on increasing the prospective customers subscribing to their organizations’ products via email (Park et al., 2010). It also provides a consistent and better customer experience; therefore, firms that maximize on its potential can enhance their competitiveness and maintain a good marketing position. E- mail marketing campaigns are expected to keep growing and everyday more and more marketers are adopting this type of digital marketing. However, there is still no perfect way to create a trustable, engaging and effective e-mail marketing campaign and there is very little knowledge about such issues. Several companies have already made tests to evaluate the performance of their e-mail campaigns. Subject line, creativity, time of the day and call-to-action button were the variables most testes, whereas subject line and 14 creativity were the ones with the highest impact on campaign performance (Experian, 2013).

E-mail advertising guides the organization on how to improve its products with reference to customers’ feedback on the company’s email address (Jensen, 2012). According to Zhu (2014), e-mail advertising is efficient in facilitating information on specific topics regarding the organization’s products and services. In addition, it is a cost-effective means of advertising, well-suited for conveying information, precipitating action, and creating brand/product image, awareness and objectives. However, it was seen as ineffective for stimulating emotions or getting attention. Email marketing is being progressively accepted as a lucrative marketing instrument and Niall (2010) states that it is one of the greatest and effective online advertising tools because of its great response rate.

2.3.2 Affordable Advertisement and Distribution Marketing through email currently enjoys success as a marketing tool due to the benefits that e-mail marketing offers marketers (Schwartz, 2010). E-mail allows for a cheaper and faster distribution to customers and also influences customers to respond faster. Kover (2010) noted that customers who find e-mails useful tend to want the company to stay in regular contact with them, suggesting that e-mail offers companies the opportunity to become an important avenue for customers to obtain information. According to Jensen (2012), while customers who receive many e-mail advertisements are more likely to visit the company stores, sending them hyperlinks in e-mails may not be as useful.

Rowley and Slack (2011) noted that the efficiency of email marketing increases with e- mail responses by customers back to the marketer. They add that in the digital domain, marketers and customers can shape the content of promotional messages together. Since highly focused, customized communications can be beneficial to building long-term relationships between companies and their customers, Arnold and Tapp (2014) opines that an interactive e-mail response to e-mail advertisements aids the development of the relationship between marketers and their customers. Jackson and DeCormier (2014) perceived that email gave advertisers correspondence that licenses relationship building and ongoing cooperation with clients. E-mail advertisement also offers the convenient

15 function of forwarding messages received to other people as well as the forwarding of e- mail advertisements to other customers in terms of word-of-mouth.

Wreden (2010) described views email marketing as the “Internet’s killer application” owing to the precision with which an email can be tailored, targeted and tracked at minimal costs given that digital processing allows companies to send out huge numbers of emails. The medium is push rather than pull and the response rates are high despite the fact that the consumer does not have to initiate the interaction (Di Ianni, 2012; Rosenspan, 2013). Peppers and Rodgers (2012) claim that clear benefits including high response rates and low costs are rapidly turning email marketing into an invaluable tool.

2.3.3 Return on Investment According to Pavlov et al. (2014), e-mail marketing campaigns produce twice the return on investment (ROI) that other forms of online marketing. There is a significant relationship between the effectiveness and profitability of e-mail marketing campaigns and Ansari (2012) concluded that the design of e-mail is essential in determining the CTR, and that this rate can increase until 62% when the design of the e-mail is customized. Choosing the number of links presented in the e-mail, the order of those links, the type of e-mail and configuring the layout are hence important variables to take into account.

Mehta and Sividas (2015) noted that email is a relatively new medium for marketing and in the future, consumer response is likely to be adversely affected by increasing traffic volume. Turban et al. (2010) noted that cases of spam i.e the act of aimless circulation of messages without authorization of the collector and without thought for the messages' propriety may likewise block the utilization of this medium for marketing. Raad et al. (2010) found that e-mail deliverability is still an issue for legitimate marketers as e-mail marketing is often confused with spam. In other words, spam messages are sent to people’s mailbox without their permission and this type of e-mail might be either welcome or not as some customers might perceive them as an unethical way of e-mail marketing.

Windham (2014) notes that unsolicited email is viewed as an attack of security and could turn into a major issue for a few clients. This taints the reputation of email marketing. In 16 any case, to abstain from being seen as spam, a few authors prescribed that organizations ought to limit the messages they send and get recipient's authorization (Wreden, 2010; Wright & Bolfing, 2011). Adestra (2013) advises on opt-in e-mails which are sent with the permission of the customer as they allowed the company to use their e-mail to send them e-mail marketing campaigns. These are more effective comparing to spam e-mails.

2.4 Online Advertising and Competitiveness of Automobile Companies New digital marketing technologies including online marketing are advancing rapidly on the economic landscape. Rachel (2011) opines that in the last decade, the media, information and communications landscape has changed decidedly where technological and demographic developments, deregulation and the convergence of different media, information and communications markets have left an important mark on the configuration of the traditional markets. Online marketing refers to commercials that are presented on the internet and are very important in creating awareness of an organization in terms of its products and services.

According to Rachel (2011), this type of marketing started in 1994 when the first online advertisement on the web. Online advertising comprises several forms of marketable content ranging from electronic advertisements that are very similar to traditional advertisements to formats like the corporate web sites that are different from traditional advertisements. Schlosser et al. (2010) observe that online advertising consists of a variety of methods including web banner advertising, blog advertising, promotional advertising, and social network advertising among others.

2.4.1 New Product and Service Information Currently, technology advancement has allowed internet diffusion into to every part of firms and their clients’ lives because people now spend more time on internet (Chaudhun et al., 2010). As a result, this has created high possibilities for firms to engage clients who are internet users through online advertising. Marketers are therefore able to capture this opportunity to reach their consumers via online platforms to create awareness for their products, services, and to increase sales in the future. Online advertising has attracted more investment from marketers because of the high benefits attributed to this form of advertising. Online advertising is flexible and makes it easier for the companies like automobile firms to update their information on products and services promptly. This 17 allows the customers to find the latest news about the products and services offered by companies in the market.

Online advertising (internet advertising) is a very important part of digital marketing whereby firms can deliver the message about the products or services. It provides the content and ads that best matches to consumer interests (Chaffey & Smith, 2010). Advertisers should place more effective and relevant ads online because through online advertising, company well controls its budget and it has full control on time. In addition, online advertising is effective in mitigating increased competition. Online advertising enables firms to overcome the challenges of saturation of markets, is effective in introduction of new products and creates an avenue for access new markets.

2.4.2 Advertising Costs and Consumer Interaction According to Belch and Belch (2011), online advertising costs less compared to advertising via traditional media. Through online advertising, companies are able can reach and cover a larger target audience and geographical areas compared to traditional advertising at a lower cost, hence, proving its worth in today’s Internet saturated world. Marketers use the internet to deliver advertising message in more ways that are creative. Tsang and Tse (2013) posit that advertisement messages that pop up in the internet with attractive animations instead of merely words make it easier to capture a consumer’s attention. This often surprises and excite the consumers and allow them to enjoy the advertisement much more compared to traditional outlets.

Another benefit of online advertising is that it enables marketers to interact with their customers easily as consumers have the ability to collect information, participate in products design, explore promotions, arrange deliveries, sales and receive post purchase support (Pavlou & Stewart, 2010). This may help companies in understanding their consumers better to generate and manage close relationships. Bauer and Greyser (2012) noted that customers tend to form diverse attitudes, perceptions and behaviors towards online advertising. This is attributed to four key factors of online advertising, such as credibility, in-formativeness, pleasure and materialism.

2.4.3 Informational Responses Credibility refers to the clients’ perception towards the credibility, trustworthiness and believability of an online advertisement (MacKenzie & Lutz, 2011). In-formativeness defines the perception of the consumer regarding whether an online advertisement is a valuable resource that provides benefit towards the brand and latest information in the market. Pleasure refers to the individual mind-set of a consumer towards online advertising that is enjoyable, pleasurable, and exciting (O’Shaughnessy & O’Shaughnessy, 2012). Materialism as consideration given towards material acquisition as an important aspect of life, the pursuit of happiness, and considering number of possessions as a correlation towards success in life.

All the four factors are important in this research because they are common frequently used by other scholars who have undertaken research in areas similar to this study (Belch & Belch, 2011; MacKenzie & Lutz, 2011). These factors have been found to have a significant and positive relationship between consumers’ attitude and online advertising. Customers form different attitude towards the online advertisement that in turn influences their informational responses. Informational responses, according to Belch and Belch (2011), refer to process that consumers go thorough when responding to and online advertisement.

Online advertising convinces customers to purchase products or services through five stages which are awareness, interest, desires, convince and action. Rawal (2013) view awareness as the stage in online advertising that raises the consumer’s attention towards the message that is being advertised. The exposure to an online advertisement draws the consumers’ awareness towards the advertisement and advertised product or services. Keller (2013) defines awareness as the consumer awareness and ability to recall a brand or product. Awareness is an important factor in decision making by the consumer as it increases the likelihood that a particular brand or product is considered when making purchase decision (Keller, 2013). Vakratsas & Ambler (2011) argued that advertising must influence consumers in some way such as awareness, memory as well as attitude before it affects behavior. The objectives of online advertising are similar to those of conventional advertising media in which marketer use online advertising to reach desired target market and to increase brand awareness.

2.4.4 Influence Customer Decision-Making Rawal (2013) states that interest in online advertisement refers to the ability of the advertisement to generate consumer’s interest towards the advertised products and services. If, for instance, a company undertakes online advertising in entertaining or humorous way, they may create advertising liking among the consumers during the advertising exposure, which will in turn lead to interest in the advertised products and services. Heath and Gaeth (2013) offered strong support for the belief that better liking on online advertising leads to higher interest on the advertised brands and products. Consumers eventually get involved in evaluating products or services when they get interested in a particular product or service. Desire refers to the measure of ability of the online advertisement to arouse the consumers’ desire towards the advertised products’ or services by convincing them that the products or services will satisfy their needs (Rawal, 2013). Online advertising helps to in arouse the desire for advertised product or services among the consumers when they are aware and have created liking for the same (Polly & Mittal, 2015). A study Mangles (2013) found that one of the key benefits of online advertisement it increases the consumer’s desire in the products and services.

Convincible defines to how powerful an online advertisement is capable of influencing the consumers to view the advertising (Morvarid et al., 2012). For any online advertising to be persuasive, companies need to use images and proficiency to raise the trustworthiness of the advertising. Using of indirect persuasions such as pictures and images in online advertisement has increased than using words in the same advertisement. This is because detailed images serve as documentary evidence and this makes it more persuasive and influence consumers to view the online advertisement.

Rawal (2013) action refers to the situation where the online advertisement results to consumers’ decision towards purchasing the advertised products or services. It is the customers’ purchase intent that arises once convinced by the advertisement. When consumers have awareness on the online advertisement, they are more likely to form a liking and interest towards the advertisement or the products advertised. This increases their intention to purchase of the product or brand (Heath & Gaeth, 2013).

2.5 Social Media Marketing and Competitiveness of Automobile Companies Technological developments have not only posed threats to automobile companies operating in these markets, but also created new opportunities to engage in profitable new ventures and businesses. In sustaining competitiveness, automobile companies face many pressures and constraints due to their limited resources of finance, skilled manpower and advanced technology that need to move with the changing environment and in particular markets and customers (Pergelova et al., 2011). The current business environment has compelled organizations to adopt social media marketing, not as an expense, but as opportunity to boost the bottom line in terms of competitive advantage.

Social media marketing involves encouraging customer communications on company’s own website or through its social presence (Smith & Chaffey, 2015). It 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 distributor that is characteristic for traditional marketing. Savvy business owners have taken to Twitter as a tool for both promotions and for answering customer complaints in real-time. YouTube nets 4 billion page views daily and has attracted business owners to this free advertising platform. Moreover, Facebook has now given business owners the flexibility of coupon marketing and special promotions to a wider target audience (Kimani, 2012). The emerging marketing techniques using social media have enabled both customers and automobile companies to be more effective and productive in receiving and providing service.

In the present contemporary societies, social media channels are frequently to connect people using the Internet. From marketing and business perspective, social media marketing offers a large variety of new opportunities for companies to promote their brand, products and services (Laroche et al., 2012). This is boosted by the personal autonomy and freedom that Internet offers because people are actively connecting with each other and talking about their experiences, sharing their opinions about products and services they have tested or even just heard about. Social networking sites and social media have increased in popularity at a global level. Social media networks have profoundly changed the propagation of information by making it incredibly easy to share and digest information on the internet (Akrimi & Khemakhem, 2012).

2.5.1 Influencing Consumer Perceptions One of the unique aspects of social media and its immense popularity that has revolutionized marketing practices such as advertising and promotion (Hanna et al., 2011). Social media has also influenced consumer behavior from information acquisition to post-purchase behavior such as dissatisfaction statements or behaviors and patterns of internet usage. According to Kaplan and Haenlein (2010), social media allows the creation and exchange of user-generated content. When used as a marketing and advertisement platform, it helps connect businesses to consumers, develop relationships and foster those relationships in a timely manner and at a low cost (Kaplan and Haenlein, 2010).

In business, other functions of social media involve affecting and influencing consumer perceptions, attitudes and buying behavior (Williams & Cothrell, 2010). In an online environment, Laroche et al. (2012) pointed out that people like the idea of contributing, creating, and joining communities to fulfill needs of belongingness, being socially connected and recognized or simply enjoying interactions with other like-minded members. The much higher level of efficiency of social media compared to other traditional communication channels prompted industry leaders to state that companies must participate in Facebook, Twitter, MySpace, and others, in order to succeed in online environments (Kaplan & Haenlein, 2010; Laroche et al. 2012). Thus, more industries try to benefit from social media as they can be used to develop strategy, accept their roles in managing others’ strategy or follow others’ directions.

2.5.2 Customer Engagement and Interaction Mersey et al. (2010) found that social media websites provide an opportunity for companies to engage and interact with potential and current consumers. They also encourage an increased sense of intimacy of the customer relationship and build all important meaningful relationships with consumers. This is important especially in today’s business environment when consumer loyalty can be won following online propagation of their fortunate encounter with a particular product, service, brand or company. According to Laroche et al. (2012), a number of companies are beginning to take notice of the power of social media. This is demonstrated by the increased number of corporate social networking websites that allow consumers to not only exchange

22 information about products or services, but also engage in co-creating value in online experiences with offline outcomes, with both current and potential consumers.

Diamond (2012) observed that social media marketing focuses on people and not products because; while products can be presented by the company with as many qualitative features and promotional tools as possible, what really matters is the comments and appreciations left by the customers. Thus, people provide the content making social media marketing challenging for marketers because they do not control the marketing content anymore. As a result, any negative word-of-mouth can be spread worldwide in a couple of minutes only with the explosion of Internet-based messages transmitted through the Social Media.

Dumitrescu et al. (2012) found that social media marketing platforms are now a main factor in influencing many aspects of consumer behavior, such as awareness, consideration, information gathering, opinions, attitudes, purchasing decisions and post- purchase evaluation. International marketers need to recognize the power and critical nature of the conversations being hold by consumers using Social Media. Consequently, the ability of influencing the crowd effectively is the main quality needed by the marketing team (Evans, 2010).

2.5.3 Advertisement Measurement Vellido et al. (2011) highlighted another importance about social media marketing to companies; that their marketers can listen, track and measure what is shared on the social media sites in order to improve the offered message and adapt it more to the customers’ needs. Social media analytics and metrics available show that the impact of social media marketing on company’s performance can be measured and evaluated relatively easily (Evans, 2010). Consumers first become aware of the brand, product or service. They then consider it as an eventual future purchase finally take the purchase decision.

According to Ward et al. (2014), social media marketing is widely used by businesses because it represents a cost-effective marketing solution. Its weapons can be used largely for free and very easily in comparison with other promotional tools. They add that the main purposes of using social media marketing are the amplification of word-of-mouth marketing, market research, general marketing, idea generation and new product 23 development, co-innovation, customer service, public relations, employee communications and reputation management. These observations are supported by Kaplan and Haenlein (2010) who found that social media marketing uses unconventional means to achieve conventional goals, through the use of creativity, community, and relationships instead of big budgets to achieve marketing objectives. This is key in the modern market where every marketer is armed with highly effective online communications tools that enable him to garner the same level of influence that many large corporations have.

2.5.4 Communication and Brand Awareness Williams and Williams (2013) found that whether it is concerning large multinationals or small and medium-sized enterprises, social media marketing presents many significant benefits for the companies’ success. Social media platforms foster communication around brands and products, enhancing positive as well as negative word-of-mouth around a business and its products and services. Any message or piece of information shared on the social media channels can be seen by thousands of people in an extremely short period of time.

Social Media Marketing increases brand awareness by extending the online presence of the products and brand (Ross et al, 2010). When social media platforms are widely used by a business, it becomes extremely important to measure the impacts of Social Media Marketing on brand awareness. This can be done with social media metrics. Ross et al. (2010) added that on the Social Media Examiner website, there are three main areas to take into account when evaluating brand awareness measurement into the context of the sales funnel. These social media metrics are social media exposure, influence and engagement.

Social media has resulted in the potential for reaching out to customers around the globe in ways not possible when, in the not-so-distant past, services were limited to local provision (Sashi, 2012). Fournier and Avery (2011) found that in competitiveness, the hunt is always on for the next deal, and social networks provide a rich prospecting resource. This has given social media an ability to boost brand awareness; encourage people to try products/services which might eventually lead to more sales returns especially when the campaign happens to go viral. In addition, social media promises 24 significant benefits by providing them with new ways to find, connect with, and understand their customers. Sashi (2012) added that one of the most valuable benefits of using digital marketing is its capacity to offer consumers a personalized relationship personalization has also been shown to increase the level of loyalty a consumer holds toward a retailer.

2.6 Chapter Summary This chapter presented a review of literature in relation to the objectives of the study. The chapter reviewed the existing literature linking SEM, email advertising, online advertising and social media marketing to competitiveness. Chapter three elaborates on the research methodology that was utilized while conducting the study.

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction This chapter describes the research approach that was used to achieve the study’s objectives. It discusses the research design that was adopted in the study, it offers the population of the study as well as the adopted sampling design which describes the sampling frame, sampling technique and the sample size of the study. The chapter describes the data collection and research procedures used to conduct the study, and it finally presents the data analysis methods that were used.

3.2 Research Design A research design includes the procedures and methodology used to conduct research in a manner that aims to combine significance to the purpose of the research (Ngechu, 2010). This study made use of the descriptive research design. Descriptive research designs are used in preliminary and exploratory studies to allow researchers to gather information and summarize, present and interpret data for the purpose of clarification (Shields & Rangarjan, 2013). The descriptive approach was considered the most appropriate for this proposed study because, descriptive studies report the way things are for understanding the current situation which was the effect of digital marketing (independent variable) on competitiveness of automobile companies (dependent variable) in Kenya.

3.3 Population and Sampling Design 3.3.1 Population Population refers to the specific group of items about which contain the desired information and can answer the measurement question (Kothari, 2010). The target population of this study was staff working in the marketing departments at the head offices of 11 major established motor vehicle dealers in Kenya (Appendix II). Table 3.1 presents the population distribution that was acquired from the companies’ websites. The target population of this study was therefore be 309 individuals.

Table 3.1 Population Distribution

Automobile Company Staff in the Marketing Percent Department Associated Vehicle Assemblers Ltd 28 8 Beiben Trucks - Nelion Trading Ltd 33 10 Cooper Motor Corporation Kenya Ltd 22 7 DT Dobie 29 9 General Motors Kenya Ltd 16 5 Honda Motorcycle Kenya Ltd 38 11 Kenya Vehicle Manufacturers (KVM) 35 10 RMA Motors (Kenya) Ltd 33 10 Simba Colt 29 9 Toyota Kenya Ltd 39 12 TVS Motors Kenya 33 10 Total 335 100 Source: Kenya Motor Industry Association (2016)

3.3.2 Sampling Design Sampling is the procedure of choosing elements (people, organizations) from a population of interest. Through the studying of a sample, researchers may impartially generalize their results on the entire population from which they were selected (Trochim, 2015). Sampling design stipulates the population frame, sample size and its selection, as well as the process of estimating the sample size. The aim of the sampling design is to identify the characteristic of the population. According to Ngechu (2010), sampling saves time, money and gives the researcher accurate solutions and answers to the research questions within a short period of time.

3.3.2.1 Sampling Frame A sampling frame refers to the list of ultimate sampling entities (Yin, 2014), in this case, automobile companies in Kenya organizations. In the current study, the sampling frame was all the automobile companies in Kenya, which according to the Kenya Motor

Industry Association (KMIA) report of June 2016, stood at 11. The sampling frame was obtained from the KMIA.

3.3.2.2 Sampling Technique Sampling techniques is the process that used in a study to select the sample size (Ngechu, 2010). This study embraced a stratified random sampling method to select 30% of respondents from the target population. Stratified random sampling is defined as a method of sampling involving grouping of a population into smaller categories known as strata. The strata in this study comprised of the 11 automobile firms. According to Kothari (2004) strata should be formed on the basis of the members shared characteristics or attributes and hence this study only focused on the staff working in the marketing departments. A random sample from each stratum was taken in a number proportional (30% from each stratum) to the stratum's size when compared to the population. These strata subsets were then pooled to form a random sample.

3.3.2.2 Sample Size The sample size of this study was 101 respondents who were working in the marketing departments of the 11 targeted automobile firms. Mugenda and Mugenda (2003) suggested that for a sample to be considered as good representation, it should be between 10 and 30%.

Table 3.2 Sample Size Distribution Automobile Company Staff in the Sampling Sample Percent Marketing Percent Size Department Associated Vehicle Assemblers Ltd 28 30 8 8 Beiben Trucks - Nelion Trading Ltd 33 30 10 10 Cooper Motor Corporation Kenya Ltd 22 30 7 7 DT Dobie 29 30 9 9 General Motors Kenya Limited 16 30 5 5 Honda Motorcycle Kenya Ltd 38 30 11 11 Kenya Vehicle Manufacturers (KVM) 35 30 11 10 RMA Motors (Kenya) Limited 33 30 10 10 Simba Colt 29 30 9 9 Toyota Kenya Limited 39 30 12 12 TVS Motors Kenya 33 30 10 10 Total 335 30 101 100

3.4 Data Collection Methods The study made use primary data. Primary data according to Kothari (2004) is the data collected a fresh for the first time while secondary data is that data that has already been collected and passed through statistical process. The study made use of a semi-structured questionnaire that confined its structure to closed-ended questions for primary data collections as shown on Appendix I. Questionnaires are the most commonly used methods when respondents can be reached and are willing to co-operate (Kothari, 2004). These methods can reach a large number of subjects who are able to read and write independently (Yin, 2014). Since the employees working the marketing departments of the 11 targeted automobile firms could read and write, the use of questionnaires was the best method to use in this study. Mugenda and Mugenda (2003) observed that, questionnaires are very economical in terms of time, energy and finances.

The questionnaire contained 6 sections that were as follows: section A: demographic information, section B: effect of SEM marketing on competitiveness of automobile companies, section C: effect of e-mail advertising on competitiveness of automobile companies, section D: effect of online advertising on competitiveness of automobile companies, section E: effect of social media marketing on competitiveness of automobile companies, and section F: automobile competitiveness in Kenya.

3.5 Data Collection Procedures Data collection refers to how information for a research study is obtained from the selected subjects of an investigation or a study. It refers to the techniques applied in extracting the required study data for analysis (Ngechu, 2010). After developing the questionnaires, the researcher conducted a pilot test to test the reliability and the validity of the instrument. A pilot test as a stage where research instruments (tests, questionnaires, observation schedules, etc.) are administered to a number of individuals in the target population who are not included in the sample size so as to test the reliability and validity of the instruments (Kothari, 2010). The researcher selected a pilot group of 5 staff from the Hyundai Motor Corporation to participate in the pilot test. The pilot study helped in refining the questionnaire, enhancing its readability, and minimized the chances of misinterpretation of the questions. Pilot testing also ensured the questionnaire’s reliability and validity.

Reliability refers to a measure of the degree to which research instruments yield consistent results (Kothari, 2010). In this study, reliability was tested using Cronbach’s alpha value. The higher the value (coefficients), the better the measuring instrument in terms of reliability. The results of the pilot study were analyzed using Cronbach Alpha with a set lower limit of acceptability of >0.7. From the responses, comments and results of the analysis, the entire questionnaire was refined and improved to take care of the observed shortcomings.

The accuracy of data to be collected largely depends on the data collection instruments in terms of validity. Validity as noted by Trochim (2015) is the degree to which result obtained from the analysis of the data actually represents the phenomenon under study. To achieve content validity, questionnaires mainly consist of questions on the variables (Kothari, 2010). Content validity was ensured by consistency in administering the questionnaires. A measure of reliability and validity was guaranteed by discussion of the instrument with experts and research supervisor and by ensuring high precision and minimal errors in the data entry through training of the research assistants.

Before going to the field for data collection, the researcher obtained a data collection letter from the university. In addition, the researcher sought permission from the top management of the 11 automobile firms to collect data. The study used drop and pick up later method to collect the data. When dropping the questionnaires, the researcher informed the respondents the data was for academic purposes only. After dropping the questionnaires in the headquarters of each of the 11-targeted firms, the researcher collected them after four days.

3.6 Data Analysis Methods Data analysis involves decrease of accumulated data to a size that is manageable, coming up with summaries, looking for patterns and applying statistical techniques (Cooper & Schindler, 2006). Kothari (2004) additionally demonstrates that data analysis is a procedure of reviewing, cleaning, changing, and displaying information with the objective of featuring valuable data, recommending conclusions, and supporting basic leadership. Statistical Package for Social Sciences (SPSS version 20) was utilized to analyze quantitative data and information. Utilizing SPSS quantitative data was investigated utilizing inferential and descriptive statistics. Descriptive statistics such as 30 mean, standard deviation, frequency and percentages were used to profile sample characteristics and major patterns emerging from the data. Inferential statistics in the study included correlation analysis and regression analysis were used to determine the relationship between the study’s independent variable and the dependent variable. The study used figures and tables to present the analyzed data.

3.7 Chapter Summary This chapter has presented the methodology that was used in the collecting and analyzing data. The chapter commences by providing the research design, this was pursued by the population and sampling design. The chapter provides procedures for data collection methods, research procedures and data analysis and methods. Chapter four dwells on data analysis and presentation of the study findings.

CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction The purpose of the study was to examine the effect of digital marketing on competitiveness of automobile companies in Kenya. This chapter presents the results and findings of the study with regards to the effect of search engine marketing, e-mail advertising, online advertising, and social media advertising on the competitiveness of automobile companies in Kenya.

4.2 Response and Reliability Rate 4.2.1 Response Rate From the 101 questionnaires that were distributed, only 83 questionnaires were found to be valid, and were used for analysis. This gave the study a response rate of 82.2% which was above the required threshold and was as indicated in Figure 4.1.

Figure 4.1 Response Rate

4.2.2 Reliability Rate Table 4.1 indicates that all the study variables met the minimum required threshold of >0.7. The Cronbach coefficient for search engine marketing variables was 0.769, the Cronbach coefficient for e-mail advertising variables was 0.907, the Cronbach coefficient for online advertising variables was 0.882, the Cronbach coefficient for social media advertising variables was 0.937, and the Cronbach coefficient for automobile competitive

32 variables was 0.838. The results show that all the study variables were reliable for analysis.

Table 4.1 Cronbach Alpha Reliability Rate Study Variable No. of Item Coefficient Search Engine Marketing Variables 8 .769 E-Mail Advertising Variables 10 .907 Online Advertising Variables 8 .882 Social Media Advertising Variables 10 .937 Automobile Competitive Variables 7 .838

4.3 Demographic Information 4.3.1 Gender Figure 4.2 indicates that 71.1% of the respondents were male and 28.9% were female. This could be attributed to the fact that the automotive industry is mainly dominated by males in the country.

Figure 4.2 Gender

4.3.2 Age Figure 4.3 shows that 49.4% were aged between 31-40 years, 24.1% were aged between 21-30 years, 20.5% were aged between 41-50 years, and 6% were 51 years and above. This could be attributed to the fact that the country’s demography has a lot of people aged between 25-45 years.

Figure 4.3 Age

4.3.3 Education Figure 4.4 indicates that 53% of the respondents had Master’s Degree, 33.7% had university degrees, 8.4% had college diplomas, and 4.8% had PhDs. These results indicate that the respondents were well educated, and could be attributed to the fact that the country’s demography has a lot of educated people within the urban centers.

Figure 4.4 Education

4.3.4 Organization Worked For Table 4.2 shows that 13.3% of the respondents worked for Toyota Kenya Limited, 10.8% worked for Kenya Vehicle Manufacturers (KVM), RMA Motors (Kenya) Limited, and TVS Motors Kenya respectively, 9.6% worked for Beiben Trucks - Nelion Trading Ltd, Honda Motorcycle Kenya Ltd, and Simba Colt respectively, 7.2% worked for Associated Vehicle Assemblers Ltd, Cooper Motor Corporation Kenya Ltd, and DT Dobie respectively, and 3.6% worked for General Motors Kenya Limited. These results indicate that all organizations were well represented and the results could be applied to all motor vehicle dealerships within Nairobi.

Table 4.2 Organization Worked For Distribution Organization/ Dealership Number Percentage Associated Vehicle Assemblers Ltd 6 7.2 Beiben Trucks - Nelion Trading Ltd 8 9.6 Cooper Motor Corporation Kenya Ltd 6 7.2 DT Dobie 6 7.2 General Motors Kenya Limited 3 3.6 Honda Motorcycle Kenya Ltd 8 9.6 Kenya Vehicle Manufacturers (KVM) 9 10.8 RMA Motors (Kenya) Limited 9 10.8 Simba Colt 8 9.6 Toyota Kenya Limited 11 13.3 TVS Motors Kenya 9 10.8 Total 83 100

4.3.5 Years with the Organization Figure 4.5 indicates that 37.3% of the respondents had been with the organization for 5-6 years, 31.3% had been with the organization for 2-4 years, 24% had been with the organization for 7 years and above, and 2.4% had been with the organization for 0-1 years. These results show that the respondents were well placed to be the study population because majority had been with their organizations for 5 years and above.

Figure 4.5 Years with the Organization

4.4 SEM and Competitiveness of Automobile Companies 4.4.1 SEM Solution Creation Table 4.3 indicates that 53% of the respondents agreed, and 47% strongly agreed. These results indicate that Search Engine Marketing had allowed firms to create solutions and plans to attract consumers to their products and services.

Table 4.3 SEM Solution Creation Scale Frequency Percentage SEM Solution Creation Strongly Disagree 0 0 Disagree 0 0 Not Sure 0 0 Agree 44 53.0 Strongly Agree 39 47.0 Total 83 100.0

4.4.2 SEM and Company Positioning Table 4.4 indicates that 43.4% of the respondents agreed, 36.1% were not sure, and 20.5% strongly agreed. These results indicate that Search Engine Marketing is used in the organization to increase the position of the company and its products in the search engine natural or organic results listings for selected keywords and phrases.

Table 4.4 SEM and Company Positioning Scale Frequency Percentage SEM and Company Positioning Strongly Disagree 0 0 Disagree 0 0 Not Sure 30 36.1 Agree 36 43.4 Strongly Agree 17 20.5 Total 83 100.0

4.4.3 SEM and Link Increment Figure 4.6 indicates that 45.8% of the respondents strongly agreed, another 45.8% agreed, and 8.4% were not sure. These results indicate that to achieve higher sales, Search Engine Marketing had been used to increase links from other websites to the companies’ web pages.

Figure 4.6 SEM and Link Increment

4.4.4 Difficult Enumeration of SEM Factors Table 4.5 indicates that 49.4% of the respondents agreed, 39.8% were not sure, and 10.8% strongly agreed. These results indicate that Search Engine Marketing factors were notoriously difficult to enumerate, and they did not reveal the specific factors used when determining the ranking of a website.

Table 4.5 Difficult Enumeration of SEM Factors Scale Frequency Percentage Difficult Enumeration of SEM Strongly Disagree 0 0 Factors Disagree 0 0 Not Sure 33 39.8 Agree 41 49.4 Strongly Agree 9 10.8 Total 83 100.0

4.4.5 SEM and Company Image Table 4.6 indicates that 37.3% of the respondents agreed, 36.1% strongly agreed, and 26.5% were not sure. These results indicate that search engines play a great role in linking firms when using the Internet to build company image and find target customers.

Table 4.6 SEM and Company Image Scale Frequency Percentage SEM and Company Image Strongly Disagree 0 0 Disagree 0 0 Not Sure 22 26.5 Agree 31 37.3 Strongly Agree 30 36.1 Total 83 100.0

4.4.6 Good Company Website Figure 4.7 indicates that 39.8% of the respondents agreed, another 31.3% strongly agreed, and 28.9% were not sure. These results indicate that the companies had good websites with a good design used to attract, and retain customers.

Figure 4.7 Good Company Website

4.4.7 Use of SEM for Advertisement Table 4.7 indicates that 56.6% of the respondents agreed, and 43.4% strongly agreed. These results indicate that the use of Search Engine Marketing for advertisement had enabled the companies to gain more new customers.

Table 4.7 Use of SEM for Advertisement Scale Frequency Percentage Use of SEM for Advertisement Strongly Disagree 0 0 Disagree 0 0 Not Sure 0 0 Agree 47 56.6 Strongly Agree 36 43.4 Total 83 100.0

4.4.8 SEM Revenues Table 4.8 indicates that 42.2% of the respondents were not sure, 31.3% agreed, and 26.5% strongly agreed. These results indicate that the search engines’ revenues are typically lower when companies spend more on Search Engine Marketing.

Table 4.8 SEM Revenues Scale Frequency Percentage SEM Revenues Strongly Disagree 0 0 Disagree 0 0 Not Sure 35 42.2 Agree 26 31.3 Strongly Agree 22 26.5 Total 83 100.0

4.4.9 Correlations for SEM and Competitiveness of Automobile Companies Table 4.9 shows that Search Engine Marketing was a significant factor to automobile companies competitiveness (r=-0.360, p<0.01). The results have a p value of <0.05 which was the study’s threshold indicating that SEM was significant.

Table 4.9 Correlations for SEM and Competitiveness of Automobile Companies

Automobile Companies Competitiveness Search Engine Marketing Automobile Companies 1 -.360** Competitiveness .001 Search Engine Marketing -.360** 1 .001 ** Correlation is significant at the 0.01 level (2-tailed) 4.4.10 Regression for SEM and Competitiveness of Automobile Companies Table 4.10 shows the results of the regression model summary for SEM (independent variables), and automobile companies’ competitiveness (dependent variable). The adjusted R square of 0.119 shows that Search Engine Marketing accounts for 11.9% of the variance in automobile companies’ competitiveness.

Table 4.10 Model Summary for SEM and Competitiveness of Automobile Companies Model R R Square Adjusted R Square Std. Error of the Estimate 1 .360 .130 .119 .43340 a. Predictors (Constant): Search Engine Marketing

Table 4.11 analysis of variance (ANOVA) verifies that there was a significant relationship between Search Engine Marketing and automobile companies’ competitiveness. This is a direct result of the expansive size of the processed F (12.069) demonstrates that there was a huge contrast in the mean distribution of the study factors at a <0.05 level of significance, showing that the observed contrasts were significant.

Table 4.11 Analysis of Variance for SEM & Competitiveness of Automobile Companies

Model Sum of Squares df Mean Square F Sig. 1 Regression 2.267 1 2.267 12.069 .001 Residual 15.215 81 .188 Total 17.482 82 a. Predictors: (Constant): Search Engine Marketing b. Dependent Variable: Automobile Companies Competitiveness

Table 4.12 indicates that Search Engine Marketing had a negative, but significant influence on automobile companies competitiveness because its p value was <0.05. The coefficient of -0.373 also indicates that for every increase in search engine marketing, one would expect a decrease of 37.3% in automobile companies competitiveness because the factors were inversely correlated. Table 4.12 Regression Coefficients for SEM & Competitiveness of Automobile Companies Unstandardized Standardized Coefficients Coefficients Model B Std. Error Beta t Sig. 1 (Constant) 5.549 .470 11.794 .000 Search Engine Marketing -.373 .107 -.360 -3.474 .001 a. Dependent Variable: Automobile Companies Competitiveness

4.5 E-mail Advertising on Competitiveness of Automobile Companies 4.5.1 E-Mail Marketing Model Development Figure 4.8 indicates that 56.6% of the respondents disagreed, 41% were not sure, and 2.4% agreed. These results indicate that the e-mail marketing model had not been developed from the ground up to avoid the companies playing catch up.

Figure 4.8 E-Mail Marketing Model Development

4.5.2 Promotional Mail Software Table 4.13 indicates that 50.6% of the respondents disagreed, 48.2% were not sure, and 1.2% agreed. These results indicate that the companies did not use e-mail marketing software to send promotional mails to their consumers.

Table 4.13 Promotional Mail Software

Scale Frequency Percentage Promotional Mail Software Strongly Disagree 0 0 Disagree 42 50.6 Not Sure 40 48.2 Agree 1 1.2 Strongly Agree 0 0 Total 83 100.0

4.5.3 E-Mail Recipients Table 4.14 indicates that 37.3% of the respondents disagreed, another 37.3% were not sure, and 24.4% agreed. These results indicate that the e-mail advertising recipients are normally consumers who had not opted to receive such emails.

Table 4.14 E-Mail Recipients Scale Frequency Percentage E-Mail Recipients Strongly Disagree 0 0 Disagree 31 37.3 Not Sure 31 37.3 Agree 21 25.4 Strongly Agree 0 0 Total 83 100.0

4.5.4 Consistent Experience Table 4.15 indicates that 43.4% of the respondents were not sure, 30.1% agreed, and 26.5% strongly agreed. These results indicate that the e-mail advertisements provide consistent and better customer experience, thus maximizing the companies’ potential in enhancing their competitiveness. Table 4.15 Consistent Experience Scale Frequency Percentage Consistent Experience Strongly Disagree 0 0 Disagree 0 0 Not Sure 36 43.4 Agree 25 30.1 Strongly Agree 22 26.5 Total 83 100.0

4.5.5 E-Mail Advertisements Guide Figure 4.9 indicates that 49.4% of the respondents agreed, 34.9% strongly agreed, and 15.7% were not sure. These results indicate that e-mail advertisements guide the organizations on how to improve their products with reference to customer feedback.

Figure 4.9 E-Mail Advertisements Guide

4.5.6 Information Distribution Table 4.16 indicates that 50.6% of the respondents agreed, 31.3% strongly agreed, and 18.1% were not sure. These results indicate that e-mail advertising offers the companies a cheaper and faster distribution of information to their customers while influencing their faster response.

Table 4.16 Information Distribution Scale Frequency Percentage Information Distribution Strongly Disagree 0 0 Disagree 0 0 Not Sure 15 18.1 Agree 42 50.6 Strongly Agree 26 31.3 Total 83 100.0

4.5.7 Foster Strong Customer Relations Table 4.17 indicates that 54.2% of the respondents agreed, 38.6% strongly agreed, and 7.2% were not sure. These results indicate that interactive e-mail responses to the company’s e-mail advertisements helps them to develop a strong relationship with their customers.

Table 4.17 Foster Strong Customer Relations Scale Frequency Percentage Foster Strong Customer Strongly Disagree 0 0 Relations Disagree 0 0 Not Sure 6 7.2 Agree 45 54.2 Strongly Agree 32 38.6 Total 83 100.0

4.5.8 Return on Investments Table 4.18 indicates that 53% of the respondents agreed, and 47% strongly agreed. These results indicate that the e-mail marketing campaigns have produced twice the return on investment compared to other forms of online marketing.

Table 4.18 Return on Investments Scale Frequency Percentage Return on Investments Strongly Disagree 0 0 Disagree 0 0 Not Sure 0 0 Agree 44 53.0 Strongly Agree 39 47.0 Total 83 100.0

4.5.9 Indiscriminate E-Mail Distribution Figure 4.10 indicates that 43.4% of the respondents agreed, 36.1% were not sure, and 20.5% strongly agreed. These results indicate that the indiscriminate distribution of messages without permission of the receiver, hinders the organization’s ability to use e- mail marketing effectively.

Figure 4.10 Indiscriminate E-Mail Distribution

4.5.10 Invasion of Privacy Table 4.19 indicates that 45.8% of the respondents strongly agreed, another 45.8% agreed, and 8.4% were not sure. These results indicate that unsolicited e-mail marketing is usually considered as an invasion of privacy and becomes a serious problem for some of the customers.

Table 4.19 Invasion of Privacy Scale Frequency Percentage Invasion of Privacy Strongly Disagree 0 0 Disagree 0 0 Not Sure 7 8.4 Agree 38 45.8 Strongly Agree 38 45.8 Total 83 100.0

4.5.11 Correlations for E-Mail Advertising and Competitiveness of Automobile Companies Table 4.20 shows that e-mail adverting was a significant factor to automobile companies competitiveness (r=0.580, p<0.01). The results have a p value of <0.05 which was the study’s threshold indicating that e-mail adverting was significant.

Table 4.20 Correlations for E-Mail Advertising and Competitiveness of Automobile Companies

Automobile Companies Competitiveness E-Mail Advertising Automobile Companies 1 .580** Competitiveness .000 E-Mail Advertising .580** 1 .000 ** Correlation is significant at the 0.01 level (2-tailed) 4.5.12 Regression for E-Mail Advertising and Competitiveness of Automobile Companies Table 4.21 shows the results of the regression model summary for e-mail advertising (independent variables), and automobile companies’ competitiveness (dependent variable). The adjusted R square of 0.328 shows that e-mail advertising accounts for 32.8% of the variance in automobile companies’ competitiveness.

Table 4.21 Model Summary for E-Mail Advertising and Competitiveness of Automobile Companies

Model R R Square Adjusted R Square Std. Error of the Estimate 1 .580 .336 .328 .37850 a. Predictors (Constant): E-Mail Advertising Table 4.22 analysis of variance (ANOVA) verifies that there was a significant relationship between e-mail adverting and automobile companies’ competitiveness. This is a direct result of the expansive size of the processed F (41.027) demonstrates that there was a huge contrast in the mean distribution of the study factors at a <0.05 level of significance, showing that the observed contrasts were significant. Table 4.22 Analysis of Variance for E-Mail Advertising and Competitiveness of Automobile Companies

Model Sum of Squares df Mean Square F Sig. 1 Regression 5.878 1 5.878 41.027 .000 Residual 11.604 81 .143 Total 17.482 82 a. Predictors: (Constant): E-Mail Advertising b. Dependent Variable: Automobile Companies Competitiveness

Table 4.23 indicates that e-mail advertising had a positive and significant influence on automobile companies competitiveness because its p value was <0.05. The coefficient of 0.857 also indicates that for every increase in e-mail advertising, one would expect an increase of 85.7% in automobile companies’ competitiveness.

Table 4.23 Regression Coefficients for E-Mail Advertising and Competitiveness of Automobile Companies

Unstandardized Standardized Coefficients Coefficients Model B Std. Error Beta t Sig. 1 (Constant) .494 .537 .920 .360 E-Mail Advertising .857 .134 .580 6.405 .000 a. Dependent Variable: Automobile Companies Competitiveness 4.6 Online Advertising on Competitiveness of Automobile Companies 4.6.1 Client Engagement Figure 4.11 shows that 49.4% of the respondents agreed, 39.8% were not sure, and 10.8% strongly agreed. These results indicate that technology advancement had created the possibility for the firms to engage with clients who were internet users through online advertising.

Figure 4.11 Client Engagement

4.6.2 Product and Service Update Figure 4.12 shows that 55.4% of the respondents agreed, 36.1% strongly agreed, and 8.4% were not sure. These results indicate that online advertising had made it easier for the companies to update product and service information promptly.

Figure 4.12 Product and Service Update

4.6.3 Online Advertising Coverage Figure 4.13 shows that 51.8% of the respondents disagreed, 47% were not sure, and 1.2% agreed. These results indicate that the companies did not use online advertising to reach and cover a larger target audience and reach broader geographical areas at a lower cost.

Figure 4.13 Online Advertising Coverage

4.6.4 Online Advertising and Customer Relationship Figure 4.14 shows that 55.4% of the respondents agreed, and 44.6% strongly agreed. These results indicate that the firms used online advertising to understand their consumers, and generate and manage close relationships with them.

Figure 4.14 Online Advertising and Customer Relationship

4.6.5 Online Advertising and Customer Convincing Figure 4.15 shows that 48.2% of the respondents agreed, 26.5% were not sure, and 25.3% strongly agreed. These results indicate that online advertising was used by the organizations to convince customers to purchase products and services through various online stages.

Figure 4.15 Online Advertising and Customer Convincing

4.6.6 Online Advertising and Customer Awareness Figure 4.16 shows that 47% of the respondents strongly agreed, another 47% agreed, and 6% were not sure. These results indicate that exposure to online advertisement draws consumers’ awareness towards the advertisement and advertised product and services.

Figure 4.16 Online Advertising and Customer Awareness

4.6.7 Online Advertising and Desire Arousal Figure 4.17 shows that 42.2% of the respondents agreed, 36.1% strongly agreed, and 21.7% were not sure. These results indicate that online advertising helped the firms to arouse the desire for their advertised product or services among their consumers.

Figure 4.17 Online Advertising and Desire Arousal

4.6.8 Persuasive Online Adverts Figure 4.18 shows that 41% of the respondents strongly agreed, 39.8% agreed, and 19.3% were not sure. These results indicate that the firms’ online adverts were persuasive, since they used images, and proficiencies to raise the trustworthiness of their adverts.

Figure 4.18 Persuasive Online Adverts

4.6.9 Correlations for Online Advertising and Competitiveness of Automobile Companies Table 4.24 shows that online adverting was a significant factor to automobile companies competitiveness (r=-0.756, p<0.01). The results have a p value of <0.05 which was the study’s threshold indicating that online adverting was significant.

Table 4.24 Correlations for Online Advertising and Competitiveness of Automobile Companies

Automobile Companies Competitiveness Online Advertising Automobile Companies 1 -.756** Competitiveness .000 Online Advertising -.756** 1 .000 ** Correlation is significant at the 0.01 level (2-tailed)

4.6.10 Regression for Online Advertising and Competitiveness of Automobile Companies Table 4.25 shows the results of the regression model summary for online advertising (independent variables), and automobile companies’ competitiveness (dependent variable). The adjusted R square of 0.566 shows that online advertising accounts for 56.6% of the variance in automobile companies’ competitiveness.

Table 4.25 Model Summary for Online Advertising and Competitiveness of Automobile Companies

Model R R Square Adjusted R Square Std. Error of the Estimate 1 .756 .571 .566 .30432 a. Predictors (Constant): Online Advertising

Table 4.26 analysis of variance (ANOVA) verifies that there was a significant relationship between online advertising and automobile companies’ competitiveness. This is a direct result of the expansive size of the processed F (107.763) demonstrates that there was a huge contrast in the mean distribution of the study factors at a <0.05 level of significance, showing that the observed contrasts were significant. Table 4.26 Analysis of Variance for Online Advertising and Competitiveness of Automobile Companies

Model Sum of Squares df Mean Square F Sig. 1 Regression 9.980 1 9.980 107.763 .000 Residual 7.502 81 .093 Total 17.482 82 a. Predictors: (Constant): Online Advertising b. Dependent Variable: Automobile Companies Competitiveness

Table 4.27 indicates that online advertising had a negative, but significant influence on automobile companies competitiveness because its p value was <0.05. The coefficient of - 0. 719 also indicates that for every increase in online advertising, one would expect a decrease of 71.9% in automobile companies competitiveness since the variables were inversely correlated.

Table 4.27 Regression Coefficients for Online Advertising and Competitiveness of Automobile Companies

Unstandardized Standardized Coefficients Coefficients Model B Std. Error Beta t Sig. 1 (Constant) 7.123 .310 22.969 .000 Online Advertising -.719 .069 -.756 -10.381 .000 a. Dependent Variable: Automobile Companies Competitiveness

4.7 Social Media Marketing on Competitiveness of Automobile Companies 4.7.1 Business Environment Table 4.28 shows that 48.2% of the respondents agreed, 36.1% strongly agreed, and 15.7% were not sure. These results indicate that current business environment had compelled the companies to adopt social media marketing.

Table 4.28 Business Environment

Scale Frequency Percentage Business Environment Strongly Disagree 0 0 Disagree 0 0 Not Sure 13 15.7 Agree 40 48.2 Strongly Agree 30 36.1 Total 83 100.0

4.7.2 Use of Twitter Figure 4.19 shows that 51.8% of the respondents were not sure, 47% disagreed, and 1.2% agreed. These results indicate that the companies did not use Twitter to promote and answer their customer concerns and complaints in real-time.

Figure 4.19 Use of Twitter

4.7.3 Social Media Effectiveness Figure 4.20 shows that 49.4% of the respondents agreed, 28.9% strongly agreed, and 21.7% were not sure. These results indicate that social media marketing had enabled the firms and their customers, to be more effective and productive in receiving and providing service and response.

Figure 4.20 Social Media Effectiveness

4.7.4 User-Generated Content Figure 4.21 shows that 55.4% of the respondents disagreed, and 44.6% were not sure. These results indicate that social media had not allowed the companies to enjoy the creation and exchange of user-generated content about their products and services.

Figure 4.21 User-Generated Content

4.7.5 Social Media Feedback Table 4.29 shows that 51.8% of the respondents disagreed, 47% were not sure, and 1.2% agreed. These results indicate that the companies did not use social media feedback and responses to develop strategy, accept their roles in managing others’ strategy or follow others’ directions. Table 4.29 Social Media Feedback

Scale Frequency Percentage Social Media Feedback Strongly Disagree 0 0 Disagree 43 51.8 Not Sure 39 47 Agree 1 1.2 Strongly Agree 0 0 Total 83 100.0

4.7.6 Social Media Focus Figure 4.22 shows that 55.4% of the respondents disagreed, and 44.6% were not sure. These results indicate that the companies did not use social media marketing to focus on people (their customers) and not their products and services.

Figure 4.22 Social Media Focus

4.7.7 Social Media Tracking and Measuring Figure 4.23 shows that 54.2% of the respondents disagreed, and 45.8% were not sure. These results indicate that the companies did not listen, track, and measure what was shared on the social media sites in order to improve on their offered message and adapt it to their customers’ needs.

Figure 4.23 Social Media Tracking and Measuring

4.7.8 Social Media and Conventional Goals Figure 4.24 shows that 51.8% of the respondents disagreed, and 48.2% were not sure. These results indicate that the firms did not use social media marketing to achieve

57 conventional goals, through creativity, community, and relationships instead of big budgets to achieve their marketing objectives.

Figure 4.24 Social Media and Conventional Goals

4.7.9 Social Media and Communication Figure 4.25 shows that 56.6% of the respondents agreed, 38.6% strongly agreed, and 4.8% were not sure. These results indicate that social media platforms had fostered communication around the firms’ brands and products, enhancing both positive and negative word-of-mouth around their business, products, and services.

Figure 4.25 Social Media and Communication

4.7.10 Social Media and Personalized Relationships Figure 4.26 shows that 65.1% of the respondents disagreed, 33.7% were not sure, and 1.2% strongly disagreed. These results indicate that social media had not enabled the

58 companies to form personalized relationships with their customers, hence did not increase their levels of loyalty.

Figure 4.26 Social Media and Personalized Relationships

4.7.11 Correlations for Social Media Marketing and Competitiveness of Automobile Companies Table 4.30 shows that social media marketing was a significant factor to automobile companies competitiveness (r=-0.783, p<0.01). The results have a p value of <0.05 which was the study’s threshold indicating that social media marketing was significant.

Table 4.30 Correlations for Social Media Marketing and Competitiveness of Automobile Companies

Automobile Companies Competitiveness Social Media Marketing Automobile Companies 1 -.783** Competitiveness .000 Social Media Marketing -.783** 1 .000 ** Correlation is significant at the 0.01 level (2-tailed) 4.7.12 Regression for Social Media Marketing and Competitiveness of Automobile Companies Table 4.31 shows the results of the regression model summary for social media marketing (independent variables), and automobile companies’ competitiveness (dependent variable). The adjusted R square of 0.608 shows that social media marketing accounts for 60.8% of the variance in automobile companies’ competitiveness.

Table 4.31 Model Summary for Social Media Marketing and Competitiveness of Automobile Companies

Model R R Square Adjusted R Square Std. Error of the Estimate 1 .783 .613 .608 .28914 a. Predictors (Constant): Social Media Marketing

Table 4.32 analysis of variance (ANOVA) verifies that there was a significant relationship between social media marketing and automobile companies’ competitiveness. This is a direct result of the expansive size of the processed F (128.107) demonstrates that there was a huge contrast in the mean distribution of the study factors at a <0.05 level of significance, showing that the observed contrasts were significant.

Table 4.32 Analysis of Variance for Social Media Marketing and Competitiveness of Automobile Companies

Model Sum of Squares df Mean Square F Sig. 1 Regression 10.710 1 10.710 128.107 .000 Residual 6.772 81 .084 Total 17.482 82 a. Predictors: (Constant): Social Media Marketing b. Dependent Variable: Automobile Companies Competitiveness Table 4.33 indicates that social media marketing had a negative, but significant influence on automobile companies competitiveness because its p value was <0.05. The coefficient of -0. 807 also indicates that for every increase in social media marketing, one would expect a decrease of 80.7% in automobile companies’ competitiveness since the variables were inversely correlated.

Table 4.33 Regression Coefficients for Social Media Marketing and Competitiveness of Automobile Companies Unstandardized Standardized Coefficients Coefficients Model B Std. Error Beta t Sig. 1 (Constant) 7.275 .298 24.422 .000 Social Media Marketing -.807 .071 -.783 -11.318 .000 a. Dependent Variable: Automobile Companies Competitiveness

4.8 Chapter Summary This chapter has presented the study findings for the effect of search engine marketing, e- mail advertising, online advertising, and social media advertising on the competitiveness of automobile companies in Kenya. It presentation was in the form of tables and figures. Descriptive statistics and inferential analysis were used to formulate the chapter. The following chapter provides the study discussions, conclusions, and recommendations.

CHAPTER FIVE

5.0 DISCUSSIONS, CONCLUSIONS, AND RECOMMENDATIONS

5.1 Introduction This study sought to examine the effect of digital marketing on competitiveness of automobile companies in Kenya, this section presents the summary of the study findings, offers detailed discussions of the findings, presents that study conclusions of the findings, and offers recommendations for improvement, and further studies.

5.2 Summary The study sought to examine the effect of digital marketing on competitiveness of automobile companies in Kenya. The objectives of the study were to assess the effect of search engine marketing, e-mail advertising, online advertising and social media advertising on the competitiveness of automobile companies in Kenya.

62 were notoriously difficult to enumerate. The companies had good websites with a good design used to attract, and retain customers, and using SEM for advertisement had enabled the companies to gain more new customers, however, search engines’ revenues are typically lower when companies spend more on Search Engine Marketing.

The study indicated that the e-mail marketing model had not been developed from the ground up to avoid the companies playing catch up, and the companies did not use e-mail marketing software to send promotional mails to their consumers. E-mail advertising recipients were normally consumers who had not opted to receive such emails, although the service provided consistent and better customer experience, thus maximizing the companies’ potential in enhancing their competitiveness. The study pointed out the fact that e-mail advertisements guided the organizations on how to improve their products with reference to customer feedback, and offered the companies a cheaper and faster distribution of information to their customers while influencing their faster response.

The study showed that technology advancement had created the possibility for the firms to engage with clients who were internet users through online advertising, and this had made it easier for the companies to update product and service information promptly. Online advertising was not used to reach and cover a larger target audience and reach broader geographical areas at a lower cost, but was used by the firms to understand their consumers, and generate and manage close relationships with them. The study revealed that online advertising was used by the organizations to convince customers to purchase products and services through various online stages, and that, exposure to online advertisement drew consumers’ awareness towards the advertisement and advertised product and services.

The study pointed out that the current business environment had compelled the companies to adopt social media marketing, however, they did not use Twitter to promote and answer their customer concerns and complaints in real-time. Social media marketing had enabled the firms and their customers, to be more effective and productive in receiving and providing service and response, but it had not allowed the companies to enjoy the creation and exchange of user-generated content about their products and services. The study revealed that social media platforms had fostered communication around the firms’ brands and products, enhancing both positive and negative word-of-mouth around their 63 business, products, and services, but had not enabled the companies to form personalized relationships with their customers, hence did not increase their levels of loyalty.

5.3 Discussions 5.3.1 SEM and Competitiveness of Automobile Companies Search Engine Marketing had allowed firms to create solutions and plans to attract consumers to their products and services. These results are similar to Chaffey and Smith (2010) who state that SEM allows firms to create solutions and plans to attract consumers to their products and services, hence enable them gain a greater representation in the global industry market.

Search Engine Marketing is used in the organization to increase the position of the company and its products in the search engine natural or organic results listings for selected keywords and phrases. These results are in tandem with Cheffey et al. (2006) who note that, search engine marketing (SEM) can be used to increase the position of a company or its products in search engine natural or organic results listings for selected keywords or phrase.

To achieve higher sales, Search Engine Marketing had been used to increase links from other websites to the companies’ web pages. These results are in agreement with Shih et al. (2013) who opine that, SEM provides a variety of techniques, it includes increasing links from other websites to company web pages, editing the content of the website, reorganizing the structure and organization of company website, and coding changes.

Search Engine Marketing factors were notoriously difficult to enumerate, and they did not reveal the specific factors used when determining the ranking of a website. These results are in agreement with Lourdes and Paloma (2013) who opine that, SEM factors are notoriously difficult to enumerate, as search engines do not reveal the specific factors used when determining the ranking of a website.

Search engines play a great role in linking firms when using the Internet to build company image and find target customers. These results are in agreement with Shih et al. (2013) who opine that, search engine is also coming to play a greater role as a critical link

64 between firms that use the Internet to build their image and find their target customers, although they also note that, to achieve excellent results, it is not enough to use SEM. The companies had good websites with a good design used to attract, and retain customers. These results are similar to those of Berman and Katonay (2012) who state that, the company needs to have a good website with a good design to attain the customer. The content on the website should be useful, usable, desirable, accessible, credible, and valuable.

Search Engine Marketing for advertisement had enabled the companies to gain more new customers. These results concur with Lourdes and Paloma (2013) who state that, if sites’ valuations for consumers are correlated with their qualities then consumers are better off with some positive level of SEM than without. By contrast, if there are sites that extract high value from visitors yet provide them with low quality then SEM is generally detrimental to consumer welfare.

Search engines’ revenues are typically lower when companies spend more on Search Engine Marketing. These results concur with Rainer et al. (2014) who state that, although SEM can enhance buyer welfare and the result of high quality sites, they opine that search engine’s incomes are ordinarily lower when promoters spend more on SEM and therefore less sponsored links.

5.3.2 E-mail Advertising on Competitiveness of Automobile Companies E-mail marketing model had not been developed from the ground up to avoid the companies playing catch up. These results differ with those of Goliger (2014) who stated that, e-mail marketing model has to be developed from the ground up because anything less puts a company in the position of playing catch up to the leaders.

The companies did not use e-mail marketing software to send promotional mails to their consumers. These results are in contrast to those of Kirkpatrick (2012) who states that, e- mail advertising refers to the use of email for sending promotional messages to internet user and has been considered one of the more effective methods of online advertising and marketing.

E-mail advertising recipients are normally consumers who had not opted to receive such emails. These results are in contrast to those of Kirkpatrick (2012) who states that, e-mail advertising allows firms use email marketing software’s to send mailings to consumers, and the recipients of email advertising need to have opted in to receive such emails.

E-mail advertisements provide consistent and better customer experience, thus maximizing the companies’ potential in enhancing their competitiveness. These results are in agreement with Park et al. (2010) who state that, e-mail advertising provides a consistent and better customer experience; therefore, firms that maximize on its potential can enhance their competitiveness and maintain a good marketing position.

E-mail advertisements guide the organizations on how to improve their products with reference to customer feedback. These results were in tandem with Jensen (2012) who stated that, e-mail advertising guides the organization on how to improve its products with reference to customers’ feedback on the company’s email address.

E-mail advertising offers the companies a cheaper and faster distribution of information to their customers while influencing their faster response. These results are similar to those of Schwartz (2010) who opines that, e-mail allows for a cheaper and faster distribution to customers and also influences customers to respond faster.

Interactive e-mail responses to the company’s e-mail advertisements helps them to develop a strong relationship with their customers. These results are in agreement with Arnold and Tapp (2014) who opine that an interactive e-mail response to e-mail advertisements aids the development of the relationship between marketers and their customers.

E-mail marketing campaigns have produced twice the return on investment compared to other forms of online marketing. These results are in tandem with Pavlov et al. (2014) who states that, e-mail marketing campaigns produce twice the return on investment (ROI) that other forms of online marketing. There is a significant relationship between the effectiveness and profitability of e-mail marketing campaigns.

Indiscriminate distribution of messages without permission of the receiver, hinders the organization’s ability to use e-mail marketing effectively. These results are in tandem with Turban et al. (2010) who noted that cases of spam i.e. the act of unpredictable dissemination of messages without authorization of the collector and without thought for the messages' suitability may likewise ruin the utilization of this medium for advertising.

Unsolicited e-mail marketing is viewed as an attack of security and could turn into a major issue for a few clients. These results are in agreement with Windham (2014) who notes that, unsolicited is viewed as an attack of security and could turn into a major issue for a few clients. This taints the reputation of email marketing. In any case, to abstain from being seen as spam, a few authors prescribed that organizations ought to limit the messages they send and get recipient's authorization (Wreden, 2010; Wright & Bolfing, 2011).

5.3.3 Online Advertising on Competitiveness of Automobile Companies Technology advancement had created the possibility for the firms to engage with clients who were internet users through online advertising. These results were in agreement with Chaudhun et al. (2010) who state that, currently, technology advancement has allowed internet diffusion into to every part of firms and their clients’ lives because people now spend more time on internet.

Online advertising had made it easier for the companies to update product and service information promptly. These results are similar to those of Chaffey and Smith (2010) who found out that, online advertising is flexible and makes it easier for the companies like automobile firms to update their information on products and services promptly.

The companies did not use online advertising to reach and cover a larger target audience and reach broader geographical areas at a lower cost. These results contrast those of Bauer and Greyser (2012) who state that, through online advertising, companies are able can reach and cover a larger target audience and geographical areas compared to traditional advertising at a lower cost, hence, proving its worth in today’s Internet saturated world.

The firms used online advertising to understand their consumers, and generate and manage close relationships with them. These results are in tandem with Pavlou and Stewart (2010) who states that online advertising enables marketers to interact with their customers easily and helps companies in understanding their consumers better to generate and manage close relationships.

Online advertising was used by the organizations to convince customers to purchase products and services through various online stages. These results are in agreement with those of Rawal (2013) who states that, online advertising convinces customers to purchase products or services through five stages which are awareness, interest, desires, convince and action.

Exposure to online advertisement draws consumers’ awareness towards the advertisement and advertised product and services. These results are in agreement with those of Keller (2013) who states that, the exposure to an online advertisement draws the consumers’ awareness towards the advertisement and advertised product or services, and that awareness is an important factor in decision making by the consumer as it increases the likelihood that a particular brand or product is considered when making purchase decision.

Online advertising helped the firms to arouse the desire for their advertised product or services among their consumers. These results are in agreement with Polly and Mittal (2015) who opined that, online advertising helps to in arouse the desire for advertised product or services among the consumers when they are aware and have created liking for the same.

The firms’ online adverts were persuasive, since they used images, and proficiencies to raise the trustworthiness of their adverts. The results are in agreement with Morvarid et al. (2012) who states that, for any online advertising to be persuasive, companies need to use images and proficiency to raise the trustworthiness of the advertising. Using of indirect persuasions such as pictures and images in online advertisement has increased than using words in the same advertisement. This is because detailed images serve as documentary evidence and this makes it more persuasive and influence consumers to view the online advertisement. 68

5.3.4 Social Media Marketing on Competitiveness of Automobile Companies Current business environment had compelled the companies to adopt social media marketing. The results are similar to those of Pergelova et al. (2011) who state that, the current business environment has compelled organizations to adopt social media marketing, not as an expense, but as opportunity to boost the bottom line in terms of competitive advantage. The companies did not use Twitter to promote and answer their customer concerns and complaints in real-time. These results are in contrast with Kimani (2012) who notes that savvy business owners have taken to Twitter as a tool for both promotions and for answering customer complaints in real-time.

Social media marketing had enabled the firms and their customers, to be more effective and productive in receiving and providing service and response. The results are similar to those of Smith and Chaffey (2015) who state that, the emerging marketing techniques using social media have enabled both customers and automobile companies to be more effective and productive in receiving and providing service. Social media had not allowed the companies to enjoy the creation and exchange of user-generated content about their products and services. These results differ to those of Kaplan and Haenlein (2010) who note that, social media allows the creation and exchange of user-generated content.

The companies did not use social media feedback and responses to develop strategy, accept their roles in managing others’ strategy or follow others’ directions. These results are in contrast to those of Laroche et al. (2012) who state that, more industries try to benefit from social media as they can be used to develop strategy, accept their roles in managing others’ strategy or follow others’ directions. The companies did not use social media marketing to focus on people (their customers) and not their products and services. These results differ with Diamond (2012) who observed that, social media marketing focuses on people and not products because; while products can be presented by the company with as many qualitative features and promotional tools as possible, what really matters is the comments and appreciations left by the customers. The companies did not listen, track, and measure what was shared on the social media sites in order to improve on their offered message and adapt it to their customers’ needs. These results differ with Vellido et al. (2011) who highlighted another importance about social media marketing to companies; that their marketers can listen, track and measure what is shared on the social

69 media sites in order to improve the offered message and adapt it more to the customers’ needs.

The firms did not use social media marketing to achieve conventional goals, through creativity, community, and relationships instead of big budgets to achieve their marketing objectives. These results differ with Kaplan and Haenlein (2010) who found that social media marketing uses unconventional means to achieve conventional goals, through the use of creativity, community, and relationships instead of big budgets to achieve marketing objectives.

Social media platforms had fostered communication around the firms’ brands and products, enhancing both positive and negative word-of-mouth around their business, products, and services. These results are in agreement with Fournier and Avery (2011) who state that, social media platforms foster communication around brands and products, enhancing positive as well as negative word-of-mouth around a business and its products and services. Social media had not enabled the companies to form personalized relationships with their customers, hence did not increase their levels of loyalty. These results differ with those of Sashi (2012) who noted that, one of the most valuable benefits of using digital marketing is its capacity to offer consumers a personalized relationship personalization has also been shown to increase the level of loyalty a consumer holds toward a retailer. 5.4 Conclusions 5.4.1 SEM and Competitiveness of Automobile Companies The study concludes that Search Engine Marketing had allowed firms to create solutions and plans to attract consumers to their products and services, and was used in the organizations to increase the position of the companies and their products in the results listings for selected keywords and phrases. Search Engine Marketing had been used to increase links from other websites to the companies’ web pages, even though its factors were notoriously difficult to enumerate. The study concludes that search engines play a great role in linking firms when using the Internet to build company image and find target customers. The companies had good websites with a good design used to attract, and retain customers, and using SEM for advertisement had enabled the companies to gain more new customers, however, search engines’ revenues are typically lower when companies spend more on Search Engine Marketing. 70

5.4.2 E-mail Advertising on Competitiveness of Automobile Companies The study concludes that the e-mail marketing model had not been developed from the ground up to avoid the companies playing catch up, and the companies did not use e-mail marketing software to send promotional mails to their consumers. E-mail advertising recipients were normally consumers who had not opted to receive such emails, although the service provided consistent and better customer experience, thus maximizing the companies’ potential in enhancing their competitiveness. The study concludes that e-mail advertisements guided the organizations on how to improve their products with reference to customer feedback, and offered the companies a cheaper and faster distribution of information to their customers while influencing their faster response. Interactive e-mail responses to the company’s e-mail advertisements helped them to develop a strong relationship with their customers, and their e-mail marketing campaigns had produced twice the return on investment compared to other forms of online marketing. The study concludes that indiscriminate distribution of messages without permission of the receiver, hinders the organization’s ability to use e-mail marketing effectively, and unsolicited e- mail marketing was usually considered as an invasion of privacy and became a serious problem for some of the customers.

5.4.3 Online Advertising on Competitiveness of Automobile Companies The study concludes that technology advancement had created the possibility for the firms to engage with clients who were internet users through online advertising, and this had made it easier for the companies to update product and service information promptly. Online advertising was not used to reach and cover a larger target audience and reach broader geographical areas at a lower cost, but was used by the firms to understand their consumers, and generate and manage close relationships with them. The study concludes that online advertising was used by the organizations to convince customers to purchase products and services through various online stages, and that, exposure to online advertisement drew consumers’ awareness towards the advertisement and advertised product and services. The study concludes that online advertising helped the firms to arouse the desire for their advertised product or services among their consumers since their adverts were persuasive, because they used images, and proficiencies to raise the trustworthiness of their adverts.

5.4.4 Social Media Marketing on Competitiveness of Automobile Companies The study concludes that the current business environment had compelled the companies to adopt social media marketing, however, they did not use Twitter to promote and answer their customer concerns and complaints in real-time. Social media marketing had enabled the firms and their customers, to be more effective and productive in receiving and providing service and response, but it had not allowed the companies to enjoy the creation and exchange of user-generated content about their products and services. The study concludes that motor vehicle companies did not use social media feedback and responses to develop strategy, accept their roles in managing others’ strategy or follow others’ directions, and neither did they use social media marketing to focus on people (their customers) and not their products and services. The study concludes that the companies did not listen, track, and measure what was shared on the social media sites in order to improve on their offered message and adapt it to their customers’ needs, and neither did they use social media marketing to achieve conventional goals, through creativity, community, and relationships instead of big budgets to achieve their marketing objectives. The study concludes that social media platforms had fostered communication around the firms’ brands and products, enhancing both positive and negative word-of- mouth around their business, products, and services, but had not enabled the companies to form personalized relationships with their customers, hence did not increase their levels of loyalty.

5.5 Recommendations 5.5.1 Recommendations for Improvement 5.5.1.1 SEM and Competitiveness of Automobile Companies The study recommends the management of the Kenyan automobile companies to secure a system that would facilitate their ability to enumerate SEM factors in their organizations. This would enable them to understand their ROI from SEM investment which would facilitate their ability to make it advantageous to the firm since search engines’ revenues are lowered by huge spending on SEM.

5.5.1.2 E-mail Advertising on Competitiveness of Automobile Companies The study recommends the Kenyan automobile companies managers to adopt the use e- mail marketing software that would be used to send promotional mails to their consumers

72 that have opted to receive such e-mails. This would facilitate the companies’ ability to send out more promotional e-mails at a go.

5.5.1.3 Online Advertising on Competitiveness of Automobile Companies The study recommends the Kenyan automobile companies managers to use online advertising to reach and cover larger target audience in order to extent their reach to broader geographical areas at lower costs. This will greatly improve the companies’ outreach as well as facilitate their acquisition of new customers that would lead to growth and company expansion regionally.

5.5.1.4 Social Media Marketing on Competitiveness of Automobile Companies The study recommends the automobile companies to make use of social media tools like Twitter, MySpace, Instagram, and Skype to not only promote their products and services, but to also respond to their customers’ concerns and complaints in real-time. This will make their customers feel valued which would increase customer loyalty. The companies could also use the feedback and responses they receive from these platforms to develop their organization strategy which would ultimately enhance their performance, profits, and growth.

5.5.2 Recommendations for Further Studies This study sought to examine the effect of digital marketing on competitiveness of automobile companies in Kenya. The study covered the automobile industry within Nairobi and its neighboring towns of Kiambu, Thika, Athi River and Rongai, and it targeted auto firms were both locally owned and foreign. The study suggests that comparative investigations be led in different zones in Kenya to give a thorough research.

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APPENDICES APPENDIX I: QUESTIONNAIRE You are invited to participate in the above mentioned research project. The survey should only take 10 – 15 minutes to complete. To ensure confidentiality of all responses, you are not obliged to provide your name. The information you give in response to this survey will be purely used for academic purpose.

Section A: Demographic Information 1. Gender of the respondents [ ] Female [ ] Male

2. Age of the respondent [ ] 21 – 30 years [ ] 31 – 40 years [ ] 41 – 50 years [ ] Over 51 years

3. Highest Educational Qualification [ ] Secondary Level [ ] College [ ] Degree [ ] Master’s Degree [ ] Others (Specify)

4. Which organization do you work for? [ ] Associated Vehicle Assemblers Ltd [ ] Beiben Trucks - Nelion Trading Ltd [ ] Cooper Motor Corporation Kenya Ltd [ ] DT Dobie [ ] General Motors Kenya Limited [ ] Honda Motorcycle Kenya Ltd [ ] Kenya Vehicle Manufacturers (KVM) [ ] RMA Motors (Kenya) Limited [ ] Simba Colt [ ] Toyota Kenya Limited [ ] TVS Motors Kenya

5. Time spent in the organization [ ] 0-1 years [ ] 2-4 years [ ] 4-6 years [ ] 7 years and above

Section B: Effect of SEM Marketing on Competitiveness of Automobile Companies 6. What is your rating of the following statements with regards to effect of SEM marketing on competitiveness of automobile companies in Kenya, use the following scale: 1 = Strongly Disagree, 2 = Disagree, 3 = Not Sure, 4 = Agree, and 5 = Strongly Agree.

1 2 3 4 5 Search Engine Marketing has allowed our firm to create solutions and plans to attract consumers to their products and services Search Engine Marketing is used in the organization to increase the position of the company and its products in the search engine natural or organic results listings for selected keywords and phrases To achieve higher sales, Search Engine Marketing increases links from other websites to our company web pages Search Engine Marketing factors are notoriously difficult to enumerate, and they do not reveal the specific factors used when determining the ranking of a website Search engines play a great role in linking our firm when using the Internet to build our company image and find our target customers Our company has a good website with a good design used to attract, and retain our customers The use of Search Engine Marketing for advertisement has enabled us gain more new customers Our search engine’s revenues are typically lower when we spend more on Search Engine Marketing

Section C: Effect of E-mail Advertising on Competitiveness of Automobile Companies 7. What is your rating of the following statements with regards to effect of e-mail advertising on competitiveness of automobile companies in Kenya, use the following scale: 1 = Strongly Disagree, 2 = Disagree, 3 = Not Sure, 4 = Agree, and 5 = Strongly Agree.

1 2 3 4 5 Our e-mail marketing model has been developed from the ground up to avoid our company playing catch up Our company uses e-mail marketing software to send promotional mails to our consumers Our e-mail advertising recipients are normally consumers who have opted to receive such emails Our e-mail advertisements provide consistent and better customer experience, thus maximizing our potential in enhancing our competitiveness Our e-mail advertisements guide us on how to improve our products with reference to customer feedback E-mail advertising offers our company a cheaper and faster distribution of information to our customers while influencing their faster response Interactive e-mail responses to our e-mail advertisements help us develop a strong relationship with our customers Our e-mail marketing campaigns have produced twice the return on investment compared to other forms of online marketing Indiscriminate distribution of messages without permission of the receiver, hinders our ability to use e-mail marketing effectively Unsolicited e-mail marketing is usually considered as an invasion of privacy and becomes a serious problem for some of our customers

Section D: Effect of Online Advertising on Competitiveness of Automobile Companies 8. What is your rating of the following statements with regards to effect of online advertising on competitiveness of automobile companies in Kenya, use the following scale: 1 = Strongly Disagree, 2 = Disagree, 3 = Not Sure, 4 = Agree, and 5 = Strongly Agree.

1 2 3 4 5 Technology advancement has created the possibility for our firm to engage with clients who are internet users through online advertising Online advertising has made it easier for our company to update product and service information promptly Our company uses online advertising to reach and cover a larger target audience and reach broader geographical areas at a lower cost Our firm uses online advertising to understand our consumers, and to generate and manage close relationships with them Our online advertising is used by the organization to convince customers to purchase our products and services through various online stages Exposure to online advertisement draws our consumers’ awareness towards the advertisement and advertised product or services Online advertising helps us to arouse the desire for our advertised product or services among our consumers Our online adverts are persuasive, since we use images, and proficiencies to raise the trustworthiness of our adverts

Section E: Effect of Social Media Marketing on Competitiveness of Automobile Companies 9. What is your rating of the following statements with regards to effect of social media on competitiveness of automobile companies in Kenya, use the following scale: 1 = Strongly Disagree, 2 = Disagree, 3 = Not Sure, 4 = Agree, and 5 = Strongly Agree.

1 2 3 4 5

The current business environment has compelled our company to adopt social media marketing

Our company uses Twitter to promote and answer our customer concerns and complaints in real-time

Social media marketing has enabled us, and our customers, to be more effective and productive in receiving and providing service and response

Social media has allowed our company to enjoy the creation and exchange of user-generated content about our products and services

Our company uses social media feedback and responses to develop strategy, accept their roles in managing others’ strategy or follow others’ directions

As a company, we use social media marketing to focus on people (our customers) and not our products and services

Our company listens, tracks, and measures what is shared on the social media sites in order to improve on our offered message and adapt it to our customers’ needs

Our firm uses social media marketing to achieve conventional goals, through creativity, community, and relationships instead of big budgets to achieve our marketing objectives

Social media platforms have fostered communication around our brands and products, enhancing both positive and negative word- of-mouth around our business, products, and services

Social media has enabled our company to form personalized relationships with our customers, hence increasing their levels of loyalty

Section F: Automobile Competitiveness in Kenya 10. What is your rating of the following statements with regards to automobile competitiveness in Kenya, use the following scale: 1 = Strongly Disagree, 2 = Disagree, 3 = Not Sure, 4 = Agree, and 5 = Strongly Agree.

1 2 3 4 5 We use our digital marketing to monitor consumers’ location page visits We use our digital marketing to monitor consumers interest through our Vehicle Details Page (VDP) views We use digital marketing for financing applications We use our digital marketing to schedule appointments with our customers We use our digital marketing to schedule test drives with our customers We use our digital marketing to engaging in chats with our customers We use our digital marketing to monitor quality site visitors who visit 3 or more pages on our platform

THANK YOU

APPENDIX II: MAJOR MOTOR VEHICLE DEALERS IN KENYA

1. Associated Vehicle Assemblers Ltd 2. Beiben Trucks - Nelion Trading Ltd 3. Cooper Motor Corporation Kenya Limited 4. DT Dobie 5. General Motors Kenya Limited 6. Honda Motorcycle Kenya Ltd 7. Kenya Vehicle Manufacturers (KVM) 8. RMA Motors (Kenya) Limited 9. Simba Colt 10. Toyota Kenya Limited 11. TVS Motors Kenya