Barriers to the use of digital marketing by Small and Medium Enterprise in Soweto

Abstract

Soweto is one of the largest townships in South Africa, predominantly inhabited by black people; it holds promise for economic growth and development in South Africa. Small and Medium Enterprises (SMEs) in Soweto are vital to this growth and development. Digital marketing represents a crucial avenue for success for these SMEs, given its potential to reach a widespread audience, increase brand awareness, and boost sales. However, limited resources, financial constraints, and skills gaps present substantial barriers to SMEs' adoption of digital marketing strategies in Soweto. This study seeks to investigate the limitations faced by SMEs in Soweto in the realm of digital marketing, utilizing a qualitative interview approach involving 12 SME owners or managers in Soweto. Despite the potential for growth and development in Soweto, SMEs encounter hurdles in leveraging digital marketing for brand awareness and sales. The study addresses the limitations SMEs face in Soweto when adopting digital marketing, particularly concerning reaching the right audience, security concerns, resource and financial constraints, market relevance, operational limitations, and skills gaps. The paper highlights the significance of digital marketing for SMEs in Soweto, emphasizing its potential benefits such as broader audience reach, business growth, and adaptation to new marketing methods. Additionally, it underscores the need for targeted interventions such as improving digital skills, providing infrastructure support, and overcoming financial constraints to enhance SMEs' ability in digital marketing. Key findings reveal several obstacles inhibiting SMEs' effective engagement in digital marketing activities, including resource and financial constraints, market relevance, operational limitations, and skills gaps. Many respondents are receptive to outsourcing digital marketing activities due to a perceived lack of expertise and cost considerations. iii The findings stress the importance of addressing the lack of awareness and understanding of digital marketing's potential, suggesting an informed strategy that could help SMEs overcome barriers and maximize digital marketing benefits for business growth. This research illuminates the varied levels of awareness about the effectiveness of digital marketing tools and platforms among SMEs in Soweto, emphasizing the need for education, training, and support to bridge the gap in understanding and utilizing digital marketing. By adopting a comprehensive digital marketing strategy, SMEs can enhance their competitiveness and long-term success.