THE ROLE OF SOCIAL MEDIA AND EFFECT OF RELATIONSHIP MARKETING ON SME PERFORMANCE IN BANGLADESH: MULTI-GROUP CFA
Abstract
Relationship Marketing (RM) is a dynamic marketing strategy that SMEs should adopt as customer buying decisions do not exclusively base on the quality and price of the products, but also depend on the customer relationship with the firm. Subsequently, in the current global economy, RM is a lifeblood to acquire and retain customers. Whereas, social media is a technique to maintain easy communication with all stakeholders for the survival of SMEs. More importantly, active SMEs generally contribute to the economy through poverty reduction, employment generation, innovation, social cohesion, and thus, SMEs are considered as a key apparatus of economic growth. Hence, this study aimed to investigate empirically the effects of RM on the SME Performance and the moderating role of Social media on the effect of RM on SME performance. This model obtains an extensive scholarly attention and thus numerous researches have been conducted in the western countries, but none has been conducted in Bangladesh using all these variables in a single model. A structured survey was conducted and selected 384 owners of SMEs in Bangladesh via cluster random sampling. The hypotheses were tested using SEM-AMOS package 22.0 based on configuration theory. Based on the statistical results, RM strategy has significant effect on Bangladeshi SME performance and Social media significantly moderate the effect of RM on SME performance in Bangladesh. In view of that, the findings evoked that there is a dire need to focus on RM strategy and Social media for SMEs to boost performance and its sustainability.
References
Ahmed, M.U. (2001). Globalization and competitiveness of Bangladeshi Small Scale Industries (SSIs): An analysis of the prospects and challenges. CPD/UPL published, Bangladesh facing the Challenges of Globalization, IRDB. p:2.
Alauddin, MD., & Chowdhury, M.M. (2015). Small and Medium Scale Enterprise in Bangladesh prospects and challenges. Global Journal of Management and Business Research: Finance, 15(7), 1-9.
Al-Dhaafri, H.S., Al-Swidi, A. K., & Yusoff, R.Z.B. (2016). The mediating role of total quality management between the entrepreneurial orientation and the organizational performance. The TQM Journal, 28(1), 89–111.
Aminul. M., & Shariff, M.N.M. (2015). Influence of strategic orientation on SMEs access to finance in Nigeria. Asian Social Science, 11, 298-309.
Arinaitwe, S.K. (2006). Factors constraining the growth and survival of small scale businesses: A developing country analysis. Journal of American Academy of Business, 8(2), 167-178.
Arslan, M and Zaman, R. (2014). Impact of Social Media on Organizational Culture: Evidence from Pakistan. Developing Country Studies, 4(21), 1-10.
Awang, Z. (2015). SEM made simple: A Gentle Approach to Learning Structural Equation Modeling. Bandar Baru Bangi: MPWS Rich Resources.
Awang, Z., Ahmed, U., Hoque, A.S.M.M., Siddiqui, B.A., Dahri, A.S., & Muda, H. (2017a). The Mediating Role of Meaningful Work in the Relationship Between Career Growth Opportunities and Work Engagement. International Academic Conference on Business and Economics (IACBE 2017), Faculty of Economics and Management Sciences (FESP), Universiti Sultan Zainal Abidin (UniSZA), October 07-08.
Awang, Z., Hoque, A.S.M.M., Muda, H., & Salleh, F. (2017b). The Effects of Crowdfunding on Entrepreneur’s Self-Belief. International Academic Conference on Business and Economics (IACBE 2017), Faculty of Economics and Management Sciences (FESP), Universiti Sultan Zainal Abidin (UniSZA), October 07-08.
Bangudu, O. (2013). Nigeria’s Operating Environment for Businesses has been difficult. Retrieved February 18, 2019, from http://www.premiumtimesng.com/business/145725
Benamour, Y., & Prim. (2000). Orientation relationnelle versus transactionnelle du client: développement d'une échelle dans le secteur bancaire français Une étude exploratoire. Cahier de recherche, 1-22.
Berry, L.L. (1983). Relationship marketing, in Berry, L.L., Shostack, G.L. and Upah, G.D. (Eds), Emerging Perspectives of Services Marketing, American Marketing Association, Chicago, IL, pp. 25-8.
Berry, L.L., Shostack, G.L., & Upah, G.D. (1983). Emerging Perceptions on Service Marketing, American Marketing Association, Chicago, IL, 1983, pp. 25-8.
Blattberg, R.C., & Deighton, J. (1991). Interactive marketing: exploiting the age of addressability. Sloon Management Review, 33(1), 29-38.
Brito, C. (2011). Relationship marketing: old wine in a new bottle. Innovative Marketing, 7(1), 66-77.
Bughin, J. and Manyika, J. (2016). How Businesses Are Using Web 2.0: Mckinsey Global Survey Results, Quarterly, 15 (1), 1-16.
Bughin, J., Chui, M., & Miller, A. (2017). How Companies Are Benefiting from Web 2.0: Mckinsey Global Survey Results, Quarterly, 17 (6), 1-9.
Butigan R. & Mahnic I. (2011). Role of relationship marketing in small and medium-sized enterprises. Trziste, 23(1), 89-104.
Callaghan, M., McPhail, J., Yau, O.H.M. (1995). Dimensions of a relationship marketing orientation: an empirical exposition. Proceedings of the Seventh Biannual World Marketing Congress, Melbourne, Australia, pp. 10 – 65.
Chowdhury, M.S., Islam, R., & Alam, Z. (2013). Constraints to the development of small and medium sized enterprises in Bangladesh: An empirical investigation. Australian Journal of Business and Applied Sciences, 7(8), 690-696.
Chowdhury, R., & Rashid, H. (1996). The role of small scale industries in an under- developed economy with reference to Bangladesh. Chittagong University Studies (Commerce), 12, 45-48.
Cook, K. (2000). Charting futures for sociology: structure and action. Contemporary Sociology, 29, 685-692.
Cooley S.C. & Smith, R.L.M. (2010). International Facebook faces: An analysis of self-inflicted face-ism in online profile pictures. Paper presented at the annual convention of the International Communication Association; Singapore. 2010.
Davood, G., & Morteza, M. (2012). Knowledge Management capabilities and SMEs organizational performance. Journal of Chinese Entrepreneurship, 4 (1), 35-49.
Don, E. (2006). Theory of performance. Retrieved from www.webpages.uidaho.edu/ele/scholars/results/workshops/facilitators_institute/theory%20of%20Performance.pdf (Accessed on 19th January, 2019)
Drazin, R., & Van de Ven, A.H. (1985). Alternative forms of fit in contingency theory. Administrative Science Quarterly, 30, 514–539.
Fiol, C.M. (1991). Managing culture as a competitive resource: An identity-based view of sustainable competitive advantage. Journal of Management, 17(1), 191–211.
Fornell, C., & Larcker, D.F. (1981), Structural equation models with unobservable variables and measurement error: Algebra and statistics. Journal of Marketing Research, 18(3), 328-388.
Fuhrman, D. (1991) Interactive electronic media. Sales and Marketing Management, 143(1), 44-47, 1991.
Gronroos, C. (1990). Relationship Approach to Marketing in Service contexts: The marketing and organizational behavior interface. Journal of Business Research, 20(1), 3–11.
Gronroos, C. (1996). Relationship marketing: strategic and tactical implications. Management Decision, 34(3), 5-14.
Guarnieri, M.A.J., Wright, S.L., & Johnson, W.B. (2013). Development and Validation of a Social Media Use Integration Scale. Psychology of Popular Media Culture, 2(1), 38-50.
Gummesson, E. (1994). Broadening and Specifying Relationship Marketing. Asia-Australia Marketing Journal, 2(1), 31-43.
Gummesson, E. (1997). Relationship Marketing as a Paradigm Shift: Some Conclusions from the 30R Approach. Management Decision, 35(4), 267-272.
Gummesson, E. (2017). From relationship marketing to total relationship marketing and beyond. Journal of Services Marketing, 31(1), 16-19.
Hair, J., Black, W. C., Babin, B.J., & Anderson, R.E. (2010). Multivariate data analysis (7th ed.). Upper saddle River, New Jersey: Pearson Education International.
Hau, L.N., & Ngo, L.V. (2012) "Relationship marketing in Vietnam: an empirical study", Asia Pacific Journal of Marketing and Logistics, 24(2), 222-235, https://doi.org/10.1108/13555851211218039
Hoque, A.S.M.M. (2018). Digital Device Addiction Effect on Lifestyle of Generation Z in Bangladesh. Asian People Journal (APJ), 1(2), 21-44.
Hoque, A.S.M.M. (2018a). The effect of entrepreneurial orientation on Bangladeshi SME performance: Role of organizational culture. International Journal of Data and Network Science, 2(1), 1-14.
Hoque, A.S.M.M. (2018b). Does government support policy moderate the relationship between entrepreneurial orientation and Bangladeshi SME performance? A SEM approach. International Journal of Business Economics and Management Studies, 6(3), 37-59.
Hoque, A.S.M.M., & Awang, Z. (2016a). The Sway of Entrepreneurial Marketing on Firm Performance: Case of Small and Medium Enterprises (SMEs) in Bangladesh, Terengganu International Business and Economics Conference (TiBEC-V), Terengganu, Universiti Teknologi Mara (UiTM), pp. 174-194.
Hoque, A.S.M.M., & Awang, Z. (2016b). Exploratory Factor Analysis of Entrepreneurial Marketing: Scale Development and Validation in the SME context of Bangladesh, International Social Sciences and Tourism Research Conference, Terengganu, UniSZA, pp. 20-22.
Hoque, A.S.M.M., & Awang, Z. (2016c). The Impact of Marketing Strategy on Small and Medium Scale Enterprises (SMEs): Case Study in Bangladesh. International Postgraduate Research Conference (IPRC 2016), Universiti Sultan Zainal Abidin (UniSZA), Gong Badak Campus, Kuala Terengganu, Malaysia, October 8-10.
Hoque, A.S.M.M., & Awang, Z. (2019). Does gender difference play moderating role in the relationship between entrepreneurial marketing and Bangladeshi SME performance? Accounting, 5(1), 35-52.
Hoque, A.S.M.M., Awang, Z., & Ghani, N.A. (2016). Conceptual Model for Quality of Life in the Perspective of Social Entrepreneurship. International Conference on Science, Engineering, Management and Social Science (ICSEMSS 2016), Universiti Teknologi Malaysia (UTM), Johor Bahru, Malaysia, October 6-8.
Hoque, A.S.M.M., Awang, Z., & Gwadabe, U.M. (2018g). The Effect of Entrepreneurial Marketing on Bangladeshi SME performance and the Role of Organizational Culture: A Structural Equation Modelling. Journal of Management and Operation Research, 1, 1-21
Hoque, A.S.M.M., Awang, Z., & Salam, S. (2017a). The Effects of Relationship Marketing on Firm Performance: Small and Medium Enterprises (SMEs) in Bangladesh, 1st International Conference on Business and Management (ICBM-2017), BRAC Business School (BBS), BRAC University, Dhaka, Bangladesh, September 21-22.
Hoque, A.S.M.M., Awang, Z., & Siddiqui, B.A. (2017b). Technopreneurial Intention among University Students of Business Courses in Malaysia: A Structural Equation Modeling. International Journal of Entrepreneurship and Small & Medium Enterprise (IJESME), 4, 1-16.
Hoque, A.S.M.M., Awang, Z., Baharu, S.M.A.T., & Siddiqui, B.A., (2018a). Upshot of Generation ‘Z’ Entrepreneurs’ E-lifestyle on Bangladeshi SME Performance in the Digital Era. International Journal of Entrepreneurship and Small & Medium Enterprise (IJESME), 5(July), 97-118.
Hoque, A.S.M.M., Awang, Z., Jusoff, K., Salleh, F., & Muda, H. (2017c). Social Business Efficiency: Instrument Development and Validation Procedure using Structural Equation Modelling, International Business Management, 11(1), 222-231.
Hoque, A.S.M.M., Awang, Z., Muda, H., & Salleh, F. (2018b). Ramification of crowdfunding on Bangladeshi entrepreneur’s self-efficacy. Accounting, 4(4),129-138. DOI: https://doi.org/10.5267/j.ac.2018.4.001
Hoque, A.S.M.M., Awang, Z., Siddiqui, B. A., & Sabiu, M.S. (2018c). Role of Employee Engagement on Compensation System and Employee Performance Relationship among Telecommunication Service Providers in Bangladesh. International Journal of Human Resource Studies, 8(3), 19-37.
Hoque, A.S.M.M., Gwadabe, U.M., & Rahman, M.A. (2017d). Corporate Entrepreneurship Upshot on Innovation Performance: The Mediation of Employee Engagement. Journal of Humanities, Language, Culture and Business, 1(6), 54-67.
Hoque, A.S.M.M., Siddiqui, B.A., & Awang, Z. (2018d). Technopreneurial Competency Effect on Technology-based SME Performance: A Structural Equation Modelling on Bangladeshi SMEs. International Journal of Entrepreneurship and Small & Medium Enterprise (IJESME), 5(July), 55-73.
Hoque, A.S.M.M., Siddiqui, B.A., & Awang, Z. (2018e). Technopreneurial Competencies Effects on Bangladeshi SME Performance: A Structural Equation Modeling. 2nd ASIA International Multidisciplinary Conference (AIMC 2018), Faculty of Management, Universiti Teknologi Malaysia (UTM), Johor Bahru, Malaysia, May 12-13.
Hoque, A.S.M.M., Siddiqui, B.A., Awang, Z., & Baharu, S.M.A.T. (2018f). Exploratory Factor Analysis of Entrepreneurial Orientation in the Context of Bangladeshi Small and Medium Enterprises (SMEs). European Journal of Management and Marketing Studies, 3(2), 81-94.
Hunt, S., Arnett, D., & Madhavaram, S. (2006). The Explanatory Foundations of Relationship Marketing Theory, Journal of Business & Industrial Marketing, 21(2), 72-87.
Ibrahim, M.I., Keat, O.Y., & Abdul-Rani, B.S.H. (2017). Government Support Policy as a Potential Moderator on the Relationship between Entrepreneurial Orientation, Contemporary Marketing and SMEs Performance in Nigeria a Proposed Framework. Arabian Journal of Business and Management Review, 6(10), 32-42.
Ivens, B.S., & Pardo, C. (2004). Les clients comptes clés sont-ils vraiment traités différemment? Le point de vue des clients. Recherche et Applications en Marketing, 19(4), 3-22.
Jackson, B. (1985). Building customer relationships that last. Harvard Business Review, 63, 120-8.
Kaplan, A.M. & Haenlein, M. (2016). Users of the World, Unite! The Challenges and Opportunities of Social Media, Business Horizons, 53 (1), 59-68.
Karides, M. (2005). Whose solution is it? Development ideology and the work of micro entrepreneurs in Caribbean context. The International Journal of Sociology and Social Policy, 25(1), 30-62, 2005.
Laeequddin M., Sahary, B.S., Sahay, V., & Waheed, K.A. (2012). Trust building insupply chain partners relationship: an integrated conceptual model. Journal of Management Development, 31(6), 550-564.
Larson, R.W. & Walker, K. (2016). Learning about the “real world” in an urban arts program. Journal of Adolescent Research, 21, 244–268.
Leidner, D.E. & Kayworth, T. (2016). A Review of Culture in Information Systems Research: Toward a Theory of Information Technology Culture Conflict, MIS Quarterly, 30 (2), pp. 357-399.
Levitt, T. (1983). After the sale is over. Harvard Business Review, 61(5), 87-93.
Luigi, D., & Mihai, I. (2011). Value Chain and Custorme Relationship Cycle: Two Concepts of Relationship Marketing. International Journal of Trade, Economic and Finance, 2(2), 24-37.
Miller, D. & Mintzberg, H. (1988). The case for configuration. In J. Quinn & R. James (Eds.), The strategy process: Concepts, contexts, and cases (pp. 518–524). Englewood Cliffs: Prentice-Hall.
Montoo, A.A. (2006). SME in Bangladesh. CACCI Journal, 1, 1-19.
Morgan, R.M. & Hunt, S.D. (1994). The Commitment Trust Theory of Relationship Marketing. Journal of Marketing, 58, 20-38.
Obiwuru, T.C., Okwu, A. T., Akpa, V.O., & Nwankwere, I.A. (2011). Effects of Leadership Style on Organizational Performance: A survey of selected Small Scale Enterprises in IKOSI_KETU council development area of Lagos State, Nigeria. Australian Journal of Business and Management Research, 1(7), 100-111.
Rashid, & Tahir. (2003). Relationship marketing: case studies of personal experience of eating out. British food journal, 105(10), 742-750.
Rugraff, E., & Hansen, M.W. (2011). Multinational Corporations and Local Firms in Emerging Economies. University of Chicago Press Economics Books, University of Saparito.
Sansom, K., & Jaroenwanit, P. (2016) A mediating role and influence of the relationship marketing success toward cluster productivity in Thailand. International Business Management 10(4), 416–422.
Santos, J.B., & Brito, L.A.L. (2012). Toward a subjective measurement model for firm performance. Brazilian Administration Review (BAR), 9(6), 95–117. http://dx.doi.org/10.1590/S1807-76922012000500007
Sheth, N.J., & Parvatiyar, A. (1995). The Evolutions of Relationship Marketing. International Business Review, 4, 397-418.
Siddiqui, B.A., & Hoque, A.S.M.M. (2018). Innovation Performance of Internet Service Providers in Bangladesh: The Sway of Corporate Entrepreneurship. International Journal of Entrepreneurship and Small & Medium Enterprise (IJESME), 5(July), 1-14.
Sin, L., Tse, A., Yau, O., Chow, R., & Lee, J. (2005). Market Orientation, Relationship Marketing Orientation, and Business Performance: The Moderating Effects of Economic Ideology and Industry Type. Journal of International Marketing, 13(1), 36-57. Retrieved from http://www.jstor.org/stable/25048999
Sin, L.Y.M, Tse, A.C.B., Yau, O.H.M., Lee, J.S.Y, & Chow, R. (2002). The Effect of Relationship Marketing Orientation on Business Performance in Service Oriented Economy, Journal of Services Marketing, 16(7), 656-676.
Sin, L.Y.M., Tse, A.C.B., Yau, O.H.M., Chow, R.P.M., Lee, J.S.Y., & Lau, L.B.Y. (2005). Relationship marketing orientation: scale development and crosscultural validation. Journal of Business Research, 58, 185-194.
Slater, S., Olson, E., & Finnegan, C. (2011). Business strategy, marketing organization culture, and performance. Marketing Letters, 22(3), 227-242. Retrieved from http://www.jstor.org/stable/41488535
Smith, L.G. (1991). Make Friends with Direct Marketing. Best’s Review, 92(1), 73-74.
Smith, T.M., & Reece, J.S. (1999). The Relationship of Strategy, Fit Productivity, and Business Performance in a Services Setting. Journal of Operations Management, 17(2), 145-161.
Wales, W.J., Gupta, V.K., & Mousa, F.I. (2011). Empirical research on Entrepreneurial orientation: An assessment and suggestion for future research. International Small Business Journal, 1-27.
Wilson, D. (1995). An integrated Model of Buyer-Seller Relationships. Journal of the Academy of Marketing Science, 23(4), 335-345.
Yau, O., Lee, J., Chow, R., Sin, L., & Tse, A. (2000). Relationship marketing: The Chinese way. Business Horizon, 12(1), 16 – 24.
Downloads
Published
Issue
Section
License
Upon acceptance of an article, authors will be asked to transfer copyright. This transfer will ensure the widest possible dissemination of information. A notification will be sent to the corresponding author confirming receipt of the manuscript. If excerpts from other copyrighted works are included, the author(s) must obtain written permission from the copyright owners and credit the source(s) in the article.