Adoption of Social Media in Small and Medium Enterprises: A study based on Khulna City

Abstract

Purpose: The purpose of the research is to analyze the existing situation of Social Media adoption in SME of Khulna city based on restaurants.  So the use of social media adoption by SMEs can be better understood.

Method: In depth interview was taken with six SMEs so that adoption of social media in SMEs can be understood better. Qualitative technique was followed.

Findings: How SMEs in Khulna use social media, the necessary tools and technologies required to use social media. And what are benefits they are getting including getting feedback about business, getting free reach, attracting new customers, opportunity of paid promotion, building trust.

Implications: Use of Social media of SMEs can be improved. By learning how the SMEs get benefits, similar SMEs can improve their way to use social media.

Limitations: Firstly, the locus of the research was limited to Khulna city. Secondly, only restaurants were included.

Keywords: Social Media, SMEs, Adoption of Social Media

Table of Contents

1. Introduction

1.1 Background of the study

1.2 Research Gap

1.3 Research Objective

1.4 Research Question

2. Some key concepts used in the thesis

2.1 Adoption

2.2 SME

2.3 Social Media

3. Literature Review

4. Methodology

4.1 Research Method

4.2 Sampling

4.3 Data Collection & Analysis Approach

5. Analysis and Discussion

6. Conclusion

References

1. Introduction

1.1 Background of the study

SMEs have to perform business operations similar to larger enterprises and operates in same environment like their larger counter parts but SMEs lacks resources like capital or human resources from larger enterprises.  Moreover, SMEs facing more competitive pressure from external environment more than ever because of globalization, legislation and less trade barrier. Beside those disadvantages, SMEs have few advantages too. SMEs can take advantage of personal networked relationship and flat management system. Social Media is a better suit for smaller companies for greater flexibility as usually there is one person to take decisions in SME.

Social media is no longer only to be in touch with friends and family members (Shankar, Jeffery, Murali, Eileen, & Ross, 2011) but also a place for users to get news, information at the same time learn about products and being connected with brands they are interested in and often make buying decisions. This creates new opportunity for business to reach to new and existing customers. Besides, the evolution of simple web page enables business to provide information about business or product to the users of the Internet easily and Web 2.0 change the role to share interactively from only receiving information. Besides, using social basic features of social media sites are free.

SMEs faces a growing concern to adopt social media given the number of internet users in Bangladesh is over 2.3 crores (Wikipedia, 2015) and most of them use Facebook or at least one other social media sites. This is a huge possibility for SMEs to reach their target customers because of the wide range of diversified group using social media. But, using social media is not always easy for SMEs because of limitations of resources. Majorities of them failed to use social media effectively (Csordás & Gáti, 2014). Businesses are not sure what to do in Social media as a result what happens in social media is more experimental than insightful planning (Miller & Lammas, 2010). Which is true for SMEs using social media in Bangladesh.

The locus of the study is Khulna, Bangladesh. The use of social media in Khulna, Bangladesh is still in primary stage where uses are unplanned and unstructured. Given the opportunity to reach to target customers are ever increasing in social media sites and the opportunity is largely unexplored by SMEs in Khulna city. This study will try to explore how and why SMEs use social media based on data from restaurants in Khulna city using qualitative-exploratory research method. As this methods allow to look into in-depth of phenomena and processes that are not yet clear in literature and where variables can not clearly be taken and relationships can not be drawn and requires further analysis and exploration (Bettiol, Di Maria, & Finotto, 2012). Data will be collected using in depth interview with SMEs owners with semi-structured questioners as it allows the researchers to explore the main issues and focus participants’ experience and can explore participants’ response further on issues emerging during the interview (Gillham, 2010).

1.2 Research Gap

Though there is a huge opportunity for business in using social media, the study to explore the use of social media is rare. And, in most of the studies about social media adoption is based on larger enterprises. Few of these studies focus on the use of social media by SMEs (Samuel & Lemuria, 2016). Most small businesses are still unsure how to use social media (Maltby & Ovide, 2013) This study is focused on the social media usage of SMEs in Khulna, Bangladesh, where use of social media by SMEs is still in instructed and unplanned. How and why SMEs in Khulna city use social media need to be explored in depth to understand better. This study is unique because it tries to understand social media use in a area where social media use is still in very early stage which is similar to study of (Ulusoy, Jones, & Borgman, 2015).  The knowledge from the study can be used by similar SMEs.

1.3 Research Objective

There are very few works can be found relating social media adoption by SMEs. The purpose of the research is to analyze the existing situation of Social Media adoption in SME of Khulna city based on restaurants. Understanding uses of social media based on experience of SME owners.  Exploring how SMEs use social media, will help them to better understand the Social Media as well as using in better ways.

• To understand how SMEs use social media
• To understand the benefits SMEs get from social media

1.4 Research Question

In order to achieve the research objective mentioned above, the following research questions are formulated:

How do SMEs use social media?

Why do SMEs use social media?

2. Some key concepts used in the thesis

2.1 Adoption

There are three different definitions of adoption of innovation (Samiaji, 2012). The first one is diffusion of innovation (DOI) theory (Rogers E. , 1995), where adoption means a commitment to implement innovation or decision of making physical acquisition of technical artefacts (Fichman & Kemerer, 1993). The commitment is the result of willingness to make full use of innovation (Rogers E. , 1995). The DOI theory is mainly from communication theory. The idea was concerned about communicating the idea to potential adopters. The idea is incomplete because it gives more important on achieving the idea of adoption in adopters’ mind rather than how they use. Thus, the idea is not sufficient to explain how the innovation is accepted and used (Samiaji, 2012). (Thong & Yap, 1995) defined adoption of IT as using IT to support business. (Bøving & Bøker, 2003) defined adoption as use of innovation as intended by designers. Which share similarities with second definition of Thong and Yap. Difference is, (Bøving & Bøker, 2003) argued that modification of innovation or re-innovation by users was not supported by their findings so all innovation are not equal to be called adoption. Where, (Thong & Yap, 1995) did not differentiate between full use and modified use. But both (Bøving & Bøker, 2003) and (Thong & Yap, 1995) argued that unless innovation is put to use, it is not adoption. This argument is similar to argument of (Zaltman, Duncan, & Holbek, 1973), (Damanpour, The Adoption of Technological, Administrative, and Ancillary Innovations: Impact of Organizational Factors, 1987), and (Damanpour & Evan, Organizational Innovation and Performance: The Problem of “Organizational Lag”, 1984)  where they described new idea as innovation only when implemented. It is not enough to be called as adoption only with mental decision is made without implementation. All activities till decision is made is mental activities and implementation requires implementation (Samiaji, 2012).

2.2 SME

In most economy SMEs are dominant in number. SMEs play a vital role in the economy of first world countries. But in third world countries SMEs are more dominant and considered as more important than first world (Rwigema & Karungu, 1999). Though small on size, SMEs has to cover all areas of business including manufacturing, wholesaling, retailing and service. SMEs are considered as active engine of economic growth. Outside agriculture, SMEs including micro business are 99.85% of all enterprises in Bangladesh (Rahman, Role of SMEs Export Growth in Bangladesh., 2009). SMEs largely contributes to GDP and generates larger share of employments (Gamage, Small and Medium Enterprise Development in Sri Lanka: A Review., 2003).

SMEs including micro enterprises in Bangladesh creates 81.2% employment opportunities outside agriculture (Rahman, Role of SMEs Export Growth in Bangladesh., 2009). Approximately, there are 6 million micro, small and medium enterprises in Bangladesh, where enterprises with a maximum of 100 employees are included. Those enterprises create employment opportunities for over 31 million people which is about 40% of all population of age above 15. SMEs mainly includes, wholesale and retail trade and repairs, production and sale of agricultural goods, services, and manufacturing respectively 40%, 22%, 15% and 14%. However, when arranged based on contribution to GDP, top contributes are manufacturing (38%), agriculture (24%) and retail trade & repairs (23%) (Mintoo, 2006).   SMEs create employment opportunity for 22% of adult population of developing countries (Daniels & Ngwira, 1993). It is easy to describe SMEs but hard to define (Beaver, 2002). There is no common definition of SME. The term is used interchangeably with SMME. Definition of SME differs based on their geographic location (Leopoulos, 2006). SMEs can be categorized in four categories, including micro enterprises, very small enterprises, small enterprises, and medium enterprises. Differentiating factor for micro enterprise is turnover, for the other categories are differentiated by size of workforce (Broembsen, 2003). The European Commission adopted a common definition of SMEs based on number of employees. Numbers are as follows: Micro Enterprises: Less than 10 People; Small Enterprises: 10-99 People; Medium Enterprises: 100-499 People. (Graham, 2002)

According to the Ministry of Industry of Bangladesh, for manufacturing enterprises, if the replacement cost of it’s plant, structures, machinery, support utility, and associated services is Tk. 50,000 to TK. 15,000,000, and/or workforce is less than 50, it can be treated as small enterprises. Can be counted as medium enterprise in manufacturing, if the replacement cost of it’s plant, structures, machinery, support utility and associated services are Tk. 15,000,000 to TK. 200,000,000 and/or workforce is less than 150. Fixed structures including land and building are excluded in both of the above cases. For non-manufacturing enterprises, this definition differs. According to the Ministry of Industry of Bangladesh, if an enterprise has fixed capital between Tk. 50,000 to Tk. 5,000,000 and/or workforce is less than 25, it can be treated as small enterprise.  Can be treated as medium enterprise, if fixed capital is between Tk. 5000,000 to Tk. 100,000,000 and/or workforce is less than 50. Again, fixed structures including land and building are excluded in both of the above cases (Uddin & Bose, 2013).

2.3 Social Media

Social media can not be defined with single definition. Scholars defined differently (Jackma & Scott, Auditing social media. A governance and risk guide., 2011). Social media is a group of web applications that is built on ideology and technology of Web 2.0 and allow users to exchange content created by users (Sinclaire, K., & Vogus, 2011). Web 2.0 is a way for end users to use and share contents in a collaborative way (Kaplan & Haenlein, 2010) which empowered users to share interactively rather than only receiving information (Campbell, Colin, Pitt, Parent, & Berthon, 2011). Social Media is software tool (Sinclaire & Vogus., 2011), operates online (Drury G. , 2008), and global platform for sharing data (Jackma & Scott, 2011) where people share news, idea, insight, opinion, humor, gossip as contents including text, image, videos (Drury G. , 2008). People gather online to communicate and share opinion, information, knowledge where they can transmit contents easily and social media sites allow them to communicate (Safko L. , The Social Media Bible: Tactics, Tools, and Strategies for Business Success., 2009). Social media must contain user profile, methods allowing users to communicate between them, available virtual groups to join based on interest (Ellison, 2007). Users can create profile and invite others to have access to those profile (Kaplan & Haenlein, 2010). However, social media can not be defined with one single definition. (Jackma, J. M.; Scott, P. R., 2011). Social media is much more related to what people do rather than the technology it uses. Users are creating and consuming contents and thus adding value to web application that allows them to do so (Campbell, Pitt, Parent, & Berthon, 2011). Social media changed the role of people to creating and sharing content from just consuming news (Cook, 2008) and changed the way of interacting, participating and involving with user generated content and provided new ways of many to many and one to many communication process with addition of a range of new service (Safko L. , The Social Media Bible: Tactics, Tools, and Strategies for Business Success., 2009). Social media is mainly free and easy to use, as a result, is becoming an non separable part of everyday life (Fischer & Rueber, 2009). Social Networking and Social Media is often used interchangeably but there is a slight difference (Kaplan & Haenlein, 2010). Social media is the environment where social networking takes place (Paquette, Social Media as a Marketing Tool: A Literature Review, 2013).

(Safko L. , The Social Media Bible: Tactics, Tools, and Strategies for Business Success., 2009) categorized social media in 15 categories, where main categories are: Social networking (e.g. Facebook, Google Plus); Microblogging (e.g. Twitter, Tumblr); Publishing (e.g. Wikipedia, SlideShare); Photo, audio and video sharing (e.g. Flickr, YouTube); Live casting and virtual worlds (e.g. Second Life); Aggregators (e.g. Digg, Reddit); Gaming and productivity applications (e.g. BitTorrent, Google Docs).

3. Literature Review

Technology advancement and powerful mobile devices in hand, made social media is a new touch point for marketers to utilize (Shankar, Jeffery, Murali, Eileen, & Ross, 2011). With the advancement of web2.0, social media increasingly becoming part of companies’ marketing activities (Kaplan & Haenlein, 2010). Social media is no longer only to be in touch with friends and family members but also a place for users to learn about products and companies they might be interested in, which creates a new aspect for marketers and retailers to provide them a new way to make buying decisions (Shankar, Jeffery, Murali, Eileen, & Ross, 2011). Common activities for companies in social media is creating page, managing promotion, managing relation, conducting market research (Bettiol, Di Maria, & Finotto, 2012). The new way of communication that social media provides was not possible with traditional marketing (Eagleman, 2013) and full fill marketing as a subset using online applications that allow to share product information and being collaborated among users (Kaplan & Haenlein, 2010). Social media gives opportunity to build trust between company and customer in a new way that was never possible before with traditional marketing (Deelmann & Loos, 2002). Also enables business to provide customer service in a new way (Chua, Deans, & Parker). Ways social media create value by creating more customer satisfaction and generating fewer complaints (Hitt, Ireland, & Hoskisson, 2013), engaging customer review& discussion (Gligorijevic & Leong, 2011) and recruiting (Newman, 2013). Social media success can not be measured with number of likes and followers only on pages (Pentina, Koh, & Le, 2012) but key to success for companies lies in their ability to engage followers (Öztamur & Karakadılar, 2014).

Business value of social engagement lies mainly in customer engagement (Stockdale, Ahmed, & Scheepers, 2012). Because mobile and web based technologies enable customers to create, modify, share content, and discuss about business (Kietzmann, Hermkens, Mccarthy, & Silvestre). Analyzing user generated contents, future purchasing behavior can be forecasted more accurately (Kim & Ko, 2011). Brand popularity can be increased (Vries, Gensler, & Leeflang, 2012). Attracting new customers are possible (Michaelidou, Siamagka, & Christodoulides, 2011).  Consumer perception is a key defining factor of consumption activities (Mady, 2011). Social networking helps marketers to reach shoppers in new ways with planning and executing all the activities that influence shoppers to purchase, consume, and repurchase (Shankar, Jeffery, Murali, Eileen, & Ross, 2011). This is how social media is an avenue for retailers to extend marketing campaign (Chi, 2011). Social media is the bridge between customer and brand. Business must learn using social media to take advantage. This is more important for farms seeking competitive advantages (Mangold & Faulds, 2009).

Social media can help to grow business due to diversity of users. The wide range of users using social media increases chance for business to reach target audience (Cha, 2009). Besides using social media has become a requirement for companies because customers expect it as an important ingredient of communication (He, Wang, & Zha, 2014). For example, the fact that over 30 million companies are using Facebook, is forcing others to use Facebook as well (Paradiso, 2015). When people perceive that business on social media is useful and easy to get, willingness to shop increases (Cha, 2009). This provide business an opportunity to promote business effectively among potential consumers. Social media allows businesses to practice goods, services, ideas, and information (Dahnil, Marzuki, Langgat, & Fabeil, 2014). How attach buyers are attached to product and brands often depends on nature of social media group (Muñiz & Schau., 2007). For example, on a Facebook group focused on luxury brands, then high end products are more relevant there. College aged users has the most positive perception about social media (Chu 2011). Social media helps companies to communicate with existing customers and create opportunity to attract new customers (He, Wang, & Zha, Enhancing social media competitiveness of small businesses: insights from small pizzerias., 2014). Besides using social media involves very low financial investments (Michaelidou, Siamagka, & Christodoulides, 2011). Companies are not sure what to do in Social media. What happens in social media is more experimental than insightful planning (Miller & Lammas, 2010).

SMEs operates in same environment like larger enterprises but they lack resources like adequate capital and extended human resource. Besides those setbacks, Competitive pressure is ever growing from globalization, relaxing trade barriers, and advancement of technology. To adapt with the situation, SMEs need to build meaningful relation with customers and to be open to adopt new ways of working (Berry, 2002). But small size has some advantages too, it allows some flexibility, which is difficult in larger farms (European Union, 2000). Using their flexibility and quick responsiveness on customers’ need, SMEs survive against their size related constrains (Yiannis, Protogerou, Spanos, & Papagiannakis, 2004). Management is style is flat in SMEs encourages innovation. SMEs are often informal and with fewer rules than their larger counterparts. Formal policies are absent (Daft, 2007). Few key factors differentiate SMEs from their larger counterparts, and characterize that they are not big business, one of them is who own or manage the enterprise does business (Carson, Cromie, McGowan, & Hill, 1995). In many SMEs, owners hold the central position (Bridge, O’Neill, & Cromie, Understanding Enterprise, Entrepreneurship and Small Business, 2003). Controls are based on personal supervision of owners (Daft, 2007). It is common in SMEs that decision making and planning is limited to one person (Culkin & Smith, 2000). Another is personal contact networks of the owner (McGowan & Hampton, 2006). Such personal networked relationship is a unique business resource for SMEs and helps to maintain meaningful relationship with it’s stakeholders (Bridge, O’Neill, & Martin, Understanding Enterprise: Entrepreneurship and Small Business, 2009). Building trust and commitment in those relationship help SMEs to reduce uncertainty risk and help all the parties to improve their business (Morgan & Hunt, 1994). Social media creates a whole new set of opportunities to build and maintain those relationships bundled with challenges (Conway, Jones, & Steward, 2001). Challenges includes decreasing of face to face communication, relatively less personal technology facilitated way of communication (Turkle, 2011).

SMEs faces a growing concern to adopt social media with a fear that doing otherwise they will miss the opportunities that social media may bring (Drury G. , 2008). Most of the SMEs can not effort to establish portal dedicated for them, where they use social media platforms (Li, Chen, Zhang, & Fu, 2012). Social Media is a better suit for smaller companies for greater flexibility and lower cost (Pentina, Koh, & Le, Adoption of social networks marketing by SMEs: Exploring the role of social influences and experience in technology acceptance., 2012). Moreover, with technological advancement, it became less costly and less complicated (Kim, Lee, & Lee, Building Web 2.0 enterprises: A study of small and medium enterprises in the United States., 2011) Social media is free to use but using it as a marketing tool requires commitments, are not always easy for SMEs (Bulearca & Bulearca, 2010). Best SMEs adopted social media increase effort to improve performance, to be more connected with customers and to remain competitive. Primary motive to adopt any technology in organization are to reduce cost and eliminating uncertainty risks (Kelley, 1989).

Stages of technology adoptions are awareness, interest, evaluation, trail and adoption (Beal & Bohlen, 1957). Adoption also depends on individual, organizations and industry in a country (Rogers E. M., 1995). Technology adopters can be categorized in 2 categories innovators, imitators (Bass, 1969). Innovators are who took decision independently considering other organizations in the same industry within a country. End users has big influence for technology adoption by SMEs (Bruque & Moyano, 2007). When competitors use technology to get competitive advantage, SMEs are more likely to embrace the new technology (El-Gohary, 2012). Market readiness is another important factor (Al-Qirim, 2007). Customer readiness is important because retailers have to know if their target customers are using social media.  Otherwise it may turn into no result or negative result.

The purpose of using social media for SMEs are not so different from their larger counterparts like informing consumers about product and brand, rising sales, building effective communication with consumers (Reijonen, 2010) and most importantly building and maintaining hones relationship with all the stakeholders (Hill, 2001). Larger companies get advantages like branding, interactions between company and customer, understanding customer needs, retaining customers and attracting new customers (He, Wang, & Zha, 2014). SMEs does not have similar resources like larger companies but “free’’ social media can be a competitive tool to get those advantages. Besides, users usually consider SMEs as more friendly than larger companies and inspired to support SMEs (Vorvoreanu, 2009). The personal tone is a potential opportunity and at the same time potential threat (Michelidou, Siamagka, & Christodoulides, 2011). Users establish the base of two-way communication by liking or following. It is argued that SMEs should re-design their core business plan with inclusion of social media to take maximum advantage which may help them to get level playing ground against large farms (Hurley, Relentless social media use a ‘turnoff’ for business., 2012). SMEs are enterprises committed to continuous growth. Way to maintain the growth is maintaining long term, meaningful networked relationship to get competitive advantages. Relations are to be maintained with all the key stakeholders (Morgan & Hunt, 1994). Internet revolution empowers business to effectively manage those relationships (Zineldin, 2000). Similar enthusiasm appears to adopt social media, the enthusiasm was for adopting internet in business, because of few clears advantages that social media provides. Inclusion of social media in marketing operation facilitate to maintain intimate and meaningful relationship with stakeholders (Brodie, 2007). Farms now can afford to provide highly customized unique content relevant to individual customer (Kim & Ko, 2011). In transformative enterprise like SMEs that aim and committed to grow and develop continuously. Long term, networked relationship is a key to maintain and continue such growth and development. The relationship includes all the stakeholders including customers, suppliers, employees and competitors (Johannisson, 1986). It is believed that internet is the ultimate tool to manage those relationships effectively with the revolutionary technological improvements of 1990 (Hoffman & Novak, 2000). Similar enthusiasm is present about the adoption of social media for a clear reason. As social media facilitates a new way of creating intimate relationship with stakeholders (Brodie R. W., 2007). Besides, it is possible to provide content of direct relevance to individual customers with mass customization (Ansari & Mela, 2003).

Majorities of the companies failed to use social media as a communication tool effectively (Csordás, Markos-Kujbus, & Gáti, 2014). This failure is more true for small and medium sized enterprises because of limited resources and lack of experience in marketing. They are also pushed back for lack of financial, IT and human resources compared to larger enterprises (He, Wang, & Zha, 2014). Those limitations can lead to different pattern of using social media use (Vuori & Okkonen, 2012). Other challenges are technical, economical, cultural (Kaske, M., & Smolnik, 2012)  including success measurement problem of social media (Steinhüser & Smolnik, 2011) cost – benefit result analysis method is indefinite (Kaske, M., & Smolnik, 2012). Main challenge of adoption is lack of technological knowledge (Stockdale & Standing, 2006). But use of user generated contents does not only create opportunity but also help SMEs to eliminate risks (Mohd, Kamarul, Juliana, & Noor, 2014).

Therefore, an effort is necessary to explore why and how SMEs use social media so that how they can better manage those relationships.

4. Methodology

4.1 Research Method

One of the key feature of SME is that the individuals and resources that consists the SME interact with each other for their operations. When any new technology or innovation is added in the system, all it’s interactions between individuals and resources and interactions between SME and the environment where it operates and serves will be changed. Adoption of social media in SME is a complex socio-technical phenomenon where all of it’s stakeholders are involved. The process is complex and so it requires to be explored fully. The process is so complex that in just number and figure the real situation can not be understood. The qualitative research is such type of research approach which allows the researcher to study the phenomenon in its original context and with all its complexity intac (Leedy & Ormrod, 2005) t. Besides, use of social media in SMEs in Khulna city is at very early stage where most of the SMEs do not use any social media. Very few types of SMEs have adopted social media like photography & event management farms and restaurants. Their use of social media is unstructured and irregular. Besides, the contents they use are not well prepared. Qualitative-exploratory research approach allows to look into in-depth of phenomena and processes that are not yet clear in literature and where variables can not clearly be taken and relationships can not be drawn and requires further analysis and exploration (Bettiol, Di Maria, & Finotto, 2012). So, qualitative-exploratory approach is chosen for the research so that how SMEs use social media and how they perceive social media as a helpful tool for marketing can be understood. By gaining practical insights, new ideas can be found that can be helpful to other similar SMEs.

4.2 Sampling

Photography & Event Management farms and Restaurants in Khulna city mostly have presence in social media. For SMEs from other industries, use of social media is rare in Khulna. So, Photography & Event Management farms and Restaurants were considered primarily but most of the photography & event Management farms are personally operated and does not have office space or any other physical existence. Besides, they are not registered under any legal authority as business. So, photography & event management farms are excluded from the study. Study was continued only with restaurants in Khulna city. For selecting restaurants, we used ‘place’ search in Facebook as Facebook is the most popular social media site in Khulna.  A list of ten restaurants were created who meet the following criteria:

• Restaurants has an official page, not created by Facebook or other third parties rather than restaurant authority and Facebook.
• At least one post or activities shown in timeline of the page by page admin since 1^st January 2017. Users posts were not considered for selection process.
• Page must have reviews posted by users rather than admins to ensure they encourage users to participate which is a key point of web 2.0, based on which social media is created.

The list is following:

1. Shawarma House Khulna
2. Citylight Cafe and Restaurant
3. Petuk, Khulna
4. Origin Café
5. Bistro-C
6. Nawab
7. Kewra
8. Lovebiites
9. Chicken King bd
10. Creamy Fest

Up to 59^th result in the search result needed to be checked to find ten restaurants that meet the above criteria. From the primary list of ten restaurants, Shawarma House  Khulna was excluded as it is part of a chain restaurants. Bistro-C was not interested to participate in the interview. Creamy Fest was not registered as business under any legal authority.  Lovebiites were agreed to take part in the study process but later communication could not be established with the owner.

Here is the final list of restaurants took part in the study and person communicated on behalf of the restaurants:

Name of the Restaurant	Name of the Participant	Participant Role	Age of the Participants
Petuk, Khulna	Asadullah Bir	Owner	35
Origin Café	Saiful Islam Abir	Owner	25
Kewra	Shekh Shariful Islam	Co-owner	26
Citylight Cafe and Restaurants	Jaber Jubaer	Co-owner	22
The Cofee Club Khulna	Mintu Kumar Roy	Manager	38
Nawab	Faria Mehejabin	Owner	30

4.3 Data Collection & Analysis Approach

As qualitative research is intent to study the phenomenon in its context, the method chosen should enable interaction with the researcher and research participants (Leedy & Ormrod, 2005). Interview is the method of collecting such data (Creswell, 2003).  In this study, the data needed to collect from participants was the experience of adopting social media for their business. In depth interview in informal environment is favorable to understand and explore the experience faced by the participants. Semi-structured interview was selected as the method of collecting data for this study. Semi-structured interview allows the researchers to explore the main issues and focus participants’ experience and can explore participants’ response further on issues emerging during the interview. Further discussion on issues emerged during interview can be helpful to get insight on new information that could not be predicted at the beginning of the interview.  The semi-structured interview method used in this research to collect data from SMEs is similar to (Sang, Dainty, & Ison, 2014) in their research into gender in the architectural profession and (Sayah, 2013) on work-life boundaries in ICT.

In depth interview was taken to analyze the SMEs social media adoption in the aspects of SME of Khulna city based on restaurants. In other words, this study is focused on analyzing how and why SMEs adopt social media. Semi structured questions were prepared focusing overall promotional plan of the SMEs, use of all the social media sites they use, benefits they are getting currently and their planning of future use of social media.  Six interviews were taken with SME owners or managers. The interviews lasted around 30 – 40 minutes and were recorded. The language used in the interview was Bengali for the comfort of the participants and to ensure that language will not be a barrier to share thoughts and experience. The interviews were conducted at the client’s premises. All participants were informed of the purpose of the study prior to the interviews and again verbally before the interviews. In this research, the interviews were limited to one member of staff within each SMEs, in six cases five times the owner of the SME was interviewed and once the manager in charge was interviewed. The interviews opened with a general discussion on the promotion effort of the business and few basic questions, then about adoption of social media, including the platforms used, frequency of use and future planning of social media for their business purposes.

From six participants, five of them were okay to use, analyze and publish publicly where kewra requested to keep their interview script only for academic use but partially or findings from their interview can be shared publicly.

After the interview was taken, the interview recordings were transcribed from Bengali to English and then analyzed using template analysis to analyze thematically. Template analysis is a method that provides structure to the analysis of the interview data for qualitative approach (Waring & Wainwright, 2008). King Template analysis is flexible and with fewer formal procedure. For qualitative research approach in different fields including business and sociology, template analysis has been widely used (Waring & Wainwright, 2008). According to (King, 2004), template analysis following a procedure carried out using the initial interview schedule themes as base codes. Then produce a final coding template by developing codes for sub themes. Template analysis helps to structure similar codes to be grouped together where the highest order codes giving an overview of general themes within the interview and the lower order sub-codes allowing finer distinctions to be made within and between participant interview (King, 2004).

5. Analysis and Discussion

Only one person was interviewed from each of the organizations, so their views does not necessarily reflect the view of the organizations. So, detailed case study based on each of the organizations could not be prepared. Primarily templates were constructed for each theme of the semi-structured question and theme were refined as further theme were identified in the transcribed interview. Final template for each of the interview section is arranged below.

Use of Social Media

1.   Use of Social Media

1.1 Social media sites

1.1.1 Facebook

1.1.2 Twitter & other sites

1.2 Use of Facebook

1.2.1 Starting

1.2.2 Ease of use

1.2.3 Difficulties faced

1.3 Stuff Involvement

The interviewed opened on general discussion on promotion efforts of the of the organization, use of social media, including the platforms used, when they started, how convenient the websites are to use, the difficulties they face, the need they feel to use frequently, and the staff in the organization who use and help to use social media for business purposes. The themes and subthemes were identified using the interview guide and later refined with transcribed interviews.

All SMEs interviewed made Facebook as their first choice. In most of the cases, Facebook was the first promotional effort they made for their business.

“I did not have many promotional activities at the beginning. I used only Facebook. Only had a Facebook page” – Petuk

Other reasons of giving Facebook priority is that Facebook is the most popular social media sites in Khulna. Almost all the target customers in the local area using social media, use Facebook. Besides, other social media websites like Twitter is not popular in Khulna.

Same respondent also added, “I think I can cover my main target customers with only Facebook. My main target audience is from Khalishpur R/A. I focus on permanent and repetitive customers. Besides, some new customers come. My target is to get referred by my existing customers.”

The pattern is same for almost all the business,

“Facebook is the most popular, right? Others are getting popular; we will expand on other platforms, but now we don’t have immediate plan to start on other platforms.” – Origin Café

“We use only Facebook, all our friend & family, working members and customers are there. We will expand on YouTube where we can add videos of food processing.” – Kewra

“We started Twitter. But not getting response there. Our reviews are on Facebook.” – Citylight Cafe and Restaurants

“We use Facebook; this is the only promotional tool for outreach. Besides, we offer discount time to time. But, no other pages.” – Nawab

All the business interviewed started using Facebook even before starting their business. When they were planning to start a business, they started using Facebook without much prior thought and planning. They wanted to let people know about their business and they thought Facebook is the tool to reach because ease of use and free of cost. Social Media is a better suit for smaller companies for greater flexibility and lower cost as mentioned by (Pentina, Koh, & Le, 2012).

“We started our Facebook page even before starting our business and in Khulna, almost everyone uses Facebook” – The Cofee Club

“Me and my brother was thinking about what to do for our Business. My brother suggested that we should opening a Facebook page. I thought why not? It evolves no costs.” – Origin Café

As all most all the effort to be presence in social media is around Facebook, one of the reason is the use of Facebook does not require extra efforts. They use Facebook personally and time to time they post on their Facebook page, just a little time is required.

“We don’t need much effort to use Facebook for our business. I just use in mobile and post time to time updates.” – Petuk

“I used internet in mobile even before opening my Facebook page. So, I don’t need any extra tool or effort. I just capture photo with my mobile and post.” – Origin Café

Where some of the SMEs gave a little more importance on using Facebook. As Nawab had their food photo session using professional photographers. Same foot print was followed by Citylight Cafe and Restaurants and The Cofee Club Khulna as well. They described as photos on Facebook as their first impression from new customers.

“We thought good photos will attract eyes, but we did not misrepresent any thing or did not over represent.” – Nawab

“Now there are many options to go, for example, for a dinner party. Your images on Facebook may help you to convert the decision in your favor.” – Citylight Cafe and Restaurants

Difficulties faced by the SMEs interviewed to use Facebook is more than exploring opportunities rather than a problem to solve.

“I buy raw ingredients for the restaurants, I cook and sometimes I serve to customers. So, I have little opportunity to explore Facebook and all the opportunities. Yes, technical knowledge is an obstacle.” – Origin Café

Pattern was same for other SMEs as well where they think Facebook has still much to offer but they need to explore. They, however mentioned lack of time to use social media in a more effective way.

Social media adoption in SME is a complex socio-technical phenomenon where all of it’s stakeholders are involved (Leedy & Ormrod, 2005). But, staffs are not involved much in social media activities of the SME in the SMEs interviewed. Sometimes, they like the page and invite their friends on Facebook to like their page is the maximum contribution to any SME. But, SMEs think stuffs should be more involved in social media because they communicate with the customers when serving, so any lack of information may turn out to be a missed opportunity or customer dissatisfaction.

“Staffs are very little or not involved in social media activities of the SMEs rather than the person who uses it. Other staffs do not have any contribution actually rather than liking our page and inviting their friends”. – Petuk

Social Media Benefits

2. Social Media Benefits

2.1 Improve product and service

2.1.1 Feedback

2.1.2Product

2.1.3Service

2.1.4Pricing

2.2 Promotional help

2.2.1 Free Reach

2.2.2 Paid reach opportunity

2.2.3 Attracting new customers

2.3 Improve communication

2.3.1Sharing information

2.3.2Competitive advantage

2.3.3 Building brand image

2.4 Building Relationship

2.4.1Referrals

2.4.2 Bonding

All the respondents were talking about many benefits they are getting from Facebook. Although the literature in the literature review section found that the primary use of social media is often sales and marketing, but this study found that participants appreciated and given priority about getting feedback and improving product & service quality, including customer satisfaction as specified by (Berthon, Pitt, Plangger, & Shapiro, 2012). Benefits are mainly chance of improving their product and service, promotional help, improving communication with customers and building long term relationship and getting the benefits of long term relationship. All the SMEs interviewed listed that Facebook is helping to improve their food and service quality. Besides they get to know how customers are thinking about their product, service and pricing strategy.

“Once I got few negative reviews about pricing of a product. I got to know that the price of the burger is higher than it should be. I got the chance to correct.” – Petuk

“Once I forgot to include cheese in burger for one of my customer. I was not aware until he left feedback on my page. Then I could offer him some compensation for the mistake we have done.” –  Origin Café

Getting feedback helped helped to know which product customers like and why, at the same time which product customers does not like and why.

“We have a special product ‘Fish Grill’, we got to know, it is very popular as I get feedback from one customer on a local foodies group and on the comment section much appreciation from others.” –  Kewra

Facebook is only promotional effort made by many of the SMEs interviewed when they started their business. For all the SMEs, Facebook is the main source to attract new customers. Besides, diversified groups using Facebook helped SMEs to reach to customers. One of the core benefits SMEs are getting from Facebook is reaching to potential customers without any cost.  Kewra mentioned they would not start Facebook that early if it involved cost.

“I would not start that early if Facebook was not free.” –  Kewra

Other SMEs mentioned similar point or mentioned Facebook as a great help as all the basic features are free of cost.

Facebook also offer very affordable paid promotion plan starting from BDT 80 only. Where Nawab and Citylight Cafe and Restaurants tried in a very minimal range, they and other SMEs interviewed mentioned paid promotion can be a very potential tool to grow their business.

“Facebook let me target my customers and potential customers precisely, I want to explore the feature more to take opportunity.” – Citylight Cafe and Restaurants

“If I can reach to people who even do not like my page, that is a great way to reach to new customers and customers who do not like my page.” – The Cofee Club 

All the SMEs shared different ways how they got new customers from Facebook. Including direct and indirect referrals from Facebook, from interest specific groups, organic reach on Facebook. When customers post images or add check-ins, their friend on Facebook get to know about the restaurant. A large share of their new customers come from local foodies’ groups where customers share their reviews.

“Suppose, someone posted image of our food and beautiful views from our restaurants. It may attract new customers who never visited us before or knew very little about us.” – Kewra

 Facebook helps SMEs to maintain communication with existing and potential customers. For most of the SMEs interviewed, Facebook is the only way to communicate and sharing information when they launch any new product or have any new offer.

“When a new product is added, we post on Facebook.” – Origin Café

“Facebook is the main way to share any special offer.” –  The Cofee Club

 Besides, sharing product and offer information, Facebook is also a way to communicate advantages unique to SMEs to take the competitive advantage. Besides, building brand image for SMEs is a challenge with limited resources. SMEs mentioned building trust can be helpful to get place in customers’ mind. 

“We are the first roof-top restaurant in Khulna. Without Facebook we won’t be able to reach to so many people in short period of time.” –  Citylight Cafe and Restaurants 

 “We can showcase our unique items and facilities to get us more benefits.” – Origin Café

“Maintaining good relation in restaurant and with gentle communication and reminders in Facebook may help to establish us as a brand in customers’ mind” – Nawab

“We encourage people to leave both positive and negative reviews. Which is helpful to have a clear idea about our business. And this is important to build trust.”– Kewra 

Building meaningful and profitable relationship with customers is a key to success of SMEs. Facebook allow SMEs to be connected with customers. Facebook is a way to communicate with customers between two visits. Meaningful relationship leads to happy posts and get referred from customers and retaining.

“Happy customers are key to small restaurants like us. A happy post on Facebook may lead to dozens of customers” – The Cofee Club

“My restaurants focus on local customers, so repeated customers are the key. Facebook helps us to get connected.” – Petuk 

Future Plan

3. Future Plan

3.1 Expansion

3.1.1Specific Plan

3.1.2 Professional help

3.2 Barrier

3.2.1 Lack of technological knowledge

3.2.2 Budget

All the SMEs interviewed want to increase their effort to get more advantage from Facebook. Expectations are creating more quality contents for social media, being consistent in posting, exploring features they do not use. Besides they are willing to take professional help.

“We understand, how powerful Facebook is, we will increase our effort.” – Kewra

But most of the cases, they do not have any specific plan of what they want to do and when then want to execute which plans.

“I have plan to do a food photography session, but I do not know exactly how to expand. I think, I need professional advice.” – Origin Café

“What to do? Advertising, photography, regular posting may be.” – Petuk

For future expansion and using social media for getting more advantages there are few obstacles they identified. Lack of technological knowledge and limited budget in promotion activities. For lacking sound knowledge about Facebook and understanding all the feature of Facebook takes the effort currently they are unable to give attention because SME owners and managers have to perform a wide range of business activities.

“We just know the basic features of Facebook and use only from mobile device.” – Origin Café

In mobile device, many features of Facebook for business page does not work properly including Facebook for business features. Targeting customers based on interest and behavior shown on Facebook is also unavailable from mobile device.

“We are still exploring Facebook but I don’t know much about audience targeting.” – Kewra

SMEs operates with minimal promotional budget. Where preparing quality contents and advertisements are sometimes a little more for SMEs. Sometimes SMEs left with no or very little to spend for promotion after full filling all the other activities.

“Professional photographers made image portfolio for us. We will definitely do that again but those are a bit costly.” – Nawab

“We don’t have enough funds now to thinking of Facebook promotion in a better way.” – Origin Café

6. Conclusion

This research was aimed to find out how SMEs in Khulna city use social media. Participants appreciated the benefits of using social media for a diverse range of purposes other than sales or marketing. All the participants mentioned about getting feedback about their product and service and also mentioned that they had improved their product, service quality, pricing strategy with those feedback, more importantly they got to know their strength and where to improve. Facebook as a free, was attractive to reach to target audience and to attract new customers for most of the SMEs interviewed. Though, few SMEs argued that they want to focus more on getting repeated customers. Half of the business interviewed mentioned, Facebook is a powerful tool to get referred by existing customers. They also mentioned the interest targeted groups and how easily you can reach to a place where everyone is your potential customers. Building trustworthy relationship with customers gets easier. Business and customers get to know each other better. Half of the interview participants listed this as an advantage they are getting from social media, specially from Facebook. User generated contents made it more believable for customers as they can find both positive and negative review on business. Social media is a place where competitive advantages can be displayed better and getting competitive advantage is possible. One third of the participants listed competitive advantage in their advantage list. However, The use is in still primary stages where almost every SMEs think they should use this powerful tool more often and in more effective way. In most of the cases, SME owners were not sure about what they are doing and how should they proceed. They wish to increase their presence on Facebook and to initiate their presence on other social networking platforms including Twitter and Instagram. All of them mentioned social media is a place with so many opportunities to explore and their willingness to explore and utilize.

The findings can be helpful to formulate strategy for social media for similar SMEs. By exploring the uses and benefits of others, competitive advantages can be exploited.

There remains a gap for future research to find how SMEs in Khulna city can use social media more effectively. An action research methodology and through in-depth interaction and case analysis can be a way to figure out more ways to use social media in SME effectively.

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Appendix 1: Semi-structured Questions

Theme 1: Use of Social Media

Which social media do you use?

When did you start which of them?

How did you reach to people initially?

Why did you choose these?

Did you have a strategy when you decided to start using social media?

How often do you use social media?

Do any other staff help to use social media?

Do you face any problem or difficulties to use it?

Theme 2: Social Media Benefits

How has social media use benefitted your company?

Do social media help to improve product and service? How?

Do social media help to your promotional activity? How?

Do social media help to improve communication? How?

Theme 3: Future Plan

Do you plan to use/expand use social media in the future?

Is your plan specific like what do you expect in 3 months?

Do you have any plan to start paid promotion?

Do you have plan to use professional photographer or graphics designer?