Cloud Based Marketing Systems For SMEs

Cloud based marketing systems for SMEs
1st
May 2014
Dissertation
Vaibhav Mishra
MBA – M&S
A0102212103
Amity Business School
Under Supervision of:
Ms. Tavishi
Asst. Professor
Departments of Economics

2
Table of Contents
Sections Content Slide No.
Section 1 Introduction 3
Section 1.1 Overview & conceptual framework 5
Section 1.2 Marketing Cloud 6
Section 3 Literature Review 7
Section 2 Research Methodology
Section 2.1 Objectives 11
Section 2.2 Hypothesis 11
Section 2.3 Tools and Technique 12
Section 3 Data analysis and interpretations 13
Section 4 Findings and conclusion 23
Section 5 Recommendations 25

4
Overview
Classification of SMEs
Micro Size firm: Plant and
machinery doesn't exceed
Rs. 25,00,000;
Small Size firm: Plant and
machinery is over Rs.
25,00,000 however doesn't
exceed Rs. 5crore; and;
Medium Size firm:
Wherever the investment in
plant and machinery is over
Rs.5 crore however doesn't
exceedRs.10 crore
(RBI)

5
While a key achievement of MSMEs over time has been their talent in utilising available domestic resources
to deliver quality products and services, these firms have made their presence felt across India’s key sectors
as well as in prominent export markets.
The inclusiveness of the MSME sector is highlighted by the fact that around 50 per cent of MSMEs in India
are owned by underprivileged groups.
Due to its low capital structure, coupled with high labour absorbing power, the sector has played a
noteworthy role in achieving rural industrialisation as well.
The MSME sector remains a key driving force for India’s complete transition from an agrarian economy to an
industrialised one. With huge production capacities, all these companies need is a better way to sell and
modern marketing practices can open global markets for these SMEs and cloud technology can be a great
tool in hands.
Why SMEs

6
Conceptual Framework of Clouds
 Cloud computing is spreading through enterprises because it allows the Agility
wanted by international organizations
 Cloud computing has emerged as paradigm shifting technology in business
environment. Cloud computing provides pathway for business agility and ready to
consume cloud based IT services
 Cloud based marketing technology makes it possible for SME to integrate its
communication efforts of Social media campaigns, email campaigns.
 SMEs of India are second biggest contributor after agriculture and there exist 48.5
million unit SMEs in India and SMEs can wisely take advantage of the cloud
computing services, without the need for upfront costs
Private cloudPrivate cloud Public cloudPublic cloud Community CloudCommunity Cloud
 Private cloud is cloud infrastructure
operated only for one organization,
whether or not managed internally or
by a third-party and hosted internally
or outwardly
 personal cloud project needs a big
level and degree of engagement to
virtualize the business atmosphere,
and needs the organization to re-
evaluate selections regarding existing
resources
 Self-run information centres square
measure typically capital intensive.
They need a big physical footprint,
requiring allocations of area,
hardware, and environmental
controls
 Private cloud is cloud infrastructure
operated only for one organization,
whether or not managed internally or
by a third-party and hosted internally
or outwardly
 personal cloud project needs a big
level and degree of engagement to
virtualize the business atmosphere,
and needs the organization to re-
evaluate selections regarding existing
resources
 Self-run information centres square
measure typically capital intensive.
They need a big physical footprint,
requiring allocations of area,
hardware, and environmental
controls
 A cloud is named a "public cloud"
once the services area unit rendered
over a network that's open for public
use
 Technically there could also be very
little or no distinction between public
and personal cloud design, however,
security thought could also be well
completely different for services
 Generally, public cloud service
suppliers like Amazon AWS,
Microsoft and Google own and
operate the infrastructure and supply
access solely via net (direct property
isn't offered).
 A cloud is named a "public cloud"
once the services area unit rendered
over a network that's open for public
use
 Technically there could also be very
little or no distinction between public
and personal cloud design, however,
security thought could also be well
completely different for services
 Generally, public cloud service
suppliers like Amazon AWS,
Microsoft and Google own and
operate the infrastructure and supply
access solely via net (direct property
isn't offered).
 Community cloud shares
infrastructure between many
organizations from a selected
community with common
considerations (security, compliance,
jurisdiction, etc.), whether or not
managed internally or by a third-party
and hosted internally or outwardly
 Community cloud shares
infrastructure between many
organizations from a selected
community with common
considerations (security, compliance,
jurisdiction, etc.), whether or not
managed internally or by a third-party
and hosted internally or outwardly
22 3311

7
Conceptual Framework of Marketing Clouds
If channel partners have restricted selling resources, it's most likely an improved plan to develop a cloud
selling resource library that partners will use to quickly and simply get your product data before of consumers.
The partners profit as a result of they get instant, custom-built facilitate and experience from the seller that's
supported research and complete quality. the seller edges as a result of partners square measure act a
compact, cohesive, and consistent message the least bit client bit points
Advent of Social media has changed marketing forever. Befor
Social media companies treated customers like data points
but people are more than just adress, phone numbers and
credit scores. People are dynamic and with social media more
connected than ever.
Social media has created Chaos and opportunity for
marketing. PR, Campaign managers and Digital Teams, all
manage their own social content using different tools. These
Teams are fragmented and there are too many solutions to
keep all your campaigns in sync and measurable.
Marketing Cloud integrates these marketing functions,
converts insight into action and content into connection and
customer for life. With Marketing Cloud you can listen to social
conversations about industry and company, create stimulating
social content, engage with targeted advertisement to your
customer and measure the impact of your efforts.

9
From the stance of vendor in developing SME, the advantages of Cloud-based technologies are:
low start-up prices, low value for scattered use, easy management, quantifiability, device and
placement independence and speedy innovation (TechRepublic , 2009). SMEs stand to benefit
from pay-per-use, high performance computing eventualities sanctioning them to encourage
innovation and enhance their fight.
Survey conducted on sixty SMEs personals to analyse scope of cloud services for SMEs reveals
that p.a. price of cloud primarily based services sums up to 83000 Rs. This indicates that ancient
on-premise ERP incurred higher price as compared to cloud computing services. (Sharma M. and
Mehra A. 2010)
Out of the 48.8 million SMBs around 55% situated in urban areas whereas the remainder
constitutes to the agricultural regions. Over the previous few years SMBs in Asian nation have
gained strategic importance from firms and government (Shinde S. 2013, Business standard)
The first profit is that these solutions will open doors and permits organisations of this size to grow
in ways in which would haven’t been possible. It’s clearly a big chance to jump-start the economy
and lead the Asian nation into brighter economic times. (FX-MM, May 2013)

10
SMEs face variety of issues, such as, absence of adequate and timely banking finance,
restricted capital and information, non-availability of appropriate technology, low production
capability, ineffective promoting strategy, identification of latest markets, constraints on
improvement & growth, non-availability of extremely adept labour at reasonable price, follow up
with numerous government agencies to resolve issues, etc (RBI, 2013)
value reduction (45.5%), quality and convenience in accessing applications (44.9%) seem to
be the key reasons behind SMEs adopting cloud computing services.(Sahandi R, 2012)
According to GFI May 2010 report on cloud computing state of affairs out of 100% of senior
business decision makers of small and medium size enterprises (SMEs) claim to completely
perceive what cloud computing suggests. 62% haven't been aware of cloud computing., an
additional 13% have detected of it however don’t grasp what it suggests. .

12
• To analyze perception
of SMEs towards
Cloud based
marketing services.
• To find out driving
factors that
encourages SMEs to
migrate to cloud
computing services.
• To explore the
strategies adopted by
SMEs for could
utilization.
ObjectivesObjectives  Hypothesis 1
 Hypothesis 2
Companies perceive high risk in adopting cloud based
marketing techniques.
There is low level of awareness of cloud based marketing
tools.
Research Design
Both, exploratory followed by descriptive analysis is adopted to gather and analyze
knowledge in accordance with the objectives
Exploratory Research: To confirm the most effective analysis style, knowledge
assortment methodology and choice of subjects. Secondary data analysis served as
background in planning a form for conducting survey.
8 Positive factors were identified which more or less play important role in decision
for selecting independent vendor of marketing cloud. These identified variables are:
Cost reduction, Mobility, Flexibility, Increasing computing capacity, Greater IT
efficiency, Business continuity, Avoiding capital expenditure, Network
infrastructure redundancy
11 concern factors were identified as: Privacy, Existing Infra clouds migration,
Disaster recovery, Integrity and reliability of services and or data, Technology
has not been proven, Lack of internal security expertise, Uncontrolled variable
cost, Confidentiality of private data, Cost and difficulty of migration to cloud,
Interoperability issues , Lack of liability of providers in case of security
incidents

13
Descriptive Research: A questionnaire was developed on variables identified in exploratory research.
Questionnaire includes 8 variables that more or less have impact on selection, 11 concern factors and
adaptation of cloud based services to extract info regarding the present, behaviour, attitudes or different
characteristics of cluster of respondents
Data collection:
Primary data:
Questionnaire form filled by 80 respondents
Secondary data: Secondary data of the Cloud tools was collected through student research papers ,
publications, Technology research papers, websites and catalogues, past research data, company’s
official records, and online journals and independent research firm reports. Data regarding market
trends and industry forecasts were taken from research articles and commercial research reports for
independent research firms like OCLC research and KPMG researches.
Scaling Technique: 5 point Likert scale where 1 indicate Least/Not important and 5 indicates very important
and nominal scale was used.
Sample Size: Sample frame of 200 respondents was taken. Survey received 40% rate and 80 responses were
recorded. Judgement sampling was used to pin point the respondents to ensure quality of responses.
Tools and Technique : SPSS 17 is used to run Factor analysis, Charts, Cross tabulations and Correlations

15
We required good mix of micro, small and medium size
firms with focus on small and medium size firms, the
fallout of sample is appropriate for the purpose.
87% of respondents were from small size firm or larger.
13% of respondents were from micro sized firms. This
representation fits to research needs.
Respondents category
Respondents involvement in ICT
decision making
77% of the respondents were decision makers or
influencers of ICT acquisition in company.

16
79% of the respondents were aware of the cloud
technology.
Cloud awareness
Marketing Cloud awareness
35% of the respondents were aware of the marketing
clouds (Cloud based marketing services).
Significantly high (65%) of the respondents were not
aware of the Marketing clouds. This is positive
indication for our first hypothesis which states that
there is low level of awareness about marketing clouds
in SMEs

17
Cross-Tabulation: Cloud awareness and marketing cloud awareness
Through cross tabulation it is clear those SME
representatives not aware of Cloud technology
were not aware of Marketing cloud terminology. 29
respondents aware of cloud technology were aware
of Marketing Cloud too.

18
Objective 2 : Exploring driving factors
Factor Analysis 1:
Principal component method is used in factor analysis model when the objective of the factor
analysis is to summarize the information in a larger set of variable into fewer factors. Here factor
analysis is used on“Drivers of Marketing cloud acquisition”
KMO Test: The Kaiser-Meyer-Olkin Measure of Sampling Adequacy is a statistic that
indicates the proportion of variance in your variables that might be caused by underlying factors.
A high value of statistic (0.5 to 1.0) indicates the appropriateness of factor analysis for the data in
hand.
H0: There is no significant relation between variables taken in consideration
H1: There is significant relation between variables taken in consideration
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of
Sampling Adequacy.
.652
Bartlett's Test of Sphericity Approx. Chi-Square 42.217
df 21
Sig. .004
KMO test score >0.5 which shows factor analysis is applicable here.
Sig 00.000< .05 thus Null hypothesis rejected. There exists significant relationship among the
variables can be identified. It indicated that there is scope for dimension reduction and factor
analysis can be applied.

19
6 Scree plot on Driving factor
components
By Scree plot we can infer that 3
Components have Eigen value above 1,
which means the factors can be grouped
into 3 components with significance factor
loadings.
Rotated Component Matrixa
Component
1 2 3
D1_efforts .117 .045 .905
D2_access -.234 .462 .374
D3_computing_capacity .700 -.139 .159
D4_agility .795 .184 -.101
D5_business_continuity -.035 .721 .299
D6_Capex -.450 .049 .015
D7_networkInfra .143 .820 -.306
By rotated component matrix, we can
group these 7 different factors in 3
components:
Computing F1: Computing
capacity(.70) + agility(.795)
IT Infrastructure F2 :Network
infra(.820)+ Business continuity (.721)
EffortsF3: marketing efforts (.905)

20
Factor Analysis 2: on concern factors
KMO test
H0: There is no significant relation between variables taken in consideration
H1: There is significant relation between variables taken in consideration
KMO and Bartlett's Test
Kaiser-Meyer-Olkin
Measure of Sampling
Adequacy.
.611
Bartlett's Test of Sphericity Approx. Chi-Square 62.472
df 55
Sig. .028
KMO test score >0.5 which shows factor analysis is
applicable here.
Sig 00.000< .05 thus Null hypothesis rejected. Which
means, there exists significant relationship among
the variables can be identified. It indicated that there
is scope for dimension reduction and factor analysis
can be utilized.
From scree plot we observe that 5
components have Eigen value above 1, thus
there are 5 components which are major
concerns to companies in using cloud
based marketing systems

21
Rotated Component Matrixa
Component
1 2 3 4 5
C1_privacy .663 .522 .202 .060 .047
C2_migration .123 -.015 -.040 -.812 .000
C3_recovery -.024 -.449 .601 -.116 .344
C4_Integrity .056 .042 -.059 -.041 .898
C5_technology_maturi
ty
-.057 .033 .745 .174 -.045
C6_internal_expertise -.061 -.592 .125 .361 .181
C7_var_cost .189 .108 .595 -.130 -.075
C8_Confidentiality .832 -.232 -.129 .015 .156
C9_migration_issues .084 -.003 -.049 .685 -.035
C10_interoperability -.030 .697 .150 .244 .387
C11_Lack_of_Liability .752 .227 .170 -.077 -.104
Grouping of variables on basis
on rotated component matrix:
Security F1= Privacy
(.663)+confidentiality(.832)+lack of
liability (.752)
Interoperability
F2=interoperability(.697)
Long-term issueF3= Disaster
recovery(.601)+ technology
maturity (.745)+ var. cost( .595)
Integration F4 = migration issues
(.685)
IntegrityF5= Integrity (.898)

22
Objective 3: Marketing Cloud utilization strategy
By the chart we can infer that 85%of the
respondents have plans to utilize Cloud
technology in their existing business
operations whereas 5% of the respondents
find cloud based services a possible tool for
their new business operations.
By the chart, 21% of the respondents think
that hosting services are easy to be handled
using Cloud based marketing system. 6% of
the respondents would use Cloud service for
booking systems, relatively higher number
(23%) find Cloud systems suitable to be
utilized for Email services. Rest of the
respondents were equally split between
preference of utilizing Cloud for Backup
services and Secure online Data storage
services.

23
One Sample t-test on key factors
Hypothesis:
H0: µ = 4
H1: µ ≠ 4
One-Sample Test
Test Value = 4
t df Sig. (2-tailed) Mean Difference
C1_privacy 9.422 61 .000 .67742
C4_Integrity 20.292 61 .000 .87097
C11_Lack_of_Liability 4.606 61 .000 .38710
For all three key concern factors
significance <.05
Null hypothesis rejected. With
positive mean difference from test
value 4 it is clear that privacy,
integrity and Lack of liability of
service provider are major
perceived risks in SMEs towards
Cloud based marketing systems.

25
Based on survey analysis, we can deduce that there is high awareness of cloud technology in
MSMEs market now but service like Cloud based marketing systems or Marketing Clouds have huge
scope of awareness. So our hypothesis(H1) that there is less awareness about cloud based
marketing systems is accepted.
By factor analysis of concern variables we can deduce that Security concern and integrity of
sensitive data are highly concerned. So our hypothesis (H2) that companies perceive high risk in
adopting cloud based marketing techniques is accepted.
One sample t test on key concern factors indicates most critical for SMEs are:
•Security
•Integrity of data
•Var. cost of cloud based marketing system
Marketing Cloud fits specific SMEs needs as follows:
•Increased Computing capacity
•Increased operational flexibility/agility
•Marketing efforts cost reduction
•Strengthens IT infrastructure
•Strategic impact

26
Recommendations
 Awareness of marketing cloud is much less in companies. To sell the service, vendors
need to provide consultative selling in SME market.
 Marketing clouds should be made customized to need of individual enterprise. Agility of
systems is important for continuous environment changes of SMEs.
 it is important to consider existing infrastructure of SMEs. Migration of existing
marketing practices and tools to Cloud is a hassle to companies and reluctance to change
plays critical. Cloud vendors can ensure that their systems are much more user friendly than
existing tools in these small organization.
 Cloud vendors must ensure that variable costs will not skyrocket while offering
flexibility to the customer.
 SMEs find marketing clouds useful for integration of webmail management, SMS
marketing, Data storage, Data recovery, Availability and for effective channel communication.
Vendors need to provide value additions to these which focusing on consistent disruptive
growth strategies for marketing clouds.
 Thirds party data security practices certifications like ISO/IEC: 27001/2005 should be
showcased to assure that client data on cloud is not only secure from volatility but its integrity
is also going to be maintained. Systems which can assure that the data are much safer
behind security layers of cloud than a node on office network can be a great value
proposition.

27
References
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http://www.business-standard.com/article/companies/indian-smb-market-at-48-8-mn-units-growing-at-a-cagr-of-4-
53-zinnov-study-113031400498_1.htmlAccessed on 01st
Oct 2013
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Oct 2013
Is Cloud the key to SME growth http://www.fx-mm.com/26134/news/is-cloud-the-key-to-sme-growth/ Accessed
on 01st
Oct 2013
Lozano, B., Marks, (2010): Executive’s Guide to Cloud Computing. John Wiley & Sons
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A. (eds.) Cloud Computing: Principles and Paradigms.
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IFIP Advances in Information and Communication Technology Volume 380, 2012, pp 186-195
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