By Elis Regina Pontel
Abstract
Marketing plays a crucial role in helping brands establish their presence in the market. As technology continues to evolve, businesses must adapt to remain competitive. The rise of digital marketing has revolutionised the way businesses connect with their audiences, using online platforms, mobile devices, and data-driven strategies to enhance communication and customer engagement.
In small communities, the adoption of digital marketing faces challenges, as traditional methods still dominate. This study aims to introduce effective digital marketing strategies tailored for microenterprises in small towns, ensuring a seamless transition from conventional marketing while optimising customer acquisition costs. Through a combination of traditional and digital tools, this research seeks to empower small businesses with cost-effective marketing solutions.
Using a qualitative, exploratory research approach, this study identifies the best digital marketing tools for small businesses in rural and small-town settings.
Keywords:
Digital marketing, Small business growth, Online marketing for microenterprises, Local business advertising, Digital transformation in small towns.
1. Introduction
Marketing, as defined by Berardi (2004, p.13), is:
“An activity whose primary objective is to satisfy consumer desires and needs by offering products or services through the exchange process. It involves discovering, acquiring, and retaining customers.”
Kotler (2017) emphasises the importance of continuous market evolution, coining the term “market-ing” to highlight its ever-changing nature. Understanding this evolution is key to developing advanced marketing strategies, particularly as businesses shift towards a more inclusive and digital approach.
In small towns, digital marketing adoption remains slow, as many microenterprises view it as unnecessary. However, as Sampaio (1995, p.4) points out, even well-established brands must consistently engage with consumers to maintain relevance. In competitive markets, brand visibility is crucial, making it essential for small businesses to leverage the most effective advertising channels.
Baker (2006) highlights that micro and small enterprises possess unique characteristics that differentiate them from larger corporations. Due to limited financial resources and marketing knowledge, microenterprises require tailored, reactive marketing strategies that align with their business scale and objectives.
Sant’Anna further argues that attracting customers goes beyond mere visibility—it requires strategic audience engagement. This study explores how marketing communication influences consumer behaviour and identifies the most effective promotional tools for small businesses, ensuring they achieve strong returns without intrusive or unnecessary advertising.
2. Methodology
This research is based on bibliographic analysis, leveraging a broad database of marketing insights and case studies. By gathering and interpreting data from marketing professionals in São Domingos (SC), the study examines how microenterprises in small towns use marketing strategies to build brand awareness and attract customers.
Adopting an exploratory approach, the research compares traditional marketing methods with digital alternatives, assessing their effectiveness in small-town contexts. A quantitative method was used, involving a structured questionnaire distributed to local advertising service providers. The findings offer valuable insights into the most effective digital marketing tools for small businesses operating in niche, localised markets.
3. Literature Review
3.1 Inclusion
3.1.1 Internet
Torres (2010) states that the internet emerged as a network where specialists, whether companies or researchers, could publish information accessible to their clients. The internet introduced instant access to business information on products and services.
Technological innovations, including the internet, have changed business practices worldwide. Regardless of company size or location, the internet and other digital mechanisms enable cost reduction through digital marketing strategies (QUEIROZ, BERGAMO, MELO, 2016).
Baker (2005) emphasises that marketing strategies for these businesses should be reactive. Since external variables are uncontrollable, companies must prepare for this reality by acquiring knowledge.
Kotler suggests that connectivity is one of the most significant changes in marketing history, reducing interaction costs between businesses and customers, lowering market entry barriers, enabling simultaneous product development, shortening brand-building time, and transforming competition and consumer perspectives.
3.1.2 Changing Market Scenarios
Hammond, Keeney, and Raiffa (1999) argue that businesses must turn problems and adversities into opportunities. Competitive strategies should be designed to manage risks and market uncertainties effectively.
Yu (2011) highlights the need for decision-makers to critically analyse their organisations in response to market dynamics, ensuring business flexibility and identifying opportunities from interdependencies between companies.
Innovation has become a key driver for survival and development in a competitive environment. Companies must continuously seek improved processes, enhance organisational performance, and compete with high-quality products and services (Lee, Park, Yoon, & Park, 2010).
Farah, Cavalcanti, and Marcondes (2008) state that even well-designed business plans can become outdated due to changing conditions, requiring entrepreneurs to stay alert to market and community shifts and update their strategies accordingly.
Horffman and Novak (1996) conducted research on marketing implications in a computer-mediated environment, viewing the internet as the first global interaction network. Internet characteristics have the potential to transform business operations, customer relationships, brand building, and reputation management, offering a universal marketing channel for companies of all sizes.
3.1.3 Digital Marketing
Oliveira (2000) describes digital marketing as strategies developed through the internet to foster interaction between organisations and consumers, facilitating rapid, personalised information exchange. With increased access to information, digital marketing has become essential for business survival.
Souza Junior and Streit (2017) emphasise that digital marketing enables companies to engage with their online audience strategically, enhancing product and service performance. Digital marketing extends beyond sales, fostering customer relationships and brand engagement.
Torres and Cozer (2000) highlight the segmentation capability of digital marketing, allowing businesses to better understand consumer needs and create personalised interactions. By targeting the right audience, companies can improve customer relationships and increase conversion rates.
Baker (2015) states that changing consumer behaviour has necessitated the adoption of new marketing strategies to align with evolving purchasing trends and maintain a strong virtual presence.
3.1.4 Permission Marketing
The advent of technological innovation has transformed customer interactions. Previously, advertising targeted a mass audience with a singular objective. Today, advertising is highly personalised, aiming to meet every customer’s specific needs and preferences through segmentation, which aligns with permission marketing. This approach allows customers to access only what interests them.
Las Casas (2009) mentions that traditional marketing models were based on capturing customer attention and then persuading them to take action, such as purchasing a product or service. In permission marketing, high-quality content targeted at the right audience attracts potential customers within a company’s segment, increasing their likelihood of making a purchase as they actively seek solutions to their problems.
Another benefit of permission marketing is fostering strong customer relationships, transforming customers into brand advocates who share positive experiences and promote brand loyalty. As advertising becomes more customer-centric, businesses must focus on delivering value-driven content to maintain engagement and long-term customer loyalty.
3.2 Environment
SEBRAE utilises the IBGE criteria based on the number of employees to classify company sizes for banking, technology actions, exports, and other purposes.
Industrial Sector:
- Micro: Up to 19 employees
- Small: 20 to 99 employees
- Medium: 100 to 499 employees
- Large: More than 500 employees
Commercial and Services Sector:
- Micro: Up to 9 employees
- Small: 10 to 49 employees
- Medium: 50 to 99 employees
- Large: More than 100 employees
3.3 Transition from Offline to Online Environment
A study on the use of information and communication technologies in Brazilian companies, conducted by the Internet Management Committee in Brazil, reveals that:
- 66% of corporations reported making online purchases, whereas only 22% engaged in online sales. The percentage of companies selling online has increased compared to 2011, when only 12% utilised the internet for sales.
- Among companies not selling online, 50% preferred their current commercial model, while 49% believed their products were not suitable for online sales.
In 2017, the study also focused on microenterprises (those with one to nine employees), using an adapted questionnaire for this segment. Previous editions of the study were conducted by Cetic.br in 2007 and 2010. In 2007, 79% of microenterprises had computers, increasing to 89% in 2017. Internet usage rose from 69% in 2007 to 88% in 2017. Additionally, 46% of microenterprises had internet speeds between 1 Mbps and 10 Mbps, indicating persistent infrastructure challenges in this sector. The TIC Microenterprises study also showed that 29% had websites, while 65% used social media. Furthermore, 52% made online purchases, yet only 19% sold products or services online.
Between 2010 and 2017, companies communicating via instant messaging increased from 51% to 63%. Email remained the most frequent communication tool (98%), followed by product/service searches (88%) and online payments and banking transactions (72%).
Building an online presence through websites or social media profiles enhances business visibility, attracts new customers, and improves customer engagement. However, the choice of platform varies by company size. The percentage of microenterprises with websites remained relatively stable, from 26% in 2007 to 29% in 2017. This low percentage likely reflects maintenance and investment challenges. In contrast, 65% of microenterprises used social media, highlighting its accessibility and cost-effectiveness for marketing and commerce.
E-commerce functionalities were less common among microenterprises. Of those on social media, 48% sold products through these platforms, and 40% provided customer support. Among those with websites, 22% featured online ordering or reservation systems, while 19% enabled online payments (CGI.BR, 2017).
3.4 Micro and Small Enterprises
MSEs are innovating through digital marketing to promote products and services, leveraging the principle that “who is not seen is not remembered” using new communication channels such as blogs, social media, and search engines. The market is gradually shifting in favour of MSEs that can harness knowledge and technological advancements to create innovative offerings and market entry strategies (TIDD, BESSANT, PAVITT, 2008).
A study conducted by the Brazilian Internet Management Committee found that among microenterprises, 24% reported having both a website and social media profile, compared to 42% of small enterprises and 67% of large companies. Microenterprises primarily use social media due to its low cost and high interactivity, making it an attractive option for engaging with customers.
3.5 Targeted Advertising for Small Towns
Lupetti (2003) highlights that strategic planning requires an environmental analysis to identify risks and opportunities in both present and future contexts. According to the author, such planning considers political-legal, economic, social, technological, and competitive factors, as well as market trends, ensuring businesses align with customer interests while complying with government regulations and industry standards.
SEBRAE notes that factors such as service quality, customer service, negotiation skills, and reasonable deadlines play crucial roles in differentiating businesses from competitors. These elements serve as organic marketing tools, as positive service experiences lead to word-of-mouth promotion, reinforcing a company’s reputation and credibility.
To maintain high service quality and industry awareness, businesses must develop a comprehensive understanding of their operational environment. Various strategic tools can assist in refining both internal and external business insights to enhance competitiveness and long-term success.
3.6 Mission
In view of the need for entrepreneurs to plan their business in a way that allows them to manage the venture correctly, it is important to define a mission for the business. According to Chiavenato (2008), this represents the very reason for the business’s existence, helping to answer why it was created and what its purpose is. The author explains that entrepreneurs may start a business for many different reasons, some of which are positive and constructive. For example, offering a new and different service to society, meeting new consumer expectations, taking advantage of or enhancing new technologies, helping the community in areas with greater needs, expressing creativity and innovation, or investing savings into a profitable business. Chiavenato also states that other reasons for starting a business may include escaping from an unpleasant job, paying fewer taxes, spending less time at home, or simply having something to do. He emphasises that the mission of the company is always centred on society. In summary, the author points out that the company’s mission defines its products and/or services, markets, and technology, reflecting the values and priorities of the business, and these motives can be seen in the company’s mission.
3.7 Marketing Mix
Marketing strategies, widely used by large companies, can and should also be implemented by micro and small businesses. Marketing aims to discover what people need and what the company should offer; it determines how to launch, price, distribute, and promote product and service offerings in the market (KOTLER, 2006).
One of the main functions of marketing is managing what is known as the marketing mix. This strategy is based on the application of the four variables of any organisation, grounded in the so-called 4 Ps: Product, Place, Price, and Promotion.
The marketing mix, or the 4Ps, had its concepts popularised by McCarthy, according to Las Casas (2009). The author highlights that some scholars expanded the 4Ps to 6Ps, 8Ps, and even 4Cs, as the way of marketing has evolved over the years. However, for the author, the greater emphasis on the use of the 4Ps was due to environmental changes rather than the method of marketing itself.
Product: the combination of goods and services that organisations offer to satisfy the needs or desires of the target market. This includes factors such as variety, quality, design, features, brand name, and packaging (KOTLER; ARMSTRONG, 2003).
Price: the only variable in the mix that generates revenue, while the other elements produce costs. It is, however, a flexible element that can be quickly altered, for example: list price, discounts, concessions, payment terms, and financing conditions, in contrast to the design of products, distribution channels, and even sales promotions (KOTLER; ARMSTRONG, 2003).
Place/Distribution: involves making the products and services available to customers. After the product is defined, there is a need for distribution to ensure good sales results and customer satisfaction. This includes, for example: the channels through which the product will be available, distribution locations, stock, transportation, and logistics (KOTLER; ARMSTRONG, 2003).
Promotion and Communication: is the process of communicating with the customer by presenting the product’s benefits in an attempt to convince them to purchase. For example: advertising, public relations, sales promotions, cultural contests, and web activities (KOTLER; ARMSTRONG, 2003).
3.8 SWOT Analysis
Through this tool, it is possible to establish business strategies and identify critical success factors, allowing actions to be created to reduce or eliminate factors that affect a company’s performance. This helps to set the direction to be followed in order to fulfil its mission (Fischmann and Almeida, 2011).
Oliveira (2007) defines the SWOT analysis as follows:
Strengths: The differentiation achieved by the company – a controllable variable – that provides it with an operational advantage in the business environment (where issues are beyond the company’s control).
Weaknesses: The company’s inadequate situation – a controllable variable – that provides it with an operational disadvantage in the business environment.
Opportunities: The uncontrollable environmental force that can favour the company’s strategic actions, provided it is known and effectively taken advantage of while it lasts.
Threats: The uncontrollable environmental force that creates obstacles to the company’s strategic actions, but which may or may not be avoided, provided it is recognised in a timely manner.
3.9 Return on Investment
In English, Return on Investment (ROI) is a calculation used to measure the profitability and effectiveness of a particular investment.
Lopes de Sá (1993, p. 404) defined Return on Investment as “a percentage measure obtained through calculations, which highlights the recovery of investments made by a company.”
ROI is calculated as follows:
Gain Obtained – Investment
ROI = ______________________________ x 100
Investment
4. Presentation of the Research
The focus of this research was on small towns with populations of up to 10,000 inhabitants, where online marketing tools are still underutilised. While the motivation for the research is to identify more advertising methods, it is important to also mention the most sought-after traditional forms of advertising in these areas, which will be discussed in the presentation of the research.
The town selected for the research was São Domingos, located in the west of Santa Catarina, which, according to the latest IBGE census data from 2017, has 9,502 inhabitants. Its economy is based on the primary sector, including agriculture and livestock. São Domingos faces challenges in growing its industrial sector, but micro and small businesses have a strong presence in the town. Most of the local commerce is made up of long-established merchants who have gained recognition over the years, and they ensure sales through word-of-mouth advertising. In the case of special offers, they mostly rely on traditional advertising methods common in small towns.
According to research conducted among local service providers and merchants, the most commonly used advertising media are still traditional, including loudspeaker vans, radio, and, to a lesser extent, print media. São Domingos does not have a printed newspaper or magazine, which leads merchants to use Facebook, the most popular media platform for daily updates.
One tool that has been gaining popularity among local businesses is Facebook. The social network is widely used because it facilitates interaction for inquiries, price requests, product photo requests, and information about delivery times and payment terms. However, the most common form of communication remains the landline phone, which continues to be indispensable, particularly for B2C (business-to-consumer) sales. Email is widely used for B2B (business-to-business) communication, as most suppliers are located in other towns, and email is the cheapest form of communication.
In São Domingos, the following traditional forms of advertising predominate:
Media: Mobile Advertising
A vehicle equipped with loudspeakers, hired to announce promotions from local businesses.
Execution Period: 6 hours (average)
Cost: R$ 240.00
Reach: 4,000 people
Sales Increase: 10%
Media: Radio
Cost: R$ 840.00
Execution Period: 7 days, with 4 30-second slots per day
Reach: 25,000 people
Sales Increase: Up to 30%
Media: Billboard + Graphic Art
Cost: R$ 989.00 (R$ 689.00 for billboard rental + printing + R$ 300.00 for graphic design)
Execution Period: 14 days
Reach: No data
Sales Increase: No data
These data were collected directly from the service providers.
In the town, Facebook is still a media alternative, which is used for free without the use of paid advertisements. It works very well as a communication channel and for regular advertisements.
Other media channels, such as Twitter, LinkedIn, blogs, and YouTube, are not used because they do not generate much return, and the public is not familiar with them. Most of the people who engage on these platforms are young individuals, who are also present on Facebook. Therefore, Facebook becomes the ideal platform for local merchants to use.
Considering the high cost of advertising on traditional media and the appeal of low-priced ads on Facebook, a test was conducted to evaluate whether the tool brings benefits to these businesses:
Media: Sponsored Ad on Facebook
Cost: R$ 30.00
Execution Period: 4 days
Reach: 3,100 people
Sales Increase: 15%
Note: The ad was targeted to people within a 17 km radius of São Domingos.
To better understand how ROI (Return on Investment) works, data collected from the service providers and the sponsored Facebook ad will be cross-referenced to evaluate which tool brings the best return. For this, we will use an example of an anniversary promotion, which will focus on the sale of sofas, a product that typically generates around R$ 17,000 in monthly revenue.
Media: Mobile Advertising. Given that an increase of up to 10% is expected, the return on this media would be:
17,000.00 x 10% = 1,700.00 – 240.00 / 240.00 = 600%
Media: Radio. Given that an increase of up to 30% is expected, the return on this media would be:
17,000.00 x 30% = 5,100.00 – 840.00 / 840.00 = 500%
Media: Sponsored Facebook Ad. Given that an increase of up to 15% is expected, the return on this media would be:
17,000.00 x 15% = 2,550.00 – 30 / 30 = 840%
In terms of Return on Investment (ROI), the best investment cannot be solely determined by the highest percentage of return, as this value is calculated based on the amount spent. For example, the return on radio advertising was 500%, and the return on mobile advertising was 600%. Contrary to what one might think, radio advertising brought a higher monetary return than mobile advertising, but the investment was higher, which is why the ROI for radio advertising was lower.
It is important to calculate the ROI to determine if the ad brought any return. If the ROI is negative, the campaign should be reviewed, and necessary changes should be made before it is run again. If the ROI remains negative, it is imperative to consider if there is another media channel that could yield better results.
5. Conclusion
A significant difficulty in advertising in small towns was observed, first due to the high monetary cost of traditional media, and second, due to the limited number of available vehicles. Billboards, even without data for determining the return, are the most expensive media for advertising, which often exceeds the marketing budget of small businesses.
The use of social media is still underutilised, especially by the older population, which makes it harder to reach an important segment of consumers with ads.
Since the challenge comes from both traditional and digital media, the best approach would be to use at least one traditional media and one digital media for advertising. As concluded in the research, Facebook is the best tool for digital advertising, as it is the most widely used social network among consumers and the cost of advertising is relatively low. It was observed that the return, between ad views and the purchase percentage, is small but compensatory, as the ROI was positive, as calculated at 840%.
Looking at the most commonly used traditional media, it was found that radio advertising provides the greatest monetary return, which increased sales by 30%, resulting in a total of R$ 5,100.00. After deducting the investment in advertising (5,100.00 – 840.00), the total profit was R$ 4,260.00.
Mobile advertising is the cheapest medium compared to the others, but the return is not satisfactory. Considering the 10% increase in sales, amounting to R$ 1,700.00, and subtracting the advertising investment (1,700.00 – 240.00), the total profit is R$ 1,460.00, which is lower than the profit guaranteed with radio advertising.
Another type of media that is very interesting, not only for small businesses in small towns but also for global use, is gamification.
This tool is widely used, but in theory, it is still not well understood. Gamification—the use of game principles in non-game contexts—is a powerful method for increasing consumer engagement. It is primarily used in two major areas for engagement: loyalty programs and customer communities.
There are several reasons why gamification is considered the best method for engagement. First, this system takes advantage of the human desire to achieve higher goals and be recognised for achievements. Some consumers are motivated by rewards, while others by self-fulfilment. Additionally, there is strong accountability in gamification. Rewards are granted when customers complete certain actions, such as purchasing more products or recommending friends.
(KOTLER, KARTAJAYA, AND SETIWAN, 2017, pp. 192-193)
The most important, although often something that goes beyond the business’s control, is word-of-mouth advertising, which can make all the difference in a small town. Therefore, being charismatic, solving customer problems, providing excellent after-sales service, and, most importantly, remembering that your customer is your source of income, is the best way to engage in positive marketing.
6. References
ARAÚJO JÚNIOR, Rogério Henrique de; CORMIER, Patricia Marie. Marketing Intelligence: Permission Marketing as a Tool for Customer Loyalty. Revista de Biblioteconomia de Brasília, Brasília, v. 23/24, no. 4, pp. 527-544, 1999/2000.
BAKER, Michael J. Marketing Management: An Innovative and Definitive Book for Students and Professionals. Rio de Janeiro: Campus, 2005.
BERARDI, René Castro. Marketing and Advertising Programme: Development and Planning. Curitiba: Ibepex, 2004.
CHIAVENATO, Idalberto. Entrepreneurship: Giving Wings to the Entrepreneurial Spirit: Entrepreneurship and the Viability of New Businesses: A Comprehensive Guide to Starting and Running Your Own Business – 3rd ed. São Paulo: Saraiva, 2008.
FARAH, Osvaldo Elias; CAVALCANTI, Marly; MARCONDES, Luciana Passos. Strategic Entrepreneurship: Creation and Management of Small Businesses. São Paulo: Cengage Learning, 2008.
HAMMOND, John S.; KEENEY, Ralph L.; RAIFFA, Howard. Smart Choices: How to Make Better Decisions. Rio de Janeiro: Campus, 1999.
IBGE. Available at: https://biblioteca.ibge.gov.br/index.php/biblioteca-catalogo?view=detalhes&id=299007. Accessed on 20 July 2018.
KOTLER, Philip; KARTAJAYA, Hermawan; SETIAWAN, Iwan. Marketing 4.0: From Traditional to Digital. Rio de Janeiro: Sextante, 2017.
KOTLER, Philip; KELLER, Kevin. Marketing Management: Analysis, Planning, Implementation, and Control. São Paulo: Pearson, 2006.
LAS CASAS, Alexandre Luzzi. Marketing: Concepts, Exercises, Cases. São Paulo: Atlas, 2009.
LEE, Sungjoo; PARK, Gwangman; YOON, Byungun; PARK, Jinwoo. Open Innovation in SMEs: An Intermediated Network Model. Research Policy, 39 (2010), pp. 290–300.
LOPES de SÁ, Antônio. Dictionary of Accounting. São Paulo: Atlas, 1993.
OLIVEIRA, Wagner P. A. de. The Influence of Communication on Decisions of Companies Transitioning to the Internet. Campina Grande, 2000.
QUEIROZ, L. S.; BERGAMO, F. V. M.; MELO, J. S. Validation of a Conceptual Model of Online Shopping Experience for Brazilian Consumers. Revista Brasileira de Marketing, v. 15, no. 4, pp. 524-539, 2016.
SAMPAIO, Rafael. Advertising A to Z: How to Use Advertising to Build Successful Brands and Businesses. Rio de Janeiro: Campus, ABR, 1995.
SANT’ANNA, Armando. Advertising: Theory, Technique, and Practice – 5th ed. São Paulo: Pioneira, 1995.
SOUZA JUNIOR, A. F.; STREIT, R. E. Cybersecurity: Brazilian Policy and International Experience. Revista do Serviço Público, v. 68, no. 1, pp. 107-130, 2017.
TIDD, Joseph; BESSNT, J.; PAVITT, Keith. Innovation Management. Porto Alegre: Bookman, 2008.
TORRES, Gabriel; COZER, Alberto. Leveraging Internet Businesses. Rio de Janeiro: Axcel Books, 2000.
YU, Abraham S. O. Decision-Making in Organisations: A Multidisciplinary View. São Paulo: Saraiva, 2011.