AN EMPIRICAL INVESTIGATION INTO WHY STARTUPS RESIST USE OF DIGITAL MARKETING

Abstract

Despite the challenges of pandemics and economic slowdown, the Indian economy is witnessing a surge in entrepreneurial activities. At the same time, we are also seeing start-up companies witnessing financial losses, mass lay-offs and salary cuts due to pandemic restrictions and economic slowdown. The main reason for failure is the lack of a viable strategy to develop and execute a strong branding, promotion and marketing strategy. Digital marketing offers a viable and affordable option to start-ups for marketing and brand building. However, many of the start-ups are resistant to the use of digital marketing for marketing and brand building. The purpose of the research study is to understand why start-ups resist the adoption of digital marketing tools and technologies. We have conducted a cross-sectional study by collecting primary data from 355 respondents from a similar number of companies, who were either owners of start-up companies or managers working in startup companies. The important finding was that factors like usage barrier, value barrier, risk barrier and psychological barrier were the major inhibitors to the adoption of digital marketing by start-ups. Gender, age and size of the company played a moderating role in influencing the adoption intention. For male owners of start-up companies, the effect of usage barrier, value barrier, risk barrier and psychological barrier all were significant, while for female owners, only the effect of value barrier and risk barrier was significant. Value barrier and risk barrier had a significant impact on young owners, while usage barrier and value barrier had a significant impact on middle-aged owners and value barrier and risk barrier had a significant impact on old owners.