Why do small and medium enterprises use social media marketing and what is the impact: Empirical insights from India

Increasingly firms are looking to use social media to connect with different stakeholders as plans on building presence on such platforms are becoming part of top-level strategy. The purpose of this study is to identify the factors that would help the Small and Medium Enterprises (SMEs) of India to adopt Social Media Marketing (SMM) mechanisms for improving their business impact. Adoption of SMM by SMEs has considerable impact on the improvement of business outcome of the SMEs. A theoretical model has been developed with the help of theory borrowed from TAM and UTAUT2 with some modifications to explore this impact through business performance, sales, connect with customers, identify customer' needs and creativity of the employees. The theoretical model has been validated empirically using a survey of 310 firms and subsequent analysis have been carried out using structured equation modelling. The results highlight that perceived usefulness, perceived ease of use and compatibility positively affect impact of SMM after adoption by the SMEs. The facilitating conditions have insignificant impact whereas cost has a significant but negative impact on the use of SMM by SMEs. Since there are a few studies in this context, the study contributes to existing literature on the impact of SMM in SMEs in an emerging economy.