EFFECTS OF INTERNET MARKETING ON SALES PERFORMANCE OF SECOND HAND VEHICLES AMONG CAR BAZAARS IN NAIROBI COUNTY AMOS GITAU GATHIRWA KAGECHU MCOM/135376 A THESIS SUBMITTED IN PARTIAL FULFILMENT FOR THE REQUIREMENT OF THE AWARD OF A MASTER OF COMMERCE DEGREE AT STRATHMORE UNIVERSITY BUSINESS SCHOOL DECEMBER 2022 i DECLARATION I declare that this work has not been previously submitted and approved for the award of a degree by this or any other University. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made in the thesis itself. © No part of this thesis may be reproduced without the permission of the author and Strathmore University. Name of Candidate: Amos Gitau Gathirwa Kagechu Approval The thesis of Amos Gitau Gathirwa Kagechu was approved by the following: Name of Supervisor: Dr. Nancy Njiraini School/Institute/Faculty: Strathmore University Business School. Dr. Ceaser Mwangi Executive Dean, Strathmore University Business School. Dr. Bernard Shibwabo Director, Office of Graduate Studies ii ABSTRACT Increasingly, organizations are operating in a competitive environment due to evolving technology and consumer taste. Technology has resulted in companies adopting internet marketing in order to reach the customers without incurring high costs in the advertising process. Like in many other local industries, players in the automotive industry in Kenya have adopted internet marketing as a way to advertise their products competitively. The general objective of this study is to investigate the effect of internet marketing on sales performance of second hand vehicles with a focus on car bazaars in Nairobi County. The specific objectives of the study are; to evaluate the influence of website marketing, search engine marketing, email marketing and social media marketing on sales performance of second hand vehicles among car bazaars in Nairobi County. The study was anchored on Diffusion of Innovation theory as well as the Theory of Firm Performance. Descriptive cross sectional research design was adopted in this study. The target population was 395 registered second hand car bazaars within Nairobi City County. A sample size of 195 respondents was arrived at using the Modified Fisher Model. Primary data was collected using questionnaires. Quantitative data was coded into SPSS and data generated. Inferential statistic was conducted to test the relationship between the independent and dependent variables. Tables and figures were used to present the findings of the study while interpretation was done through prose interpretation. The study found that there was a statistically significant relationship between website marketing, search engine marketing, e-mail marketing, social media and sales performance of second-hand vehicles in Nairobi County. Second-hand vehicle dealers used free and paid search engine marketing to acquire new customers. Furthermore they used email lists for promotional marketing and social media to increase sales. The study concludes that website marketing contributed most to the sales performance of second-hand vehicles followed by social media marketing, search engine marketing while email marketing contributed least. The study recommends that car bazaars should adopt internet marketing to improve their sales performance. The study was limited to Nairobi County and second hand cars. Further research could be carried out in other regions within the country and among other sectors. iii TABLE OF CONTENTS DECLARATION................................................................................................................ i ABSTRACT ....................................................................................................................... ii TABLE OF CONTENTS ................................................................................................ iii ACKNOWLEDGEMENT ............................................................................................. viii DEDICATION.................................................................................................................. ix LIST OF TABLES ............................................................................................................ x LIST OF FIGURES ......................................................................................................... xi OPERATION DEFINITION OF TERMS ................................................................... xii LIST OF ACRONYMS AND ABBREVIATIONS ..................................................... xiv CHAPTER ONE ............................................................................................................... 1 INTRODUCTION............................................................................................................. 1 1.1 Background of the Study .................................................................................. 1 1.2 Problem Definition........................................................................................... 2 1.3 Objectives of the Study .................................................................................... 3 1.3.1 General Objective .............................................................................................. 3 1.3.2 Specific objectives ............................................................................................. 4 1.4 Research Questions .......................................................................................... 4 1.5 Scope of the Study ........................................................................................... 4 1.6 Significance of the Study ................................................................................. 5 1.7 Chapter Summary ............................................................................................ 5 CHAPTER TWO .............................................................................................................. 6 LITERATURE REVIEW ................................................................................................ 6 2.1 Introduction ..................................................................................................... 6 2.2 Theoretical Foundation .................................................................................... 6 2.2.1 Diffusion of Innovation Theory ......................................................................... 6 iv 2.2.2 Firm Performance Theory .................................................................................. 9 2.3 Conceptual Review ........................................................................................ 10 2.3.1 Internet Marketing and Sales Performance .................................................... 10 2.3.2 Sales Performance ............................................................................................ 11 2.3.3 Car Bazaars in Nairobi County ........................................................................ 13 2.4 Empirical Review ........................................................................................... 14 2.4.1 Website Marketing and Sales Performance ..................................................... 14 2.4.2 Search Engine Marketing and Sales Performance ........................................... 16 2.4.3 Email Marketing and Sales Performance ......................................................... 18 2.4.4 Social Media marketing and Sales Performance ............................................. 21 2.5 Research Gap ................................................................................................. 24 2.6 Conceptual Framework .................................................................................. 23 2.7 Operationalization of Study Variables ........................................................... 23 2.8 Chapter Summary .......................................................................................... 25 CHAPTER THREE ........................................................................................................ 26 RESEARCH METHODOLOGY .................................................................................. 26 3.1 Introduction ................................................................................................... 26 3.2 Research Philosophy ...................................................................................... 26 3.3 Research Design ............................................................................................ 27 3.4 Target Population ........................................................................................... 28 3.5 Sampling Design ............................................................................................ 29 3.6 Data Collection Methods ................................................................................ 30 3.7 Data Analysis ................................................................................................. 31 3.8 Research Quality ............................................................................................ 32 3.8.1 Reliability Test ................................................................................................. 32 v 3.8.2 Validity Test..................................................................................................... 33 3.9 Ethical Considerations ................................................................................... 33 3.10 Chapter Summary ........................................................................................ 34 CHAPTER FOUR ........................................................................................................... 35 DATA ANALYSIS, FINDINGS, AND DISCUSSIONS .............................................. 35 4.1 Introduction ................................................................................................... 35 4.2 Questionnaire Response Rate ......................................................................... 35 4.3 Demographic respondents’ profile ................................................................. 36 4.3.1 Gender of Respondents .................................................................................... 37 4.3.2 Age of the Respondents ................................................................................... 37 4.3.3 Years of Organization Operations ................................................................... 38 4.3.4 Respondents’ Level of Education Qualification .............................................. 38 4.3.5 Position held by the Respondents in the Firm ................................................. 38 4.3.6 Vehicles Sold in the Car Bazaar ...................................................................... 38 4.3.7 Ownership ........................................................................................................ 39 4.4 Descriptive Statistics ...................................................................................... 39 4.4.1 Website Marketing and Sales Performance ..................................................... 39 4.4.2 Search Engine Marketing and Sales Performance ........................................... 41 4.4.3 E-mail Marketing and Sales Performance ....................................................... 42 4.4.4 Social Media Marketing and Sales Performance ............................................. 43 4.4.5 Sales Performance of Second Hand Vehicles .................................................. 44 4.4.6 Descriptive Statistics Summary ....................................................................... 45 vi 4.5 Inferential Statistics ....................................................................................... 46 4.5.1 Pearson’s Coefficient of Correlation ............................................................... 46 4.5.2 Multiple Regression Analysis .......................................................................... 48 CHAPTER FIVE ............................................................................................................ 59 DISCUSSIONS ................................................................................................................ 59 5.1 Introduction ................................................................................................... 59 5.2 Demographic Profile ...................................................................................... 59 5.3 Discussion of Findings ................................................................................... 60 5.3.1 Website Marketing and Sales Performance ..................................................... 60 5.3.2 Search Engine Marketing and Sales Performance ........................................... 61 5.3.3 E-mail Marketing and Sales Performance ....................................................... 63 5.3.4 Social Media Marketing and Sales Performance ............................................. 64 5.4 Conclusion ..................................................................................................... 66 5.5 Implications of Research ................................................................................ 67 5.5.1 Contribution to Management ........................................................................... 67 5.5.2 Contribution to Policy ...................................................................................... 68 5.5.3 Contribution to Knowledge.............................................................................. 68 5.6 Limitations and Recommendations for further studies ................................... 69 REFERENCES ................................................................................................................ 70 APPENDICES ................................................................................................................. 81 Appendix 1: Letter of Introduction ...................................................................... 81 Appendix II: Questionnaire .................................................................................. 82 Appendix III: List of Sampled Registered Car Bazaars in Nairobi County ........... 87 Appendix IV: Strathmore University- Ethical Approval ...................................... 90 vii Appendix V: NACOSTI Research License ........................................................... 91 viii ACKNOWLEDGEMENT I sincerely thank our Almighty God for the gift of life, health and protection for the entire period of my study. Without His help I could not have come this far. Special appreciation to my supervisor Dr. Nancy Njiraini for her patience and guidance throughout the process of writing this thesis. I appreciate my dear wife Juliana and my family for their understanding and support during the period of my studies. God bless you all. ix DEDICATION This Thesis is dedicated to my loving parents Mr. Simon Kagechu and Mrs. Anne Kagechu for the support and encouragement throughout my studies. Thank you very much for your prayers and sacrifices. x LIST OF TABLES Table 2.1 Summary of Knowledge Gaps .......................................................................... 21 Table 2.2 Operationalization of Variables ........................................................................ 24 Table 3.1 Target Distribution ............................................................................................ 28 Table 3.2: Sample distribution .......................................................................................... 30 Table 4.1 Demographic Characteristics ............................................................................ 36 Table 4. 2 Website Marketing and Sales Performance ..................................................... 40 Table 4.3 Search Engine Marketing and Sales Performance ............................................ 41 Table 4.4 E-mail Marketing and Sales Performance ........................................................ 42 Table 4.5 Social Media Marketing and Sales Performance .............................................. 43 Table 4.6 Sales Performance of Second Hand Vehicles ................................................... 44 Table 4.7 Descriptive Statistics Summary ........................................................................ 45 Table 4.8 Pearson’s Coefficient of Correlation ................................................................ 47 Table 4.9 Regression Analysis for Website Marketing and Sales Performance ............... 49 Table 4.10 Regression Analysis for Search Engine Marketing and Sales Performance .. 51 Table 4.11 Regression Analysis for E-mail Marketing and Sales Performance ............... 53 Table 4.12 Regression Analysis for Social Media Marketing and Sales Performance ... 54 Table 4.13 Regression Analysis for Internet Marketing and Sales Performance ............. 56 xi LIST OF FIGURES Figure 2.1 Conceptual Framework ................................................................................... 23 Figure 4.1 Questionnaire Response Rate .......................................................................... 35 xii OPERATION DEFINITION OF TERMS E-mail Advertising E-mail advertising uses email to send promotional messages to internet users and is one of the most effective online advertising and marketing tactics (Kirkpatrick, 2012). Innovation orientation is the framework of information that comprises of an organizational philosophy of learning, strategic direction, and trans-functional values that leads organizational plans and activities toward certain skills and processes that foster innovation (Kanagal, 2017). Internet Marketing also called online marketing refers to marketing strategies such as search engine optimization, social media and email marketing which utilize internet channels (Atshaya and Rungta, 2016)_. Online Advertising This refers to commercials that are presented on the internet and play a crucial role in promoting an organization's products and services (Schlosser et al., 2010). Sales performance The performance of the sales team in selling operations, both individually and collectively; the team's ability to meet sales goals (Calvin, 2010). Search Engine Marketing is a phrase for paid search engine advertising in which businesses purchase keywords so that, when a user conducts a search using those keywords, their advertisement displays next to the search result listings (Chong et al., 2010). xiii Social Media Marketing refers to messages made through the company's social media presence or on its own website (Chaffey & Smith, 2018). xiv LIST OF ACRONYMS AND ABBREVIATIONS CRO Conversion Rate Optimization GDP Gross Domestic Product IT Information Technology ICT Information Communication Technology PPC Pay Per Click ROI Return on Investment SEM Search Engine Marketing SEO Search Engine Optimization 1 CHAPTER ONE INTRODUCTION 1.1 Background of the Study This chapter provides a detailed scope of the study relating to the background of the study, problem definition, research objectives, research questions, scope of the study and significance of the study The 20th Century saw another modern era of advertisement dawn. The introduction of radio and TV created an entirely new means in which advertisers could attract potential consumers. A new power, the Internet, started to step out of the domain of 'techies' and early adopters into the century to become a valuable business and networking instrument for the masses. With internet accessibility, the age of internet marketing was born (Christensen, Raynor & McDonald, 2015). It is similar to the traditional marketing where people (marketers) connect with other people (consumers) to build relationships and ultimately drive sales and enhance business competitiveness (Thackery & Neiger, 2016). All around the world, companies compete in a competitive climate as a result of constantly advancing technology and shifting preferences among consumers (Djakasaputra, Wijaya, Utama, Yohana, Romadhoni & Fahlevi, 2021). As a result of the shifts in the environment, information technology has emerged as a crucial force in mediating the connection between businesses and their clients (Schneider & Spieth, 2014). The extent to which a corporation is sensitive to the needs of its customers is another factor that has become an increasingly important factor in the competitive arena. In order to cater to clients who, have more options, more services, more media, more texts, and more internet discussions than ever before, the methods of marketing are being revolutionized by the technologies of the internet (Weber & Henderson, 2016). In light of the shifts that have taken place, information technology has assumed a pivotal position as a mediator in the connection that exists between businesses and their clients (Schneider & Spieth, 2014). The extent to which a corporation is sensitive to the needs of its customers is another factor that has become an increasingly important factor in the 2 competitive arena. One of the ways in which internet technology has revolutionized marketing activity is through the rise of online marketing (Weber & Henderson, 2016). The promotion of goods or services through the use of internet-based platforms and the marketing strategy known as internet marketing are both common uses. New growth that reaches beyond traditional revenue streams is currently being experienced in the marketing business. This is a reference to the incorporation of the online medium that is the Internet, also known as new media, which involves distributing content to large audiences through the use of internet media channels and devices (Wymbs, 2017). Therefore, advertisers throughout the world are gradually bringing products closer to the daily lives of customers, and technology plays a significant role in enhancing the quality of services supplied by business units. This trend may be attributed to the rise of internet marketing (Vinerean, Cetina, Dumitrescu & Tichindelean, 2015). 1.2 Problem Definition Technology-based marketing is a must for companies to succeed in today's diverse, competitive global business climate (Kotler, 2012). More businesses are turning to internet marketing to meet their target audiences because of the growing usage of internet media by customers and the trend is growing (Christensen, 2015). The advanced growth of ICT has forced car companies across the globe to change their advertising model from the conventional style to the philosophy of e-business and e-advertising for sustainability (Bagga & Gupta, 2014). Because of these challenges, in order to be successful, car marketers have had to change tact. Like in other industries in Kenya, the automotive industry is adopting internet marketing technology with its own benefits. With the intention of optimizing profitability and growing their market share, automotive companies also need to revise their marketing strategies (Llopis-Albert et al., 2021). Before the advent of the digital revolution, car bazaars like other businesses successfully used traditional marketing. According to Njuguna (2021) even though Kenyans have adopted online shopping, 79% of Kenyan consumers shopped over the internet with preferred products being clothing, computer, healthcare, banking and other fast moving consumer goods. Only 1% of 3 consumers prefer to buy vehicles over the internet, as a majority would like to have a test, visual inspection and feel of the vehicle prior to making a purchase. Studies done include; Thuo (2020) studied the influence of economic factors, psychosocial and functional factors on revenue growth of used vehicle enterprises in Kenya. His study primarily focused on consumer decision factors and their effect on revenue growth, while the current study aims to look at how internet marketing affects sales performance of the firms surveyed. Velayudham and Rose (2019) did a study on impact of search engine marketing towards customer purchase behavior. This study focused on the customer behavior while the current study aims to investigate the impact of online marketing on sales performance. Sahni et al., (2018) conducted a study on Personalization in email marketing. The study is focused on the South American market and fast moving consumer goods. Therefore, the relationship between internet marketing on sales performance requires additional research. Simply implementing internet marketing strategies does not guarantee positive sales performance. As seen above, past studies have focused on social media and e-commerce marketing when applied separately. However, they fail to provide an overview of the interaction between the two from a firm’s perspective (Braojo et al., 2019). Furthermore, the studies have focused on customer behavior with minimal attention paid on the firm’s perspective and capabilities (Braojo et al., 2019). Similarly, the majority of studies have not focused on the interaction of these factors in the second-hand vehicles sector. The study aims to fill this gap by examining how second-hand vehicle dealers utilize internet marketing capabilities to impact sales performance in Nairobi County. 1.3 Objectives of the Study 1.3.1 General Objective The broad objective of this study was to establish the effects of internet marketing on sales performance of second hand vehicles with focus to car bazaars in Nairobi County. 4 1.3.2 Specific objectives i. To establish the effect of website marketing on sales performance of second hand vehicles in Nairobi County. ii. To investigate the effect of search engine marketing on sales performance of second hand vehicles in Nairobi County. iii. To determine the effect of email marketing on sales performance of second hand vehicles in Nairobi County. iv. To establish the effect of social media marketing on sales performance of second hand vehicles in Nairobi County. 1.4 Research Questions i. What is the effect of website marketing on sales performance of second hand vehicles in Nairobi County? ii. What is the effect of search engine marketing on sales performance of second hand vehicles in Nairobi County? iii. What is the effect of email marketing on sales performance of second hand vehicles in Nairobi County? iv. What is the effect of social media marketing on sales performance of second hand vehicles in Nairobi County? 1.5 Scope of the Study This study objective is to establish the impact of internet marketing on the sales performance of car bazaars in Nairobi County. Although car bazaars can be found throughout the country, Nairobi County was chosen because most of car bazaars are located in this locality according to a report on the used automobile market in Kenya for 5 2020 (AutosKenya, 2020) which indicates that the county accounts for 81 percent of all car sales, followed by Mombasa with 7.5 percent. This study is limited to the following objectives: website, search engine, email, and social media marketing. The target respondents for this study were the Yard manager (owner), the sales manager, or the ICT manager of the car bazaars. The data was collected from them since they are responsible for daily operation of these firms. This thesis was developed between January and August of 2022 while data was collected in the month of July 2022 from in 195 used car bazaars in Nairobi County. 1.6 Significance of the Study This study may be of great beneficial to the following: Policy makers will benefit from the findings of the study by identifying clear guidelines as well as policies that will favor the growth of the Kenyan automotive industry by analyzing the effects of e-commerce on the growth of auto industry The research results are expected to be helpful to the Kenya Motor Industry Association as they can provide better information on some of the internet marketing channels and provide the requisite incentives and policies, as the automotive industry plays an important role in Kenya. This will improve their formulation of effective strategies to channel financial support to internet marketing in a way that can effectively ensure that investors obtain due income. Academicians and researchers on the other hand, will benefit from the findings to test their hypothesis on the study as well as getting additional knowledge and information in the field of electronic commerce in respect to sales performance of second hand vehicles. 1.7 Chapter Summary This chapter provides detailed information to the study. As such, the chapter is structured into various key sub-chapters which are background of the study, statement of the problem, research objectives, research questions, scope of the study and significance of the study. 6 CHAPTER TWO LITERATURE REVIEW 2.1 Introduction The present chapter covers the literature reviews that are related to the effects of internet marketing on sales performance. Categorically, the chapter deals with the theoretical reviews, empirical review of the study variables, conceptual framework, existing research gaps, and the summary of the chapter. 2.2 Theoretical Foundation This study is based on the two theories that that is Diffusion of Innovation Theory and Firm Performance Theory. 2.2.1 Diffusion of Innovation Theory Diffusion of Innovation Theory was first presented by Rogers in 1962. Rogers explained how innovation is communicated through specific channels over time to members of a social system. Dearing (2009) suggested the process of diffusion of innovation starts slowly and over time begins to accelerate positive communication. The four components of the diffusion of the innovation process are innovation, communication channels, time, and the social system (Rogers, 2003). An innovation is an idea, practice or object that is perceived as new by an individual or adoptee. Newness is dependent on the individual regardless of when the idea or object was first invented. As a result, the newness of an innovation is defined in terms of knowledge, persuasion or decision to adopt (Rogers, 2003). Individuals are concerned about the innovation, how and why it works, the impact of the innovation and its advantages and disadvantages. As a result, the innovation’s attributes will affect its rate of adoption. These factors include relative advantage, compatibility, complexibility, trialability and observability (Rogers, 2003). Relative advantage is the extent to which an innovation is perceived as better than previous ideas. It may be measured in economic terms, convenience, and satisfaction 7 factors, the higher the perceived relative advantage of an innovation, the faster its rate of adoption (Rogers, 2003). Compatibility is the degree to which an innovation is perceived as aligning with current values, past experiences and potential adopters needs. An idea which conflicts with the values and norms of a social system may not be adopted quickly (Rogers, 2003). Complexity is the extent to which an innovation is discerned as difficult to understand and use. New ideas which are simpler to comprehend are adopted more quickly. Trialability is the extent to which an innovation may be experimented on a limited basis. New ideas which can be implemented in phases without an additional cost are adopted more quickly (Rogers, 2003). Observability is the extent to which the outcomes of an innovation are visible to others. The easier it is for people to see the results the increased likelihood of adoption. Innovations perceived by people as having greater relative advantage, compatibility, trialability, observability and reduced complexity will experience a rapid adoption rate (Rogers, 2003). However, relative advantage and compatibility may be more important. Communication channels refer to the media by which participants create and share information with each other to reach a mutual understanding. The process involves an innovation, an individual or adoptee with knowledge or experience of using the innovation, an adoptee without knowledge of using the innovation and a communication channel linking the two units (Rogers, 2003). Communication is achieved through mass media, interpersonal communication and internet platforms. Further to innovation and communication, time is an important element in the diffusion process. Time is evaluated using three factors: the innovation-decision process by which an individual transits from first finding out about an innovation to its adoption or rejection, the innovativeness of an individual and the number of members in the system adopting the innovation (Rogers, 2003). The innovation-decision process involves a time-ordered sequence of knowledge, persuasion, decision, implementation and confirmation. The innovativeness of an individual is described using adopter categories such as innovators, early adopters, early majority, late majority and laggards. The rate of adoption is used to measure the length of time required for a specific proportion of the members of a system to adopt an innovation (Rogers, 2003). 8 A social system is set of interrelated units engaged in joint problem solving to achieve a shared goal. Diffusion occurs within a social system. It is influenced by norms which define the range of acceptable behaviour providing a guide for the behaviour expected from members of a social system (Rogers, 2003). Still, innovations can be accepted or rejected by an individual member of a system or by the entire social system. Individuals make choices using optional innovation decisions while groups do the same using collective innovation decisions. The goal of the diffusion of innovation theory is the change in the structure and functioning of a social system. The use of the diffusion of innovation theory with a multidisciplinary approach produced a rich and diverse understanding of diffusion dynamics (Frattini, Bianchi, Massis, & Sikimic, 2014). The robustness of this theory derived from the many disciplines and fields of diffusion studies, and the nature of the theory suggests leaders determine what innovation will be adopted (Dearing, 2009). Information flows through social networks as an innovative form of communication (Rogers, 2003). Once business leaders implement an internet marketing strategy, they have created a social system, which supports continuous interaction with employees, stakeholders, and consumers. The diffusion of innovation theory is used as the conceptual framework in this study to understand the internet marketing strategies small retail business leaders use to increase derivative sales. Internet marketing is a new technological innovation. However, its adoption is not a one- time occurrence. Instead, it is a gradual process. Consequently, the diffusion of innovation theory is vital in explaining the adoption of new technology by business enterprises. It also helps explain the factors which predict the successful application of internet marketing. Iqbal and El-Gohary (2014) found that the diffusion of innovation theory was relevant in explain the adoption of internet marketing by business enterprises. Businesses considered internal and external factors before adopting internet marketing. Research conducted to investigate the application of internet marketing by businesses has found that organizational, technological and environmental factors influenced firm’s decision to adopt the strategy (El-Gohary, 2014). Important technological innovation factors included relative advantage, complexity and compatibility. Business users who 9 adopted one internet marketing strategy had a high likelihood of adopting other techniques. Members of the social system are the main receivers of the information that is communicated to them through innovation as showed by this theory. The theory relates to the car bazaar managers who desire to use internet marketing platforms to reach buyers. By accepting to use the internet marketing platforms herein the innovation to transact on the unit the diffusion is consumed at this point and thereafter the use of innovation takes precedence until the unit is received or otherwise thus results to adoption of e-commerce technology in business operations. 2.2.2 Firm Performance Theory Firm performance is a process by which organizations measure their efficiency and effectiveness. It is an approach for measuring the outcomes of an organizational strategy. Firm’s performance falls into two broad categories strategic performance and financial performance each with its own indicators (Santos & Brito, 2012). Strategic performance indicators include customer and employee satisfaction, environmental and social performance. Financial performance indicators on the other hand include profitability, growth and market value (Santos & Brito, 2012). Profitability measures the organization’s ability to generate positive returns and utilizes indicators such as net income and revenues. Growth symbolizes the organization’s ability to increase its size and market share. Increased size even at the same profitability will increase its net revenue. Growth indicators include market share, gross income, and net profit growth. Market value symbolizes the future expectations of a firm’s performance based on historical profitability and growth levels. It uses indicators such as market value-added (Santos & Brito, 2012). Consequently, profitability, growth and market value resulted from sales growth. Deraz and Gebrekidan (2018) stated that internet marketing influences the firm’s financial performance through framing market opportunities, and informational and interactional functions. This theory is applicable in this study since sales performance directly impacts on the firm’s financial performance. The firm’s financial performance derived from sales is evaluated using profitability, growth and market value indicators such as net income, market share, gross income and net profit growth and market value added. 10 2.3 Conceptual Review 2.3.1 Internet Marketing and Sales Performance Fakha and Saeed (2014) noted that technology has played an important role in transforming local industries. Technology had a critical role in enhancing and diversifying marketing communication, and expanding the advertising platforms. The impact was evident in small and medium enterprises that used technology. The study found that those which used technology including internet market had better revenues and sales performance than those who did not. Marketing strategies have a direct impact on sales performance. Examples of non-traditional media marketing strategies include social media marketing, website marketing, and email marketing. No marketing strategy is superior to the other (Fakha and Saeed, 2014). As a result, it is vital that organizations find the right media mix for their specific product. Internet marketing, according to Maguire and Magrys (2007) is a process that entails determining the optimal online marketing mix of methods that appeal to the target demographic and actually result in sales. According to Burges and Bothma (2007), internet marketing is a company’s endeavor to inform, converse, promote, and sell goods and services via the internet. Additionally, Internet marketing or e-marketing is defined as the marketing of products or services via the Internet (Emeh, Ahaiwe & Okoro, 2019). Thersthol and Lovgren (2007) described internet marketing as the process of reaching as many current and prospective customers as feasible over the internet. The science of internet marketing consists of the study and analysis that goes into deciding which internet marketing methods to employ and measuring the success of those strategies. Internet Marketing has indeed ushered in a revolution in the way companies conduct their businesses. In the case of motor vehicles, model lifecycles are shortening by the day as a result of improving computer technology, the future of middlemen remains a contentious issue and costs are bound to continue decreasing and the traditional marketing elements are no longer the undisputed ways of building brands - to mention just but a few of the changes (Huang & Chung, 2018). Mckintyrye (2012) noted that the use of internet by organizations has allowed cheaper marketing of its products, a greater customer base and 11 a more personal interaction in the marketing. The evolution of internet marketing has led to better supply chain systems allowing the delivery of online goods to the customer allowing convenience to the customer while guaranteeing a sale for the firm. This system has allowed accountability to be more effective as compared to the traditional selling. Hughes and Fill (2009) pointed out that companies employ various forms of internet marketing such as website marketing, Search engine optimization (SEO), E-marketing and social media marketing to promote their product and services. Kotler (2010) explained that the company website is the core of the company's online activity which is designed to generate more customers and helps to get feedback from them. The purpose of the sites is to create an opportunity to interact and form a more realistic dialogue. The website's commercial appeal is due to the website design. The design creates an opportunity to display product and company information, often in the form of catalogs, as evidence of company’s identity and internal communications, to attract visitors and turn potential customers into leads, then convert them into customers and support them in all stages of purchasing and communicate with them after the process is completed. Moreover, it has been used to collect customer information as a feedback link for evaluation and measurement purposes. Gibson (2018) identified top internet marketing strategies as social engine optimization (SEO), social engine marketing (SEM), pay per click (PPC), content marketing, social media marketing, email marketing, and affiliate marketing. However, the most effective and widely used strategies were identified as website marketing, search engine marketing, social media marketing and email marketing. 2.3.2 Sales Performance The ultimate but most challenging method for evaluating the effectiveness of marketing strategy is the change in sales (Farrukh, Meng, Sajid & Shahzad, 2020). Sales serve as a Key Performance Indicator (KPI), a metric that indicates the overall health of a firm. Relationship alignment between marketing and sales is tough for the majority of firms. The sales force gives crucial information regarding the external environment (Si, Wang & Zhou, 2020). The flow of information, which can be the key to success, is facilitated by the establishment of a positive rapport between the parties. Soyer (2020) asserts that 12 sales management is the least expensive and most effective method for boosting revenue and sales margins, market share, cash flow, and return rate. It requires no additional effort to recruit, train, pray for, motivate, and assess salespeople (Tamaș, Barbu, Rakos, & Solomon, 2020). Efficient management, forecasting, planning, budgeting, and effective coordination and use of time and territory are not more expensive than inefficient performance of these duties. Sales performance is the ability of an organization to generate revenue by selling its products and services. Sales performance directly contributes to firm performance (Taiwo et al., 2010). As a result, firms need to prioritize sales perform. To achieve these firms need to utilize appropriate marketing strategies. Marketing supports sales performance through the growth of market share. Taiwo et al., (2010) found that strategic marketing had a significant impact on sales performance. Braojos et al. (2019) stated that internet marketing strategies such as social media and e-commerce had impact on sales performance. Sales performance was mediated through online customer engagement. Sales performance outcomes included customer service and financial performance. Consequently, digital marketing resulted increased sales performance as measured through quality customer service, and increased revenue, profits and earnings per share. Santos-Vijande et al., (2012) found that marketing strategies had a positive impact on customer satisfaction and loyalty which led to higher sales performance measured through sales, profit and market share. For organizations to get and keep competitive advantage over their competitors they have to check over their performance as stipulated in their organization objectives. In order to achieve these purposes, organizations must have to use the performance management systems (Teau & Protopopescu, 2015). Simply the performance management is done by the organizations in order to confirm that either they are going in right direction or not. In sales performance, one of the tool used is Key Performance Indicator (KPI). KPIs evaluate the success of an organization or of a particular activity in which it engages. Accordingly, choosing the right KPIs relies upon a good understanding of what is important to the organization. According to Velimirovic and Stankovic (2011) KPIs can be used to measure sales performance in an organization. KPIs can be quantitative and 13 qualitative indicators. The constructs that can be used to measure sales performance are sales growth, average sales cycle length, customer loyalty, number of customers, number of average appointments of new customer per day, average sale turnover, and market share to growth ratio. This study will employ a quantitative methodology to determine the effect of internet marketing on sales performance indicators such as increased sales volume, market share, and profit margin. 2.3.3 Car Bazaars in Nairobi County Car bazaars in Kenya sell imported and locally used second-hand vehicles (KABA, 2021). The secondhand motor vehicle importation started around 1993 when trade was liberalized in Kenya. Before then, the motor vehicle assemblers enjoyed monopolistic operations. As a result of trade liberalization, the competition in motor vehicle industry became stiff since the Kenyan market was no longer monopolistic. It is from this time that the monopolies of the time such as D.T Dobie, Toyota East Africa, Mashariki Motors, and CMC lost their large local market share to competitors. In Kenya today, the motor vehicle market has various types of varieties of imported motor vehicles from different destinations. This has contributed to the car bazaar across the country dealing with second-hand vehicles. Kenya Auto Bazaar Association [KABA] (2021) report indicated that the demand for imported second hand in the country has resulted to growth of the car bazaar firms. Majority of these firms are located in urban centers with Mombasa, Nairobi, Nakuru, Eldoret and Kisumu having biggest share of these firms. Most of the popular models that are traded in these car bazaars includes Mazda Demio, Toyota Corolla/Fielder, Toyota V8, and Subaru Outback. The models are common with small business owners and professionals since they are cheap and easy to maintain. Data from the Motor Vehicle Registration (2021) indicates that sales of saloon cars such as Toyota Corolla are highly demanded in the market forcing most of the second hand dealers to include the model of the cars in their firms. Sales of station wagons like Subaru Outback contributes to 36% of the vehicles sold in the car bazar while pick-ups, mini- busses, lorries, trailers, and buses do not have high demand. There 395 registered car 14 bazaars dealing with imported second hand operating within Nairobi County. Majority these car bazars are located along the main roads such as Ngong road, Mombasa road, Thika road, Langata road, Uhuru highway, and Jogoo road (KABA, 2021). Due to changing customer demand and technology advancement as well as the non- contact situation created by the COVID-19 pandemic, most of the car bazaars have embraced technology in their sales and marketing activities. According to Motor Vehicle Registration (2021) online sales of saloon cars such as Toyota Corolla was 256, outback was 134 while the sales of Vitz and Demio was 372 units. This implies that car buyers have embraced internet marketing as a method of selecting the preferences of the vehicles that meet their taste. 2.4 Empirical Review This section will focus on empirical literature on the effects of internet marketing on sales performance of second hand vehicles from international and local perspectives. The section is guided by the objectives that were identified in chapter one. 2.4.1 Website Marketing and Sales Performance In their study, Pestek and Cicic (2019) investigate the effect of website marketing on tourism companies within Bosnia and Herzegovina. The study sought to establish to what extent the firms marketing managers perceive and utilize the website as a marketing tool. Pestek and Cicic (2019) suggest that managers deemed a website a prerequisite and believed that internet marketing provided their companies with a competitive advantage. The study further found that the firms that utilized websites for marketing, but did not have a marketing or strategic plan were less successful than those which did, and had a marketing strategic plan as well. In Jordan, Kokash (2020) undertook a study to determine both the experts and the tourists’ perceptions of travel agencies’ websites and the association of these perceptions with clients’ satisfaction. The study findings established a disparity between what the tourists perceived as important and experts’ assessment of the websites’ performances. The main areas of difference were in the provision of basic information to users of the 15 websites. Also noted were the various standards of marketing, proficiency of procedures and forms of communication provided to individuals. The study noted the need to enhance the interaction of the website between the business and the customer, to improve the relationship with the client and encourage the business to search out new techniques to achieve faster interaction. In India, Ohri and Sharma (2018) conducted a study to evaluate how consumers acquired and utilized website information in new cars pre-purchase decisions. The study used a narrative review to analyze the Indian market. The study found that consumers used search engines to seek product information when purchasing automobiles. Moreover, consumer automobile purchase decisions were influenced by social media reviews and peer influences. Additionally, consumers primarily used websites to seek product information. Overall, consumers did not have to walk to a showroom to make their purchase decision, as internet marketing channels replaced physical visits. Although the study adds valuable insights, it focused only on new car purchase and not the used car sector and other non-Indian market. The current study will evaluate the impact of the above strategies in the used car market industry in Nairobi County in Kenya. Similarly, El Mansoury (2016) studied how website marketing influenced an automobile car company’s credibility and consumer purchase intentions. The study used a survey design and qualitative and quantitative approaches. Consumers trusted online sources when obtaining car purchase information. Moreover, the most trusted source of online information was the official car company website (El Mansoury, 2016). The study is limited to website marketing in an Egyptian market. The current study will include email, social media marketing and search engine optimization. Additionally, it will focus on used car sales in a Kenyan market. In Morroco, El Hachimi, Lhassan and Belamhitou (2021) did a study on the contribution of website marketing to business performance. They conducted a quantitative survey among 120 companies in the northern region of Morocco using the PLS path modeling. The study found that website marketing has a positive impact on the performance of companies in the northern region of Morocco. 16 Kimicho (2020) carried out a study on influence of website marketing and performance of firms in Tanzania. Most of the respondents agreed to employ the use marketing website like trip advisor and booking.com and mobile applications (SMS) and corporate website to help firms to create awareness in their target market about their services and products. These studies were carried out in other countries and in other sectors other than motor vehicle sector which the current study aims to investigate in Kenyan context. In Kenya, Maina (2017) did study on effect of the use of web solutions on performance of firms in the real estate sector. The study employed descriptive research design. The questionnaires were used by the researcher as an instrument of collecting primary data. The target population included real estate investors. These included 145 employees, who represented the total number of employees found in Real estate investors, from the real estate in Kenya (Nairobi County). The study concluded that web use affects the performance of the company greatly and positively. 2.4.2 Search Engine Marketing and Sales Performance Search engine marketing (SEM) is a strategy to boost website ranking in search results. It works by targeting prospective customers through incorporating keywords into their search. Key words are used to direct the user to the organizations. Businesses use hyperlinks and banner ads to maximize their internet marketing (Jain, 2018). Additionally, it enhances user clicks and increases relevant traffic to the website (Bhandari and Bansal, 2018). SEM helps to improve the online visibility of the website or webpages in search engines like Google, Bing, Baidu, Yandex, Yahoo among others site (Bhandari & Bansal, 2018). Improving the online visibility is important for the organization to reach out to their possible clients. Use of SEO through linking page to another page of the website inform users about the related information. It also informs search engines that the link includes related information which helps in the ranking of the page. Title page being one of the important elements of SEO practice, a properly optimized page title has a positive impact for the web ranking (Jain, 2018). 17 In India, Velayudham and Rose (2019), conducted a study to evaluate the impact of search engine marketing on consumer purchase behavior. The research was based on a descriptive study design and quantitative and qualitative approach. The study found that higher search rankings positively influenced consumer purchase behavior with internet search skills a critical factor. 68% of the respondents used the internet for electronic appliance purchases while 4% used it for automobile purchases. The study does not consider other forms of internet marketing and is only limited to Chennai, India. The current study will focus on other forms of internet marketing such as social media, email, and website marketing in the used car industry in Kenya. A study carried out by Bayes, Santos, and Wildenbeest (2015), explained that SEO provides a different way of marketing where internet search providers rank websites using a unique algorithm so that when an internet user searches for a product online, the results displayed will contain some adverts for products from some companies. Giomelakis and Veglis (2015), adds that SEO marketing practice capitalizes on the fact that large number of internet users are likely to click on the top ranked results displayed after a search. Consequently, firms invest in SEO marketing to promote brand visibility and presence of website. Similarly, a study by Tseui et al. (2020), on SEO marketing practices noted that machine learning helps the search engine to establish frequently visited websites and boost their visibility while low volume websites are listed among the last pages in a search. In Egypt, Adel and Norhan (2021) did a study on effect of search engine optimization on Egyptian consumer response. For this, a descriptive study was conducted. The target sample for the study was consumers according to their age, gender and educational level. A sample of 158 consumers was selected. The results showed that there is a fundamental difference for customer in search engine optimization according to customer’s gender. While there is not a fundamental difference for customer in search engine optimization according to customer’s age, finally, the results show there is a fundamental difference for customer in search engine optimization according to customer’s educational level. Even though the study focused to SEO adoption similar to the one adopted in this study, 18 the study targeted consumer response while the current study will target the management in the car bazaars firms located in Nairobi. The different sector targeted by the study may reflect differing results that may not be applicable to other sector. In Uganda, Atim, J. O. (2019) did a study on relationship between SEO and performance of small and medium sized enterprises in Uganda. The study found that SEO is very important, especially when the company conducts business online. The study concludes that there is a relationship between SEO and performance of SMEs. This study adopted purposive and random sampling methods while the current study will adopt descriptive research design. This study was on SMEs, while the current study was conducted on used motor vehicle sector. The business environment within Uganda may differ with that of Kenya hence the need to carry out this study in the Kenyan context. In Kenya, Kisato (2014) did a study on utilization of search engine optimization (SEO) and the influence on the Performance of Micro and Small Fashion Enterprises in Nairobi County, Kenya. The study revealed that, there was a statistically significant relationship between SEO and firm performance. Kasimu (2017) did a study on the influence of Search Engine Optimization (SEO) on the market performance of Top 100 SMEs in Kenya. The findings obtained indicated that SEO increased the number of unique visitors to their websites and that SEO increased the number of clicks on their adverts. These studies agreed that indeed SEO has influence on firms’ performance; however, the were conducted in other sectors other than in motor vehicle sector. This study will fill that gap by investigating the effect of SEO on sale performance of second hand vehicles in Nairobi, Kenya. 2.4.3 Email Marketing and Sales Performance Email marketing is a strategy that involves using email communication to convert leads into sales. The business achieves conversion by sending various product or service content directly to the target audience (Hudak et al., 2017). Email marketing is one important part in an internet marketing strategy and is becoming popular method adopted 19 by the companies to deliver marketing information to customers (Hudak et al., 2017). Marketers design marketing Emails differently and put separated content for different segments, which makes the marketing information more relevant to the recipients and possibly creating more conversions. One of the best method of E-mail marketing is sending out mass emails with promotional materials, publishing and distributing e- newsletters and offering correspondence courses via email (Tian, 2018). The advantage to all of these marketing strategies is the ability to reach a more customers at once. In a study carried out in the UK by Ellis-Chadwick and Doherty (2012) on online ads with an emphasis on the role of e-mail marketing, the sample included almost 1000 promotional e-mails sent by twenty U.K. leaders over an 18-month period. Content review of e-mail campaigns shows that various format, address, subject lines, hyperlinks and interactivity techniques are applied to capture the attention of consumers initially and then stimulate further interest. In Iran, Bluecast Internet (2017) found that 94% of Iranian marketers use emails to establish customer relationships, and 84% agree that email is an essential or very significant component of marketing strategies. Chaffey (2005) noted that before the advent of social media, emails were the primary source of communication. Their enhancement from the use of postage mails enabled communication between stakeholders and the organization to be shortened and allowed more detailed correspondences. A total of 54.7 percent of respondents consider emails on mobile devices to be the greatest chance of success, as a majority of the population access their emails on a daily basis through smartphones. A study by Brock et al. (2016) observed that Tobacco companies in the United States often used emails to their target customers which were quite attractive and appealing to the customers. The study however notes that mass marketing emails sent to target customers may be ignored by the targeted customer or flagged as spam mail and blocked hence defeating its purpose. Conversely, Todor (2016), noted that email marketing requires firms to carry out data gathering activities of its customer base and learn their buying habits before bombarding them with marketing email for better success. The 20 scholar supports the argument that if email marketing is done right, then the rewards for the organization could be huge. In an organizational sense, Quaresma, Silva and Marreiros (2017) carried out a study on e-mail use behaviors with an emphasis on Portuguese employees. In an organizational sense, the research empirically explored the use of e-mail, using a sample of the Portuguese population with an active e-mail account assigned by an employer. The findings show that most users have what is considered acceptable behavior in the use of this communication tool. Hudák, Kianickova and Madlenak (2017) pointed out in another study that e-mail success and popularity contributed to a high regular traffic of sent and received messages. As a result, the widespread use of this communication tool has a positive contribution in their professional or personal lives, considering the vast amount of knowledge they share and handle. Sahni et al. (2018) conducted a study to evaluate the impact of personalization in email marketing. The research design for this study was a randomized field experiment that utilized quantitative and qualitative approaches. The study was based on psychology advertising theories. The study found that personalized emails had a positive impact on advertising outcomes; specifically increasing sales leads. Moreover, personalization did not always have to be about the product. Although the study analyzed the impact of personalization in email marketing, it is focused on the South American market and fast moving consumer goods. The current study will address the impact of email marketing in the used car industry in Nairobi, Kenya. A study by Bodoine (2020) carried out on Jumia Company in Cameroon, established that a host of digital marketing practices played a role in the growth of an organization. Despite the study analyzing several digital marketing channels, it was clear that Email marketing contributed directly to the growth of Jumia in Cameroon. This can be attributed to the fact that Email marketing is more precision-based than other marketing strategies that target the masses. This means that Email marketing allows firms to send tailored marketing messages to specific customers (Desai, 2019). Quantifying the 21 personalization factor of email marketing indicates that email marketing has a higher return on investment than any other digital marketing strategy (Addou, 2020). However, most organizations have not discovered the effectiveness of email marketing and tend to overlook it in their marketing strategies. The downside of such a move results in firms missing important marketing opportunities and using more expansive marketing channels that negatively impact the performance of the firms. Regionally, an analysis by Njoku and Chiana (2019), established that a significant relationship exists between customer satisfaction and email marketing as well as between successful marketing outcomes and email marketing. The findings of this study imply that email marketing can lead to better organizational performance. Further findings by Njoku and Chiana (2019), established that email marketing led to increased stock turnover, brought in higher revenues, and promoted customer satisfaction. This indicates that email marketing holds good prospects for the company that opted to deploy it as a marketing strategy. 2.4.4 Social Media marketing and Sales Performance Marketing on social media entails promoting consumer contact on the company's own website or through its social presence (Smith & Chaffey, 2018). Facebook, Twitter, LinkedIn, MySpace so on are such examples of social media websites. With these websites, one can share their thoughts, pictures, videos, and anything that they wish to (Akrimi & Khemakhem, 2017). With the rapid increase in the number of users, Marketers use this platform to advertise and increase awareness about their products. With internet now a part of life and social media being easy shopping source, company focuses on a popular social networking site for advertisement. Bagga and Gupta (2014) conducted a study to evaluate the use of internet marketing in the Indian automobile industry. Using a descriptive research design that combined a quantitative and qualitative approach, the study focused on how Volkswagen, Hyundai and Renault used social media marketing specifically Facebook, Twitter and Google+. 22 The study found that although Hyundai was the oldest automobile in India, it had been surpassed by newer entrants Volkswagen and Renault. The two companies posted regularly on Facebook and Twitter positively impacting their brand promotion, perception and visibility. Moreover, respondents noted that Volkswagen’s website was very informative ranking it as their preferred brand. However, the study did not focus on sales performance, non-social media internet marketing, used car sales market, which will be addressed in this study, in the Kenyan market context Haarman, et al (2020) examined the effectiveness of online Facebook campaigns, whereby Facebook usage was approximately three to four times lower in West Africa. Approximately 10 per cent of targeted Facebook users engaged with campaign content on likes, comments, shares or clicks. The study indicated that fewer than 3 in 10,000 people who saw the advertisement on Facebook were willing to complete their business transactions. Nwokah and Aenee (2017) studied the impact of social media marketing on the business performance outcomes on automobile dealers in Rivers State, Nigeria. The study used a survey design and quantitative and qualitative approaches. The study found out that Facebook, Twitter and YouTube had a positive impact on sales growth, market share and profitability for automobile dealers. The study is limited to the use of social media marketing in a Nigerian car sales context. The current study will focus on the impact of social media and non-social media internet- based marketing strategies in a Kenyan context. Silvano and Mbogo (2022) did a study on impact of Social Media Marketing on Small Businesses’ Sales Performance with focus to Women Clothing Stores in Nyamagana District, Tanzania. The study used quantitative research approach. Data was collected through questionnaires, and analysis conducted. ANOVA was applied to predict how the use Facebook, Instagram and Twitter for marketing purposes influences the sales performance of small businesses engaging in women clothing retailing. The result obtained through regression analysis established that Facebook has impacts on the sales performance of small businesses. On Instagram, the findings obtained established that 23 Instagram has a significant impact on the sales performance of small business. And on Twitter the results obtained revealed that Twitter has little or no direct relationship on the sales performance of small business. This study was conducted on clothing while the current study will be conducted in motor vehicles sectors. Musyoka (2017) analyzed telecommunications companies' social media brand strategy and marketing success in Kenya. A descriptive survey design was used; it targeted all 11 telecommunication companies in Kenya that were registered and licensed. The study found that the engagement of the business with its clients via social media increased their attitude loyalty and strengthened customer retention and acquisition, thereby enhancing marketing efficiency. A research on social media use and its effect on the financial performance of deposit taking microfinance institutions in Kenya was carried out by Okari (2017). In order to achieve the study objectives, a descriptive research design was adopted and a census survey was carried out on all (13) deposits receiving microfinance in Kenya. The study found that the deployment of social media contributed to a rise in the number of new clients, which increased their portfolio of assets and loans and thus improved the performance of Kenya's microfinance institutions. Kimathi et al. (2019), conducted a study to evaluate the impact of social media on the performance of medium and small enterprises in Kenya. The study looked at how businesses used mobile phone and internet marketing to influence customer base growth, sales performance and profitability. The study used a descriptive survey design and quantitative and qualitative approaches. The study found that digital marketing enhanced MSMEs sales and profitability performance by 38.8% . Still, the study does not identify specific internet marketing strategies and is not focused on the used car industry. The current study will address these gaps. The inclination of a prospective user to use a given system is hypothesized to be a fundamental factor in taking into account whether it will be adopted. The adoption and use by most companies of emerging technologies is aimed at improving work efficiency, which then leads to improved job performance. Based on the Hughes and Fill (2009) 24 observations about the internet marketing, this study will adopt website marketing, Search engine optimization (SEO) E-marketing and social media marketing as the independent variable. 2.5 Research Gap El Mansoury (2016) conducted a study on the correlation between social network credibility and online purchase intent for the Egyptian automobile market. According to the report, Egyptian online users have confidence in social media networks for automobile purchase research. The scope of the research is restricted to social media and website marketing in the Egyptian market. Email marketing and search engine optimization marketing will be included in the current study. Additionally, it will concentrate on used automobile sales on the Kenyan market. In India, Bagga and Gupta (2014) did a study on the online marketing practices of the automobile sector, with a focus on Indian rivals. Volkswagen and Renault's active participation on Facebook and Twitter favorably impacts their brand marketing, perception, and visibility. Sales performance was not the focus of the study. The focus of the present study will be Kenyan context. Kanapathipillai and Kumaran (2022) investigated the effect of a digital marketing strategy on consumer purchasing decisions in the Malaysian automobile sector. The study included a survey design and quantitative and qualitative methodologies. According to the survey, digital marketing is crucial for establishing consumer relationships within the automotive business. Consumer purchase decisions were influenced positively by relationships. Internet marketing played a huge role in the car-purchasing decisions of consumers. Although the report underlines the importance of digital marketing, it does not disclose specific online marketing tactics the businesses employed. In addition, it is restricted to Malaysia and does not focus on the used automobile business. The current study will assess the influence of particular online marketing methods on the Kenyan used automobile market. Nwokah and Aeenee (2017) conducted a study on social media marketing and the commercial success of vehicle dealers in Rivers State. Facebook, Twitter, and YouTube 25 had a beneficial effect on sales growth, market share, and profitability for motor car dealers, according to the study. This research is limited to the usage of social media marketing in the context of car sales in Nigeria. This study will examine the influence of social media and non-social media internet-based marketing methods in the setting of Kenya. Kimathi et al. (2019) conducted a study on the impact of digital marketing on the performance of SMEs in Kenya. The study indicated that digital marketing increased MSMEs' sales and profitability by 38.8 percent. Nonetheless, the report does not identify specific internet marketing methods and is not exclusive to the used automobile business. This study will fill the gap identified in the previous studies. 21 Table 2.1 Summary of Knowledge Gaps Study Focus of Study Findings Research Gap Focus of current study Ohri and Sharma, (2018) Source & Role of Online Information in Pre-purchase Consumer Behavior in New Passenger Car Industry The study found that when purchasing autos, buyers utilized search engines to research product information. Moreover, social media reviews and peer influences influenced the buying decisions of automobiles.. The report does not discuss the used car industry or markets outside of India.. This study will examine the impact of the aforementioned strategies on the Kenyan used car market. El Mansoury, 2016 Relationship between Social Network Credibility and Online Purchase Intention for Automobile Market in Egypt The survey indicated that Egyptian web users trusted social media networks for researching automobile purchases.. The scope of the investigation is limited to social media and website marketing in the Egyptian market.. The current investigation will encompass email marketing and SEO marketing. In addition, it will concentrate on used car sales in Kenya. Velayudham and Rose, 2019 Influence of Search Engine Marketing on Consumer Purchasing Behavior. Higher search rankings positively influenced consumer buying behavior, with internet search abilities being a crucial element, according to the study.. The research excludes all other forms of internet marketing and is limited to Chennai, India exclusively. This study will focus on social media, email, and website marketing in Kenya's second-hand automobile business. Sahni et al. 2018 The function of commercial content that is not informational in email marketing The study discovered that tailored emails had a beneficial effect on advertising outcomes, specifically on sales lead generation. The subject of this study is the South American market and fast-moving consumer goods This study will examine the impact of email marketing on the Kenyan used-car market. Kanapathipillai and Kumaran, 2022 The Mediating Effect of Relationship Marketing Strategy on Digital Marketing According to the survey, digital marketing is essential for establishing consumer interactions in the automotive business. The influence of The report did not identify which online marketing methods the businesses employed. In a Kenyan context, the current study will examine the impact of certain internet marketing methods in the used automobile 22 Strategy and Consumers' Purchasing Decisions in the Malaysian Automotive Industry relationships on consumer purchase decisions was beneficial. Overall, online marketing played a substantial role in customer automobile purchase decisions. Moreover, it is limited to Malaysia and does not concentrate on the used automobile business. business. Bagga and Gupta, 2014 Internet marketing conducted by the automotive industry, with specific attention paid to Indian competitors Both Volkswagen and Renault often posted on Facebook and Twitter, which had a favorable impact on the promotion, perception, and visibility of their respective brands.. The study did not focus on sales performance, The current study will focus on Kenyan Context Jira-alongkorn and Vungsuntitum, 2020 The Perspectives of Thai Customers Regarding Mazda Brand's Online Marketing Communications The findings of the study established that Mazda's online platforms, particularly Facebook, are an important component of the company's strategy for consumer involvement.. The study did not detail the companies' internet marketing tactics. It doesn't focus on used cars and is only applicable in Malaysia. The purpose of this study is to investigate the influence that particular internet marketing methods have had on the secondhand automobile market in Kenya. Nwokah and Aeenee, 2017 The use of social media marketing strategies and the commercial success of car dealerships in the state of Rivers The study found that Facebook, Twitter and YouTube had a positive impact on sales growth, market share and profitability for automobile car dealers The study is limited to the use of social media marketing in a Nigerian car sales context. This study will examine social media and non-social media internet-based marketing tactics in Kenya. Kimathi et al. 2019 Effect of Digital Marketing on the Performance of MSMES in Kenya Digital marketing improved MSMEs sales and profitability by 38.8%, study revealed. The report does not focus on the used automobile business or identify specific internet marketing tactics. The current study will address these gaps. Source:Researcher(2022) 23 2.6 Conceptual Framework In the conceptual framework adopted for this study, the independent variables are website, search engine, email and social media marketing, while the dependent variable is sales performance. Figure 2.1 Conceptual Framework Source: Researcher (2022) 2.7 Operationalization of Study Variables Operationalization facilitates the reduction of abstract notion of constructs into observable characteristics so that they can be measured using indicators. A rating scale ranging from 1=strongly disagree to 5=strongly agree will be used to measure both the dependent and independent variables. The indicators that will be used in the study are summarized in the below table. Website Marketing  Website design  User experience Search Engine Marketing  Website visibility  High search rankings Social Media Marketing  Facebook marketing  Twitter marketing  Instagram marketing Sales Performance  Market share  Volume of sales  Profit margin Independent Variables Internet Marketing Dependent Variable Email Marketing  Information marketing  Promotion marketing 24 Table 2.2 Operationalization of Variables Objective Variable Measurable Data Collection Tool Data Analysis Citation To establish the effect of website marketing on sales performance of second hand vehicles in Nairobi County.  Website design  User experience Quantitative Structured Questionnaire Description Correlation Regression Tests Pestek and Cicic (2019). El Mansoury (2016). Ohri and Sharma (2018). To investigate the effect of search engine marketing on sales performance of second hand vehicles in Nairobi County.  Website visibility  High search rankings Quantitative Structured Questionnaire Description Correlation Regression Tests Velayudham and Rose (2019). Wildenbeest (2015). Giomelakis and Veglis (2015). To determine the effect of email marketing on sales performance of second hand vehicles in Nairobi County.  Informatio n marketing  Promotion marketing Quantitative Structured Questionnaire Description Correlation Regression Tests Bluecast Internet (2017). Brock et al. (2016). Bodoine (2020). To establish the effect of social media marketing on sales performance of second hand vehicles in Nairobi County.  Facebook marketing  Twitter marketing  Instagram marketing  Market share  Volume of sales  Profit margin Quantitative Structured Questionnaire Description Correlation Regression Tests Bagga and Gupta (2014). Nwokah and Aenee (2017). Silvano and Mbogo (2022). Malgwi and Dahiru (2014). Liu, Y., Feng, J., & Liao, X. (2017). Eriotis, N. P., Frangouli, Z., & Ventoura- Neokosmides, Z. (2002). Santos and Brito (2012). Source: Researcher, 2022 25 2.8 Chapter Summary This chapter discussed the theories on which the study was anchored as well as the empirical studies scholars have carried out on internet marketing and sales performance. The research gaps arising from previous studies are also summarized. The conceptual framework is derived showing the interrelationships between variables, and the operationalization table summarizes the description of variables and their measures. 26 CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction This chapter focuses on the methodology of the study and starts with outlining the philosophy of the research, research design, population of the study, data collection, data analysis, research quality and ethical considerations of this study 3.2 Research Philosophy The assumptions made by researchers about how they see the world are reflected in their research philosophy, which is related to the process of developing new knowledge as well as the nature of the knowledge itself (Saunders et al., 2007). Positivism and interpretivism are the two primary research theories that serve as the foundation for research in the social sciences. Interpretivism acknowledges the presence of numerous readings of reality as a component of the scientific knowledge that is being pursued and asserts that the only way reality can be understood is through the subjective interpretation of interventions. According to this idea, acquired knowledge is a product of social construction rather than something that is objectively determined or seen. Its purpose is not to generalize or make predictions about causes and effects; rather, it seeks to interpret and comprehend the meaning behind human behavior. Interviews and observations are common techniques of data collecting used by interpretivism, and the data collected is heavily influenced by the researcher's own personal opinion and values. Studies based on qualitative research are made possible as a result of the philosophy (Cooper & Schindler, 2006). On the other hand, positivism is based on the idea that the observer is independent of what is being observed, and it maintains that measuring ought to be done through objective standards. Positivism is a school of thought. It aims to gather predictive and explanatory knowledge of the world by the determination of cause and effect in relationships, and it is founded on real facts, neutrality, measurements, and the validity of outcomes (Uddin & Hamiduzzaman, 2009). The positivist method of conducting research begins with the formulation of a theory, followed by the collection of data, its 27 examination via statistical methods, and the application of the findings to support or refute a hypothesis. The positivist research philosophy was used for this study. This suggests that the research presumes that only knowledge based on facts can be relied upon (Bajpai, 2011). According to Saunders, Lewis, and Thornhill (2009), positivism encourages the researcher to focus on the facts rather than the researcher's own impressions. The findings of research that is conducted in a positivistic manner are able to be observed and quantified using statistical methods (Wilson, 2014). The positivist approach utilizes theory in order to generate hypotheses, which are then put to the test during the research phase (Easterby, Thorpe & Jackson, 2008). 3.3 Research Design The overall method that is adopted to integrate the variables of a study in a consistent and logical manner in order to effectively address the research topic is referred to as the research design (Kothari, 2010). The study will be based on descriptive research design which is a category of quantitative research. Quantitative research measures data using numbers and statistics. The approach is selected because it helps quantify outcomes, establish the cause and effect relationships, and make predictions about generalizability (Cooper and Schindler, 2014). According to Blumberg, Cooper and Schindler (2014), the descriptive research design provides an accurate profile of people, events, or situations by documenting the pre-existing conditions and attitudes through the use of observation and interpretation methodologies. It makes it possible to collect quantitative data that, after being evaluated quantitatively with descriptive and inferential statistics, may be interpreted quantitatively. This study employed a descriptive cross sectional survey design since it describes phenomena as they exist. Descriptive cross-sectional survey design is a research tool used to capture information based on data gathered for a specific point in time. A cross- sectional study is a type of research design in which you collect data from many different individuals at a single point in time. Thus, the cross-section research design was selected because the study is a survey involving collection of data at one point in time and this 28 study was undertaken in July 2022. Descriptive cross-sectional survey design characterizes the prevalence of a study outcome in a specified population. Studies such as Ongoto (2021) and Adede (2017), which are related to this one, have utilized this research design. The study design is appropriate because it helps measure data trends and compares variables (Ibrahim et al., 2010). Furthermore, it is less time-consuming allowing collection of data from a large number of variables. 3.4 Target Population Target population is the collection of elements that possess the information sought by a researcher (Solverman, 2016). According to Taylor, Bogdan and DeVault, (2015) a population refers to the entire group of persons or elements that have at least one thing in common. Nairobi County was selected as the geographical scope as it houses the largest number of second hand car bazaars. This study involved all the car bazaars that are registered with Kenya Auto Bazaar Association by the end of year 2021. According to KABA (2021) report there were 395 second hand car bazaar operating within Nairobi County. Most of these car bazaars are located along the major highways including but not limited to Ngong road, Mombasa road, Thika road, Langata road, Uhuru highway and Jogoo road as presented in Table 3.1. Thus, the target population of this study was 395 second hand car bazaar within Nairobi County where the unit of analysis was yard managers, sales managers an IT manager. These people were targeted since they are in charge of day today running of the business thus they aware of the effect of internet marketing which this study aims to investigate. Table 3.1 Target Distribution Cadre Frequency Percentage Ngong road 93 24 Mombasa road 51 13 Thika road 64 16 Langata road 77 19 Uhuru highway 72 18 Jogoo road 38 10 Total 395 100 Source: Kenya National Bureau of Statistics (2021) 29 3.5 Sampling Design In order to come up with a representative sample of the target population for this study, the study will use the Modified Fisher Model since the population is less than 10,000. The formula is as follows: Equation 1: Where; n =refer to the desired sample size when the entire survey population is less than 10,000. Z =the standard normal deviate usually set at 1.96 which corresponds to the 95% confidence level. p=Population of the target population estimated to have a particular characteristic, 50% is normally used because it is the recommended measure if there is lack of reasonable estimate. q =1.0 – p e =degree of accuracy desired in this context set at 0.05. The sample size was obtained using the formula as indicated below: = ( ) ( )( ) ( ) = 384 where the above sample size was adjusted using equation 2 below: Equation 2: nf= ( ) Where: nf= the sample size, n= the sample size in equation 1 above; and N= is the population size Given that the population of interest is 395 (population size N=395), the sample size was obtained as illustrated mathematically using Modified Fisher’s Model as below: Equation 3: nf = ( ) = 384/ [1+ (384/395)] n=195 30 For a manageable sample, stratified and random sampling were employed. Stratified random sampling is used to pick a sample based on homogenous subpopulations with shared attributes. The method is selected because it ensures efficient and accurate data collection (Frey, 2018). It minimizes bias by enabling systematic selection of a sample that takes into account the population attributes. As the population comprised a number of various groups, the frame will be divided into separate strata based on the location of the automobile bazaar. Each stratum was then sampled independently, resulting in a stratified sample. To ensure that specific groups within the population are sufficiently represented in the sample and to increase efficiency by gaining better control over the sample's composition are the primary reasons for utilizing a stratified sampling design. The sample distribution is depicted in Table 3.2. This study's sample size was 195 companies, and one respondent was recruited from each company. Respondents included yard managers, sales managers and IT managers. After stratifying respondents, one respondent was interviewed randomly across all the firms that were targeted in order to get a general view with as little bias as possible. Table 3.2: Sample distribution Cadre Sample of Bazaars Percentage Ngong road 46 24 Mombasa road 25 13 Thika road 32 16 Langata road 38 19 Uhuru highway 36 18 Jogoo road 19 10 Total 195 100 Source: Kenya National Bureau of Statistics (2021) 3.6 Data Collection Methods A questionnaire was used to collect the primary data. Individuals' thoughts, motives, behaviors, accomplishments, and experiences are questioned via questionnaires, and this is why knowledge collection is accepted (Mellenbergh, 2008). The questionnaire adopted closed-ended questions. The study's questionnaire captured the study's objectives, and the researcher also ensured that the subjects were not manipulated (Franker, 2006). 31 According to Franker (2006), questionnaires are favored for data collection since they are less expensive and require less time. The questionnaire was subdivided into three parts: the first section included demographic details, second section discussed the independent variables of the study while section three covers the dependent variable. Questionnaires were given to the targeted respondents, which were circulated with the help of three other assistants involved by the researcher. In administering the questionnaires, the drop and pick later approach was used. To test the level of the respondent agreement for a particular construct that was used to measure the independent variables and dependent variable adopted in this analysis, the questionnaire adopted a Likert scale questions ranging from 1 to 5 in the 5- point Likert scale (Kiess & Bloomquist, 2008). 3.7 Data Analysis The techniques for data analysis and testing are described in this section. The data will be edited, coded and cleaned prior to processing the responses. In addition, quantitative data will be collected as part of the project. The quantitative data will be coded and recorded using SPSS 23 and descriptive statistics. Researchers will utilize statistical methods to describe the data and determine the level of agreement that respondents have with the numerous assertions mentioned under each of the categories in the study. The analysis was conducted in the following manner: the frequency and percentage distribution table were used to determine the profile of the respondents; descriptive statistics, such as mean and standard deviation were used to determine the magnitude and direction of dispersion of the items that characterized internet marketing and sales performance. Inferential statistics will also be conducted using correlation analysis and multiple linear regression analyses in order to determine the level at which the independent variables predict the variation in the dependent variable The regression equation is: Y= “β0+ β1X1+β2X2+ β3X3 + β4X4 +α” Where: “Y is the dependent variable (sales performance),” β1, β2, β3 and β4 are the slopes of the regression equations, X1 is Website marketing 32 X2 is search engine marketing, X3 is e-mail marketing X4 is social media marketing, α “is an error term normally” distributed “about a mean of 0 and” for purpose “of computation, the α is assumed to be 0.” 3.8 Research Quality This section presents the validity and reliability test of the study. 3.8.1 Reliability Test A questionnaire is considered credible if it produces consistent findings when administered multiple times to the same population (Collis & Hussey, 2013). The Cronbach's reliability test was performed to ascertain the reliability of the instrument. Classification on quality of Cronbach 's Alpha value by Stevens (2013), state that value exceeding 0.9 is excellent, between 0.9 and 0.8 is good, 0.7 to 0.8 is acceptable, 0.6 to 0.7 is questionable and 0.5 to 0.6 is poor, and below 0.5 as unacceptable. The Cronbach's results of both internet marketing and sales performance were 0.805 and 0.751 respectively and were interpreted as acceptable (Stevens, 2013). Table 3.3 gives the summary of the reliability results. Table 3.3: Reliability Results Internet Marketing Cronbach's Alpha N of Items 0.805 31 Sales performance Cronbach's Alpha N of Items .751 5 Source: Researcher, 2022 33 3.8.2 Validity Test It is a representation of the amount to which the questionnaire is measuring what it intended to assess when it comes to the measurement of validity. Since a measuring instrument should measure what it is intended to measure, validity is considered to be the most important quality of a measuring instrument, as stated by Cooper and Schindler (2014). Validity can be measured in three different ways: the face or content validity, the construct validity, and the criterion validity (Johnston, 2014). Validity was determined based on the construct as well as the content of this investigation. The content validity of the instrument was determined through conversation with industry professionals who are knowledgeable about internet marketing for used motor vehicle businesses. Construct validity was carried out with the cooperation of the supervisor in order to make certain that the questionnaire has all of the components that are included in the conceptual framework. When conducting research, it is important to make sure that the face, content, construct, and concurrent validities are all met. This finding is in line with the proposition made by Cooper and Schindler (2011). When conducting research surveys, it is best practice to first carry out a pilot study using between 10 and 30 percent of the population that is being surveyed (Connelly, 2008). Within the scope of this investigation, the pilot study was performed on ten percent of the total number of respondents to the questionnaire. The pretest for this study was carried out with the participation of twelve employees recruited from the used vehicle businesses that are based in Kiambu County. The results of the pilot study were not incorporated into the overall findings of the study. The results of this test were analyzed to determine how the questionnaire may be improved in terms of its wording, phrasing, and sentence structure, as well as its alignment to the goals. 3.9 Ethical Considerations There are two primary reasons why research ethics are so vitally important: To begin with, the use of ethics in research is necessary in order to advance the goals of the research, which include the attainment of knowledge