CONTRIBUTION OF AFFILIATE MARKETING TOWARDS MULTIPLE INCOME GENERATION: A SURVEY OF BOTSWANA TERITORY

Presented by Samuel Chingoiro (PhD-Economics Candidate; ICSA and CIMA)

Robert P. Machera ( MBA; ICSA; FSAAA; MIPMZ; MZIM; ICM-HRD)

INTRODUCTIONAffiliate marketing is a mutual agreement between the affiliateand the online merchant, whereby the affiliate is paid either afixed percentage of money or a commission for selling themerchant’s products or services online. Affiliate marketing is arecent discipline that has gained momentum in the field ofmarketing and it has managed to uplift the standards of living ofmany individuals across the world as it facilitates multipleincome generation. Income from multiple sources such asaffiliate marketing is one of the most attractive trends of presentday lifestyle. In the process of globalization, companies on theother hand, are finding it imperative to market their productsand services through online marketing as they put up great effortto reach all corners of the world markets including developingcountries like Botswana.

Background of affiliate marketing Affiliate marketing worldwide has been recognized as

engines of growth and development (Harper, 2002:11etal, 2004:15; Ba-el and Felsenstein, 2005:28) and inmany countries there has been some considerableeffort to support its strategy so as to create thenecessary employment opportunities, incomegenerating and productivity capacity building.

Recently developing economies in Asia, and Africaclearly shows that online marketing has a highpropensity to apply technology and training

Problem statement In most instances individuals rely on a single source of

income, which could mainly be earned fromemployment or a private business. The problem thatarise is that single source income in most of the casefail to generate enough money to sustain all the needsand wants of individuals. Therefore it is encouraged toimplement multiple incomes through affiliatemarketing.

This study investigates the importance of affiliatemarketing that can boost more income to individualsand hence reduce financial stress.

Aim of the studyThe main aim of this study is to investigate theimportance of affiliate marketing in order to diversifythe sources of income for households in Botswana.

LITERATURE REVIEW Affiliate marketing can be defined as the strategic

process of creating, distributing, promoting andpricing products for targeted customers in the virtualenvironment of the internet.

E- Marketing is emerging as a very powerful means ofcommunication and marketers are increasinglyadopting it as part of their promotional activity.

Marketers welcome e-marketing because of the abilityto target individuals rather than using mass mediaapproaches.

‘ lit…….continued Technology in this area is developing rapidly as more and more users get connected, as

band with increases and technologies become more integrated, whether they are TV,computer or mobile based. All this provides exciting opportunities and challenges formarketers.

Afuah and Tucci (2001) suggested that the purpose of affiliate marketing is to cater for the following components of business fitness:

Creating customer value: by marketing its products through the internet, a firm offers more value to its customers by attempting to differentiate its services from its competitors.

Scope: Internet marketing can easily indicate which markets a firm has been serving the most, which markets are growing, and which new markets is higher risk.

Price: Internet can reveal through customer response rate whether the firm’s products are priced to appeal to markets and also achieve company share and profit objectives.

Revenue sources: it becomes ease to identify the greater source of revenue and determine whether it is plentiful enough to sustain growth and profit objectives overtime.

Connected activities: Adopting affiliate marketing implies that the firm should have the capabilities of engaging onto connected services, which may include a 24/7 customer service.

Multiple income streams Multiple-income-stream is a term that is coined to

imply instances where individuals enjoy more thanone or two sources of income.

There are many sources that people across the globecan turn to in order to enjoy multiple-income-streams.

For example, a person can both run a small businesswhilst at the same time is employed.

One of the most recent developments on the globalmarkets that have presented an opportunity toindividuals for earning multiple-income-streams isthrough affiliate marketing.

‘multi…………continued Knox (2011) suggested that internet entrepreneurship is one of

the easy ways of earning multiple-income-streams. Internet entrepreneurship encompasses coming up with new

ideas or products that can be marketed online or even findingnew ways to promote an existing product or joining a newaffiliate program or pursue an online joint venture.

When an individual has multiple streams of income, the loss ofone income stream will not devastate the entrepreneur.

Conversely, when an individual relies only on one source ofincome and that single income source goes away, then theentrepreneur would be broke. Knox (2011) further argues thatmost successful internet entrepreneurs have multiple incomestreams.

RESEARCH METHODOLOGY For the purposes of this paper a qualitative approach

was conducted. The research process explains themanner in which the research instrument was utilizedin the whole process of primary data collection. Theobjective of the researchers was to gain access to thesample and attempt to maximize the response rate.

TARGET POPULATION

According to Goddard and Melville (2001:34) apopulation is any group that is the subject of researchinterest. Furthermore, Utts and Heckard (2007:72)refer a population as the entire group of units aboutwhich inferences will be made. However, for thepurposes of this paper, the target population wasbased on the BTC employees, which stand at 20technical and trained internet specialists.

SAMPLING

Terre Blanche et al. (2006:49) define sampling as theselection of a few from a population and involve decisionsabout which people, settings, events and behaviours toobserve. It is not possible to experiment on wholepopulation hence it is imperative to target a subset whichis commonly referred to as a sample.

Sample procedures Questionnaires, interviews and observations are the

most commonly used methods of collecting data. The researchers used the questionnaire and interviews

as the method of collecting data for this paper. The researchers distributed questionnaires to fifteen

(15) BTC employees with a cover letter that stated thepurpose for the paper.

The executive management and technical staff wereasked to complete the questionnaires and inform theresearchers when they were ready for collection.

Sample procedures continued The researchers selected a sample as follows:

BTC –Employees

Sector N (Populationof technical staff at BTC)

n – Sample size

Percentage

Employees Telecommunications

20 15 75%

Total 20 15 75%

Sample procedure -Continued A sample (n) of 75% was acceptable and this gave atrue representative of the total population. Thesefifteen (15) employees were convenient to theresearchers and it was easier to use the convenientsampling method. As mentioned earlier theresearchers used the convenient sampling in order toinclude and exclude other persons in the overallpopulation.

THE RESEARCH INSTRUMENTS According to Goddard and Melville (2001:41), the fundamental

criteria for data collection instruments are that they must bereliable and valid. Terra Blanche et al. (2006:286), state that datarepresents bits of discrete information that can be extractedfrom their context and analyzed as numbers.

Keller (2005:19) describes three types of data. These are interval,nominal and ordinal data. Interval data are real numbers such asweights, incomes and distance. The study adoptedquestionnaires as the research instruments.

A research instrument titled: “Management and Staff on affiliatemarketing in Botswana” was used to gather data for the study.Furthermore, the questionnaire was structured according to five(5) point Likert Scale (Strongly Agree, Agree, Neutral, Disagreeand Strongly Disagree). The questionnaire consisted of threesections. The sections were as follows:

THE RESEARCH INSTRUMENTS – CONT... Section A – personal information about the

respondents Section B – affiliate marketing as a strategy to the

general public Section C – affiliate marketing as a strategy to firms in

Botswana

ADMINISTRATION OF QUESTIONNAIRES The questionnaires were distributed to the sampled

employees of BTC. The respondents were given two weeks to complete the questionnaires. The researcher collected the questionnaires in person. The questionnaires were very easy to administer, since all the completed questionnaires were submitted at central place, where the researcher would collect them.

DATA ANALYSIS The data from questionnaires was analysed as the

questionnaires were being received. The data was then entered into spreadsheets. Then, the data was analyzed using the Microsoft Excel; lastly the research findings were presented, combined

and categorized to the objectives of this study. The use of tables, graphs and pie charts were employed during the analysis procedures.

ANALYSIS, INTERPRETATION AND DISCUSSION

5Strongly

Agree

8Agree

2Neutral

0 0

I believe that affiliate marketing will uplift the standard of living

The results reflected that the majority of the respondents agreed that affiliate marketing uplift the standard of living, the results were that 53% agreed with the believe and 34 % strongly agreed with the phenomenon of affiliate marketing. This shows that the study agreed with the objectives of the researcher that states that affiliate marketing creates multiple incomes for the general public as well as firms or corporations.

3strongly

agree

10Agree

2Neutral

0Disagree

0strongly Disagree

0

2

4

6

8

10

12

1 2 3 4 5

Affiliate marketing can create employment to the general public

The graph 2. above indicated that affiliate marketing create employment to the general public. This was as a result from the findings that showed a respond of 67% and 20% of the respondents agreed and strongly agreed with the statement. This means that in Botswana the government should encourage the public and firms to use affiliate marketing as a strategy to generate multiple income.

1Strongly

Agree

10Agree

2Neutral

2Disagree

0Strongly Disagree

0

2

4

6

8

10

12

1 2 3 4 5

Affiliate marketing reduces household financial stress

The results indicated that 74% of the respondents agreed that affiliate marketing reduces household financial stress. It is true that affiliate marketing reduces household financial stress because the housewives will earn extra income through different projects using internet marketing.

2Strongly

Agree

4Agree

9Neutral

Affiliate marketing reduces the level of poverty

The results indicated that 60% of the respondents were neutral to the statement and this reflected that the level of understanding affiliate marketing in Botswana is still very low. Some people are too sceptical about affiliate marketing and hence they lack confidence in regards to this concept.

2Strongly

Agree

6Agree

4Neutral

3Disagree

Firms in Botswana use affiliate marketing

The results indicated that 53% of the respondents agreed that firms in Botswana use affiliate marketing. The results show that affiliate is known in the firms in Botswana and what is needed is to strengthen the strategy and concept.

SUMMARY The main aim of the study was to investigate the

importance of affiliate marketing as a means of increase income and wealth in Botswana. The study also attempted to establish whether there is a relationship between affiliate marketing and increase in wealth. The methodology used was a survey study of the BTC technical staff in Botswana. Data was collected using the questionnaires and interviews. The data was analyzed in chapter four and in this chapter the research will draw conclusions and recommendations.

KEY FINDINGS The study established that affiliate marketing and internet marketing assist individuals and firms in generating

multiple incomes. Therefore, affiliate marketing and internet marketing enhances the country in improving the grossdomestic product. Furthermore, affiliate marketing creates more employment opportunities. From the study affiliatemarketing is a source of extra income for house wives and hence reduces the levels of financial stress in the household.It was established that firms improve their market share as well as productivity if they use affiliate marketing andinternet marketing in their businesses.

This study focused out that there is a strong relationship between affiliate marketing and standard of livings.Individuals and that use affiliate marketing and internet marketing benefits in terms of multiple source of income.

The research also indicated that the study established that affiliate marketing and income generation plays a pivotalrole in enhancing the growth of the economy. Affiliate marketing and internet marketing have been established as keyto organizational performance. The study also reveals that the market share of firms in Botswana can grow if there isdiversification in terms of products or services. The study also established that firms and individuals in Botswana mustappreciate the use affiliate marketing strategy. Despite the general understanding of principles of affiliatemarketing, the study reveals that there is a serious gap in the firms and general public as far as training intervention isconcerned.

The study also established that firms take great exception to affiliate marketing strategies and issues. Investors want toinvest in well managed companies that generate multiple incomes so that they can maximize their returns.Furthermore, very little investment from external investors is coming through into the Affiliate marketing inBotswana. This could be attributed to lack marketing techniques and performance as evidenced in chapter four of thisstudy.

CONCLUSION Most studies carried out on affiliate marketing strategies are aimed at

enhancing company performance and customer requirements. From the descriptive data in this study, it is established that affiliate marketing strategies affect performance and growth of firms and individuals in Botswana. Research findings revealed that most firms are strategically positioned but they fail to use that competitive advantage in their businesses and households.

It was also revealed that most firms and households are failing to penetrate regional and global market. The research also revealed that firms were not aware of the main purpose of multiple incomes. The individuals and firms in Botswana must adapt the affiliate marketing strategies so that they will be growth in the country and hence reduce the level of poverty as well as the unemployment rate.

RECOMMENDATIONS This study revealed that affiliate marketing strategies are important to households and firms in

Botswana hence are a key to the success of the economy. In order to see the importance of affiliatemarketing strategy in Botswana one should consider the following:

Strategies to support affiliate marketing should be developed and targeted to households and firms. Full time house wives should be involved in affiliate marketing strategies so that they can earn whilst

at home.

The government should promote affiliate marketing strategies in order to reduce the level of poverty.

The cost of internet marketing should be subsidized by the government to cushion the firms andhouseholds.

Training and development on affiliate marketing should be instituted by the government ofBotswana.

The government should inject funds into firms and households who adapt to affiliate marketingstrategies.

RECOMMENDATION ‘CONT……….. The study also shown that programmes on youth participation in affiliate marketing strategies have

not yet borne the desired outcomes. This calls for a holistic approach to be taken regarding youth entrepreneurship development in order to strengthen their participation in business and income generating.

This can be done by strengthening training, mentoring and benchmarking of business owners in order to assist them to acquire requisite business skills. Further, it is now widely recognized that the education system should incorporate affiliate marketing programmes as part of the curriculum in order to inculcate entrepreneurship in youth at an early stage of their development. It is also recommended that the work of Junior Achievement Botswana, which focuses on these issues, should be extended to cover the whole country.

The government should take initiatives in the provisions of computers and internet throughout the country so they the whole population of Botswana will benefit from affiliate marketing and internet marketing.

House wives should be educated in terms of the benefits of affiliate marketing in order reduce the financial households stress.

The larger corporations should initiate in developing small firms and households in terms of affiliate marketing as part of their social corporate responsibility.

RECOM……. If firms and households adapt to some of the above

recommendations they will be able to generate multipleincomes and hence accomplish their intended goals.

Furthermore, they will lure both local and foreign investorshence gaining a bigger market share. This research provesthat affiliate marketing promotes multiple incomes andimproves the standards of living of people in Botswana.

Firms and households in Botswana should adapt affiliatemarketing because the research proved that there is a co-relationship between affiliate marketing strategies and thegrowth of the economy.