Utilization of Social Media and Its Implications on the Performance of SMEs in Dodoma City, Tanzania

Abstract

This study investigated the relationship between utilization of social media and performance of SMEs in Dodoma City, Tanzania. The specific objectives of the study were to examine the effect of effect of social media on SMEs performance, and the relationship between social media use and innovation and branding in SMEs. Data were collected from 336 systematic randomly selected SMEs using a structured questionnaire. Data analysis involved the use bivariate correlation analysis, structural equation model and confirmatory factory analysis. It was found that use of social media has significant effect on SMEs performance as it contributes to cost effectiveness, customer satisfaction and market performances. Similarly, use of social media also positively affects innovation and branding of SMEs. Thus, SMEs should be encouraged to fully exploit and use various available and affordable social media networks for marketing and networking purposes to rapidly increase performance and their growth.