The Impact of Marginalization on Online Marketing

Despite the opportunities and benefits associated with establishing a web presence, there is a significant subset of entrepreneurial ventures that are offline. Given the proliferation of internet use across the United States, exploring the factors contributing to this counterintuitive decision unearths new insights on entrepreneurial behavior. Through a survey of 260 small business owners and managers in the United States and additional interviews with 18 leaders at small entrepreneurial firms, we examine how marginalization, an external challenge that creates barriers to success, can influence an entrepreneur’s perceptions about digital marketing, and ultimately contribute to performance issues within the firm. We find that marginalization heightens the level of risk entrepreneurs assign to internet use. This risk perception limits the extent to which an entrepreneur responds to online customer feedback, which has implications for the venture’s relationship and reputation management efforts with buyers, ultimately impacting the firm’s performance.