Position Paper

On

SMEs and Branding In partial fulfilment of the requirement for the course on

STRATEGIC BRAND MANAGEMENT

Su'mitte+ to" 3rof4 Satish Nair

Su'mitte+ B%" Mahesh ,ani -)&)&&). /init Sharma -)&)&01. /iral Shah -)&)&2(.

Institute of Mana!ement" Nirma #ni$ersit% && Decem'er" &()*

INTRODUCTION Brand Accor+in! to De Chernaton% -&(()." a 'ran+ can essentiall% 'e +escri'e+ as an i+entifia'le pro+uct" ser$ice" person or place" an+ it can 'e increase+ 5hen the 'u%er or user percei$es rele$ant" unique" sustaina'le a++e+ $alues 5hich match their nee+s most closel% an+ more satisf%in!l% 4 6eller -&((*. intro+uce+ the concept of 'ran+ 7no5le+!e" an+ referre+ to a consumer8s co!niti$e 'ran+ representation" 5hich inclu+es information a'out a 'ran+ that the consumer has acquire+ o$er time4 9e in+icate+ that a 'ran+ shoul+ inclu+e the attri'utes" ima!es" feelin!s" a5areness" 'enefits an+ e:periences -6eller" &((*.4

Brand Management Bran+ mana!ement is a communication function that inclu+es anal%sis an+ plannin! on ho5 that 'ran+ is positione+ in the mar7et" 5hich tar!et pu'lic the 'ran+ is tar!ete+ at" an+ maintainin! a +esire+ reputation of the 'ran+4 De$elopin! a !oo+ relationship 5ith tar!et pu'lics is essential for 'ran+ mana!ement4 Tan!i'le elements of 'ran+ mana!ement inclu+e the pro+uct itself; loo7" price" the pac7a!in!" etc4 The intan!i'le elements are the e:perience that the consumer ta7es a5a% from the 'ran+" an+ also the relationship that the% ha$e 5ith that 'ran+4 Contemporar% +efinitions of 'ran+in! are +eeper than the simple transaction 'et5een the 'ran+ or!ani<ation an+ consumers" '% inclu+in! aspects of 'ran+" li7e 'ran+ name" lo!o" colors an+ relationship intan!i'les such as customer lo%alt% an+ preference4 Different people ha$e +ifferent $ie5s on the +efinitions of 'ran+ mana!ement4 Strate!ic 'ran+ mana!ement in$ol$es the +esi!n an+ implementation of mar7etin! pro!rams an+ acti$ities to 'uil+" measure" an+ mana!e 'an+ equit%4 A compan%8s 'ran+ mana!ement is inte!rate+ into the +ail% operation of the compan%4 =urthermore" a 'ran+ strate!% an+ 'ran+ mana!ement implementation is not a one>time effort" 'ut a re!ular mar7etin! strate!%" an+ it shoul+ follo5 the +e$elopment of the enterprise4

Small and Medium Enterprises SME sector of In+ia is consi+ere+ as the 'ac7'one of econom% contri'utin! to ?0@ of the in+ustrial output" ?(@ of In+ia8s e:ports" emplo%in! 2( million people" create )4* million Ao's e$er% %ear an+ pro+uce more than 1((( qualit% pro+ucts for the In+ian an+ international mar7ets4 Bith appro:imatel% *( million SMEs in In+ia" )& million people e:pecte+ to Aoin the 5or7force in ne:t * %ears an+ the sector !ro5in! at a rate of 1@ per %ear" Go$ernment of In+ia is ta7in! +ifferent measures so as to increase their competiti$eness in the international mar7et4 There are se$eral factors that ha$e contri'ute+ to5ar+s the !ro5th of In+ian SMEs4 =e5 of these inclu+e; fun+in! of SMEs '% local an+ forei!n in$estors" the ne5 technolo!% that is use+ in the mar7et is assistin! SMEs a++ consi+era'le $alue to their 'usiness" $arious tra+e +irectories an+ tra+e portals help facilitate tra+e 'et5een 'u%er an+ supplier an+ thus re+ucin! the 'arrier to tra+e4 Bith this hu!e potential" 'ac7e+ up '% stron! !o$ernment support; In+ian SMEs continue to post their !ro5th stories4 Despite of this stron! !ro5th" there is hu!e potential amon!st In+ian SMEs that still remains untappe+4 Once this untappe+ potential 'ecomes the source for !ro5th of these units" there 5oul+ 'e no stoppin! to In+ia postin! a GD3 hi!her than that of #S an+ China an+ 'ecomin! the 5orl+8s economic po5erhouse4

Manu$acturing Enterprises Investment in Plant % Mac&iner' Description INR USD!"# Micro Enterprises upto Rs4 &0Ca7hs upto D 2&"0(( a'o$e Rs4 &0 Ca7hs E upto Rs4 0 a'o$e D 2&"0(( E upto D )4&0 Small Enterprises Crores million Me+ium a'o$e Rs4 0 Crores E upto Rs4 )( a'o$e D )4&0 million E upto D &40 Enterprises Crores million

Service Enterprises Investment in E uipment Description INR USD!"# Micro Enterprises upto Rs4 )(Ca7hs upto D &0"((( a'o$e Rs4 )( Ca7hs E upto Rs4 & Small Enterprises a'o$e D &0"((( E upto D (40 million Crores Me+ium Enterprises a'o$e Rs4 & Crores E upto Rs4 0 Crores a'o$e D (40 million E upto D )40 million

Importance o$ Brand Management The most important aspects of a successful 'ran+" is that the stron! 'ran+ can +istin!uish the compan% or pro+uct from the competitors" an+ earn their respect" 5hile also !ainin! the attention of the tar!et customers4 Bran+s can pro$i+e special meanin! an+ 'enefits to consumers4 The meanin! of a 'ran+ is s%m'olic" an+ allo5 consumers to proAect their self>ima!e an+ relate to others4 Bran+s i+entif% the source or pro+ucer" an+ consumers can !ain confi+ence from a particular pro+ucer4 In a++ition" 'ran+s allo5 consumers to lo5er the search costs for pro+ucts an+ re+uce ris74 Bran+s also pro$i+e a num'er of $alua'le functions to their o5ner firms4 It can 'e consi+ere+ as a strate!ic reference point an+ supports 'usiness +e$elopment '% reali<in! an ali!nment 'et5een the capa'ilities of the firm an+ the e:ternal en$ironment4 A 'ran+ offers the firm le!al protection" retains intellectual propert% ri!hts an+ !i$es le!al title to the 'ran+ o5ner4 The firm can earn an+ sustain e:tra profits from their 'ran+s" an+ creates !reater $alue for sharehol+ers4 Bran+ mana!ement inclu+es +e$elopin! a promise" ma7in! that promise an+ maintainin! it" such as +efinin! the 'ran+" positionin! the 'ran+" an+ +eli$erin! the 'ran+4 So 'ran+ mana!ement is the pi$otal role of creatin! an+ sustainin! the 'ran+4

Our (ie) Bran+in! ma7es sellin! easier 'ecause people 5ant to 'u% from those the% 7no5 an+ li7e" an+ those the% trust 5ill +eli$er on commitments4 A !oo+ 'ran+ puts forth that promise4 Bith a 5ell>mana!e+ 'ran+" a compan% har+l% nee+s to intro+uce itself4 Bithin the tar!et mar7et" people 5ill alrea+% 7no5 its 'usiness" its personalit%" an+ the promise it ma7es to customers4 Bithout a 5ell>mana!e+ 'ran+" a compan% 5oul+ spen+ a !oo+ part of e$er% sales opportunit% tr%in! to intro+uce its 'usiness" 5hile some 5ell>7no5n 'ran+ +o5n the street can spen+ that time actuall% ma7in! the sale4 Bran+s fuel success in three 5a%sF Bran+s lea+ to name a5areness4 Bran+s prompt consumer selection 'ecause people prefer to 5or7 5ith those the%8$e hear+ of an+ hear+ !oo+ thin!s a'out4 Bran+s unloc7 profita'ilit% 'ecause people pa% premium prices for pro+ucts -or" in the case of personal 'ran+s" for people. that the% trust 5ill +eli$er hi!her $alue than less>7no5n an+ less>truste+ alternati$es4 As a result of the a+$anta!es the% +eli$er" 'ran+s increase the o++s of 'usiness success" 5hich ma7es them especiall% $alua'le in a 5orl+ 5here half of all 'usinesses fail in the first fi$e %ears" nine out of ten pro+ucts +on8t ma7e it to their secon+ anni$ersar%" an+ too man% people are $%in! for the same Ao's" sales" an+ opportunities4

Counter arguments* )4 Narro5 Interpretation on Bran+ Mana!ementF In fact" 'ran+ mana!ement pla%s an important role in mar7etin! processes 'oth in SMEs an+ lar!e companies4 Actuall%" most mana!ers +o not actuall% un+erstan+ 5hat 'ran+ mana!ement is4 This is +ue to a lac7 of un+erstan+in! of the real meanin! of 'ran+in!4 In fact" small 'usinesses" such as local corner shops an+ !rocer% stores" ma% e$en fail to reco!ni<e that the% are a 'ran+4 =or them" 'ran+ mana!ement is restricte+ to a+$ertisin!" the 'ran+ name an+ the lo!o4 Then also" the a+$ertisin! acti$ities" such as tele$ision" %ello5 pa!es an+ promotional leaflets are seen as important to 'ran+in!" 'ut the% +o not seem as critical to SME o5ners4 3ersonal sellin! an+ face>to>face con$ersation is a critical part of their mar7etin! in SMEs4 &4 Cac7 of Resource an+ TimeF One other common issue SMEs face is that SMEs ha$e limite+ time" resources" structures an+ processes to carr% out 'ran+in! acti$ities4 Also" there e:ists certain o'structions to 'ran+in!4 Cimitations on financial" human resources an+ time are the main o'structions4 These limitations can force o5ners an+ mana!ers to focus on short>term 'usiness strate!%" li7e 5hat an+ ho5 the% can +o 'est in their +ail% tas7s an+ !et more profits in the short term4 9o5e$er" the short term focus on +ail% tas7s can 'ecome an o'stacle for the companies in +e$elopin! a lon!>term 'ran+in! strate!%" an+ it is har+ to 7eep focuse+ on the lon!>term 'usiness4 Outsi+e of those pro'lems mentione+ a'o$e" the lac7 of a 'ran+ mana!ement professional is also a 7e% issue for SMEs4 9o5e$er" the challen!e for %oun! an+ small companies ali7e is ho5 to create a 'ran+ i+entit% that not onl% meets 'oth e:istin! an+ future customer nee+s" 'ut can also 'e consistent 5ith pro+uct attri'utes an+ features at the same time4 Ne$ertheless" man% o5ners an+ 'ran+ mana!ers of small compan% fall short on +eli$erin! this !oal 'ecause the% lac7 the 'ran+ mana!ement s7ills to formall% anal%<e metho+s to lin7 customer nee+s to their 'ran+s an+ pro+ucts" an+ the% lac7 the s7ills to i+entif% 5hich customer nee+s 'est fit compan% capa'ilities4 *4 Cess attention on Bran+in! in SMEsF Man% SMEs pa% little or no attention on 'ran+ mana!ement in their +ail% tas7s an+ their 'usiness strate!%4 A common pro'lem is that SME entrepreneurs usuall% pa% more attention to financial an+ pro+uction issues an+ less on 'ran+ mana!ement issues4 The reason is that entrepreneurs 'elie$e a !oo+ 'ran+in! an+ communication strate!% is not necessar% to start a 'usiness4 It is seen that man% small firms 'elie$e 'ran+in! is a 'i! 'usiness

issue an+ is meant for 'i! 'usinesses such as 'an7s" 5ell 7no5n international 'ran+s" motor corporations an+ the famous an+ popular companies 5ith stron! 'ran+ reco!nition4 9o5e$er" man% companies fail to reco!ni<e that 'ran+in! is important for SME8s as 5ell4 Thus" 5e see little or no 'ran+in! in SME8s4 Our +rguments Be ha$e come to a point of $ie5 accor+in! to 5hich si: aspects of the role 'ran+ mana!ement are pla%e+ in SMEs" 'ase+ on a secon+ar% qualitati$e research stu+%4 An+ these si: aspects are e:plaine+ as follo5sF ). Bran+in! is not a priorit% for SMEs4 It is $ie5e+ as a re+ucti$e concept in$ol$in! onl% the lo!o" the

pro+uct" the ser$ice or the technolo!% the% sell4 In man% SMEs" the% pa% lessor no attention to 'ran+ mana!ement in their +ail% tas7s4 &. In man% SMEs" the +irector or o5ner is the 7e% person in +eterminin! 'ran+ polic%" chan!in! 'ran+

names an+ 'ran+ lo!os4 The responsi'ilit% for 'ran+ mana!ement is carrie+ out '% the hi!hest ran7in! mana!er4 In fact" $er% fe5 companies ha$e +ele!ate+ or constitute+ an in+epen+ent +epartment to ta7e the responsi'ilit% for 'ran+ mana!ement4 9o5e$er" in the 'alance of the companies" no'o+% 5as specificall% concerne+ 5ith 'ran+ mana!ement" an+ no one +iscusse+ 'ran+ mana!ement in the compan%" not e$en the +irector an+ o5ner4 *. Bran+ i+entit% strate!% !ui+es 'ran+ +ecisions an+ 5arrants coherence of mar7etin! actions throu!h

time" an+ shoul+" in turn" 'e associate+ 5ith specific an+ limite+ core $alues that are complementar% to or!ani<ational $alues an+ culture4 In SMEs" entrepreneurs are the $isionar% in+i$i+uals 5ho are the focal points for 'ran+ 'uil+in! an+ i+entit% creation4 ?. Onl% 0(@ of the small an+ me+ium companies their compan% name an+ 'ran+ name are the same"

'ecause the companies usuall% ha$e use+ one or t5o 'ran+ names4 O5in! to this reasons" so the compan% name an+ 'ran+ name +ifferent are al5a%s +ifferent4 9o5e$er this situation can lea+ to re+uces its chances of !ainin! people8s attention an+ re+uces their 'usiness4 0. Most companies +o not 5ant to co>'ran+ or cooperate 5ith other 'usinesses an+ no one pa%s attention to

co>'ran+in! an+ 5or7in! 5ith other companies to !ain more 'ran+ $alue an+ ma7e their 'usiness successful throu!h 'ran+ mana!ement4 2. The characteristics of a 'ran+ an+ the pro+uct or the compan% are +ifferent4 There are some connections

'et5een these three" 'ut o'$iousl% the% are ha$e +ifference" the characteristics can +istin!uish them4 To create a po5erful 'ran+ is $er% important for an SME" an+ man% former researchers formulate+ their theories 'ase+ on +oin! lar!e stu+ies 5ith man% small an+ me+ium>si<e+ enterprises an+ summari<e+ certain steps for entrepreneurs to follo5 to 'uil+ stron! 'ran+s4

A reason to 'e the 'ran+ an+ pro+uct concept has to 'e +istincti$e" rele$ant an+ appealin! to the consumer4

Emphasi<e the role of 'ran+ $alues4 3a% attention to 'uil+in! one to t5o stron! 'ran+s in a compan%4 Bhen +oin! 'usiness" thin7 lo!icall%" an+ 7eep %our 'eha$ior consistent 5ith %our polic%4 The entrepreneur shoul+ ma7e sure that there is a stron! relationship 'et5een the character of the entrepreneur an+ the 'ran+4

The entrepreneur shoul+ ha$e a passion for the 'ran+in! 5ithin the compan%4

Conclusions Since the o5ners an+ mana!ers ha$e a narro5 interpretation of 'ran+ mana!ement" the% shoul+ +ifferentiate the 'ran+ an+ pro+uct concept" an+ un+erstan+ 5hat the 'ran+ mana!ement concept actuall% is4 Secon+l%" 'ecause of limite+ capital" time an+ the +ifficult% in fin+in! talent to +o 'ran+ mana!ement" it is har+ to +e$elop 'ran+ mana!ement in SMEs4 These limitations can force o5ners an+ mana!ers to focus on the short> term 'usiness strate!%" ho5e$er" the short term focus on +ail% tas7s can 'ecome an o'stacle for the companies +e$elopin! a lon!>term 'ran+in! strate!%4 The o5ner an+ mana!er shoul+ increase their 7no5le+!e a'out 'ran+ mana!ement to anal%<e 5hat the customers reall% nee+4 In a++ition" the compan% shoul+ allocate more capital an+ time to 'ran+in! an+ +e$elopin! the lon!>term 'ran+in! strate!%4 An+ the o5ners an+ mana!ers nee+ to 7no5 'ran+ mana!ement is a function of e$er%one 5ho 5or7s in the firm4 Bran+ mana!ement is require+ 'oth in 'i! companies an+ SMEs" thus the companies ha$e to reco!ni<e the importance of 'ran+ mana!ement" not Aust the 'ran+" an+ therefore the o5ners an+ mana!ers ha$e to pa% more attention to 'ran+ mana!ement4 SMEs shoul+ 7no5 that the% are the 'ran+" an+ the $alue of a 'ran+ is 'eneficial for the compan%" e$en thou!h there is not enou!h resources an+ time" an+ shoul+ culti$ate a passion for the 'ran+ 5ithin the compan%4

Re$erences ,- httpFGG5554eis'c4or!GDefinitionHofHIn+ianHSMEs4asp:

.- httpFGGen45i7ipe+ia4or!G5i7iGBran+Hmana!ement /- httpFGG5554mana!ementstu+%!ui+e4comG'ran+>mana!ement4htm