Introduction
Currently, there exists numerous research-works on brand management within larger and established organizations (LOs). Such research in the organizations has dwelt on important aspects that enable the organizations to achieve the goals of brand organization (Berhon, Ewing and Napoli p.1).
Nevertheless, on sad note, such extensive and intensive research-work lacks in small and medium enterprises (SMEs). Some specific reasons cited to be the main contributing factors relate low research on brand management within the SME sector.
The factors include: majority of SME are perceived to exhibit low capabilities; SME have low marketing power as compared to large organizations; SME have inadequate resources that they can use to effect appropriate and quality brand management (Berhon, Ewing and Napoli p.1).
Other notable reasons have to do with the general perception among SME that brand management involves huge budgets a situation that has been refuted by majority of authors on brand management who maintains that effective branding of the organization can be achieved irrespective of the organization’s budget where it only requires creativity and market assertiveness (Berhon, Ewing and Napoli p.2).
Therefore, undertaking research work on the issue of brand management within the SME sector is necessary due to numerous identified gaps. SME is a growing sector contributing immensely to the economies of many countries.
However, it is lack of appreciation and concern by majority of scholars and experts for the sector that today, this important sector remains ‘unknown’ adequately. Brand management is becoming important and vital in modern marketing strategies.
Many organizations irrespective of their nature are continuing to realize that, to leverage market advantage, then creation and sustainability of organization’s brand management is essential. This research paper will hence explore the issue of brand management in SME sector outlining some of the necessary recommendations for adoption.
Background
Small and medium enterprises (SME) constitute a large and important sector in developed and developing countries.
For example, in USA, it is estimated that there are about 5.7 million businesses and out of these, about 14,000 provide jobs to over 500 people (p.28). On the role of SME to country’s gross domestic product (GDP), it is clear that SME activities continue to boost economies of many countries.
Notable contribution of this sector is more pronounced in country’s employment rate together with export performance (Berhon, Ewing and Napoli p.28).
SMEs are perceived to be different from large organizations (LOs) in terms of management styles, overall organization operations, and functioning (Berhon, Ewing and Napoli p.28). in addition, SMEs are seen to have unilateral management style and decision-making process, for example, it is the SME manager who undertakes multiple roles of making decision for the organization, attending to many of the organization’s functions and calls where incorporation of professional services such as in employee recruitment and training are minimal if not rare.
Compounding further the problem of SME is the fact that, many of these organizations lack enough key resources for investment and expansion and as a result majority of these organizations become victim to ‘survival mentality’ syndrome (Berhon, Ewing and Napoli p.28).
This problem of ‘survival mentality’ syndrome has become exuberant specifically due to lack of strategic planning in many of SME organizations as compared to large organizations.
As the result of the above factors, management styles in most SME cannot be predicted as each organization exhibit unique, different, and almost independent style from each other. In general, literature postulates that SME experience many problems in key areas of marketing, human resource management and with regard to business planning.
Not all negative aspects have been associated with SME organization and performance. According to Berhon, Ewing and Napoli, SME as compared to large, and multinational organizations are seen to be more entrepreneur in nature.
In addition, majority have flexibility with regard to operation, and in most instances, many of them are innovative in nature a factor that enables majority of them to remain competitive and impressive to their particular market niche (Berhon, Ewing and Napoli p.28p.29).
Accordingly, SME are regarded to have “more opportunity of getting close to their customers and obtain valuable feedback which then can be used to provide them with customized and value-added service” (Gilmore cited in Berhon, Ewing and Napoli p.29).
Further, SME are seen to have more coping-abilities to the general and complex environment where at the same time, they appear to have and express “higher order level of organizational learning and are more adept at acquiring and utilizing marketing information than their non-entrepreneur counterparts” (Berhon, Ewing and Napoli p.28 p.29).
The problem of branding in majority of SME arise from the fact that numerous problems in the organization are spiced and motivated by lack of marketing expertise in the organization and due to existence of this it becomes difficult for the organization to carry out selection of effective and most appropriate “promotional media, designing content, conducting market research, and interpreting marketing information” (Berhon, Ewing and Napoli p.28 p.29).
This particular circumstance may be associated or attached to the lack of enough financial resources, technological know-how, effective managerial resources, absence of management information systems, and poor and ineffective decision-making processes (Berhon, Ewing and Napoli p.28 p.29).
Literature review
Brand management constitutes a concept that has received wide literature organization especially with continuing competition in the market place. Branding continues to characterize many organizations, and today, large numbers of organizations are allocating huge budgets translating even in billions that they use in planning and implementing brand activities.
Numerous researches and much literature continue to be developed which all attempt to find common ground on the issue of brand management (Heding, Knudtzen and Bjerre p.3). At the same time, many domains, scope, and potential of the brand have been developed together with different concepts, theoretical frameworks, and ideas.
On further note, Heding, Knudtzen and Bjerre, view the definition of the concept of brand management in seven different perspectives: the economic perspective, which sees and regards brand as part of traditional marketing mix; and the identity perspective, which on its part regard brand to be interconnected to the corporate identity.
This is in addition to consumer-based perspective which perceive brand to have established links in the consumer associations; the personality perspective that regard brand as human-like character; the relational perspective that sees brand as viable relationship partner; the community perspective that regard brand as the pivotal point of social interaction and lastly the cultural perspective that regard brand to be part of the wider and broader cultural fabric (Heding, Knudtzen and Bjerre p.3).
Providing a prolonged and enriching discussion of brand management, Kotler, Pfoertsch and Michi observe that branding is a concept that continues to confuse many people and organizations (Kotler, Pfoertsch and Michi p.1).
To the authors, branding continue to be celebrated in many quarters due to its nature of being a strong and enduring asset and a value driver that in most instances continue to boost the company’s success (Kotler, Pfoertsch and Michi p.1).
Starting the exploration of the concept of brand management, Kotler, Pfoertsch and Michi begin their analysis by looking at the branding as a concept of brand management and note that it is not about stirring people into irrational buying decisions but branding constitute an intangible concept vital to the success of the organization (Kotler, Pfoertsch and Michi p.3).
According to the American Marketing Association, brand constitutes “a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers” (AMA cited in Anonymous p.2).
Today, many organizations are forced by competition forces to device new sources in which to leverage sustainable competitive advantage that over time become unique, intangible in nature, and protective.
Associated with branding is the aspect of brand equity, which, within the precepts of marketing, originates from the greater confidence that majority of consumers invest in a brand than they do in its competitors (Anonymous p.2).
Defining brand equity Leuthesser observes that it constitute, “a set of associations and behaviors on the part of the customers, channel members, and Parent Corporation that permits the brand to earn greater sales volume or greater profit margins than it could without the brand name” (cited in p.2).
Moreover, brand equity is seen to be composed of brand awareness, brand associations, perceived quality, and brand loyalty (Anonymous p.2). In its broadest usage and application brand equity comprises vital and critical resource or asset and for market functioning and performance it constitute an excellent marketing strategy.
White Paper on SMEs in Taiwan is an article that provides another perspective on the definition of brand where it defines brand to constitute “the addition of value to a product, and also combines physical and psychological elements” (White Paper on SMEs in Taiwan p.2).
According to the author, the physical aspect comprises the connection between the brand name and the organization together with its products or services, differentiating them from other organizations or products (White Paper on SMEs in Taiwan p.2).
On its part, psychological aspect largely involves the “maintenance of uniformity in terms of communications, guarantees and behaviors, as well as consistency and conformity to particular requirements” (White Paper on SMEs in Taiwan p.2).
Marketing strategies for SME and concept of branding
Within the boundaries of SME sector, the aspect of branding is relative infant and uncommon although within large organizations and multinational companies brand management is common and norm (Anonymous p.3).
As it is postulated in the background literature, majority of SME operators cite various reasons to be behind their predicaments of lagging behind in band management.
For instance, it is general consensus that brand management within SME is constrained by marketing problems that are largely spiced up by inadequate budget, capacity, skills, and expertise and in most recent times triangle of debts has added to these problems (Anonymous p.3).
According to Bunnett and Smith, majority of SMEs for a long time have put much emphasis on product and price; their marketing communication involves use of brochures and in most cases they are sales-oriented and these aspects brings out the fact that SME have less concern to building strong brands and such priority are still dormant in majority of SME (cited in Anonymous p.3).
At the same time, other related literature note and express the fact that competitive advantage for many of SME operators rests on “high speed of decision making, short lines and flexibility, cost, price, specialized products, designs and services, and personal attention to clients needs” (Bunnet and Smith cited in Anonymous p.3).
Importance of branding in SME
Little literature exists on the role or importance of brand on SME, but such huge literature exists on importance of brand on multinational on large organizations.
For example, according to the published articled by White Paper on SMEs in Taiwan, numerous advantages exists especially to companies and organizations that adopt it. First, brand is seen to constitute a brand name and trademark that in turn provide legal protection for a product, putting barrier to the organization’s competitors from copying it (White Paper on SMEs in Taiwan p.2).
Branding, at the same time, is seen to facilitate market segmentation where a brand has the potential and capabilities of cultivating customer loyalty and in the process maintain a stable sales volume that in turn ensure long-term profitability for the organization (White Paper on SMEs in Taiwan p.2).
Two authors, Onkvisit and Shaw, perceive branding to have some benefits for an organization in that, due to brand development, it becomes easier for the organization’s products to be identified and better known in the market.
At the same time, it leads to creation of opportunities for differentiation and further it has the potential to results into brand loyalty and price premium (White Paper on SMEs in Taiwan p.2).
Branding process in an organization further impacts the process of product sale where brand is seen to have protection role where it becomes critical and vital in providing help for the protection of the interests of consumer, the producer, and even their middlemen.
Within these boundaries, branding is seen to perform an important role on the part of consumers where it becomes possible for the consumers to identify and locate the particular and specific product that they want and through this, it becomes apparent that there is reduction of the amount of time such consumers require to spend in making their individual selection.
Given this scenario, branding is seen to be a vital tool in price competition where at the same time it has capabilities of helping and increasing sales volume and profits for the organization (White Paper on SMEs in Taiwan p.3).
The very act of possessing an excellent brand gives producer higher value added, and increases the chances of such producer maintaining high earnings performance over a long period of time where at the same time, producers are presented with the opportunity to use their created brand as a medium for communication with the consumer.
Branding for SME is recommended, and suggestion made is that, brand value for SME activities lies in the initiatives such SMEs create in terms of pursuing their innovation ability and speed that in turn become critical in establishing and pursuing product differentiation.
Through this, SME products are able to fit well in the market where they later results into increased value added and higher profits. SMEs, in numerous literatures, are advised to take and capitalize on their advantageous position of being close and near to the market an aspect that is not enjoyed by large corporations and organizations (White Paper on SMEs in Taiwan p.3).
Further, SMEs should take advantage of their extensive and more appropriate mechanisms of forming close ties with customers while at the same time being flexible.
When this is realized, SMEs will be in a position to employ innovative methods and ways to deliver differentiated products and services while at the same time building their own brand (White Paper on SMEs in Taiwan p.3).
Discussion and Recommendations
The continuing fierce market competition by organizations and corporations of all sizes calls for employment and implementation of effective marketing strategies to win and such marketing strategies lies in branding.
For a long time, many SMEs have been disillusioned that branding is a preserved benefit and action by large organizations. What SMEs operators need to realize is that brand strategy irrespective of the organization should be part of business management and competition strategy.
Another disillusion has centered on the fact that, majority of SMEs see themselves as unable and financially inadequate to afford brand construction (Guiling and Xiaojuan p.1210).
What majority of SMEs need to know is that, cost of brand construction greatly lies within each organization’s strategic plan on cost management. The essence here is that, even with little resources through effective and efficient planning an organization is able to develop strong brand for market performance.
Another negative perception of brand management within SME is the belief that brand construction takes a long time and it has no capability of resulting into short-term sales growth. The wisdom here should be that brand construction is a continuous process that intends to see sales growth.
With lack of brand strategy, then, even in the short term the organization is largely deficient of realizing sales growth with regard to the capacity and potential of the organization (Guiling and Xiaojuan p.1210).
Today, it is true that brand strategy in any organization has numerous advantages and benefits especially analyzed within the context of increasing market competition. Effective and function brand strategy is seen to promote an excellent organization vulture.
SME are advised to develop and have an organization culture that has potential to advance business productivity and improve profits as well as social value. Therefore, SME are required to develop brand strategies that have broad acceptance within stakeholders and consumers (Guiling and Xiaojuan p.1211).
Proposals that have been for SME to develop excellent brand strategies are convinced that SME are required to learn and adopt modern brand management knowledge that dwell on “developing clear brand strategy, consideration and analysis of the situation, seizing the opportunities available more fast and then implementing and promoting enterprise brand strategy”( Guiling and Xiaojuan p.11).
Understanding, developing and implementing effective brand strategy is seen to be one of the key fundamentals of capturing market share and striving for survival and development for SME.
Therefore, in summary, it is recommended that SME needs to create brand strategies and this can be achieved through “selecting proper market localization and setting strategic brand; exerting brand management and speeding up the pace of development; using information networks and implementing portfolio management; implement the brand strategy in a large-scale and intensively; get involved in creating fist-rate development rate for success of brand strategy; and pay more focus on product brand than enterprise brand” (Guiling and Xiaojuan p.1211).
Conclusion
SMEs can no longer disregard the concept of brand management anymore. The increasing truth and prerequisite is that SMEs have the role of putting more effort and focus on building brand strategies which in turn determine brand equity if they hope to realize success and excellent performance in the market.
Brand equity is the specific aspect that has evolved to become an important concept in strengthening the competitive position of an SME organization with regard to the increasing competition. Nevertheless, SMEs need not just to embrace brand management strategies without adequate cautions.
Given their financial position and overall resource constraint, insufficient marketing budgets and lack of adequate capacity and infrastructure brand development can turn out to be costly and expensive and in turn impact an organization negatively
Works Cited
Anonymous. Brand Equity and Performance of Small-Medium Sized Enterprises (SMEs) in Uganda. Web.
Berthon, Pierre, Ewing, Michael. T. and Napoli, Julie. Brand Management in Small to Medium-Sized Enterprises. Journal of Small Business Management. 2008. (Attached notes).
Guiling, Li and Xiaojuan, Zhang. The Brand Management Status and Development Research of SME in China. Hubei University of Technology. Web.
Heding, Tilde, Knudtzen, Charlotte F. and Bjerre, Mogens. Brand management: research, theory and practice. NY: Taylor & Francis. Web.
Kotler, Philip, Pfoertsch, Waldemar and Michi, Ines. B2B brand management. NY: Springer. Web.
White Paper on SMEs in Taiwan. The Brand Management Models Adopted by Taiwan’s SME’s. Web.