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Importance of branding - SMEs still unaware

SME Times News Bureau | 17 Mar, 2010
The Ministry of MSME has taken several initiatives for providing marketing assistance to Micro, Small & Medium Enterprises (MSMEs). This information was given by the Minister of State (Independent Charge) for Micro, Small and Medium Enterprises (MSMEs) Shri Dinsha Patel in a written reply to a question in the Lok Sabha on Tuesday.

Importance of branding - SMEs still unaware
Branding Generic
Namrata Kath Hazarika
Most Small Medium Enterprises (SMEs) are still lagging behind in branding strategies due to inadequate infrastructure, capital, management and other amenities, says industry.

Explaining the importance of branding, N.K.Sagar, Chairman, Enkay Sagar Holdings Pvt. Ltd. told SME Times that branding is essential for promotional activities where SMEs are concerned. The fact is not only small and mid-sized businesses are unaware about effective branding methods, they also have inadequate infrastructure, capital, management and other amenities in order to leverage their brand promotional activities.

Branding facilitates a company to get an identity of its own which further allows a company to compete in tough marketing conditions and to bond a strong relationship with their customers to create loyalty.

He said, "SMEs are more engrossed in making or manufacturing products so they are not keen towards developing their brand image. The essential thing for SMEs is to target the right market or the right audiences."

"Branding always facilitates in giving an identification not only to the company but also helps the promoters to get an authentic identification as well," Sagar added.

He also focused on how an effective brand promotion can help a solely-owned venture to get a broader view in the potential market. Mentioning this he further said, "There are many companies especially SMEs whose names are unfamiliar to us. In many cases we are unaware of the services and quality of products a company is manufacturing. Branding will always help in identifying such companies and to boost their image in the potential market."

In fact, Rajann Kochar, Director of Shalimar Precision Enterprises Pvt. Ltd said, "The success of SMEs are dependent on three utmost crucial elements that includes the brand, package and the customer."

"However, most SMEs are unaware of the benefits of branding. SMEs feel that brand-promotion campaigns are waste of time, energy and money," he added.

When asked whether SMEs are focusing on manufacturing products instead of indulging themselves in brand promotion activities, Kochar said, "It is true that SMEs are lagging behind in their brand promotional skills. They usually focus on product quality and their own client base. They are not keen towards increasing their company's image world wide."

Sagar also added, "We can also say that perfection of the product matches with the character of the promoters."

He expressed that once the branding is achieved or established then the goodwill would be achieved simultaneously. And, once the goodwill is achieved it will help a company to come in the top position.

Moreover, branding is often associated with advertisement. Since SMEs have limited resources they probably can't have big advertising and promotional budgets or afford an in-house specialist, which is another reason why SMEs avoid indulging in brand promotion activities.

In this context, Sagar pointed out that it is difficult for SMEs to invest in traditional media. For instance, SMEs can offer consumer discounts, cash card discounts, display low budget advertisements such as door-to-door advertisements and small hoardings can help SMEs in promoting their brand image enormously. Online business promotion is another updated modus operandi at present which is useful in promotional activities.

"SMEs need to increase their awareness about effective branding either via organizing workshops or imparting training on the same," Sagar added.