Is branding a waste of money for small and medium enterprises?

Business Sunday 01/October/2017 17:10 PM
By: Times News Service
Is branding a waste of money for small and medium enterprises?

Muscat: Small and Medium Enterprises (SMEs) are an integral part of Oman’s long term plans to diversify the economy. Thanks to the encouragement provided by the government and the private sector, there has been a steady growth in the number of SMEs. It has been estimated that at the end of 2016, there were 23,221 SMEs operating in the country. The question is, how many of them are really successful?
There are many factors that contribute to the success of an SME. However, one of the most important and often neglected aspects is branding. The general feeling is that branding is meant for big companies with huge budgets. But, SMEs often don’t realise that branding is equally important for small businesses.
Before we explore why branding is so vital for SMEs, let us try and understand what we mean by a brand and branding. The American Marketing Association defines a brand as “a name, term, design, symbol or any other feature that identifies one seller’s goods or services as distinct from those of other sellers.” You will probably be able to easily identify Lulu and Carrefour as popular hypermarket brands. You will also be able to instantly recall popular brands of telecom, banks, automobiles and even real estate projects in Oman but how many SME brands can you recollect? Probably none. There lies the problem and the opportunity.
The process of building the brand, also known as branding, has been defined as “the universe of activities you undertake that affects the perceptions of the brand.” To build a positive brand image, you must engage in internal as well as external activities, designed to deliver a consistent impression of who you are.
How do you build a brand? Is it very expensive? How can an SME benefit from it?
The first step in building a brand is choosing a name .Only a name that is relevant, meaningful and distinct should be selected. Focus on a name that is easy to remember and gives some idea of the kind of product/service you offer. For example, “Cakes and Bakes” is a nice name for a bakery. The next step is to develop a strong logo. Make sure that every element right from colours used, fonts as well as the symbol convey your story. If a customer can recognise your logo at a glance, you are more likely to have a high brand recall. Remember to use a consistent tone of voice across all communication as it reflects the character of the brand. Carve out a distinct brand identity, taking care not to imitate other brands as this could lead to confusion in the customer’s mind. Finally invest in consistent advertising and communication. Mass media may be beyond the budget of most SMEs but low cost, innovative communication using social media and an online presence can greatly help in building the brand.
The question that pops up all this brand building really worth the effort? The simple answer is...Yes, because it pays rich dividends.
Firstly, it will help you stand out from the competition. When faced with multiple choices, the customer tends to choose the brand he or she is familiar with. Secondly, a strong brand and positive customer engagement help to develop trust and brand loyalty. Customers are likely to talk about the product with their friends and this could lead to a chain of additional customers.
Thirdly, a well known brand is able to command a premium price in the market, which leads to higher profits. Fourthly, it is easier for a strong brand to raise funds, attract suppliers and negotiate better deals with large institutions. Also, as the brand grows, it will find it easier to find acceptance/shelf space with powerful buyers/distributors.
In summary, a strong brand increases the chances of your small business succeeding. This is of special significance in a world where nine out of ten brands launched, even by established companies are doomed to fail.

*John Smith is a seasoned marketing professional who has spent almost two decades in the Middle East. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of Times of Oman.