Branding issues in SME industry

Why branding is important for SME

According to De Chernatony (2001), a brand can essentially be described as an identifiable product, service, person or place, and it can be increased when the buyer or user perceives relevant, unique, sustainable added values which match their needs most closely and more satisfyingly?. Famous brands play an important role in business decisions. For example, when you think of Apple, you think of sophistication, quality and premium service. Such is the effect of brands. A company is often recognised due to its brand value. It is what increases customer loyalty and stickiness.

Small and medium enterprises are generally family owned businesses, start-ups or spinoffs. They have very small market share and are generally confined to a geographical region. They generally have minimal online footprint. Branding is something SMEs are not very aware of. There exists a number of issues in branding in SME. Let us look at these pain points one by one.

Lack of knowledge about branding

SMEs are generally run by a single person. They always have their hands full with routine business tasks that they don?t have any thought to give towards branding. They don?t regard branding as an important task. For SMEs, branding is only about the logo, the product, the service or the product they sell (INSKIP, 2004). They are mostly concerned about direct selling and do not consider building a brand as a crucial task. As the owners do not pay attention to branding, the impetus for employees are further reduced. This indifferent attitude towards branding is one of the major issues facing SME.

Lack of time and resources

Even if the owners are aware of branding and its importance, they lack the time or resources to focus on building a brand. Building a brand value takes time and does not give immediate returns.  Short-term profits take precedence over long-term brand building strategies. There is no dedicated person or team to take care of branding needs. As it does not give immediate or tangible returns, SME owners tend to divert resources to core business functions. There is a lack of internal process, policy or structures in regards to branding. There are no branding teams to take care of branding issues. Lack of professionals and high cost of hiring brand managers prevent SME owners from effectively build their brands.

Focus on short-term

Many SMEs are focussed on short-term profits and day to day challenges. As brand management is something that doesn?t give quantifiable returns in the short run, owners tend to neglect it. They put their resources to core business functions. By the time they realise that creating a brand value is crucial, it is too late and too expensive to create a brand. Therefore focusing on short term goals and profits cause SME to lose out on the benefits a proper brand building strategy can give. This makes it very difficult for SMEs to compete with the big companies, who pay a lot of attention in building a brand.

Download Jobseeker app

Download Employer app