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Frameworks for research

(MBA 6010-L)

Topic

Successful brand management in SMEs: a new theory and practical hints

Submited To

Dr.S.T.Sommerville (CTL)
Stephen.sommerville@ctlondon.ac.uk

Submitting date 26th August 2009

Brief contents

Name page no
1. Abstract ------------------------------------------------------------------------------- 2
2. Introduction--------------------------------------------------------------------------- 2
3. Literature review -------------------------------------------------------------------- 3
4. Method-------------------------------------------------------------------------------- 4
5. Discussion---------------------------------------------------------------------------- 6
6. Conclusion---------------------------------------------------------------------------- 7
Bibliography-------------------------------------------------------------------------- - 8

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Successful brand management in SMEs: a new theory and practical hints

Abstract:
This is a critical review of “successful brand management in SMEs: a new
theory and practical hints” Written by Frank B.G. F. M. Krake. The objective of this
study is twofold. One is to make a new theory which will help increase the knowledge
in this field and second objective is to provide information to the entrepreneurs. My
aim is to review the study, critically discuss about the report and give my personal
reflection. For clarification about the topic I discuss about other literature. In literature
I define SME and characteristics of SME, what is brand what the speciality about
brand. To understand the role of entrepreneur’s researcher done qualitative study

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based on interviews with ten middle size companies’ owners. Researcher found that
after asking the first question most of the companies mention they do something about
brand management in the last part I discuss how company manage brand successfully.

Introduction:
Brand management is new field of study. Most of the time brand focuses on big
companies or multinational companies such as Coca Cola, Nike, Philips, Unilever,
Shell or Procter & Gamble. According to Story 1994 cited Krake, (2005) ninety five
percent of all business start from small and medium size enterprise. There are
thousand of examples those start as small business and become a world leading brand.
Microsoft, Philips and Nike all started small. In literature most of the time discuss
about the brand management but never discuss about the Small and Medium
Enterprise (SME). A study by Cohen and Stretch 1989 cited revealed that the most
common problem of the small companies are marketing problem, about seventy five
percent. Hills 2001 cited said that SMEs marketing orientation are largely depend on
the characteristics of their marketing. Some time promotion does not work and it is
affect negatively to build a strong brand. Never the less there are some advantages
and positive side in SME business. Verstappen 2003 cited Krake, (2005) and several
author said that speed of reaction, flexibility and the opportunities are the strong
points of SMEs. There are two pillars where strategy of marketing is based on they
are unique characteristics which differentiate the product from its competitors and
brand add extra value than in branded product. Akter 1996 cited Krake, (2005)
mansion ten guide lines to build a strong brand which is accepted to the business
authors but none of them apply that guide line to the SMEs.

Literature review:
The meaning and definition of SME itself, that is small to medium size
enterprise. There are so many authors discuss about SME but every body covers
number of employees, revenue and turnover, size and range of products and markets
and so on. The characteristics of SMEs are a lack of finance. Some SME may start
their life as a cash rich company but the majority of SMEs lack of cash flow and
resources enforce severe limitations upon performance (Baker, 2003).
The increasing role that brand, organisational identity and reputation occupy in
competitive markets loaded with meanings, and the symbols in which organisations

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learn to express themselves (Schultz et al 2000 cited abimbola 2007 ) . According to
Kevin Keller cited McLennan (2004) “a brand is a name, term, sign, symbol or design
or a combination of these intended to identify the goods and services of one seller or
group of seller and to differentiate them from those of competition”. Product is
produce in the factory but a brand is something which made in customer mind. A
product can be copied but a brand can not be copied it’s unique. That is why Don
Williams said that cited McLennan (2004), “you can say its name and people
immediately think of imagery that is not just a product, a product evokes a function a
brand evokes emotion”.

Question: There are following question on which basis the study has been done:

1. What role does brand management play in Small Scale Enterprises?


2. What are SMEs doing to create heightened brand awareness?
3. Are the problems encountered by SMEs in managing a brand comparable to
the problems – recognised by the business literature – they encounter in
marketing?
4. To test Kwller’s model in practice.
5. To develop a new model from the outcome of the previous four questions and
undertakings.

Method:
To understand the role of entrepreneur’s about brand management researcher
done qualitative study based on interviews with ten middle size companies’ owners.
Because most of the time small scale enterprise is controlled by the owner and he or
she decides everything about the company. Same thing happened in brand
management as well, owner will take the main role to set the guideline. That’s why to
get the maximum result of the study; owner is the person who can give available
information. The interview question was not structured. It was free manner as possible
and sufficient space of time to get broader answer from the interviewee. Here also ask
about the owners background which clearly the context and make positive reliability
of the result (Gilmore and Coviello 1999 cited Krake 2005).

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Before interview, interviewer investigates about the whole organisation and the
question was rechecked by expert to make sure the level of validity is optimum in
both internally and externally. The list of question also tested before interview. Then
the appointment was made by telephone discuss with the person who will interview
The study has done mainly medium size organisation where turnover is three million
Euros to twenty nine million Euros. This study has done only on production based
industries not on service or non profit organisation. Researcher also done group
companies study with one small size organisation and one micro company. Both are
agree on to compete to the market.

Findings:
Researcher found that after asking the first question most of the companies
mention they do something about brand management. Half of the companies use
different company and brand name. Most company’s dose not knows what is co
branding. Every company want high recognition of its own brand. To highlight the
brand name they use different types of communication media. SMEs face some
problems manage the term brand such as purchasing, production and sales. The
importance of Killers model has been partly established in this study. For the
development of new brand researcher explained about funnel model and brand
development model.

Critical evaluation of methodology:


The objective of this study is twofold. One is to make a new theory which will
help increase the knowledge in this field and second objective is to provide
information to the entrepreneurs. What owners do to build a strong brand?
Research has done on the basis of interview. When interviewer ask to the owner of
the company what they do for brand management most of them said they something
about brand management. Whether knowing or unknowing they answered positively.
But when they clearly about the word brand three of them said that brand is not their
daily activity. Top level manager and owner is the responsible for managing brand of
the company. But research shows that one or two company give priority to the
manager to manage brand. All other companies are not concerned about the brand
management not even discuss in the organisation. In SME industry the word ‘brand’
get very tiny or no attention. Because in SME the owner or director who will deal

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with the brand but they don’t have enough training and knowledge about brand. From
the study it is clear that the brand management don’t get enough priority.

Every company wants a high recognition of its own brand. Because the brand
recognition one of the marketing key goal. According to Mauborgne (2005) “the rapid
brand recognition built by the company as a result of the unprecedented value offered
in the marketplace”. It makes the competitor harder to catch up. That’s why people
deliberately want to build a well knowing brand. They place their brand name in
communication media such as business cards, packaging, and trucks. Another thing
they mention that every company dose not use their brand name in the actual product.
Every company said that they use internet. Less than half of the company use
television to converse their brand name. From this study it is confirmed that
purchasing, production and sales are the most problematic area. They didn’t say
enough about marketing budget but generally they spent about two percent of the
turnover of the company. Most of the budget spent to make brochures and folders.
Almost every company use big proportion of their budget for it. The company must
have a budget if not there is a possibility to waste extra money Bangs (2002).
Building brand awareness sometime a major goal at the time of determining
companies marketing budget. They can minimise the advertising cost by using as
many surface as possible. Research shows that brand not only represent the quality
but also possessing attractive and distinguished design.
There are several advantage of marketing brand management in SME, such as speed
of decision, short line and flexibility. Due to few items to market SME can give more
focus on brand management. SME also spent a good size fund on marketing. Study
found that SME spent 2.3 percent of their turnover for marketing purpose. Study also
found that brand management brings different types of problems to the marketing.
Because both term is very close relates to one another. All problems are differing
from one company to another company, on the basis of the nature of the business.

The importance of Kellers model for establish of a brand in small scale enterprise has
been established in the study. From the five guidelines they accepted three and two
are not. Author suggests that to justify about that two guideline need further study.
To develop the brand owner should play double role. Because the owner or manager
will determine how much attention the company will give on brand. Most of the time

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company recruit marketing manager and specify the task. The influence of an owner
is more direct in SME than large organisation. That’s why brand is closely
incorporated with the owners of the SME. As a result any attack on brand means
attack on the owner. Because he is the brand. Some time this scenario can be positive
or negative for the company.
Discussion:
This study has done on the basis of primary data. Because researcher interview
to the SME owner or manager and get the data and their opinion. Researcher prepares
the report with only make five questions. Here I think he should add some more
question. Reporter mansion that answers of the question has varied from one company
to another company. SME organisations always suffer from financial difficulties. This
factor affect to the brand management process. From the survey it is found that SME
annual marketing budget is 2.3 percent of revenue. For example if the revenue of a
SME organisation is one million their marketing budget is just twenty three thousand
pounds. On the other hand large organisation gets more budgets to develop their brand
because their revenue is very high in compare to SME organisation. Another problem
I found is lack of training and awareness about brand. As a result they can not make
any strategic plane. Aakers 1996 cited Krake, (2005) gives ten guidelines to build
strong brand but unfortunately on one apply to the SME organisation. The main
reason is the bundled of organisation responsibilities are anchored with the
entrepreneur, founder and owner manager who hold the key position in the firm.
Survey found that SME organisation use media adequately, especially internet. That’s
why organisations success is depend on the founder. The creation and rise of Dyson is
the prime example. Form this research it is clear that the owner of the company can an
important role in the building of a brand (Boyle 2003) cited.

Conclusion:
Brand management is new field of study. Most of the time brand focuses on
big companies or multinational companies such as Coca Cola, Nike, Philips, Unilever,
Shell or Procter & Gamble. But ninety fine percent of all business start as a small
business. There are thousand of examples those start as small business and become a
world leading brand. Microsoft, Philips and Nike all started small. . To understand
the role of entrepreneur’s about brand management researcher done qualitative study
based on interviews with ten middle size companies’ owners. The result shows that

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SME organisation doesn’t give enough attention to brand. Few authors introduce
some guidelines for brand management in SME organisation. But they don’t apply
that guideline. To usefully develop and manage the brand owner must play double
role, how much attention have to give to the brand management and how important is
brand management. Because owner is attaching with the brand in SME, if brand is
successful then owner will be successful.

Bibliography:

Abimbola, T. & Vallaster, C. (2007) Brand, Organisational Identity and Reputation in


SMEs: an Overview: Qualitative Market Research: An International Journal. Vol: 10
No: 4 Pp. 341-348

Bangs D. H. (2002) The Market Planning Guide: Creating a Plane to Successfully


Market Your Business, Product and Services. 6th Edition. Dearborn.

Baker. M. J. (2003) The Marketing Book: Marketing to Small to Medium Size


Enterprise. BH

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Krake, F. (2005) Successful Brand Management in SMEs: A New Theory and
Practical Hints : Journal of Product & Brand Management.Vol.14 No.4

Mauborgne, R. & Kim W. C. (2005) Blue Ocean Strategy: How to Create


Uncontested Market Space and Make the Competition Irrelevant. Havard Business
School.

McLennan, J. (2004) Brand Planning for the Pharmaceutical Industry. Gower