Brand building: Impetus for SMEs to gain competitive edge

Brand recognition is the keystone of any successful business, irrespective of its size. While multinationals see branding as an integral part of their business tactics, Small and Medium Enterprises (SMEs), which operate on shoestring budgets, often stand at a critical crossroads when it comes to marketing and brand building.

However, there is a growing realization among Indian SMEs exhibiting a robust entrepreneurial spirit, that marketing and an effective brand strategy can rev up the revenue cycle and increase sales.

According to a survey conducted jointly in 2013 by FICCI, Google India and Nathan Economic Consulting India, 69 percent of SMEs using the Internet to promote their brand have seen a surge in customer base, 65 percent a rise in profits, 64 percent surge in sales, 63 percent arise in their geographic reach to customers, and 44 percent a surge in employment records. Clearly, the process of creating brand value and effectively marketing products and services has begun for Indian SMEs.

Why brand strategy is crucial for SMEs

SME leaders are increasingly adopting a global approach as they face intense competition from larger entities and empowered customers. In this scenario, effective execution of a brand strategy for SMEs is crucial not just for their growth but also for the development of a particular cluster, state and the country as a whole. A reliable brand strategy will help SMEs make inroads in the minds of their customers and will ensure that all products and services have a visual identity and good positioning in the sector that SMEs operate in. A good brand strategy can help SMEs create a niche of their own and enable their target audience to identify and differentiate their brand in the cluttered marketplace.

Broadening marketing network  

SMES in India have extensive opportunities on the one hand, and face grave bottlenecks on the other. Restricted market access, lack of resources and marketing support, lack of awareness, and lack of access to information and communication technology (ICT) support are some of the challenges SMEs face. To survive the intense pressure of competition from larger enterprises, SMEs need to find better ways to cope with evolving marketing needs and innovations. The sector must be equipped with better market access facilities in order to augment its contribution to the economy.

Government initiatives

The Centre has taken major strides to facilitate SMEs and improve their market access locally and globally. The Ministry of MSME helps organize exhibitions/ fairs and buyer-seller meets across the country, providing SMEs the much-needed opportunity to showcase their products and services. The Marketing Assistance and Technology Up-gradation Scheme for MSMEs mandates that clusters that generate quality products and have export potential will get brownie points in the form of schemes that will assist them to become competitive in the local and global markets. In short, the program looks at boosting the marketing competitiveness of the SME domain.

The undertakings under the scheme include technological advancement in packaging, giving a fillip to innovative marketing techniques, identification of new markets at state and district levels, local expos, trade fairs, corporate governance practices, marketing forums and reimbursement for ISO certification. The Ministry of MSME has also taken steps under the National Manufacturing Competitiveness Program (NMCP) to simplify the marketing process for SME products. It has also set up a National Small Industries Corporation (NSIC) e-commerce portal on which SMEs can sell their products as well as industrial equipment online.

Steps to bolster marketing and branding approach

As Indian SMEs hold the key to strong economic development, the following steps should be implemented to help them focus on branding strategies and improve their market access:

• Robust co-ordination among institutions at state, regional and cluster levels to enhance access to market.
• Joint efforts by various SME bodies in the country to devise novel and innovative marketing techniques, cut down overall costs and help SMEs reach out to global markets.
• Focus by the Centre on bolstering schemes like brand building, product designing and packaging assistance, and promotion of SME products and services.
• Strengthen NSIC for effective synchronization of marketing support programs for SMEs.
• SMEs should focus on customers and branding must be done with their target audience in mind.
• SMEs must ensure that their firm has a positive credit rating. This will allow smooth inflow of funds. Value-added credit ratings will lead to development of products and marketing strategies.

By Ms. Sudha Sarin, Vice President, Power2SME