SMEs need to understand benefits of branding

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Bikky Khosla | 10 May, 2011
Despite the fact that branding is absolutely imperative for small and medium enterprises (SMEs), they still seem to be unaware of the advantages that corporate branding has to offer. It is indeed sad that only a handful of SMEs today believe in the brand-building process and most companies do not perceive the benefits in transforming their businesses into strong, clear and differentiated brands.

What most SMEs fail to see is that branding can bring in new business, exclusive clients, and an opportunity to eventually garner higher revenues and thus ensure long-term profitability.

I believe that intelligent branding serves to create confidence not only in one's business, but also in one's products and service offerings. Which means that this confidence impacts not only the SME player and his employees, but most importantly, the customers too.

To SMEs who want to take that first step to prepare a branding strategy, I would strongly suggest that one needs to first have a thorough understanding of one's customers or target market, and business offerings including one's competition. After a thorough research in these areas, he would be in a better position to identify how to best position his business. Undeniably, effective branding usually allows a business to charge more for its products thus leading to increased profit margins.

Another trend I have noticed is that established SMEs often make the mistake of assuming that branding is not important for them and that only new players need to worry about it. On the contrary, branding is equally important for both new and old businesses, owing to the fact that effective branding strategies significantly help a company in creating a highly effective and well-established corporate identity.

I would like to reiterate the fact that for any SME, a strong brand image can prevent the erosion of market share of one's products, ensure higher growth margins and can serve as a weapon against consumers switching to products offered by one's competitors.