It has been found that investment in branding by the small and medium sized enterprises has shown a positive co-relation to their sales performances. Branding plays a relevant role for SMEs as the market is becoming more competitive and there is an increasing concern for the product quality. While banding has been a core element of all the big and established brands, small sized enterprises often find it difficult to fit in this world of branding. Though even with constrained budgets, SMEs have to invest in marketing for creatively managing the brand and leverage the full potential of their respective brands. Researchers have shared that it is very interesting to study the impact of SMEs branding on their sales performance.
As per media reports, the demonetization of high currency notes resulted in a liquidity crunch and thus a short-term dip in retail consumption. At such times, MSMEs who had invested in brand creation saw a good recall with customers and thus they were in a better position that their peers. MSMEs on a large scale have been majorly relying on word-of-mouth to get more clients, and have not invested in brand creation. On the other hand, the MSMEs who have invested time and money into innovative marketing strategies have seen not only a greater visibility, but also more acceptance. Investments in marketing and brand building have to be done at an initial stage of product development stage. An investment in brand building results in product acceptance. The impacts will not be immediate for sure and reap results in three to four years. A common advantage that they get is leading to strong financial flexibility to create future assets. Investment in ‘adequate marketing’ by MSMEs have shown good results when considered for sales growth as well as operating margins.
Branding has moved ahead from just being restricted to television, print media or radio. Social Media is turning out to be an effective and affordable medium of brand building and promotion. In fact, social media is becoming a platform for personalized engagement with SMEs. For making your product global, brand building is very significant. From selecting the right name for your product development, all are a part of branding. Small and Medium Enterprises (SME’s) usually ignore the importance of branding because if the costs involved in generating the brand. Why do we forget that the brand is your image in the minds of your customers!
Benefits of branding for MSME’s:
- Recognition: Usually the brands that are quickly recognizable attract more customers. Branding is much more that the logos that help to identify your brand. Brand building helps the consumers recognize the products and services. Consumers feel at ease while purchasing if they are familiar with the name.
- Differentiation: In small markets where the products are similar, differentiating your brand and product from the competition will place you ahead. The consumers relate to your products and services through branding and these consumers only become your regular and loyal customers.
There are millions of MSME’s operating across the world and it is branding that helps to differentiate one organization from another. A strong brand recognition helps you in numerous ways like command higher prices, gain a larger market share, etc. It also protects you in adverse market conditions that might impact you financially. It is high time when the MSMEs should focus on their brand and image management to gain a good hold in the market and achieve the targets that they have set for themselves.