27 Apr 2010 | By Abigail Kor - The Business Times
The Business Times Singapore. English., © 2010 Singapore Press Holdings Limited
Simpler branding programmes and offensive branding strategies are more appropriate for SMEs, reports Abigail Kor.
Key excerpts:
As the battle for customers intensifies, more and more SMEs are realising the importance of a strong brand as a strategic asset. Many brand consultants have noticed a marked increase in the percentage of SMEs among their clients.
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The increase in branding by SMEs can be explained by a growing trend among B2B companies to venture into the B2C space.
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An SME's approach to branding greatly differs from that of a larger company due to differences in scale and structure. Because an SME will have generally been around for a shorter time than an MNC, it will have simpler needs in terms of branding.
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Jacky Tai, principal consultant of B2B branding specialist StrategiCom, relates the difference in brand strategies of an SME and a large company to the tactics employed against competitors.
Referring to his presentation at Singapore Brand Conference 2010 entitled 'Attacking the Enemy's Strength', Mr Tai says: 'A small company uses an offensive branding strategy against bigger and stronger competitors, with the aim of gaining market share and achieving growth.
'Once a company becomes big, its branding strategy becomes defensive. It aims to maintain its market share and block all its competitors, usually by standing for the same things as it did before.'
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For SMEs which have yet to actively engage in branding, a lack of commitment and understanding of the importance of branding among top management is often a stumbling block.
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Another obvious deterrent is the cost of hiring a brand consultant. Currently, Spring's Brand Pact Grant and and International Enterprise Singapore's Internationalisation Capability Development Programme (iCDP), help defray costs by covering up to 70 per cent of consultancy fees.
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There are several ways for SMEs that lack funds to hire a consultant to engage in branding. Several consultants are, in fact, encouraging SMEs to employ a hands-on, do-it-yourself approach, which creates a greater sense of identification with their brand.
For such brand-savviness to be inculcated, 'SME bosses can start by reading and learning branding books to build up their knowledge'. 'If they have the time, they can consider enrolling in an executive MBA programme,' says Mr Tai.
But prior to embarking on strategy work, SME owners should ensure that the fundamental building blocks - product quality, relevance to customer needs and differentiation - are in place.
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Identifying and specialising in a key competency is also crucial for a brand to differentiate itself successfully, according to Mr Tai...
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'SME bosses need to pick their battles properly and know where to channel their resources,' says Mr Tai.
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A key part of branding is your relationship with customers - what your brand implicitly or explicitly promises them and what they perceive the brand to be able to deliver.
Thermal Limitec, a locally based passive fire protection specialist, has branded itself based on this principle.
According to its CEO David Thomas, who was a guest speaker at the recent Singapore Brand Conference 2010: 'Thermal Limitec is mindful of this obligation to customers and works hard to make sure it delivers on the brand promise.'
In today's cut-throat business climate, 'a brand is only as good as what it does tomorrow', he says. 'Its past achievements - no matter how brilliant - won't matter if it fails to deliver on its tomorrow.'
Thermal Limitec started in 2005 as a subsidiary of Industrial Services. The company was 60 per cent owned by Industrial Services and 40 per cent by Mr Thomas.
In 2007, he bought out Industrial Services to facilitate Thermal Limitec's international expansion.
Thermal Limitec manufactures engineered passive fire protection solutions for the protection of structures.
Its products are used on floating-production, storage and offloading vessels and offshore oil and gas platforms, and at onshore refineries and petrochemical plants.
The company is headquartered in Singapore but serves global oil and gas companies such as BP, BR Petrobras, ExxonMobil and Pemex in areas like the US, Brazil, Mexico and Angola.
To help refine its brand strategy, Thermal Limitec hired business-to-business branding consultant Strategicom in 2009.
About $250,000 is being spent on the brand strategy work, close to 70 per cent of which will be defrayed by government grants.
For now, Thermal Limitec's brand strategy is to position itself as a passive fire protection specialist that understands the needs of oil and gas companies - especially in terms of protecting the lives of their employees and the multi-billion-dollar equipment.
It uses two platforms to communicate its brand to its clients. Static channels, comprising its website, brochures, corporate presentations and showrooms, and dynamic channels, which basically mean the people who carry the Thermal Limitec brand.
Recognising that a brand is only as good as the people who represent it, 'Thermal Limitec tries to ensure its people understand what the brand is about and what they must say and do to ensure it grows from strength to strength,' says Mr Thomas.
The company aims to meet customer expectations by continuously engaging in R&D. It plans to launch a test programme in its US laboratories next month and is investing $2 million in expanding its manufacturing facilities.
'Thermal Limitec has built up a reputation as a brand that delivers everything it promises,' says Mr Thomas.
But Mr Thomas is quick to reinforce the need to fulfil the expectations the brand has raised.
'We need to reiterate again that a brand is all about promise and delivery,' he says. 'We are only a good brand as long as we deliver on the brand promise.
'A strong brand helps in the selling process - but a strong brand is not born, it is built. You have to work very hard to build a strong brand. And you have to work equally hard to maintain that brand.'
Mr Thomas: 'Thermal Limitec has built up a reputation as a brand that delivers everything it promises.'
(BT PHOTO: Arthur Lee)
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