May 2010 | By Marketing Interactive
Marketing Interactive., © 2010 Singapore
What are Singaporean companies really up to after attending branding and innovation workshops?
Singaporean companies may be excited about innovation, but real creativity may be a long time coming.
A recent study on small and medium enterprisies (SMEs) in Singapore by branding specialist StrategiCom showed that only 21% of Singapore SMEs successfully apply innovation management tools, despite 91% of them having an understanding of the concept of innovation.
The definition of innovation used in the study was: "The introduction of a new things or method that has to ultimately be translated into value for both the firm and its stakeholders, and as something that is applicable to all businesses, not requiring formal R&D."
The objective of the study was to discover how leaders of Singapore SMEs perceive innovation, how innovation in management has brough success for companies and how much of this success was attributable to branding efforts.
For SMEs with the appropriate tools to innovate, 61.9% achieved efficiency innovation, 23.8% achieved product-line novelty, market novelty and business-model innovation, while 14.3% experienced quality innovation.
Out of 21% of respondents that achieved innovation success, 90.5% of them have applied branding efforts towards their innovation, showing that a majority of SMEs that enjoyed success, implemented branding efforts in commercialising the innovations.
Out of 21% of respondents, who have innovated successfully, 90.5% had applied branding efforts, while 9.5% had not applied branding efforts.
The branding efforts of SMEs were categorised under three main categories: public relations, marketing and corporate branding. Of the group of respondents, 38.1% conducted public relations activities, 33.3% ran marketing activities and 28.6% carried out corporate branding activities.
According to the StrategiCom study, SMEs with branded innovations enjoy more commercial success than non-branded innovations. Firstly, a brand helps enhance the marketability of the innovation, increasing the receptiveness of a new product or service.
Secondly, a branded innovation can command a premium over a non-branded innovation. A brand establishes an innovation and justifies the price premium by summarising the benefits of the innovation.
Thirdly, a strong brand helps generate long-term profitability for a company.
Among listed companies in Singapore, it was found that perceived brand strength is closely tied to share price expectations, especially in the property, retail, F&B and the environment industry.
"Effective commercialisation of a firm's innovation through PR, marketing, corporate branding, engaging external consultants and design activities ensures that profits generated from the innovations can be re-invested into other innovation areas that will serve to generate new revenue streams," says group principal consultant and CEO Dr Wilson Chew.
"However, this cycle requires that the firm has the appropriate innovation management tools and, more importantly, applies branding efforts towards their innovation successes to fully leverage on their commercial potential."
SMEs made up 99% of enterprises in Singapore in 2007, employing nearly six out of every 10 workers and generating almost half of the total value of enterprises across the country.
A total of 100 SME leaders from a diverse range of industries in Singapore were interviewed for the study in 20 minute face-to-face sessions.
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