Branding (II) A Competitive Advantage for SMEs

ABSTRACT In the first part of this article we showed that the total value delivered to the customer is the sum of “what” is being delivered (the product itself) and “how” it’s being delivered (collaboratively,  reliably, on-time, post- purchase service etc.). Branding activities is shorthand for trust. As such, branding is part of “how” the value is delivered to the customer. Branding is a minor cost to the manufacturer but delivers significant value to the buyer. When it comes to branding, Western small and medium size companies (SMEs) should have an inherent competitive advantage over low cost manufacturers.  By increasing the customer delivered value through branding, Western companies can partially compensate for their structural cost disadvantage embedded in the “what” component. The article explained in the first part why branding renders Western manufacturers  more competitive in the global market place. In the second part of we are providing a step by step practical branding process for SMEs. THE BRANDING PROCESS The second part of the article provides a practical guide to steer the chemical SMEs branding process in the context of limited internal resources and/or minimal outsourcing to an agent. Whichever your choice might be, the proposed branding process can accommodate a wide range of budgets by adapting the volume of work to the financial realities of each company. The branding process consists in the following basic stages (Figure 1): •    Establishing the branding goals •    Creating the brand team •    Delivering the brand strategy document •    Developing the branding concept •    Executing the branding program (implementation  and monitoring)   Stage 1: Establishing the branding goals This is a list of deliverables spelling out the desired outcomes of the branding exercise. For example, deciding where to invest within the brand architecture of the SME is mission critical. A clear differentiation should be made from the outset between 1) branding a corporation, 2) a business line, 3) a product line or 4) an individual product. The resources needed and the measured outcomes will be vastly different in each case. Investing in a corporate brand (or an umbrella brand) takes time and considerable financial resources but will have import spill over effects across the whole portfolio of product lines. Corporate branding will also have a positive impact on the motivation of human resources and facilitate leadership towards strategic objectives. By contrast, branding a specific product might not necessarily influence the overall image of the company (a process called brand metonymy1, will take less time and less financial resources. Besides brand architecture decisions, the branding project might have many other objectives such as to increase awareness, acceptance, brand loyalty or brand preference over other brands. These desiderates are related to the natural product life cycle and are integral part of the brand management. Whatever the objectives might be, it is important to have clear processes and performance measurements  to monitor the progress of the branding during the implementation  phase. For example, increase in brand awareness can be gleaned in a pilot test by participating in a small trade show before investing in a fully- fledged branding program at a national or international show. Figure 1. The branding process for SMEs At last but not at least, these outcomes should be quantified in pro-forma financials to establish the return on the branding investment. The ROI needs to meet the corporate hurdle rate and compared with other competing investment opportunities. In this respect, branding is no different than any other investment decision. This step is critically important in the marketing-sceptical, technically driven environment of the chemical SMEs. CEOs, CFOs and even sales VPs are generally not familiar with the branding concept in the SME environment. This is why presenting the value of branding in terms of return on investment is critical to get the management’s  buy-in and support. Stage 2: Creating the brand team The brand needs to communicate on an emotional level. This is possible only if the brand captures live feelings and expresses them in an artistic, powerful manner. The information collected through secondary research (print, digital) is certainly informative but unfortunately not engaging. This is why developing a brand concept needs direct interactions through one-on-one interviews that capture individual real life experiences and spur healthy debates amongst representative stakeholders who form the “brand team”. The brand team could include both permanent members and occasional participants. The permanent members
are generally company founders, present owners, executives and other key employees. Occasional participants are line employees, suppliers and at last but not at least, customers who are willing to share their own experiences with the company or product. This includes successes, challenges or simply thei stakeholders aspirations and suggestions for the future. It is particularly important to include in the process not only long-time customers but also lost customers in order to capture the full emotional picture surrounding the company, address the negatives and build on the positives. Stage 3: Delivering the brand strategy document In the initial stages, the agent’s role is to facilitate these group discussions, lead interviews, gather information and manage the whole project against the budget and timeline. Eventually, the role of the agent evolves into identifying and highlighting similarities while unveiling several potential emotional connections to the intended positioning of the brand. All this work will eventually generate a several page document called “the brand strategy document”. The brand strategy document ultimately provides the strategic groundwork for the brand image and positioning. Once the brand team agrees on the new brand positioning, it needs to have the reality check against market size, key market segments, intensity of competition and customer hierarchy values. The proposed brand positioning must also resonate with the business environment in order to be profitable2. If the market size is large enough, the intensity of the competition reasonable and the new brand positioning relevant to the customer, the branding project can be handed over to the Creative Agent for concept Development. The brand strategy document has several building blocks that will eventually end up being used in various marketing communications  documents. Here are the main building blocks: a.    The organizational history The history of the organization is critical for understanding the trajectory of the business from its inceptions to the present moment. The milestones related to organization past successes and challenging moments would reveal the values and the culture of the business. The history of the company included in the branding exercise will give the brand meaningful continuity, and increased credibility in the market place and with the company employees. b.    Key business messages It is equally important to consider past marketing and PR messages. This effort gives an idea for the content, voice and tone of the existing brand (if any), and also correlates with historic sales outcomes, which is helpful for pro-forma projections. The accent falls on the most recent messages, their alignment or possible connections with the intended branding objectives highlighted above. c.    Perception of past messages If the budget allows, it is informative to see what was the perception of past messages by key stakeholders, their likes and dislikes and to what degree the intended effect has in fact been achieved. A gap between the intended key messages and their perception and retention can provide useful insights in the way the target audience acquires information, thinks and absorbs the brand. d.    Profile of target audience The background of the target audience is important for the branding project. For example certain symbols might have geographically  restricted significance. This is important if the company intends to operate in international markets. The education, age and functional position are also highly relevant. By way of example, in the case of a company that is relying on a new product line the target audience will be R&D types who are generally early adopters in customer organizations. On the contrary, a company that is basing its growth plans on gaining market share for existing products must target their brand mainly to corporate purchasers. And yet again, for a company where the moral of the employees is low, branding must respond to their aspirations and concern. The logo, the tag line and all other elements of the brand might be completely different in these cases. e.    Competitive mapping Brands do not exist in vacuum; they compete with other brands for the attention of the target audience. The brand positioning exercise needs to take into account the existing competitive landscape in order to create a brand identity that is distinctive amongst competitors and simultaneously  relevant to the target market. For example the agent in charge with branding could generate a list of key messages of main competitors by interviewing customers and reviewing their market communications.
Based on the information garnered from stakeholders and secondary sources (print and digital) the brand strategy document must ultimately spell out the following deliverables: •      Brand story: documents in an inspiring way the social benefits provided by the organization along the years •      Brand core values: highlights the spiritual backbone that helped the organization overcome vicissitudes and reach meaningful objectives above and beyond financial ones •      Brand attributes: show what are the most appealing aspects to the main stakeholders, employees, customers and owners •      Brand vision: an inspiring description of how the organization or product will fit in a progressive future •      Brand mission: a short, mobilizing call to action anchoring the focus of the company for the long term •    Brand promise: describes what are the functional and emotional benefits to stakeholders •    Brand tag line: a catchy short statement summing up the vision, the mission and core values •      Brand positioning: shows what distinctive place should occupy in the minds and hearts of the target audiences relative to other competing brands The brand strategy building blocks and deliverables are presented in a schematic form in Figure 2.   Figure 2. The brand strategy document. It is important to note that there must be a logical alignment between the deliverables of the branding project. Although the organization might never fully reach any of these deliverables, the management must work towards creating an organizational culture and structure that supports the corporate brand. Stage 4: Concept development Once the brand team agrees on the brand strategy document and arrives to the list of deliverables, the process moves to the concept development stage. The creative development stage has a single clear purpose: translate the brand strategy content in an emotional experience.
Branding ultimately works because it touches everyone on an emotional level. There is no place to hide from the humanity within; this is why branding done right delivers infallibly. The logo of Christianity, the cross, touches emotionally even the nonbelievers because it embodies the basic values, the vision and the mission of the great Western culture. The logo of Mercedes is the representation  of success. Swastika, the Nazi symbol, remains a constant reminder of the darker side of humanity. In a similar manner, the logo of the company should elicit an irrepressible emotional response in the minds and souls of the customers, employees and other stakeholders in the business landscape. This is why the concept development stage starts by discussing in further detail the information contained in the brand strategy document with the brand team. What are the key messages of the competition, what is their heraldic and what does it convey? What are the colours used, the tone, what is their website experience? The brand team needs to spell out the likes and dislikes in the branding of the competition. Once the competing brands are understood, turning attention to the company’s existing brand the brand team must decide what are the elements that need to be kept, and why? Based on this comparative introspection, what should the new company image look like in order to express the deliverables captured in the brand strategy documents? Bottom line, the creative stage is both subjective and limitless from an artist’s perspective. This is why the brand team must define the creative boundaries and choices. The creative team role is to propose several concepts to the brand team in an iterative process. The creative process is in fact an evolution of symbols, colours, shapes, tone and content providing an increasingly acceptable outcome to all stakeholders on the brand team. Obtaining consensus is critical because the brand will ultimately become alive through the unconditional support of owners, management and employees represented on the brand team. The winning brand concept is ultimately something that the brand team loves and wants to buy. There should be no need for convincing the brand team by the branding agent. While the logo and the tagline are important elements of the branding exercise, it is highly recommended  to develop other key branded print, digital and live deliverables. Corporate brochures, product brochures, advertising campaigns, website, presentations, booth design, table tops etc. work in synergy to create the branded ecosystem in which your sales force is going to interact with the customers and operate successfully. Stage 5: Execution While you might be using a design firm initially to produce the new marketing package, in time, employees will have to create, modify, enrich and adapt materials for their specific needs. It is important therefore that all ulterior communication  materials follow the same branding guidelines in order to ensure the continuity of the look, feel and tone from day to day correspondence,  to the most elaborate customer call presentations. In order to achieve this goal the users must share from the same “brand tool kit”, a repository of images, symbols etc. that are right in tone, manner, voice and colours. Along with the tool kit along comes a “brand manual”, instructing users on how to use the elements in the tool kit in a brand consistent manner. We recommend having the “brand tool kit” and “brand manual” available on the intranet of the company in order to ensure that all communications  are always conveyed in a consistent branded environment. From a market perspective, although the delivered content might be completely different from one occasion to the other, there will always be a sense of familiarity that translates ultimately in trust.  Trust simplifies relationship between buyer and vendor, speeds up the sales cycle, increases conversion rate and makes higher prices acceptable. CONCLUSIONS The value delivered to the customer is the sum of “what” is being delivered (the product itself) and “how” it’s being delivered. Branding is shorthand for trust. As such, branding is part of “how” the value is delivered to the customer and creates customer delivered value. Most of the Western chemical SMEs fail to recognize the inherent competitive advantage they have in branding for the Western markets. This is one of the points where low cost producers will continue to struggle in the near future. Branding represents therefore an important sustainable competitive advantage for Western chemical SME. The second part of this article provides a practical “How to” on the branding process in the context of the chemical SME. It should help SMEs to understand and execute the branding process with limited resources at minimal cost. References 1 Brand metonymy can work very efficiently for SME’s where a successful product can be then leveraged in the creation of a corporate brand. This is a low cost, low risk but slower branding approach particularly adequate for SMEs that are not familiar with the branding process. See D. St.Andrei, Chemistry Today29(2(2011). 2 Some ofthis information, such as market size, market segments, customer value model and customer value hierarchy might be already available if the company has a strategy plan in place MarketChemica offers specialized marketing services to the global fine and specialty chemicals industry. For more information see marketchemica.com