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BRAND SMALL BRANDS The small companies              shouldlearn to understand this instrument in orderto be better equippe...
Branding and small companiesShould a small company use branding as a part         well it works in comparison to what the ...
It is like David´s fight against Goliath with the      You do not build a strong brand only throughdifference that most peo...
McDonald´s deals with these kinds of problems,          companies have flat organisations, the decisionand over all manage ...
Why do we not see more of the small brands?In business after business we see that they are       tial in the first place. U...
Jonas Bergvall         COCOS    phone +46 152-150 01e-mail
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Branding for small_brands


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Branding for small_brands

  1. 1. BRAND SMALL BRANDS The small companies shouldlearn to understand this instrument in orderto be better equipped to govern andstrenghten their credibility. But also to be able to understand thestrengths and weaknesses of greater brands. COCOS Jonas Bergvall
  2. 2. Branding and small companiesShould a small company use branding as a part well it works in comparison to what the customerof its competitive strategy? I will point at some is expecting. But also the brand´s ability to sat-factors that imply that brands with a small geo- isfy more of the customer´s needs, may it begraphic market have a good chance to steal cultural, psychological, social etc. These intangi-market shares from the gigantic, global brands. ble assets are what you through branding want to control and collect under one symbol so that If I ask you to think about a brand, one which it will be easy for the customer to identify theyou consider to be a strong brand, the probabil- product which he feels satisfies his needs in theity that this would be a global brand is pretty best and most exciting way.high. In rankings of the strongest, or the mostvaluable, brand´s it is the same thing. It is theglobal brands we tend to measure. But the most Branding demands a lot of moneyimportant thing from a small brands perspectiveis to be strong in its own defined market. How- Considering that the strongest and most valua-ever, I will not define an exact size of this market ble brands seem to be global it is easy to cometo which these thoughts can be applied. My main to the conclusion that the only ones that areimplication is that a smaller brand has an oppor- able to build strong brands are big, multinationaltunity to serve its customers in a more flexible companies. It seems like branding always haveand in a more creative way than its greater coun- to cost a lot of money since it can only be doneterparts. Most of all that goes for small brands through advertising and media. And big invest-that live and breath closer to its customers than ments in media takes a lot of money.big, global brands. Yes, big investments in media do take a lot of My belief is that many of these small brands money. But no, brand building is not done solelyhave a chance to get stronger if they stop having through advertising and media. This is a miscon-inferiority complex against the bigger brands ception that in many cases lead small brands toand start to make their brands more clear and think that they have to focus on product andfocused, and build their brand in a new and exit- price. You can think of it this way, global brandsing way. are forced to invest heavily in media due to their lack of possibilities to be present locally every- where, which simply would be even more expen-A definition of branding. sive.My definition of branding comes from the idea The paradoxical in this situation is that globalthat the winner in a competitive situation is the brands may feel closer to its customers thanproduct, or service, that the customers experi- the smaller brands, even though they are muchence as the best choice. The keyword is experi- closer physically. The big brands invest in forence. When a customer is about to make a choice example TV-commercials and activities on theof buying something he weighs in several factors web which bring their brands into your homes.against each other which in the end sums up in You can not get much closer than that. Or canwhat he experience to be his best choice. These you?factors are partly the capacity and performanceof the product or service, in other words how
  3. 3. It is like David´s fight against Goliath with the You do not build a strong brand only throughdifference that most people no longer only want advertising and media, it is the collected, overto see David as the winner. Even though it seems all experience that makes a strong brand. Thislike it is a human characteristic to support the experience is influenced by all encounters yousmaller and weaker, we now know Goliath so have with a brand, how the salesperson act, howmuch better than David. We know what Goliath other personnel interact with you, service, pack-stands for, what he believes in and what he wants aging, public relations, contributions to the com-to accomplish. munity etcetera. There may even be ways to interact with your customers that has yet to be invented. The bottom line is to which degree youWhat do the smaller brands do? manage to satisfy those needs that you have promised to satisfy. One of the problems bigSmall companies with local and regional markets brands have to deal with, is how to deliver whatseem to have accepted the global brand´s domi- their advertising has promised. It is difficult fornance over their customers and live by the con- big companies to have complete control overvention that branding costs too much money the whole experience all through the distribu-and they are left to compete with product offer- tion channel. There are of course exceptions, butings and price. Even though they have realized over all, most big brands are dependent upontheir opportunity to offer personal service, it is subcontractors when it comes to the distributionseldom you come across companies that manage channel. The consequences of this are that theyto do so in a unique or exiting way. Therefore have to deal with the channel as more of a distri-they do not manage to overcross the hindrance bution channel than a communications channel.which the credibility of the big brands put up.This seems to be a general phenomenon, no Apple computer is a good example of a strong,matter if it is consumer or B2B. global brand which recently found themselves forced to expand their brand experience by open- ing Apple branded stores. Earlier they wereThe small brand´s opportunity dependent upon the good will of the computer to promote Macintosh, Apples computer brand.Then what can the small brands do to increase This move is probably expensive, and for the timetheir profitability, or even survive, in their strug- being limited to the North American against the great brands? McDonald´s is also a good example of a brandI think they have a great opportunity to create a who tries hard to push the brand experiencecompelling experience with the customers which down to the local restaurants. But McDonald´s iswould insure them that the small brands are a also an example of how difficult it is to managebetter choice. After all, branding is nothing new, the experience over time. How many times haveit has always been crucial for anyone who wants you not waited a lot longer for your hamburgerto sell something to gain credibility. But the small than what you have come to expect? Howcompanies need to understand this instrument many times have you not felt that the youngin order to control and strengthen their credibil- person behind the counter really would like toity, and also to better understand the strengths be somewhere else, and therefore not being ableand weaknesses of the greater brands. to perform the service you expect? Naturally,
  4. 4. McDonald´s deals with these kinds of problems, companies have flat organisations, the decisionand over all manage to handle them very well. making process should be a lot easier and theyBut it shows how hard it is for a big company are physically close to the market they wishto be consistent, despite all control and internal to attract. Yes, small companies may have lesseducation. It is after all a very simple product, a money to spend on large media, but due to theirhamburger. small sizes a possibility to create a near, unique and possibly also an exciting experience for their But if it is difficult for a big brand to be consist- customers. In a small organisation it should beent, there is something that is even more diffi- much easier to manage and perform a consistentcult, namely to be flexible and creative. You do branding strategy.not easily change direction with a tanker that hasgained speed. The possibility lays not in thinking big, but to think further. A small company has an opportu- Small companies and small brands have a great nity to stop saying ”if we only had money weopportunity to take advantage of the giant´s would communicate in large media”, and takeweaknesses. In small companies there is the better use of existing channels to create anopposite situation from the big companies. Small expressive experience for its customers.Creative Sales Promotion- an underestimated experienceA concrete suggestion to small companies and naturally an attracting place for those who aresmall brands is to examine their sales promotion. always looking for the lowest price.When you are short on money the risk is that you For those small companies and brands whofocus too much on short term sales. When the wish to explore the possibility to use brandingbattle against big brands already feels lost it all as a part of their competitive strength, I suggestbecomes a struggle of taking what you can, often that the sales channel, or the sales force, is aby putting the focus on price. But due to the lit- good place to start. This is where you alreadytleness of the small companies they seldom have are in contact with your customers and the salesthe resources to create long term cost advan- people are often in a crying need of better sup-tages, but are forced to a profitability way below port. Since the big brands have to go throughthe market leading brands. Sales risk to become big trouble to ”push down” the brand experi-a hunt for closures where your own short term ence through the distribution channel, and mayinterests are more important than the ambition not be giving sales promotion top priority, this isto create satisfied and loyal customers. The inter- the perfect place to create unique does not make the situation any better where Also, among advertising agencies, sales promo-it is becoming increasingly easier to find undif- tion has not been as fancy to work with as TV-ferentiated, cheap products and brands. This is commercials or other large media.
  5. 5. Why do we not see more of the small brands?In business after business we see that they are tial in the first place. Unfortunately this makes itdominated by a few market leaders, and these difficult for him to think that marketing could beare often globally active brands. The smaller something else than solely that product or serv-brands with a narrower geographic market are ice. When the big brand comes along and satis-left to fight for the bits and pieces that are left fies more of the costumer´s needs, other thanover. Some even see a moral dilemma in the the functional needs the product or service satis-dominance of the big brands, not least after the fies, the competitive strength of the small brandrelease of the book No Logo by Naomi Klein. becomes rather weak. But from a small brand´s perspective this is The will to invest in a small brand may be con-more of a profitability problem. But why are there nected to the small companies´ will to grow at few small brands that act with a clear differen- If that is the case, maybe we can learn somethingtiation strategy and make themselves heard and from a licentiate thesis written by Henrik Barthliked? at Luleå university, Sweden. In order to write the thesis ”Barriers to growth in small firms” Barth Surely, there are as many explanations as there interviewed 1.240 small companies in Sweden,are brands and there are differences from nation Finland, Belgium and Ireland about what they seeto nation. In Sweden for example we have some- as the main hindrances for innovation. Althoughthing which is commonly referred to as ”the law the results differ between the countries the con-of Jante”. This nationspread convention means clusion is that a company has problems to grow”you shall not consider yourself to be some- above the size where the CEO no longer canbody”. Although this conception has lost its grip manage everything by himself. Lack of knowl-around the swedish minds, it still sets its mark on edge about organisational issues makes it hardthe swedish society. To differentiate yourself, to to create an organisation that are able to grow.make a stand, is therefore something that prob- Also the lack of knowledge in other areas and theably feels awkward and strange. In a small organ- difficulty to attract competent employees makesisation there are a few people who are to stand it even more the identity of the brand and communicate itsaspiration. This makes it much more difficult to Since an effective brand strategy in a small”hide” than if you are part of a bigger organisa- company depend upon its organisation this is ation. serious problem. To have a stiff hierarchy and other internal problems is of course not a good Many small companies are founded and run by way to start if you want to stimulate your organi-entrepreneurs who are often mainly focused on sation to communicate certain common valuesa product or a service in which they saw a poten-
  6. 6. Jonas Bergvall COCOS phone +46 152-150 01e-mail