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ONCE an SME has created and protected its distinctive signs, also possibly one or more industrial designs, and may have even identified a geographical indication under which to market its goods and services, what does it do with such objects of intellectual property protection? How does it use them creatively to bring value to its business? Among the most important things it can do with such intellectual property assets is to use them as tools in developing a brand image for itself and the goods and services it provides.

Brands today are generally recognised as a key asset for creating value for a business. Any “enterprise”, in the wide sense of that term, be it for-profit, not-for-profit, small, medium-sized or large, even a country or geographical region, can develop a brand image. So why SMEs are still paying so little attention to developing brand value for their goods and services?

Many SMEs do not understand or are not truly convinced that a brand image can be a powerful tool for promoting and marketing goods and services.

Some may recognise its importance but prefer to focus their priorities elsewhere and devote the major part of their resources to other aspects of the business, such as research and development. Small and medium-sized enterprises, may not know how to go about developing a brand image or perhaps erroneously believe that brand development is a privileged sphere reserved only for large, multinational enterprises.

These are all short-sighted attitudes, which may eventually prove fatal for a business. Experience has shown that the potential commercial value of a brand cannot be underestimated. The brand is the central nexus of communication between an SME and its customers. Developing a brand image should not be left as a last priority, to be addressed only after a business is established and running. To the contrary, a brand image should be developed in parallel to the business, and a branding strategy should constitute an integral part of any business plan. What is the use of making major investments into developing quality goods and services if that quality reputation cannot be captured and developed in the form of a brand image? It is through its brand image that an SME will attract and, more important, retain customer loyalty for its goods and services and thus bring very real and concrete value to its business.

Developing a brand image is not an out-of-reach venture for small and medium-sized enterprises. It does require time, effort and commitment, and certainly some financial resources, but not as much as might be expected. Experience and knowledge of the market, a creative and flexible approach to problem solving, enthusiasm about one’s products or services, and the courage to take risks are just as important factors in developing a powerful brand image, and these are common attributes of most successful small and medium-sized entrepreneurs.

What is a brand?
Although the term “brand” is sometimes used as a synonym for a “trademark”, in commercial circles the term “brand” is frequently used in a much wider sense to refer to a combination of tangible and intangible elements, such as a trademark, design, logo and trade dress, and the concept, image and reputation which those elements transmit with respect to specified products and/or services. Some experts consider the goods or services themselves as a component of the brand. This wider, more flexible, definition of “brand” is more useful for my write up.

Strictly speaking, a brand is composed of the sum of its individual parts, the brand ultimately exists independently of and its value is greater than the mere sum of those parts. In fact, the value-added of a brand is precisely the concrete and direct result of the synergy that is created among its component parts.

The brand thus takes up a life of its own and leads us beyond the limited functions of such objects of intellectual property protection as a trademark or a design and the generic product or service differentiated and rendered more appealing by those objects of protection. The concept of a brand reminds us that creating and protecting a trademark or design is not an end in itself. These are only tools (albeit important ones) in the process of developing an effective brand image for one’s goods or services. It is the brand image as a whole, and not merely a trademark or design as a stand-alone element, that differentiates one’s goods and/or services from those of competitors, denotes a certain quality, and over the long term attracts and nourishes customer loyalty.

What makes a brand successful?
Many factors go into making a successful brand. There is no single miracle formula. Brand development is as much a science as it is an art. To be successful, a brand must at least be clear, specific and credible in terms of its message, its differentiation power, and the quality it symbolises. It should also be attractive and appropriate in relation to the goods and services which the brand embodies.

Among the various factors that determine a brand’s success, one of the most important ones is the brand’s differentiation power. The brand must have a “point of difference” as far as the target group of customers is concerned. This point of difference must be:

-recognisable (in terms of the good and/or services marketed);
-desirable (in terms of the quality and value of the goods and/or services offered);
-credible (in terms of reliability); and
-properly communicated (in terms of how the message is formulated and to whom it is targeted).

In today’s highly competitive global market place, with its overwhelming selection of similar and frequently identical goods and services, if a brand cannot differentiate itself and the goods and services it is meant to promote from those of the competition, then it is useless and thereby worthless. The stronger the differentiation power of a brand, the greater its effectiveness and therefore its value both for its owner and for consumers. Only a brand with a strong differentiation power can serve as a focal point around which to promote an enterprise’s products and services, develop their reputation and thereby attract and maintain consumer loyalty, the essential reasons for justifying the investment of time, money and effort required to develop a successful brand.

In the next write-up, I will focus on brand image development and the importance of having a branding strategy for SMEs.