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SME brand building and management: an exploratory study

Martine Spence and Leila Hamzaoui Essoussi
Telfer School of Management, University of Ottawa, Ottawa, Canada
Abstract
Purpose The purpose of this paper is to assess brand identity, equity and brand management in SMEs. Design/methodology/approach The methodology is based on the analysis of four site cases of consumer goods SMEs through in-depth interviews and related documents. Findings Results showed that the founders value and beliefs set the tone for the core competencies to be developed and transmitted through brand identity. A bundle of marketing innovations, including coherent marketing programs and the use of the country of origin image, support the brands. Brand diversication strategies contribute to SMEs growth. Research limitations/implications Results need to be expanded and conrmed with other international SMEs that are not as well established and that do not use the country of origin in their brand image. Practical implications Entrepreneurs need to be aware that their public image may reect consumers perception of their rms. Consequently, this image should be carefully nurtured. Because of resource constraints, a limited number of product or service features that complement the entrepreneurs core values should be selected to enhance brand equity. Among those, features linked to the rms capabilities and to the country of origin would be the most cost-efcient and effective. Moreover, a number of brand diversication strategies can be used by SMEs to spur their growth. Originality/value The study emphasizes the use of strong brand associations by SMEs, primary and secondary, a focused and integrated communication strategy to enhance the brands as well as a creative approach to brand strategies to contribute to their growth. Keywords Small to medium-sized enterprises, Brand management, Business development, Country of origin Paper type Research paper

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Received January 2008 Revised October 2008 Accepted December 2008

Introduction Brand management is an area where small- and medium-size enterprises (SME) studies have received little attention from researchers (Abimbola and Vallaster, 2007; Krake, 2005; Wong and Merrilees, 2005; Mowle and Merrilees, 2005; Inskip, 2004) in spite of the fact that 95 to 99 percent of businesses are considered as SMEs worldwide (OECD, 2005). Although the literature on SMEs marketing is well developed (Carson, 1990; Carson and Cromie, 1990; Carson and Gilmore, 2000; Gilmore et al., 1999; Gilmore et al., 2001), this work does not touch upon branding. Additionally, a large amount of research has been carried out on branding in the context of the large rm only (Aaker, 1991; Aaker and Keller, 1990; Srivastava and Shocker, 1991). Owing to their resource limitations and the owner/managers powerful inuence on decision making, small rms behaviors follow different patterns than their larger counterparts when dealing with marketing issues (McCartan-Quinn and Carson, 2003;

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Carson, 1990). Moreover, in the present global competitive environment, especially in regards to consumer goods marketing, brands provide a differentiating statement and a competitive advantage if used appropriately. It is through the development of a specic brand identity that a company makes a brand unique and conveys its distinctiveness (Srivastava and Shocker, 1991), leading to a positive brand image in consumers minds, and ultimately to high brand equity. It has, however, been demonstrated that SMEs have so far put little emphasis on branding (Inskip, 2004; Gabrielsson, 2005; Ojasalo et al., 2008). Manufacturing SMEs are also subjected to increased international competition and need to nd opportunities in foreign markets. There is evidence that a larger number of small businesses are expanding into foreign markets soon after their inception and they are mimicking large organizations (LOs) strategies in various elds (Oviatt and ` s and Julien, 2005). McDougall, 1994; Jones, 1999; Torre Given the scant literature on SMEs brand equity management and the inherent properties of these rms, the research question for this paper is: RQ1. How do SMEs, which are characterized by limited resources and an owner/manager focused decision-making process, create their brand identity and manage their brand equity locally and internationally? To investigate the research question, a comparative overview of the main concepts and practices in branding in LOs and SMEs are rst presented. The methodology is then explained followed by an analysis of the interviews. The paper closes with a discussion about the implications of study ndings for managers and researchers. Literature review The benets of brands A strong brand can lead to several marketing advantages and increase companies competitive strength (Hoefer and Keller, 2003; Keller, 2001). A strong brand generally refers to a brand having positive equity to the extent that consumers respond more favorably to marketing activities when the brand is identied, compared to when it is not. Consumers personal identication with a brand is the ultimate differential response to strong brands (Keller, 2001), leading to specic brand relationship through attitudinal attachment, loyalty, and consumers active engagement. This relationship is built through the meanings the brand projects, via favorable associations, to consumers who are open to its values and image (Dacin and Smith, 1994). Differences in consumers brand knowledge inuence their responses to marketing activities. Consequently, a successful brand-building process involves the creation and development of a brand identity and its effective management. A comparison of brand building and brand management in SMEs and large organizations Large organizations (LO) have developed nely-crafted strategies to manage their brands on a local as well as global scale (Keller, 1999). Branding is not a priority for SMEs. It is viewed as a reductive concept involving only the logo, the product, the service or the technology they sell (Inskip, 2004). Recent empirical studies and conceptual papers have attempted to identify relevant factors and processes in SMEs

brand building and management. In the following section these processes will be compared to the ones commonly found in LO models. Brand identity. De Chernatony (2001) suggests that visionary management should be the starting-point to strategic brand building. Brand identity strategy guides brand decisions and warrants coherence of marketing actions through time (Madvaharam et al., 2005; Michel, 2000), and should, in turn, be associated with specic and limited core values that are complementary to organizational values and culture (De Chernatony, 2001; Urde, 2003). In SMEs entrepreneurs are the visionary individuals who are the focal points for brand building and identity creation (Krake, 2005). Krake (2005) stresses that there should be a clear link between the entrepreneurs character and the brand as s/he is the personication of the brand. Brand equity. High brand equity means that a products value is enhanced when it is associated with a brand name and the meanings attached to it (Kapferer, 1997; Keller, 2003). Brand equity sources include consumers awareness of the brand and strong, favorable and unique associations. The rst step in creating brand equity is to develop a brand identity (Aaker, 1996; Keller, 2003) that is achieved through a unique set of associations that a rm aspires to create or maintain (Aaker, 1996). The importance of brand associations is highlighted in several studies as associations can positively inuence consumer choice, preferences, purchase intention, and also brand extensions acceptance (Park and Srinivasan, 1994; Yoo et al., 2000). These associations should be directly linked to consumers needs that can be categorized either as functional (solving consumption-related problems) or symbolic (consumers need for self-enhancement, group afliation, etc.) (Park et al., 1986; Roth, 1992; De Chernatony et al., 2000). It is suggested, however, that symbolic values are more sustainable in terms of differentiation than functional values (De Chernatony et al., 2000). Furthermore, consumers derive beliefs not only from direct associations to the brand but also from secondary associations (such as the country of origin of the brand, the company reputation, spokespersons personality or events), to the extent that these associations can be leveraged by the brand (Keller, 1993). The development of brand equity in SMEs is also based on associations. These associations should not only be representative of consumers needs, as in LOs, but also of the entrepreneurs personality. Entrepreneurs are the main conveyors of the brands identity, therefore, there should be a high degree of coherence between the personality they project and the brand associations that are evoked. Consequently, entrepreneurs need to cultivate their images to the same extent, if not on the same scale, as CEOs of large corporations (Filion, 1991). It is also suggested that SMEs should choose no more than one or two product features to become the brands main associations (Krake, 2005). Moreover, it has been shown that, as in LOs, both symbolic and functional values can be used as well as interdependency between the two (Mowle and Merrilees, 2005). In SMEs, therefore, the associations are more closely linked to the entrepreneur instead of being fabricated from consumer research to ll latent needs, as it is the case in LOs. The value of brand equity can only be assessed if it can be measured. Various methods have been developed to do so in LOs. Such is not the case in SMEs as their internal systems are more collegial and less formalized. Krake (2005, p. 234) states There are no objective criteria for measuring the recognition of a brand in SMEs and

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absolutely none for measuring them in relation to each other. Berthon et al. (2008, p. 40) add that measuring the effectiveness of past actions is a differentiating factor between SMEs and LOs brand management. The evaluation of brand strategies may be a problem for SMEs. Brand strategies. Multinational corporations seem to follow the practice of having multiple brands in a single market. The depth of their branding strategy (nature and number of brands marketed) is the main aspect managers focus on when designing their optimal brand portfolio to maximize market coverage and minimize brand overlap (Keller, 2008, p. 439). In their internationalization process, several strategies can be used by large companies: cultivate established local brands, use global concepts and local adaptations, create new brands, purchase local brands and internationalize, or develop brand extensions. Whatever the strategy adopted, the brand portfolio of the company will be judged on its ability to maximize brand equity. Therefore, the key to successful international branding lies in a well-orchestrated brand strategy that is reasonably global in terms of both its content and consumer recognition, or that may use different brands but coordinate them internationally to minimize conict between their images and positioning. Moreover, large organizations are also strategically building their corporate image since a rms corporate brand/image is becoming increasingly important as a resource to be exploited in attaining sustainable competitive advantage (Kowalczyk and Pawlish, 2002). Several companies have changed their names to redene their images. With the increase in global business and the increase in global corporate mergers and alliances, large organizations are carefully considering their corporate image when designing their branding strategies, which may not be the case for SMEs. SMEs constitute a heterogeneous group strongly inuenced by their immediate environment and their close constituencies, and this applies to brand management as well (Krake, 2005). Wong and Merrilees (2005) identify degrees of brand orientation among SMEs: minimalist, embryonic, integrated, and link them to brand distinctiveness and performance. Higher performance (Berthon et al., 2008) and stage of global expansion have been associated with a more integrated brand management among SMEs. The type of clientele, consumer or business, also inuence SMEs brand strategy (Galbrielsson, 2005). Contrary to LOs that often have to maximize their visibility and their reach with a large number of customers, it is suggested that SMEs focus on developing one or two strong brands instead of spreading their limited resources (Krake, 2005). Co-branding strategies, cooperation with other businesses and corporate branding are strategies not widely used. In most cases, the company name is not the brand name (Krake, 2005). Consequently, Krake (2005) suggests that, if the brand gains enough equity, its name should be used as the company name as well. Organizational structure. In LOs, brand building implies a team-based approach and iterative process over a ten-year time span that includes the senior team as well as staff and external constituencies (De Chernatony, 2001). It should be a holistic and integrative on-going exercise linking the various parts of the organization through its core values (Urde, 2003). Branding is generally distributed among various functions such as marketing, top management or corporate communications and coordinated by specialists. De Chernatony (2001) stressed that the organizations culture is important

in brand building because of its critical contribution to the brands functional and emotional values. As for LOs, it has been suggested that the brand management should take a holistic approach. Abimbola and Vallaster (2007) state that SMEs have a clear advantage over large companies due to their more exible structures and processes to integrate various parts of the organization in the branding process. Interview data are, however, not consistent with this view. Abimbola and Kocak (2007) demonstrate that SMEs are, indeed, more integrative than LOs where brand management can be shared among different teams in and out of the organization. Conversely, Krake (2005) and Ojasalo et al. (2008) show that building brand and reputation is undertaken by the entrepreneur himself or by a limited management team. This could be due to the fact that in SMEs, entrepreneurs usually characterize the organizational culture, and the organizational identity seems to invariably develop around the founders personality (Rode and Vallaster, 2005). Marketing mix. For SMEs, as well as for LOs, consistency in communication and coherence between organizational and brand values are the messages that are found in most studies (Krake, 2005; Keller, 1993; Madhavaram et al., 2005). LOs show increasing interest in standardized branding leading to a standardization of marketing programs (Yip, 1997). They seem to compete more on brands than on products. Positioning is, therefore, a key element and relies heavily on selected communication strategies, which mainly differentiates LOs and SMEs in their marketing mix management. For LOs, integrated marketing communication is considered a critical component of the brand equity strategy. Effective communications are a good means to develop brand awareness and a positive brand image that will contribute to brand knowledge formation, and lead to the differentiated responses that constitute brand equity. According to Keller (1993), communications can lead to strong brand equity only if the brand identities are well integrated into the rms overall marketing programs, such as product, price, advertizing, promotion and distribution decisions. Firms with a brand identity-oriented culture will be better at integrating their marketing communications (Madhavaram et al., 2005). In the few papers studying brand management in SMEs, the product was an integral part of the brand. Wong and Merrilees (2005, p. 157) talked about brand distinctiveness and posited that this can be achieved through the development of distinctive products/services or any other marketing activities (such as distribution). Born global SMEs generally lack the resources for intensive marketing and brand building and differentiate themselves through product innovation (Knight, 1997). Other marketing aspects are creative marketing programs to support both brand awareness and brand image: Added value can be achieved through one or a number of activities, including product, packaging, delivery/distribution, sales, advertizing and customer service (Gilmore et al., 1999, p. 29). In the international arena, the issue rests in the degree to which national marketing strategies have to be adapted to international markets and the forces that trigger that adaptation (Cavusgil and Zou, 1993; Samiee and Kendall, 1992). A common understanding is that minimum national requirements should be met. Efcient brand building and management in SMEs implies using greater creativity, focusing on strong associations developed by the rm itself or through partners and nding low cost

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communication schemes to enhance the brand. It was shown, however, that a single brand strategy would not t all SMEs given their heterogeneous nature and the specicity of their clients as it is business-dependent (Krake, 2005). Some factors were found more prominently in SMEs with high brand orientation such as higher performance and greater international expansion. It, therefore, seems that those SMEs that have mimicked LOs practices in brand building and management have gained from it, but the direction of the causality still needs to be determined. International brand management for SMEs does not seem to have attracted the interest of researchers who have focused on export marketing or international marketing for these rms instead, without mentioning branding. The above discussion is summarized in Table I. The above comparison and contradictory ndings lead to the following research issues: How is brand identity created by SMEs? What process do SMEs follow in their brand equity management locally and internationally and how is this process different from the LOs process? Methodology Since SME branding is an emerging area of research, a qualitative approach allows for the development of insights into the phenomenon to be studied. Eisenhardts (1989)
Activity Brand culture Brand identity LOs Sophisticated concept. Visionary management Systematic process based on extensive market research, lling a gap in the marketplace Associations fabricated from consumer research and linked to consumer needs and product features Sophisticated measurement system SMEs

Brand equity

Brand strategies

Organization structure Marketing mix

Table I. Comparison of brand building and management in large organization and SMEs

Reductive concept Visionary individual the entrepreneur Intuitive process based on the entrepreneurs personality and values Associations derived from the entrepreneurs personality and values as well as from consumer needs and product features Measurement of brand equity a problem A multitude of strategies are being used A limited number of strategies are being locally and internationally, with the aim used. Collaborative strategies as well as corporate branding not generally used of maximizing market coverage and Different levels of brand orientation minimizing market overlaps Corporate branding is part of the overall have been observed brand strategy development Brand responsibilities spread over Brand responsibilities handled by the several departments and functions entrepreneur and the entrepreneurial team A wide range of highly visible and The emphasis is on the product integrated programs A wide diversity of innovative and more or less integrated actions depending on the rm Search for low cost tactics that would maximize the impact Internationally, minimum national requirements should be met and local adaptations are left to horizontal partners

methodology of multiple case studies was selected, as it provides rich data founded on contrast and diversity drawn from the natural context of SMEs and from which processes and behaviors can be understood rather than measured. This methodology was used by other SME branding studies (Wong and Merrilees, 2005; Krake, 2005; Mowle and Merrilees, 2005). Cases were selected from the pool of 106 manufacturing companies in Monaco in 2004. This locale was selected for several reasons. First, little is known about the manufacturing output of Monaco. Second, in order to overcome the liability of smallness attached to the territory, as well as its consumer goods manufacturing SMEs, powerful strategies had to be used, which could serve as a benchmark for rms in other countries. The criteria for selecting companies were size less than 250 employees (European Commission, 2003) and independence, with the objective of remaining so, hence bearing the sole responsibility of their decision-making process and focusing their strategies on sustainability. Firms in the consumer goods sectors were specically targeted as well as exporters as the internationalization of the brand provides legitimacy and could be used as a proxy for brand equity, together with the rms length of active operations. Four companies were recruited through the Economic Chamber of Development (EDC) based on the above criteria as well as their leadership in their respective sectors and the availability of the principal. Respondents were one micro-sized, two small-sized and one medium-sized company in the cosmetics, textile and porcelain manufacturing sectors respectively. These rms are small players in a highly competitive environment where their counterparts are often multinational companies. Only the major brand carried by each of the rms was the focus of this study. These brands were historically the rst developed by the respective businesses. Considering the exploratory nature of this research, primary data relating to selected SMEs brand strategies were collected through face-to-face interviews with the owner/manager of each company in order to obtain the most reliable information. This cross-sectoral, multisize and single-respondent approach was used in other qualitative studies on branding such as Abimbola and Kocak (2007), Wong and Merrilees (2005) and Krake (2005) to identify factors and processes that transcend sectors and size in the branding process. The interviews were open-ended and addressed the main themes outlined in the case study protocol. Interview questions included: asking about the origins of the brand and the company, the companys core values, how its brand developed and was supported internationally, the particular challenges the company faced and the companys objectives for the next ve years. The interviews were taped and lasted between one and two hours. A content analysis of the web sites of the selected companies and their distributors web sites were completed in addition to the packaging and promotional material supplied in order to provide a more complete picture for each case investigated. The respondents main demographic features are summarized in Table II. In existence for 39 years, on average, the rms interviewed are well established. They are all self-nanced family businesses that provides coherence across the cases in terms of comparability of resources and long-term vision for sustainability and independence.

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Company Cosmetic laboratories

Sector Cosmetics and perfumes Skin, hair, nail and foot care products Porcelain gifts and tableware Swimwear, sportswear

Number of employees Brands 23 210 3 Misslyn Monte Carlo ine Akile

Date Export intensity Sales created and presencea N/A 1960 25% EU, Russia, Middle East 25% EU, Tunisia, Canada, USA, Asia 50% Asia, Middle East, Belgium, Luxembourg 40% EU, USA

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Laboratoires Asepta Monaco Manufacture de Monaco MC. Company

e20M 1946 1975

Manufacture de N/A Monaco Porcelaine

60

Table II. Demographic prole of participating companies

Banana Moon e30M 1986 California Swimwear

Note: aMonaco has a free trade agreement with France, so the percentages of goods considered as exports are those sold outside the French and Monegasque territories

Interview analysis The origins of the brands and their brand value development All four business founders had extensive experience in the eld in which they launched their rm before, literally, stumbling on the business opportunity they developed. In terms of brand development strategies, Misslyn was the only brand which was purchased by one of its managers as it presented a good business opportunity. The other three were developed from scratch from a serendipitous encounter between an entrepreneurial individual and one with inspiration. In all four cases, determination, hard work and persistence contributed to the development of the brand. The common core values among the four brands were innovation and quality. These values have been carried on over several decades. The core values of the brands have trickled down to present day business practices as seen in some of the discourses and an analysis of the web sites. In answer to external pressures and to preserve their core values, the rms have successfully nurtured the younger generations and layers of staff members. Laboratoire Asepta has taken these values to the next level by creating an R&D Center and implementing a Quality and Innovation Policy. The inspiration rst developed by a French-Californian designer and the founder of MC. Company, was nurtured over several years and transmitted to a team of younger designers who now develop the brand. Interestingly, only one rm mentions the development of the brand in their objectives for the future (Manufacture de Monaco) while the others mainly focus on international market development. Brand equity creation. Over the years, the rms have ne-tuned their brands strategies to add value and increase their differentiation statements by broadening the associations used. The four case sites use both functional and symbolic associations as identied in the brand management literature. Analysis of the main functional associations shows that Laboratoires Asepta uses problem solving (exfoliating,

softening, treating diabetics feet, etc.) stimulated by product innovation and efciency of treatment with products based on natural active ingredients and experience. Manufacture de Monaco relies on product innovation based on the owners artistic air and credibility due to its afliation with the House of Grimaldi and prizes won. Cosmetic Laboratories focuses on quality and MC. Company highlights fashion, innovation, experience and comfort. The most powerful sources of differentiation are, however, the symbolic associations communicated by these companies. Laboratoires Asepta emphasizes the experiential aspects of their products, such as the sensory pleasure of skin care, in turn MC. Company promotes a lifestyle, the American dream and fun linked to its product. Manufacture de Monaco brings the prestige aspect up front through uniqueness and by being the ofcial supplier of the House of Grimaldi; Cosmetic Laboratories uses glamour and prestige through the exclusivity of their distribution channels and the sophisticated packaging of the product. These ndings highlight Bhat and Reddys (1998) conclusions that functionality and symbolism, although being separate components, can be used simultaneously and successfully by a brand. Contrary to Krakes (2005) ndings, but in line with Abimbolas (2001), the four rms leverage their brand equity with a secondary association, that of their country of origin or inspiration. Laboratoires Asepta Monaco, Cosmetic Laboratories and Manufacture de Monaco clearly communicate their origin from Monaco. The managers interviews and the content analysis of the web sites of three of the rms show not only the use of Monaco in the companys names, but also the emphasis on the creation and development of the rms in Monaco. In the case of Cosmetic Laboratories, the addition of Monte-Carlo in 1967 was done deliberately to enhance the brand. The country image of prestige and high quality perpetuated by international media stimulates local rms to reach in the same direction. MC Company dismissed the halo effect that may have been induced by its country of origin and opted instead for its region of inspiration, California, to be its secondary association. By emphasizing the Californian lifestyle and American dream, the vibrant colours and original patterns specic to Californian beaches, this origin rapidly became the rms differentiating factor in the competitive French and European fashion industry. The use of country of origin conrms the positive contribution of secondary associations to brand equity, and corresponds to Abimbolas (2001) suggested approach to develop strong brands in SMEs, that of leveraging secondary associations whenever possible (see Table III). Brand strategies. The rms interviewed used a wide range of brand strategies to encourage sales growth. Except for Manufacture de Monaco, the other companies names are different than the brand name. This was a conscious decision to allow the rms to grow beyond the original brand and diversify their activities, which contradicts Krakes (2005) suggestions. The diversication of activities includes the development of product lines or other proprietary brands, licensing agreements to distribute other brands with potential, acquisition of new brands and private branding. These various strategies have different purposes, but overall they tend to ensure the rms growth and the spreading of risk over several segments. For instance, brand extension with the launch of lingerie and winter lines was a strategic decision of MC. Company to reduce the effect of seasonality when the rms revenues depend on the

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Companies Laboratoires Asepta Monaco

Functional associations Solutions to problems Efciency of treatment Innovation Credibility Expertise Innovation Experience Credibility Innovation Credibility

Symbolic associations

Main brand associations

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MC. Company Manufacture de Monaco Table III. Brand identity components

Country of origin Experience/high quality (country of Natural origin)

Cosmetic Laboratories Innovation

Country of origin Lifestyle Fun Country of origin Prestige Uniqueness Social responsibility Country of origin Prestige

Originality/lifestyle (country of origin) Family know-how/prestige (country of origin) Innovation/glamour (country of origin)

sales of beach wear, as was the acquisition of Liva, more conservative swimwear marketed to middle-aged women. Enhancing the prestige of both brands was the reason behind the co-branding strategy between Manufacture de Monaco and the Austrian rm Swarovski Crystal, although co-branding has been found to be little explored among SMEs (Krake, 2005). Asepta Monaco grew by proprietary development and acquisition. Known for their own proprietary brands, Akileine and Ecrinal (hair care), they diversied into skin care, pet care, perfumes, etc. Cosmetic Laboratories acquired and manages two brands, Misslyn Monte-Carlo and Les meilleurs parfums de Paris. They also distribute a number of branded perfumes they select according to their non- representation on the markets they serve and their potential. The strategy being to diversify their revenue streams. It seems, therefore, and this has not been covered in the existing literature, that in spite of their strong brand, the rms studied needed various business diversication strategies to sustain their growth. It could be that the niche markets they serve and the intense competitive environment in which they operate does not make it possible to rely on one or two brands as suggested. It has to be noted that the additional brands undertaken are complementary, allowing the rms to use the same or similar distribution channels. Managing brand equity in SMEs A multi-faceted approach to innovation was used by the four case sites to support brand identity and differentiate themselves (Table IV). Product innovation. In the sampled rms, several incremental as well as more radical innovations were based on the product itself to add value to the total offering. Laboratoires Asepta Monaco, for instance, added credibility to the brand and convenience to customers by focusing on particular foot problems (sore feet, dry feet, etc.) and offering both a wide and deep line of products to cure each condition. This

Strategies/ tactics The entrepreneur Founders values

Asepta

Cosmetic Lab.

Manufacture

MC Company

SME brand building

Founders experience in eld Expertise Innovation Innovation Quality

Present owner/ Being the leader in the Overcoming the niche on which we focus competition by cutting managers costs, expanding the objectives presence overseas and acquiring more brands to distribute Design Innovation Deep and broad lines Fashion trends Co-branding Product Scientic expertise Colours Packaging Communication Young radio stations Professional magazines Women, sports magazines Informational web site No web site Informational Web site only Other No price competition innovation Strict focus on quality, image, reputation Selective distribution and market strategies where their competitive advantages can be enhanced

Technical know-how Artistry Developing brand visibility

Originality Quality Developing our three strategic axes: Exports Distribution New lingerie line Design Fashion trends Women magazines Transactional Web site

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Table IV. Brand equity development and management strategies

supports Gilmore et al.s (1999) ndings that demonstrate that small rms add value by offering a wider range of products than their competitors. Some product innovations are dictated by market trends as in the design and fashion industries where companies have to launch one or two new collections a year. Aside from these requirements, more radical innovations are aimed at rmly establishing the company in the market. Such is the case of Cosmetic Laboratories, who pioneered several new packaging features: the sleeve, a transparent wrap displaying ingredients, bar code, etc. that once removed leaves a pleasingly elegant container i.e. the See through packaging for their lipsticks and eye shadows. Some innovations were initiated by the market. Their pump dispensers were developed after earlier version of the bottles were copied. Due to the success of their cosmetics brand in Jordan, their distributor developed a line of skin care under the brand name Misslyn and pays royalties to the company. The products are generally standardized around the world to allow for production efciency. The three companies involved in fashion would rather not consider a market than adapt to it as it may not be protable. Only Manufacture de Monaco develops customized products for exclusive customers. Other marketing innovations. The sampled rms are well aware of their capabilities and compete on their strengths rather than venturing in market spaces which may be

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too risky. Since their positioning is middle to high range, discounted pricing is not part of their marketing discourse, as it is for most SMEs (Gilmore et al., 1999). Instead, image, reputation and quality are some of their differentiating factors. In order to increase their overall efciency and competitiveness while keeping the integrity of their positioning, the four rms implemented operational changes to reduce their costs. The most prominent change was the outsourcing or centralizing of their manufacturing processes to more efcient locations. The additional value of this strategy is the exibility of the output whereby production can be increased more easily if needs be. These strategies are consistent with De Chernatonys (2001) suggestion that internal ow processes need to be developed to support brand essence. Owing to limited resources, the rms use of media is targeted and coherent with the characteristics of their customers. Manufacture de Monaco, with primarily corporate clients, uses no media. Three of the rms have well-developed web sites that support the positioning of the brands and the products. Cosmetic Laboratories does not have a web presence. The reasons given were that the high speed at which the products are changing as well as the number of products they distribute would make it too resource intensive, although they are aware that they lose visibility by not having a web presence. Organizational support. Brand management remains in the hands of a small management team that deals directly with major clients at home and abroad. They are helped in foreign countries by distributors who are allowed a wide range of initiatives and are allowed to grow the brand, after receiving the management teams agreement on tactics. For these rms, international brand management consists of hiring the right agents or distributors and managing them. To preserve the integrity of the brand, MC. Company makes sure that their foreign partners show a genuine interest in the brand before hiring them. Discussion This paper has investigated the creation of brand identity and the management of brand equity among SMEs, which are generally characterized by limited resources and an owner/manager focused decision-making process. The site cases were of interest as they were well established, self-nanced, consumer goods family rms aiming to sustain their development through appropriate management of their brands. Given the scant literature on brand management in SMEs, this paper contributes to the eld by demonstrating which strategies and tactics could be used by SMEs looking at self-nanced growth through efcient brand management. This paper has also contributed to comparing and contrasting brand management in SMEs and in LOs. Proposition development Contrary to LOs, where brands are created to ll a gap in the market place and answer to latent needs thoroughly identied through market research, or where brand associations are created articially to correspond to an average brand ideal positioning (Kapferer, 1997), brands in SMEs are the continuation of the entrepreneurs vision, beliefs and values. Their creation and development are intrinsic rather than extrinsic. Consistent with the literature on SMEs and brand management (Krake, 2005), the original founders have instilled a passion for the brand to their family and staff and have perpetuated their values that ensured rms longevity and brand reputation. Over

the years, the development of brand equity led to an increase in core competencies. Results show that SMEs brand identity core values include specic associations linked to the founders history and visions such as innovation and quality. Therefore the rst proposition: P1. In SMEs, the founders values are the main source of brand associations used to develop core brand identity.

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This study conrms Abimbolas (2001) ndings, these rms made full use of secondary associations by enhancing their brands through the halo effect of their country of origin. Studies show that this concept is known to lead to positive associations in consumers minds(Aaker, 1991; Keller, 1993). These associations have a positive impact on brand equity and may be more difcult to imitate. Country of origin image being multidimensional, each brand uses the dimensions that are the most coherent with its brand concept which is consistent with Pappu et al.s (2006) ndings. The rst contribution of this paper is, therefore, that the country of origin or inspiration of the brand can be used as secondary association to enhance brand equity in SMEs. Since these rms have limited resources for communication and brand identity creation and brand equity development, the country of origin gives the brand an added value at a low cost. Hence, the following research propositions regarding brand identity creation in SMEs: P2a. P2b. In SMEs, the country-of-origin is a relevant secondary brand association to be used for brand identity creation and brand value development. For SMEs, the country-of-origin image provides low cost enhancement of the brand.

It was also found that both functional and symbolic values were used in the development of strong and positive brand image without confusing consumers, thereby supporting a number of studies (Bhat and Reddy, 1998; De Chernatony et al., 2000; Mowle and Merrilees, 2005). Some symbolic values, such as prestige, glamour, or lifestyle seem to prevail and may evoke emotional experiences for the consumer and represent an added value on a longer-term basis, enhancing brand equity. This leads to the third set of propositions: P3a. P3b. In SMEs, functional and/or symbolic brand associations contribute to build strong brand images. In SMEs, functional and symbolic brand associations can be used without creating confusion among consumers.

This is the second contribution of this paper, a number of brand strategies are available to SMEs not only to enhance their core brand, but also to spur their own growth. This is contrary to previous ndings. Given the narrow niche markets served by the rms and the competitive environment in which they operate, the use of a number of brand strategies allow for risk diversication and growth sustainability. Whatever the strategy used the common feature was a complementarity of the additional brand to the existing ones. Often, this complementarity meant using the same distribution channels to increase market penetration or segment diversication. It was not clear, however, to which extent these diversication strategies were purely

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opportunistic or part of a brand management plan. This leads to the following propositions: P4a. P4b. P4c. SMEs can spur their growth through various brand diversication strategies. In SMEs, brand diversication has to be consistent with the rms capabilities. For SMEs, using the brand name as the company name may stie their growth.

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As suggested by Carson and Gilmore (2000), marketing innovations in SMEs are supported by a number of incremental innovations in various parts of the rm, which added together, provide its differentiation statement. These innovations are an integral part of brand equity management. To support these innovations, as well as the integrity of the brand, was the use of targeted media and an integrated communication strategy to enhance the brands and achieve efciency at a lower cost. Therefore, these two propositions can be applied. P5a. P5b. SMEs, a multiplicity of incremental innovations support brand equity management. In SMEs, an integrated and focused communication strategy is essential in supporting brand equity.

Managerial implications As demonstrated in this study, the use of brand management in SMEs bore positive results for the rms. Entrepreneurs should be aware that the way they portray themselves in public has an impact on their consumers perception of the rm. Their public image should, therefore, be coherent with the values they want to project for their businesses. Among the features that could enhance brand equity at low cost are those linked to the rms capabilities and the country of origin. Entrepreneurs should also investigate the number of branding strategies available and assess which ones would be most suitable for their rm and their markets. Diversifying the number of brands could actually reduce risks while creating new revenue streams and a more complete coverage of the market. Innovation in SMEs is an overall rm affair. Finally, a strict focus should be kept on the core market segments and communication with these segments should only be made with a restricted number of high impact supports. Limits and future research This research was limited to the study of four self-nanced family businesses specialized in consumer goods, and, therefore, can only be generalized with caution. The process of brand equity creation, development and enhancement could be different for SMEs dealing with industrial markets where relationships with buyers seem to bear more weight than the rm or product brand (Tsapi, 2004). The fact that only one key informant per site was interviewed can be justied as small family rms generally feature a group think attitude.

The ndings provide avenues for further research in the eld of SMEs brand management and more specically, for rms which are interested in self-nanced sustainable growth. Answers to the following questions could provide further insights into the management of brands in SMEs: (1) To what extent does the use of secondary brand associations, particularly the country of origin image should be used by SMEs? Under which conditions? (2) Is it more efcient to use the brand name as the company name in SMEs or not? (3) Which brand development strategies and brand management strategies are more efcient for SMEs?
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About the authors Martine Spence is Associate Professor of Marketing and Entrepreneurship at the Telfer School of Management of the University of Ottawa. Her research interests focus on SMEs internationalization processes and growth and sustainable entrepreneurship. Her work has been presented at international conferences and published in peer reviewed journals. She is a member of the Editorial Board of the International Journal of Entrepreneurship and Small nault), Business and Revue Congolaise de Gestion. She has co-authored a book (with Georges He thique et liens (PUQ). Martine Spence is the corresponding Marketing international Synergie, e author and can be contacted at: spence@telfer.uottawa.ca Leila Hamzaoui Essoussi is Assistant Professor in Marketing at the University of Ottawas Telfer School of Management. Her current research interests include: consumer behavior and international marketing; brand management and country of origin effects on consumer behavior in industrialized countries and in emerging countries; and issues related to global brands and multinational production. Her work has been presented at international conferences and published in peer-reviewed journals.

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