Role of Branding for MSME
India is emerging as one of the highest growing economies in the world. The Indian economy thrives through the process of creation of enterprises. The MSME sector is an important pillar of the Indian Economy as it contributes quality to growth of Indian economy. The MSMEs are widening their domain across sectors of the economy, producing diverse range of products & services to meet demand of domestic as well as global markets. The MSME sector is contributing 8% in GDP, 45% in manufacturing sector & 40% in exports from the country. The MSME sector also accounts for 96% of industrial units and has great potential to spread industrial growth across the country through inclusive growth. MSME in India has potential to increase the share of contribution to GDP from present 8% to 15% by 2020.
Besides above, MSME can save as a building block for the industrial sector & other opportunity area by providing quality suppliers, vendors, as well as customers. However, the present growth is not uniform among all sectors and a huge disparity exists in the growth of enterprise across services and manufacturing sector. Many significant measures have to be taken in order to achieve holistic & balanced growth pattern. One of the area where MSMEs are lacking is in brand building. There is considerable amount of work done by small to medium sized enterprises in marketing but little is reflected on the subject of branding of MSME's.
Branding is a crucial activity for the successful establishment of new company, customer acquisition, retention & to build a favorable reputation. Keller (1998)[Keller, K L (1998), Strategic Brand Management, Presents Hall, Lepper Saddle River, NJ ] propose that brand strategy is not only for large organizations, rather he also suggested small business branding. Although the approach & methodology of branding to be done by MSME's is going to be very different for large business houses.
To make sure that the efforts put in by MSME give fruitful result, we need to understand the following:-
1. Role of Branding for MSME’s
The role of branding for MSMEs comprises of support extended by branded product/services in creating awareness, creating quality ,increasing the scope of product, support extended in expanding the market by increasing the market reach domestically. Training experts & sustaining the current market and also supporting MSMEs in MSME growth in terms of customs acquisition, customer retention creating loyal customers and to build favourable reputation etc.
2. Key Branding Strategies
The effectiveness of branding done for MSME’s would depend on the key branding strategies followed by the organization. The various methods of branding include, branding by getting IPR like patenting, trademark, brand logo, branding by conducting training/workshop, by advertisements by designing website, tying up with associates etc.
One also needs to ponder up on the mode of branding which should be applied. Since there are Omni channel present today for branding like social media, word of mouth, networking, etc therefore model of branding also becomes quite significant decision to be taken by MSME’s
3. Source of Funding
Decision regarding the branding strategy and mode of branding would depend on the sources of funds provided to MSME’s. Various funding sources for MSME’s can be govt, through association/clusters, Corporates (by CSR initiatives), autonomous institutions etc.
4. Acceptability of Branding
Some of the enablers for branding of MSME’s are Government initiation, inform of schemes, involvement of NGO’s Limited Liability Partnership,(LLP)
Though the above points need to be taken into consideration and hence decision regarding branding of MSME's would be taken, however we cannot negate some of the hurdles faced MSME product/services in the process of branding their products/services. To name a few, some of the hurdles are lack of understanding of real meaning of branding, lack of funds & time, comparing MSME branding strategy with branding strategy of MNC's and in many cases it is consumer ignorance