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Branding – A competitive advantage for SMES

BOGDAN COMANITA*, DAN ST ANDREI
*Corresponding author
MarketChemica Inc., Ottawa ON, K1H 5A4, Ontario, Canada

Abstract

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 describes a practical branding process for SMEs and explains why branding renders Western manufacturers more competitive in the global market place.


 INTRODUCTION

“To be, or not to be: that is the question:
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles,
And by opposing end them?”
                               Shakespeare, Hamlet 3/1

For many owners and executives in the Western fine chemical industry the Shakespearean monologue rings increasingly true in the globalization context. The Western fine chemicals industry is under siege. A combination of adversary drivers such as cost structure, flat demand and enormous price pressure in their home markets are creating the perfect storm conditions. While the problems are obvious, the question remains: what “arms” should they use against this “sea of troubles”?
This article shows that the SMEs unique focus on delivering the tangible chemical product fails to acknowledge the sustainable competitive advantage that Western chemical enterprises have over low cost competition at the INTERFACE with the customer.