Mistaken Idea and Measure on Brand Foundation
in Small and Medium-sized Enterprises
Li Zhengliang
Xu Liying
Advertising Department, College of Journalism & Communication, Hunan University, P.R. China, 410082
Abstract With the market competition of same quality product being increasingly fierce, the 21st
century is the age of competing for brand. The brand foundation is an inevitable trend. Some of
mistaken ideas of understanding and application, when small and medium-sized enterprises design
brands, are analyzed. Some measures of getting rid of these wrong ideas are put forward for establishing
the suitable brands for the small and medium-sized enterprises’ characteristics.
Keywords Small and medium-sized enterprises; Brand foundation; Wrong idea; Measure
1 Introduction
In the brand win era, It needn't verbosity of the importance of the brand to an enterprise now. our
country implemented the famous brand strategy project in the 1990s of last century, many famous
brands appeared in the small and medium-sized enterprises of more than 90% of enterprise. However,
the overwhelming majority is just a transient famous brand, such as “ IDALL” “QinCHi”. Cause the
state, except that small and medium-sized enterprises start late, foundation thin, have inadequate
experience, I thought the main reason was that small and medium-sized enterprises had a mistaken idea
in the brand was molded.
2 The mistaken idea scanning on the brand foundation
2.1 The mistaken idea of realize
2.1.1 Despise one's own ability Lack the brand foundation
Small and medium-sized enterprises are small scale, their ability to offer products and service is
limited, make the big famous brand of the whole country, need to invest a large number of manpower
and material resources, this is what general small and medium-sized enterprises can't bear. Because of
obstacles such as the fund, technology, culture, speed, etc., it is very difficult for small and
medium-sized enterprises to come to coordinate the contradiction of survival and development from the
strategic angle, cause a lot of small and medium-sized enterprises to be out of patience to do brands at
all, They think the task of top priority of small and medium-sized enterprises is to solve problems of
surviving, accumulating the capital, it is a thing for the future to do the brand, thus willing to do OEM,
avoid the question of brands. Under the long-term planned economy condition, enterprises of our
country lack the consciousness of brands, lack the competition between enterprises, have not regarded
the brand as the valuable intangible assets which influences enterprise's long-term competitiveness, the
backwardness on this kind of idea and market awareness is more terrible than the products.
2.1.2 Idea falsehood of the brand Break away from the essence of the brand
To be objective, a lot of small and medium-sized enterprises have already paid attention to the
brand more and more now, but they can seldom really understand its precise intension. In fact, the brand
is not the products, and not merely that some names, noun, symbol, pattern or they make up briefly too,
it includes the market meaning of six aspects of attribute, interests, value, individual character, user,
culture. It represents the commitments of enterprise on goods that bought toward buyer and service and
key value; At the same time, it is still consumer's loyalty to brand quality that this brand reflects, and it
is demand of premium culture, and it is consumer’s trust and definite to enterprises. A lot of small and
medium-sized enterprises cannot correct to understand meaning of brand so that brand image make
unpredictable changes on brand operation, the individual character is not distinct, lacks key value , lacks
integrated planning, thus damage the brand image, have weakened brand assets.
The idea of the brand is determining the cultural grade and rank of the brand image, it has reflected
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the pursuit and mental realm of enterprises. A lot of enterprises haven’t established one correct brand
idea in china, It’s understanding to definition, spread and competition way, etc. respect of brand remain
in a tender stage also, it is advertising fights and price wars that it is especially represented.
2.1.3 Value production manufacture Ignore brand foundation
Small and medium-sized enterprises often think that it does the products to make brands in brand
operation. In fact, the brand not merely means that the products (the attribute, interests) is outstanding, it
is the real focal point that the psychology is consumed (value, individual character, culture). Small and
medium-sized enterprises should understand: It is totally the competitions of two different aspects
between the product competition and the brand competition. At present, the social consumption
demonstrates a kind of “double element structure” system --The material function consumed and the
meaning consumed of the goods. To it enjoys to be secondly thing, brand bring consumer’s meaning
consumed is more important [1]. Brand let products distillation, the more thoroughly the brand do, the
more the brand accumulates. The products are quite different. There are products, popular, do not mean
that there are surging brands. In addition, small and medium-sized enterprises ignore brands, it bring
much danger to enterprises, such as the quality of the products drops, brand image is damaged;
Influence the extension of the products; Despise brands to protect; Influence working morale, etc..
2.1.4 Exaggerate the function of brand Empty the carrier of brand
No doubt, the brand has enormous function, According to the analysis report of the famous
management and consultation corporation-McKinney, in Fortune Magazine big company rank of the top
250, there is nearly 50% market value, which comes from the intangible assets, the brand equity is the
important component in the enterprise intangible assets. Small and medium-sized enterprises have know
deviation to function of the brand, exaggerate the role of brands in behavior of buying limitlessly,
ignoring the pragmatic work, there is no good product quality, thus make the brand carrier melt emptily.
The function of brand in the buying behavior course is divided into several levels such as: Popularity,
interest degree, cognition degree / difference degree, prejudice degree, buying desire degree, loyalty
degree, etc.. Popularity of enterprise or products to consumer is distant very much to behavior or loyalty.
Small and medium-sized enterprises do not know how to adjust according to customer's behavior while
developing their own brand, and they do not find out the existing and potential customer attitude and
understanding toward brand, their brand tactics only stay in the degree of enhancing the reputation and
cognition.
2.2 The mistaken idea of operation
2.2.1 The brand spreads singly
Mould brands can not leaving the advertisement spreads, but rely on being too high to the
advertisement, hasn’t all articles brand marketing activities of key value commander's enterprises, it is a
typical operation mistaken idea, even regard the advertisement as the only means to mould brand. Why
are many far-famed famous brands that the sales volume will glide if the advertisement stopping at once?
The reason lies in this.
A lot of small and medium-sized enterprises interpret brand as name sounded to call, it and quality,
vivid, additional value of product a series of being tangible or intangible assets cut apart to come, in
addition the obvious impetus that there are the advertisements in propagating a name or the slogan,
causing a lot of enterprises to depend on the advertisement unduly, causing the cost is too high to the
brand moulds, come up to a large number brand profit very low or condition lost to fall into explain this.
In fact, a successful brand not merely reflects in having a loud name, still reflect it on the superiority of
the properties, packaging and distribution channel of product, it could reflect the key value of the brand
and only through the superiority. Advertisement is only one link in brand propagate, it can't give brand
prosperous forever vitality, it can't set up for a long time consumer’s loyalty. In 1997, Chongqing
OLIVE Company put out have one's hair wash hair care new product " moisten the hair in a century ",
regard Zhou Runfa as image spokesperson as the advertisement, this advertising film receives
unanimous favorable. " moisten the hair in a century " becomes a black horse which assaults P&G, but
the packaging of this brand is extremely coarse , and marketing means and distribution channel have not
received enough attention too, result to needn't have P&G attack, consumers give up " moisten the hair
in a century " automatically. It is obvious, it is not enough that brands are built and only depended on
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advertisement, the intension of understanding the brand deeply is the primary importance.
2.2.2 The brand is operated blindly
The brand is not operated, scale merit is difficult to realize. But operated blindly, the brand will be
stepped. The brand operation has brand expanding and the brand extending, domestic many famous
small and medium-sized enterprises brands operated blindly when there is influence slightly in the brand,
fall into “ the brand is operated ” trap.
The brand expanding is the expansion in low cost to utilize the famous brand, it expands
enterprise's production scale rapidly, remedies the variety defect. Its result has expanded the occupation
rate of market of the products, has raised the visibility of the brand, therefore the popularity of the brand
was higher. But the brand is expanded blindly, it will produce the opposite result. Such as " IDALL " in
the foundation of the brand is still simple, it expanded the brand to such eight major fields as the color
TV, etc., this cause brands to collapse. The brand expanding isn't only sending trade mark right to use, it
is the more important that pouring into the new management mode and management theory.
The brand extending is to use the same brand in new product while famous brand was created.
This kind advantage uses famous brand in consumers' psychological, can improve the success rate that
the new products introduce to the market. The brand extending not only can be extended in the same
product, but also can be extended in different trades. But the brand extending can't deviate from the
products, the brand extending will do things within the limits of one's own resources, it is especially
important that it has measure in operation and management. An important principle when the brand was
extended cannot jump greatly, so that lost the position of the original products on market. Otherwise, it
lost the meaning of the brand extending. Actually “ RPOLLO ” was a famous brand in the health, after
extending to the real estate field blindly, the characteristic of the brand has not exist when it was
extended to estate field blindly.
2.2.3 Confusion in brand expands.
There is priority order in the popularization behavior of enterprise's branding, which must first be
position, then packaged. And a lot of small and medium-sized enterprises often lack the correct
theoretical direction, the development goal is not clear, the idea and content of products are also not
clear. Under such a situation, packaging without repositioning and cross--check of idea, makes
enterprise resource to enormously waste [2].
In the competition of the brand, the Chinese brand is eager for quick success, in the face of the
market competition pressure and internal and external environment, rash some use have but short-term
result will injure tactics of brand image, among them the most typical one is the price war. Now, a lot of
enterprises in China regard price as the even only weapon mainly of the competition, have neglect
technological development and technological transformation, has neglected the management innovation.
Indicate to the investigations of 500 enterprise operators according to Shanghai, 83% Chinese
enterprises improve the first choice in the competitiveness to unexpectedly make a reduction, it is that
100% raises the quality that the foreign brand improves the first choice in the competitiveness [3]. Some
enterprises, in order to deal with the price war aggravated day by day, on terms that it is limited that
lower costs in the space, adopt the method of the scamp work, make the brand image and consumer's
loyalty damaged enormously.
3 The measures of the brand foundation for getting rid of mistaken ideas
The above-mentioned two major mistaken ideas that we analyze in the brand of small and
medium-sized enterprises is molded, I thought that small and medium-sized enterprises should
strengthen the understanding that the brand is molded, establish the scientific brand view, adopt the
feasible action, go out of the mistaken idea on the brand foundation of small and medium-sized
enterprises.
3.1 Strengthen the work of foundation of the brand foundation
The brand is the result that the market economy develops in certain stage. The brand’s foundation
is a system engineering complicated. A lot of managers of small and medium-sized enterprises always
thought that the brand would be molded after enterprises had considerable scale. In fact, the brand
should be molded when enterprises are original, as the saying goes that “lofty tower is built on the
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base ”, we want to mold strong brand of the individual character distinctly and associating abundant ,
high good reputation and loyalty, must strengthen the foundation work of the brand molds . Such as the
foundation work of the brand foundation --The recognition system of corporation identity (CIS), it is the
early channel into, the lower to cost, the more favorable to enterprises.
3.2 Strengthen the science of the decision of brands
In our country, small and medium-sized enterprises pay not enough attention in the scientific of
decision. It is the deadly and great weakness of the brand operation already. When an enterprise is in
period of establishment, the scope of the enterprise is not big, the information source and range are
relatively narrow, the range of operation brand, management and the brand capacity are not big.
Operators can carry on the correct brand and make policy according to experience. However, with the
development of enterprise , if they continue to use the decision way of " patting the forehead "and "
wade across the stream by feeling the way ", it will make brand development fall into and stay cool and
decline , and cause enterprises to step into the predicament finally [4]. So we must have science decision
when we participate in brand operation monolithically.
3.3 Improve the accuracy that the brand makes a reservation
With tend of consumer demand becomes individualized more and more, the brand must have
distinct distinctions, they must be different in qualities with the competition brand, and must have
unique difference advantages. Accurate position of the brand has already become prerequisite and
foundation of normal brands operation. The brand position means the course to unify the advantage
characteristic of a brand oneself and the psychological need of targeted consumers, pass and establish
the difference competition advantage and position out of the common in targeted consumer's mind, at
the same time, thus lock targeted consumers. A lot of small and medium- sized enterprises lack system,
science and oneness, can only let consumers produce the conflicted mood finally, cause enormous losses
in brand development. So brand position request relatively stable, unify, and must accord to the value
and taste of consumers in targeted market in brand.
3.4 Fully utilize the comparative advantage
Compared with big enterprise, small and medium-sized enterprises lack the advantage of people,
wealth, and thing. Small and medium-sized enterprises have small scale, flexible mechanism, fast
market-react, strong regional, characteristic products and cheap work-force, this is its comparative
advantage. Small and medium-sized enterprises can fully utilize these advantages to manage
characteristically in specialization and region, create their own brand. For example, Fengyuan former
(Anhui) group was only one state-run factory originally, they put technological innovation to the
primacy, and involve to the study on the produce with maize medicine which spend high-quality craft of
citric acid to ferment. such they not only make cost reduce to 2000yuan each ton, their products even
squeeze into market of France , U.S.A. etc. developed country .its output of citric acid has already
occupied the third in world now, and they have their own brands, even succeed in become a stock
company [5].
3.5 Paying more attention to integrated communication while the brand is spread
According to the definitions of 4As and Professor Schultz, Integrated Marketing Communication
(IMC), so-called, is that: “This is a concept of marketing communication planning that recognizes the
added value of a comprehensive plan that evaluates the strategic role of a number of communication
disciplines (for example, general advertising, direct response, sales promotion, and public relations) and
combines these disciplines to provide clarity, consistency and maximum communication impact.” Its
key is to make the influence power of communication maximized by combining various kinds of forms
of communication. At present, in the fierce market competition, single star advertisement too difficult to
get the best result of communication. Introduction of Integrated Marketing Communication and
combination of various kinds of communications such as public relations, incident marketing,
advertisement, news, etc. can avoid the risk of single advertisement [6].
Brand building is a long-term course. Enterprises must renew the idea, and avoid the short time
action on media propagating and marketing. The brand can’t be set up in short term. Because , the scale
of the small and medium-sized enterprise is smaller, its goal should be smaller in starting stage, goal
market region should be also smaller, goal trade field should be narrower, in order to set up some good
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local brands. Confirming the brand name, such respects as the registered trademark, etc., pay attention to
the need of enterprise's brand development. In case of putting into and lacking , only insist for a long
time that is paying attention to keeping brands and corporate image constantly, just favorable to the
constant promotion of the value of brands , realize the leap from some brand to the famous brand finally.
3.6 Pay attention to the innovation of the brand
Nowadays innovation is the strong weapon for brands to market contest and participate in the
competition and to spread the living space. The enterprise and his brand operation are destined to fail
any brand, no matter how long the history is, no matter how illustrious it achieved, no matter how loud
its reputation is, without innovation, without giving the products or the service with the new function, or
without giving the new intension of the brand.
On the other hand, the demand of consumers is to abandon the old and adore the new forever.
Enterprises can only innovate constantly, from all respects such as quality, function, appearance, style,
pack, serving etc. to substantiate intension of brand constantly, then enterprises could develop constantly,
and the brand could be prosperous forever. Some brands have earned a certain reputation in one period,
but they lack innovation, persistence and constant.
Some enterprises’ products sell well very much in brilliant period. But they have not turned their
own market advantage into the brand equity, or have not kept the lifelike image of the brand through
putting out the new products in time, or make voluntarily withdraw new products to the market. Thus
cause the product and brand out of the market and cause the failure in operation of enterprise. These are
the representation of pay little attention to brand management or not rigorous and unripe. As to small
and medium-sized enterprises, they should strengthen brand management, through setting up,
maintaining, consolidating the whole course of the brand, realize the distant view of brands, establish
the competition advantage of the brand finally, and then find one's own uniqueness in the subdivided
market, set up one's own brand advantage, obtain profits, and realize the showing one's talent in the
market.
4 Conclusions
In such a “brand consuming” era, small and medium-sized enterprises could cultivate the own
brand, and mould into a known brand, it will determine the competitiveness of an enterprise in the
market. Strengthen brand planning management become the request of times, and become enterprise
modernization and important sign of ripeness already. Because small and medium-sized enterprises’ own
restriction, how to run and manage one's own brand, have already become the important factor of
influencing development of small and medium-sized enterprises. We should comb the mistaken idea of
the brand foundation of small and medium-sized enterprises, promote the brand images of enterprises
effectively, make small and medium-sized enterprises create one's own brand even famous brand under
the limited resource condition, and realize the leap of enterprise's development finally.
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