Branding in small and medium enterprises in KwaZulu-Natal as a means of ensuring business survival

Abstract

Small to medium enterprises (SMEs) are known to be important for the development of economies in developing countries. This is so because SMEs create jobs therefore reducing unemployment and alleviating poverty. The South African government has done a lot to help SMEs grow and become established businesses. They offer, among other things, financial assistance and expert advice in the field of marketing, technology and venturing into foreign markets (SEDA, 2014).

However, it seems that it is difficult for SMEs to establish themselves in the different sectors such as the Manufacturing, Retail, Service, Financial and Agricultural sectors. They complain among other things, of financial constraints and the global economic crisis (NCR report 2011). Olawale and Garwe (2010) go on to say that, SMEs in South Africa have a high failure rate compared to other countries and only about 7% of new SMEs become fully established firms. The reason for this might be the inability of those firms to utilise marketing and in particular branding to market their firms. Branding is the process of stamping a product, which the marketer offers with some identifying name, mark or a combination of both (Sawant 2012). Thus branding creates individuality in the product or service offered facilitating it to be distinguished and recognised in the market from competitors. For this reason different aspects of branding especially brand dimensions will be explored to identify shortcoming of SMEs branding practices to assist them survive the dynamic business environment.

The study involved SMEs in KwaZulu Natal in the manufacturing, retail, agriculture and financial services sectors. To address the research problem a combination of quantitative and qualitative approaches were used.

Participants, more specifically those from the very small SME category, were selected and questionnaires were distributed to them. Those participants who responded to the questionnaire, in depth interviews were held with them. In both approaches a convenient samplings technique were used to select participants. The data will be analysed by using normal descriptive statistics and content analysis.

The problem under investigation in this study is that SMEs in KZN may lack the ability to harness branding in support of their business survival. SMEs are limited financially when it comes to creating a brand. Randall (2000) says that companies face a number of challenges when it comes to creating a brand such as mature markets, brand proliferation, consumer revolt, management failure, fragmentation of media and retailer power.

The contribution of the study is to help SMEs in KZN to understand branding and especially brand dimensions to assist them survive the dynamic business environment. The study found that SME owners have an understanding of brand creation and management. However, they agreed that more needs to be done when it comes to creating strong brands. SMEs express the brand dimension of sincerity and competence when branding their products. They face financial constraints, lack of creativity and competition as some of the challenges when it comes to creating brands.