Branding and advertising veteran Prahlad Kakkar says promoters of small and medium enterprises aren't doing enough for branding their products or services. On the sidelines of the recently concluded India SME Forum in Mumbai, he spoke to Ashish K Tiwari on why branding is important for SMEs and how can they go about it. Edited excerpts...
You spoke strongly on the need for SMEs to start focusing on branding.
While a lot still needs to be done in this area, think some players especially the rice millers have started taking branding seriously and that's why your see so many rice brands in the market. The last couple of years have seen some momentum starting to build up in this area and I think the pace should increase. The SME players need to understand that as a commodity they will maximum make 2-3% in margins but as a brand it can go as high as 15-16%. Branding makes a huge difference altogether to the business.
What is stopping the SMEs to look at branding, given there is such huge potential?
The thing is they are scared. No one has really taught them the nitty-gritty of branding and the perception in their minds is it's an expensive proposition. They feel it's going to cost them an arm and a leg because of organised advertising through print and electronic media. They don't realise that digital/social media offers so many options and that too at a fraction of the cost. You don't need a Rs 10 crore budget, it can be done in just about Rs 1 lakh annually. In fact, it costs less than Rs 5,000 a month on digital platforms. The only setback in using digital is that it's a young medium and hence the audience is also largely young. But I think it will come off age in another three to four years and SMEs need to start investing in this medium to reap the benefits. Today individual brands are getting created through the use of social media and BJP's prime ministerial candidate Narendra Modi is a great example. If individuals can become brands so can products and services from Indian SMEs.
Are marketing / branding agencies also focusing on catering to Indian SMEs?
I think every other sector is changing focus to meet the current and future needs and branding agencies are no exception. It's a different kind of a market and agencies will have to strategise for SMEs and I think digital and social media offers a huge potential.
How has been your experience in this space? Any SMEs you have worked with in the past have become big brands now?
Of course, Vadilal was one such company when we were approached to make an ad film for them. There were so many international players in the market then and we had to work very hard to create a brand out of Vadilal. And it went on to become a successful brand that promises great quality ice-cream.