Journal of Small Business Management 2008 46(1), pp.

2745

Brand Management in Small to Medium-Sized Enterprises*

by Pierre Berthon, Michael T. Ewing, and Julie Napoli

Although an impressive body of literature has emerged focusing on the critical activities involved in brand management for larger organizations with wellestablished brands and substantial marketing budgets, no research has been undertaken to examine branding within small to medium-sized enterprises (SMEs). The present study therefore seeks to assess the nature and scope of brand management within an SME context. Findings show signicant differences between small and large organizations along 9 of the 10 brand management dimensions reported in Kellers brand report card. Moreover, different brand management practices are associated with business performance in SMEs. Implications of the study are highlighted, limitations noted, and directions for future research outlined.

Introduction
The marketing literature has long recognized the strategic importance of effective brand management (Berthon, Hulbert, and Pitt 1999a; Keller 1998; Low and Fullerton 1994; Park, Jaworski, and MacInnis 1986). Two research streams have emerged: the rst focuses on providing an overarching brand management framework to guide managerial decision-making (Keller 1998; Macrae 1996; Aaker 1991; Park, Jaworski, and

MacInnis 1986); whereas the second concentrates on various discrete aspects of the process (Aaker and Joachimsthaler 2000; Berthon, Hulbert, and Pitt 1999a; de Chernatony and Riley 1998). This literature suggests that organizations that direct their managerial actions and practices toward the development, acquisition, and leveraging of branded products and services will be better placed to see positive gains in performance (Noble, Sinha, and Kumar 2002; Hankinson 2001). However, two notable gaps in the

*All authors contributed equally. Names appear alphabetically. Pierre Berthon is Clifford F. Youse Chair of Marketing at Bentley College. Michael T. Ewing is professor and head of the Department of Marketing at Monash University. Julie Napoli is senior lecturer in marketing at the University of Melbourne. Address correspondence to: Julie Napoli, School of Marketing, Curtin University of Technology, GPO Box U1987, Perth, WA 6845. Tel: (618) 9266 7288. Fax: (618) 9266 3937. E-mail: napolij@cbs.curtin.edu.au.

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27

literature can be identied. First, there is a growing realization that successful rms often pursue multiple orientations simultaneously. This has been referred to as organizational ambidexterity (Berthon, Hulbert, and Pitt 1999b). More specically, the literature suggests that market orientation alone may not always elicit desirable results for every type of organization (Voss and Voss 2000; Christensen and Bower 1996; Frosch 1996; MacDonald 1995; Hamel and Prahalad 1994). Empirical studies of the extent to which organizations focus on alternate business philosophies, such as brand management, are limited. Second, the brand management literature has focused almost exclusively on large, multinational brands (for example, the Interbrand top 100). Small to medium-sized enterprises (SMEs) have been largely overlooked. This is surprising, given that SMEs constitute the vast (numerical) majority of organizations. Could it be because SMEs typically lack the capabilities, marketing power, and other resources of larger organizations (LOs) (Knight 2000; Cohn and Lindberg 1972)? Or do SMEs fail to realize that brands can in fact be established and maintained on relatively modest budgets (Aaker and Joachimsthaler 1999)? We contend that even with constrained budgets, SME marketers can creatively manage and leverage the full potential of their brands. The question then becomes which brand management principles, practices, or philosophies are most amenable to SMEs. To address these gaps, the present study seeks to identify the nature and scope of brand management within an SME context by comparing such practices to those of LOs. We commence by outlining the characteristics of SMEs and (some of the) marketing challenges they face. We then describe the present study, discuss the results, note the limitations, and highlight possible directions for future research in this area.

SME Marketing Management

SMEs account for the vast majority of organizations in most developed economies (Culkin and Smith 2000; Graham 1999; ABS 19971998). By way of example, of the 5.7 million businesses in the United States, only 14,000 employ more than 500 workers (Chaston, Badger, and Sadler-Smith 2001). Furthermore, SMEs contribute signicantly to a countrys gross domestic product, national employment, and export performance (Culkin and Smith 2000; Graham 1999; ABS, 19971998). It has long been recognized that the management style, operations, and functions of SMEs are different from LOs (Knight 2000; Cohn and Lindberg 1972). The SME ownermanager is often the key decision-maker and is responsible for managing and attending to many of the functions performed within the organization, such as banking, advertising, recruitment, or even stationery purchases. The use of specialists, such as advertising or recruitment agencies, is rare (Culkin and Smith 2000). Furthermore, SMEs often face resource constraints, both in terms of time and money, which result in many owner managers adopting what could be described as a survival mentality. This is perhaps exacerbated by the fact that strategic planning within SMEs is often limited (Huang, Soutar, and Brown 2002; Orser, Hogarth-Scott, and Riding 2000; Gilmore et al. 1999). As such, the management style within SMEs is one that is very unique and personal to each rm (Culkin and Smith 2000; Gilmore et al. 1999). Several scholars have been quick to extol the virtues of being small. They suggest that unlike LOs, SMEs tend to be more entrepreneurial, exible, and innovative, which makes them more adept at serving specialist or niche markets and remaining responsive to customer needs

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(Gilmore et al. 1999; Cohn and Lindberg 1972). SMEs have more of an opportunity to get close to customers and obtain valuable feedback, which can then be used to provide them with a customized, value-added service (Gilmore et al. 1999). In addition, research has shown that entrepreneurial SMEs have a greater ability to leverage marketing strategies for entering new product markets and coping with complex environments (Knight 2000). Furthermore, they tend to exhibit a higher order level of organizational learning and are more adept at acquiring and utilizing marketing information than their nonentrepreneurial counterparts (Chaston, Badger, and Sadler-Smith 2001). However, research has demonstrated that SMEs are more likely to experience problems in marketing, human resource management, and general business planning (Huang and Brown 1999). When combined with a lack of marketing expertise, difculties arise in selecting suitable promotional media, designing content, conducting market research, and interpreting marketing information (Raymond, Brisoux, and Azami 2001; Huang and Brown 1999). This is partly a result of limited nancial, technological and managerial resources, lack of management information systems and concentration of decision-making with, more often than not, the owner manager (Huang, Soutar, and Brown 2002; Raymond, Brisoux, and Azami 2001; Huang and Brown 1999). Furthermore, marketing tends to be more reactive, in terms of responding to customer needs, rather than proactive (Carson and Gilmore 2000). As the business develops, SME managers begin to experiment with different marketing techniques, acquiring experience and knowledge as time progresses and becoming more adept at accommodating those marketing practices that produce positive results for the organization (Carson and Gilmore 2000).

It seems, then, that some of the conventional principles prescribed in the marketing literature cannot always be fully appreciated or applied within an SME context (Carson and Gilmore 2000; Conant and White 1999; Gilmore et al. 1999). The marketing activities of SMEs tend to be pragmatic, practical and adapted to suit the unique needs, circumstances and abilities of an individual SME (Carson and Gilmore 2000). When constrained by resources, managers of SMEs tend to pursue those activities they believe will deliver the greatest benet to the organization and most effectively utilize the resources that are available (Carson and Gilmore 2000; Gilmore et al. 1999). Furthermore, most marketing principles are adapted to suit the unique situation of an SME, with many owner/ managers relying largely on their intuition, experience or judgment to make such decisions (Carson and Gilmore 2000).

Brand Management
Most marketing scholars are of the view that a clear distinction can be made between a companys identity/image and their reputation. Corporate image is dened in terms of the publics latest beliefs about a company (Balmer 1998) or the total impression an entity makes with such publics (Dowling 1994). Corporate reputation, on the other hand, refers to value judgments about an organizations qualities, trustworthiness and reliability built up over time (Balmer 1998; Fombrun and Van Riel 1997). This suggests that corporate reputation is more durable than image and cannot be developed or altered as quickly (Markwick and Fill 1997). Likewise, it requires nurturing over time (Bennett and Kottasz 2000). De Chernatony (1999) suggests that brand management can help bridge the gap between a brands image/identity and its reputation. Brand management is the process of creating, coordinating and

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monitoring interactions that occur between an organization and its stakeholders (Schultz and Barnes 1999), such that there is consistency between an organizations vision and stakeholders beliefs about a brand. It is important that organizations initially focus their efforts on creating an appropriate brand image that has a niche in the market place. Marketing mix elements should be used to operationalize the concept and communicate this to a target audience (Park, Jaworski, and MacInnis 1986). As the brand (and organization) grows, managerial emphasis should shift toward making a brand memorable, ensuring that positive brand associations can readily be recalled by consumers and reinforcing the link between a brand (image) and other products within a companys portfolio (Farquhar 1989; Park, Jaworski, and MacInnis 1986). Regardless of whether an organization is comprised of a singular or multiple brands, it is necessary that marketing efforts be directed toward establishing and maintaining a positive brand image in the minds of key stakeholders. Ultimately, this can contribute to the development of a favorable corporate reputation (de Chernatony 1999).

management in SMEs. Two studies allude to this issue through a comparison of the organizational structures and internal cultures of organizations that manage the worlds top 100 brands and those managing smaller, or outsider, brands (Hankinson and Hankinson 1999, 1998). Results indicate that some aspects of corporate culture impact the way in which brands are managed. A third study by Goldberg, Cohen, and Fiegenbaum (2003) suggests that few small businesses follow a reputation-building strategy and when a need for image management is recognized, it is often limited to implementing a public relations campaign. As is evident in the brand management literature, however, the process of managing a corporate and/or brand image certainly could entail a much broader set of activities. This suggests that an SMEs approach to brand management differs from the practices adopted by LOs, which raises the question of how brands are in fact, managed within SMEs. Hence, the following axiom and propositions are offered A1: SMEs and LOs will vary in the extent to which they implement key brand management practices (BMPs). P1: BMPs differentiate high versus lowperforming SMEs and LOs. P2: High- and low-performing SMEs will differ in the extent to which they implement key BMPs.

Managing Brands in SMEs

Small business managers generally accept that a good corporate reputation is important to receiving legitimization from different stakeholders (Goldberg, Cohen, and Fiegenbaum 2003). However, the difculty often arises in terms of translating this viewpoint into specic reputationbuilding activities. Managing the external image of a business is one way to build and enhance its reputation (Goldberg, Cohen, and Fiegenbaum 2003). Although some scholarly attention has been directed toward SME marketing (Carson and Gilmore 2000; Conant and White 1999; Gilmore et al. 1999), we could nd no prior research specically on brand

The Study
Kellers (2000) brand report card (BRC), which consolidates many of the varying perspectives on brand management, formed the basis of the questionnaire used in this study. From the BRC, 37 items, purported to measure organizational BMPs and philosophies, were generated. Face validity was assessed by two marketing academics, whose task was to identify any overlapping, ambiguous or irrelevant items. This resulted in the retention of all 37 items. We then con-

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ducted three focus groups with senior managers of both small and large organizations, to evaluate each statement for relevance and clarity. Minor adjustment to the wording of some statements was required, however, all 37 items were retained for analysis. Each item was then placed on a seven-point scale, with respondents asked to rate the extent to which their organization engaged in the activity described. A response of 1 reected to a very little extent, and a 7, to a very great extent. The questionnaire also included subjective measures of organizational performance. Subjective measures have been shown to be reliable in gauging an organizations performance (Mintzberg 1996; Pearce, Robbins, and Robinson 1987), and produce results consistent with objective measures of performance (Dess, Lumpkin, and Covin 1997; Dess and Robinson 1984). The use of subjective measures can also be an effective way by which to overcome difculties associated with obtaining, what could be described as, competitively sensitive information (Caruana, Ramaseshan, and Ewing 1998). Furthermore, measuring an organizations performance using objective nancial data can be difcult as the information may either be unavailable, unreliable or difcult to validate with external sources (Sapienza, Smith, and Gannon 1988).

Sample
Consistent with prior literature, we focused on organizations that marketed their products or services directly to nal consumers (B2C). Industries were selected based on the Standard Industry Classication code and specic organizations within each sector selected through a random sampling technique. The nal sample consisted of 1,000 organizations operating across six broad industries. Data were collected from the Chief Executive Ofcer via a mail survey. Ninety-two questionnaires were returned to us unopened, with 263 usable ques-

tionnaires retained for analysis. This represents a response rate of 29 percent. Armstrong and Overtons (1977) procedure was used to assess for nonresponse bias. This technique is based on the assumption that late respondents are similar to the theoretical nonrespondent. If no signicant differences are observed between early and late respondents, it can be assumed that nonrespondents are similar to survey participants and the effects of nonresponse bias minimal (Armstrong and Overton 1977). An independent samples t-test was used to compare responses along the scale items between early and late respondents, which were represented by the rst and fourth quartiles, respectively. Results indicated that there were no signicant differences between early and late respondents. As such, it can be assumed that the probability of nonresponse bias is minimal. As can be seen in Table 1, both service organizations and manufacturers are evenly represented. The majority of respondent organizations (78 percent) have been in operation for less than 50 years. Furthermore, 63 percent of the sample reported annual revenues of less than AU$30 million and employed fewer than 500 people (85 percent). In terms of the demographic characteristics of individual respondents, the position held within the organization was either that of Chief Executive Ofcer (66 percent), manager (33 percent) or other (1 percent). Eighty percent of respondents were male, 30 percent were younger than 40 years of age, 33 percent were between 41 and 50 years, 34 percent were between 51 and 60 years, with the remainder being older than 61 years.

Results
The analysis proceeded in a number of stages. First, the reliability of items comprising the 10 BMPs was assessed. Second, BMPs in SMEs and LOs were compared and a discriminant analysis

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Table 1 Organizational Characteristics

Valid Percent Industry Sector ManufacturerFMCG ManufacturerShopping/Specialty Goods Retailer Banking/Insurance Services Other Less than AU$5 million Between AU$5 and 10 million Between AU$10 and 30 million Between AU$30 and 100 million More than AU$100 million Less than 25 people Between 26 and 100 people More than 101500 people More than 501 people Less than 10 years Between 11 and 20 years Between 21 and 50 years More than 51 years 20 16 34 9 21 23 20 20 17 20 9 50 26 15 19 24 35 22

Annual Revenue

Number of Employees

Years of Operation

performed to see which BMPs differentiated high- and low-performing organizations. Finally, the BMPs in high- and low-performing SMEs were examined through an independent samples t-test. The rst stage of the analysis involved assessing the reliability of items comprising the 10 BMPs identied in Kellers (2000) BRC. To date, these have not been meaningfully operationalized. Generally, scales are regarded as reliable for commercial purposes if the alpha coefcient exceeds 0.7 (for example, Carman 1990). As can be seen in Table 2, the coefcient alpha for BMP 1 (Brand delivers benets customers truly desire) is marginally below this cutoff point, which raises questions regarding the reliability of the three items comprising this factor. Keeping this limitation in mind, BMP 1 (Brand delivers benets customers truly desire) was nonetheless, retained for

further analysis. With respect to BMP 3 (Pricing strategies are based on perceptions of value), item 8 was deleted as it substantially improved the coefcient alpha of this factor. It is evident then that the remaining 36 items are reasonably reliable measures of organizational BMPs. The second stage of analysis involved comparing the brand management activities undertaken by SMEs versus LOs. The sample was divided into two groupsthe rst consisted of those organizations that employed less than 200 people (that is, SMEs) and the second comprised LOs that employed more than 201 people. Such a classication is consistent with the Australian Bureau of Statistics denition of small, medium and large organizations (ABS, 1997 1998). The split yielded 186 small medium organizations and 77 LOs. Next,

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Table 2 Reliability Analysis of BMPs by Item and Dimension

Item Item Mean Corrected Item-Total Correlation Alpha if Item Deleted

BMP 1: Brand Delivers Benets Customers Truly Desire (Alpha = 0.6359) 1. Attempt to uncover unmet consumer needs 5.12 0.4254 0.5660 and wants 2. Focus on maximizing our customers product 5.54 0.5482 0.4271 and service experiences 3. Have a system in place for getting customers 4.80 0.3891 0.6317 comments to the people who can effect/ implement change BMP 2: Brand Stays Relevant (Alpha = 0.7676) 4. Invest adequate resources in product improvements that provide better value to our customers 5. Keep in touch with our customers tastes 6. Keep in touch with current market conditions 7. Base marketing decisions on knowledge of the current market conditions, customers tastes and new trends. BMP 3: Pricing Strategies Based on Perceptions 8. Optimize the price, cost and quality of the product/service offering to meet or exceed customers expectationsa 9. Have a system in place to monitor customers perceptions of brand value 10. Estimate how much value our customers believe the brand adds to our product 5.25 5.34 5.77 5.63 0.4954 0.6131 0.5938 0.6039 0.7624 0.6875 0.7078 0.6934

of Value (Alpha = 0.5866) 5.67 0.1797 0.7241 3.98 4.00 0.5569 0.5062 0.1950 0.2964

BMP 4: Brand Is Properly Positioned (Alpha = 0.7691) 11. Establish points-of-parity for our brands 4.50 that are necessary to simply compete in the product/service category (that is, identify the attributes/benets that a brand must possess in order to just compete in a category) 12. Establish points-of-parity for our brands 4.35 that negate the advantages our competitors attempt to achieve in the product/service category 13. Establish unique points-of-difference for 5.44 our brands that provide us with a competitive advantage in the product/service category (that is, identify the brand attributes/benets on which we are clearly superior)

0.6182

0.6750

0.7044

0.5690

0.5027

0.7915

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Table 2 Continued
Item Item Mean Corrected Item-Total Correlation Alpha if Item Deleted

BMP 5: Brand Is Consistent (Alpha = 0.7280) 14. Develop marketing programs that do not send conicting messages about our brands to our target audience 15. Adjust the brands marketing program to keep current and abreast with changes in consumer tastes

5.11 4.88

0.5725 0.5725

BMP 6: Brand Portfolio and Hierarchy Make Sense (Alpha = 0.7684) 16. Have a corporate brand that creates a 4.76 0.5065 seamless umbrella for all the brands in our portfolio 17. Ensure that the brands in our portfolio target 4.54 0.6210 specic, well-dened segments, which do not overlap with one another 18. Ensure that brands in our portfolio fully 4.82 0.6229 maximize market coverage 19. Create a brand hierarchy that is well thought 4.82 0.5416 out and well understood by our staff

0.7535 0.6857 0.6864 0.7276

BMP 7: Brand Uses Full Repertoire of Marketing Activities to Build Equity (Alpha = 0.8597) 20. Design the brand name, logo, symbol, 5.51 0.6161 0.8454 slogan, packaging, signage etc., for our products/services to maximize brand awareness and image 21. Implement integrated push and pull 4.37 0.5604 0.8611 marketing activities to target both distributors and customers 22. Ensure that brand managers are aware of all 4.94 0.7690 0.8057 of the marketing activities that involve their brands 23. Ensure that all people involved in managing 5.01 0.7267 0.8177 the marketing activities for a brand are aware of one another 24. Capitalize on the unique capabilities of each 4.68 0.7222 0.8186 communication tool (that is, advertising, PR, sales promotion, etc.) while ensuring that the meaning of the brand is consistently represented

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Table 2 Continued
Item Item Mean Corrected Item-Total Correlation Alpha if Item Deleted

BMP 8: Brand Managers Understand What the Brand Means to Consumers (Alpha = 0.8446) 25. Develop detailed knowledge of what 4.08 0.6767 0.8061 customers dislike about our brands 26. Develop detailed knowledge of what 4.71 0.6850 0.8053 customers like about our brands 27. Develop knowledge of the core associations 4.42 0.6037 0.8254 that people make with our brands, whether intentionally created by our company or not 3.85 0.6229 0.8228 28. Create detailed, research-driven portraits of target customers 0.6786 0.8054 29. Outline customer-driven boundaries for brand 3.71 extensions and guidelines for marketing programs and activities BMP 9: Brand Is Given Proper Support and It Is Sustained over the Long Run (Alpha = 0.7495) 4.19 0.6197 0.6168 30. Develop a good understanding of the successes and failures of our brands marketing program before it is changed 31. Provide our brands with sufcient research 4.14 0.6582 0.5656 and development support 4.18 0.4638 0.7880 32. Resist the temptation to cut back marketing support for the brand in reaction to a downturn in the market or a slump in sales BMP 10: Company Monitors Sources of Brand Equity (Alpha = 0.8939) 33. Create a brand charter that denes the 4.00 0.6786 0.8839 meaning and equity of the brand and how it should be treated 34. Conduct periodic brand audits to assess the 3.68 0.8022 0.8563 health of our brands 35. Conduct routine tracking studies to evaluate 4.01 0.7632 0.8653 current market performance of our brands 36. Regularly distribute brand equity reports, 3.11 0.7633 0.8655 which summarize all relevant research and information, to marketers to assist them in making decisions 37. Assign explicit responsibility to an individual 3.82 0.6983 0.8815 within the organization for monitoring and preserving brand equity
a

Removed from dimension and further analysis.

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Table 3 Comparison of BMPs between Small to Medium-Sized Enterprises and Large Organizations
Dimension Organization Type SME LO SME LO SME LO N Mean S.D. Signicance

BMP1

BMP2

Brand delivers benets customers truly desire Brand stays relevant

BMP3

BMP4

Pricing strategies based on perceptions of value Brand is properly positioned Brand is consistent

186 77 263 186 77 263 186 77 263 186 77 263 186 77 263 186 77 263 186 77 263 186 77 263 186 77 263 186 77 263

5.09 5.46 5.20 5.45 5.55 5.48 4.36 4.99 4.55 4.58 5.11 4.73 4.71 5.62 4.97 4.54 5.06 4.69 4.65 5.35 4.86 3.89 4.75 4.14 4.03 4.47 4.16 3.33 4.72 3.74

1.09 1.87 1.37 0.94 0.79 0.90 1.09 1.01 1.10 1.27 0.98 1.22 1.29 0.96 1.27 1.24 1.05 1.21 1.32 0.89 1.25 1.26 1.03 1.25 1.35 1.22 1.33 1.40 1.53 1.57

0.05

0.44

0.00

SME LO SME LO SME LO SME LO

0.00

BMP5

0.00

BMP6

BMP7

BMP8

BMP9

BMP10

Brand portfolio and hierarchy make sense Brand uses full repertoire of marketing activities to build equity Brand managers understand what the brand means to consumers Brand is given proper support and it is sustained over the long run Company monitors sources of brand equity

0.00

0.00

SME LO

0.00

SME LO

0.01

SME LO

0.00

10 BMP dimensions were formed by summating the items that comprised each factor. An independent samples t-test was then used to compare responses between the two groups along

each of the 10 BMP dimensions. As can be seen in Table 3, signicant differences exist between SMEs and LOs along 9 of the 10 BMP dimensions (BMP1 and 310), lending support to A1.

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A discriminant analysis was then used to identify which BMPs were associated with superior business performance among both small and larger organizations. The sample was split in terms of size and performance. The index for organization performance was the composite of three self-report measures of performance: return on investment, market share and ability to serve customers better, relative to rivals, (Delaney and Huselid 1996; Youndt et al. 1996; Conant, Mokwa, and Varadarajan 1990). Table 4 summarizes the main results of four-group discriminant analysis. First, from the univariate F-test, it can be observed that all 10 BMPs varied across the four groups (p < .01). Second, three discriminant functions are extracted, the rst two are signicant at the 0 percent level, and third is signicant at the 28 percent level as measured by Wilks Lambda statistic. The rst discriminant function explained 57.1 percent of the variance, the second function explained 38.0 percent of the variance, whereas the third function explained 4.9 percent of the variance. Figure 1 plots the centroids of the four groups against the rst two discriminant functions. As can be seen, high-performing LOs load positively on both discriminant functions, highperforming SMEs load positively on function 2 and negatively on function 1, low-performing LOs load positively on function 1 and negatively on function 2, while low-performing SMEs load negatively on both dimensions. Thus, the rst discriminant function primarily differentiates between SMEs and LOs, whereas the second discriminant function primarily differentiates between high- and low-performing organizations. From the structure matrix, it can be observed that BMPs 10 (Company monitors sources of brand equity), 5 (Brand is consistent) and 7 (Brand uses full repertoire of marketing activities to build equity) contribute primarily to the rst discriminant function, whereas BMPs 2 (Brand stays

relevant), 9 (Brand is given proper support and it is sustained over the long run), 8 (Brand managers understand what the brand means to consumers), 3 (Pricing strategies based on perceptions of value), 1 (Brand delivers benets customers truly desire), 6 (Brand portfolio and hierarchy make sense), and 4 (Brand is properly positioned) contribute primarily to the second discriminant function. Further validation for the discriminant functions is provided by a comparison of the discriminant functions accuracy in predicting group membership with the accuracy expected from the use of a proportional chance model (cf. Hair et al. 1998). The classication results reveal that the derived discriminant functions provide an overall accuracy of 64.6 percent against 28.9 percent that might be expected from proportional chance, a 35.7 percentage point improvement. The classication table shows that the classication for low-performing SMEs is the most accurate, with 74.5 percent of cases being correctly assigned. Highperforming SMEs are also well classied with 67.9 percent of cases being correctly assigned. High- and lowperforming LOs are slightly less well classied, with 42.9 and 54.3 percent correct classication, respectively. As such, P1 is supportedBMPs differentiate between high- and low-performing SMEs and LOs. The nal stage of analysis involved specically comparing the brand management activities undertaken by high versus low-performing SMEs. The sample of SMEs was divided into two groups, by way of a mean split on organization performance. The split yielded 84 low-performing SMEs and 78 highperforming SMEs. An independent samples t-test was then used to compare responses between the two groups along each of the 10 BMP dimensions. As can be seen from Table 5, signicant differences exist between high- and

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Table 4 Discriminant AnalysisBrand Management Practice (BMP) Difference among High- and Low-Performing Small to Medium-Sized Enterprises (SMEs) and Large Organizations (Los)
Eigenvaluesa Function Eigenvalue Percent of Variance 57.1 38.0 4.9 Wilks Lambda Test of Function(s) 1 through 3 2 through 3 3 Wilks Lambda 0.512 0.741 0.963 Chi-square 170.929 76.407 9.733 df 30 18 8 Sig. 0.000 0.000 0.284 Cumulative Percent 57.1 95.1 100.0 Canonical Correlation 0.557 0.480 0.194

1 2 3

0.449 0.299 0.039

Tests of Equality of Group Means and Structure Matrixb Tests of Equality of Group Means Univariate F-Test Wilkss Lambda BMP10 BMP5 BMP7 BMP2 BMP9 BMP8 BMP3 BMP1 BMP6 BMP4 0.803 0.804 0.844 0.878 0.880 0.792 0.876 0.951 0.846 0.893 F 21.151 21.008 16.003 12.009 11.788 22.706 12.244 4.404 15.753 10.377 Sig. 0.005 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Structure Matrix

Function 1 r 0.713c 0.607c 0.487c 0.090 0.241 0.392 0.357 0.203 0.377 0.344 b 0.887 0.688 0.810 -0.345 -0.105 0.337 0.054 0.049 -0.093 -0.045

Function 2 r 0.260 0.366 0.361 0.759c 0.688c 0.672c 0.555c 0.473c 0.444c 0.378c b -0.263 -0.075 0.067 0.555 0.351 0.558 0.343 0.275 0.447 0.295

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Table 4 Continued
Classication Resultsd Predicted Group Membership LowHighLowHighTotal performing performing performing performing SMEs SMEs LOs LOs Count Low-performing (%) SMEs High-performing SMEs Low-performing LOs High-performing LOs
a

73 (74.5) 20 (23.8) 6 (17.1) 10 (21.7)

19 (19.4) 57 (67.9) 6 (17.1) 11 (23.9)

2 (2.0) 0 (0.0) 15 (42.9) 0 (0.0)

4 (4.1) 7 (8.3) 8 (22.9) 25 (54.3)

98 (100.0) 84 (100.0) 35 (100.0) 46 (100.0)

First three canonical discriminant functions were used in the analysis. r = Pooled within-groups correlations between discriminating variables and standardized canonical discriminant functions. Variables ordered by absolute size of correlation within function. b = standardized canonical discriminant function coefcients. c Largest absolute correlation between each variable and any discriminant function. d 64.6 percent of original grouped cases correctly classied; 28.9 percent accuracy expected from proportional chance model.
b

low-performing SMEs along 7 of the 10 BMPs. That is, higher-performing SMEs place relatively more emphasis than lowperforming SMEs on brand benets (BMP1), relevancy (BMP2), consistency (BMP5), portfolio (BMP6), activities (BMP7), meaning (BMP8) and support (BMP9). These ndings provide some empirical evidence of the importance and value of brand management to SMEs and lend support to P2that is, highperforming SMEs implement BMPs to a greater extent than their less successful counterparts.

Discussion and Implications

Over the years, marketing scholars and practitioners have continued to

expand the domain of brand management and describe the salient practices, principles and philosophies that organizations should adopt. Not surprisingly, the focus has tended to be on the worlds most successful brands. Managers of large corporations, with signicant marketing budgets, therefore have an abundance of information (albeit not all empirical) to guide their branding efforts. However, the question of how smaller organizations, with modest resources, can effectively manage their brands has been hitherto completely overlooked by researchers. This study examined the nature and scope of brand management in SMEs. Specically, we sought to rst identify whether BMPs employed by SMEs varies to that of LOs

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Figure 1 Plot of Group Centroids for High- and Low-Performing Small to Medium-Sized Enterprises and Larger Organizations by Discriminant Functions
2 High Performing SMEs Function 2 High Performing LCs

Low Performing SMEs -2 -2 -1 0

Low Performing LCs 1 2

tially getting back to the branding basics: that is, understanding customers needs and brand perceptions, creating relevant and valued brands, supporting the brand consistently over time, effectively communicating the brands identity to internal and external stakeholders and creating a coherent brand architecture. Such activities are well noted in the literature as necessary for building and managing brand equity in the long term (Keller 1999, 1998; Shocker, Srivastava, and Ruekert 1994; Park, Jaworski, and MacInnis 1986). In particular, this suggests that there is the potential for SMEs to optimize their performance by mirroring and adapting the brand management activities of their larger counterparts to their specic needs and circumstances. Ultimately, this should go some way toward contributing to the ongoing performance of organizations.

Function 1

and second, whether such differences extend to high- and low-performing SMEs. The results indicate that there are certainly differences between SMEs and LOs in the extent to which they implement key BMPs. It is evident from the results that SMEs and LOs alike are both cognizant of the need to deliver relevant and desirable brands to customers. However, the BMPs of LOs are certainly geared more toward understanding and monitoring consumer needs and measuring the effectiveness of past actions. It is also evident from the results that the 10 BMP dimensions are effective in discriminating between high- and lowperforming small and large organizations. More importantly, it seems that high-performing SMEs implement key BMPs to a greater extent than lowperforming SMEs. Brand-focused SMEs are able to achieve a distinct performance advantage over rivals by essen-

Limitations and Directions for Future Research

This study paves the way for delineating the salient brand management activities necessary for enhancing the performance of both SMEs and LOs. Several limitations of the study are to be noted, however. First, the two subgroups used in this study (that is, SMEs and LOs) were unequal size, with the latter being somewhat smaller than desirable. Second, the study was based on Kellers (2000) BRC, which raises the question of whether the BRC in fact fully captures the nuances of branding in SMEs. Third, the reliability of one of the BMP dimensions is questionable. There are several salient avenues for future research in this area. First, the eld would benet tremendously from a grounded, interpretive study of SMEs and how they view their key intangible (marketing) asset. Such an approach might take the form of multiple case studies or depth interviews and could

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Table 5 Comparison of Brand Management Practices (BMPs) between High- and Low-Performing Small to Medium-Sized Enterprises
Dimension BMP1 Brand delivers benets customers truly desire Brand stays relevant Performance Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High N 84 78 162 84 78 162 84 78 162 84 78 162 84 78 162 84 78 162 84 78 162 84 78 162 84 78 162 84 78 162 Mean 4.93 5.32 5.13 5.28 5.75 5.52 3.60 3.90 3.75 4.48 4.85 4.66 4.42 5.09 4.76 4.27 4.97 4.62 4.37 5.08 4.73 3.66 4.28 3.97 3.75 4.53 4.14 3.20 3.53 3.37 1.34 1.52 0.15 1.17 1.30 0.00 S.D. 1.16 0.87 1.08 0.66 1.36 1.60 1.28 1.23 1.36 1.18 1.15 1.17 1.38 1.14 1.19 1.23 Sig. 0.02

BMP2

0.00

BMP3

Pricing strategies based on perceptions of value Brand is properly positioned Brand is consistent

0.20

BMP4

0.06

BMP5

0.00

BMP6

Brand portfolio and hierarchy make sense Brand uses full repertoire of marketing activities to build equity Brand managers understand what the brand means to consumers Brand is given proper support and it is sustained over the long run Company monitors sources of brand equity

0.00

BMP7

0.00

BMP8

0.00

BMP9

BMP10

focus in detail on issues surrounding what, how, and why. The same (or a subsequent) study should also address issue surrounding the denition of a brand to a typical SME, and if and how corporate reputation, corporate brand, and product-level brand differ.

A second and highly related line of inquiry could focus on SME stakeholders perceptions of SME brands. One alternative here would be to adapt and administer Yoo and Donthus (2001) consumer-based brand equity scale to various stakeholder groups. However,

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other more generative approaches could work just as well. A third direction might entail the development of a psychometrically robust measure of brand management within SMEs (in other words, a more deductive approach than that followed in this paper). This could assist practitioners in benchmarking their activities against rival organizations and understanding the effectiveness of their branding activities. From an academic perspective, such a scale would provide a mechanism by which to explore relationships and associations with other constructs. Fourth, research could be directly toward identifying and understanding the key antecedents to and consequences of an SMEs BMPs. For instance, what are the key drivers of the BMPs pursued by an organization? What impact does organizational culture have on an organizations BMPs or vice versa? What are the outcomes of adopting effective BMPs and does it lead to measurable improvements in organizational performance, customer satisfaction or commitment? Alternatively, which BMPs lead to increased brand equity? These are some of the questions that future researchers could address. Finally, it may be useful to identify how the BMPs of SMEs differ across cultures and whether this leads to desirable performance outcomes. In sum, this is an underresearched area. The present study provides an empirically based springboard for future research. Hopefully, others will take up the challenge.

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