A theory of brand-led SME new

venture development
Bill Merrilees
Department of Marketing, Griffith Business School,
Griffith University, Gold Coast, Australia
Abstract
Purpose – The purpose of this paper is to understand how branding can facilitate small business
development of new ventures.
Design/methodology/approach – A conceptual approach was used for understanding branding
in new ventures. A model with eight propositions has been developed and then validated using ten
existing case studies of exceptional entrepreneurs.
Findings – The key mechanisms proposed for branding to assist small business create new ventures
include opportunity recognition, innovation, business model development, capital acquisition,
supplier
acquisition, customer acquisition, and success harvesting.
Originality/value – The paper helps redress a relatively lack of research into small business
branding. Previous research has mainly focused on small business brand management of existing
ventures. The findings are readily translatable to small businesses launching new ventures. The
paper
extends the existing small business branding literature into a new domain, having a strong
entrepreneurial character.
Keywords Small enterprises, Brands, Business formation, Business development, Entrepreneurialism
Paper type Research paper
Introduction
Small business branding is often seen as an oxymoron. Branding is usually
considered
the province of big business. Big businesses, such as banks, fashion labels and car
companies, are household words with strong recognition by the majority of the
population. Does anyone not know that Ford is a car company? In contrast, many
small
businesses themselves, such as the local butcher, may well not think they are a
brand.
If they do, they are not likely to incorporate this knowledge into their daily
operations.
Many members of the public would associate a brand with large advertising
expenditures, again reinforcing the mindset that big businesses can be brands, but
not
little businesses. Just as small business branding might be considered an oxymoron,
so
might the term entrepreneurial branding.
Previous research reinforces these thought patterns. Much of branding research is
about major consumer products, such as coffee or some other supermarket item,
almost
certainly made by a large firm, or about the large firms themselves, such as Nike or
Coca Cola. There is very little research about small business branding. The very
limited research on small business branding is mainly concerned with brand
management of an existing venture. There seems to be little academic research on
the
role of branding in small business new ventures. The current paper addresses the last
challenge, using a qualitative research design.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1352-2752.htm
Theory of
brand-led SME
403
Qualitative Market Research: An
International Journal
Vol. 10 No. 4, 2007
pp. 403-415
q Emerald Group Publishing Limited
1352-2752
DOI 10.1108/13522750710819739
Previous small business branding research
Not only is the previous research limited, but it is also very recent, and so it
probably has not had time to greatly influence the marketing discipline. There is
a considerable amount of small- to medium-sized enterprises (SME) it marketing
literature (Gilmore et al., 1999), but little of it reflects much on branding.
One of the earliest explicit studies on SME branding is Abimbola (2001) who
explores the role of branding as a competitive strategy. Other studies (Cravens,
2000)
have also explored this theme, but not in an SME context. Abimbola argues that new
brands are like new products, and brand extensions in particular need to draw on
inventiveness, innovation and creative flair. Examples were given in which the
creative
flair of the owner, such as Virgin or Easy Jet, help deliver creative applications of
branding programs. Although, similar principles apply to SME compared to
large-scale branding, Abimbola (2001) suggests SMEs, having fewer resources,
require
greater focus and effectiveness. For example, an SME should focus on the corporate
brand or just one or two brands and run very tightly specified and targeted
campaigns.
Making use of the entrepreneur in public relations was also advocated.
An interesting case study (Doyle, 2003) of how one firm used an entrepreneurial
approach to building its brand is the study of the Dyson appliance company.
Particular
attention was paid as to how Dyson built a brand personality as part of its marketing.
Wong and Merrilees (2005) have provided a useful typology of branding among
small businesses based on case research of eight small- to medium sized firms.
Three alternative types of small businesses were identified. At the bottom of their
ladder was the minimalist branding approach, where firms have low-key marketing
across the board. In the middle and potentially representing the norm for small
business was an embryonic branding archetype. These firms are stronger than the
first
archetype with respect to marketing, but their understanding of branding is not well
developed. Branding is seen as very informal, possibly optional, and involves a
narrow
range of promotional tools. Wong and Merrilees (2005) found that SMEs at the top of
the ladder, and possibly the least common, were the integrated branding archetype.
Both marketing and branding were stronger; informal and formal approaches were
taken to branding; branding was integral to the business; branding was not simply an
option; and a wider range of promotional tools were used. Among the integrated
branding small businesses there was a clearer understanding of customer needs: one
firm included the letter A in their name to appear near the top of any industry list and
another firm had posted a laminated description of its brand on the back-office door
to
remind employees of it.
Krake (2005) also offers another substantive perspective on SME branding.
He concurs with the lack of previous literature on the subject compared to SME
marketing research and uses a qualitative case study of ten medium-sized firms.
There seemed to be a diverse set of approaches to branding, little at a conscious
level.
The cases themselves did not suggest a common tack or brand success route. Krake
(2005), drawing in part from the cases and especially the general branding literature,
developed a “funnel” model of brand management in SMEs. The special SME features
included:
. a major role of the entrepreneur/owner in terms of their passion of the brand and

this may extend to their personification of the brand;

QMRIJ
10,4
404
. the entrepreneur will have an especially controlling influence on the company
structure; and
. there may be more creativity used in marketing promotions.

In other words, there is a more personal character to the brand. Further, providing
the
owner appreciates the importance of branding, there may be more scope to drive
the brand throughout the firm.
One of the most recent papers on small business branding examines the role of
corporate branding for start-ups (Rode and Vallaster, 2005). This study is also closest
to
the domain of the current paper. Start-up companies refer to both pre-launch and
early
start-up activity, though the nine cases in Rode and Vallaster (2005) seem to focus
on the
first couple of years of operation.Theirwork usefully summarises the connection
between
corporate identity and corporate image and they indicate its relevance to new
ventures.
Their empirical evidence of nine cases paints a somewhat dismal picture of
howwellsmall
businesses have used corporate identity ideas.Most of the interviewed entrepreneurs
had
only a vague idea of their business concept, core values and market positioning and
the
business concept was rarely documented (Inskip, 2004). Submissions to banks were
somewhat contrived in order to secure financing. Basic values and philosophies
seemed
fluid, aswere brand names, and consistency not always achieved. Selection and
training of
staff seemed haphazard. Corporate communication and sharing of information
proved
problematic. In sum, the development of corporate identity and culture seemed
unstructured, motivating Rode and Vallaster (2005) to develop three propositions
that
potentially could start to turn around this observed low level of performance.
Interestingly, four of the above five major studies have alluded to the central role of
the founder in the branding process, so it would seem that any new theory of small
business branding should do the same.
Towards a theory of branding for small business new ventures
There is surprisingly little explicit research available on this topic. Primarily there is
some general entrepreneurial research, but with limited reference to branding and a
very limited amount of direct (regarding branding) anecdotal research. The few
articles
above have been referred to. Additionally, brief reference to branding is made in
entrepreneurial books (Allen, 1999; Lodish et al., 2001; Scarborough and Zimmerer,
2006; Barringer and Ireland, 2006; Katz and Green, 2007).
The general entrepreneurial research suggests the following key considerations in
developing a new business venture:
. innovation and creativity;

. opportunity recognition skills;

. a good business model;

. access to capital;

. accessing customers initially; and

. accessing suppliers initially.

The author has combined branding, marketing and entrepreneurial research domains
to propose how branding might facilitate new venture entrepreneurial activities. The
ideas are put forward as propositions at this stage and collectively form a new
theory:
Theory of
brand-led SME
405
P1. Corporate branding provides an overarching integrating tool for the entire
new venture process.
To clarify, the term “corporate” branding refers to the entire organisation and not
necessarily a large company. Essentially this is the suggestion from Abimbola (2001)
discussed above, reflecting less resources available to small businesses. We believe
that
corporate branding is better than the second alternative suggested by Abimbola
(2001),
namely just focusing on a small number of product brands. The reason that corporate
branding is better than focusing on one or two product brands is that the former
facilitates interaction with stakeholders other than customers, such as suppliers and
bankers. The corporate brand can be leveraged more than product brands. There
could
also be advantages of using one or two strong product brands in dealing with
particular
customers, so the product branding approach could complement the corporate
branding
approach. For example, one electrical component small business sells a basic model
and
a premium model, with superior casing, but in both situations the firm’s name is
critical
in marketing. P1 sets the scene for all of the other propositions:
P2. The founder/owner has to take responsibility for getting stakeholder buy-in to
the corporate brand.
We noted that four of the five studies discussed in the literature review allude to the
key role of the founder in the branding process (Abimbola, 2001; Doyle, 2003; Krake,
2005; Rode and Vallaster, 2005; Wong and Merrilees, 2005). The role of the leader in
facilitating buy-in to the corporate brand has recently been highlighted (Vallaster and
de Chernatony, 2006). For many small businesses the founder, CEO and general
manager are likely to be the one person, so the weighty responsibility of achieving
stakeholder buy-in falls on the shoulders of the founder. This is a lot to ask of one
person who has a lot of other functions to manage.
The remaining propositions relate to different stages of the new venture process,
with the potential role of branding highlighted. We start with the creative process:
P3. Branding brings focus and discipline to the innovative and creative process.
The very nature of branding is a focusing tool. A brand focuses on a small number of
core values that are targeted at key customers. Innovation and creativity is by nature
a
somewhat uncontrolled phenomenon, so a well-chosen means of bringing discipline
to
innovation is likely to benefit the new venture. Part of the creative process is naming
the business, part of corporate branding. The only reference to branding in Katz and
Green (2007, pp. 235-36) refers to naming the firm. They suggest a name that helps
differentiate the firm from its competitors and guides the consumer in their direction,
possibly through reference to the product category, but allowing for future expansion
of business scope. Apart from naming the firm, branding can assist the innovative
process. A small change management consultancy reinvented itself by delimiting its
charter to only briefs that required abstract solutions. Thus, the need to narrow the
capabilities and brand reputation of the firm required a reinvention (innovation) of
the business. More generally, a strong corporate brand vision ensures that the right
innovations are pursued, not just any innovation. This helps conserve resources.
Another aspect of the branding-innovation nexus is the role of the consumer in the
innovative process. There is well-established literature that recognises that input
from
the customer can help guide the innovative process in both large (Harvard Business
QMRIJ
10,4
406
Review, 2001; Trott, 2002) and small firms (Cobbenhagen, 2000; Whiteley and
Hessan,
1996). More recently, another perspective has been added to the link between
consumers,
innovation and branding. In a more devolved world, niche segments or sub-cultures
may
give their own meaning to brands (Gottdiener, 1995; Kates and Goh, 2003; Brown,
2006).
This takes us into the world of brand polysemy, ambi-brands or brand morphing, in
which there may be multiple meanings for the brand. This means that consumers
essentially co-construct brands with producers, rather than the traditional top-down
view of brand development. Such a new perspective can be harnessed by
entrepreneurs
when developing new ventures; in essence, consumers are a resource that can be
leveraged by small firms to extend and strengthen their (common) brand equity:
P4. Branding could be seen as a filter to the opportunity recognition process.
Searching and capturing new ideas that lead to business opportunities is called
opportunity recognition (Katz and Green, 2007, p. 79). There is some suggestion that
female entrepreneurs may be better at opportunity recognition than males
(Mankalow
and Merrilees, 2001). Some authors have attempted to map out the opportunity
identification process (Gaglio and Katz, 2001), but it is hard to allow for the
unexpected
or unusual opportunities that may emerge. Some authors have suggested that
serendipity goes to the heart of the opportunity recognition process (Merrilees et al.,
1998). Serendipity is seen as a real capability rather than just chance. The challenge
is
whether branding considerations could help interpret the otherwise infinite range of
opportunities. Potential entrepreneurs could see the world of opportunities through a
branding lens. That is, what are the branding opportunities out there? Branding is
thus a
holistic tool, a way of chunking or processing information into bite size pieces.
Branding
helps reduce an infinite range of opportunities into a relatively small number of
discrete
brand bundles. Branding might thus be a way of learning how to handle serendipity
effectively, especially for those small businesses that lack the innate capabilities to
do so:
P5. Branding sharpens the business model formulation.
The business model essentially specifies what the firm will offer to future customers;
who the target market will be and howto deliver the offer to the customer. An
especially
comprehensive approach to business model formulation is given in Davidsson and
Klofsten (2003), in which their model incorporates formulation of the business idea,
product and market definitions, and development of an operational organization,
competencies, commitment and customer relationships. A number of
entrepreneurship
writers have highlighted the significance of the business model, a place essentially
where the entrepreneurial and strategic management perspectives intersect (Amit
and
Zott, 2001; McGrath and MacMillan, 2000; Sirmon and Hitt, 2003). For a recent
excellent
overview and extension of the literature see Morris et al. (2005). One advantage of
the
Morris et al. (2005) approach is that it sets out a very detailed platform that could
readily
be extended to more explicitly embed branding considerations. The need in business
models is to identify critical resources and capabilities and work out how to leverage
them into a competitive advantage. We would suggest that branding principles can
be
used to sharpen the focus. It is a more rigorous way of developing value propositions.
Essentially the entrepreneur has to give consideration as to how the brand will be
developed. Penttila (2004) gives an example of how an entrepreneur could spell out
the
Theory of
brand-led SME
407
firm’s branding strategy in the business plan. The example of an upscale dry-cleaning
business is given, with all touchpoints linked through the integrated strategy:
P6. Branding increases access to new venture capital.
There are two ways that branding can help acquire capital. Firstly, as we have
already
argued, branding can sharpen the business model formulation. The sharpened
business
model formulation in turn can be translated into a sharper and better-justified
business plan, which should increase the chances of financial approval. Secondly,
apart from the business plan itself, an additional role of branding is the reputation of
the
organization applying for capital.A better branded/more reputable entrepreneurwill
also
increase the chance of financial support. Thus, branding raises both the quality of the
venture project proposal and the profile (trustworthiness) of the application.
Franchising is
a special case where the common business format type of franchising is really
inseparable
from the brand (Scarborough and Zimmerer, 2006, Chapter 4). That is, designing an
innovative new franchise model that is well branded should facilitate financing:
P7. Better branding will increase the acquisition of customers in the early and
later stages of the venture.
There is now a lot of documentation about the role of branding as a determinant of
customer loyalty (Selnes, 1993; Low and Lamb, 2000; Delgado-Ballester and
Munuera-Aleman, 2001; Taylor and Hunter, 2003). However, what is not well
established is the role of branding in acquiring the initial set of customers. Branding
will of course, be weakly established in the pre-launch period. However, despite the
brand not being fully manifest, the embryonic brand can help secure the initial
customer sales. Some contracts or agreements might be made even before launch.
An
example illustrates the possibility here. An early-stage new venture, Ozforex, an
online
foreign exchange service, took steps in the early years to build credibility. It did this
by
striking an agreement with the Australian Gift and Homeware association and
became
the preferred supplier of foreign exchange services to its 4,000 members – including
importers and exporters. So while identifying a new market is one thing, winning its
confidence can be tougher (Derkley, 2007):
P8. Better branding will increase the access to suppliers in the early and later
stages of the venture.
Particularly with manufacturer’s brands, their impact is invariably discussed in terms
of consumer markets. The overwhelming interest is in terms of whether manufacturer
brands are positively perceived in the minds of final consumers. Webster (2000),
however, has opened up a new role for manufacturer’s brands, namely as influencer
on
intermediate channels, such as wholesaling or retailing. Manufacturer’s brands
indicate a promise to serve from the manufacturer to the retailer. So when the new
venture is established, a strong brand will help the small business in its dealings with
suppliers. However, as with P7, the beneficial effects of strong branding on future
supplier relationships also apply, to a lesser degree, in the pre-launch phase. Indeed,
by
definition, firms need to put in place supply arrangements before they can launch.
Again, the pre-launch brand is not fully developed, but there is some scope for the
partly formed brand to influence the pre-launch supply negotiations.
QMRIJ
10,4
408
A theory of brand-led SME new venture development
We are now in a position to collectively refer to the eight propositions as the basis for
a
composite theory. The newtheory has been coined “brand-led” newventure
development.
It is called brand-led because brand is a central or pivotal catalyst for all aspects of
the
pre-launch activity. P1 in particular refers to the overarching role of corporate
branding.
It is not saying that branding ismore important than innovation, opportunity
recognition,
acquiring capital, acquiring customers or acquiring suppliers. Rather, branding offers
a
way of integrating the newventure development process. Other integrating tools are
also a
possibility. Moreover, from the outset, it is likely that this approach ismainly suitable
for
the more sophisticated entrepreneurs, those who are able to combine creativity and
discipline and to take their capabilities to the next level. The prior literature suggests
that
there is a spread ofSMEtalent and skills, such that the brand-led approachwould not
be of
interest or within the abilities of many small businesses.
Note that the above model is normative, dependent on whether the small business
actually uses a branding emphasis. Particularly for innovation and opportunity
recognition there may be almost no role for branding allowed by entrepreneurs
unless
they choose to do so. The current paper is simply raising the possibility for this
influence to be built in. For all elements, branding will invariably creep into the
processes, either intentional or not. For example, the reputation of the entrepreneur
will
influence customer, supplier and capital acquisition regardless of whether the
entrepreneur is even aware of the notion of branding. Again, we are suggesting that
if
it can be made explicit it can be used as a powerful, enabling force.
Illustrating the brand-led theory using ten case studies of best practice
entrepreneurship
Given the novel nature of the proposed theory it is appropriate as the first stage of
theory development to use existing cases (secondary data) rather than initiate new
cases through field research (primary data). The literature review suggests that
branding is at a low level of consciousness for most new entrepreneurs and even
existing SME businesses. Therefore, it would be difficult to justify the project to new
venture entrepreneurs and to get their buy-in to such a project.
The ten cases were purposively chosen, namely those cases in Fifty Lessons (2005).
The ten cases include the founders of a number of well-known and successful
ventures,
such as the Body Shop, lastminute.com, Cobra beer and easyGroup. Their success
makes
them prime candidates for case selection because the brand-led model focuses on
exceptional entrepreneurs. Further, and most unusually in cases about
entrepreneurs, a
number of the cases explicitly refer to the role of branding, reinforcing their
usefulness to
validate the brand-led model.
We will discuss each case briefly, isolating the relevant parts of the case that
contribute to validating the brand-led model. The evidence will be in terms of
whether
particular propositions are supported by the specific case. We start with easyGroup.
easyGroup
An interview with Stelios Haji-loannou, founder and chairman of easyGroup (Fifty
Lessons, 2005, pp. 92-99) gives support to some of the propositions, but in particular
the interview is a major endorsement of the model as a whole. Indeed, the chapter is
entitled “building brand awareness,” indicating strong support for branding as a
focus
Theory of
brand-led SME
409
of new ventures (P1). Haji-loannou is a serial entrepreneur. Branding became more
important with his second venture, the founding of easyJet, which was the first in the
“easy” series. He has moved into his third and subsequent ventures, extending the
easy
brand into new categories and considers himself more of a brand manager rather
than
a shipping magnate or airline owner. P7 gets strong support from the easyGroup
case since it advocates a strong role for public relations in the early stages,
suggested
as the “cheapest and quickest way to build a brand without having access to a large
advertising budget” (Fifty Lessons, 2005, p. 94). Haji-loannou gives the publicity
example of how he boarded the inaugural flight of British Airline’s discount brand Go,
wearing an orange jumpsuit to grab the media attention. A possible extension of this
idea is that the role of public relations, including the leader, as a way of building the
brand, could be built into the business model (thus reinforcing P5).
lastminute.com
An interview with Brent Hoberman, Co-founder and Chief Executive of
lastminute.com
(Fifty Lessons, 2005, pp. 22-31) supports several propositions in the brand-led model.
The reputation of the entrepreneur in previous work circles can contribute to
expanding
opportunities (P4), to selecting a business partner (P1 and P6) and to securing lead
customers (P7). The common ingredient here was getting credibility early on, in
terms of
partners, capital financing and customer selection. Getting one good potential
customer
to sign on helped to get additional prestige customers to sign on. Credibility,
reputation
and branding are very much inter-related activities. The idea of credibility is
broadened
to cover credibility with potential partners, financers and customers. We suggest that
such benefits are clearly synergistic with each other. Moreover, Hoberman makes
an interesting point “that the initial DNA of a company is very hard to change, so it is
imperative to get it right from the outset” (Fifty Lessons, 2005, p. 22). The DNA might
include the culture and relationship modes, so an extension of Hoberman’s excellent
comment would be to code this in the business model (thus enhancing P5).
Cobra beer
An interview with Karan Bilimoria, Founder and Chief Executive of Cobra Beer (Fifty
Lessons, 2005, pp. 32-47) supports several propositions in the brand-led model.
Bilimoria gives importance to coming up with a big, differentiated idea (P1 and P3),
using the entrepreneur’s personal qualities to gain credibility especially with
suppliers
(P8), understanding that innovation and speed are a firm’s main advantages (central
to
P5), and maintaining a competitive edge by nurturing an entrepreneurial spirit
(letting
go in order to trust and respect the talents of staff).
Body shop
An interview with Anita Roddick, Founder of The Body Shop International (Fifty
Lessons, 2005, pp. 10-21) supports a couple of the proposition in the brand-led
model.
The importance of passion and enthusiasmis critical at the start-up phase. Essentially
the
brand-ledmodel assumes this and takes over fromthere.Roddick says that creativity
is not
enough and needs the support of others, possibly in terms of the discipline
ofmanagement
(indirectly supports P5). Notwithstanding, Roddick is legendry for using public
relations
to sell the company to the market (P7), in a process that she terms storytelling.
QMRIJ
10,4
410
WPP
Ashort interviewwithSirMartinSorrell,GroupChiefExecutive,WPP(FiftyLessons,2005,
pp. 48-53) supports P6, in the special case of being able to get the go-ahead to buy a
company. The success in so doing was attributed to established contacts, networks
or
reputation in an industry that holds you in good stead (Fifty Lessons, 2005, p. 52).
St James’s place capital
An interview with Sir Mark Weinberg, President, St James’s Capital (Fifty Lessons,
2005, pp. 10-21) reveals several lessons. Success in a venture makes you prone to
buyout, so be prepared to become a serial entrepreneur. Notwithstanding there was
one
very innovative product idea he could not resist, but failed to invest enough time and
focus on the project, thus supporting our brand-led model overall. Sir Mark comments
on the notion that he is often recognised as the person who invented unit-linked
insurance. He explains that he was not the inventor, but the first to make it clearly
understood in the public’s mind. This is a classic case of successfully using branding
to
drive a new venture (P1 and P7).
Other cases
Don Cruikshank (Fifty Lessons, 2005, pp. 76-81) working with Richard Branson, soon
realized the benefit of focusing on a small number of tasks at a time, supporting our
overall
brand-led model. Lord Kalms, President of Dixons Group (Fifty Lessons, 2005, pp. 82-
91)
could clearly see a brand in the retailworld of opportunities (supporting P4).Luke
Johnson,
Chairman Signature Restaurants (Fifty Lessons, 2005, pp. 100-109) stresses the
turning of
big ideas into a thriving business; translating ideas into action make the difference
(consistentwith our P5). Finally, Michael Jackson, Chairman of Sage (Fifty Lessons,
2005,
pp. 66-75) emphasised the initially adaptive and then the ruthless consistency
ofmarketing
and branding of Amstrad’s accounting software support products (P7).
Discussion of the cases
The ten cases were not designed around a research protocol using the brand-led
model, so
they are unable to do full justice to validating the brand-led model. Despite, this
inherent
limitation, each of the cases does help substantiate parts of the brand-led model in a
very
convincing way. Collectively, all propositions were supported. P2, P5 and P7 were
supported the most. There were slight differences in the nuances of how particular
propositions were validated, reflecting the individual character of the specific
entrepreneur.
The implications of support from the cases for the new theory are profound. No
previous theory of small-business branding has been so comprehensive in the role of
branding through all aspects of the new venture development process: from
opportunity
recognition, to innovation, to business model development and to accessing capital,
suppliers and customers. Previous papers have covered most (but not all of these
aspects) in a piecemeal sense limited to one or two aspects, but not the total
package. The
propositions and the justification relating to the propositions enable a more
considered
and more comprehensive understanding of the role branding can potentially play in
developing new ventures. In part, branding facilitates the integration (weaving
throughout a common, synergistic theme) of the new venture process, itself a
powerful
contribution. Importantly, such a benefit of integration helps conserve scarce
resources,
so critical for small businesses. Also in part, branding ensures that brand equity is
Theory of
brand-led SME
411
maximised by ensuring that the firm’s brand is effectively and consistently
communicated to all stakeholders, including customers, suppliers and financers.
Reputation building is a major activity of small business and is closely associated with
network building. Brands and relationships go hand in hand.
In a few cases the interviews suggest extensions of the brand-led model. For both
easyGroup and the Body Shop, the material indicates a potential critical role for the
entrepreneur to use public relations to project the brand. Such a role is also
consistent
with the emphasis in Abimbola (2001), Krake (2005) and Rode and Vallaster (2005)
and
supports P2, with a further opportunity to factor it into P7.
Another possible extension of the brand-led model is the quote by Brent Hoberman,
founder of lastminute.com, that firms need to get the DNA of the new venture right
from the beginning because it is hard to change later. We suggest that this matter
could be factored into P5. It is also consistent with the emphasis in Rode and
Vallaster
(2005), with their attention to corporate culture, values and identity. The business
model should, if possible, give attention to these matters from the outset, activating
the
three propositions in Rode and Vallaster (2005).
Conclusions, limitations and future research
Branding has been missing from most of the SME literature despite a good coverage
of
marketing more generally. There are a small number of SME branding papers, but
these deal essentially with the ongoing brand management of existing SME firms.
Certainly more work is clearly needed in this area. However, the current paper
switches
focus from existing SMEs to new SME ventures. The published material is even
relatively sparser in this other field of SME branding.
The method used to develop a theory of brand-led SME new venture development
was qualitative, namely conceptual development with the help of the literature. Using
the literature, eight propositions were developed. Branding has been proposed as an
integrating tool for SME new venture development.
Finally, a set of ten published cases was used to provisionally test or at least validate
or illustrate the propositions. All propositions were supported, though we do not
clearly
know which ones are the most critical. The cases provide a more earthy character to
the
propositions and do suggest that they are grounded in best practice
entrepreneurship.
Two extensions to the brand-led model of SME new venture development were
inferred
from the cases. Firstly, there seems to be a role for entrepreneurs to use public
relations to
drive brand growth. Secondly, some consideration of corporate identity, values and
culture is worthwhile as early as possible, even at the pre-launch stage. These
matters
can be incorporated into the business model.
The limitations of the study include the reliance on conceptual modelling. The
domain of the literature used and the ten best practice cases used create a
knowledge
boundary that could have been extended by other published literature and cases or
by
future research. Inherently, a theoretical paper can only propose a theory and not
test
it. Quantitative research is a better means for testing a theory.
Future research could include quantitative methods that code the propositions.
The advantage of this type of research method is that it would be able to test the
broader
proposition that the more brand-led a new venture is, the greater is its performance.
Alternatively, there is scope for further qualitative research that explores particular
cases
in a holistic way. The main drawback for future qualitative research is the difficulty of
QMRIJ
10,4
412
finding enough strong case studies that have moderately or comprehensively used
the
brand-led approach.
Implications for SMEs
It must be re-iterated that the brand-led model is optional and mainly relevant for
high-aspiration entrepreneurs that seek very high performance for their new venture.
Not all entrepreneurs would have the capabilities to comprehensively and
appropriately implement it. The current paper is simply raising the possibility for
this influence to be built into the planning for the new venture. The proposal is that if
branding can be explicitly incorporated, it can be a powerful, enabling force.
The model is theoretical, but it has been designed in a practical way, incorporating
the major known phases of new venture development. All of the phases have to be
conducted anyway. The resonance of the model is that a fairly subtle fine-tuning of
each phase has the potential to bring sharper focus and effectiveness to the new
venture. The theory has not been tested holistically, but is consistent with ten best
practice entrepreneurship cases.
References
Abimbola, T. (2001), “Branding as a competitive strategy for demand management in SMEs”,
Journal of Research in Marketing & Entrepreneurship, Vol. 3 No. 2, pp. 97-106.
Allen, K. (1999), Growing and Managing an Entrepreneurial Business, Houghton Mifflin,
Boston, MA.
Amit, R. and Zott, C. (2001), “Value creation in e-business”, Strategic Management Journal,
Vol. 22, pp. 493-520, Special issue.
Barringer, B. and Ireland, R. (2006), Entrepreneurship: Successfully Launching New Ventures,
Pearson, Upper Saddle River, NJ.
Brown, S. (2006), “Ambi-brand culture: on a wing and a swear with Ryanair”, in Schroeder, J.
and Salzer-Morling, M. (Eds), Brand Culture, Chapter 3, Routledge, London.
Cobbenhagen, J. (2000), Successful Innovation: Towards a New theory for the Management of
Small and Medium-sized Enterprises, Edward Elgar, Cheltenham.
Cravens, D.W. (2000), Strategic Marketing, 6th ed., McGraw-Hill, New York, NY.
Davidsson, P. and Klofsten, M. (2003), “The business platform to gauge and to assist the
development of young firms”, Journal of Small Business Management, Vol. 41 No. 1,
pp. 1-26.
Delgado-Ballester, E. and Munuera-Aleman, J. (2001), “Brand trust in the context of consumer
loyalty”, European Journal of Marketing, Vol. 35 Nos 11/12, pp. 1238-58.
Derkley, K. (2007), “Client trust the key”, Australian Financial Review, January 25-28, p. 21.
Doyle, E. (2003), “A study of entrepreneurial brand building in the manufacturing sector in the
UK”, Journal of Product & Brand Management, Vol. 12 No. 2, pp. 79-93.
Fifty Lessons (2005), Exceptional Entrepreneurship: Real-life Lessons from Top Business
Leaders,
BBC Worldwide, London.
Gaglio, C. and Katz, J. (2001), “The psychological basis of opportunity recognition
identification:
entrepreneurial alertness”, Small Business Economics, Vol. 16 No. 2, pp. 95-111.
Gilmore, A., Carson, D., O’Connell, A. and Cummins, D. (1999), “Added value: a qualitative
assessment of SME marketing”, Irish Marketing Review, Vol. 12 No. 1, pp. 27-35.
Theory of
brand-led SME
413
Gottdiener, M. (1995), Postmodern Semiotics: Material Culture and the Forms of Postmodern
Life,
Prentice-Hall, Cambridge, MA.
Harvard Business Review (2001), Harvard Business Review on Innovation, Harvard Business
Review Press, Boston, MA.
Inskip, I. (2004), “Corporate branding for small- to medium-sized businesses – a missed
opportunity or an indulgence?”, Journal of Brand Management, Vol. 11 No. 5, pp. 358-65.
Kates, S. and Goh, C. (2003), “Brand morphing”, Journal of Advertising, Vol. 32 No. 1, pp. 59-
68.
Katz, J. and Green, R. (2007), Entrepreneurial Small Business, McGraw-Hill Irwin, Boston, MA.
Krake, F. (2005), “Successful brand management in SMEs: a new theory and practical hints”,
Journal of Product & Brand Management, Vol. 14 No. 4, pp. 228-38.
Lodish, L., Morgan, H. and Kallianpur, A. (2001), EntrepreneurialMarketing,Wiley, NewYork, NY.
Low, G. and Lamb, C. (2000), “The measurement and dimensionality of brand associations”,
Journal of Product & Brand Management, Vol. 9 No. 6, pp. 350-68.
McGrath, R. and MacMillan, I. (2000), The Entrepreneurial Mindset, Harvard Business School
Press, Boston, MA.
Mankalow, G. and Merrilees, B. (2001), “Toward a model of rural female entrepreneurship”,
Journal of Developmental Entrepreneurship, Vol. 6 No. 3, pp. 221-35.
Merrilees, B., Miller, D. and Tiessen, J. (1998), “Serendipity, leverage and the process of
entrepreneurial internationalisation”, Small Enterprise Research, Vol. 6 No. 2, pp. 3-11.
Morris, M., Schindehutte, M. and Allen, J. (2005), “The entrepreneur’s business model: toward a
unified perspective”, Journal of Business Research, Vol. 58, pp. 726-35.
Penttila, C. (2004), “Battle of the brand”, Entrepreneur, March, pp. 52-6.
Rode, V. and Vallaster, C. (2005), “Corporate branding for start-ups: the crucial role of
entrepreneurs”, Corporate Reputation Review, Vol. 8 No. 2, pp. 121-35.
Scarborough, N. and Zimmerer, T. (2006), Effective Small Business Management:
An Entrepreneurial Approach, Pearson, Upper Saddle River, NJ.
Selnes, F. (1993), “An examination of the effect of product performance on brand reputation,
satisfaction and loyalty”, European Journal of Marketing, Vol. 27 No. 9, pp. 19-35.
Sirmon, D. and Hitt, M. (2003), “Managing resources: linking unique resources, management,
and
wealth creation in family firms”, Entrepreneurship: Theory and Practice, Vol. 27 No. 4,
pp. 339-59.
Taylor, S. and Hunter, G. (2003), “An exploratory investigation into the antecedents of
satisfaction, brand attitude and loyalty within the (B2B) eCRM industry”, Journal of
Consumer Satisfaction, Dissatisfaction and Complaining Behaviour, Vol. 16, pp. 19-35.
Trott, P. (2002), Innovation Management and New Product Development, 2nd ed., Prentice-
Hall,
London.
Vallaster, C. and de Chernatony, L. (2006), “Internal brand building and structuration: the role
of
leadership”, European Journal of Marketing, Vol. 40 Nos 7/8, pp. 761-84.
Webster, F. (2000), “Understanding the relationships among brands, consumers and resellers”,
Journal of the Academy of Marketing Science, Vol. 28 No. 1, pp. 17-23.
Whiteley, R. and Hessan, D. (1996), Customer Centered Growth, Century, London.
Wong, H. and Merrilees, B. (2005), “A brand orientation typology for SME: a case research
approach”, Journal of Product & Brand Management, Vol. 14 No. 3, pp. 155-62.
QMRIJ
10,4
414
Further reading
Eisenhardt, K. (1989), “Building theories from case study research”, Academy of Management
Review, Vol. 14 No. 4, pp. 532-50.
Goldberg, A., Cohen, G. and Feigenbaum, A. (2003), “Reputation building: small business
strategies for successful venture development”, Journal of Small Business Management,
Vol. 41 No. 2, pp. 168-86.
Huang, X., Soutar, G. and Brown, A. (2002), “New product development processes in small and
medium-sized enterprises: some Australian evidence”, Journal of Small Business
Management, Vol. 40 No. 1, pp. 27-42.
Mowle, J. and Merrilees, B. (2005), “A functional and symbolic perspective to branding
Australian SME wineries”, Journal of Product & Brand Management, Vol. 14 No. 4,
pp. 220-7.
Shepherd, D. and Zacharakis, A. (2003), “A new venture’s cognitive legitimacy: an assessment
by
customers”, Journal of Small Business Management, Vol. 41 No. 2, pp. 148-67.
About the author
Bill Merrilees is a Professor of Marketing and Head of Department at Griffith University,
Queensland, Australia. His research interests are branding, SMEs, strategy and retailing.
The journals that he has published include Journal of Business Research, European Journal
of Marketing, Industrial Marketing Management, International Marketing Review, Journal of
Strategic Marketing, Journal of Product & Brand Management and Journal of Brand
Management. Bill Merrilees can be contacted at: bill.merrilees@griffith.edu.au
Theory of
brand-led SME
415
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com
Or visit our web site for further details: www.emeraldinsight.com/reprints