Brand strength vs category maturity: The SME dilemma

Which steps should a brand undertake to achieve long-lasting success?

Lijo Ittoop is a marketing professional and founder of Digital Nerd and ProdigiConnect, a marketing boutique agency
Lijo Ittoop is a marketing professional and founder of Digital Nerd and ProdigiConnect, a marketing boutique agency

Over the last two years, I must have met over a 200 startups or small enterprises. I have spent considerable time discussing their businesses and what they do in sales and marketing. Lots of learnings both ways. Many businesses sometimes just try to copy what others are doing. Many a time a strategy document is made understanding the execution of the market leaders. Its important to understand where you are and what should be your way forward.

Low brand strength, Early category

Unless you have an innovation that has good number of early adopters and are able to cover "The Chasm", the challenge is the toughest as the organization has the dual responsibility of education and brand awareness. Probably, the number of players in this segment is not much. This is a segment Peter Theil would have been proud of as an advocate of Zero to One. AirBnB is a good example of how they started a new category and today its almost the category. It addressed a latent need. Coming to SME’s, they struggle on trying to spend only on brand awareness. They need to educate and build advocates at the preference and consideration stage. Conversion will take time. This is a long haul as the brand and the category needs to be built.

Low brand strength, Mature category

Would e-commerce be a mature category? Well depends on what you are selling. Consumers are aware of the different choices in the category or subcategory. The onus of innovation for the business is the biggest here. For eg, Bira91 in India made an impact in a crowded category like beers with innovation in flavor that consumers were missing. Most SME’s start in this as it seems easy as there is an existing market expecting immediate results and they try to copy strategy of what the stronger brands do in this category. For e.g., if Google Ads is working for the leading brand, it wont work for you too as the CTR based on brand recognition would be very low. Building awareness through guerilla tactics is what’s needed. Expecting conversion with the same strategy that the stronger brands in the same segment uses will never yield results.

High brand strength, Early Category

When a SME starts a new category, the easiest is to start with a category closely associated with the present one. The challenge is to have the right people as one may bring the learning of the older category to this and one wouldn’t have enough people in the new category to recruit to lead. For e.g., should a branding company advertise, or an event company get into marketing activations? Doing brand extension into a new category has to be thought through especially for an SME. For eg, when Amazon entered into cloud services with AWS in the early stage, that was comparatively easy, and they pumped in investments. Unless it’s an allied service or product, brands avoid brand extensions and be sure of the investments required as there is education too.

High brand strength, Mature Category

Bigger brands can do this easily compared to smaller brands. That doesn’t mean that established brands have it easy. Google entered the office productivity apps space late and had to price its product lesser than Microsoft office. They went cloud only model with basic requirements making working simultaneously on a sheet easier than Microsoft. The first use can be induced by free trials and giving Value Added Services. Be ready to burn a lot of cash. This is a tough space to be in irrespective of the size of your organisation.

In summary, what worked for different brands in the same category may not work for you. Your marketing strategy would need to be different. Just because the leader in your category is doing Google Ads, that doesn’t mean that should be your plan. What you may need is building awareness through organic method. Do not expect any conversions till you have made considerable investments on awareness using the mix that’s best suited for you at that time of the journey. Be aware that making a customer care about your brand is a lot of effort. Understand them and target them with micro targeted ads. Maybe 1500 followers in your category is good enough and needs to be nurtured through a dedicated email program. Whatever be your goal, make sure you invest behind basic tools like Google Analytics so that you can understand if you are headed in the direction you want to. Vanity measures of likes, shares is of no use to you. If not, evaluate and push towards success.

Lijo Ittoop, is a marketing professional and founder of Digital Nerd and ProdigiConnect, a marketing boutique agency. He has cross continent experience working for industry giants from the likes of Pepsico, Nokia, Microsoft and Perfetti.

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