Core competency vital for effective branding


This week, we begin a series of fortnightly articles in conjunction with TheBrandLaureate — SMEs Chapter Award 2007 

IF Tiger Woods decides to take a break from his golf career and concentrates on the professional tennis circuit, will he be a winner in any of the Grand Slams? Likewise, if David Beckham ventures into golf, will he win The Masters or any tournaments on the PGA Tour? 

You may be asking on the relevance of these questions in relation to the subject of core competency and branding.  

Woods’ core competency is in golf and he stayed focused, honed his skills to be the world number one champion and became a famous brand personality that the golf industry is proud of.  

Beckham’s forte is in football and was once an excellent and highest paid footballer until he was distracted by Victoria and his involvement in too many business ventures. 

To be a champion, be it in sports or business, you need to be committed and stay focused in your area of specialisation. You need to be a master of your trade. If you get distracted by the many business opportunities that arise, you may end up as jack of all trades but master of none.  

For small and medium enterprises (SMEs) to develop their brands successfully, it is important that they identify their core competencies.  

Core competency is an area of specialisation that a company excels in. It can take the form of a product, skill or service and is normally what customers identify your company with. 

Defining the core competency is the core essence of a brand. SMEs that do not define their core competencies may find that their brands are all lumped together or a “me too” and will be swimming against the tide in their move to establish their market share.  

Dr K.K. Johan

Companies that have their core competencies mapped out have a clear brand identity and command market share. For example, Perodua’s core competency is manufacturing small compact cars. By focusing on this, its models such as the Kancil and Myvi have been well received. 

In 2006, Perodua had a market share of 41.6%, overtaking Proton as the largest passenger car manufacturer in Malaysia. Proton used to command a market share of over 70%.  

Should Perodua shifts its focus to the bigger models, it will move away from its core competency and may face an uphill battle in terms of having to compete with the bigger marques of the more established brands.  

Similarly, McDonald’s excels in its burgers and fries and quick service concept.  

While core competencies are normally based on product or services, there are companies that leverage on their brand positions.  

Having established its turf in the unit trust industry, Public Mutual leveraged on its leadership position as its core competency. What distinguishes Public Mutual’s unit trusts from the rest? Its unique selling proposition is that it is the leader in the unit trust industry and all its funds are guaranteed a high return.  

Hence, leadership and trust are the key competencies of the brand. 

Brands that excel in their core competencies are those that live up to their brand promises. I am sure you would have noticed that a McDonald’s burger tastes the same and is of the same size in any outlet and in any country. Consistency in quality helps to build the consumers’ trust in the brand and provides an assuring brand experience.  

Investors who purchased Public Mutual’s funds are confident that their investments will be well managed due to the brand’s leadership position and staff expertise. The trust generated creates strong brand emotions, which often translate into brand loyalty and help to enhance the brand’s equity. 

It is important for SMEs to stay focused, excel in their areas of specialisation and build up the brand before moving on to other areas of new business growth. Brand building is a long-term commitment, but the end results are rewarding.  

Woods started his career at a very tender age and now, at 31, is the highest paid professional athlete and commands premium pricing when it comes to appearances and sponsorships.  

Similarly, brands that become leaders command premium pricing and consumer loyalty. 

In the next few articles, we will delve on other components of brand building. 

  • The writer is the CEO of The BrandLaureate. He can be contacted at info@thebrandlaureate.com 

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