Exports Promotion through Branding

The article appeared in the Money Matters on December 16, 2013

In the last three decades, successive governments have emphasised the importance of export promotion.  But, the country’ export performance still remains dismal. Although Pakistan’s exports have increased from 10.5 percent in 1980 to 16.8 percent in 1990 and currently stand at 21.3 percent, the share of manufacturing exports and the terms of trade have declined in the last ten years.

The Ministry of Planning and Development is in process of developing Vision 2025 and the Five-Year Plan. Similar to its previous plans, more emphasis is being placed on increasing exports through value addition, which can take place through industrial development.

To achieve the aforesaid goal various strategies including technical upgradation; improvement in business environment; restructuring of industries; internalisation of innovation; tariff escalation and tariff rationalisation; export-oriented industrial policies; research and development; human resource development and enhancement of workers’ skills and the establishment of industrial clusters, estates and zones are being discussed by the economic policymakers. However, all these strategies have been discussed and partially implemented before but the issue of branding has not been taken into consideration as yet.

A brand name is the name of a distinctive product or service, which people can associate themselves with. It is an idea or image of a specific product or service that consumers can connect with, by identifying the name, logo, slogan, or design of the company who owns the idea or image.    In today’s age of globalisation and e-commerce, foreign buyers can ask for any product or service by looking at the brand name.

Building a brand name is none other than building trust with one’s employees, customers and stakeholders. In terms of marketing, a brand name represents the value of a company. The assumption that only big companies have better brands is incorrect. Strong brands help consumers know what to expect, regardless of the company size. In addition, a brand name helps develop a unique product or service that develops customer loyalty overtime. For instance, even though Cola is a brown, sweetened beverage, a loyal Coca Cola customer will always prefer Coca Cola over other brands.

Similarly, a significant component of branding is how much a certain brand is valued or its reputation in the market. Unique selling proposition is another factor that makes a product or service different from and better than that of competitors. Reputable brands deliver their message clearly; maintain their product or service credibility; form emotional connections with their prospective consumers; motivate buyers and solidify customer loyalty.

A brand name represents the quality of a product or service, which determines its price. It also makes it easier for local and foreign buyers to decide what to purchase and in what quantity. In other words, a brand name gives potential clients a better idea of what they are buying, thus making the purchasing decision easier.

Consequently, consumers are ready to pay a higher price if they see that the product quality is better than what is available in the market. Foreign buyers are also willing to buy a high quality product, which leads to more foreign exchange earnings for the country. For example, a few products that have a competitive advantage over their competitors include: Coca Cola and Pepsi Cola as compared to other Colas that may have almost the same taste; various smartphones against other ordinary phones and among them, iPhone is the most reliable and expensive brand both globally and domestically; Bareeze as compared to other similar clothing outlets and Shan Masala has its own significance as compared to other spices available in markets. 

On the other hand, when it comes to the services sector, for instance the construction sector, most of the materials used are similar in nature for building buildings, commercial centers and homes. However, if the products being used are branded then a reliable brand name has more demand in the market. Branding in the construction industry is more profitable in terms of value addition that pays more when exported to the other countries. Nevertheless, the construction services sector should have certain features such as creativity, durability and integrity, which add to its branding value.

The above discussion leads us to the conclusion that branding is critical to increase a country’s export earnings through value addition. However, producers want to protect their rights to produce and sell products, thereby making it necessary to enforce patent laws in the country.

Intellectual property rights help promote branding and invention as they protect the name, product, logo, design, image and slogan of a product. The issue of intellectual property rights has neither been discussed at length nor strictly implemented in Pakistan. This needs to be addressed on an urgent basis. Similarly, the country’s justice system should be quick and transparent to ensure that any violation of intellectual property rights would not be tolerated. In terms of law-making, clear legal ownership and copyrights should be defined as well as further licencing and conditions for franchises should be clearly laid out .

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