SMEs in Malaysia is experiencing positive growth rate but not without any challenges. The global economy instability especially in the European market and flood in Thailand has added on to the operation and marketing burden of SMEs. SMEs faced with many operational and marketing issues. According to a survey conducted by SMECorp Malaysia with SMEs in Malaysia, the top 3 main issues faced by SMEs are :-
- Increase in Cost of Raw Materials
- Rising overhead cost
- Cash flow problems.
I do remember in one of my past articles, I mentioned that branding do not need huge investment. We can start small by focusing on strategic thinking and planning. It will be a good starting point. Nevertheless, to do that, SMEs will still need to hire a marketing manager or at least marketing executives to strategise and execute it accordingly. These are overhead cost and do not include cost associated with it including EPF, SOCSO, bonuses, office space, computers, training etc. Is there a better alternative solution? Yes, Outsourced Marketing (OM)!
The concept of outsourced marketing is very common in more developed nations but not in Malaysia except IT related Outsourcing. OM happens when a company hire a brand & marketing expert agency as a single resource assumes responsibility for the marketing function. That might include everything from marketing analysis, strategic planning and management to execution of advertising, public relations, direct marketing, internal communications, Web marketing and even media buying and printing. A company pays only for the services used for the length of contracted period.
So, how would OM helps to reduce overhead cost or improve cash flow?
- The experts of OM do not sit in your office, thus saving office space, equipment and utilities.
- There is no marriage or sick leave. Only pre-defined tasks and plans to be delivered.
- Reduce cost and time to train your marketing executives as OM companies supposed to be an expert in its field.
- Better cash flow planning as cost involved is corresponds to contract period instead of long term employment of internal staff.
The above should not be the only reasons why should SMEs consider OM. There are many more benefits associated with it.
- SMEs can focus on its core competencies which is product and process innovation. Presently, most SMEs employs multi-tasking policy where the same person takes care of marketing, sales and product development too.
- Tap on external marketing team talent, knowledge and experience. It allows in flow of new ideas and better ways in managing marketing tasks.
- Gain “objective viewpoint” from an external & neutral perspective. Internal staff usually too close to the business and too involved resulting biases in decision making process.
- Continuity in marketing plans and implementation. Marketing staff may take leave or move on. Project will be left stranded. Under OM, we are engaging an external company with many team members who will continue to serve in accordance to the contract.
- Enjoy economy of scale. OM experts have the process and people who are domain experts in marketing. In addition, they have better bargaining power with other marketing partners like printers, media owners, creative designers etc.
- Compared with engaging different marketing partners for different marketing tasks, OM is an integrated effort where the focal point starts from looking into the business and brand strategies, opportunities and capabilities. It is strategic in nature instead of merely execution of marketing tasks.
Said is easier than done. The challenge for SMEs is still to find a trusted, responsible, committed, knowledgeable, experienced OM partner. It is just the same process as to look for a raw material supplier or distribution partner. There should be some basic selection criteria which include the OM partner reputation in the market, project references, processes and methodology and not forgetting “chemistry” with people handling your account.
I am not indicating that SMEs should rely on OM partners for long run. SMEs should capitalise the opportunity to learn from OM partners during the servicing period. Prepare yourself to be in better position and enough experience to set up your own marketing department. Yet, SMEs might still need external consultancy and branding support but in a more matured level, speedier execution and comprehensive branding approach in global branding initiatives.
