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Let’s say you’ve successfully landed a client with a perfect product to sell, and you’ve determined which countries you’re going to export it to and sell it in. Now comes the next phase of the game: getting your product into the marketplace and generating those sales.
Assuming you’re going to hire sales help, which specific conduits in the trade channel will be most effective for you? The three most common options for the export management company are:
• Selling direct to foreign markets (hiring your own people to work in the country as sales representatives.)
• Hiring a commission representative or representative company
• Working with a distributor
The best trade channel options for the importer are:
• Manufacturer’s representatives
• Distributors
• Retailers
Before we go any further, let’s review the various conduits of the trade channel:
Representative. This person works alone or as part of a company with various reps on board; they make sales calls for you to wholesale or retail buyers. When they’ve solicited a sale, they pass it on to you. In most cases, you then send the merchandise directly to the buyer. A typical representative’s commission is 5 percent of the cost of the goods, but this varies slightly from one part of the world to another and from product to product.

Related: 4 Online Marketing Tactics to Advertise Your Import/Export Business

Distributor. A company that buys your goods and resells them to a retailer or other representative for further distribution through the channel until the product reach¬es the end user. A distributor, who determines their own sales price for your product, may wait until sales have accumulated before buying the merchandise, or they may purchase the merchandise up front and warehouse it, thus acting as a wholesaler. You won’t have as much control as you would with a representative, but you won’t have as many worries because the distributor handles all advertising, promotions, returns and customer service. A distributor acting as a wholesaler, buying your imported merchandise and warehousing it before accumulating sales, is sometimes called an import house.

Manufacturer’s representative. This is a salesperson who specializes in a specific product or line of complementary products. They often provide additional product assistance, such as warehousing and technical service, and can work alone or as part of an agency, in which case each rep divides their selling time among the various products promoted by the agency. This allows you to field a regional or national sales force without expending any capi¬tal. The downside, however, is that because these people carry a variety of product lines, yours may end up at the bottom.

Retailer. The ultimate distributor who sells to the end user.

Direct sales. Direct sales can work for products with a very limited market in which each sale is substantial. If you’re sell¬ing jet engine nozzles, for example, you can easily send out your own reps to pitch jet engine manufacturers — there aren’t all that many out there. When you make a sale, you’ll probably be assured of repeat business (there aren’t too many nozzle suppliers either). But for most products, the markets are so large and complex that this method just isn’t feasible.

Pursuing the perfect rep
Finding the perfect sales rep is just as important as finding that perfect manufacturer and product. Because some reps are better than others at pitching different types of products, the trick lies in choosing one who best complements your particular type of merchandise and, preferably, already has experience and contacts.

If you plan to sell in more than one corner of the world, you may need to locate several representatives. If your target countries are all in close proximity, however, you’ll do better to find a distribution company or rep that can handle them all.

So where do you find these perfect people? If you’re talking exports, take a look at the services offered by the ITA’s Commercial Service, including the Agent/Distributor Service. Other foreign rep sources include:

• Freight forwarders and customs brokers
• Trade associations in the countries you’re targeting
• Foreign consulates, embassies and trade offices
• American chambers of commerce abroad
• International Yellow Pages (which you can find on the internet)
• International trade publications
Sources for domestic distributors and representatives include:
• Domestic trade associations, publications and journals that cover your product’s industry
• Referrals from your international banker
• Manufacturer’s Agents National Association
• Online business directories or even your local phone directory
• U.S. and state trade centers

Interview kit
After you’ve compiled a list of reputable distributors or representatives, the real work begins: choosing the best one for your company and products. Interview your prospects with as much care as you’d take to interview prospective employees. A good place to start is with a sort of interview in a kit, a three-part packet consisting of a one-page fact sheet, product literature and a questionnaire. You should prepare a packet for each client you represent and have enough printed so that you can pop them in the mail or pass them out to sales reps as the need arises. You should certainly be able to email them as well.

The fact sheet should outline your client’s commission structure, agreement policies, and company information so that each prospective rep has a snapshot of who they’ll be dealing with and what they can expect as compensation. The questionnaire, which you’ll ask prospects to fill out and return to you, is designed to elicit as much pertinent information as you could possibly need.

Related: The Major Players You’ll Work With When Running an Import/Export Business

Once you receive a prospect’s questionnaire, make sure you check references. Find out if other companies that deal with this rep are satisfied with the relationship. Delve into what size territory the rep is most capable of covering. You don’t want one with a tendency to bite off more than they can chew.

If a prospect doesn’t return the questionnaire, call or email them with a friendly nudge. If you still don’t receive a response, cross them off your list. A person who doesn’t take the time to respond to a potential associate may have already found work with a competitor or is someone who might not take the time to do a good job, either.

You should now meet your prospect in person. You can find out if you really click, and you can size up the way they handle themselves in a one-on-one situation. If you’re in two different countries, however, and your budget simply won’t stretch for an in-person meeting, be sure to conduct a phone interview. Other alternatives include Skype and FaceTime. For hiring help, you can use software programs, such as ClearCompany or Vidcruiter, both of which are talent management tools that can also help you bring in qualified talent.

Sign on the dotted line
Once you’ve decided which reps you want on your team, you need a written agreement or contract to clarify their responsibilities and duties as well as yours. We strongly advise that you consult an attorney familiar with international law, especially as a newbie, because you might overlook details that could turn into migraines down the line.
The specific details of each agreement will vary from one situation to another, but they should all include these types of basics:
• Responsibilities of the distributor or representative and your responsibilities. Make sure these are clearly delineated. This will be a legally binding contract.
• Term of contract
• Compensation
• Any bonus or incentive programs
• Territory. Does the distributor or rep have exclusive or nonexclusive rights to the territory? This is an important consideration. Most reps prefer to have exclusive rights to market your product in a given territory. Furthermore, granting the rep exclusive rights is a good way to give them a start-off perk and develop that winning relationship.
• Pricing. This is often the most significant variable determining sales success. Price your product carefully, neither too high nor too low. Remember that your rep will earn a specific percentage, while a distributor will buy at the prevailing wholesale market price.
• Warranty and returns. Who’s responsible for returns or repairs? What’s the policy? This can be a critical section of your agreement depending on what you’re selling. Also consider whether you’ll need product liability insurance.
• Does the rep have the right to use trademarks, patents and copyrights in advertis-ing? Make sure the product doesn’t require or infringe on any of these intellectual property rights.
• Marketing and advertising. Spell out who’s responsible. Remember that you or the manufacturer may have to defray some of these costs. Consider having to sign off on advertisements, since they’re essentially representing your business.
• Record-keeping. Both parties should keep sales and other pertinent records, and reserve the right to examine each other’s documents.
• Language. What language in the agreement is legally binding?
• Contract termination. Give yourself an out. If the rep fails to meet certain require-ments, for example, a minimum number of sales within a specified period, you can terminate the contract.
• Arbitration. Make sure your agreement contains a clause outlining what hap¬pens if you and your rep disagree in interpretation of the terms of the contract. Most such contracts stipulate arbitration by the International Chamber of Commerce.
Source: https://www.entrepreneur.com

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Export management company (EMC). An EMC handles export operations for a domestic company that wants to sell its product overseas but doesn’t know how (and perhaps doesn’t want to know how). The EMC does it all — hiring dealers, distributors and representatives; handling advertising, marketing and promotions; overseeing marking and packaging; arranging shipping; and sometimes arranging financing. In some cases, the EMC even takes title to (purchases) the goods, in essence becoming its own distributor. EMCs usually specialize by product, foreign market or both, and — unless they’ve taken title — are paid by commission, salary or retainer plus commission.

Export trading company (ETC). While an EMC has merchandise to sell and is using its energies to seek out buyers, an ETC attacks the other side of the trading coin. It identifies what foreign buyers want to spend their money on and then hunts down domestic sources willing to export, thus becoming a pseudo-EMC. An ETC sometimes takes title to the goods and sometimes works on a commis­sion basis.

Import/export merchant. This international entrepreneur is a sort of free agent. He has no specific client base and doesn’t specialize in any one industry or line of products. Instead, he purchases goods directly from a domestic or foreign manu­facturer, then packs, ships and resells the goods on his own. This means that unlike his compatriot, the EMC, he assumes all the risks (as well as all the profits).

Let’s say you’re an exporter with a really hot product to sell. Who do you look for? A buyer, otherwise known as an importer. Here’s the rundown on the various types of importers:

Commission agents. These are intermediaries commissioned by foreign firms searching for domestic products to purchase.

Commission representatives. Similar to independent sales reps in the United States, these folks usually work on a commission basis, and because they don’t purchase (take title to) the product, they don’t assume any risk or responsibility.

Country-controlled buying agents. These foreign government agencies or quasi-governmental firms are charged with the responsibility of locating and purchasing desired products.

Foreign distributors. Similar to wholesale distributors in the United States, these merchants buy for their own account, taking title to and responsibility for the mer­chandise.

State-controlled trading companies. Some countries have government-sanctioned and controlled trading entities. These agencies often deal in raw materials, agricul­tural machinery, manufacturing equipment and technical instruments.

The major players

There are, of course, more players than just the importers, exporters and their cast of distributors and representatives. You’ll also be dealing with the major players in the game: the government entities.

Two important goals of the U.S. Customs Facilitation and Trade Enforcement Reauthorization Act of 2009 were enhancement of supply chain security and enhancement of trade facilitation. Toward those goals, the U.S. government created the U.S. Customs and Border Protection Agency (CBP) and the U.S. Immigration and Customs Enforcement Agency (ICE). Together these two agencies take on many more tasks than just checking for contraband souvenirs. According to their websites, they also:
• assess and collect customs duties, excise taxes, fees and penalties due on imported merchandise;
• intercept and seize contraband, including narcotics and other illegal drugs;
• process people, baggage, cargo and mail;
• administer certain navigation laws;
• protect American business, labor and intellectual property rights by enforcing U.S. laws designed to prevent illegal trade practices, including pro¬visions related to quotas and the marking of imported goods;
• enforce the Anti-Dumping Act;
• provide customs records for copyrights, patents and trademarks;
• enforce import and export restrictions and prohi¬bitions, including the export of technology used to make weapons of mass destruction;
• protect against money laundering;
• collect import/export data to translate into international trade statistics;
• secure the national borders;
• enforce immigration laws;
• strive to guard against terrorism.

The Bureau of Industry and Security (BIS) is another entity that governs the exportation of sensitive materials such as defense systems, plutonium and encrypted software. Headed by the Department of Commerce, BIS administers export controls, coordinates Department of Commerce security activities, and oversees defense trade. The BIS manages the export of most merchandise through the Export Administration Regulations, also known as EAR.

Beyond CBP, ICE and BIS, various agencies regulate the importation and exportation of sundry products. To find out which agencies oversee your particular product(s), contact visit the CBP’s website.

Guided tour

Depending on whether you’re importing or exporting, you can also get answers to your pesky procedure questions from a customs broker or a freight forwarder.

The customs broker (sometimes called a customhouse broker) is the importer’s pal. It’s their job to know the ins and outs of importing in intimate detail and to handle them for you. Some brokers are small outfits; others are large corporate entities. The U.S. Customs and Border Protection (CBP) licenses them all.

When you hire a customs broker, they act as your agent during the entry process. They prepare and file the entry documents, acquire any necessary bonds, deposit any required duties, get the merchandise released into their custody or yours, arrange delivery to the site you’ve chosen and obtain any drawback refunds. A customs broker isn’t a legal necessity, but a good one will make your life considerably easier.

While the customs broker is the importer’s best friend, the freight forwarder is the exporter’s pal. Acting as the exporter’s agent, the international freight forwarder uses their expertise with foreign import rules and regulations as well as domestic export laws to move cargo to overseas destinations.

Freight forwarders can assist with an order from the get-go by advising you of freight costs, port charges, consular fees, special documentation charges and insurance costs. They can recommend the proper type of packing to protect your merchandise in transit, arrange to have the goods packed at the port or containerized, quote shipping rates and then book your merchandise onto a plane, train, truck or cargo ship. Like a concierge in a really good hotel, they can get anything you’ve got anywhere you want it to go.

Like customs brokers, freight forwarders are licensed, but in this case, by the International Air Transport Association (IATA) and Federal Maritime Commission (for ocean freight). You don’t have to use the freight forwarder’s services to transport your goods, and not all exporters rely on such services, but they’re a definite plus.

‘Swimming the trade channel’

Now it’s time to take a swim in the trade channel, the means by which the merchandise travels from manufacturer to end user. A manufacturer who uses a middleman who resells to the consumer is paddling around in a three-level channel of distribution. The middleman can be a merchant who purchases the goods and then resells them, or they can be an agent who acts as a broker but doesn’t take title to the stuff.

Who your fellow swimmers are will depend on how you configure your trade channel, but for now, let’s just get acquainted with the group:

Manufacturer’s representative. This is a salesperson who specializes in a type of product or line of complementary products, such as home electronics. He often provides addi­tional product assistance, such as warehousing and technical service.

Distributor or wholesale distributor. A company that buys the product you’ve imported and sells it to a retailer or other agent for further distribution until it gets to the end user.

Representative. A salesperson who pitches your product to wholesale or retail buyers, then passes the sale on to you; differs from the manufacturer’s rep in that they don’t necessarily specialize in a particular product or group of products.

Retailer. This is the tail end of the trade channel where the merchandise smacks into the consumer. As yet another variation on a theme, if the end user is not Joan Q. Public but an original equipment manufacturer (OEM), you don’t need to worry about the retailer because the OEM becomes your end of the line. (Think Dell purchasing a software program to pass along to its personal computer buyer as part of the  goodie package.)

Source: https://www.entrepreneur.com

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Income & Billing

You have a number of options when it comes to deciding on your approach to pricing. Some operators simply call around, find out what other companies are charging and set their prices in that range. Others decide what they want to earn and set their prices based on that without regard to how it relates to the competition. Then there’s the issue of pricing by the project, the page or the hour.

The best approach is a multifaceted one that considers the skill level of the work, your profit goals and the market. You need to set up a system that gives you a structure to work within so you can quote consistent, reasonable and fair rates.

What’s Inside
• Introduction
• Target Market
• Startup Costs
• Operations
• Income and Billing
• Marketing
• Resources

Multiple Hourly Rates

If you’re going to charge by the hour, consider that different rates should apply depending on the complexity of the service and skill level required. For example, Cindy P.’s hourly rate ranges from $28 for straight word processing up to $40 for complex desktop publishing. The Association of Business Support Services International suggests a structure similar to the following:

  • Level 1 (lowest hourly rate):Basic word processing, routine clerical services, simple proofreading
  • Level 2:Enhanced word processing, copyediting, proofreading, basic spreadsheet design, internet research
  • Level 3:Desktop publishing, spreadsheet design, simple web page design, simple web page maintenance
  • Level 4:Graphic design, writing (academic, business, resume, technical), web page design, web page maintenance
  • Level 5 (highest hourly rate):Consulting, training

Note that the same basic task might fall into more than one pricing level, and you’ll need to make a judgment call based on the particular project as to which rate to apply.

Hour Power

When the Association of Business Support Services International surveyed its members, it found that the hourly rate ranges for the most popular services offered by respondents were:

• Basic word processing – $7-40
• Enhanced word processing – $7-50
• Copyediting – $7-75
• Database entry – $18-50
• Transcription, general – $15-45
• Consulting/training – $7-90
• Spreadsheet design – $15-75
• Desktop publishing – $7-75
• Graphic design – $14-100
• Web site design – $20-150
• Internet research – $7-75

Estimating the Job

Many new business owners find estimating one of the most challenging things they do, but if you approach the process systematically, it’s simple. You just need to determine an appropriate hourly rate, calculate the length of time the project should take, and do the math.

Regardless of the format you use to provide the quote (in writing or verbal), it’s a good idea to make notes for yourself so you know what you quoted and how you arrived at that figure. This will be necessary if the actual project turns out to be different than what the client described, or if the client questions the invoice later, even though they agreed to the quote. You may even want to create an estimate form that you can provide to the client and keep a copy in your own files.

Marketing

Marketing is an area where your creative side can shine. It’s something many people don’t like to do, but it’s essential if you’re going to build a successful, profitable business.

Don’t be discouraged if your marketing efforts don’t produce an immediate response. It’s rare that someone will have a need for your services at precisely the moment you contact them, but if you put together a professional, attractive information package, they’ll keep the information on file and call you when they need you–or they’ll refer you to a colleague who may have the need. It’s not unusual for a sales contact not to generate a response for months–or even a year.

What’s Inside
• Introduction
• Target Market
• Startup Costs
• Operations
• Income and Billing
• Marketing
• Resources

You can find out how to create a basic marketing plan here, but there are issues and ideas specific to business support services that you need to know as you develop your plan. For example, check with your local phone company to find out its advertising deadline and directory distribution date and, if possible, plan to launch your business in time to be included. Your Yellow Pages listing will be an important source of new business, especially in the early days, so don’t get so distracted by other startup tasks that you miss this opportunity.

Another important point is to be sure all your marketing materials are professional and letter-perfect. Many business support services that do a great job in this area for their clients often forget to do the same for themselves. Consider hiring a graphic designer and/or professional writer to help you with your marketing package; you may be able to negotiate a trade-out that will benefit you both.

Referrals Are Essential

Referrals will likely be a primary way you get new clients, so it’s a good idea to have a systematic approach to the process. You should be able to identify who is making referrals that ultimately turn into business so you can cultivate and reward those referral sources.

Complementary businesses are great sources of referrals. For example, print and copy shops often have customers who need word processing or desktop publishing but don’t have the equipment, skills or staff to handle these services.

Your referral arrangements can be set up to provide cash compensation for new business, or you may simply have an agreement where you and other cooperating businesses refer clients to each other as the need arises.

According to Lynette M. Smith, executive director of the Association of Business Support Services International, typical referral fees are 10 percent of the first six to 12 months of business from a new client; 15 percent of the first three months; or 25 percent of the first transaction only.

Of course, many referrals involve no compensation at all–satisfied clients will be happy to refer others to you simply because you do a good job. And you’ll probably also get referrals from friends and associates. Charlene D. says a major portion of her Winter Park, Florida, company’s business came through referrals from people at her church. “Most of my clients over the years have been either church members or people who heard about me from church members or through the church office,” she says.

Advertising

Advertising is a great way to bring in new business, but choosing effective media may take some experimentation. Probably the single best place to advertise is in your local Yellow Pages, because that’s where people look when they need a service and don’t know who to call. Many communities have more than one telephone directory publisher, so you may need to do some research to determine which directory (or directories) should carry your listing and ad.

Don’t limit yourself to the telephone directory. Bill H. in Iowa City, Iowa, does some radio ads on a local news and talk station, and although he can’t credit much specific new business to them, he says his current customers do hear and mention the spots. “It’s only $100 to $150 per month, and I figure it’s worth it to keep my name alive with current customers,” he says. He also places ads in the university newspaper classified section and gets a good response from that.

In Chicago, Joann V. limits her advertising to the Yellow Pages, one trade journal and a semiannual direct-mail campaign. She used to buy a mailing list for her direct-mail efforts, but she has found it more effective to build her own list using the telephone directory (using the listing categories of her target market) and trade journals (pulling prospects from ads and editorial mentions) as a resource. “We send a brochure and a Rolodex card, with an introduction, prices and a toll-free number,” she says. “The Rolodex card is really useful, because if they don’t use it right away, they generally hang onto it. I’ve gotten calls years later.”

Resources

Associations

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Startup Costs

One of the most appealing aspects of the business support services industry is its relatively low startup costs. If you have a decent credit rating, you can be ready to start serving clients with virtually no cash out of pocket–although you’ll certainly be on firmer ground if you have some startup capital.

Most of the business support services entrepreneurs we talked with used their own personal savings and equipment they already owned to start their businesses. Because the startup costs are relatively low, you’ll find traditional financing difficult to obtain–banks and other lenders would much rather lend amounts much larger than you’ll need and are likely to be able to qualify for.
What’s Inside
• Introduction
• Target Market
• Startup Costs
• Operations
• Income and Billing
• Marketing
• Resources

Many operators start their businesses on the side while working full-time jobs, so their personal living expenses are covered. But if you plan to plunge into your new business full time from the start, be sure you have enough cash on hand to cover your expenses until the revenue starts coming in. At a minimum, you should have the equivalent of three months’ expenses in a savings account to tap if you need it; you’ll probably sleep better if you have six to 12 months of expenses socked away.

Charlene D. in Winter Park, Florida, decided to invest in a new computer and printer and says she spent about $3,500 on equipment and supplies to get started. Perrysburg, Ohio’s Rachelle Y. used her old 486 PC to develop her business plan and brochure but decided to purchase a new system before she actually began her operation. “I wanted to be able to offer everything I could,” she says. “In this field, your computer is your best friend. So I bought a new computer and printer, paper, and some other odds and ends. I probably spent between $3,000 and $4,000 on startup.”

Irvine, California’s Cindy P. paid $10,000 to buy an existing business; that fee included the client list and the lease on the office, but no furniture or equipment. She spent another $4,000 on initial equipment purchases and has added more over the years.

Joann V. in Chicago started her business before the days of PCs. “Originally, all I needed was a typewriter,” she says. “I bought an electronic typewriter for $500 and some paper, and someone loaned me a transcription unit. That was it–that was all I needed to start.” In Edmond, Oklahoma, Janet S. says that because she already owned a computer, printer and answering machine, her startup costs were “virtually zero.”

As you consider your own situation, don’t pull a startup number out of the air; use your business plan to calculate how much you need to start your ideal operation, and then figure out how much you have. If you have all the cash you need, you’re very fortunate. If you don’t, you need to start playing with the numbers and deciding what you can do without.

Operations

As a solo operator, expect to spend at least one-fourth of your time on general business management and administration, marketing, purchasing and billing. The bigger your business and the more people you have, the more time you’ll spend managing them rather than actually doing the work yourself. With four employees, Irvine, California’s Cindy P. spends very little of her time working on projects for clients. And Chicago entrepreneur Joann V. hasn’t actually transcribed anything herself in years–she has a team of five full-time employees in the office and nearly 50 part-time transcribers who work from their homes.

No matter how small or large your company is, it’s critical that you not neglect the administrative side. It won’t do you much good if you do the work but never get around to sending out the invoices so you can get paid. Poorly maintained records can get you into trouble with the IRS and other government agencies. And if you aren’t marketing on a regular basis, your business will eventually dry up.

What’s Inside
• Introduction
• Target Market
• Startup Costs
• Operations
• Income and Billing
• Marketing
• Resources

Running a business support service takes a lot of energy. It helps if you enjoy people but are also able to work alone or in small groups. You’ll need to be able to juggle several projects at the same time, and always make each client feel as though he or she is the most important person to you.

Location

When it comes to the actual site of your business, you have two choices: homebased or a commercial location. A business support services company can be extremely successful in either venue; your decision will depend on your individual resources and goals.

As you consider the issue of location, keep a few things in mind. Depending on the specific services you offer and market you target, you’ll possibly be dealing both with the general public, who will need access to your office, along with small-business owners and managers in larger corporations who may also want to visit your facility or have their employees or a messenger pick up and deliver work.

In any business, but especially in this one, a professional image is a critical element of success. Homebased operations are very accepted in today’s business world (in fact, many customers prefer dealing with homebased suppliers because they have lower overhead and can therefore charge less), but you still need to present the appearance of being a serious business, even though you choose to work from your house. And if you opt for a commercial location, be sure it’s one that is compatible with your goals.

In the mid-1990s, about half the members of the Association of Business Support Services International (ABSSI) were homebased; by the turn of the century, an estimated 70 percent were homebased, one-person operations. “Many of our previously office-based members are simplifying their lives by moving back to a residential location,” says Lynette M. Smith, ABSSI’s executive director. “They acknowledge that a homebased business is no longer the exception but the norm. In the perception of clients, there no longer is a stigma associated with being homebased.”

While conceding that operating from home can make growth challenging, Smith says, “At home, one cannot expand through the traditional means of hiring employees. However, it’s becoming more realistic to subcontract out work–especially transcription–to others, so there is still significant profit potential to be expected by replicating one’s efforts in this way.”

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The secretary of yesteryear needed to know how to take shorthand, type and answer the phone. Today’s secretary deals with dictation using a tape recorder and transcription equipment; instead of simply typing, she inputs data into a computer; and the office telephone she uses is actually a complex communications center.

What we now call the business support services industry has experienced a similar and perhaps even more remarkable evolution. It began as secretarial services or typing services, and typing was pretty much all they did. But those operations have gone the way of the horse and buggy, replaced by modern, techno-savvy entrepreneurs who want to take advantage of a virtually limitless market.
What’s Inside
• Introduction
• Target Market
• Startup Costs
• Operations
• Income and Billing
• Marketing
• Resources

Though the term “secretarial service” has a strong degree of consumer recognition, it’s no longer an appropriate description of the industry. While typing and transcription (historically typical secretarial services) are still a mainstay, consumers often don’t think of a secretarial service as providing desktop publishing, spreadsheet design, Internet-related services, and other sophisticated product and service packages. The phrase “business support services” does a much better job of conveying what the industry is all about today and still leaves flexibility for the changes that are likely to occur in the future. You’ll also hear terms such as “administrative support services” and “office support services” applied to this industry.

In 1998, the National Association of Secretarial Services changed its name to the Association of Business Support Services International. Executive Director Lynette M. Smith says, “We felt that ‘business support services’ did a better job than ‘secretarial services’ of covering the scope of our members’ services and bringing more respectability to the profession.”

Of course, the size of the market for business support services is difficult to estimate for a number of reasons–primarily because the U.S. Bureau of the Census mixes other types of businesses with business support services. Also, the providers, services and customers are constantly evolving with technological advances. The secretarial service of the 1960s and 1970s, when a good electric typewriter was pretty much all you needed, wouldn’t get off the ground today. And who knows what technology will be able to do 20 or 30 years from now?

The Sky’s the Limit

To understand the future potential, take a look at how the industry has evolved. Over the span of the 20th century, the administrative demands of doing business have grown tremendously, creating a need for secretarial and clerical support. With the advent of desktop computers and increasingly sophisticated office equipment, the skill and knowledge requirements of secretaries have also increased.

At the same time, the general business landscape has changed dramatically. Big businesses are looking for ways to streamline their operations, and one popular option is outsourcing, where they retain another company to provide a service that may have traditionally been done by employees. Small companies want to stay lean and profitable, so they, too, are turning to outsourcing, rather than fattening up their payroll.

Combine the obvious need with the new way of operating in the business world, and you have a dynamic young industry wide open with opportunity: business support services. In fact, there is so much opportunity that if you don’t have a clear plan, specific services and a target market, your chances of success are slim. But with a lot of thought and preparation, and a minimal amount of cash, you can quickly be on the road to profitability.

Types of Services

You can offer a wide range of services. The following list encompasses what we found on the market, but it is by no means exhaustive. Some of these services could be businesses in and of themselves; others are ancillary to a primary service. Listen to your clients; they’ll let you know what they need, and then you can decide if you can provide it.

-Word processing

-Tape transcription

-Phone-in dictation

-Desktop publishing

-Spreadsheet design

-College papers and reports

-Telephone answering

-Mail receiving and forwarding

-Packing and shipping

-Database/mailing list management

-Bookkeeping, check preparation and billing

-Resume preparation

-Proofreading

-Print brokering

-Fax sending and receiving

-Photocopying

-Notary

-Internet research

-Web page design and maintenance

-Event planning

-Consulting

-Training

Target Market

You have three broad markets for your business support services business: the general public; small commercial and homebased businesses; and large corporations.
• General Public. By “general public,” we mean individual clients who are not businesses. The two largest segments of this market are people needing resume preparation and college students.
A job hunter creating or updating a resume may actually write the document and bring it to you for layout and printing; he or she may need you to assist in writing the content as well. Even when the unemployment rate is low, the resume market is significant because people don’t have to be unemployed to need a resume.
What’s Inside
• Introduction
• Target Market
• Startup Costs
• Operations
• Income and Billing
• Marketing
• Resources

There are thousands of higher-learning institutions in the United States with a collective enrollment of millions of students. Although many students prepare reports and papers themselves, enough of them will turn to a professional word-processing firm to make this market substantial.
Students working on particularly long papers, such as graduate theses or dissertations, are strong candidates for your service. And, of course, once they graduate, they may come back to you for assistance with their resumes.
In addition to students, the academic community may also be a source of business (think professors who need word processing, editing and proofreading services for their books and articles).

• Small Businesses. Chances are, the majority of your clients will fall under this category. These are companies that require secretarial and administrative support but do not have the money, space or need for a full-time employee. Or they may prefer to outsource specific tasks rather than invest in the talent and equipment necessary to get the job done right. And hiring temporary employees can be more costly than small businesses’ needs demand.
As the number of small businesses continues to grow, so does your potential market. And the list of services they use is limited only by your imagination and personal preferences. As you develop relationships with small businesses, you’ll be in a position to make suggestions that will increase the volume–or even expand the scope–of the work you do for them.
Typically, small businesses turn to business support services firms for word processing, faxing, photocopying, shipping, desktop publishing, mailing list management, dictation and transcription.

• Large Corporations. Even fairly large operations with full-time secretaries and administrative assistants may be candidates for your services. If a company has a temporary situation where they have more work than they can handle in-house, they may turn to you to pick up the overload. Or, like the small businesses mentioned earlier, they may prefer to outsource special projects rather than hiring temporary workers. This is a smart move, because hiring temporary employees means training them and providing them with an adequately equipped workstation. Sending the work to you eliminates that hassle and cost.
Large companies also use business support services when their own staff members are unavailable due to vacations or illness. They may not actually need a “temp,” that is, someone to come in and be present in the office, but they may need someone who can handle all or part of the work of the absent staffer.

Finding a Niche
It’s a good idea to select one or more key market groups to target. There are a number of very valid reasons for choosing a well-defined market niche. By targeting a very specific market segment, you can tailor your service menu, marketing efforts and customer service system to meet that segment’s needs. You can refine your marketing efforts and gain a reputation within the industry for expertise in certain areas–which means you can charge more. Think about it: In the medical field, who earns more–a family practitioner or a neurosurgeon? The neurosurgeon, naturally, because he’s a specialist, and what he does requires greater skill. Some market niches you might consider include:

• Other business support services. Let existing business owners know you’re available for overflow or to work on a contract basis. Expect to have to sign confidentiality and noncompete agreements, but be sure any such contract limits you to only being prevented from marketing directly to the service’s clients whose work you actually do. You might have to discount your rates to allow them to make a profit, but your marketing and sales costs will be minimal, which offsets the discount; however, be sure you are compensated for rush jobs.

• Specific professions or industries. If you have expertise in a specific field, you may target your service to that field. Two of the most common are the legal and medical fields, particularly transcribing for these groups, because you’ll need to be familiar with a long list of special terms and formatting requirements. Or you may want to target professional salespeople, such as manufacturers’ reps, who work from their homes and need occasional administrative support. Chicago’s Joann V. focuses on the insurance industry, and Cindy P. in Irvine, California, targets the legal field.

• Geographic areas. If you are in a densely populated area, perhaps an office center or a light industrial park, you may want to choose your market by geography. Determine your parameters, and then market to the companies within your service area, emphasizing the convenience of using your service.

• Academic. If you are near a college or university, you can serve a number of academic-related niches, including students, instructors and even administrators.

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Making it Work
After you’ve found a provider, your work isn’t over yet. Even after you’ve checked references, “don’t be afraid to put a little extra time creating a specific contract that outlines exactly what performance is expected,” Resnick says. “Use incentives to motivate the outsourcer to focus on what is most important to you rather than their own preferences or their assumptions about what you want.”

Communicate your expectations and the steps included in the job clearly; never assume that contractors are thinking what you’re thinking. “When there is a problem [with the work], I am often the one to blame, as my instructions may not have been clear enough,” says Jeremy Belcher, owner of FoxyMelody.com, who has hired numerous contractors through eLance. “It is very important that the requirements and expectations are laid out in the beginning, and that nothing is left to assumption.”

Even when you clearly state your expectations, “there will be a learning curve on the provider’s side,” Belcher adds. “Hang in there. The provider will get better, and you will have the freedom to focus on more important tasks.”

Your final responsibility as a successful outsourcer is to step back, relinquish control, and allow your new team members to do the job you’ve hired them to do. “You need some measure of trust,” Resnick says. “If you are going to micromanage all of your outsourcing, the savings in management attention and time that is the whole point of outsourcing is lost.”

If you’re used to doing everything yourself, consider delegating the management of outsourcing relationships to another member of your management team, a move that may help you let go, according to Resnick.

“It’s less about logistics and entirely about mindset,” Walsh adds. “Many owners take pride in having the world on their shoulders and their entire organization buried in their mind. Knowing your business is critical, but keeping yourself indispensable is reckless and un-scalable. Realize that removing yourself from low-level operations is the smartest investment you can make in the long-term success of your business.”

 

Weighing the Costs vs. the Benefits

Counting the Cost
So what can you expect to pay a contractor for allowing you to rise above day-to-day tasks and build a better business? It depends on the type of work you’re buying, the skill level and location of your provider, and your own preferences.

For instance, SeatGeek’s Groetzinger says that through online hiring sites, you can find contractors in developing countries who will work for less than $1 per hour. While U.S.-based contractors will likely require higher fees, they may be lower in rural areas than in metropolitan cities where the cost of living is greater.

“‘You get what you pay for’ is true, wherever you go in the world,” Walsh says. “Always pay someone what they’re worth, regardless of location but accounting for and leveraging currency differences that often work in your favor. [Place] value [on] outcomes over hours. If you don’t get the outcome you need, it doesn’t matter how much time your contractor spent along the way. Consider distinct task-based agreements while you’re evaluating new providers, and transition to a fixed-cost retainer once you’re confident in their ability to consistently deliver.”

Facing the Challenges
While outsourcing can yield great advantages for a small company, it’s not without challenges. If you choose to work with offshore providers, language barriers and time zones can be difficult to deal with. However, Walsh says that focusing on making your own communications clear can help overcome confusion for those who are not native English speakers. And “time zones create more opportunity than inconvenience, as you can extend your productive hours by handing tasks over to someone during their workday,” Walsh says. “Assign a task at night, and awake to find it complete and waiting for you.”

Just as when you hire a new employee, there are security risks involved when handing tasks over to an outsourced provider. “The challenge is to outsource functionality securely, in a manner that does not put employee personal information or customer data at risk,” says Jonathan Gossels, president of SystemExperts, a security and compliance consulting firm.

If contractors are handling credit card data, Gossels recommends reviewing their Payment Card Industry Data Security Standard compliance statement; if they are handling health or benefits information, review their HIPAA compliance statement. For a general sense of the contractor’s security policy and practices, review their ISO 27002 compliance statement.

“The most important step a business owner can take to protect his data is to only provide the outsourced service provider with the absolute minimum data necessary for the provider to do its work,” Gossels says.

The Small Office Assistant’s Thomas discovered the importance of protecting client data when one of her contracted virtual assistants stole a client from Thomas for her own virtual assistant business. Now, rather than working directly with clients, Thomas’ contractors communicate with them anonymously through the company’s online system and Thomas herself serves as the sole client contact.

Reaping the Benefits
Although there are risks, outsourcing ultimately offers business owners great advantages. The process allows you to build a team of skilled professionals without adding the expense of full-time employees, and to avoid getting bogged down with tasks that can be completed without your attention, Sparks says. It’s an affordable, proven strategy for growing your business without letting it take over your life.

“Handing off work forces you to objectively, ruthlessly and systematically consider your activities and the steps taken to perform them,” Walsh says. “Defining a process flushes out inefficiency.”

When you outsource, you can focus your time, attention and resources on your company’s core competencies–and spend your time setting new goals and finding ways to achieve them.

 

Source: https://www.entrepreneur.com/

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When Laura Lee Sparks left her job as a law firm manager to launch her own business, she knew from the beginning that there were certain tasks she didn’t want to handle. The owner of Legal Marketing Maven–a firm that helps law firms streamline their practices through outsourcing–Sparks practiced what she preached from the start, hiring an outside bookkeeper and slowly adding to her virtual team of contractors. Within months, her business revenues reached six figures.

“Most entrepreneurs have great talents but many times they think they can do it all,” Sparks says. “That can really stall the growth of the business. By outsourcing the day to day back-office tasks, the business owner has more time to focus on generating income.”

Entrepreneurs have long seen outsourcing as a strategy reserved for big business, but technology has made it a more accessible tool for small businesses–and for some small firms, outsourcing has made a powerful impact on their growth, productivity and bottom lines.

“More small businesses are outsourcing tasks these days because technology has advanced to the point of professionals being able to work from anywhere in the world, coupled with the availability and accessibility of extremely qualified professionals who have decided or been forced to leave the corporate world, [such as] virtual executive assistants, marketing directors, graphic designers, transcriptionists, paralegals, web designers, HR consultants, bookkeepers, PR directors, IT specialists, and the list goes on,” Sparks says. “These freelancers come on board as subcontractors and save the small business owner the burden of paying overhead associated with payroll taxes and expenses such as health insurance and worker’s compensation, as well as the space constrictions that growing a company in-house can present.”
Taking the first steps toward outsourcing can be time-consuming, but figuring out how to build your business with help from outside professionals can offer increased efficiencies and economies of scale. “Progressive entrepreneurs realize the unstoppable power of outsourcing to handle aspects of their business that are essential but simply don’t make sense for them to deal with personally,” says David Walsh, entrepreneur and author of Source Control, an e-book on effective small business outsourcing. “Small business, augmented by a global pool of human capital, can compete directly with the biggest players in their space, and win.”

 

When to Outsource
For every company, the right time to outsource is different. Some businesses have in-house staff to handle daily activities, but may need outside help to undertake new projects that don’t warrant another full-time employee. When you and your current employees are unable to manage the day-to-day business of your company and build the business satisfactorily, it may be time to consider outsourcing. For Tonya Thomas, president of The Small Office Assistant, the right time was when she realized that although she wanted her business to grow, she had no time left in her day to pursue that growth.

“At first I felt like I was the only person who could do the work efficiently; I wanted control over everything,” Thomas says. “But I wanted my business to grow and in order to do that I had to let go and start delegating.” Letting go paid off: The first year she began using contractors to help carry her workload, Thomas doubled her company’s revenue.

For very small businesses, Sparks recommends outsourcing from the very beginning. She suggests starting out with a bookkeeper and a virtual assistant, and growing the team from there. In her own business, Sparks now contracts with a virtual bookkeeper, a web designer, a ghost writer, a graphic designer, an executive assistant and a project manager.

 

What to Outsource
Chances are you’re already outsourcing some business tasks, such as payroll administration or background and criminal checks for employment. And these days, almost any task can be outsourced, with so many qualified professionals leaving the corporate world to work as freelancers or contractors. However, just because you can outsource a task doesn’t mean you should.

“Don’t outsource something just because you don’t want to do it,” says Jim Lanzalotto, principal at Scanlon Louis, a marketing and strategic outsourcing company. “Sometimes there are things you don’t want to do but they are important to your core business.”

Before choosing which tasks you can farm out, take a hard look at your business and determine your strengths and values. “Small businesses must identify their core competencies and capabilities and focus their own R&D, talent management and resources on being the best in their industry at these,” says Marc Resnick, Ph.D., a small business consultant and director of the Institute for Technology Innovation at Florida International University. “Outsourcing any aspect of [these tasks] would be a big mistake because they would cease to offer anything that their own customers couldn’t get elsewhere. So a small business that focuses on product design should not outsource anything related to developing its internal design talent or their design activities. But they should investigate all opportunities for outsourcing tangential processes like payroll services, IT and so on.”

The types of tasks that are best outsourced fall into three general categories, according to Gregg Landers, director of growth management at CBIZ MHM, the nation’s eighth largest accounting and business services provider. They include:

• Highly skilled, or executive, expertise. For example, you may not need to pay a CFO’s salary, but you could have a CFO-level
person to come in a few times each month to provide financial analysis and ensure that the bookkeeper is handling the books well, Landers says.

• Highly repetitive tasks. Accounts payable, data entry and shipping inventory could fall into this category.

• Specialized knowledge. “An example might be the IT support for your accounting system or your network,” Landers says. “You may not be able to afford or need a full-time IT person, and it is easier to change to an outsourced provider with the right skill set as your IT needs change.”

Related: 8 Great Time-Tracking Apps for Freelancers

 

Finding the Right Contractors
Before handing over the reins, be sure you’re working with the right partner. While technology makes it much easier than it once was to find capable, reliable outsource providers, the selection process is still vitally important. A good starting place is your own network; ask other business owners or your accountant, lawyer, or banker if they can recommend a provider offering the services you need. Online networks like LinkedIn and Twitter make it easy to expand your personal networks and to ask for recommendations.

In the absence of a good recommendation from a friend or acquaintance, there are other options. Thomas located outsource providers by placing ads on a work-at-home website and by submitting requests for proposals to professional trade organizations. Lanzalotto says that while local Chambers of Commerce usually can’t recommend one provider over another, a professional association or trade group will often recommend the right partner for your needs.

A number of online services such as oDeskBidModo and eLance serve as virtual marketplaces for contractors and business owners to connect and begin working relationships. Jack Groetzinger, co-founder of SeatGeek.com, a Manhattan-based company that forecasts ticket prices for sports and music events, works regularly with contractors through oDesk to gather photographs and collect ticket price data. Along with a full-time staff of seven, SeatGeek now works with contractors scattered from the Philippines to Pine Bluff, Ark., and Aurora, Colo. When hiring freelancers, Groetzinger says he pays most attention to the feedback they’ve received from other employers.

“Finding the right vendor means having access to the right information about the prospective contractors,” says Zack Fuentes, CEO of BidModo. Outsourcing sites usually allow you to see how previous clients rated prospective vendors’ work, as well as detailed profiles of the vendors.

Whether you use a web-based marketplace, a personal referral, or a personalized matchmaking consultant, the key to identifying the right contractor is to know exactly what you’re looking for.

“First identify exactly what performance metrics are important for each task [you] want to outsource,” Resnick says. “Some outsourcing providers focus on speed at the expense of quality or vice versa. This is fine as long as there is a good match between what the small business wants and what the [provider] specializes in. But many small businesses don’t realize that there are large differences among outsourcing providers and select the wrong ones. An open and clear conversation with potential contractors regarding these key performance metrics is essential.”

Related: 10 Online Invoicing Services for Small-Business Owners

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3- SBUs relations and holding branding

With the expansion of holding companies, their activities have become more competitive and the matter of core brand among them is more important which may cause the distinction of them from market situation. The more sponsorship plans of holding companies and SBUs conform, the more positive its effect will be in identity, feedback, common relations of holding brand and SBUs. Adversely, the weaker is the conformity of plans, the more negatively will affect the identity, meaning, and feedback and brand relations like barriers against holding brand management strategies.

Strong SBUs provide many strategic advantages to holding companies. These advantages are defined as brand capital. In contrast, famous holding companies introduce economic advantages and loyal customers to SBUs.

For instance, Emerson Company founded in 1890, in 2000 was converted to a global engineering and technology company from an electronic company by adopting a new strategy of the 3rd millennium, branding with changing the logo of the company for the first time from 1967 and shortening its name from Emerson Electric Co. to Emerson. In 2000-2001 it purchased the Jordan Industries Inc. Thus it provided access to markets of china, India and Malaysia. Then it purchased Avansys Power Co. at the price of $750,000,000 in October 2001 and it turned into the biggest foreign private company in China.

This investment retained the sales of 2001 as the last year. When other companies were in economic collapse, Emerson was obliged to reduce costs and make strategic investment for long-term growth. In 2001 it improved its 43-year revenue record.

Currently Emerson consists of 3 main companies: ABB Ltd., General Electric Company and Hitachi Ltd. And 33 other affiliate companies. Many of Emerson’s affiliate companies are not globally known, but with the global fame of Emerson Companies Group and its holding companies (Astec International Holdings Ltd. (United Kingdom), Fisher-Rosemount Holding AG (Switzerland), Emerson Holding Corp., Emerson Electric Holdings Ltd. (China)) the sales of affiliate companies enhanced.

With the depression in governmental investment in SBUs, holding companies in competition for acquiring the same capital, need to establish and retain the brand identity to reach the higher levels of brand capital by strategic locating and recognition in capital market.

On the other hand, holding companies and grouping of SBU companies’ value, SBU companies intensify and may successfully use the advantages of being brand. In this case, the strategic importance of the good definition of corporate branding of SBUs is clear and the alliance of these companies have positive effects on brand and reinforces the SBU companies of brand and help the stronger growth of loyalty emotion of customers and finally enhances the brand capital value.

The support of holding company of a brand or SBU, gives the opportunity of generation of brand holding, from a type of cooperation to a long-term cooperation and relation between two or more organizations and holding changes its position to brand. Holding and SBU activities both include a symbolic relation with transfer of inherent values of sponsorship to the activity. Development of this symbolic exchange in long-term period in a diversified area and range of activities forms the structural basis of common co-branding identity and the relation in between.

 

4- Results

  • As stated in this paper, we must think about the branding of holding companies as equity of partner brands.
  • The relationship between different brands and holding brand companies may develop cooperation and sponsorship and collaboration in holding. Holding brand tasks are the sources of value and establishment of a new sponsorship environment, research and study in collaborative cooperation identity.
  • Corporate brand management needs that the company’s values initially are shared and aligned so that the holding brand identity may be formed and fixed. The common start points may be the basis for marketing relations and advertisement. Brand companies cooperation in holding company may be continued in ideological, strategic, tactical and emotional levels.
  • If the banding of holding is successful, a new value is added to partner brands. Firstly with holding branding strategy (brands holding), the equity of holding is fixed, but with marketing relations, it merges with the existing brands.
  • The role of marketing relations in brands cooperation and sources of equity in relation to the nature of holding brand equity, need further study. These studies will indicate that how holding branding gives opportunity to partner brands to move beyond sponsorship and define brand identity and make holding brand equity.
  • The sponsorship of holding companies may be a strong tool for making brand in organizations. But all holdings do not have the same conditions and advantages and holdings may produce value for their brand by using sponsorship plans.
  • When the congruity of holding companies is high, customers experience the scientific and information adaptation and often give favorable feedback. When the congruity is low, customers’ experience of information non-adaptation that negatively affects their feedbacks will have weak effect.

 

Regarding the mentioned discussion, consequently we will have relations with high congruity:

  1. Reinforcement of band identity
  2. Reinforcement of brand meaning
  3. Enhancement of brand feedback
  4. Reinforcement of brand relation

 

In low congruity we will have the adverse cases.

 

Reference:

1.Batra ,R. and Homer, P.M(2011).the Situational impact of Brand image beliefs ,Journal of Consumer ,Psychology.

2.Smith,G.(2010).Brand Image transfer through Sponsorship :a Consumer learning perspective Journal of Marketing Management .

3.Keller ,K,l(2010).Conceptualizing ,Measuring ,and Managing customer based brand equity,

Journal of Marketing.

4.Aaker ,J.L (2009) .Dimensions of Brand personality ,Journal of marketing Research .

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Product involvement or contribution

The notion of product involvement or contribution is precisely examined in customer’s behavior and society’s psychology and it relates to how customer uses the product in everyday life. Product involvement expresses that products and special services are more or less the core of people’s lives and point to their needs and demands and reflect their beliefs and values. For example, automobile is a product with high involvement. Many personalities choose an automobile to feel that they show the original and real image of themselves in society. Thus such a choice improves their social identity and self confidence. Products with low consumption life such as beverages have little involvement and customer has less care for them. The product involvement has an important aspect in marketing, because it can affect the people’s feedback to product and services.

 

2- Branding of holding companies

Brands activity is inherently the identification and distinction of products, but services, organizations, sport, art, beliefs, people and places may also be brands. Brand is the dialogue of senses and identity. This sense and identity was previously designed and/or declared and established in customers’ mind.

Holding brand may be the reasonable summation of marketing efforts of companies to provide the holding collaborative value. Value systems need to be considered in a wider concept of identity theory. This subject provides the strategic framework to understand holding brands. Holding brand may be the image or identity expression of an organization .

Holding brand is a smart decision made by the senior manager to clarify the reputation and identity of the organization in shape of brand design. In forming a strong holding brand, the organization has the opportunity to establish a connection with bank or finance and credit resources to define the required cases. The meaning of holding brand values must help the organization to reach its objectives.

 

2-1 Co-branding with one holding name

Blackett and Boad defined co-branding as a form of cooperation between two or more brands with significant customer recognition, in which all the participants’ brand names are retained. Thus, co-branding is not simply cooperation between organizations, but must involve the public linkage of corporate brands that are owned or controlled by different organizations. This linkage process should start with the corporate brand values. Co-branding values are:

  • Core values
  • Absentee values
  • Peripheral values
  • Generic values

Each co-branded partner has, as its own core values, a set of fundamental values that define the brand and differentiate it from the competition. The challenge within co-branding ventures is to align the core values and maximize the opportunity to augment absentee values that the brand lacks but wishes to acquire. Co-branding may also offer an opportunity to abandon peripheral values that are inappropriate or negative. In order for the co-branding exercise to succeed, each partner must have the generic values that enable their brand to enter the co-brand category and compete effectively.

Just as successful mergers require best practice in corporate identity and corporate communications, co-branding initiatives need to take into account synergies in the corporate identities and corporate communications. Furthermore, successful co-branding may result in transferring the three virtues of corporate brands :

  • Communicate clearly and consistently the co-brand promise
  • Differentiate the co-brand from its competitors
  • Enhance the esteem and loyalty of its customers and stakeholder groups and networks

 

2-2 Brand Equity

Initially brand equity was seen from a consumer behavior perspective that emphasized the consumer response to the marketing of the brand. The consumer behavior perspective has been extended to include interactive communications, marketing strategy, channel management, services and financial perspectives. This broader understanding of brand equity and branding recognizes the importance of relationships with multiple stakeholder groups .The way in which the firm communicates the brand is a significant factor in the increase of its equity. From a financial perspective, a brand is regarded as an asset and its value to the firm lies in the ability to build and maintain earnings over and above the value created by the tangible assets. Knox et al. (2000) identified reputation, product/service performance, product brand and customer portfolio, and networks as the unique organization value proposition. Brand equity is, therefore, an intangible asset that resides in the complex interaction of brand reputation, performance, meanings and relationships that add to the value of an organization.

Branding is the creation of the conditions that allow the connection of brands and the production of a viable linked identity, even though the brands may have no necessary belongingness. If the branding is successful, then stakeholders who participate in the relevant discourse will accept the linkage and speak and behave accordingly.

Potential sources of brand equity for corporate co-brands are outlined below.

  • Equity source 1: equity is developed through access to the brand strategy and associations of the co-branded partner.

ao-branding offers access to the brand strategy of another brand. Thus each organization has the opportunity to pursue new strategies assisted by an experienced partner.

  • Equity source 2: equity is developed through the alignment of corporate brand values.

Value is derived from the alignment of agreed-on common starting points. When brand values are compatible and connected the brands at a fundamental level. Thus, a successful co-branding articulation may enable the values associated with one brand to be linked with another brand. Alternatively, when particular values are shared by both brands, then these values may be even more powerfully associated with the co-brand.

Alignment may occur with core, extended or inspirational brand values. Some brand values are culture-specific and may offer fewer opportunities for marketing communication promotions.

 

  • Equity source 3: equity emerges from the marketing communications association

Association with a partner’s brand facilitates the articulation, disarticulation and/or re-articulation within desired discourses. In this case, much of the initial co-branded equity was established through the marketing communication relationship, and it is possible to argue that the marketing relationship was crucial to the establishment of the co-brand identity and reputation.

 

  • Equity source 4: the corporate co-brand reach offers equity

An immediate source of co-brand equity may also be access to the established stakeholder relationships, media, distribution channels, and markets of the partner brand. A prime reason for sponsorship is to gain access to a new set of consumers, and in a co-branded relationship that access is extended to include stakeholders such as media, local communities, and even government. Co-branding also allows easy access to a brand partners’ established markets and product distribution channels.

 

2-3 The Strategic importance of Fit (Congruity)

Fit means the strategic adaptation of brand companies and holding in mission, target customers and/or the defined values. The target customer of brand products is determined by congruity evaluation (for instance, between brands and affiliates, or brands and stockholders). When congruity is high, the scientific and information adaptation of customers often leads to their favorable feedback. Adversely, when congruity is low, the non adaptation of information and customers’ experience negatively affects their feedbacks.

The ability of branding programs of holding companies in customization a particular belief in brand image, meaning, feedback and brand relationships are studied in meaning transfer model. According to this model, transfer of meanings and beliefs from one subject to another (for example, from brand companies to holdings and vice versa) and establishing some cooperation needs good development of two subjects. The clearer relationships are defined, the stronger their cooperation and collaboration will be and the better the competitive situation of holding brand will be. In contrast, the weaker are defined the relationships, the less favorable will be the common definitions, values, mission and records, target customer etc.

In fact customers easily understand the relationship between two brands, like a musical brand with Sony company brand and consequently the special cooperation of two brands, brand images, brand reputation enhance and perception risk will reduce and a sense of intimacy is created that finally leads to a positive situation.

 

2-4 Branding Strategies

Holding brand changes the way of presenting product/service to market. Some features of brand such as name, logo, values, motivation and/or sign or special reputation of organization, help the customer to choose product/service between different variables. Presenting exclusive services (in effect unique) in services industry is reflected in uniqueness, especially commitment throughout the organization. In addition strong brands have demand advantages like cost advantage.

The real value of strong personality depends on customer’s perception and commitment of a brand. Strong brands reduce the search time of customer and limit the access of rivals to their company information and reduce the risk of information retrieval and facilitates the customers relation with brand and reinforces the positive beliefs towards brands.

Brand feedback is the next step of customers’ experiences which ends in brand relations. Brand feedback forms with two components: judgments and emotions. Judgments are the knowledge feedbacks of customers from validation and brand value that a holding must have. Validation is the perception capacity of doing commitments. Brands with high validation have low perception risk (by customer), information costs and non reliability and have higher expected profitability.

Brand emotions include warmth, welfare, excitement, self-respect and social acceptance. Brand emotions help the companies to develop the positive effective relation with customers and improve their tendency to the brand.

 

Measurable factors of brands congruity with each other are:

  • Brand preference (loyalty, satisfaction etc.)
  • Transfer of brand image (definition and recognition of brand)
  • Customer product pattern (affected by brand identification)
  • Process customization

 

2-5 Holding plans and brand management

Holding plans in support of the special objectives of branding has effects on partners’ collaborative relations. Brand management strategies of holding need holding’s profound notions and activities.

The benefits of holding branding may include the increase of brand associations, improvement of competitive situation, positive feeling of customer and increase of brand fans.

The maximum effect of holding’s branding plans need specific conditions. Customers’ evaluation of the plans and holding brand management is performed on these factors: personal interests, company’s reputation, sponsor’s motivation and perception of congruity.

 

2-6 The role of customization process

The process of identification and customization of brand concept, in clarification of situation and preference and brand benefits in market is very important. Customers may easily understand the adapted concepts and may reach more positive features ad situations. The simplicity of the process has significant effect on the customer’s feedback.

 

2-7 The role of brand pattern, and the effect of customer product pattern

The patterning theory affects the customer product pattern feedback. If the customer product pattern conforms to the product classification, the brand image beliefs have huge effect on brand preference. Therefore the information classification facilitates the motivation made by sponsor or holding. Thus customer confronting the purchase situation uses the schematic pattern of brand in his mind. One may suppose that when this pattern is well defined and recognized, customers will have fewer tendencies to accept their image beliefs whether it does not conform to their schematic pattern.

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Abstract

Brand products and branding have important role in profitability of manufacturing institutions and holding companies. The relationship between brand and holding companies is very important because of its role and place in economic growth and development in these companies and needs further investigation and study. This paper examines the conditions and requirements of branding in holding companies.

Mutual congruity and aggregation of interests and economic activities of brands and SBU companies, along the development of brand for holding company may be a bold tactic in absorption of capital and acquiring economic interests.

It seems that the more brand holding and SBU products have compliance, the more reliability is created in customers, and consequently more capital and interest is generated for customers and holding companies.

Keywords: brand products, branding, brand holding and SBUs

 

Introduction

The main subject of merchants is achieving their objectives and multi-product sales. The majority of customers go to market when their desired product has successfully passed the performance tests. Therefore, presentation of the new product in a saturated market is difficult. This challenge is even more complicated because of the communicative traditional relations of market such as advertisement and messaging and product features to the customers in the mass publicities presented to customer.

Holding companies may provide a significant role in market by determining the activity area and target customers and improve their economic activities. Along this, choosing the proper kind of activity, market and company’s reputation are very important factors. Choosing brand product for activity of holding companies, and branding for holding companies may be a tactic to achieve this goal.

Researches show that strong brands might have many strategic advantages such as giving discount to loyal customers. These advantages are defined as brand capital. One of the valued added features to customers is hidden in companies’ brands.

Holding identity and holdings branding have had a complicated challenge for researchers. Researches about the increasing importance of holding identity and brand holdings are originated from some behaviors: 1- dialogue and communication of holdings, 2- organizational behavior. The existing challenge lies in management of holding brand, type of development, management and balancing the brand corporate. Type of relationship of the holding of some brand owners and formation of a united brand in the name of holding company is the subject of this paper.

 

Definition of brand

Brand is a name, term, symbol, design or any other feature that identifies on sellers’ good or service as distinct from those of other sellers. One of the brand features is the general evaluation of the customer from product which often expresses the behavior feedback of them. Brand makes the beliefs and features based on the product benefit. These features may be product related or not product-related and their benefits may be functional, experimental or symbolic

. Product-related are components that are expected by the customer in product performance or service. While not product-related is about the external aspects of product or service which is about purchase or consumption. Benefit is the value or price that customers believe the product or service have.

Customer finds different features towards the brand which are formed by using the product. These features intensely affect his/her future behavior such as joy of purchase and real purchase.

 

1- The factors affecting brand and branding

Two main principles in branding are: informing customers about the brand existence and reinforcement of brand image. One of the notions about reinforcement of brand image is the original brand personality. Brand personality is the features of brand formed by the customer. These features are: attributes, benefit and situation .

Consumer and consumption images are two main kinds from the four kinds of not product-related features. The other two kinds are knowledge about price and packaging or superficial information. Consumer and consumption images allow the consumer to generate reputation and features of brand personality and they are generated by direct experience or advertisement or marketing. These circumstances develop the reputation personality and the features of brand described by the consumer. Based on the research literature, the main factor for choosing brand by the consumer is to understand the brand personality of the product or service considering the competitive environment .Therefore, the brands that are well established and have the desired personality have advantage in marketplace and draw the positive attention of customers.

The other factor for choosing brand is reputation. Having reputation like a popular athlete makes the customers purchase the product or service. Confirming the reputation depends on the person and product. The endorser’s fit is important, such that a brand with a fixed personality may use it well for its interest (or not). Therefore, the endorser’s personality must have compliance and fit with brand.

The variables affecting the customer’s perception are:

  • Sponsorship
  • Fit
  • Brand personality
  • Attitude towards brand
  • Product involvement or contribution
  • Theoretical framework
  • Endorser personality
  • Attitude towards sponsor
  • Purchase behaviors

 

1-1 Sponsorship

Sponsorship is a kind of marketing that has been increasingly developed as a promotion tool in the last three decades. The sponsorship is defined as: a capital in cash or in kind in an activity for access to its potential capital, in cooperation and collaboration with that activity.

This notion as a way for marketing communication has significantly developed for the 6 following reasons:

  1. Governmental policy for privatization
  2. Adjustment of commercial costs of media
  3. Fixing the sponsorship ability
  4. New opportunities generated by the increase of leisure times
  5. Mass media to cover the sponsored events
  6. Inefficiency of traditional media

Basically companies have to be creative in their products and services market, based on the nature of government policy and customer behavior.

 

1-2 Framework of theory

The theory foundation in this research is “adaptive theory” that is used in management for describing the compliance of profession and employees’ personality for affecting organizations and the outputs related to work, activity, cooperation and their corporate. This theory is used in marketing for testing and describing the levels of compliance and adaptation between events, sponsors, features and endorsers of reputation and brands. Based on this theory, the experiences and information related to each other that are somehow similar and may be compared with little deviance are as much adapted to each other. Based on the article of Becker et al. the level of adaptation (compliance) between brand and its endorser (sponsor) is very important. When this compliance is low, its relation and value in customer’s mind is less formed and consequently will affect the sales of the company and its value and equity. Since the customer will not intend to buy the brand product or service.

 

1-3 Fit

Fit means: dependence, similarity, or adaptation of real communication, sponsor and reputation.

Fit means collaboration between two or more companies. The effective feedback of customers is more favorable when the fit is higher than the fit is weak.

Fit may be measured in some ways: 1- characteristics of product/service, 2- customer image, 3- brand personality, 4- benefit.

 

1-4 Endorser personality

Using the reputation of endorser for sales is a marketing strategy. Celebrities and famous and popular people in a society may play a role in the publicity of a product/service of an organization as the endorser personality of a brand. A successful endorser is a celebrity who has public acceptance for proposal or cooperation and collaboration with a product or service in an advertisement. The general indices of brand endorser in advertisement are gender (male/female), physical attractions, reliability and personality.

 

1-5 Brand personality  

Brand personality is a series of human characteristics common with a brand. Compared to the features related to product, brand personality tends to be symbolized or self-expressed. This aspect of human personality influences over time like cartoon or movie characters. Customers simply think about brand and they choose it if it is famous.

Considering the relationship between brand and human one may realize that brand has human-like or human personality with little difference.

 

1-5-2 History of brand personality

Although features of brand personality and human may rationally be similar, but they are different in how they are formed. The inherent feature of human personality is formed based on the unique behaviors. Physical characteristics, features and beliefs and popular characters are of the same kind. In contrast, understanding the features of brand personality may be formed and affected by any direct or indirect contact of customer with brand. The personal features of individuals are directly related in contact with brand. Thus the human features common with brand are directly transferred to brand.

In addition to personality characters, human characters such as gender (knowing the way of thinking of man and woman is very difficult), age and level of life like personality characters directly affects the brand image of consumer, staff or endorser of product. For instance, Virginia Slims cigarette may seem feminine and Marlboro may seem masculine or Apple PCs may seem ideal for youth and IBM may seem ideal for old people.

 

1-5-3 The symbolic use of brand: brand personality against human personality

Theoretically the reason for brand weakness is the asymmetric relationship of brand structure compared to human personality. Although three dimensions of the five dimensions of brand personality are connected with three human dimensions (adaptation and intimacy both consist of warmth and agreement; extroversion and excitement are both resulted from sociability, energy and activity; and curiosity and competition both are generated from responsibility, reliability and safety) but the other two dimensions: stability and complication are different from the five human personality.

Although the dimensions of human personality remained fixed in cultures, the dimensions of brand personality in these circumstances are not stable and unique because of the differences between them. Eventually, little information is available about the psychological mechanism of brand personality performance in cultures.

The symbolic use of brand in cultures significantly differs. For instance, in cultures where independence and individualism are known as values, customers show more interest for using brands to show their difference from others. Adversely, in pluralist societies where solidarity, unity and similarity are known as values, customers tend to use brand for showing similarity with others.

 

1-6 Attitudes towards sponsor

A situation may be defined as follows: the personal evaluation of an individual of a subject such as advertisement may be desirable or undesirable. The customer’s evaluation of the advertiser or the sponsor has essential importance in purchase behavior and brand features. The formation of positive feature of the sponsor is the first step in affecting the sponsorship process and it affects the purchase behavior.

Customers that have better feeling of adaptation between brands have good feeling about sponsor. Long-term cooperation between brands or between brand and sponsor along the objectives and image of organization might have much effect on success.

 

1-7 Purchase intention

According to Spears and Singh  purchase intention is the unique smart program in generating brand demand. The more is the level of motivation the more is the real intention of individual for purchase. This feeling or intention is the connection of features and behavior. Customers have the intention of purchasing the product or service before doing it and this intention exists before purchase. If the features related to advertisement occur in the first place, they affect all other features.

 

Product involvement or contribution

The notion of product involvement or contribution is precisely examined in customer’s behavior and society’s psychology and it relates to how customer uses the product in everyday life. Product involvement expresses that products and special services are more or less the core of people’s lives and point to their needs and demands and reflect their beliefs and values. For example, automobile is a product with high involvement. Many personalities choose an automobile to feel that they show the original and real image of themselves in society. Thus such a choice improves their social identity and self confidence. Products with low consumption life such as beverages have little involvement and customer has less care for them. The product involvement has an important aspect in marketing, because it can affect the people’s feedback to product and services.