A handbook for branding Hungarian SMEs

MORE THAN A PRODUCT – THE BRAND AS A PERSONALITY

Why is it difficult to stand out from the noise?

In today’s market, competition is not just about price and product features. The choice is vast and the information overload almost unmanageable. Shoppers can easily get lost in a sea of options, where products and services are often interchangeable. In this noisy environment, consumer choices are increasingly driven by emotions, trust and personal feelings about a brand, rather than purely rational considerations.1 The key to differentiation is to make a brand not just a product, but a person that people can really relate to.

The brand as a human being

The definition and essence of brand personality.

A brand arc, or brand zone, is a collection of human attributes used to describe a business.2

  • Think about it: if our brand were a flesh and blood person, what would its character be like?
  • Is it serious and reliable or loose and fun?
  • What values would you stand for and how would you communicate with others?

This kind of personalisation is one of the most important elements of branding, because it gives the brand a more human and nuanced feel that consumers can relate to more easily than a faceless company or object.3 An emotional attachment to the brand, whether it is a feeling of friendship or a family bond, reinforces brand loyalty and loyalty.4 It is this deeper connection that protects the brand from the lure of price competition in the long run.

Why is this vital for SMEs? The link between profit and trust.

Many people tend to think that conscious branding can only be achieved with the huge budgets of large corporations, and that small and medium-sized enterprises have a luxury.6 But this approach is wrong. Brand building is in fact a long-term investment that increases the value, credibility and profitability of a company, and the entry threshold is much lower today than it was in the past.6 Hungarian SMEs are not competing with giant companies like Apple or Google, but with their direct market rivals. A well-built brand arc can give them an invaluable competitive advantage in their own segment.6

Although SMEs often face resource constraints, whether in terms of money, marketing skills or time, this is where they have the biggest natural advantage over large companies.9 While multinationals invest huge amounts of money in artificially constructed campaigns, for a smaller business it is the personality of the owner or the team and their real story that is the real heart of the brand.10 This direct, human face, this honest portrayal of difficulties and failures, gives the brand a credibility that gigacompanies find extremely difficult to replicate. The greatest asset of SMEs is therefore not their marketing budget but their honesty and personality.

THE BRAND ARC: STEP BY STEP TO BUILD YOUR BRAND IDENTITY

Getting the basics straight: the DNA of the brand and the question “Why?”.

Defining the DNA of the business is the basis for creating the brand arc. 12 This process is not an abstract philosophical reflection, but a strategic step to clarify the mission, vision and core values of the business. 12 The question “Why does our business exist?” is not just about revenue, but about the fundamental purpose that motivates the business. 12 Clarifying the core purpose of the brand is critical, especially for SMEs with limited resources. 9 If the brand purpose is not clearly defined, all marketing efforts become fragmented, purposeless and ultimately costly. The answer to the “Why?” question is therefore the basis for cost-effective marketing, which provides a coherent direction for all subsequent decisions, from visual identity to communication tone.15

Know your terrain: target group and competitor analysis.

Once we know the DNA of the brand, it’s up to us to get to know the terrain in more depth. This means understanding exactly who your target audience is, what problems they have and how your product or service solves them.13

Consumers are not looking to buy a product, they are looking for a solution to a problem or to fulfil a desire.1

Competitive analysis is also essential. We need to look at how competitors position themselves and what we can do differently or better than them. A thorough understanding of our competitors allows us to find the unique value proposition (known as USP) that differentiates us in the market.12

How should the brand personality reflect the visual elements and tone of voice? The power of coherence.

One of the most important steps in making your brand arc visible is to create a visual identity. This includes the logo, the colours, the fonts and the imagery.12 These elements must be in strict harmony with the brand personality. If our brand is young and playful, colours and fonts should not be formal or rigid.

The same applies to the tone and language of communication.15 The brand voice should be recognisable and consistent across all channels, from social media posts to website copy. The key is consistency: the same brand experience should be delivered to the consumer at every touchpoint.15

THE STORY THAT ENGAGES: STORYTELLING AS A STRATEGIC TOOL

The human brain in storytelling mode: why do we get attached to stories?

Storytelling is as old as mankind.18 Our brains are highly receptive to stories because they evoke emotions and create empathic connections that allow for deeper bonds.1 Ninety percent of consumers are not looking for products, but for stories, values and feelings.1 A well-constructed story can make the customer feel part of the brand’s mission and take ownership of the brand.18

And good stories spread organically. An effective brand story can spread by word of mouth, even among community members, like a good gossip.

Gossip and branding can be seen in parallel: both aim to get a good story out to as many people as possible.18 This kind of free distribution is invaluable for SMEs, as it increases brand awareness and credibility without the need for big-budget advertising.

The definition of storytelling and its role in building emotional connections.

Storytelling is a marketing tool that creates stories about a brand with the aim of adding emotional value to a product or service.1 It is particularly effective in the online space, where e-commerce can often feel impersonal.19 A well-written story can show the values and philosophy of a brand that a dry product description would be unable to convey.19

Through stories, the business is humanised, which creates a more personal connection with customers.19 Whether the story is about the founders or the process of making the products, it makes the brand more credible and trustworthy in the eyes of consumers, which plays a significant role in building customer loyalty.

SMEs have a natural advantage: the founder, the team and the community.

Storytelling is the most authentic strategy for SMEs because people identify the entire company with the owner.20 This personalisation allows for the sharing of real, honest stories, such as the founder’s personal struggles or how a product was created to solve a real problem.1 This approach builds a direct, emotional connection and is the most authentic form of communication for a small business.

THE PRACTICE OF STORYTELLING: THE TOOLBOX OF SMES

Building Storytelling: the “Hero’s Journey” in your brand.

Good storytelling has a proven dramatic arc, also known as The Hero’s Journey.16 The structure is built on the following elements:

  • The hero: The main character of the story, who can be the founder, the company or even the customer.18
  • The problem or conflict: the customer is faced with a real challenge to which the hero, the brand, offers a solution.1
  • The helper: the brand product or service that helps the hero overcome obstacles.18
  • The solution: at the end of the story, the problem is solved and the hero reaches his goal.1

In storytelling, it is important that the brand does not focus on itself, but on the customer and the problem it is solving. People like to hear stories because they get answers to their own needs and challenges through storytelling.16

Authenticity is key: presenting white spots and failures.

The secret to authentic storytelling is honesty and transparency.16 A brand cannot gain the trust of its audience if it exaggerates or omits the difficulties from its story. Instead, speaking openly about failures and challenges puts a human face on the brand that builds trust and transparency.16 For example, if a business has had to overcome a challenge through hardship and shares this with the audience, it shows human traits such as perseverance and tenacity that customers can easily identify with.

Fare-friendly storytelling tools: blogs, social media and customer reviews.

There are a number of cost-effective storytelling tools available for SMEs.23

  • Content marketing: the web is a “faceless landscape” that can be made more personal with a company blog, quality content and guides.1 This content can show your brand character and position you as an expert.
  • Social media: social media platforms such as Instagram, Facebook and LinkedIn provide a great opportunity to share daily, real-time stories through Story features.1 Sharing user-generated content (UGC), such as customer photos and reviews, is a free way to increase brand credibility and reach.23 A brand can ask customers to use a branded hashtag and post photos of the product, making them part of the community.
  • Case studies and customer testimonials: brands can tell stories about their own successes, but it’s more credible if they are told by satisfied customers. Providing detailed case studies of outstanding customers, or sharing customer reviews on the website, is not bragging, but demonstrating the value of the brand through real-life examples.16

HUNGARIAN SUCCESS STORIES AND LESSONS FROM PRACTICE

The case of Varga Winery and Julius-K9: How local businesses became world-class brands

The Hungarian market is full of examples where SMEs have risen to the top through the power of branding.24 Varga Winery has grown from a small business to one of the most influential players in the market. The winery’s brand strength lies in its consumer-centric philosophy, which is perfectly reflected in its message of “quality batches that anyone can afford”.25 This positioning has allowed them to appeal to a mass of people who were not previously the target group for wine consumption, and by giving the product a personality that is both quality yet accessible, they have built a strong emotional bond with customers.

The story of Julius-K9 is equally inspiring. The family-run business, which started out in Szigetszentmiklós, started as a manufacturer of equipment for police dogs and grew into a world-class brand.24 Their brand arc is based on the development of a “dog-human-city symbiosis”, which was enhanced by the interchangeable harness with inscriptions.26 This innovation allowed the dogs and the brand to be talked about by people, and the product to become part of a mission, not just an accessory. The company’s success stems from the passionate, personal connection to the product that permeates the brand’s story.

Smaller but more credible examples: the power of ownership.

In addition to the larger, well-known examples, there are also many businesses in the SME sector where the owner and family background are the basis for branding. Ferzol Ltd, for example, started out as a small-scale garage and has grown into a robotised factory employing nearly 600 people.24 The company’s history, its narrative of perseverance and growth, encapsulates its brand values. Similarly, the case study of Jankovits Engineering illustrates how the personality of an engineering company can be interwoven with the humanity of the founder and team, bringing the brand closer to the people while conveying authenticity.10 These examples also show that size is not a barrier when authenticity and honest storytelling are at the core of the brand.

Recommendations and action plan for the future

Branding is a continuous task: measurement and optimisation.

Brand building is not a one-off exercise, but an ongoing, dynamic process.13 SMEs should continuously measure their brand performance to optimise their strategy. Targeted measurement prevents unnecessary marketing expenditure, which is critical for SMEs.9

The table below shows the brand performance metrics and their practical application:

MetricPractical tip for SMEs
Brand Awareness (Brand Awareness)We measure brand recognition through questionnaires and social media outreach.15
Website traffic and return rateUse web analytics tools to analyse traffic and user behaviour.15
Social media activityTrack reach, number of comments and shares, and use of hashtags.15
Customer loyalty and repeat purchase ratesInvestigate repeat customer rates and collect feedback through satisfaction surveys.15
Customer feedbackActively solicit feedback from customers, for example via email or social media.15

Targeted, cost-effective marketing tips for SMEs.

For SMEs with limited budgets, the smartest strategy is to choose tools that offer high efficiency on a low budget.23

The table below shows the cost-effective branding tools recommended for SMEs:

ToolApplication as an SME
Content marketingWrite quality blog posts and guides that offer solutions to your target audience’s problems. This will position you as an expert.23
Cross-promotionGet in touch with other non-competing businesses with a similar target group. Run joint competitions or publish content together.23
MicroinfluencersCollaborate with micro-influencers with a smaller but more engaged follower base. They are often more credible and cost-effective than the big names.23
User-generated content (UGC)Encourage customers to share photos or videos of your products. This is free and highly credible advertising.23
Local networkingAttend local fairs, exhibitions and business events to build personal relationships in the community.23

THE BRAND THEY LOVE

In today’s saturated market, branding and storytelling are the two keys to success for Hungarian SMEs. Creating a brand arc that gives the business human qualities allows consumers to connect emotionally with the brand. And storytelling, as a strategic tool, helps tell the brand story that engages customers and makes them part of the community.

The biggest advantage SMEs have over large companies is precisely their personality and honesty. Limited resources are not a handicap, but a unique opportunity to build a brand on authenticity and real, human relationships.

Brand building is an ongoing, conscious task, but the good news is that in today’s digital world, there are a number of cost-effective tools available for SMEs to achieve their goals. The key is to boldly stand up for your own authentic story, because profit and long-term success are built on trust and a deep, emotional connection. The brand you’re passionate about isn’t the one that costs the most, it’s the one that’s the most genuine.

List of sources

Works cited

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Aletta Nagy-Kozma

alettafocusmarketing.com