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While the government is undertaking a review of its measures to help local enterprises promote their brands overseas, some academics have suggested that public funds go directly to research and development (R&D) projects rather than individual companies.

Speaking at a Legislative Council meeting yesterday, Secretary for Commerce and Economic Development Frederick Ma said the Financial Secretary is carrying out an in-depth study of the "Brand Hong Kong" program and reviewing initiatives designed to help Hong Kong companies promote their brands overseas.

One major scheme is the SME Export Marketing Fund, which has been set up to help small and medium-sized enterprises (SMEs) expand their businesses through participation in export promotion activities.

Ma said the government is planning to raise the grant ceiling for each applicant to HK$80,000.

Some academics, however, suggested a different approach to help these companies.

Director of Master of Science Programme in Marketing of the Chinese University of Hong Kong Leo Sin said the government should offer more funding for universities and institutions undertaking R&D projects.

He noted that R&D is the pre-requisite to successful brand building for small and medium-sized enterprises in Hong Kong.

"The research should cover product design, manufacturing as well as marketing strategies," said Sin. "Such knowledge pays the ground for brand management, since brand building depends largely on the quality of products in the long run."

To heighten SMEs' awareness of brand management, Sin suggested that the government collaborate with local tertiary institutes in introducing training courses for entrepreneurs, who can subsequently transfer the knowledge to their staff and other professionals.

Commenting on the government's plan to raise the SME Export Marketing Fund's grant ceiling, Sin noted that the move may not produce optimal results.

"It's not a big amount and a SME can spend it all on advertising quickly," said Sin. "Increased R&D will be the most effective, since it will benefit the whole industry in the long term, rather than individual SMEs."

Meanwhile, Ma said that some local enterprises have pinpointed the difficulties of advertising on mainland the awards their brands have received, which affects their competitiveness in the mainland markets.

While the enterprises have requested the government to discuss relevant arrangements with the mainland, Baniel Cheung, part-time lecturer, Faculty of Business and Economics, the University of Hong Kong said it will have minimal impact on brand building of Hong Kong enterprises on the mainland.

"Mainland consumers are very much under the spell of lavish advertising campaigns, which feature celebrities such as Olympic gold medalists," said Cheung. "The idea of 'famous Hong Kong brands' would mean nothing to them, unless the ads appear all over the country."

For Hong Kong brands to establish their presence on the mainland, Cheung agreed that product development is the first step, since their reputation in the local markets will attract mainland customers and investors.

"The strengths of our SMEs lie in production at present," Cheung explained. "With a solid reputation in place, the SMEs can gradually enter the mainland market by launching publicity campaigns in target cities like Shanghai, but brand building will take time."

(HK Edition 11/01/2007 page6)