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2012 Suggestions on the Dedicated Fund on Branding, Upgrading and Domestic Sales

To help Hong Kong enterprises capture the opportunities arising from the National 12th Five-Year Plan, the Chief Executive announced in the 2011-12 Policy Address the setting up of a dedicated fund of HK$ 1 billion to assist the industries in tapping the Mainland market through developing brands, restructuring and upgrading operations, and promoting domestic sales.

In January 2012, the BDC submitted a position paper to the Trade and Industry Department to express views on the operation of the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund):

1. Brand is a sophisticated and comprehensive undertaking involving not only the strategic management but also the overall operation of an enterprise. More often than not, branding activities are unlikely to be conducted within limited or compartmentalized geographic areas. On the other hand, in order to take advantage of the Hong Kong Origin status, an edge that helps Hong Kong brands stand out in the Mainland market, many local companies tend to establish their brands first in Hong Kong before going across the border or overseas. In this connection, the BUD Fund should not confine the sponsorship scope to activities taking place on the Mainland; rather, it should cover all kinds of branding-related initiatives of local companies, be they conducted in Mainland China or not.

2. As stipulated in the Terms of the Fund, an applicant enterprise has to formulate a “holistic business plan” and submit reports including progress reports, final reports and financial audit reports periodically. Such requirements might err on the side of procedures and formalities, whereas excessive clerical work and reporting would unavoidably discourage SMEs from filing applications. The BDC thus suggested that the application procedures and the monitoring mechanism of the BUD Fund should be simplified wherever possible so as to maximize the effectiveness of the funding scheme.

3. Brand development and promotion demand a great deal of financial resources. While looking into the possibility of raising the cumulative ceiling of funding that an enterprise may obtain from the BUD Scheme, the Government might consider taking the lead in launching some strategic projects, such as formulating a plan to position and promote “Brand Hong Kong” and rolling out a propaganda campaign in the Mainland to boost the consumer awareness and market influences of Hong Kong brands. Such landmark activities would, through promoting the overall image of Hong Kong brands, create an “umbrella effect” to the benefit of a larger number of local brands especially the SMEs.

4. The BDC also suggests that BUD Fund might be used to provide pertinent supports for companies that have arrived at an advanced level of brand development. For instance, the Government could organize recognition schemes to commend and promote Hong Kong’s representative brands, so as to establish success models and best-practice benchmarks in branding.

5. Human resources development is crucial to sustaining a company’s competitiveness and a brand’s long-term success. It is suggested that the BUD Fund should provide funding supports not only for in-house training projects of individual enterprises ,but also for public training programs organized by qualified organizations, e.g. chambers of commerce and tertiary educational institutions, modeling after the SMEs Training Fund.



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