Rebranding

bp

altria

Rebranding is a marketing strategy in which a new name, term, symbol, design, or combination thereof is created for an established brand with the intention of developing a new, differentiated identity in the minds of consumers, investors, competitors, and other stakeholders. Often, this involves radical changes to a brand’s logo, name, legal names, image, marketing strategy, and advertising themes. Such changes typically aim to reposition the brand/company, occasionally to distance itself from negative connotations of the previous branding, or to move the brand upmarket; they may also communicate a new message a new board of directors wishes to communicate.

Rebranding can be applied to new products, mature products, or even products still in development. The process can occur intentionally through a deliberate change in strategy or occur unintentionally from unplanned, emergent situations, such as a ‘Chapter 11 corporate restructuring,’ ‘union busting,’ or ‘bankruptcy.’ Rebranding can also refer to a change in a company/ corporate brand that may own several sub-brands for products or companies.

The ubiquitous nature of a company/product brand across all customer touch points makes rebranding a heavy undertaking for companies. In rebranding the iceberg model holds true, 80% of the impact is hidden. The level of impact of changing a brand depends on the degree to which the brand is changed. There are several elements of a brand that can be changed in a rebranding these include the name, the logo, the legal name, and the corporate identity (including visual identity and verbal identity). Changes made only to the company logo have the lowest impact (called a logo-swap), while changes made to the name, legal name, and other identity elements will touch every part of the company and can result in high costs and impact on large complex organizations. Due to the tremendous impact that renaming and rebranding can have, new company identities and brands are often launched in a subtle but consistent manner intended to attract new business prospects without alienating old customers.

Small businesses, however, face different challenges than large corporations and must adapt their rebranding strategy accordingly. Rather than implementing change gradually, small businesses are sometimes better served by rebranding their image in a short timeframe – especially when existing brand notoriety is low. ‘The powerful first impression on new clients made possible by professional brand design often outweighs an outdated or poorly-designed image’s weak brand recognition to existing clients.’ A change of image in a large corporation can have costly repercussions (updating signage in multiple locations, large quantities of existing collateral, communicating with a large number of employees, etc.), while small businesses can enjoy more mobility and implement change more quickly.

Rebranding has become something of a fad at the turn of the millennium, with some companies rebranding several times. The rebranding of Philip Morris to Altria was done to help the company shed the negative image it had garnered from its tobacco company holdings. Other rebrandings, such as the British Post Office’s attempt to rebrand itself as Consignia, have proved such a failure that millions more had to be spent to revert back to the original brand. A successful rebrand aims at enhancing, regaining, and/ or transferring the corporate brand equity. Rebranding also enables companies to differentiate themselves from their competitors, which is especially important in saturated markets such as the financial services industry.

According to marketing scholar Roger Sinclair businesses the world over acknowledge the value of brands: ‘Brands, it seems, alongside ownership of copyright and trademarks, computer software and specialist know-how, are now at the heart of the intangible value investors place on companies.’ As such, companies in the 21st century may find it necessary to reexamine their brand in terms of its relevancy to consumers and the changing marketplace. Rebranding projects can shed undesired brand connotations, while preserving extant brand equity, and even confer new, modern associations, yielding a brand better off than before.

Corporations rebrand in response to external and/or internal issues. Internally, firms commonly have rebranding cycles in order to stay current with the times or set themselves ahead of the competition. Companies also utilize rebranding as an effective marketing tool to hide malpractices of the past. Once a brand has negative connotations associated with it, it can only lead to decreased profitability and possibly complete corporate failure. Corporations such as Citigroup, AOL, American Express, and Goldman Sachs all utilize third-party vendors that specialize in brand strategy and the development of corporate identity. Companies invest valuable resources into rebranding and third-party vendors because it is a way to protect them from being rejected by customers in a very competitive market. Sinclair, a leading expert on brand valuation and brand equity practice worldwide stated, ‘A brand is a resource acquired by an enterprise that generates future economic benefits.’

Brands often re-brand in reaction to losing market share. In these cases, the brands have become less meaningful to target audiences and, therefore, lost share to competitors. In some cases, companies try to build on any perceived equity they believe still exists in their brand. Radio Shack, for example, re-branded itself as The Shack in 2008, but have yet to see an increase in market share. The most meaningful rebrands are those that fixate on the customer and pose an aspirational self-reflection of them. When Steve Jobs returned to Apple in 1997, he rebranded it from Apple Computer to Apple so the company would have customer permission to sell other products, such as the iPod and iPhone. In addition, the new brand came with a new theme line that said, ‘Think Different,’ a description of the Apple customer and how Apple operates. In time, Apple has become the world’s most valuable company.

Companies can also choose to rebrand to remain relevant to its (new) customers and stakeholders. This could occur when a company’s business has changed, for example its strategic direction and industry focus, or when its brand no longer fits its (new) customer base. For example, a company might rebrand so that its name works in new market it enters, whether for cultural reasons or for language reasons (e.g. the name is not easily pronounceable in other languages). Rebranding is also a way to refresh an image to ensure its appeal to contemporary customers and stakeholders. What looked fresh and relevant in 2001 is no longer as appealing in 2015. Some well known examples of companies who recently ‘refreshed’ their brand are Philips and Google.

Brands are often protected by a form of market segmentation called product differentiation, which is similar to rebranding but does not entail the elimination of the original brand image. Dexxa computer mice are rebranded Logitech devices sold at a lower price by Logitech in the low-end market segment without undercutting their mid-range products. Rebranding in this manner allows one set of engineering and QA to be used to create multiple products with minimal modifications and additional expense. Another form of product rebranding, called rebadging in the automotive industry, is the sale of a product manufactured by another company under a new name. An original design manufacturer is a company that manufactures a product that is eventually branded by another firm for sale. This is often the case with international trade. A product is manufactured in a place with lower operating costs, and sold under a local brand name.

Following a merger or acquisition, companies usually rebrand newly acquired products to keep them consistent with an existing product line. For example, when Symantec acquired Quarterdeck in November 1998, Symantec chose to rename CleanSweep to Norton CleanSweep. Later on, the company chose to reposition its entire product line by grouping products into a bundle known as Norton SystemWorks. Symantec is not the only software company to reposition and rebrand its products. Much of Microsoft’s product line consists of rebranded products, including MS-DOS, FoxPro, and Visio. Another example is the rebrands of GeForce 8-series GPU into 9-series by nVidia. The reverse can also happen, as when AlliedSignal acquired Honeywell, Southern Railroad of Long Island acquired Long Island Rail Road, and Chemical Bank acquired Chase Manhattan Bank. In such cases, the acquiring company rebrands itself with the acquired name.

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