Caution!! Brand name change

“I ABC hereby change my name to XYZ…”

If only changing a brand name was that easy. A notice in the newspapers, neatly tucked away. An sms or e-mail sent to friends and associates and hey presto you have a new name!

In the complex world of branding, things are not quite so easy.

A brand occupies a unique space in the mind of its consumers and other key stakeholders (employees, shareholders, trade, etc). That unique space is everything a person has experienced, seen or heard about the brand. It’s a unique bundle of benefits, attributes, opinions, features, delights and disappointments, etc,. It all adds up to create a “brand”. It takes time and money to build this space in person after person. It takes more money to protect this space from marauding competitive brands. And it takes even more money to keep this space fresh, relevant and meaningful. This needs to cut through the increasing cacaphony of voices competing for attention. And not all these voices or even a majority of them are from other brands. The consumer “hosts” this space and therefore owns your brand.

In this cacophony it is difficult to preserve that unique space in a person’s mind. The brand name is the magic key that unlocks that precious space. It is like a hot button that unleashes all those hidden memories, associations, impressions, images, etc,. Now imagine changing the key. The new one may fit, but then it might not. And then re-entering that special space becomes much more difficult.

Why would anyone need to change a brand if it has been well established and has a strong base of customers? Especially in our attention deficit world. Where strong brands help cut through the noise. Create fortresses of preference. And are thus often valued more than the physical assets of their parent company. As John Stuart, former CEO of Quaker, said “If this company were split up, I would give you the property, plant and equipment. And I would take the brands and trademarks. And I would fare better.” Or “If Coca-Cola were to lose all of its production-related assets in a disaster the company would survive. By contrast, if all consumers were to have a sudden lapse of memory and forget Coca-Cola the company would go out of business.” (Barwise et al., 2000, p. 75)

The first reason is the most obvious — change of ownership. In this case the company might already have a strong brand of its own. Or it might want to enter the category and use the existing experience and expertise but with a fresh new brand. Or it could be to access scarce resources like spectrum or parking rights (airlines). In some cases companies have tried to “transfer” the equity of the previous brand on to a new one. That rarely works because the original “name” is the key to unlock the brand’s core values. Absent that and it becomes just another product with a name. It also allows aggressive competitors to entice its erstwhile customer base. Dangerous if the company in question is distracted by this usually illusionary process of brand “asset” transfer.

The second reason would be to refurbish a damaged brand franchise. To put the past behind it and move on. While retaining a valuable customer base. Thus LG re-entered India in a new avatar after failing to gain success earlier (as Lucky Goldstar).

Sometimes the brand remains but its core business changes. In cases such as Wipro it is a very dramatic change (from FMCG to IT). It is a huge challenge to change what a brand stands for, which might be deeply entrenched. There needs to be strong reasons to retain the same brand for a different business. There is a danger of diluting the brand’s core values. The new business might not be successful, in which case it could be a serious threat to brand value.

Sometimes a name becomes generic to a category and needs differentiating. Examples abound such as Surf, Nescafe and Dalda in India and Xerox worldwide. In this case there is a need to refurbish the brand. Since as for its customers it is the category thus weakening differentiation. This would then impact preference. It isn’t always such a good thing for the brand name to become synonymous with the category. Substitution by its competitor brands and reduced pricing power could result.

There’s a temptation to change a brand name when competition gets too hot. Or when the brand goes through a down phase. It is then that it is critical to hold the brand-fortress. And to protect the key to it during such times. Because often the brand can bounce back. Bajaj was synonymous with scooters for much of its life. But it did not change its name when switched to motorcycles. Yes it remained in the two-wheeler category. But the market and positioning for motorcycles was very different from scooters. The reassurance of a well-established and respected brand was very important.

If a brand name change does become necessary the challenge is very similar to launching a new brand. It is important that all energies are directed towards establishing the new brand. Without the distractions of brand “asset” transfer.

Before going in for a name change it is critical to ask these questions. To evaluate the real challenges and cost of brand name change.

  1. The first question is the most obvious but the rigor in answering it could be missing. That question is “why?” What are the alternatives available and why are they not feasible? What is the outcome expected? At what cost? And with what potential threats?
  2. Understand the challenges of the category in which the brand operates. What category is it? Is it high interest or low interest? The higher the interest levels the tougher it will be to change the name. The higher the interest the greater the likelihood of entrenched loyalties. This makes it tougher for what is now a new brand to “break in.”
  3. What is the “noise” level and competitive intensity in the category? What is your “share of voice”? What is the share of voice of your competition? In many FMCG categories for example the competitive intensity from national and regional brands are high. It requires significant investment to cut through.
  4. What is the degree of competitive advantage enjoyed by your brand? If it is great then losing the original name may well erode that advantage. To have a tangible competitive advantage is no longer enough. Intangible brand values entrenched in people’s mind space are a significant advantage. Remove that and you risk losing that advantage. Even though your products might still have strengths.
  5. Heritage. GM created Saturn to avoid some of the disadvantages of the GM name and the GM “way.” Toyota created Lexus to be able to appeal to a luxury consumer. One who would not consider a Toyota no matter how good the cars were. But Toyota did not change its name nor did GM. Does your brand have a cache, a history, a space enshrined by time? Does it stand for something much bigger than its product alone? Sometimes brand custodians and owners underestimate the real value of their brands. It is sometimes more than the so-called “asset” value of the brand. The brand has an “emotional” value that can transcend its monetary value. It is important to understand that emotional value before changing its name.
  6. Finally the impact on the distribution network can be important. Trying to change the flagging fortunes of a brand by spending millions re-branding it can be completely negated by the trade. They are the ones in direct contact with customers. And all they have to say is, “Yeh to wohi cheese hai — sirf naam badal diya”(It’s the same product. All that’s changed is the name). Or the pernicious “Aap zaroor le lo par mein garantee nahin le sakta” (Do buy it but I cannot stand by it). Hence impact on those who will “sell” the new brand needs to be realistically evaluated.

Ah for the days when, as Shakespeare, said

“What’s in a name? That which we call a rose

By any other name would smell as sweet.”

Today the essence of the brand is unlocked by its name. The more you invest in it, the more complex and irreplaceable it becomes. Change it, without great care, at your peril.

Originally published at on March 16, 2017.