Re-branding is a complex process with serious risks. As the result of a re-branding campaign, customers could become confused or alienated and sales could drop. Consequently, this will harm the brand’s pricing position and market share. Therefore, the decision to re-brand must be carefully made after thorough research and analysis.
The Fundamental Reasons
There are basic reasons why a company chooses to re-brand. For example, if your brand’s logo or name is too similar to an existing trademark, then re-branding may be cheaper than the legal litigation process. Sometimes, the company’s products or services expand beyond the original brand meaning. For example, the popular restaurant chain Boston Market was formally known as Boston Chicken. However, their original brand name created a very limited perception of their available products and services. Occasionally, a brand is vague, overly complicated or simply does not connect with consumers. For example, the popular mobile phone giant BlackBerry was a company called Research in Motion (RIM) up until 2013. However, the uninspiring company name was at odds with the name of their popular BlackBerry phone, so they wisely borrowed the name.
The most urgent situation requiring a re-branding is when disaster strikes. For example, BP was recently known as BP Amco. However, the global oil company undertook a major PR and marketing campaign to redefine their public image. This is a logical movie, because the original company started out at British Petroleum and was historically associated with certain political conflicts around the world. Now, BP is aggressively campaigning to disassociate themselves from their tainted past associations and instead, present themselves as an eco-friendly, modern company that is committed to the community and the environment. In addition to this, the mobile payment company ISIS changed its name to Softcard because of the negative association with the extreme political group ISIS.
Sometimes brands are created with a time or geographic association. For example, a brand might be associated with a certain decade and sub-culture social movement. On the other hand, the brand might be associated with a certain location name. However, re-branding the name may be a good idea once the company expands beyond different borders. Still, sometimes that name may simply appear weak and therefore irrelevant. Forbes magazine notes that many Hollywood stars and successful entrepreneurs have changed their name to present a powerful and attractive image. For example, Ralph Lauren used to be Ralph Lifshitz. The first name sounds trendy, while the second sounds more formal, like a legal or financial firm. Therefore, brand name upgrades can be successfully done through creating a positive image and offering visual appeal.
To sum up, re-brand can be risky, but may also be necessary because of certain circumstances. The two biggest reasons for a re-branding is to keep up with the times or smooth over major PR disasters. Legal issues, company expansions and bland brand names are all legitimate reasons to re-brand.