EFFECT OF CORPORATE REBRANDING ON

STOCK PRICES
A PROJECT STUDY SUBMITTED IN PARTIAL
FULFILLMENT FOR THE REQUIREMENT OF THE TWO YEAR
POST GRADUATE DIPLOMA IN MANAGEMENT
(2013-15)

SUBMITTED BY:
AMARNATH JV
144 / 2013
PGDM GENERAL

LAL BAHADUR SHASTRI INSTITUTE OF MANAGEMENT, DELHI

JAN, 2015

PROJECT CERTIFICATE

This is to certify that Mr. Amarnath JV, Roll No. 144/2013 a student of PGDM has worked on a
project titled Effect of corporate rebranding on stock prices under my guidance. It is his
original work, and is fit for evaluation in partial fulfillment for the requirement of the Two Year
(Full-Time) Post Graduate Diploma in Management.
Date: ____________

Signature ______________
(Prof. Joyeeta Chatterjee)

ACKNOWLEDGEMENT
The conclusion of any project is not complete without thanking the people behind the venture
and this project is no exception. Racing against time as well as fast approaching deadlines, the
fact that the project was successfully completed in time would not have been possible without
the help and support of many people. Their constant guidance and encouragement coupled with
the efforts and their commitments acted as the cornerstones for the successful completion of the
project. It gives me immense pleasure to acknowledge the persons whose help gave me the
required confidence, enthusiasm, and perseverance in order to successfully culminate this
project.
I express my sincerest thanks to my faculty mentor, Associate Joyeeta Chatterjee (Prof.
LBSIM) for her guidance and encouragement during the various stages of the project.

Amarnath JV,
PGDM General (2013-15),
Lal Bahadur Shastri Institute of Management, New Delhi

EXECUTIVE SUMMARY
Today in this corporate world, the scenario is fast changing with new technologies, mergers &
acquisitions & production ramp-ups. Consumers are no more ignorant of the products they are
buying but they are conscious of the Brands, Brand Equity & value for money. Hence companies
have realized this & have gone in for rebranding time & again.
Rebranding corresponds to the creation of a new name, term, symbol, design or a combination of
them for an established brand with the intention of developing a differentiated position in the
mind of stakeholders and competitors. Increased competition has led firms to an avenue of
differentiation, and rebranding has been approached by firms in order to differentiate themselves
and to promote the corporate image.
This project tends to contribute to fill this gap in the academic literature, by analyzing the impact
that corporate image through rebranding has on the firms stock market value, using event study
methodologies. The method chosen to analyze the impact of corporate rebranding on market
value is event study methodology. This method measures the stock price reaction to the
unanticipated announcement of an event. In our case, the event is the announcement of a
corporate rebranding action.
The event study methodology shows, the CAR (cumulative abnormal returns) is changing as the
event occurs. Few companies showed negative impact while others showed positive impact on
the event of corporate rebranding. The data used has been taken from Bloomberg terminal.
The assumption undertaken for this project is, markets are efficient.

Project Study
(Records of Meetings with the Project Guide)
Meeting #

Date

Purpose

Remarks

Signature
(Project
Guide)

th

12

July

2014

Discussing the Project

Title

17th

July

2014

Deciding the Project

title

27th
November
2014

Discussing the scope of

project

17th
January
2014

Tackling the
shortcomings of the
project

Table Of Contents
Table Of Contents......................................................................................................................................5
Chapter 1 Introduction.............................................................................................................................8
1.1 Rebranding...........................................................................................................................................9
1.2 Objectives Of Rebranding:...............................................................................................................10
1.3 Challenges Of Rebranding:...............................................................................................................11
1.4 The Emergence Of Rebranding........................................................................................................11
1.5 Types Of Rebranding.........................................................................................................................13
1.6 Companies Considered For This Project.........................................................................................14
1.7 Literature Review ( Corporate Rebranding ).................................................................................15
1.7 From Corporate Rebranding To Market Value...............................................................................17
Chapter 2 Research Methodology..........................................................................................................18
Chapter 3 Data Analysis And Interpretation.........................................................................................21
3.1 Airtel...................................................................................................................................................22
3.2 Reliance..............................................................................................................................................23
3.3 Uti To Axis Bank................................................................................................................................24
3.4 Hindustan Unilever............................................................................................................................26
3.5 Birlaplus To Ultratech.......................................................................................................................28
3.6 Canara Bank......................................................................................................................................29
3.8 Videocon.............................................................................................................................................33
Chapter 4 Key Learnings And Recommendations................................................................................35
Appendix A- Prices..................................................................................................................................37
References................................................................................................................................................41

CHAPTER 1
INTRODUCTION

1.1 Rebranding
To start up with its very important to know meaning of brand and branding. A brand is the
symbolic embodiment of all the information connected with a product or service. It encompasses
the set of expectations associated with a product or service, which typically arise in the minds of
"people" (consumers, buyers, or other target audiences). A brand typically includes a name
("brand name"), logo, and other visual elements such as images, fonts, color schemes, or
symbols. In other contexts, the term "brand" may be used where the legal term trademark is more
appropriate.
Branding -The art of creating and maintaining a brand. Marketers seek to develop or align the
expectations comprising the target audience's brand experience through branding activities.
Branding carries the "promise" to the marketplace that a product or service has a certain quality
or characteristic which make it special or unique (i.e. differentiated). Whatever the mix of
programs, branding techniques should be consistent and complementary when well executed.
Rebranding- In today's business world, re-branding can take many guises and need not be
confined to circumstances where there has been a name change only. Re-branding can be defined
as "affecting a change to a brand in order to stimulate a change in consumer attitudes,
perceptions and behavior with the end goal of generating positive market growth". The reality is
that the scope of this change could be as minor as subtle changes to the company's graphics and
logo or as major as a full-blown name change. In effect, changing any of the tangible elements of
the brand can do re-branding, whether through the advertising, corporate stationery & sales
literature, packaging design, staff uniforms, vehicle livery or the corporate identity and
trademark. Changes to any or all of these can have the effect of re-branding a company.
Increasing global competition has led firms toward an even higher need for distinctiveness.
When looking at the variables that are most qualified to sustain a competitive advantage, the
corporate image emerges. Adopting the definition, rebranding corresponds to the creation of a
new brand element aiming to create a new image or position in the mind of stakeholders. A good

and strong corporate image can have a positive impact on workers, managers, investors, and
customers evaluations. On the other hand, rebranding is a strategy involving considerable risks,
as strong brands take years to be successfully built in order to provide higher margins, loyal
customer bases and a continuous stream of income for the firm representing the brand.
While this may sound painfully obvious, there are enough examples of rebranding disasters to
prove that common sense may indeed be, uncommon. Brands, like people, are scared of change,
of growing old and losing their market position. Products as well as corporate brands begin to
panic when they have been in the maturity stage for too long. This is where rebranding comes to
the rescue with glamorous creative and brilliant strategies. Normally, rebranding does involve
changing the brand name, brand logo, punch line, brand ambassador and advertising strategies to
attract new customers and retain existing customers. The rebranding exercise can be either
deliberate (e.g., change management strategy). Very often the rebranding exercise of firms does
reflect the dynamic nature of the market at present times. Firms are intended to change, often
radically, to deal with the expectations of customers and other stakeholders.

1.2 OBJECTIVES OF REBRANDING:

A company can rebrand for different reasons such as

To create a sound strategy supported by facts related to sales and profit.

To increase consumer loyalty

To refresh consumers

To enter new market trend and new product direction

To increase share holder value

To refresh design elements or slight naming alteration

To attain competitive differentiations

To re energize a company

1.3 CHALLENGES OF REBRANDING:

To successfully build a brand...is to communicate your key value proposition to the key
customer segment in an integrated and consistent way."
The three most common catalysts for misguided Rebranding are:

New executives trying to make their mark,

The need for instant gratification Trumping long term commitment, or

Organizational malaise/boredom.

1.4 THE EMERGENCE OF REBRANDING

Beauty lies in the eye of the beholder, so goes the saying, Like this, a brands acceptance by
the consumers, depends on the intangible personal experience. To start with, a brand was
represented by a trademark. This was primarily to differentiate a particular company, product or a
service from that of competitors. Later on, a kind of aspiration branding evolved in which the
consumers were bewitched through celebrity endorsements. People experienced a kind of
satisfaction by identifying themselves with the heroes and dignitaries who endorsed the brand.
Companies, retailers and service providers resorted to this kind of marketing tactics to exploit the
gullible consumers.
In the present day marketplace, many companies fall out of the marathon racetrack of
competition as time passes on, as they fail to withstand the rigors of the stiff competition. We can
find many reasons for this fatality namely, the unwholesome tactics of undercutting by the rivals,
the lack of innovation to provide that extra/different feeling to the customers by the companies,
fading quality resulting in losing market share, etc. Also, the product position in the product life
cycle is very critical as the brand life cycle almost traces the same stages. The four stages of

products life cycle consists of the launch/introduction stage, the growth stage, the stable/mature
stage and the declining stage.

Sales

Sales

Profits

Time

FIGURE-1
As can be seen from the above (figure 1), a companys sales and consequently its profit start
dwindling from the end of the maturity stage and in the subsequent declining stage. So,
companies start looking for avenues to stay alive. If a company feels that all other methods to
attract consumers have exhausted, it has to opt for rebranding. The present day mantra is
Customer is king. Customers are well informed about the products, compared to earlier times.
Hence, the marketplace has become customer centric. The evolution of the marketings role in
a company is well elucidated by Philip Kotler, as shown in diagram (figure 2).
Recognizing the importance of the customers in the business structure, companies have started
effecting minor rebranding exercises on a regular basis due to ever increasing customer
aspirations.
The per unit margins of products are thinning day by day in the competitive environment.
The law of diminishing returns is the order of the day. Companies are searching for innovative
and creative ideas to attract and retain their customers by offering value for money.

In such a condition, rebranding has become a useful and effective tool in the hands of marketers
to protect and retain their market share. In certain specific cases, where the brand equity of a
brand has eroded abysmally, companies resort to rebranding to make a comeback from obscurity.

1.5 TYPES OF REBRANDING

Rebranding can be divided into two types:
Evolutionary
Revolutionary
Evolutionary rebranding:
Evolutionary rebranding is where the changes are minimal and less visible
to the outside observer .In the evolutionary process, rebranding takes place in a gradual manner
such as change in the colour or design of the logo, a change in the slogan or some such minor
variation
Revolutionary rebranding:
Unlike evolutionary rebranding, revolutionary rebranding is highly visible
and often results in a new brand name. In revolutionary rebranding, a total revamping of the
brand takes place which is a very costly and risky proposition. So, corporations resort to a total
rebranding only in rare cases (in case of mergers and acquisitions, almost all visible features of
the brand have to be changed to herald a new combined image and hence a revolutionary type of
rebranding results). Of course, the image value and brand equity of the individual brands, before
the mergers and acquisition, are lost in such cases. This type of brand change is not a simple
action. It has far reaching implications since it can make or mar the brands image and put the
company in jeopardy unless exercised with utmost care.

1.6 Companies Considered for this project

In the Indian scenario, for this project, 8 companies have been considered which have gone
corporate rebranding. The following are the companies along with the date the companies have
gone for corporate rebranding
AIRTEL

18th November
2010

RELIANCE
(ADAG)

28th May 2006

AXIS BANK

30th April 2007

HUL

25th June 2007

ULTRATECH
CEMET

23rd October
2007

CANARA BANK

29th December
2007

GODREJ

18th April 2008

VIDEOCON

19th
September
2013

1.7 Literature review ( Corporate Rebranding )

A brand is usually defined as a name, term, symbol, design or a combination of
them intended to identify goods or services of one seller or group of sellers and to differentiate
them from those of competitors (Kotler, 2008). Brands are increasingly viewed as one of the
major assets firms possess. defined a firms reputation (and its associated name) as a valuable
intangible asset. Brands differentiate, protect and convey meaning to what firms communicate to
customers. Competition increases the power of brands, as these allow non-price differentiation
(Aaker, 1991). Brand names are somewhat different than corporate brand names and corporate
brands are more than just trade names). Following Einwiller and Will (2002, p.101), corporate
branding is considered a systematically planned and implemented process of creating and
maintaining a favourable image and consequently a favourable reputation of the firm as a whole
by sending signals to all stakeholders by managing behaviour, communication and symbolism.
Kay (2006) adds that corporate branding is the way an organization communicates its identity. As
product brands, corporate brands are designed to evoke positive associations from stakeholders
(Dacin and Brown, 2002). Corporate brands are said to be more central and strategic, controlled
by top management and more complex, with possible different meanings for different
stakeholders (Balmer and Greyser, 2002), when compared to product brands.
The issue of corporate branding has been adequately discussed in the literature, but
corporate rebranding has been somehow neglected from academic research, despite firms
evidence of such moves. Most of the existing research on corporate rebranding focuses on
revolutionary rebranding, such as the creation of a new name (Horsky and Swyngedouw, 1987;
Delattre, 2002; Muzellec and Lambkin, 2006; Muzellec, 2006). In this project, we approach all
the continuum of rebranding, trying to include minor and major changes to corporate branding.
A good and strong corporate image influences current workers, investors future
applicants (Dowling, 1988) and customers evaluations and preferences. That is to say that
managing a strong corporate brand is different than managing strong product brands: corporate
brands are communicated to different stakeholders and may have lesser impact on consumers
(Kay, 2006). A well-conceived, solid, strong corporate branding strategy provides management

with a holistic framework to integrate the firms activities, its vision and mission; it allows the
firm to express its distinctiveness, that is, to differentiate itself in the relationship with
stakeholders (Schultz and de Chernatony, 2002), and represents an opportunity to increase the
future incomes of the firm.
Sometimes, despite the high budgets spent on communicating the corporate positioning,
firms fail to create a distinctive image and have to rebrand. The reasons to rebrand can come
from changing external conditions, weaker competitive position, changing ownerships structures
and/or changes in corporate strategy; Muzellec and Lambkin, 2006). Delattre (2002) finds four
categories of reasons to rebrand: new corporate image, new management or shareholding
structure, new activity, and change of legal status. Despite the motivation and the investment
involved, rebranding has its risks: part of existing accumulated goodwill, in the form of name
recognition, corporate image, and routinized purchase behaviour, can be lost (Horsky and
Swyngedouw, 1987).
Hence, corporate rebranding can be distinguished from corporate branding as the former
refers to a change between an initially formulated corporate brand and a new formulation
(Merrilees and Miller, 2008). Muzellec and Lambkin (2006) define rebranding as the creation of
a new name, term, symbol or design for an established brand, in order to create a differentiation
in the mind of stakeholders and competitors. As a brand is composed of tangible and intangible
elements, rebranding may consist of changing one or all of these elements along a continuum
(Daly and Moloney, 2004): from minor improvements to the visual identity of the corporate
brand (i.e., logos and slogans) defining an evolutionary rebranding, to major changes such as the
creation of a new name, i.e. revolutionary rebranding.
Rebranding strategies are directly linked with brand equity management. Firms wanting
to add value to their offer through corporate rebranding have to evaluate and manage their brand
equity. One approach to assess the value of brand equity derives from finance theory and uses the
stock price as the evaluation basis (Aaker, 1991). The argument is that the stock market will
adjust the price of a firm to reflect future prospects of its brands. Stakeholders define their image
of the firm based on the signals that emanate from it. Corporate rebranding is a very strong
formal signal that stakeholders receive that something about the corporation has changed
(Muzellec and Lambkin, 2006). It is expected that these corporate rebranding actions will impact
the corporate market value and thus constitute a signal that shareholders will use when they

evaluate the firm. One mentioned disadvantage of working with the stock market relates to the
need of events to be sufficiently large to be detected. Corporate rebranding exercises are
considered major events and so noticeable.

1.7 From corporate rebranding to Market value

This financial market perspective derives from the efficient markets literature,
that forecasts that in a well functioning capital market, stock prices are the best available
unbiased estimates of the value of the assets of a firm. It is preferable to use the financial market
valuation than historic accounting measures that fail to incorporate the expected future returns of
rebranding actions. Additionally, by using objective market based measures, comparisons over
time and industries are possible. It is claimed that a good corporate reputation will be a part of
the firms intrinsic value which will be factored into the firms share price. Einwiller and Will
(2002) find evidence that a strong corporate brand and a favourable reputation contribute to
higher stock prices. Successful corporate branding strategies will provide an opportunity for
generating a significant future income stream, which, under the hypothesis of efficient markets,
will be reflected on the stock price. A common approach to analyse this financial market
perspective, i.e., the impact of corporate rebranding in market value, is provided by event study
methodology. In marketing, event studies have been published across research streams linked to
product, promotion and services (see Johnston (2007) for a metanalysis on the subject).
However, Kilic and Dursun (2006) conclude that a name change has a positive impact on the
firms value. Horsky and Swyngedouw (1987) claim that name changes signal to the market that
measures to improve the performance will be adopted by the firm, which can contribute to a
positive impact on shareholders value.

CHAPTER 2
RESEARCH METHODOLOGY

Research Objective :
The objective of this study is to find the effect of corporate rebranding on the stock prices in the
Indian market scenario.

The method chosen to analyze the impact of corporate rebranding on market value is event
study methodology. This method measures the stock price reaction to the unanticipated
announcement of an event. In our case, the event is the announcement of a corporate rebranding
action. The event study methodology is based on the hypothesis of efficient markets (Fama,
1970). If stock prices reflect all the available information of firms, then when the market faces
an event that is not anticipated, abnormal returns should happen with a positive or negative
impact on stock prices. An appropriate event is an event likely to have a financial impact on the
firm, providing new information that is unanticipated by the market and where there are no
confounding effects (McWilliams and Siegel, 1997).
We define the event day as the day when the new corporate brand is announced in the
media. In a fully efficient market, we would expect that the impact on stock prices occurs either
on the event day (day 0) or in the following day (day +1), if the information only became
available after the market closing of the event day. In practice, it is normal to consider a larger
set of days around the event window. We define the event window including days -5 to +5,
relative to the event day. This allows for the possibility that the arrival of information to the
market, about the corporate rebranding, has been leaked before the event day, which could lead
to an effect on price occurring on the days before day 0. Also, allowing for the possibility of
some market rigidities, or a lagged response by investors, we analyze price behaviour until day
+5.
It is important to note that the broadening of the event window to include more days has
the disadvantage that prices, in that period, might be affected by confounding effects, including

other significant announcements about the firm. Therefore, it is important to use an event
window as narrow as possible, balancing the pros and cons of smaller and larger windows. As
the event window of [-5; +5] is arbitrarily chosen, we also observe the behaviour of returns in
two smaller windows [-2;+2] and [+1,+3], to confirm the robustness of our results.

The appraisal of the events impact requires measuring abnormal returns around the event day.
The abnormal return is the return of the stock during the event window, deducted by the normal
return of the firm, over the same period. The normal return is defined as the expected return if
the event did not take place.

Rit =i + i Rmt +it

(1)

where Rit is the log return on the share price of firm i on day t, Rmt is the log return on the PSI 20
stock market index on day t, i is the intercept term, i is the systematic risk of stock i, and it is
the error term with E(it )= 0 .
From estimation of the above equation, we estimate the daily abnormal returns for the ith
firm using the following equation:
ARit = Rit (ai + i Rmt )

(2)

From the data collected from Bloomberg historical data has been used to calculate
1.
2.
3.
4.

Intercept
Slope
R square
Standard Error

For the window given that is [-5,+5] , the following have been calculated.

1. Expected Return
2. Abnormal Return
3. Cumulated Abnormal Return
The graph of the above calculated for [-5,+5] have been used to show if there is any significant
change in the Abnormal returns. This indicates whether the event has had any effect on the prices
or not.

CHAPTER 3
DATA ANALYSIS AND INTERPRETATION

3.1 Airtel
Since Airtel is going global with the acquisition of Zain Telecom, Airtel felt the necessity of
changing its logo - ET
"The brand needs to speak to different countries... think internationally. The brand has to connect
with the youth in the geographies that we are in." - Sunil Mittal

AR
0.12
0.1
0.08
0.06
0.04
0.02
0
40493
40497
40500
40504
40506
-0.02
40492
40494
40498
40501
40505
40507
-0.04
-0.06
[E]

AR

AAR

The event date for Airtels rebranding is 18th November 2010. There is a significant increase in
the AAR ( or CAR ) from the day corporate rebranding has taken place.

CAR
0.12
0.1
0.08
0.06
0.04
0.02
0

40493
40497
40500
40504
40506
-0.02
40492
40494
40498
40501
40505
40507
-0.04
-0.06

3.2 RELIANCE
By dropping it now, Anil is going back to the basics. It makes his group look stronger. It doesnt
look like ADAG is something under an umbrella of Reliance. It makes ADAG the umbrella
itself. Hence, just the title, Reliance. Alpana Parida, president of DMA, a strategic branding and
design firm.

AR
0.03
0.02
0.01
0
-0.01

38859 38860 38861 38862 38863 38866 38867 38868 38869 38870

-0.02
-0.03
-0.04
[E]

AR

CAR

After the event ( which happened on a non-trading day ) the abnormal returns and Cumulative
abnormal returns are high indicating the markets support the decision of corporate rebranding.

CAR
0.03
0.02
0.02
0.01
0.01
0
38859 38860 38861 38862 38863 38866 38867 38868 38869 38870
-0.01
-0.01
-0.02
-0.02

3.3 UTI to AXIS BANK

Need for change in Name : There were three main reasons behind it

The bank had to give up the UTI name after using it for 13 years as they were not prepared to
accept terms and conditions (including royalty) from UTI AMC.
The decision to rebrand itself was taken by the bank as it was allowed to use the 'UTI' brand
name for free till January 31, 2008, beyond which it had to pay royalty for using the name.

The name UTI bank was changed to AXIS bank as UTI gave a look of government sector bank.
They had to go for a change of name to create their own brand and identity.

The recommendation for name change to Axis Bank has arisen from the existence of several
shareholder-unrelated entities using the UTI brand, and the consequent brand confusion that it
generated.

AR
0.01
0.01
0.01
0.01
0
0
0

39196
39198
39202
39206
39210
0 39195
39197
39199
39205
39209
39211
0
-0.01
AR

CAR

CAR
0.01
0.01
0.01
0.01
0
0
0

39196
39198
39202
39206
39210
0
39195
39197
39199
39205
39209
39211
0
-0.01

The event date for UTI bank to be rebranded as AXIS bank is 30th April. Though the subsequent
days were non trading days, the Abnormal returns surged on 27th and following on.
The company after its corporate rebranding exercise got an overall increase in its Revenue.

The bank scrip moved up by 2.7% in the BSE to close at Rs 467.85

In FY2008 customer acquisition grew at 67% to over 9.9 million customer accounts.
( Source Annual Reports).

3.4 Hindustan Unilever

On June25 2007, India's leading Fast Moving Consumer Goods (FMCG) Company, Hindustan
Lever Ltd. (HLL) announced that it would officially rebrand itself as 'Hindustan Unilever Ltd.'
(HUL) taking on the name of its parent company Unilever PLC (Unilever). Through the new
corporate identity, the company expected to benefit from the global brand positioning of
Unilever without compromising on its local heritage.
'Our new identity will help us confidently position ourselves in every aspect of our business,' said
Doug Baillie, chief executive of Hindustan Unilever, which has some of 25 different icons
representing the organization and its brands.

AR
0.01
0.01
0.01
0.01
0.01
0
0
0
0
0

39252
39254
39258
39260
39262
39251
39253
39255
39259
39261
39265

-0.01
[E]

AR

CAR

The event day is 25th June 2007. The abnormal return is increasing after the event day which
indicates positive market sentiment after corporate rebranding.
In India, HLL is a popular household brand name. Its products such as Surf, Lux, Sunsilk,
Pepsodent and Lifebuoy touch the lives of more than 60% of Indians.
Earlier, it was largely speculated that HLL would be changed as Unilever India Ltd. But now it
has been decided that HUL would be its new name in India. The Employees and shareholders
had given the hint that it would be difficult for the company to shake off the cultural association
linked with the name Hindustan.

CAR
0.01
0.01
0.01
0.01
0
0
0
39251
0

39252

39254
39253

39258
39255

39260
39259

39262
39261

39265

3.5 Birlaplus to Ultratech

The group also said it would increase its cement production capacity by almost 50% to 46 mtpa
in the next one year as it seeks to increase sales and gain higher market share. The group had
earlier rebranded L&T Cement as Ultratech after the takeover three years ago.
UltraTech will be the face of our cement business, OP Puranmalka, group executive president
(marketing
and
strategy)
of
Aditya
Birla
Group
told
reporters
here.
The group has a total cement capacity of 31 mtpa. It will add another 15 mtpa over the next 12
months, improving its market share to 22-23% from 19.5% now.

CAR
0.01
0.01
0
3937139372393733937439377393783937939380393813938439385
-0.01
-0.01
-0.02
-0.02

AR
0.06
0.04
0.02
0

39372
39374
39378
39380
39384
-0.0239371
39373
39377
39379
39381
39385
-0.04
[E]

AR

CAR

3.6 Canara Bank

This whole exercise shows that the new logo of Canara bank has been designed to bridge the
gap between its stake holders and also to bring a new look with the new age definitions, keeping
its association with the past while maintaining its rich heritage. A survey conducted of a few
respondents indicated that the new logo of Canara Bank was instantly captured and had good
recall among the customers.
The customers and the public quickly forgot the old logo. Canara Bank managed to promote its
new brand and the associated message to the public at all levels. This helped it to position its
brand in the minds of the customers.
0.04
0.03
0.03
0.02
0.02
0.01
0.01
0

39441
39443
39447
39449
39451
-0.01 39440
39442
39444
39448
39450
[E]

AR

CAR

CAR
0.04
0.03
0.03
0.02
0.02
0.01
0.01
0
39440394413944239443394443944739448394493945039451

The result depends on the depth of this rebranding exercise. Canara Bank is in the service
industry. Any rebranding should be supported by a paradigm change in the service of the bank. If
the bank's internal operations does not reflect the new positioning, more damage will be done.
The CAR has increased after the event date 29th December.
Hence this rebranding hopefully may have been backed by an intense training program of the
employees, a thorough restructuring of the processes and a set of new products to cater to the
new customer class. Any rebranding without such back-end restructuring will be only cosmetic
in nature and will neither justify the money spent nor yield long-term results.

3.7 Godrej
The Godrej Group undertakes a massive rebranding exercise. Brighter Living, the new mission
for the brand, is born of a vision to take what is good and timeless about Godrej and make it
great and topical. So that today and forever into the future, Godrej will continue to serve its over
500 million customers with reliable and innovative products and services.

AR
0.05
0.04
0.03
0.02
0.01
0

39548 39549 39553 39554 39555 39559 39560 39561 39562 39563

-0.01
[E]

AR

CAR

The event date April 18th was a non trading day. CAR has increased after the trading opened.

CAR
0.05
0.04
0.03
0.02
0.01
0
39548 39549 39553 39554 39555 39559 39560 39561 39562 39563
-0.01

Godrej has invested over Rs 100 crore in the rebranding exercise, including Rs18 crore worth
of advertising over six weeks during the Indian Premier League cricket matches.
It makes sense to go to the investors with a fresh and smarter look. Its a good marketing tactic,
said Daljeet Kohli , head of research at Emkay Share and Stock Brokers Ltd. Godrej might also
be seeking to project itself as a global brand by shedding its old brand image, he added.

3.8 Videocon
The Videocon logo is the heart of the new brand identity. The Fluid lava reflects the brand idea,
Experience change. The color palette has been chosen to reflect the philosophy of Videocon
Group i.e. the color green is symbolic to the companys ecology drive says the official coverage
of Videocon

The rebranding exercise has been successful on the front that it is:
* Fresh and relevant- It is a campaign that has a whiff of fresh air and also projects a brand
identity that people can relate to easily.
* Well Launched The decision to launch the campaign at the IIFA 2009 was a masterstroke
since it guarantees eyeballs and also combine its punchline with IIFAs green pledge.
* Vibrant- The green color for the V logo is Vibrant, appealing and also provides continuity
from its earlier green products platform.

AR
0.1
0.08
0.06
0.04
0.02
0

41530
41534
41536
41540
41542
41533
41535
41537
41541
41543
-0.02 41529
[E]

AR

CAR

CAR
0.1
0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0
41529

41530

41534
41533

41536
41535

41540
41537

41542
41541

41543

The date of event is 19th September. The news of Videocon rebranding with a crispier logo has
attracted interest of shareholders.

CHAPTER 4
KEY LEARNINGS AND
RECOMMENDATIONS

The event study methodology is a valuable approach to better understand and evaluate the
performance of marketing strategies. This methodology, contributes to solving the problem of
integrating firm-level financial data with strategic marketing variables.
Our results are consistent with previous studies (Howe, 1982, Bosch and Hirsche, 1989,
Karpoff and Rankine, 1994), which do not find evidence of a significant positive impact on firm
value, resulting from corporate rebranding decisions. In our study, not only we do find such a
positive impact, but the evidence from the days after the event (weakly) points in the positive
direction, i.e., corporate rebranding strategies seem to be favorably viewed by investors.
However, we do not find our results as necessarily implying this conclusion, as there are
alternative explanations.
Firstly, it is possible that the information on corporate rebranding decisions is frequently
leaked to the market well before the official announcement, so that the impact on stock price may
occur prior to day -5. Secondly, some studies have found that the Indian market has been less
than fully efficient in the period under study (Borges, 2009), so it is possible that the good or
bad news implicit in the corporate rebranding are not immediately incorporated in the stock
price, nor in the five days following the event.
The main limitation of our project is that we were able to identify only 8 events in the
Indian market, in the period under study, which is a consequence of a narrow number of quoted
firms in the Indian stock market, and may also reflect the postponing of rebranding decisions by
firms, in the context of sluggish economic growth experienced by Indian over the last decade.

Appendix A- Prices
AIRTEL :

Date

Adj
Close

Daily
Return

Market
Close

300.3
5
303.7
4

0.017661
59
0.032604
65
0.035918
34
0.011286
832

307.2
7
318.8
5

0.011621
782
0.037686
725

22-11-10

322.7
3
330.6
3

23-11-10

323.0
2

0.012168
731
0.024478
666
0.023016
67

24-11-10

325.4
7

0.007584
67

19459.85

329.6

0.012689
342

19318.16

10-11-10

322.0
4

11-11-10

311.5
4

12-11-10
15-11-10
16-11-10
18-11-10
19-11-10

25-11-10

20875.71
20589.09
20156.89
20309.69
19865.14
19930.64
19585.44
19957.59
19691.84

Market
return
0.0027
1
0.0137
3
0.0209
9
0.0075
81
0.0218
9
0.0032
97
0.0173
2
0.0190
01
0.0133
2
0.0117
8
0.0072
8

VIDEOCON :

Date
13-Sep-13

Adj
Close

Marke
Daily
Market
t
Return Close
return
178.0 0.024158 5913.

0.0380
87
0.0027

5
16-Sep-13

178.9

17-Sep-13

179.4

18-Sep-13

178.0
5

19-Sep-13

177.8

20-Sep-13
23-Sep-13

177.4
180.0
5

24-Sep-13

178.2

25-Sep-13

177.9
5

26-Sep-13

177.7
5

76

15

5840.
55

81
0.0105
6
-1.7E05
0.0017
2

0.004773
94
0.002794
86
0.007525
08
0.001404
1
0.002249
72
0.014937
99
0.010274
92
0.001402
92
0.001123
91

5850.
7
5850.
6

5850.
2

0.0016
52

5899.
45
6115.
55

5889.
75

0.0084
19
0.0366
31
0.0169
2
0.0203
5

5892.
45

0.0004
58

6012.
1

CANARA BANK
Adj
Daily
Market
Market
Date
Close
Return
Close
return
25-120.017473
0.0017
07
247.81
06
6081.5
68
26-120.014243
07
244.33
03
6079.7 0.0003
27-120.034383
0.0095
07
253.03
27
6138.6
95
28-120.066206
0.0009
07
270.97
59
6144.35
36
31-120.022897
0.0056
07
277.32
74
6179.4
72
01-010.127238
0.0001
08
317.75
39
6178.55
4
02-01326.96 0.028168
6274.3 0.0152

08
03-0108
04-0108

322.6
324.3

58
0.013515
19
0.005242
06

61
6279.1
6287.85

0.0007
64
0.0013
92

AXIS
Date

Closi
ng

Daily
return

NSE
closing

23-0407
24-0407

425.8
430.6
3

25-0407

430.1
7

26-0407

428.4
2

27-0407
30-0407
03-0507

418.4
9
430.6
3
435.2
8

0.007139
5
0.011216
13
0.001069
3
0.004084
8
0.023728
2
0.028191
25
0.010682
78

04-0507

441.5
8

0.014266
95

4117.35

07-0507

465.9
5

0.052301
75

4111.15

08-0507
09-0507

466.0
4
476.5
7

0.000193
12
0.022095
39

Market
return

4085.1

0.0003794
28

4141.8

0.0136897

4167.3

0.0061190
7

4177.85
4083.5
4087.9
4150.85

4077
4079.3

0.0025252
22
0.0231051
79
0.0010763
47
0.0151655
68
0.0081363
01
0.0015080
94
0.0083762
57
0.0005638
22

RELIANCE
Closi
daily
Date
ng
return
290.7
08-Mar-06
8

24-May-06

278.7
5
269.9
5
272.5
9

25-May-06

254.7
5

22-May-06
23-May-06

29-May-06

253.6
3
244.4
4

30-May-06

236.4
7

31-May-06

227.3
8

26-May-06

01-Jun-06
02-Jun-06

191.3
6
215.3
6

0.0648
61
0.0326
0.0096
85
0.0700
3
0.0044
2
0.0376
0.0337
0.0399
8
0.1882
3
0.1114
41

NSE
Marke
closi
t
ng
return
3116.
7
3081. 0.0537
35
3
3199. 0.0368
35
82
3115.
55 0.0269
3177.
7

0.0195
58

3209.
6
3214.
9

0.0099
39
0.0016
49
0.0092
9

3185.
3
3071.
05
2962.
25
3091.
35

0.0372
0.0367
3
0.0417
62

HUL

Date

Closi
ng

18-0607
19-0607

187.7
5
188.9
5

20-0607
21-06-

188.6
189.5

daily
return
0.0031
96
0.0063
51
0.0018
6
0.0050

NSE
closin
g
4147.
1
4214.
3

Marke
t
return
0.0058
7
0.0159
46

4248.
65
4267.

0.0080
85
0.0043

07

12

22-0607

192.3
5

4252.
05

25-0607
26-0607
27-0607

189.2
190.2
5
190.8
5

4259.
4
4285.
7
4263.
95

0.0017
26
0.0061
37
0.0051

28-0607

189.2
5

4282

0.0042
15

29-0607

188.6

0.0145
57
0.0166
5
0.0055
19
0.0031
44
0.0084
5
0.0034
5

94
0.0036
1

02-0707

188.6
5

0.0002
65

4313.
75

4318.
3

0.0084
06
0.0010
5

GODREJ

Date
10-0408
11-0408
15-0408
16-0408
17-04-

Closing
125.5
125.5
125.55
126
127

daily
return
0.012749
004
0
0.000398
248
0.003571
429
0.007874

NSE
closin
g
4733
4777.
8
4879.
65
4887.
3
4958.

Marke
t
return
0.0029
7
0.0093
77
0.0208
72
0.0015
65
0.0143

08
21-0408
22-0408
23-0408
24-0408
25-0408

016

127

127

5037
5049.
3

127.4

0.003139
717

5022.
8

0.003909
304
0.000781
25

4999.
85
5111.
7

127.9
128

39
0.0156
05
0.0024
36
0.0052
8
0.0045
9
0.0218
81

ULTRATECH

Date

Closin
g

16-Oct07

1105

17-Oct07

1131.0
5

18-Oct07

1049

19-Oct07

1005.6

22-Oct07
23-Oct07
24-Oct07
25-Oct07
26-Oct07

1024.9
1030
1019.9
984
1010

daily
return
0.0299547
51
0.0230316
96
0.0782173
5
0.0431583
13
0.0188311
05
0.0049514
56
0.0099029
32
0.0364837
4
0.0257425
74

NSE
closin
g

Market
return

5473.7

0.0004146
05
0.0195618
15
0.0389273
03
0.0260195
96
0.0060378
09
0.0529258
09

5496.1
5

0.0040846
77

5568.9
5

0.0130724
82
0.0233853
01

5668.0
5
5559.3
5351
5215.3
5184

5702.3

29-Oct07

1030.0
5

0.0194650
75

5905.9

30-Oct07

1000

-0.03005

5868.7
5

0.0344740
01
0.0063301
38

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