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be rebranded?
Received (in revised form): 23rd March, 2004
HELEN STUART
is a lecturer in marketing at the Australian Catholic University in Brisbane. She was previously a lecturer in
marketing and communication at Queensland University of Technology. She attended the first-ever symposium on
corporate identity management in 1994, and has since been researching aspects of corporate identity, image and
communication. In 1999 she won the prize for the best empirical academic paper in Corporate Reputation Review.
She is now on the editorial board of that journal.
LAURENT MUZELLEC
is a doctoral candidate in marketing at the Smurfit Graduate School of Business, University College Dublin,
Ireland. He has previously worked as a product manager for an internet-mapping application company in Paris
and as a trade representative at the French Embassy Trade Office in New York. His current research deals with
the corporate rebranding phenomenon and its implications in terms of corporate associations, reputation and
ultimately corporate performance.
Abstract
Corporate rebranding is a strategy used by companies to change their image. There may be very
good reasons for doing this, the most obvious being to send a signal to stakeholders that something
about the organisation has changed (for the better). Other less pressing reasons, discussed in this
paper, are, however, also instigators for rebranding. To some extent, a corporate makeover appears
to contradict what has long been regarded as standard marketing practice in product branding, that
is, long-term investment in and commitment to a brand. Despite this, many firms are undertaking
corporate rebranding exercises. The cost of corporate rebranding is very high, running into millions
of dollars in many cases. In this paper, the concept of rebranding is discussed, the motivations for
corporate rebranding are categorised, and the main issues in corporate rebranding in relation to
rebranding the name, logo and slogan are discussed. Lastly the effectiveness of corporate rebranding
as a corporate strategy is evaluated.
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CORPORATE MAKEOVERS: CAN A HYENA BE REBRANDED?
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corporate personality of the company bring myself to say it. Now it trips off
or the raison d’être7 — unlike ‘Mon- my tongue and I hardly cringe at all.’9
day’, which was supposed to reflect the A variation on the coined name is
smell of fresh coffee and doughnuts. the use of Latin and Greek words to
It is difficult in the case of mergers add to the mystique. The name ‘Altria’,
to find a satisfactory name since all which derives from the Latin word
companies usually want their name left ‘altus’, meaning high, and apparently
in some form, and this can result in a suggesting an enterprise that aims
long and unwieldy name. Usually the for peak performance and constant
dominant partner in the merger be- improvement,10 is one example of this
comes the first name mentioned in category. Other new corporate names
the combined name. This often be- such as ‘Novartis’ and ‘Advantis’ are
comes the company name after a also representative of this category. The
couple of years, as was the case desire to build global corporate brands
with Suncorp Metway, an Australian has led to the creation of somewhat
bank/insurance company, which later disconnected corporate names that
dropped the Metway part of the name. represent values common to any cor-
It would seem far less expensive to poration (ie performance, innovation,
change the name immediately but, respect and dynamism). This is rather
apart from the negative reaction of paradoxical as corporate brands are
external stakeholders such as customers supposed to represent a ‘unique selec-
and shareholders of Metway, employees tion of attributes and personality’.11
of the no-longer-named company may Dowling12 wrote that asking
have experienced low morale (al- employees to name the company might
though they probably knew who was antagonise them since ‘many of the
the major player in the merger when it losers may feel disappointed’. However,
was formed). A temporary appease- consultation with employees is
ment of merger fears is expensive in imperative as, in some cases, the
the long run, however. employees are the last to hear about the
One solution to the new name corporate rebranding. It is also important
dilemma is to brainstorm names or to consider employees as key
generate them via a computer and stakeholders in a name change as their
come up with a name that is a new identification with the new name will be
word, as was the case with Primerica.8 critical. A case in point is the Australian
This strategy worked, although the Department of Social Security, which
initial insistence by the company’s rebranded to become Centrelink. A
CEO that the new name should greeting of ‘Hello, Santalink’ (a bad
include the letter ‘x’ could have pronunciation of ‘Centrelink’) was
negatively affected the result. ‘Accen- confusing at Christmas time. Obviously,
ture’, a coined name, which connotes employees need to be trained to
accent or emphasis on the future, was pronounce the new coined name
the result of employees being asked to correctly. Additionally, employees
submit names. As Kellaway notes, this sometimes have strong attachments to
was an example of an organisation that the old name, and have been known to
grew into its name. ‘When I first heard store memorabilia from the previous
the name ‘‘Accenture’’ I could not organisation in their desks.
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organisation’s positioning and the busi- none of the ‘group of eight’ leading
ness they are in is often a deeper Australian universities (the universities
mystery. Additionally, public organisa- of Adelaide, Melbourne, New South
tions that adopt such names may face Wales, Queensland, Sydney, Western
the devaluing of their important role as Australia, Australian National Univer-
an organisation that services the com- sity and Monash) have changed their
munity. logo from a crest to an abstract design.
Again, there is a trend for public
institutions to distance themselves from
The logo change their public role by changing from
In relation to changes in the logo, crests to abstract designs to give
abstract symbols are popular, although themselves a marketing edge.
they are generally explained as relat- Dowling17 referred to ‘the cosmetic
ing to the company in some way, identity change trap’. If there is no
either by the colours, the shapes or apparent reason for the logo change,
both. As Napoles16 wrote, finding a it will either go unnoticed (which
good abstract design that stands out is hardly cost-effective), or will be
from the crowd, gives the appear- regarded with suspicion. Balmer, in a
ance of power, evokes a strong posi- personal communication, described a
tive emotional response and a sense of favourite example of this — the
experience, confidence and tradition, Royal National Institute for the Blind
is difficult to achieve. Recently, the changed its logo, but this probably
Queensland Government changed its had little impact on the primary
logo from a crest to a rather abstract stakeholders.
design which is meant to reflect an For a more detailed treatment of
indigenous shield, the Queensland sun- what makes a logo high in recogni-
shine and state’s rich diversity, but to tion, see Henderson and Cote.18 The
many it simply looks like a round results of their empirical research
maroon object with yellow coming were that high-recognition logos were
out of it. The problem with abstract very natural, very harmonious and
designs is that although the designer is moderately elaborate. Logos that are
certain of the significance and meaning highly abstract would not fit into this
of the symbol, it is ‘lost in transla- category, nor would single-colour ones.
tion’. These results may be somewhat mis-
The trend to change from a crest leading as an organisation with a large
to an abstract logo is also seen budget and an abstract symbol can
in Australian universities, although educate stakeholders using classical
universities in the UK are similar in conditioning to gain high recognition
this respect. For example, Manchester of its logo, as is the case with
University Business School in the UK McDonald’s.
rebranded to an abstract design. Griffith If the reason for the logo change is
University in Queensland has changed that the organisation has changed its
from the crest to an abstract design of name, then it is obviously important to
a book. Yet it could be argued that, in have a new logo. If, however, it is
the university setting at least, a crest is about changing the logo to an abstract
associated with quality, and significantly design to be more up to date and
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symbol changed to BE on the New structure and complete its initial public
York Stock Exchange; a uniform offering on the market.22
global website (and adaptation of local
websites); 16,000 new business cards
printed and 16,000 e-mail addresses SUCCESS OR FAILURE OF
changed; 500 signs replaced in 200 REBRANDING
offices; and 20,000 launch announce- It is very difficult to measure the
ment packages sent to clients and success or the failure of a rebranding.
associates.19 Altogether, its renaming As the motivations as discussed above
and rebranding initiative is reported vary, so do the goals. Therefore each
to have cost between US$20m and corporate rebranding should ideally be
US$35m.20 evaluated with regards to its initial
It does not just cost to promote the goals. Regardless of the lack of
new brand, however; it also costs to measurement procedures, companies
bury the old one. Since the mid-1980s, are quick to attribute stronger
the concept of brand name equity does performance to their rebranding
not solely appear in academic publica- decisions. For instance, France Telecom
tions — brand name equity is an announces on its website that
actual asset, to which accountants as- ‘Orange Netherlands contributed posi-
sign a value on the company’s balance tive operating income before deprecia-
sheet. Therefore, when UBS decided tion and amortisation for the first time,
to scrap two well-known brands, S.G. at c29m, up from negative c14m in
Warburg and PaineWebber, in an ef- H1 2002, driven by a successful
fort to promote a global and unique restructuring and rebranding process.’23
UBS brand, the Swiss company also Accenture would certainly consider
took an approximate US$770m non- its rebranding successful; its new
cash charge, that being the value at name made a direct entry as the
which the two brands were carried on 53rd most valuable brand in the
its balance sheet.21 world (worth US$5.8bn) in the
Finally, a last category of costs are 2002 Interbrand/Business Week special
hidden or opportunity costs, which report on global brands. This achieve-
are the costs implied by keeping ment was greeted with the following
employees doing things necessary to comment: ‘In the light of the former
the rebranding, but diverting them parent Arthur Andersen’s fate, the
from their everyday job. For in- Accenture branding initiative looks like
stance, in the quarterly earnings report sheer brilliance.’24
following its rebranding, Accenture Nevertheless, a rebranding exercise
reported a fourth-quarter loss of nearly is generally received with far less
US$370m. This was apparently due to enthusiasm, and sometimes a great deal
costs associated with changing its name of sarcasm. A close look at papers
from ‘Andersen Consulting’ and tran- ridiculing the name change of the Post
sitioning to a public company. It Office (Consignia), PwC Consulting
included rebranding costs of US$13m (Monday), CGNU (Aviva), Scottish
to rename the company, and reor- Power (Thus) and KPMG Consulting
ganisation charges of US$58m to (BearingPoint) would certainly help
complete its transition to a corporate managers to measure the failure of
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