Ditch the name, not the customers

As several big-name brands face the chop, Jane Simms asks what owners can do to phase out a marque without a consumer backlash

Marathon, Opal Fruits, Midland Bank, Jif - there is no shortage of seemingly successful brands cut off in their prime, and there could be plenty more to come. Last month, the chief executive of insurance company Aviva admitted he was considering scrapping the Norwich Union name, utilities firm E.ON is phasing out Powergen, and there have even been whispers - so far vehemently denied - that Spanish bank Santander will kill off Abbey.

The most obvious question is why any company would choose to slay an established brand that has been built with years of investment. Clearly some brands simply outlive their usefulness; others are judged not fit for purpose, or are no longer deemed to reflect the vision and aspirations of the brand owner; while others still are 'rationalised' in mergers and acquisitions, or sacrificed in the questionable drive for corporate 'neatness'.

High-profile abortive attempts to replace well-known brands, such as renaming the Post Office Consignia and Coco Pops becoming Choco Krispies, show that marketers do not always make the right call. The first part of any brand-replacement strategy, then, should be a thorough analysis of the risks involved in dropping a marque by working out the nature of the brand equity and its value in the eyes of stakeholders, including staff, distributors and opinion formers, as well as consumers.

Terry Tyrrell, worldwide chairman of branding agency Enterprise IG, believes Aviva would be 'mad' to ditch the Norwich Union name in a quest for global economies of scale. 'Huge amounts of goodwill have accumulated in the Norwich Union brand over many years, and you mess with that at your peril,' he warns. But equally, Tyrrell admits that without thorough research it is easy to be misled by emotion or nostalgia. Last year, Enterprise IG worked with Dubai container port-operator DP World, which had recently bought its UK rival P&O, to see whether keeping the acquired name would help or hinder its business.

'P&O was better known than DP World, but research showed that people thought it was slow, hadn't moved with the times, hadn't invested in people or infrastructure and depended on its colonial past. We concluded that the P&O name no longer carried any equity,' says Tyrrell.

To some extent, decisions about dropping brands depend on the sector concerned. Financial services marques, for instance, seem to instil a great deal of nostalgia. Tom Blackett, deputy chairman of the Interbrand Group, claims Santander is a case in point and must tread carefully if it ever decides to ditch Abbey. 'There is a lot of affection for the Abbey brand, despite the muddle it got into after demutualising, and Santander would have to work very hard to persuade customers that the benefits of being part of the bigger group compensated for the loss of the local brand,' he says. As others point out, 15 years after HSBC did away with Midland, some still dispute the relative merits of being a customer of 'the world's local bank' rather than its genuinely local predecessor.

By contrast, customers are less attached to their utilities providers: as long as they get good service at a reasonable price, most people are not concerned with the source. This should make it relatively easy for E.ON to migrate Powergen customers from the old brand to the new.

Nothing, however, seems to compare with the emotional attachment people have to their favourite confectionery brands. 'Research shows many people stopped buying Marathon when it was rebranded Snickers, but that they would start buying it again if it reverted to its former name,' says Ian Ryder, chief executive of brand consultancy UffindellWest.

Likewise, the rationale behind the 1998 rebranding of Opal Fruits to Starbursts is debatable. Angus Porter, global chief executive of brand development specialist Added Value Group, oversaw the change during his time at Mars and claims that in addition to the desire for global harmony, the confectioner wanted to use the name across a broader range of products, including gums and jelly beans. 'Our research gave us the thumbs-up to do something more generic with Starburst, but not with Opal Fruits, which was a bit constrained by its history,' says Porter.

Some consultants believe Mars squandered Opal Fruits' potential. Dragon chairman Dorothy Mackenzie points out that the brand was almost synonymous with soft fruity sweets, whereas today, many consumers are unaware of Starbursts' heritage.

Sometimes, business imperatives take precedence, as was the case when Go was subsumed into fellow low-cost flight operator easyJet in 2002. David Magliano, former marketing director of Go, was part of the integration team. 'We looked at whether to run both brands together, or even get rid of easyJet, but at the end of the exercise it was a no-brainer,' he recalls. 'EasyJet was a bigger, stronger, better-established brand, and it was part of the wider easyGroup. Also, the business model meant that Go's level of customer care had to fall to that of easyJet, which meant the whole iconography of easyJet was more appropriate. Yes, we threw away brand equity, but that wasn't what easyJet was buying.'

Once the decision to dump a brand has been made, there is a three-stage process to carrying out the task, according to Tyrrell. 'First, the company explains to staff why it has made the decision, what it means and what's in it for them,' he says. 'Then it sets out its long-term strategy, discreetly endorses the brand it bought, shifts to joint-branding, and finally moves over to the "masterbrand". The timing depends on the strength of the acquired brand, and may take up to two or three years.'

This is exactly what E.ON has been doing since it took over Powergen five years ago. It recently switched the sponsorship of the ITV national weather from Powergen to E.ON and launched an advertising campaign to raise awareness of the latter and explain the relationship between the two. At the same time, it unveiled an updated red logo for Powergen, in line with E.ON's look and feel.

Arguably, Santander has been doing the same. Despite claims it has 'no plans whatsoever' to ditch Abbey, it has spent the past 18 months familiarising UK consumers with the Santander name, colours and logo, culminating in the current campaign starring Formula One driver Lewis Hamilton, which informs consumers that Abbey is now part of Santander's 'team'.

Done correctly, phasing out an established brand can be an opportunity to reinvigorate a product. It offers the company the chance to position the brand around fresh priorities. 'Whatever the reason for having to change a brand, companies should use the exercise as a positive opportunity to refresh the name in consumers' eyes, by hanging on to the best of the old while communicating the new vision,' says Mackenzie.

'Customers have to see what's in it for them.'

This is the approach E.ON is adopting in its latest advertising campaign. A recent 'Wind of change' TV execution, created by TBWA\London, highlights E.ON's progressive stance on renewable energy through its investment in developing one of the world's biggest offshore wind farms, in UK waters.

It is important not to underestimate how much and how quickly a company changing its brand has to communicate with internal and external audiences. E.ON, for example, is quite open about its plan to ditch the Powergen brand.

'We've rebranded the power stations, the head office and the call centres, and E.ON sponsors the FA Cup,' says head of PR Nick Sandham. 'Changing the consumer brand to E.ON is the next logical step.' 

Brand experts believe this transparent approach is crucial to successfully replacing one name with another. Apart from anything else, it helps to foster staff co-operation. As employees are the brand in many cases, particularly in the service sectors, explaining the reason for a rebrand to them early in the process could spell the difference between success and failure.

Ashley Stockwell, managing director of brand at Virgin Media, has spent the past few months melding four different companies - NTL, Telewest, Virgin Net and Virgin Mobile - into one cohesive brand. 'It is about so much more than putting up the Virgin logo,' he says. 'The cultural work we have done to immerse staff in the Virgin Media brand values is probably more important than external communications to customers.'

Amanda Jennings, head of sponsorship and interactive partnerships at O2, agrees. She oversaw the rebranding of BT Cellnet to O2, and describes getting staff behind the new business as 'the biggest thing'. 'We ran brand inductions for everyone from the chief executive to the security guard. You can't just put a fresh lick of paint on the front door and expect things to change.'

The perils of a purely cosmetic approach were highlighted in the rebranding of the Post Office to Consignia five years ago. The changeover was intended to act as a vehicle for diversification and expansion. As a result, the company paid scant attention to communication with existing stakeholders. The name was subsequently boycotted by unions, reviled by customers, lampooned by the media, rejected by staff and soon scrapped.

Dumping a brand with strong equity is fraught with danger; in some cases, whole media campaigns have been set up to thwart rebranding efforts. It requires a clear rationale and an honest approach to both staff and customers. Even with these safeguards in place, consumers may well spend decades reminiscing about the brand they loved and lost.

 

Jif to Cif

In 2002 Unilever changed the name of its cream household cleaner Jif to Cif to make it consistent with other markets. It created humorous TV advertising, based on the idea that foreigners couldn't pronounce the word Jif. The work was intended to communicate to its loyal UK consumer base that the product was essentially unchanged. Sales in the UK were reportedly unaffected.

 

Coco Pops to Choco Krispies

Kellogg ran into trouble in 1998 when it decided to rename children's cereal Coco Pops. The rebranding as Choco Krispies was designed to bring the product into line with other European markets, but Kellogg didn't bank on the national outcry the decision caused in the UK. One of the chief bones of contention was that the slogan 'I'd rather have a bowl of Coco Pops' just didn't sound the same with the new name inserted into it. Kellogg launched a telephone poll in which 92% voted to ditch the new name, and Coco Pops was resurrected.

 

Switch to Maestro

MasterCard changed the name of its debit-card brand Switch to Maestro in the UK in 2003 to bring it in line with its international brand. It spent £8m on a year-long TV, press and outdoor campaign featuring penguins using their Maestro cards overseas. Transactions rose by 22% in the nine months following the start of the campaign and have continued to increase.

 

PwC to Monday

In 2002, with the help of brand consultancy Wolff Olins, the consulting arm of PricewaterhouseCoopers renamed itself Monday. The intention was to denote fresh thinking and new beginnings, rather than the unwelcome start of the working week. After a few weeks of ridicule, the company was bought by IBM Global Services, which swiftly ditched the £75m rebranding.

 

BT Cellnet to O2

When it broke away from BT in 2001, BT Cellnet wanted to shed all vestiges of its former life. Six months later it launched the O2 name and identity, supported by TV ads voiced by actor Sean Bean and the strapline 'Let's see what you can do'. At the time, many analysts expected O2 to suffer against established rivals such as Vodafone and Orange, but it has prospered under the new brand. It was sold to Telefonica last year for £18bn.

 

Post Office to Consignia

In 2002, the Post Office decided to call itself Consignia in preparation for a more commercial and international approach to business. But failure to communicate the rationale for the change to its various stakeholders, combined with poor performance, led to a national outcry. Then-chairman Allan Leighton rebranded it as the Royal Mail Group a few months later.

 

Dos and Don'ts

Do be up-front about intentions. Don't dump a brand after saying for months that you won't.

Do remember that in some categories, consumers can be very sentimental about brands.

Do take your time. In the case of rebranding work, build up the new brand and make sure people know it is replacing the old one.

Don't relinquish the goodwill a brand has accumulated over the years without a very good reason.

Don't forget your staff. Without buy-in from a brand's employees, you're less likely to convince customers.

Don't panic if it all goes wrong. With some nifty PR, you can use the furore to boost interest in the brand.

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