What’s in a Name? Everything, or is it?

Apr 8

posted by Dr. Russell Abratt in Branding | 9 Comments

One of the most important concepts in marketing is branding. We as consumers' do not buy products and services, we buy brands and we shop at stores we know and respect. We shop at Publix or Macy's. We don't buy toothpaste we buy Colgate, we don't buy a car, and we buy a Chevy. We don't go to school. We go to Nova. Some of us are so impressed with brands we pay premium prices for products like Apple. As a result, organizations spend a lot of resources on building their brands. Brand building takes time, sometimes many years, much money is spent on building brand identity and firm's employ branding experts just to give focus on brand development. There are even specialized agencies that would value your brand. An example is Interbrand, who put the value in 2012 of the world's two top brands, Coca-Cola at $77.8 billion, and Apple at $76.9 billion. Thus brands are one of the most valuable assets of an organization.

So why then do we have a company like Maroone rebranding to AutoNation? Is there no brand equity in the Maroone name? This is not the first or only time organizations have rebranded. I am sure that you can think of many. The airline industry has also lost some big brands recently. Continental is now United Airlines, Northwest is now Delta and the most recent is US Airways becoming American Airlines. As there is great value in brands, and we as consumers love brands, why do companies rebrand?

There are generally speaking four reasons for organizations wanting to rebrand. First, there could be a change of ownership structure, usually as a result of mergers or acquisitions. This was certainly the case in the airline industry. Second, there could be a change in corporate strategy. For example, the company wants to have one name nationally and internationally. This could be the reason in the AutoNation example. Third, there could be a change in the competitive position. A company could have reputation problems or an outdated image. Last, there could be a change in the external environment, for example a legal obligation. This happens when government owned companies become publicly owned ones.

A rebranding exercise is costly, risky and time consuming. Just think of all the logos and signs that have to change, all the advertising and promotion that needs to be done in order to create the new image. It is also risky. Will the staff "buy" into the new name. Will they identify with the new brand? How will consumers react?

So what do you think? Is it good for a well-known and respected brand name to change its name even for one of the reasons stated above? Will they lose or gain business?

Russell Abratt, Ph.D., is Professor of Marketing at the Huizenga School of Business and Entrepreneurship, Nova Southeastern University. He can be reached at abratt@nova.edu About the Contributor

This entry was posted on April 8, 2013 at 7:57 AM and has received 3899 views. There are currently 9 comments. Print this entry. Download attachment.

Comments

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• #1 by Nina Chandler on 4/11/13 - 5:56 PM

  

  I think the staff and the customers will easily adapt to the new brand because Maroone has been a popular name for a long time. However, AutoNation has been around for a while also, but with proper advertising such as the TV commercial the use to advertise Maroone and now AutoNation makes it even more interesting and attractive to the customers. People will buy into the new name and customers will also stay aboard and patronize the new brand. I think when a major company changes their name, they must be very careful of the change and continue to be innovative while also implementing the customer value along with the change. I do not think it is anything wrong with a company changing their name just as long as they do it with much consideration to the customers. By the company changing its name will not cause them to lose business if they go about it the right way. This could be done by carefully planning and controlling the necessary changes in a strategic manner.

• #2 by Russell Abratt on 4/12/13 - 11:19 AM

  

  Nina
  You do make some good points and I agree with you.
  Another thing companies must note is the cost of the change of name. The ads that you mention must be costing Autonation a lot of money, not to mention all the other items that need changing like signage and documentation.

• #3 by Tiffini Redler on 4/14/13 - 12:07 AM

  

  Being in the veterinary industry, animal health companies are often rebranding themselves, either timed in correlation with their IPO (Pfizer Animal Health to Zoetis) or as a result of mergers and acquisitions (Schering Plough merger with Merck). Very oftern the industry struggles to adjust to the new name and recognize any differentiation in the new brand, beyond new product selections. Also, despite intense advertising and marketing strategies, in many cases the direct sales force of these companies continue to use the old name, making the overall process of rebranding with customers a challenge. Companies need to pay close attention to the message being delivered by its employees and received by its customers during the rebranding process.

• #4 by Russell Abratt on 4/14/13 - 5:07 PM

  

  Your observation about employee comments after the rebranding exercise is an important issue. In brand building we often forget the internal branding elements and as part of any rebranding a company may do, they must ensure that employee re-branding takes place. Employees must "live the brand" and do act as brand ambassadors. Therefore they must be "on-board" with the new brand and understand the new brand values. The leadership must ensure that this is done to have a successful re-branding plan.

• #5 by Nurylin Rivera-Weinstein on 6/2/13 - 8:10 PM

  

  In today society, brand names talk about prestige, good quality, high image, and expensive cost. We only experience the idea when we buy any product with a brand name. The feeling is good and the cost is expensive. The reaction of those who see the brand name is amazing and surprise. Yet, all brand names have something in common,the positive prestige and image among society. When someone sells brand name items in a garage sale, people buy them quickly, because it is the image of the brand names that call their attention such as good quality and expensive items.

• #6 by Samar Akbarian on 6/4/13 - 2:57 PM

  

  The importance of the branding in the world of marketing has been explained. It shows the important role that a brand makes in the mind of customer to go and shop. I think, if a company is known and recognized like Coca Cola, They will not change their name; they just introduce their new products under parental name and add a new addition to the parental name like Coke Zero or Cherry Coke, and etc. On the other hand if a company is not very known or recognized, changing the name is a risk that they have to take. They may lose the business completely or they may attract lots of costumer. If a company wants to rebrand, they really have to change more than just a brand. They have to come up with a merger or change of ownership and selling the business to a known company, otherwise they may resolve themselves.

• #7 by Danai Cheretis on 6/5/13 - 12:49 AM

  

  I think it is good for even seasoned companies to rebrand as long as they analyze and properly forecast that the brand and customer equity they can acquire under the new name is greater than what can be lost by altering the existing one. I think a lot goes into the actual act of re-branding as to how they transition the brand and advise the staff and existing or potential clientele. Most cases turn out to be unsuccessful because they are not transitioned properly or several of the companies that are re-branding are already dying (why would you change a growing brand). Whether it is to refresh an old business or try to start with a clean slate, merger, or change in vision the appropriate re branding efforts are essential for many businesses.

• #8 by Nicole Smith on 6/12/13 - 11:49 AM

  

  As you mentioned, rebranding is a very risky and costly endeavor, so it is very important that a company considering this decision determines that the potential benefits will outweigh the immediate costs associated. If executed effectively, the company can reap long-lasting rewards from both its previous customers in addition to appealing to new market segments. It is also important that the acquiring company has to ensure that its employees, from both entities, are committed to the change and identify with the new “brand” and corporate strategy. If the marketing campaign is effective and can position the brand successfully, the consumers should react well to the new changes. In the example of AutoNation, the company created a merged television advertisement that incorporated the AutoNation brand with the popular Maroone theme song. That was an interesting tactic that caters to consumers from both companies and allows for a unified image; this in turn, will prevent the consumers from feeling disloyal or that they have lost desirable attributes of the previous company. Overall, I believe that AutoNation’s rebranding will be well received by consumers and provide long-term profits.

• #9 by Donnajean Wellington on 6/17/13 - 10:33 PM

  

  I believe it is wise to rebrand under the right conditions, for the right reasons. In the Maroone/AutoNation example, AutoNation is a name that leaves little doubt as to what industry the company is in, whereas Maroone isn't exactly a name that's synonymous with the automotive industry. A name like AutoNation allows the company to be instantly recognizable within its industry as it seeks continued growth.