Rebranding

Every building occasionally needs a new coat of paint. Similarly, a brand – which is really a business’s public face – sometimes needs to be refurbished to maintain or enhance its appeal. In essence, rebranding involves reimagining the company’s marketing strategy, such as by changing its name, design aesthetic, product portfolio or logo. This sounds deceptively easy; the reality is quite different. Before embarking on a rebranding mission, business leaders must be cognizant of the risks involved. After all, it is an expensive exercise that may cost 10-12% of the annual marketing budget, but which, according to a University of Pennsylvania study, may have a success rate of just 30%. This paper explores the right (and wrong) reasons to rebrand.

The Right Reasons to Rebrand…

Market repositioning

Rebranding can help redefine one’s target audience, reflect a new value proposition or convey a shift to a distinct market segment. Once mainly a refrigerator manufacturer, Godrej sought a new brand image as it entered the consumer goods, agro-goods and furniture space. It retained its typography but changed its font colour from a monolithic blue to red, maroon, green and blue as it ventured into new areas, including real-estate.

A revised vision or values

Major changes in a business’s vision and values should be reflected in its brand and messaging. With the global shift towards health-consciousness, McDonalds needed to shed its unhealthy fast-food image and its association with obesity. It did this by changing not just its logo, but also by launching marketing campaigns promoting salads and fresh ingredients, publishing nutritional facts and refreshing its restaurants worldwide.

Mergers and demergers

A merger of two businesses is a merger of brands. Rebranding is the ideal way to reflect the new partnership while preventing brand confusion. When Vodafone acquired Hutchison Essar in 2007 it launched a campaign featuring Hutch’s famous brand-ambassador, a pug. This raised awareness about the partnership while establishing continuity with Hutch’s brand values in the eyes of consumers. Conversely, Hero-Honda’s demerger resulted in the birth of two distinct brands. In 2011, Hero introduced a new logo. It backed this up with a marketing campaign that emphasised the company’s Indian roots, building it around a patriotic anthem by AR Rahman.

Entering new geographies

While entering a new market, even an iconic global brand must sometimes tweak its messaging/offerings to suit local preferences and differentiate itself from incumbents. When it stepped foot in India, KFC changed both its branding and its menu. It added local spices to appeal to the Indian palate but also created a range of vegetarian options with the tagline, ‘So Veg, So Good’.

…And A Few Wrong Ones

Logo fatigue

For every successful rebranding initiative, there are several cautionary tales. More often than not, failure arises when a company rebrands for the wrong reason(s). A big no-no is giving in to internal – and often misplaced – feelings of brand fatigue, such as from repeatedly seeing the same logo/slogans. However, rather than reviving a well-established brand, abandoning its legacy and nostalgia value can be damaging. When Gap, an iconic clothing company, released a new logo for no good reason, it spurred outrage among loyal customers, who had a strong emotional connect with its logo. Worse, the new format did nothing to communicate the brand’s identity. Gap reverted to its old, trusted logo after just 6 days.

Sweeping things under the carpet

Rebranding cannot cover up a scandal or distract from bad press. Facing negative publicity and mounting allegations of fraud, Sahara India Parivar launched a new retail chain, ‘Sahara Q Shop’. The aim was to highlight the quality and purity of Sahara’s products and rebuild public trust. However, customers remained sceptical of the firm and saw the move for what it was: an attempt to distract from its financial irregularities.

Vanity

Vanity-driven branding/rebranding projects are often doomed to fail, unless backed up by a truly sustainable business model. Even as it continued to struggle financially, Kingfisher Airlines doubled-down on a luxury-driven branding approach. Extravagant marketing spends and giveaways made an unviable business model even less so, hastening the company’s fall.

Clutching on to market share

Finally, rebranding can do little to arrest falling sales when the problem is structural in nature. Faced with a declining market share, smartphone manufacturer BlackBerry sought to rebrand. It launched a new operating system, and a range of smartphones with a more contemporary, less corporate appeal. This created a short-term buzz that soon fizzled out. Here, a key failing was that BlackBerry had not done enough market research – missing the plain fact that consumers now wanted touchscreens, not jazzed-up, keypad-based phones.