Rebranding Essentials - Part 1: Why Rebrand?

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Posted Aug 15, 2011
Susan Gunelius

A few weeks ago, I wrote a series of posts on the AYTM blog that answer two fundamental branding questions -- what is a brand and how to brand? Now, it’s time to learn about the process of rebranding in the new Rebranding Essentials series.

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Rebranding occurs when a business or organization decides to change a significant element of the brand. Such a change could be glaringly obvious like a new brand name or logo, or it might be more subtle such as a slight shift in messaging to better communicate a more relevant brand promise.

Any way you slice it, rebranding is extremely important. Not only can it be expensive to execute a complete rebrand, but it can also be risky. Sometimes employees and consumers won’t accept a rebranding, and that’s when disaster strikes.

Why do companies rebrand? There are actually a multitude of reasons why a business might initiate a corporate rebranding or the rebranding of a product or service, but no matter what the reasons are, those reasons can always be categorized as either proactive or reactive. Let’s take a closer look.

Proactive Rebranding

Sometimes a company sees a reason to rebrand to seize an opportunity or thwart potential threats in the future. For example, proactive rebranding might happen in the following situations:

  • Predicted Growth: When a company is preparing for expected growth, particularly international growth, it might rebrand products and services into a consolidated brand. This is often done for consistency and to save money over time. This type of rebranding is also done when a company simply needs to create a greater sense of brand unity across its business.
  • New Line of Business or Market: When a company enters into a new line of business or market that is not cohesive to the existing brand identity, a rebranding might be in order. Remember when Apple was known as Apple Computer? As the company evolved into new lines of business beyond computers, the original brand name was too restrictive. With a simple snip to the ancillary word in the brand name in 2002 (which most people didn’t use anymore), the brand was ready for new growth and opportunities.
  • New Audience: When a company wants to appeal to a new audience, a rebranding might be necessary. Keep in mind, the rebranding might not require an actual name or logo change. Think of McDonald’s referring to itself as MickeyD’s in commercials to target a different demographic from its traditional family audience.
  • Relevancy: When a company realizes its brand is losing relevancy in consumers’ minds, it might be time to rebrand. The Yellow Pages rebranding is a perfect example. With the use of printed Yellow Pages directories declining, Yellow Pages rebranded to YP and began to focus more attention on the digital space making it significantly more relevant.

Reactive Rebranding

Other times, companies rebrand in reaction to an event that is so significant that the existing brand must be changed. For example, reactive rebranding might happen in situations like the ones listed below:

  • Merger or Acquisition: When companies merge or acquire other companies (and even when they break apart), rebrandings are often required. That’s how we’ve gotten brand names like Pricewaterhouse Coopers and Bank of New York Mellon. When AT&T broke up into three separate companies in the late 1990s, Lucent Technologies was born. These types of rebrandings are very common and often go through multiple iterations.
  • Legal Issues: There are a number of different legal issues that could cause a company to rebrand. Trademarks are often at the root of these rebranding examples. That’s why it’s so important to conduct an exhaustive trademark search and obtain the trademark rights to your brand name before you launch it.
  • Competitive Influences: Sometimes a company’s competitors’ activities can be the catalyst to a rebranding. When a competitor renders your brand useless or dated, a rebranding could help you regain a foothold in your market and give you the facelift you need to effectively strike back.
  • Negative Publicity: Remember a company called Andersen Consulting? It was part of a larger company along with the accounting firm Arthur Andersen that was tied to the collapse of Enron. Andersen Consulting was granted independence from its parent company in 2000, and on New Year’s Day 2001, the consulting company was reborn as Accenture, representing a great example of effective rebranding in response to negative publicity.
Andersen Consulting Accenture Logos

Whether it’s your own strategic goals or macro-environmental factors that necessitate a rebranding, realizing that it might be time to rebrand is just the preliminary step in the rebranding process. Next, you need to determine the extent of the rebranding and how you’re going to get it done. That’s exactly what you’ll learn in Part 2 of the Rebranding Essentials series, so stay tuned to the AYTM blog for the next post!

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