Opinions - 04.05.2015 - 00:00 

New brand: risk or opportunity?

A Swiss telecom firm renames itself: Orange becomes Salt. What does such a name change mean for a brand? Five propositions on rebranding by Sven Reinecke, Executive Director of the Institute of Marketing at the HSG.


4 May 2015. What happens if a brand reinvents itself? The brand change of the Swiss Orange company to Salt is only one example; many other enterprises have already undergone a brand change. Five propositions on so-called rebranding:

Branding is strategic and long-term
With the exception of Google, all the top 10 brands in the Interbrand Ranking of the world’s strong brands are old, “tried and tested” brands. This underlines that the generation of brand strength requires a great deal of staying power. For one thing, this applies to the core of a brand. Thus ever since the beetle, Volkswagen’s brand values have always been based on the notion of a “safe purchase”, communicated with slogans such as “And it runs and runs and runs” and “You know what you’ve got”. For another, it also concerns communicative implementation: the Mobiliar insurance company’s amusing advertisements with the accident sketches are unique and pithy – and because they have been running for more than 16 years, they are particularly memorable. In our fast-living time, continuity is a top-class achievement because in some firms, marketing managements and advertising agencies are replaced at annual intervals.

Yet a brand must not gather dust

Consumers’ requirements change, which is why brands must accentuate their positioning again and again in the course of time. Brands which do not change at all become boring and uninteresting. Thus Rivella succeeded in updating a strong, traditional Swiss brand again with Rivella Cliq. Innovations such as Coca-Cola Life also result in a well-known brand emphasising a new aspect without changing the fundamental message (in Coca-Cola’s case, refreshment). From time to time, it makes perfect sense to very cautiously change, or stylistically simplify, the logo of a brand, as is sometimes done by Migros, Coop and Nestlé, and occasionally even by Google.

A strong brand stands for a promise kept.

This means that, on the one hand, it represents a long-term relationship between customers and the brand company; on the other hand, it also requires a high degree of employee identification with the brand to ensure that the brand comes across as authentic. An abrupt brand change thus results in a change in customers’ relationships with the company; this was felt by the Cailler brand, for example, when it changed its packaging in a direction which its customers perceived as excessively luxurious. However, a brand change also calls for reorientation: thus Coop City stands for different target groups and values from EPA – which change makes new demands on employees, too.

Exception: rebranding

Total rebranding should be an exception and only be envisaged if there is a really compelling reason for it. The former Rentenanstalt linked its transformation from a cooperative to a listed company with a name and logo change; this brand change is regarded as exemplary by many marketing experts. Before and after the logo change, the rebranding exercise was accompanied for years with the help of the dual name “Rentenanstalt/Swiss Life”. The merger between the Union Bank of Switzerland and the Swiss Bank Corporation also required rebranding, which was skilfully done by combining the name and logo components (UBS and key symbol) of both companies. However, a great number of name and logo changes are unfortunately carried out more from a lack of marketing expertise or from the vanity displayed by the executive board and the marketing management in order to attract their own community’s attention. Incidentally, customers have scant interest in logos and are even less interested in logo changes – they appreciate trust and continuity instead.

Brand changes are expensive

The introduction of a new brand is usually much too costly. In marketing, the principle applies that without brand awareness, everything is nothing. It is extremely expensive to re-establish the present degree of brand awareness of Orange (surely more than 95% among the target group) for the Salt brand. It has been and is equally demanding and expensive for the AXA insurance company to achieve a similarly favourable image and equivalent brand strength to the traditional Swiss brand, Winterthur. Therefore the company has also professionally communicated the brand in parallel, with the focus increasingly on AXA.

A change to a new brand that is exclusively justified with international synergies – such as “Raider is now called Twix, nothing else changes” (which cleverly rhymed “Twix” with “nix”) – would certainly be challenged today. Almost all international consumer good companies reduce the number of their brands and focus on a few “megabrands” in order to attain effectiveness and economy in communication. Only in this way is it possible to be noticed at all in today’s advertising world. It is perfectly conceivable, for instance, that a company like Beiersdorf will at some stage integrate the strong, more than a century old but relatively small “Labello” brand under the Nivea umbrella brand in Switzerland – for example as Nivea Labello or Nivea Lip Care. In such a case, the lip care products would also pay into the Nivea brand and thus reinforce customers’ brand awareness.

The “Orange/Salt” case

How must the brand change from Orange to Salt be rated? There was an actual reason for the brand change (sale of the company and the related licence fees to Orange) – and the firm wants to offer innovative products (target-group-specific annual contracts and flat rates) to appeal to new and attractive target groups made up of people who are less sensitive to prices. At first sight, the brand change looks like good craftsmanship, but the strategy is expensive, extremely demanding and hazardous. For this reason, in particular, it will remain exciting to observe the success of this rebranding campaign among customers.

Bild: Photocase / sör alex

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