Re-branding.

Question - is re-branding a high risk strategy?

Answer - it depends on what you are re-branding. If you are merely giving yourself a new name,
then it is usually simply a question of money - making people aware of the new name. But if you
are re-positioning your brand, that can be very high risk

Key Points

Re-branding can mean at least three different things:

1. changing your name

2. changing your brand identity policy (color palette, logo etc.)
3. repositioning your brand

Of these three, the first two are relatively safe, but the third can be lethal if not managed properly.

There a number of reasons why businesses re-brand themselves by trying to transfer their
existing equity into a new name, identity policy or positioning:

• when they launch new businesses that are significantly different from the traditional one
• when there has been a merger/acquisition
• when there has been a de-merger/spin-off
• to achieve international harmonisation of the brand
• to rationalise the brand portfolio and concentrate the brand investment in few, bigger
names
• to update the brand image. This typically entails a change to the brand identity policy
rather than a total re-branding, but this can happen too (for instance when nationalised
industries are privatised - BA, BT, Consignia, Energis, Powergen etc. )

Brands are valuable, and that value is a culmination of many years' investment and commitment.
Re-branding is expensive and entails some risk. You have to explain to historic buyers of the old
brand what you are doing and why, and try to take them with you. This may rack up a significant
communications budget and may not work, although very often it does.

Few companies go to the cost and effort of re-branding unless there is a very good reason for
doing so, and when they do so they mostly get it right. Customers can be very forgiving of name
changes, sceptical about identity changes, and highly resistant to repositionings.

As the old saying goes, in order to get something worth having, you have to give up something
worth keeping. That is the calculation.