Side Click: When rebranding takes a U-turn

Successful rebranding involves restoring a brand’s overall goal, message and culture – not just a logo or name change. It means connecting with consumers. But do all rebranding exercises bring the desired results? Or can they go horribly wrong?

Branding and rebranding can be a very tricky business. Brands distinguish a company for who they are and convey value to customers. But when a brand’s value proposition, personality and values no longer align with their vision, function and purpose; it prompts a marketing message realignment or rebranding.

A successful rebranding can refresh, renew and improve customer’s sentiments towards the company. But rebranding can also become a costly affair if it fails to re-build that all-important emotional connection with customers. Some implications of unsuccessful rebranding include:

High level of expenditure

Rebranding burns up a great deal of money and energy. And reversing an unsuccessful rebranding cost even more. In 2010, Gap attempted to change their 20 year old logo as part of their rebranding efforts, with unexpected results. Online users vocally demanded the return of the old logo, which Gap had to reintroduce within six days of the new logo’s launch . The attempt at rebranding reportedly cost USD100 million.

Unexpected results

Rebranding is notoriously hard to pull off – especially when a brand commands a strong foothold in the market and has years of recognition to its name. Consumers might refuse to accept a new concept or changes to the logo due to the absence of that long term emotional connection. For instance, Airbnb – a US-based online booking hub for accommodation worldwide – introduced a new logo as part of their rebranding campaign in July 2014. The new logo – known as Belo – was a simple icon for ease of recognition. However, the logo’s similarity to several other businesses like Automation Mobile led to a lot of criticism. In spite of consumers’ displeasure, the new logo remains in use.

Dent in rebranded brand

Careless rebranding can be very damaging to a brand. One of the greatest rebranding debacles was when Tropicana redesigned its Pure Premium beverage line in 2009. Their new Pure Premium beverage line led to a 20% plunge in sales post rebranding! Dollar sales further dropped 19% which means an estimated USD33 million to USD137 million loss between January 1 to February 22 in 2009.

The history of rebranding is littered with more failures than successes, not to mention plenty of episodes of under-performing “rebranded brands” that fail to justify the costs of rebranding.

The moral of the story seems to be that iconic brands are deeply emotional entities. And rebranding risks cracking this delicate Humpty Dumpty. It should be undertaken only as a last resort.

https://www.spireresearch.com/spire-journal/yr2014/q4/side-click-when-rebranding-takes-a-u-turn/

Comments

The race to invest in Vietnam – How FDI is changing Vietnam’s economy and society

Vietnam’s economy has been among the fastest growing in Southeast Asia. Today, it is a key destination for Foreign Direct Investment (FDI) in the region. In 2016, FDI climbed to USD24.4 billion, a 9 per cent growth compared to 2015. This is despite Vietnam suffering an epic drought in 2016 and a third of its vast population of 93 million people living in poverty. Vietnam has won a reputation as a cheaper manufacturing hub compared to China. Could FDI propel Vietnam to become Asia’s next Tiger economy? A growing economy With a USD200 billion Gross Domestic Product (GDP), Vietnam’s economy is tracking well since the start of deep economic reforms – known as Doi Moi – in 1986. Since 1990, its GDP per capita growth has been one of the fastest among emerging economies, at an average 6.4 per cent (yearly) growth in the 2000s. Vietnam has improved provision of basic services. In 2014, the part of the population living below poverty line fell to 13.5 per cent – down from approxim...

Africa's aviation sector opens up

When the African Union (AU) launched the Single African Air Transport Market (SAATM) in January this year, it finally opened up Africa’s skies. 23 signatories on board, though another 32 AU members are yet to sign on. SAATM’s launch is a part of AU’s Africa 2063 project, which is a commitment to intra-continent development. If a common regulatory framework is put into place, this could benefit intra-continental travelers immensely, thus boosting commerce and tourism flows among African countries. Will Africa become the world’s next big aviation market? For more information, click here .

Spire talks about ICT strategies at ICT market Movement 2019 in Yogyakarta

On 20th January, Spire was honored to participate in the ICT Market Movement 2019, Strategic Plan 2020 in Yogyakarta. Jeffrey Bahar, Deputy Chief Executive Officer, Spire Research and Consulting Group shared his insights on the outlook for the Indonesian ICT sector and the strategies needed to win. Jeffrey discussed strategies for digital transformation, which is a watch-word among most corporates in Indonesia today. Going forward, key areas for ICT players to look at include Big Data, the Internet of Things and smart payment solutions. While cyber security remains a concern, technological advancements are improving the security options and tool-kit available to companies. Read more: https://www.spireresearch.com/newsroom/events/spire-talks-about-ict-strategies-at-ict-market-movement-2019-in-yogyakarta/

Harnessing social innovation for Malaysia’s progress

The Social Impact Innovation Challenge by Berbudi Berganda – driven by Agensi Inovasi Malaysia (National Innovation Agency) – brought together individuals across Malaysia to scout for innovative solutions for Malaysia’s social development. Carried out over a period of 10 weeks, 12 finalists were shortlisted out of 300 entries using selection criteria that spanned three parameters – innovation, cost-effectiveness and sustainability. Yap Far Loon, Business Development Director, Telecommunication of Spire Research and Consulting, was among the Challenge panelists interviewed on BFM 89.9 (The Business Radio Station) for the Live and Learn show. He shared his views on how to measure impact of social innovation. This Social Impact Innovation Challenge strives to turn innovative ideas into realities. To explain the impact of social innovation, Far Loon uses a simple demand-supply model. Supply here refers to the finalists. Demand refers to the beneficiaries, such as people with low-inco...

China's measured reaction to US trade tariffs

The recent US trade tariff announcement will impact Chinese imports worth USD60 billion. Will China’s reaction and the prospect of continuing tit-for-tat tariff hikes cause more panic across global markets? Leon Perera, CEO of Spire Research and Consulting, shared his thoughts in China Daily – Asia Weekly. As the US Treasury explores restrictions on Chinese investment in the country, the value of stocks plunged across Asian markets. Industries that might come under more scrutiny for possible higher trade tariffs include maritime equipment, new materials, automated machine robotics and tools along with new advanced information technology and high-tech shipping to name a few. Voicing concern, Perera pointed out that China’s focus will still be on minimizing an escalation of mutual tariff hikes. China has hugely benefitted from global trade and FDI flows. However, China is clearly prepared to pursue retaliatory tariffs of its own for strategic reasons – it has announced tariff h...

The Knowledge to Decide

Search This Blog