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The pitfalls of rebranding


The strength of a company's brand depends on more than just a name and a logo. It's also dependent on the public's perception of the quality of its products or services and, increasingly, its social and environmental credentials.

One of the most sought-after components of brand value for companies is the hard-to-define - let alone hard-to-quantify - 'cool' factor. However, given that The Sun, McDonald's and Manchester United were voted among the 10 least cool brands in a survey by Marketing magazine, 'cool' is far from the be all and end all of branding.

The Sun, McDonald's and Manchester United were voted among the 10 least cool brands - but 'cool' is far from the be all and end all of branding

Central to the pursuit of cool, and the effort to associate a product with a range of other positive qualities, is advertising. People are usually savvy enough to recognise - on an intellectual level at least - when an advert is making ludicrous claims about a product. But people do respond on an emotional level. They know that a particular beer doesn't make them any sexier, and they don't really believe that a shampoo could possibly have 27 levels of softness - but somehow sales go up anyway.

Nevertheless, clever advertising can only disguise a bad product until someone has actually used it - at which point they'll probably vow never to repeat their mistake. A good product will benefit from free advertising and brand-building courtesy of word of mouth. If a product is flawed, then the converse impact on the brand is probably amplified: a bad experience is always memorable.

Superficial brand-building backfires when built on shaky foundations. Rebranding has become a fad in recent years, but new names and logos are never an adequate substitute for addressing systemic deficiencies in a business. It's also an expensive undertaking, consuming resources better spent on resolving operational problems.

Successful rebrands

Successful rebrands are usually prompted by changes in strategic direction, the industry, or in the wider world.

One successful rebranding was Kentucky Fried Chicken's. By 1991 the company had long expanded beyond the borders of Kentucky, had diversified its menu beyond chicken, and was concerned about the unhealthy connotations of the word 'fried'. KFC - which was also snappier - was born.

As the world changes, so does our language, and brands sometimes adapt to take this into account. BT Wireless, for example, became O2 as part of a demerger in 2001, as BT was associated with the pre-mobile age and 'wireless' was simply anachronistic.

Sometimes a name change is pure inspiration. In 1978 Blue Ribbon Sports changed its name to Nike. The new name was short, snappy and, being the name of the Greek goddess of victory, drew on the great sporting traditions of ancient Greece.

Not so successful rebrands

But not all rebranding exercises are so successful, especially if they move the company away from the qualities that the public values most. In 1997 British Airways replaced the British flag on its fleet's tailfins with colourful, multi-ethnic liveries at the cost of £60m, because it thought it better reflected the diversity of its passengers. However, it received a frosty response - most notably from Baroness Thatcher - and the planes were soon bearing the Union Jack again.

Similarly, in 2001 the Post Office changed its name to Consignia, purportedly to reflect its expanded range of services. Yet the name didn't seem to say anything about the company. The Post Office's core function was still the provision of postal services, which the public thought were getting worse. So when it spent £2m on a name change, with the shift in company direction that implied, it drew near-unanimous derision. The change was reversed after just a year.

British Steel encountered a very similar problem when it merged with the Dutch company Koninklijke Hoogovens in 1999 to form Corus. A leading branding expert blamed an ambiguous brief for the new name, as the new company couldn't decide whether it was a steel or a multi-metal business, so Corus was the product of muddled thinking. Despite - excuse the pun - a Corus of disapproval, the name has remained unchanged.

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