How to change a brand’s name successfully
A brand may change its name for a number of reasons. The rebranding process will have a direct impact on the success of the name change. Name changes often result in a drop in sales, but when the process is done well, sales can hold steady. However, if a poor strategy is followed, a name change puts the brand at risk of losing equity, consumer loyalty and ultimately market share.
Brands change their name for several different reasons, including repositioning, merger, acquisition, globalization of brands or to counter bad publicity or a negative image. The change can be major — a completely different name, such as Marathon to Snickers; minor — a slight modification to the original name, such as US Air to US Airways; or simply involve the addition of the parent brand name — Chicken Tonight to Knorr Chicken Tonight.
Brand health measures
While tracking measures usually suffer a significant decline with a brand name change, most measures show a steady increase towards original levels after the new name is introduced. As would be expected, unaided brand awareness experiences the sharpest drop. Although, on average, total brand communication awareness actually increases following renaming, this is likely to reflect an increase in activity to communicate the brand name change.
Levels of claimed usage remain similar overall, with users naturally
being less likely to be affected by the change in brand name.
The impact of a name change
Some newly named brands are not picked up on or are overlooked, while some are flat-out rejected by consumers. Coco Pops, a Kellogg’s cereal brand in the UK, changed its name after 28 years for global consistency, a decision that resulted in equity and market share declines along with strong public protest. Kellogg’s responded with a television campaign that gave kids the opportunity to vote on which name they preferred — 90 percent chose the original name. The company listened and changed the cereal back to its original name. Sales increased 20 percent over the next year.
In our experience, many brands see an immediate 5–20 percent decline in sales, and can take years to restore levels, while others are negatively affected only in the short term. The sales response can be impacted by several things, including the amount of equity in the original brand name, how much is invested in communicating the name change, the strength of the advertising and the consumer reaction.