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Asia Business Development – Asia Business Consulting » Side Click: When rebranding takes a U-turn

SpirE-Journal 2014 Q3

Side Click: When rebranding takes a U-turn

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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.

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