There is not much academic research on brand transfers. It is however possible to draw on some brand and business models to clarify the conditions of a successful transfer. We selected them because they illustrate very different market situations and brand role, from mere impulse to highly risky purchase decisions, from products to services.
From Raider to Twix
In the autumn of 1991, continental Europeans were informed by a massive advertising campaign that the chocolate bar Raider was to be henceforth called Twix, Twix being the name used everywhere else in the world from New York to Tokyo and London. The difference from the Mars group’s previous brand transfer (from Treets to M&Ms) where everything had changed, including the product, was that this time, great care was taken not to disturb the customers. Nothing was changed apart from the name. It was a success.
When rebranding fails: from Fairy to Dawn (P&G)
Why was the brand change necessary? Philippe Villemus, the marketing director of Mars, explained (for more details see Villemus, 1996) that Mars was a worldwide group with six brands each worth more than a billion (US) dollars, and that it wanted only to have mega-brands which satisfy the five following conditions:is able to meet an important, durable and global need;represents the highest level of quality;is omnipresent all over the world, and within every one’s reach both physically and financially;creates a high level of public confidence; andis the leader in their segment (when this is not the case the brand is simply removed, like Treets and Bonitos).
For legal reasons it can happen that a trademark cannot be registered in a particular country or region. This was the case with the Twix name in continental Europe. As soon as the legal aspect had been dealt with by the acquisition of legal rights in certain countries, the group did not hesitate to rename Raider and to give Europe the global name.
What were the objectives behind this change of brand? In the first instance, it was to gain more market share and increase sales, otherwise, according to Villemus, there would have been no point to the operation. It is important to remember that a brand transition is not an exercise in style, but a unique opportunity to increase the share of the market.
It is a competitive move. A second objective was to have a global brand. A third objective was to reduce production, packaging and advertising costs. A fourth objective was to make its management easier. Finally, it was desirable to have one brand name so as to make the preparations easier for the intended brand extensions towards new sectors such as ice creams.
Raider had a strong brand equity in Europe so the transition was no small matter. It was the second most popular chocolate bar after Mars and it had an annual volume growth rate of 12 per cent. This was thanks to its specific concept and its slogan, which included a physical description of the product as well as its benefits for the customer.
In France, for example, spontaneous recognition was 43 per cent, assisted recognition was 96 per cent and that of the slogan was 88 per cent. Eighty-five per cent of all adolescents had tried Raider and 44 per cent bought it on a regular basis. Knowing this, Twix was marketed as the ideal snack for adolescents and young people between the ages of 15 and 25.
Even though the customers thought that the transition was rapid, in truth it took over a year. From October 1990 to October 1991, the Raider’s wrapping carried the words ‘known globally as Twix’ and for six months after the transition, ‘Raider’s new name’.
The communication objectives given to the campaign by the marketing director were:to communicate clearly and simply that only the name was changing;to transfer all Raider’s values to Twix;to quickly obtain a high brand awareness within the target group of young people (30 per cent unaided, 80 per cent assisted);to make the change popular using the alibi that the new name was in tune with the rest of the world, and that Twix was a global brand for young people all over the world.
The key elements of the success of the operation were due to the flawless implementation of the strategy:it was very rapid: 15 days to change everything in one country (the whole transfer in Europe took three months);Mars made a big event of it, which maximised its visibility and the awareness created;promotional activities at sales outlets contributed to the impact and trial of Twix;finally, great care was taken to ensure good coordination with field activities.
It was decided that, even if it meant buying back stock, on the day of the transfer no stocks of Raider should be left in any shops. Looking more closely at the different means of communication that were used, we see that the packaging was the first medium. It was used for one year before the transfer to warn customers of, and to familiarise them with, the new name. It was used for six months after that to explain the transfer. In order to meet the communication objectives the advertising campaign was characterised by:a strong emphasis on the pack-shot to maximise the recognition;the interruption of all communication of the Raider brand six months before transfer day to hasten the drop in its awareness;a high-impact European commercial starring David Bowie;a strong concentration of means: in three weeks as much as the total advertisement budget for two years was spent on television advertisements alone (it is now easy to understand why it was absolutely vital that all Raider packets were removed from all sales outlets).
In shops, Twix was given prominence and was put on visible display. Twix was the focal point of all the sales force, and all other brands were sidelined in terms of priority. Supermarkets had, of course, been informed well in advance. The bar code was kept the same so that supermarkets did not take Twix to be listed as a new brand and hence claim a listing fee.
Six months after the operation, Twix’s market share was the same as Raider’s had been. But from then on there was only one brand name, one factory and far less complexity. Due to its young and international status, Twix’s image was more modern than Raider’s.
Looking back, all the decisions taken seem logical. All successful operations give the impression of being easy. But the decisions were not taken without debate. For example, some people recommended improving the recipe and announcing ‘even better’. In the end it was decided, after reflection on the opposite approach of Treets/M&Ms, to change the product as little as possible.
It might also have been a good idea not to change the Raider music in the change-over film to Twix. Was the modification necessary? It is said to have disturbed some customers, which goes to show just how much the brand’s music is an integral part of its identity and personality.
From Philips to Whirlpool
On 1 January 1989, Philips and Whirlpool joined together to create the world’s biggest household appliances group, Whirlpool International, owned 53 per cent by Whirlpool and 47 per cent by Philips. This partnership was formed with the intention of attaining a significant global size which would enable and ensure the development of a long-lasting manufacturing firm.
Besides, Philips wanted to concentrate on its core activity. Finally, both companies were highly complementary, in their plant layout and industrial capacity, in innovation and in their geographic market coverage. Philips was the most important domestic appliances brand in Europe.
Whirlpool, for its part, was the number one in the United States, Mexico and Brazil. With 11.1 per cent of all the goods manufactured, Philips Whirlpool overtook Electrolux (9.6 per cent) to become the world leader in the household appliances market. In 1990 the Philips Whirlpool brand was launched in Europe by a spectacular advertising campaign (US $50 million). In 1991, Whirlpool bought the remaining 47 per cent held by Philips.
In January 1993, the Philips Whirlpool brand became Whirlpool in all communications, but the dual brand was kept on its products. In the last countries to make the switch, Philips was removed from all products in 1996. Via this brand transfer Whirlpool became the world number one domestic appliance brand. The importance of what was at stake and the risks involved during the brand transition become evident when one looks at the significance customers put on a brand when buying durable goods which are perceived as high-risk investments.
According to a study carried out by Landor, in Europe Philips was the second-most powerful brand over all sectors. In France, another study showed that when customers were asked to mention names of brands from any sector off the top of their head, Philips was placed fifth after Renault, Peugeot, Adidas and Citroën (Kapferer, 1996). Nevertheless, it is worth noting that Philips’ market share and its public brand recognition differed from country to country.
This is why it was quickly apparent that it would be impossible to carry out the change in different European countries simultaneously. In the same way, the guarantee role of brands in the domestic appliances market rules out a sudden, quick transfer as was the case with Raider/Twix.
In January 1990, the assisted brand awareness of Whirlpool in Europe was nonexistent. This was why a stage-by-stage progressive approach was decided upon. This included a Philips Whirlpool stage before Philips was abandoned. The case is different, therefore, from that of Black & Decker’s takeover of General Electric’s domestic appliances activities in the United States where both names already had a good reputation.
Another reason favoured the stage-by-stage approach. In order to ensure global coherence, Philips’ products left in stores would have had to have been bought back, as Twix had been for the transfer to Raider. But this of course would have been impossible for both practical and financial reasons.
So what was Whirlpool’s transfer strategy and why did they choose it? In the first instance early research had shown that customers perceived favourably the Philips Whirlpool partnership. Both companies had very different images. Whirlpool had potential, it evoked change, fluidity, movement and dynamism. It had the ideal qualities required to give the brand transfer a positive image.
The fusion of both companies gave the Philips Whirlpool brand an ideal image, the dynamism of one was tempered by the solidarity of the other. Research showed that the Philips Whirlpool couple was perceived as ‘sure and dynamic, solid and robust, classic and stylish, reliable and innovating’. In Europe, the arrival of Whirlpool was seen by consumers as bringing new impetus to Philips, a touch of high tech to a reliable classic brand, imagination to a brand characterised by experience.
The first thing that needed to be done was to decide upon the nature of the dual brand and its visual form. To start with, should it be called Whirlpool Philips or Philips Whirlpool? Tests revealed that the first option did not inspire confidence and that it evoked a confused perception. People associated it with jacuzzis and all ‘water equipment’. On the other hand, Philips Whirlpool evoked a healthy equitable partnership or even a slight predominance of Philips.
Only a minority thought that it referred to a Philips product range like that of the Philips Tracer razors. The second question regarded the graphic trademark. Should both names be written on the same line or one on top of the other? The first choice was adopted because it inspired an image of partnership and looked better.
With regard to the communication, what target should it be aimed at? Obviously the priority was the distributors. Only 20 per cent of domestic appliance customers visit a shop with a specific brand in mind, and only 10 per cent, ie half of them, actually buy that brand. This shows the importance of sales outlet staff in the sale of these products.
Whirlpool started in 1990 a considerable communication effort aimed at retailers – this is a little known facet of brand transfers. This, of course, was addressed to the big European or national retail bosses, but it was also used by Whirlpool’s sales force with customers, shop owners and sales staff whose opinions were so influential on consumers.
Moreover, Whirlpool’s image was that of an innovating leader, so merely confining oneself to innovations in products and services would have been limited. Whirlpool brought about a revolution in producer–distributor relations, a new approach that distributors weren’t accustomed to, which not only touched on services but market information and more besides. As regards the consumers, the plan was to reassure them as quickly as possible by the rapid acquisition of brand awareness and a strong image of quality and innovation.
These communication objectives had several important operational consequences. On the one hand, wanting to associate with Whirlpool an image of quality and innovation implied that the brand transfer on the products themselves had to take place progressively, in line with the launch of new products and the rejuvenation of Philips’ old ranges.
If this had not been the case the project would have suffered from the Talbot- Chrysler syndrome, where the only thing that was changed on the vehicles was the name on the bonnet. The Whirlpool brand on its own was not to be found on an old product. Launching a new brand implies taking great care over the early impressions the brand would create among the European audiences.
Giving Whirlpool a quality image involved prohibiting all promotional advertising of any sort in the media during the first years of establishing the brand in Europe. Finally, as it is impossible to pursue an image objective and an awareness objective at the same time, it was obvious that to the classic advertising a media action had to be added so as to quickly reach the required level of brand awareness before the final brand transfer, ie two-thirds of the assisted awareness of Philips. It is certainly true that, in the case of durable goods, the involvement of consumers is low when they are not actually engaged in the buying process – which is most of the time.
When the consumer is not considering a purchase, the means of persuasion that should be adopted are very specific. When consumers’ attention disperses, a multiple contact approach should be privileged, even if received incidentally. This calls for a high number of (gross rating point) GRP. Consumer resistance can become weak; in this case contact should be received in an agreeable ambience to benefit the effect of the affective transfer to the brand. Finally, when the consumer is not ready to make a cognitive effort one must repeat the consumer benefits of the brand rather than point out the difference between specific products.
This is why, in some countries, Whirlpool invested large amounts of money sponsoring prime-time TV programmes. This choice was no coincidence; they represent viewers’ favourite moments on the most popular channels, and are often associated with a relaxed family atmosphere. Thanks to this strategy, the brand awareness made considerable progress. In all the countries where only traditional commercials were used, the awareness reached was less significant.
It was indeed important to separate the treatment of the Philips brand in the media and in sales outlets. In the media, it was necessary to stop mentioning the brand as quickly as possible, otherwise the brand would only have been reinforced when the objective was to see a decline in its spontaneous awareness. This is why, during the short period when the dual brand existed, Philips Whirlpool adverts finished with the dual brand but the signature tune only mentioned Whirlpool. This was to ensure that only this brand was associated with the innovations.
As early as January 1993, it was decided to remove Philips from all TV adverts. This put an end to any reinforcement of Philips’ awareness. What is more, it sent the message to retailers that Whirlpool, the market leader, no longer needed the Philips guarantee and that the transfer programme was ahead of schedule.
On a European level, how was the multiplicity of countries to be dealt with? Taking into account the differences in the market shares and the brand equity that Philips had from country to country, all monolithic approaches were ruled out. Some countries wanted to pass to the single brand, Whirlpool, quickly.
Others would have liked more time: where Philips’ reputation was excellent, it could not be removed overnight if the objective was not only to maintain market share but also use the transfer to increase it. The order in which each country was to have the Whirlpool brand transfer was decided using a multi-criteria analysis, which took into account, for each country:Philips’ market share;the presumed reaction of the distributors (based on an ad hoc survey);the strength of the brand in the eyes of consumers (brand recognition, evoked set, preference);the influence of retailers on the customers’ decisions;the feeling that the management in the country was ready for the abandonment of the Philips brand.
Recent research on the transfer from the local brand Libertel to Vodafone seems to indicate that a dual branding phase does not in fact transfer values from the former to the latter. In fact brand values must be built, they are not simply transferred by this tactic of dual naming for a while.
Attaching two names is creating a third one. In the Philips–Whirlpool case, the dual naming gave saliency (brand awareness) to Whirlpool, but did not transfer the values of Philips onto Whirlpool. Its first objective was to maintain the consumer or customer loyalty and the trade franchise, which would have deserted if the name Philips had not been maintained as an endorser of the totally unknown American newcomer.