Learn Strategic Brand Management
Brand Equity In Question
Strategic Implications Of Branding
Brand And Business Building
From Private Labels To Store Brands
Brand Diversity: The Types Of Brands
The New Rules Of Brand Management
Brand Identity And Positioning
Launching The Brand
The Challenge Of Growth In Mature Markets
Sustaining A Brand Long Term
Adapting To The Market: Identity And Change
Growth Through Brand Extensions
Handling Name Changes And Brand Transfers
Brand Turnaround And Rejuvenation
Managing Global Brands
Financial Valuation And Accounting For Brands
It is a fact that brand changes arouse hostility, which can be a real danger in terms of the effect on market share. The source of the opposition can be found with consumers, with distributors and also internally. From the clients’ point of view a brand change is not a superficial act, but it affects the very identity of the product. There is therefore a perceived risk of altering the implied contract. This is especially the case in emerging countries.
A change of design is interpreted as a sign of a counterfeit product. It is also the case in the service industry. When there is a lack of any tangible element the brand becomes the heart of all contractual relations. Besides, we have already seen that a brand can only be successfully extended to cover a new category of products if it is seen to be legitimate. This was Black & Decker’s principal challenge when it took over General Electric’s domestic electrical appliance activities.
A successful brand transfer also has to deal with distributors. In the industrial world with long distribution channels, retailers tend to choose a few complementary brands that they stick with. Having promoted these brands, they have inevitably linked their reputation with them and their customer loyalty derives from them. To change a brand is therefore like questioning 10 or 15 years of good and loyal service. A retailer loyal to a brand expects something in return from the company.
A simple presentation of the strategic reasons why a company should replace brand X by brand Y is not enough, even if the products remain identical. There must be some compensation. The situation is completely different when dealing with supermarkets who care far less about brands apart from their own. Here their analysis is much more down to earth: is this an opportunity to receive a listing allowance for the new brand or a contribution to the temporary hassle incurred by the transfer? Also, distributors will not hesitate to criticise any operations aimed at placing a weak brand under the umbrella of a strong one in order to improve its shelf prominence.
Finally, one must not forget the internal and human elements of resistance. Generally speaking, all brand changes have to pass through managers who will inevitably be attached to their own brand. When l’Oréal decided to give Ambre Solaire a modern technological dimension by placing it under the umbrella brand Garnier, the division came up against numerous pockets of resistance in Europe.
In the UK, where Ambre Solaire had a good name and Garnier was unknown, the partisans against the change pushed forward the fact that the future signature brand Garnier had little recognition. The opposite was true in France: the Garnier management argued on the basis that Ambre Solaire suffered from a bad reputation, and that the change might devalue their brand. In the end the operation did take place and Ambre Solaire sales increased from s4 million to s20 million.
The precautions taken by the British group ICI when it made an apparently insignificant brand change, transferring the leading paint brand in the French market Valentine to ‘ICI Dulux Valentine’, illustrate the need to take into account these three stumbling blocks. The precautions aimed solely at the personnel showed just how much they were involved.
The personnel at Valentine were attached to their brand so much that they saw themselves as its trustees and looked after it as if it were their own. This is why they took any brand modification to heart, and the dividing line between evolution and dispossession was very fine. The importance of internal communication during this brand change was therefore absolutely crucial if feelings of loss of identity were to be avoided and all thoughts of disappearance kept at bay.
As a result, one of the first things to be done was the setting up of a selective information policy. Only the people who worked closely on the project were informed of progress. The project itself was given a code name rather than a title which would have given the game away. Afterwards, when the deadline date was imminent, the personnel were told. The operation was presented as a step forward and not as the end of the Valentine company once bought by the ICI giant.
The sales force was gathered for a big presentation on the evolution of the European market, on ICI and on its Dulux brand. Particular attention was given to the worldwide importance of Dulux, to its long history (founded in 1930), to its sympathetic and relaxed communication strategy (projection of advertisements), to its content and to its corporate values. The change was presented not as a big event but rather a natural evolution which would bring real and important benefits to the customer.
This gathering was held six months before the brand change. A notable consequence of this date was that all internal rumours were avoided, at least on a large scale.
Some of the distributors were informed very early on of the name change. It is worth remembering that they were part of the cause of the decision to change, because they also favoured a European extension and therefore wanted a European brand. They could not therefore oppose the principle of a brand change. All that was needed was to show them that everything would be done to assure a smooth transition.
Some retailers were informed a whole year before the name change directly by Valentine managers, when internally only the people responsible for the project knew about it. On the other hand, shopkeepers were forewarned by Valentine sales representatives only three months beforehand. Finally, department or shelf managers were informed by mail, just before the change, that on 23 March 1992, ICI Valentine was to become ICI Dulux Valentine.
The letter was accompanied by a free luxurious badge of the Valentine mascot, a panther. And when the Valentine sales force next came by they distributed an ICI Dulux Valentine watch (blue background, 12 yellow stars for the 12 hours of the clock and a black panther in the middle) which was such a great success that some people still wear it.
In fact, if this brand transfer was carried out without any hitches, it is because it was presented as an adaptation to meet the constraints of the retailers, and therefore more for their benefit than a revolutionary brand change. What is more the new packaging was intended to make the distributors’ life easier and the product clearer and more comprehensible for the consumer, and it permitted a more homogeneous organization of the shelves.
It had already been established that it was more practical, from the clients’ point of view, to organise shelves according to purpose (paint for floors, for ceilings, for wood, for steel, etc), rather than according to brands. Thanks to the new packaging, customers could easily find all the information they needed, paint for the kitchen, for the bedroom, etc.
What is more, Valentine made sure that the brand change would not upset the shelf layouts and that no extra work was needed by the distributors. They also decided that at no point should there be the two different brand names on the same shelf. This is why 180 people carried out the necessary relabeling when the transfer took place in each of the 620 shops concerned. What is more, a freephone number was made available to the retailers should any kind of problem occur.
Tests to measure consumer reactions were also carried out before the brand change. Tachytoscope tests (successive presentations of the old and new packaging) revealed that both versions of the packaging were equally well associated to the brand.
Another benefit for the customer was the opportunity to quickly reorganise the whole range of paint products into sectors according to the main kinds of uses. In normal circumstances this would have taken three years. This makes the customers’ choice much easier when they do not know what kind of paint to use in the room or on the surface that they are repainting.
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