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This paper is designed to discuss how companies operated a decade before and how do they operate now. It also discusses about how rebranding in the companies have happened for them to survive in this very competitive market. A qualitative study has been done on UK’s six companies which includes Abbey National renamed as Abbey, Deloitte consulting re branded as Deloitte, The spastics society as Scope, Midland Bank as HSBC, Scottish Telecom as Thus and Anderson consulting as Accenture.
The data collection is through secondary sources of information.
Company is recognised by its brand and reputation. Customers invest in
company or company products because of its image in the market.
Therefore rebranding the corporation name is the best way forward if
reputation of the company is damaged due to any reason.
Rebranding a company is a long process and therefore should be avoided
as much as possible. To improve the image of the company it often
changes the name without sufficient planning and high expectations. It
should be a well thought process as it involves a lot of change and
reverting back to the old name can be very expensive and give the
company a financial set back.
It is also important to realise that rebranding and company will give
it a new name but it will also cost the company to market the new brand
name and establish itself to get new contracts. A completely new
advertising and marketing will be needed to tell the customer why they
are the best and therefore they should be chosen of all the other
options provided to them. Because of technology and increased
communications loads of data is available on the internet and therefore
convincing the customer to choose a company is a far more challenging
task than it was a decade ago. Some companies while changing their name
would want to associate themselves with their old name to convince the
regular client of the good work that was provided by them before while
other companies may not want to associate due to bad reputation and
people loosing trust in the company.
Anderson consulting was renamed to Accenture because of the Enron
scandal. Anderson worldwide has various businesses like accounting and
consulting. Previously when requested by them for a change of name it
was not approved. But after Arthur Anderson the accounting business of
Anderson worldwide was caught in the Enron scandal, Anderson Consulting
refused to associate with them because of the negative brand image the
customers would perceive them with.
Change in business today is a must but the arbitration had ordered
Anderson Consulting to change its name in approximately 5 months. 'At
the time, I felt that this is really tough to have to sit here and
shoot our baby after ten years in business as Andersen Consulting,'
recalls Jim Murphy, global managing director for marketing and
communications. Soon they realised that it may be a difficult task to
change their brand identity in a short span interval but would turn to
be beneficial in the long term. They therefore renamed Anderson
consulting to Accenture and were positive to set up a good image for
their company as they were 10 years in business and always gave good
performances.
But not all companies are successful in setting up a new brand image
once they or their parent company have received a negative public
image. It cost the company a lot of money to re-establish themselves
but it turned out to be good for them as they are rated one of the best
consulting firms in the world today.
Some companies do not rebrand themselves or are scared to change the
name because of the cost involved. But it is impotant to relaise that
in todays perfect competitive world there has to be a continuous change
for a company to survive. Companies also adopt to different global
strategies like mergers and acquisitions instead of forming a
completely new company. In this case it may be better to scrap the name
of the company with a bad reputation so that its customers don’t
associate
a bad image with them. Atmost care needs to be taken so that a unique
name can be selected which has not been registered by any other
company. The name should also be selected carefully with a good logo so
that customer can regonise the brand through it and should not have
different meaning in different cultures if the company is global.
Accenture was name by a senior manager from Norway and it means a blend
of ‘accent’ and ‘future’. Accenture rebranding was done in a very
short interval of time and therefore it costed the company a $175
million to establish its new business in the market. Accenture marketed
its company and changed name in 178 offices in 47 countries and also
ran ad campaigns in super bowl commercials. Besides this all other
administrative expenses was also to be taken care of. Everything from
stationary used in the company to labourers clothes, business cards,
servers, desktops and promotional material needed to be changed as they
did not want any association with its parent company.
A brand name should be approved by the board of directors, investors,
share holders and the public. The name can cost the company millions if
it is meaningless and cannot be linked to the services or products of
the company.
Corporate scandals produced a number new names from accounting firms,
as they seperated themselves from the parent company to prevent any
loss of business.
Brand name is by what the customers regonise the company and therefore
it is one of the most important factors probably even more than
marketing, advertising and promotion.
With globalisation coming into affect and competition increasing,
creating a brand is becoming expensive and tough. Brands are the only
way a company can retain its customers as it is linked to their culture
and desires. Brand helps the company to capture a higher market share
and generate revenues. Global companies usually twist and turn the
brand name according to the culture of the people in the traget area.
Consolidating brand portfolios further is difficult without harming
customer loyalty and profits.
Global brand can also be formed by mergers and acquitions of companies.
HSBC’s global strategy involved acquisitions of financial services with
good reputation in different countries and subsumed them all under the
HSBC name. Transformation os rebranding is not an easy or short process
as it takes longer to transfer a brand from local to be recognised
globally.
Secondary or endrosement branding startegy can be applied for a bank to
be recognised globally. Midlands bank therefore first changed its name
in the Uk to Midlands Bank, a member of HSBC group and then the name
was completely dropped to form HSBC. This is done usually to associate
with the good reputation of Midland Bank and so that it retains its
customers even though the name has been changed.
This endorsement strategy is usually successful it depends from company to company and different industries
Global brands like HSBC save marketing and production cost as it
markets itself as a global brand. Therefore it is easier for marketing
company create brand awareness by using different marketing and
promotional activities. Global companies also may have the advantage of
central planning but this may be a disadvantage as it may be difficult
to customize the product according to the local area.
HSBC did not apply the global strategy of merging and therefore lost
its leadership position in the market place moving to position three.
Global concepts like economies of scale and scope effect the market.
Timing is also important in competitive markets. Brand preference of
the customers can give customer loyalty, increase sales and keep the
demand high. Rebranding is most effective when these above factors
disappear. Change can be forced as in the case of Anderson Consulting.
Rebranding comes with change in strategy which come mainly through
globalisation. As in the case of HSBC it rebranded all its operations
worldwide. Brand loyalty can also be a failure if the customers
perception of a brand is already high. Deloitte was a high perceived
brand in the mind of the customers and lost all its clientele when its
rebranded its consulting firm to Braxton.
COST – Rebranding can not cost anything if it is “rolling rebranding”
by which the new branding in incorporated into the different market
material and stattionary which doesn’t need to be replaced.
Rebranding can also cost a lot of money for companies who want to change everything.
BENEFITS – change is eesential as it happened in the case of arthur
anderson changing into Accenture. It would be very beneficial for them
not to be linked with Arthur Anderson because of the legal problems the
company was under.
Benefits can be optional as rebranding is also done to change the way
business is being operated and to change peoples percerption of the
product.
Accounting firms thought that branding is done in only consumer goods
companies. But professional services firms also build their image on
the quality of work provided by them and the good feedback they receive
from their customers.
Branding is all about understanding your customer and providing them
the right product at the right place and right time. Brand
differentiation from other brands is what sells in the market.
Professional companies provide professional services as compared to a
product. Therefore the service is the brand of the company as compared
to product brand. The brand gives certain unique values by which the
customers identify the company. Brand has emotional attributes that
relate to the customer.
Rebranding an organization must take into consideration all consents of
the stakeholders to successfully integrate it. It is quiet possible
that during the rebranding process the employees of the company may
have certain concerns regarding job security, pay, reward structure,
board of directors, mission, objectives and values if the company.
Retaining the loyalty of the senior management staff and how to
maintain the culture of the organisation is important. Employees are
the people who help in the migration process and their support is most
important.
There has to be complete communication from the top management to the
employees giving them an overview of aims and future aims of the
company. Anderson Consulting spent millions and communicated with their
offices and partners around the globe to launch their new brand,
Accenture. It is estimated that Andersen Consulting spent over £70m and
two years interviewing all partners around the world for the launch of
the new global brand, Accenture. Rebranding may change the way an
organisation would operate.
HSBC was the global brand because it was recognised globally and had
values than any other smaller brands. HSBC before rebranding spoke to
all stakeholders conveying to them the change that would happen and
benefit everyone eventually. The used the hexagon logo and slowly
modified each bank making it globally recognised and easily acceptable
by the consumers.
HSBC carefully examines places where the brand would be damaging to the
company. HSBC delivered banking service to the customer taking into
consideration all services that would need to be added to keep its
image of being global.
Deloitte Consulting's CEO, Doug McCracken, said: 'While our competitors
are distancing themselves from their consulting roots, we are
reaffirming our commitment to the profession.'
Deloitte & Touche changed its name to Deloitte to follow the trend
of single – brand name. To increase awareness of the brand Deloitte
announced it new name during profits.
Anderson contributed to the growth rate in the UK after it was taken
over. John Connolly, global managing director and UK chief executive,
said: 'The UK firm contributed an exceptionally high growth rate,
substantially influenced by the Andersen transaction in August 2002.'
The new name, the firm said, would highlight the value of its
multi-disciplinary practice. William Parrett, global chief executive
officer, said: 'The new brand name is a reflection of the greater
capability and array of services that we can offer to clients as a
multidisciplinary firm.'
Deloitte also tried changing its consulting business to Braxton but
then decisions were made to keep the name as Deloitte Consulting.
Anderson lost its position of Big Five after the Enron scandal and
restructured the entire business. Today there are only big Four audit
firms in the UK but something like that what happened to Arthur
Anderson could take place with them too.
Camp says that the demise of Andersen was a devastating blow to the top
firms, which has caused these giants to keep a low profile. But, he
says, in the professional services world, brands are important not just
to the outside world but internally. 'They show employees how to behave
within their organisations.'
The failure of Anderson clearly shows how employees can betray the
company by not believing in its core values. It damaged the reputation
and also scared the competition and made them aware about such scandals.
Nigel Mengham, UK head of marketing and consumer affairs at KPMG, says
Andersen and other scandals have had what he refers to as a 'grand prix
crash effect, where one car crashes and causes the others to crash too'.
Small auditing firms today have the opportunity the rebrand themselves
and enter the competitive market of accounting. Chris White, national
director of communications at Grant Thornton, says his firm recognises
that branding is 'an extremely important way to differentiate
yourself'. Brand strategy has to be close to the way you operate your
business.
According to Andrew Pincott, director of marketing at PKF (rebranded
from Pannell Kerr Forster), adopting a personal approach is key to
success.
This view is shared by David Haig, chief executive of consultants Brand
Finance. He describes the Big Four brands as standing for 'one-stop
shops' where making money is the 'be all and end all', and more
importantly where they 'don't want to give up what they already have',
referring of course to auditor independence concerns and conflicts of
interest issues which have dogged them.
According to Haig: 'They are in retreat - the mid-tier firms are on the
rampage and doing very well. The mid-tier are happy to talk. Their
brands offer good value for money and they have been neglected in the
past.'
As Mark Allatt, director of brand and image at Deloitte, explains: 'The
Big Four represent a brand category in their own right and this
category also includes the four most well known firms.' Deloitte, which
along with KPMG was the only Big Four firm to comment, has arguably
been more proactive in its brand identity then its rivals. Allat is, of
course, responsible for the rebranding of Deloitte & Touche to the
more succinct Deloitte.
He claims that the change was driven by the need to refresh the brand
and move on. 'The new identity is more distinctive, which is a good
thing in a busy market,' he says.
Haig says rebranding is generally driven by the market. 'In the case of
Deloitte & Touche, clients were already calling them 'Deloitte' so
the rebrand was a natural progression.’
Scottish Telecom was rebranded as Thus and was regarded as the biggest
corporate flotation when it announced about its rebranding in November.
Scottish Power which is the parent company has 50.01 stake for Thus
which includes more than half of the company. It also has a market
capital of $ 8.2b. After the rebranding of the company and an entry
into FTSE 100 its stock price crashed at the market. Thus has planned a
national roll-out plan and therefore has to show enormous profits to
maintain the shareholders trust in them.
"Thus was the first telco in the UK to be affected by the bursting
dotcom bubble," says Maguire. "Scottish Power was rethinking its
multi-utility strategy at the time the bubble burst. Thus didn't really
fit with the Scottish Power portfolio and they were rethinking their
options."
Finally demerger took place between Thus and Scottish Power as they
separated. After the separation Thus entered the FTSE 250 trying to get
a market share of BT. Thus’s brand image in the company started
acquiring a positive perspective in the mind of the customers and
therefore started showing profitable balance sheets.
Communication had previously been a problem at Thus but with improved
technology and increased communication between the departments has
helped the senior managers of the company to make much more wise
decisions.
Branding is a change of image
Organisations change their image by changing their logos and other
marketing products. Change of image can happen because of the changing
trends in the market, but also happens because of restructuring of the
company in the market. It can change to remove the negative perceptions
as brand is the value of the company. If the value of the brand is more
the company would make better profits. But to increase the value of the
brand good services and products need to be provided to the customer so
that he is assured that the brand is value for money. Most companies
try and advertise their brand to create awareness among people. The
brand forms the image of the company and therefore has to relate to the
company and its customers. Brand is what a heart is to a human, without
which it wouldn’t be able to function. Corporations usually outsource
their branding to Brand consultants who work with various different
departments of the company for setting up a new identity.
The Spastic society’s image did not match with their brand name. It
was different and did not feel a suitable brand name for a charity. It
made it sound to harsh and exclusive instead of an organization that
would help. It focused on disability rather than the help they were
providing to these people. Today non profit organization and charities
also need to market themselves because of the stiff competition in this
business. They try to create awareness by using celebrity for publicity
or make use of tragic events when people are emotional and would
contribute. The use of logos on t shirts, pens and other marketing
material is used for public relations. The Spastic society reframed
itself by changing its name to Scope which helped remove the negative
connotations that was associated with the brand name.
Change in Image
The spastic society was formed in 1952 and is one of the leading
disability charitable organization in the UK. It helps the disabled
people to claim their rights and to lead a fulfilling and happy life.
It operated under the name Spastic Society for almost four decades
before a research was done in the 90’s whereby the stake holders in the
company felt the need for it to be rebranded as the brand did not hold
the image of the company and was seen in a different way.
It was hard for customers to realize what the company does once they
saw the brand. It was always associated with a commercial organization
selling a product and therefore was not able to attract more customers.
The held various meetings in the 90’s and finally reframed themselves
as Scope by redefining and repositioning themselves in the market. The
brand name of the Spastic society needed to be progressive and
innovative, committed to help people, have a strong national presence,
develop good services by keep the disabled people always satisfied,
trusted and recognized by customers as everyone wants to make sure that
the money they contribute is used for the cause they are donating to,
reaching out to more and more people with cp and helping them get a
good career, dynamic and progressive, genuinely distinct and
differentiable, stake holders views and a brand that would sound very
subtle and helpful.
Scope defined values of the company different for different stake
holders. For example, parents – “this charity can help me and my
child”, donors – “this charity is doing worthwhile, valuable work; it
is professional, responsible and effective” and local authorities –
“they are skilled, expert, professional, relevant to our needs; we can
work with them with confidence”
They changed their logo after they announced their new name Scope on
letterhead, shop fronts, advertising posters, brochures, information
and campaigning literature, transport, offices. Brand identity should
convey a confident organization than does not sound very corporate and
design appropriate. It should also define the business or service
provided by the organization, should not be ambiguous and have a clear
view with the minimal chances to be changed again. It should
differentiate itself and be flexible.
The name of the brand should attract the customer, easy to read,
memorable, and very attractive and acceptable by the general public.
At the second quarter of 2000, 5 years after scope was launched
awareness reached 71% of the public as compared to 90% of the Spastic
name.
More important perhaps is an understanding beginning to emerge for
what Scope is and stands for and its desired image although there is
still much to do in this area and this will take time . James Rye,
Assistant Director of Marketing, Scope, 2000
Globalisation has changed the way business is operated in the past
two decades. Corporations therefore have to adapt to this change
quickly to survive in the market. A number of political, legal and
technological factors have led to this globalization and therefore
global strategies have come into effect. Global strategies such as re
branding, restructuring of the corporation, mergers and acquisitions,
franchising etc. have come into effect because of the ever increasing
competition in every industry sector.
The literature review would therefore discuss on how different been
formed to change people perception and create customer value.
Technology has changed the way businesses are operated. The world is
becoming a smaller place to live in with communication becoming
efficient.
All corporations have a brand name by which it sells its value. Therefore a brand name is very important to a corporation
All aspects of banking business are being radically transformed and
to an extent that is changing the fundamental economics of the banking
firm and the banking industry. This is because of three dominant
factors: a series of powerful pressures acting simultaneously;
technology is changing the very core of banking business: information
advantages, processing, monitoring, delivery, etc; and because, as a
result of these pressures, competition is increasingly developing from
outside the traditional banking industry. The paper reviews the
pressures impinging on the economics of banking and considers their
implications for the structure of the banking industry; the business
operations of banks, and the structure of the banking firm."
Affects of Globalization and liberalization of the world are
available and utilized by countries that manage their economies.
Because of global banks like HSBC it becomes easier to transfer funds
and resources between different countries which has increased exports
and trade between countries. Standard of living has been improved with
growth in trade. Higher productivity and competition and lower cost of
financing has led to growth in world trade.
Globalization has also increased competition and integration of
world market, technological change and lower cost competitiveness.
There are no geographic boundaries and therefore trade is not limited.
There are certain risk factors involved with the process of
globalization. Process of globalization involves social, financial and
economical risk. Corporate regrinding is very expensive and may be
approved by the stakeholders and will fail or succeed.
Main reason for rebranding is that they need certain change in the
organization. Accenture for example developed new culture, strategies
while rebranding. Sometimes rebranding may fail to reflect change in
the organization and should answer what the aim and objectives of the
new company would be. Change should be pursued only if it will bring
the company more advantages than it was previously working under. CEO
should bring change in the organization and should be driven by both
internal and external factors for it to be successful. Rebranding
suggest all stakeholders to be in full consent with the new identity as
they may be overlooked in a lot of situations. Reaction of the
competitors and increased effort by them to increase their own market
share should also be taken into consideration
Accenture reported a $370 m loss immediately after its change of name
and it has taken the company a couple of years to build up a good brand
image. Rebranding is a risky strategy as it is important to match the
new identity to the ideal communicated desires of the company.
Accenture wanted to break any relation it had with Anderson Consulting.
Anderson Consulting was established in 1989, but they went through a
separation in court as it was harming their consulting business. After
a consideration of over 50 names Accenture was chosen keeping in mind
the domain availability and legal issues over names today. In three
months the company conceptualized, planned and reached a final stage
for a new identity. Arthur Anderson faced huge problems trying to
convince the Anderson Worldwide for a name change and finally the issue
was solved by arbitration.
Accenture kept a name that was not linked by any context and if they
had retained their previous name they would be linked with the bad
practices and fraud done by employees of Arthur Anderson. Enron the
main reason for the scandal was also rebranded as they filed for
bankruptcy.
Deloitte Touche Tohmatsu also split with its consulting division
because of the new trend in the auditing and accounting industry to
split with its consulting services. Customers refused to buy consulting
services from their auditors after the split. Deloitte’s had never
decided to split, but pressure from the competition seeing the conflict
of interest between the auditing and consulting firms forced them to
loose trust in their own company and announced a split. The scandal by
Enron completely changed the way everything was operating in the
auditing industry.
It was almost possible to hear the gritted teeth of Jim Copeland,
global head of Deloittes, grind as he conceded defeat: 'We came to this
decision very reluctantly,' he said.
Deloitte always said that it would be customers first and how it would
provide better business by splitting but when they rebranded their
consulting services it did not work for them. They made a very
reluctant decision.
'In the current environment, we cannot expose our clients to
possible criticism because of the perception problem surrounding the
scope of services audit firms may provide to clients,' Copeland said.
Rather immodestly, Copeland added: 'We cannot put our clients in the
position of having to choose between working with the best auditing
professionals in the world and our world-class colleagues at Deloitte
Consulting.'
Deloitte are in minority and try to get on with their colleagues in
audit firm. There is a love hate relationship between consulting and
auditing firms as they relied on the credibility of the audit firms
which helped provide them good business. Also old methods of auditing
needed to be changed to make a place in the highly competitive market.
External and internal pressure forced audit firms to split with their
consulting business and rebrand. 'Deloittes seemed to be about the only
ones to have got it right by living in peace and harmony with each
other,' said Rob Anderson, head of consulting at Edengene, a niche
consultancy.
rebranding in a established market is the most difficult task.
Midland bank was taken over by HSBC for their global strategy. Midland
bank was one of the oldest and most recognized banks in the UK. HSBC
replaced all logos of midland bank in all areas of the UK to create a
new rebranded HSBC. Hsbc had also moved its head quarters from
HongKong to London and therefore people in the UK were always aware of
the red hexagon its brand logo.
The rebranding process was done for cost effectiveness "A strong brand
creates value for shareholders and customers alike," Penny notes. "But
execution should always be carried out with strict control of costs."
"We have excellent in-house skills, and consultants are extremely
expensive," says Penny. Next, the two finance heads nixed the idea of
changing the company's name overnight. Instead, they chose a less
expensive, step-by-step approach. "[We] implemented on a replacement
basis with a phased approach to signage," Penny explains. "To throw
out, for example, huge stationary stocks on a single day would have
been a waste of money." While HSBC has yet to declare what the branding
rollout cost, most expect it to fall between US$50 million and US$100
million.
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