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.
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.
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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