Tuesday, December 7, 2010

The Rebranding Dilemma





Gaurav Ralhan, Kaustubh Rawool, Sria Majumdar, IIM S

The Rebranding Dilemma

‘’Whatever you do, be careful not to undermine the fundamental values and strengths of your brand and ensure that whatever you do is in sync with your business rationale and aims.” - Richard Duncan
While this may sound painfully obvious, there are enough examples of rebranding disasters to prove that common sense may indeed be, uncommon.
Books like ‘Who moved my Cheese?’ prove time and again that change is almost never well received. Brands, like people, are scared of change, of growing old and losing their market position. Products as well as corporate brands begin to panic when they have been in the maturity stage for too long. This is where rebranding comes to the rescue with glamorous creatives and brilliant strategies. One of the most common ways of delaying the ageing process, rebranding, includes changing the name, changing the logo, modification of the overall look and sometimes overhauling the entire brand philosophy.
Rebranding is the flavour of the season in the backdrop of Airtel’s rebranding campaign which was launched on the 18th of this month. As in Airtel’s case, rebranding may be spurred by sudden growth or the need to fit into a global identity. Rebranding is no child’s play, and as many disasters have shown us, must be dealt with very cautiously. Many a times, decisions have been reversed. A classic example of this is the failure of the new sweeter Coke that was introduced in the 1980s. Coca Cola finally had to bring back its original brand and formula. Although the risks are great, rebranding remains more popular than ever. The need to stay ahead makes companies gamble their heritage for the promise of better profits in the future. While it is too early to comment on the success or failure of Airtel’s rebranding strategy, in this issue we deal with some major rebranding successes and failures of the past.
The Tropicana Episode
A recent example of a rebranding exercise that fell flat was PepsiCo’s Tropicana juice brand. In early 2009, Pepsi relaunched Tropicana with new packaging and created a new advertisement to promote it. Tropicana’s whole packaging was overhauled and a rebranding campaign termed as the “Squeeze Campaign” was launched. The old design of an orange with a straw in it was replaced with a glass of orange juice. Also, the normal screw cap was replaced with a squeezable cap which had the appearance of half an orange.
As Tropicana’s case reinforces, relaunch of a trusted and well established brand can be tricky. The redesign was done to have a better connect with the customers and to present a clearer image of what the brand meant to customers. This is where the problem begins. Understanding consumer perceptions is no mean task.
When the new packaging was introduced, consumers were quick to register their displeasure. They did not like the new packaging and were quite vocal about it. It was all over the internet and PepsiCo was bombarded with emails, letters and phone calls of complaints. People went to the extent of commenting that the new packaging was too ‘generic’ and resembled a store brand. The packaging which made Tropicana stand out on the shelf was lost. In addition, there was criticism over the fact that the same glass of juice imagery was displayed on all of Tropicana juice varieties. The previous design had more obvious colour differentiation for each variety.
PepsiCo was forced to respond to the heavy criticism and reinstated the old packaging imagery, as a means of placating consumers and creating positive public relations. This case spotlights the importance of assessing the realities of the marketplace and recognizing what is important in rebranding a product. At the end of the day, nothing is more important than consumer insights.
Tropicana’s packaging story was interesting on many fronts. It was one of the most blogged topics in February 2009. The consumer’s reaction and the publicity it generated definitely had one positive for Brand Tropicana. It was proved beyond doubt that the consumers were attached to the brand, and Tropicana could not rebrand without the consumer’s approval.
Tommy Hilfiger’s Fiasco
Tommy Hilfiger’s logo has always been its key branding strength. Customers would associate the logo with the symbol of the US flag and could relate to it as US citizens. However in 1999, Tommy Hilfiger suggested that the logo be changed to give it a trendier feel. He believed that the customers wanted rebranding. There was an overhaul in the brand philosophy and the Tommy Hilfiger tried to become trendier and competed with chic brands such as Gucci and Prada. The company launched ‘Red Label’, a sub brand without the Tommy Hilfiger logo, which targeted the upper segment of the society.
Unfortunately, the strategy backfired as the average customer could not afford this range. Customers could not relate with this new range as it lacked the very logo responsible for Hilfiger’s success. The company’s share price fell from US $40 per share in 1999 to US $22.62 in 2000 which further reduced to half by the end of 2000. Sales reduced drastically and several showrooms were shut down. Also, location strategy of the company was flawed. Brand Hilfiger was associated with the youth and in locations such as Rodeo drive where stores were set up, the average age in the neighbourhood was about 50 years. Obviously, the response was poor.
The solution in this case too was no different from Tropicana. Tommy Hilfiger reverted back to its original classic and preppy feel which the customers could relate to. However, Tommy Hilfiger took a significant hit because of its rebranding campaign. The company lost a lot of customers and it cost Hilfiger a lot of time and resources to win the customers back. The lesson to be learnt from this case is that sometimes it is best to let things be as they like. Maybe that’s the way they are meant to be.
The Godrej Magic
By this point in the story, we are sure that most of the readers have become cynics. It seems like the most of the rebranding campaigns are nothing but a waste of resources in retrospect. However, the case of Godrej reinforces our faith in the concept and its success.
A 110 year old iconic brand went for a makeover. Godrej, the behemoth present in around 27 product categories with close to 100 products ranging from locks to homes, soaps to animal feeds to mission critical rocket engines got a new look. The famous Godrej logo which was actually founder Ardeshir Godrej’s signature was infused with animation and colours to give it a more contemporary look. Rather than completely changing the image of the brand—and thus alienating its loyal customer base built over time—Godrej decided to simply change the colour of its logo to the vibrant hues of green, blue and ruby.
The company’s old logo which represented the virtues of quality and trust were given a fresh contemporary look to reflect the new positioning of “Brighter Living”. Youngsters perceived the company as belonging to their grandparents’ generation- manufacturing locks and almirahs, but with the increase in the product portfolio the company needed to create a refreshed image. Hence this campaign was well placed to convey this message of change and renewed vitality.
The logo with the jazz and vibrant colours has worked wonders in establishing a better connect with the younger consumers and yet retain its loyal customer base. The new logo also helps to address the issue of Godrej being perceived as a company lacking innovation. The corporate rebranding strategy adequately portrays the new product development taking place in Godrej.
In situations similar to Godrej’s where firmly established brands become out dated, rebranding resembles identity makeovers. Godrej’s rebranding campaign is proof that we don’t have to lose out the old, in order to gain the new. For brands like Godrej heritage is important and it would be foolish to get rid of it, in order to stay relevant with the times.
With majority of the India’s population under 35 years of age, the company has timely recognized the need for generating a younger customer base for staying in the competition. If the brand represents an interface, through which the consumer interacts with the organization, then the logo is a useful touch point. However, the rebranding strategy should not be limited to the mere change of the logo; the change should be inculcated within the function of the whole organization. Godrej is strengthening its brand by leveraging its aerospace expertise through advertising to enhance the ‘advanced technology' perception among consumers. Through Godrej Eon in refrigerators, air conditioners, washing machines, DVD players, microwave ovens and colour televisions, Godrej is talking technology which will help it gaining market shares in various sectors where its new products are being launched. The company has proved it can understand consumer India well and cater to its needs by its successful rebranding campaign.
The CCD Story
Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL) was a name unheard of till 1996 when the first Café Coffee Day outlet was inaugurated in Bangalore. Boasting of more than 1000 cafes in 141 cities, CCD, as it is called, is proof of the increasing purchasing power of today’s youth.
The company was initially perceived as a South Indian coffee joint where serious business discussions could be carried out. It was CCD’s belief that there was a latent market segment in teenagers which the company could target. Realising this fact, the company went for a complete brand overhaul in 2002. CCD’s earlier logo was quite simple with a simple red square having white streak and ‘Coffee day’ written at the bottom. The new logo incorporated red, white and green colours with emphasis on the word ‘Café’. The colour red signified passion while the colours green and white signified the long heritage of CCD and its purity. CCD had put an emphasis on the word ‘Café’. It was a place where one could go with a whole bunch of friends at any time of the day and have a good time, over coffee.
After a successful rebranding campaign, the company is currently in the midst of another rebranding propaganda. The new logo is a ‘Dialogue Box’, with the words Café Coffee Day written in a distinct, specially created font, which symbolizes the company’s motto of providing a perfect place for relaxation and conversation. 180 new retails outlets will be rolled out by 2015. Out of the 180 outlets, 65 would be new lounge format. Also other features such as new smart menu, take away dining, and comfortable dining would be part of the rebranding.
CCD has proved yet again that it understands the youth. The youth tend to get bored with similar decorations and ambience after a few visits. Keeping these useful insights in mind, a fresh rebranding campaign was launched. The earlier rebranding in 2002 proved to be very successful for the company considering the growth from 14 cafés in 6 cities to around 1000 cafes in 2010. While the full impact of the current rebranding is yet to be seen as implementation has not been completed, initial consumer reactions are very positive.
The Moral of the Story
Rebranding is a double edged sword. Used wisely, it could rejuvenate the brand and widen consumer base. However, there are too many rebranding mishaps in the history of marketing. Rebranding must be an absolute necessity; else it ends up diluting the brand equity. The importance of market research in a rebranding strategy cannot be overemphasized. At the end of the day, the customer is the king. When he accepts the rebrand and deems it necessary, it is a success, else a failure.

2 comments:

Mukund said...

Gives practical examples of rebranding. good to learn

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