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Corporate rebranding: learning from experience

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Corporate Rebranding:
Learning from Experience
Wendy Lomax, Martha Mador and Angelo Fitzhenry
ISBN No. 1-872058-28-0 KINGSTON BUSINESS SCHOOL
Kingston University Occasional Paper Series No 48
Date: February 2002
Contents
Page
Abstract ii
1. Introduction 1
2. Literature Review 1
3. Research Objectives 2
4. Research Design 2
5. Findings 3
5.1 Drivers for Re-branding 3
5.2 Research on Original Brand 4
5.3 Re-branding Objectives 4
5.4 Stakeholder Involvement 5
5.5 Unexpected Learning 6
5.6 Critical Success Factors 6
6. Discussion 7
7. Conclusions 8
References 10
Table 1: Four Stages of Building Corporate Identity
(Hankinson and Cowking, 1993) 2
Table 2: Sample Characteristics 3
Table 3: Issue Areas for Managers Engaged in Corporate Re-branding 9
Figure 1:Integrating Conceptual Model of the Re-branding Process 9
i
Abstract
The arena of corporate re-branding has seen considerable activity in recent years, with many
organisations treating a change of name as a prerequisite to transforming their image. So the Post
Office is re-named Consignia, and the Spastics Society is reborn as Scope. Past constraints are
relieved by a new name. But, although much has been spent on this process, there is little in the
public domain to enable us to benefit from the experiences of these companies.
This qualitative study examines seven UK-based organisations which have re-branded in the past
five years. The sectors are diverse, ranging from energy to charity. Depth interviews were
conducted with key decision makers in each organisation, with the aim of capturing their
experiences of re-branding. The aim was to understand better the complex and infrequent
process of re-naming, and to identify key issue areas which those undertaking a re-branding
process need to manage. Ultimately, this will contribute to the development of a best practice
model so that other companies might benefit from their experience.
We identify key issue areas for managers when re-branding their organisations, and offer an
integrating conceptual model of the re-branding process as an aspect of, or activity within,
corporate renewal.
ii
Corporate Rebranding: Learning from Experience
1. Introduction
The phenomenon of corporate name changes reflects the dynamic nature of markets today.
Firms need to change, often radically, to address the expectations of customers and other
stakeholders. For instance, those at the cutting edge of technology may find themselves
outdated, and the boundaries of the existing business may become restrictive: Scottish Telecom
became Thus in recognition of the fact that it was neither exclusively Scottish nor confined to
the telecommunications industry. Organisations may merge, creating a combined business for
which neither of the previous corporate brands are appropriate (eg Grand Met and Guinness
became Diageo). De-merger may also provide a trigger, with the new companies needing to
assert their own identity: this was the case with Carillion emerging out of Tarmac and British
Gas splitting into BG and Centrica.
2. Literature Review
The role of the brand has been much debated (de Chernatony and Dall’Olmo Riley, 1998;
Hankinson and Cowking, 1995) and does not need revisiting here. However, corporate brands
where the company is synonymous with the brand are a special case. Increasing diversity of
contact (King, 1989) increases the diversity of communication methods required, while still
requiring a coherent and consistent message. But while this image must be consistent, it is the
reception of the message which is paramount (Ind, 1992). An audience develops an image of an
organisation through the accumulation of received messages. Some of these may be unintentional
since organisations are continually communicating with their targets.
The role of internal marketing is stressed by several authors as a means of providing effective
competitor differentiation (for instance, Macrae 2001; Olins 1978; Redhouse 1999). Staff play a
significant role in communicating the corporate brand, particularly in service industries.
Boundary spanners are the first line of contact with external stakeholders, and play a vital part in
creating and managing the corporate image.
Dowling’s (1995) finding that there is a widespread assumption among design consultants and
CEOs, that changing a company’s identity will automatically enhance the company’s image is
somewhat worrying. Whilst a change of name or logo may have a revitalising effect on the
company, this will only translate into consumer perception where there has also been a
concurrent shift in strategy and/or products and services. As Macrae (2001) points out, the test
of a brand is not what it says, it’s what it does: appropriate communication to all stakeholder
groups is required. Re-branding is itself a message, and should be the outward manifestation of
some real change.
While the literature recognises the importance of the brand, how it is communicated and
received, and how it must represent something real, there is relatively little written on how to
manage the change of a brand name. Hankinson and Cowking (1993) recommend a four-stage
process for building corporate identity. Table 1 summarises their approach.
This staged process approach is very general, and assumes a centralised planning process for
brand management. It provides a useful background for the current study, which seeks to
understand better the process which firms actually undergo in changing their brand name.
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3. Research Objectives
Our concern was to gain from the experiences of organisations who had been through the re-
branding process to aid those who are proposing to go down the same route. Our research
probed:
drivers for re-branding
research on original brand
objectives
stakeholder involvement
unexpected learning.
4. Research Design
Depth interviews were carried out with representatives of six of the seven companies who agreed
to participate in the research. The remaining organisation (Scope, formerly the Spastics Society)
supplied a comprehensive case study which answered the questions contained in the semi-
structured outline. [The outline is available from the correspondence author.] Five interviews
were carried out face-to-face, the remaining one by telephone (Thus, formerly Scottish Telecom).
Five of the interviews were recorded and transcribed, with HSBC refusing permission.
A wide range of industries and company sizes is represented, as indicated in Table 2.
Table 1:
Four Stages of Building Corporate Identity (Hankinson and Cowking, 1993)
Stage Content
Research and recommendations Identity, design, communications and behaviour audits
conducted
Perceptions of the brand, its business and its behaviour
established
Nature and extent of communications articulated
Creation of a new identity Consulting agency fulfils a brief for a new ‘visual’
identity
Development of communications strategy to introduce
identity and change behaviour
Developing the detail Development of credible, distinctive and coherent
identity
Consistent approach to communications throughout
the organisation developed
Launch and implementation Choices made about scale and timing of change
Training of staff
Table 2: Sample Characteristics
NewPrevious Nature of Geographic Turnover No of
Corporate Corporate Business Presence (£m) Staff
Brand Brand
Carillion Tarmac Construction, building services UK, Europe 1609 14000
and facilities management Caribbean
BG British Gas Gas and oil exploration and UK, Europe 4787 18900
Centrica British Gas Gas supplier UK 7134 19600
Citrus BLA Publishing agency UK, Europe 11 60
Publishing
HSBC Midland Banking and financial services Global 23674 144500
Bank
Thus Scottish Telecom and internet services UK 166 2088
Telecom
Sodexho Gardner Catering and support services Global 5925 232586
Scope The Spastics Charitable support for cerebral UK 90 4000
Society palsy sufferers and their
families
5. Findings
The findings are discussed below in the same order as the research objectives.
5.1 Drivers for Re-branding
Most companies had re-branded in response to external factors. Two over-arching drivers
emerged: corporate structural change, and concern over external perceptions of the organisation
and its activities. In the group affected by corporate change, British Gas and Tarmac had both
demerged, Midland Bank was bought by HSBC, and BLA was sold to the William Reed Group.
The group addressing external perceptions, namely Gardner Merchant, Scottish Telecom and the
Spastics Society, all organisations felt that there were sufficient negative image connotations with
their existing brands to necessitate a name change. Gardner Merchant’s concern was with its
restriction to catering, Scottish Telecom with the location- and industry-specific nature of its
name, and the Spastics Society with the stigmatising image of spasticity. BLA also wanted to take
the opportunity offered by its sale to address associations of its name with staidness and
tradition.
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5.2 Research on Original Brand
In the cases of Tarmac, Scottish Telecom and Gardner Merchant, research confirmed that
stakeholder image was not congruent with the desired image of the company and its associated
operational activities. For example, Scottish Telecom did not want the sector and geographic
restrictions that its name implies; they operate across the UK, not just Scotland, and offer
internet services, as well as telecommunications. The brand, Gardner Merchant, is strongly
associated with catering and has high recall, but the company’s activities were not exclusively
limited to catering; they offered other support services as well. The proposed new brand name of
Sodexho had very weak recall, but it offered the advantage of no limiting associations, giving the
company flexibility in the direction of brand extension.
As already noted, the change of name at British Gas was the result of de-merger, forced by
legislation. Both new divisions recognised the strength of the British Gas brand from previous
research and wanted to retain rights to it. This desire translated into both divisions eventually
having rights to the original name: while Centrica is the name of the company responsible for
energy retail, it continues to trade under the name of British Gas in the UK. On the distribution
side, the trading name of British Gas is used by BG in overseas markets.
The Spastics Society was the organisation with the least previous brand research. It carried out
extensive research with its thirteen stakeholder groups. The word ‘spastic’ emerged with negative
associations for virtually all groups. People with cerebral palsy did not like it; parents
(particularly younger ones) found the label stigmatising; donors both corporate and individual
expressed dislike; even staff had reservations about the use of the word. The name Spastics
Society was preventing access to the very people the organisation was trying to help. The only
stakeholders unaffected were older established groups who had been affiliated to the Spastics
Society for longer, and did not suffer from the same negative connotations.
Uniquely in our study, BLA relied on internal perceptions of the company in relation to its
competitors. This informal and internally focused approach may well have produced a biased
result. Perhaps BLA’s perception of themselves as ‘stuffy’, ‘well-respected’, ‘experts’ and ‘trusted
would not be replicated in a more objective research study. It is also moot whether the need to
re-brand really was so imperative, given the number of positives allegedly associated with the
existing brand name.
Midland/HSBC did no local research on the existing brand, since HSBC was rolling out a
programme of re-branding of its acquired subsidiaries around the world. In the face of this
homogenising programme, local research on the old brand was not deemed relevant.
5.3 Re-branding Objectives
The disparate drivers for re-branding were reflected in a diversity of objectives.
The most common objective was to develop a new image. Scottish Telecom wanted a more
flexible name which allowed them to develop a young and dynamic persona. Similarly, BLA
wanted its change to Citrus to be a catalyst and spark off a new spirit of innovation in the
company. Tarmac’s transformation into Carillion was made to emphasise its progression into a
construction-to-services company, with the Tarmac name retained for the more traditional
materials business.
The Spastic Society’s focus was on repositioning and on the desire for greater involvement of
people with cerebral palsy within the organisation on a day-to-day basis, and within the
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constitutional framework. Gardner Merchant’s move to Sodexho reflected a desire to break the
confines of the catering industry. Despite the research showing poor recall of the new name,
Sodexho was set the ambitious target of reaching the same level of awareness as Gardner
Merchant within twelve months.
A recurring theme was that of marketing decisions made with one eye on the City. Scottish
Telecom’s new name was intended to play an important role in the flotation of the company.
Similarly Carillion’s new image was intended to encourage the share price on its flotation. British
Gas’ demerger into two holding companies, while driven by legislation, had the City as a
primary audience.
Gardner Merchant’s increasingly global client base provided it with a further objective, namely
the development of its operations to be a global partner. The name Sodexho, with its lack of
local resonance, suggests just such a global organisation.
In a similar way, HSBC’s mission was to have one global brand. Its organic and acquisitional
growth in the 80s and 90s had left it with eight local brands and a huge array of sub-brands.
The HSBC brand was not being delivered consistently and the potential benefits of a global
brand were not being exploited. The re-branding programme, which included the UK, saw all of
this empire re-branded as HSBC throughout the world.
5.4 Stakeholder Involvement
5.4.1 Project Leadership
In each company, it was clear where project leadership lay. At Tarmac, the re-branding exercise
was led by the main Board of Directors who engaged an agency to help develop the new brand.
The same applied at British Gas, where the Director of Marketing took the lead role but without
the use of agencies. The re-branding of Scottish Telecom was driven by the entire senior
management team. At HSBC, it was managed from the corporate centre. BLA’s name change
was handled by the Managing Director. Gardner Merchant created a small but broadly based
project team with representatives from sales, marketing, staff, and a consultancy.
5.4.2 Involvement of Staff
The selection of a new name, underlying values, and a new look were each the subject of varying
levels of involvement. Unsurprisingly, given the significance of the decision, all companies
involved senior managers in the process, but the involvement of staff at lower levels ranged from
all (BLA) through some (Gardner Merchant, Tarmac) to none (HSBC, Scottish Telecom, British
Gas).
BLA involved all their staff, which was relatively easy since the company had only 60 employees.
Focus groups were held and staff brainstormed descriptors to represent brand values, brand
personality, emotional attributes and rational benefits of the brand. Staff were involved at each
stage and decisions made by majority voting. Tarmac, a larger organisation, consulted a mixed
sample of staff on similar issues in one day workshops.
Gardner Merchant’s mixed project team ensured that staff views on values and operational issues
were adopted. This was felt to be particularly important given that some 3,500 on-site managers
would be responsible for communicating the brand directly to clients.
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HSBC were somewhat more elitist, soliciting the views only of senior managers at each stage,
although they spent time on cascading internal communication.
Confidentiality was a concern for some organisations, with Scottish Telecom and British Gas
maintaining secrecy due to the sensitivity of the issue and the possible impact on share price. In
both cases, the change of name was announced at company conferences.
5.4.3 Customer Involvement
Most organisations did not formally solicit the views of their customers. Where customers were
consulted, it tended to be in an informal, discreet, secretive and sometimes casual manner.
Gardner Merchant provides the exception here and amended a number of their decisions
significantly as a result. HSBC consulted widely, but only with their commercial and
institutional clients, not the retail customer base.
Both Tarmac and BLA felt that their customers did not care too much about the name. As
Carillion put it,
what quite a few of them were saying was that, quite frankly we don’t care
what you call yourselves so long as we are dealing with the same people…”
5.4.4 Agency Involvement
Most companies used an agency at some stage, to help with communications, advertising, media
buying and/or new brand development. The exceptions were British Gas on the grounds that
agencies added to bureaucracy, and the Spastics Society for financial reasons.
5.5 Unexpected Learning
The re-branding exercises took between five months (Scottish Telecom to Thus) and fourteen
months (Midland to HSBC, BLA to Citrus Publishing). The shorter time scales tended to be
driven by the City. Most respondents found the process far more complex and time consuming
than they had anticipated, thus in particular they felt that the scale of the task should not be
underestimated.
The importance of people to the process was specifically cited. HSBC did not appreciate the
impact of the softer ‘people’ issues, and with hindsight would have recruited consultants to help
them handle the internal communication process. Citrus Publishing found the involvement of
all staff useful and motivating. Sodexho cited detailed planning through a steering committee,
and the use of local co-ordinators to assist in effective internal communication. Scope felt their
thorough involvement of stakeholder groups was very successful.
5.6 Critical Success Factors
While responses varied to some extent from company to company, clear patterns emerged from
this exploratory research. The following actions or stages were felt to be critical by almost all
respondents.
Establish key stakeholders, both external and internal
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Use external help to support change and to monitor and evaluate
progress.
Include staff in the development process, to ensure commitment to the
change
Communications must be continuous, consistent, sustained, and multi-
lateral
Tailor communications to the needs of the different targets
Plan thoroughly; evaluate capacity and have contingency plans for
potential crises
Equip and prepare people properly
Monitor and evaluate at all stages.
6. Discussion
The research reveals the varied origins and directions taken by re-branding activities. In most
cases, the approach to the re-branding process was congruent with the initial drivers of the
change. At one extreme, a new corporate parent imposing a name on a subsidiary required no
local research, but resulted in an underestimate of the internal marketing requirements of the
process. At another, a fundamental philosophical re-alignment of a charity, initiated by the
charity itself, resulted in in-depth consultation with stakeholders, and a thorough and well-
documented process of change. Organisations considering re-branding should beware the
myopia created by their context.
Hankinson and Cowking’s (1993) process approach seems to assume a top-down process. Yet
many of these firms engaged in intensive consultation internally and externally which shaped the
development of the new brand. Those which engaged in this way (Scope, Citrus, Sodexho) also
valued the process particularly highly. It enabled them to develop their new image in a robust
and meaningful manner.
The complexity and therefore the resource-intensity of the process (particularly but not uniquely
the communication process) deserves highlighting. The complexity may require additional
resources, such as external consultants. As already noted, corporate re-branding is an infrequent
process, so the knowledge of experts, their dispassionate observation, and the extra hands they
may be able to supply, should be considered.
This complexity also demands a careful planning process. The importance of integrating
operational thinking into the decision making process is highlighted. In particular in a multi-site
service environment like banking or contract catering, designing and rolling out the
communications elements within a tight schedule may be difficult. A realistic approach to
project planning is needed.
The difficulty of controlling the process, when powerful stakeholders are at work, is also
highlighted. In particular while The City is cited as a key marketing target of the change of
name, its short time horizons may interfere with the implementation process. The difficulty of
working to these truncated time-scales is exacerbated by the complexity already noted.
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It is interesting to note how many corporates chose to re-brand themselves with names which
have no existing meanings, eg Centrica, Accenture, Consignia, Sodexho, Carillion. As Kapferer
noted, brands with abstract meanings offer the most potential in terms of both brand extension
since their very ambiguity offers flexibility and lack of constraint. Tarmac, for example, is tied to
concrete product attributes limiting it to the construction industry, and even more narrowly to
materials within it. Its successor, Carillion, has no such limitations and allows the brand to
operate successfully in diverse sectors. Even those brands with meanings tend to be the more
abstract ones, for example, Thus and Scope. Similarly a name with no meaning or linguistic
origin may obscure the origin of the company, or more simply undo the link to a parent country
in a globalising industry.
Finally, throughout the interviews, all the managers were clear that the process of change itself
had been valuable. Even when extensive consultation was not undertaken, a corporate learning
process had been engaged. Tacit knowledge of the organisation had been made explicit. In
particular, a better understanding of the brand, its underlying values, and the means which were
used to express it, were developed.
7. Conclusions
The research suggests a process based approach to re-branding organisations which addresses the
more varied circumstances of organisations than Hankinson and Cowking’s (1993) approach
acknowledged. This approach defines key issue areas (Table 3) of concern to managers in the re-
branding process.
These issue areas can be built into an integrating conceptual model of the re-branding process as
an aspect of, or activity within, corporate renewal. It suggests that re-branding though indeed
infrequent, might be seen as part of a cyclical model of organisational management and renewal
(Figure 1).
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Table 3:
Issue Areas for Managers Engaged in Corporate Re-Branding
Issue Area Action
Trigger Monitor stakeholder perceptions and needs
Identify need to change
Recognise limitations created by decision making
process
New Brand Development Audit perceptions of existing brand
Establish mission and values through consultation
Select a name, through appropriate consultation
Develop the look and communications systems
Involve, train and develop staff appropriately
Project Management Recognise size and complexity of project
Evaluate capacity in terms of volume and specialist skills
Allow plenty of time; plan for contingencies
Integrate implementation into decision making process
Follow-through Evaluate specific objectives
Monitor stakeholder responses and change
Figure 1:
Integrating Conceptual Model of the Re-Branding Process
Manage Project
Re-development
of brand
Management of firm
and its brand
Identify and
address trigger
Consult and
engage with
stakeholders
Monitor and
manage
stakeholder
perceptions
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Brand Management, Vol 2, Number 6, p.377-384.
Hankinson, G. and Cowking, P. (1995) ‘What do you really mean by the brand?’, The Journal of
Brand Management, Vol 3, Number 1, p.43-50
Ind, N. (1992) The Corporate Image, London: Kogan Page. [659.132 IND].
King, S. (1989) ‘Building Successful Brands: The Strategic Options’, Journal of Marketing
Management, Vol 5. No 1, p.77-95.
Macrae, C. (2001) ‘Editorial: The multidisciplinary crisis of e- and branding’, The Journal of
Brand Management, Vol 8, Issue 3, p.165-168.
Olins, W. (1978) The Corporate Personality: an inquiry into the nature of corporate identity,
London: Design Council. [659.132 OLI].
Redhouse, J. (1999) ‘Corporate branding plays key role in effective recruitment’, Brand Strategy,
Oct 1999, p.16-17.
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... Some authors have used case studies to develop a better understanding of the rebranding process, which can be applied in different industries and rebranding categories (Finney & Scherrebeck-Hansen, 2010;Muzellec & Lambkin, 2006). Most of these case studies focus on the drivers of rebranding, emphasizing which contexts have led to the need to change an already developed brand (Lindstrom & Andersen, 1999;Lomax, Mador, & Fitzhenry, 2002;Merrilees & Miller, 2008). Others, however, go further and also analyze rebranding enablers, barriers, and outcomes (Daly & Moloney, 2004;Davis & Dunn, 2002;Miller et al., 2014;Vallaster & de Chernatony, 2006), attitudes and staff (Hankinson et al., 2007). ...
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... Finally, the conclusions and recommendations are provided. Lomax et al. (2002) inspected the seven UK based associations that have remarked in the previous five years. Corporate re-branding has seen broad movement as of late, with numerous associations regarding a name change as an essential to picture change. ...
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Corporate branding plays key role in effective recruitment
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Redhouse, J. (1999) ‘Corporate branding plays key role in effective recruitment’, Brand Strategy, Oct 1999, p.16-17. - 10 -
The Corporate Personality: an inquiry into the nature of corporate identity
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