Competition is one of the inherent market factors that force businesses to maintain a unique brand with a great customer base. Brands yield vast benefits to organizations, including establishing loyalty with customers. Consequently, it increases profit margin, thus enhancing the organizations' success. Additionally, a unique brand offers a competitive advantage because it differentiates itself from competitors dealing with similar products. Most companies invest a lot in maintaining a unique brand that can compel and retain clients. However, organizations may require to undergo rebranding at specific points to redeem declining brand equity due to various reasons. Rebranding is changing an organization's public image to create a new position in the customers, competitors, and stakeholders' minds. Rebranding is a complex process that may involve a series of changes ranging from the organization name, term, logo, among other structures. A business may succeed in achieving its rebranding intention or fail. An assessment for rebranding reasons, changes involved, success, and failure encountered will provide a profound understanding of the entire process.
Strategic Reasons for Rebranding
Rebranding is inherent in businesses as they strive to adapt to the dynamic changes encountered in external and internal environments. There are several strategic reasons for rebranding which includes mergers, acquisition, and demergers. Mergers and acquisitions prompt structural changes that provoke rebranding because it has an immediate impact on the organization's identity (Joseph et al., 2020). These processes change the organization's ownerships thus, leading to the need for rebranding. It is crucial to make the changes visible and known to the stakeholders, competitors, and clients. Furthermore, rebranding after mergers, acquisitions, and demergers is a legal requirement. Organizations may develop a new brand or use the name of one of the parties involved in mergers and acquisition procedures. On the other hand, after a demerger, a company must rebrand itself to show that it is no longer a part of an organization.
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Additionally, organizations may rebrand themselves to reposition and target a broader market. Repositioning ensures that an organization is updated with the current market's conditions, thus adapting and anticipating customer needs (Titi & Anang, 2018). Meeting the market needs and compelling a vast pool of customers acts as an assurance of businesses' success; therefore, rebranding to reposition is vital. Repositioning changes the perceived product quality, organization's image, and customer targets, especially when the brand equity appears to be declining. A company designs new marketing positions and delivers them to the market during the brand repositioning process. Repositioning can yield immense benefits for an organization. For instance, Burberry recorded a successful repositioning in 2002 that increased its sales by forty-six percent in one year (Joseph e al., 2020). Burberry repositioned itself as a luxury brand to target young clients in addition to the existing loyal customers. Consequently, it increased its customer base and served a broader market than before.
An organization may rebrand itself because of market changes. Both macro and micro factors play a significant role in the success of companies. Therefore, changes may force businesses to rebrand themselves to align with the current market conditions. For instance, in the current era associated with increased technological advancement, companies are forced to shift from analog to digitalized ways of operation to thrive in the market. Organizations may rebrand themselves to adapt the digitalized marketing strategy, which is essentially based on the current market changes ( Tarnovskaya & Biedenbach, 2018 ). For instance, social media marketing is more effective in recent days than the traditional newspaper mode of marketing. Undoubtedly, market changes force many businesses to reinvent themselves to meet the current standards because different needs require different measures.
Organizations may be forced to rebrand themselves to improve their brand reputation. An organization may experience bad reputation instances in the market prompted by specific factors like a lawsuit and data breaching. A bad reputation may lead to adverse consequences, thus affecting the organization's performance and profit margins. Stakeholders and customers may refrain from associating with a company that has a bad market reputation. As a result, such a company may strategically redeem itself through rebranding. Rebranding can change the negative associations with the original organization's brand over time. Therefore, it is justifiable to conclude that rebranding may act as a brand promotion technique. However, to successfully eliminate an unpleasant reputation, an organization should not just focus on changing the external image; it should also rebrand internally. Furthermore, such an organization should aim to create credibility by being transparent in its operations to ensure that people do not associate it with the original brand's negative reputations.
Changes Executed in Rebranding Process
Rebranding involves diverse changes in an organization. A company may opt to change only one factor or combine several. The most inherent modifications made in the rebranding project target its brand name, logo, visual image, and advertising themes (Titi & Anang, 2018). The aim of rebranding focuses on changing the idea of the original brand. Therefore, an organization may decide to change its brand name, especially when trying to avoid negative connotations among stakeholders and clients. Naming strategy is an essential aspect of rebranding regardless of the reason pushing the company to rebrand either as a result of a merger or a measure of eliminating a bad reputation (kjellin, 2019). A successful and effective naming process may increase the firm's market performance by attracting more customers and retaining employees. The naming strategy does not only involve the name of the brand but also the logo. A logo is a symbol adopted by an organization to act as an identity for its products and services. An organization may change its logotype to be more modernized to match the market standards.
Naming's rebranding strategy has both advantages and disadvantages. Changing a brand's name may help the organization overcome a bad reputation that may have resulted from wrongdoings. It gives the organization a fresh look and an opportunity to create a new brand free from negative connotations. Additionally, both the name and the logo act as a symbol of businesses' products and structure. Consequently, it increases the possibility of business recognition among the clients; therefore, potential customers can quickly identify it. However, name and logo rebranding may lead to loss of the original brand value. Customers value loyalty, and when an organization changes its name, customers may feel betrayed, and some may not associate the new brand with the old one. As a result, there is a high possibility of the organization generating less revenue, unlike before. Additionally, name and logo changing may make employees feel misrepresented, especially after an acquisition or merger. Therefore, most of them may opt to quit their jobs.
In the rebranding process, an organization may change the visual image of an organization. Visual images involve all the graphics and taglines used by an organization to identify itself. A company focuses on incorporating radical changes on all the graphical images representing it. It may change the colors and graphic designs. Rebranding an organization's visual image possesses both advantages and disadvantages. Visual image rebranding helps a business to differentiate itself from the competitors, thus increasing its recognition level. Due to image rebranding, customers can quickly identify a company and its products from competitors and build a long-lasting relationship with it. Additionally, a unique visual image acts as aesthetics in marketing. Marketing aesthetics has a tremendous impact on brand equity than other factors (Joseph et al., 2020). Furthermore, image rebranding increases customer engagement because clients are more compelled to skim through an image than read texts. Therefore, a compelling visual image conveys information better than plain text. Unfortunately, an organization may encounter internal chaos as different shareholders and employees may disagree on the perfect graphical images based on individual preferences and sentiments.
Advertising theme is another area that changes during the rebranding process. It is the central and repetitive message that promotes brand awareness. After rebranding, a company needs to communicate these changes effectively to the public. Therefore, it changes the advertisement theme to cover the changes made during the rebranding project. Rebranding an advertisement theme helps a company to target a broader market. It does not have to target the same demographics. It creates an expansive pool of customers, which helps in increasing the organization's revenues. Additionally, it increases the business's competitive advantage in the market. Advertisement theme rebranding also helps the organization communicate the reasons behind the changes, eliminating possible customers' confusion. Unfortunately, changes in advertisement themes may make it hard for a company to go back to its original brand incase the new brand fails to be accepted in the market. As a result, the company may lose its initial brand value and equity and also fail to secure a better market position with the new brand.
Rebranding Success and Failure
Rebranding project is always uncertain as a company may anticipate receiving positive or negative results. A successful rebranding achieves all the intended objectives and, most importantly, improves the firm's performance by increasing sales. For instance, the rebranding of Domino's pizza chain company was successful. It raised its 9% market share in 2009 to 15% in 2015 (Zhao et al., 2018). Domino Pizza Chain successfully implemented a successful rebranding because it focused on identifying their customers' needs and what they disliked about the restaurant's products. Subsequently, the company improved on these areas to meet and satisfy their clients' needs. Several factors affect the success of a rebranding project. For instance, a rebranding project is more likely to be successful when a high percentage of its employees are committed to the initiative (Kjellin, 2019). Commitment is enhanced through adequate communication between the managers and employees. Additionally, an internal understanding of the rebranding steps increases the possibility of success. Domino Pizza Chain ensured that all the employees understood all the processes required and could execute them (Zhao et al., 2018)
On the other hand, a business may face failure in the rebranding implementation process. A failure occurs when the organization fails to achieve its intended objectives of rebranding. A company may encounter a rebranding failure due to poor leadership (Zhao et al., 2018). A poor organization's leadership fails to convince the stakeholders about the rebranding values and importance. As a result, they exercise an autocratic rebranding process. They impose the new brand on employees and subordinate staff without regarding their opinions. Therefore, employees become less informed, motivated, and inspired toward the rebranding project. Subsequently, leading to its failure. Additionally, an unclear rebranding vision may lead to failure because employees do not understand what the new brand aims to achieve. Therefore, they do not understand the specific areas they should focus on.
Conclusion
In conclusion, rebranding is an essential process in an organization because it may improve its performance by increasing its competitive advantage. Several reasons may drive a company to change its brand. These reasons include eliminating negative connotations, the need for repositioning, market changes, and acquisition and mergers. The rebranding process is complex, and it may prompt changes in several organization structures, including the brand name, logo, visual image, and advertisement themes. Although rebranding is essential and can yield vast benefits, it may fail in producing the desired results. Therefore, an organization should prepare adequately for the rebranding implementation to ensure that it is successful.
References
Joseph, A., Gupta, S., Wang, Y., & Schoefer, K. (2020). Corporate rebranding: An internal perspective. Journal of Business Research .
Kjellin, G. (2019). A Case Study Exploring the Most Important Factors in Firm Rebranding.
Tarnovskaya, V., & Biedenbach, G. (2018). Corporate rebranding failure and brand meanings in the digital environment. Marketing Intelligence & Planning .
Titi, S., & Anang, S. (2018). The effect of new identity, new image, and repositioning as a process of rebranding toward brand loyalty, brand associations, perceived quality as part of brand equity. Russian Journal of Agricultural and Socio-Economic Sciences , 76 (4).
Zhao, Y., Calantone, R. J., & Voorhees, C. M. (2018). Identity change vs. strategy change: the effects of rebranding announcements on stock returns. Journal of the Academy of Marketing Science , 46 (5), 795-812.
