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The Perils and Possibilities of Rebranding
(Marketing Memo December 2009)

Following years of declining enrollment in its enrichment programs for active seniors, Elderhostel has renamed its learning adventures program Exploritas to attract active people over 21. "Exploritas" is an amalgamation of "explore" plus "veritas," Latin for "truth." Elderhostel typifies some of the perils of undertaking a rebranding and repositioning initiative. With the rebranding, will Elderhostel attract a broader constituency and retain existing customers?

Why Rebrand?

A company's brand name is its unique identifier and is among its most important assets. Companies rebrand to appeal to new customers and for other reasons:

  • To enter a foreign market. In 2003 Legend PC of China adopted the Lenovo brand name to sell PCs abroad. In 2005 Lenovo acquired IBM's Personal Computer Division and began selling PCs in the US using the Lenovo logo. "Lenovo" suggests "innovation."
  • To forge a common identity following a merger. Venyu is the product of the merger of NTG, a provider of data protection services, with AmeriVault, a provider of online backup services.
  • To create a new identity after a spin off. Agilent Technologies was once Hewlett-Packard's measurement and test equipment business.
  • To rebuild following a set back. Following the loss of Flight 592 in 1997, ValuJet, Inc. merged with Airways Corp, Inc. and assumed the name of Airways Corp.'s wholly owned subsidiary, AirTran Airways.
  • To reflect an altered product line. National Cash Register originally sold mechanical cash registers. Renamed NCR, the company became a major computer company that later became part of AT&T. Subsequently, AT&T spun off AT&T GIS and named it NCR once more, attesting to the power of a respected brand.

Five Rebranding Tips

Following are some tips for companies that are considering a rebranding:

  • Retain premier brand names and product names. When Sears acquired LandsEnd, it retained the LandsEnd name, which is associated with excellent quality and service. Philips Electronics acquired Lifeline Systems, the personal emergency medical services company, and added "Philips" to "Lifeline" to preserve both brand names.
  • Reassure customers and prospects that you will continue to provide high quality products and services.
  • Reassure employees that the company is stable and that their jobs are secure.
  • Check whether the new brand name translates well into other languages.
  • Plan a marketing campaign to introduce the new brand name, and consider including social media outlets, as well as traditional outlets. Make sure that new positioning and messaging do not alienate existing customers.

Before rebranding, weigh the tangible and intangible costs and benefits. We can help you evaluate the issues associated with a rebranding.

Copyright 2011 Ruth Winett. All rights reserved.

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