What Is Rebranding? It Is Probably Not What You Think It Is

What is rebranding

Commoditization and replication have always been a fact of competitive markets. Even the most unique and successful strategies can come close to being duplicated, improved upon or rendered obsolete given enough time for competitors, technology and consumer preferences to evolve.

Charles Darwin’s theory of evolution is often misunderstood. While some interpret his theories to mean only the strong survive, his theory and the generally accepted reality is that only those species who can adapt more successfully to their changing environment will survive. The analogy with business ends there, however.  While biological changes happen very slowly via gradual mutation of each generation, changes in the business world can happen more quickly. Sometimes, the appropriate response is for a business to reinvent itself.

But like Charles Darwin’s theory of evolution, the true definition of rebranding is often misinterpreted.

Rebranding is not the same as a name change, redesign, or new logo

It is easy to see why many people – even marketers – misunderstand rebranding. Even in the United States, where many of theories of modern brand-building were pioneered, and home to the majority of the world’s most valuable brands, the concept is embarrassingly misunderstood by their own overseers. The American Marketing Association defines a brand as a “name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.”  But a brand is so much more than its visual elements or the sum of its features.

While many studies have shown that, yes, people purchase products in the short term based on visual associations or features, they become loyal because of the subjective and emotional linkages consumers create. This stickiness and emotional response is what separates iconic brands from also-rans. For example, people do not value Hermes handbags or BMW automobiles for their design features. These elements change every year. Nor do they value them for their logo. They do, however, value what the name and logo represent to them – elegance, exclusivity, freedom or performance.

A brand exists only in the minds of consumers

The most important thing to remember is that a brand is not what a company does or what it looks like – it is what people believe the company does and how they feel about it. While this definition of brand image can seem imaginary, its foundation is real. The ultimate goal in business is to create a perception of your company, its products and services that is valuable, meaningful and most importantly, different from competitors. It is the combined activities of the entire organization from operations to leadership, production, distribution, human resources, customer service and marketing that create the real experiences, impressions and interactions that, together, shape how consumers feel about a brand and where they rank it among its peers.

Since this is the true definition of a brand, then it must follow that no superficial amendment, such as a name, logo or design change can truly be considered a rebrand. The colloquial phrase, rearranging deckchairs on the Titanic, is the most apt description of these activities.

Rebranding can occur without any name, design or logo changes

While superficial changes can, indeed, have short-term positive impacts for a company and are often included in the process of rebranding, none of them on their own, or even combined, define what rebranding is. These activities should be called what they are. A logo change is a logo change. A redesign is a redesign. A name change is a name change. IBM and Nokia, for example, sought to meaningfully redefine themselves in the minds of consumers without doing any of these activities at all.

When IBM sold its PC division to China’s Lenovo in 2004, it was still one of the world’s largest computer manufacturers. Courageous executives believed that its future was a slow crowding-out of market share and decided to exit the consumer business in one swift move and become global leaders in an entirely new market now known as “big data.” Today, IBM is the world’s 4th most valuable brand according to Interbrand. While it builds supercomputers and processing software, IBM brand represents big, aspirational ideals that consumers believe in – building a smarter planet through smarter transportation, finance, healthcare, business and cities. IBM changed people’s perceptions of what it stood for with minimal change in imagery, but a consistent commitment to a new narrative and major internal reorganisation.

Today, Nokia is trying to do the same thing. In fact, Nokia has repeatedly changed its pubic perception throughout history as it evolved from timber products to power generation and eventually consumer electronics. Recent exploits are well documented. Missing the smartphone revolution, Nokia sold its mobile phone division to Microsoft in 2011 and now has a renewed focus on building networks and equipment for the world’s telecom carriers.

But where IBM redefined itself on its own terms, Nokia was forced to. Its brand value as measured by Interbrand has continued to decline – down 65% in 2013 – and although it remains one of the world’s 100 most valuable brands, it remains to be seen whether Nokia can occupy a similar ideal in the minds of its new target consumers that it once did when it was the world’s undisputed mobile phone leader.

Many brands do not do what is necessary, only what is easy

Big ships take a long time to turn around, and most CEOs lack patience. Too often, the short term-ism of financial markets discourage the C-Suite from taking time to cultivate the new culture required for a visionary new strategy. Because it is much less painful to outsource design changes to a creative agency than to turn a company inside out, most rebranding initiatives do not confront their underlying problems. Instead they opt for the equivalent of band-aids, medication or cosmetic surgery rather proper wellness programs or necessary surgery – dealing only with the symptoms of their illness and minimizing only short-term discomfort. Even from a financial perspective, doesn’t it make sense to avoid spending huge amounts of money on activities that generate only short term results.  Doesn’t it make more sense to spend money where it has the greatest long-term impact?

The lack of proper rebranding initiatives also stems from misunderstanding that a brand simply refers to the company’s symbols. It is no wonder why many rebranding efforts are met with cynicism. Rebranding activities must have the purpose of changing the emotional and mental associations consumers have with a company over hundreds of thousands of individual experiences. No logo change, name change or redesign will be able to accomplish that.