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Rebranding is Risky, But Here's How To Get It Right
Iniobong Uyah
October 14, 2024
In partnership with
Sometimes, in the course of our lives, we get to a point where we know something must change. At this point, some people take up new habits like going to the gym, practicing meditation, or running. Others could consider a complete overhaul of their habits, routines, and values. The same applies to businesses. When a business gets to this point, then it’s time to Rebrand. If branding is about creating an identity, rebranding is about changing that identity, much like molting.
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Branding is the process of creating a distinct identity for a business in the mind of your target audience and consumers.
Rebranding is when a company refreshes or completely changes its identity to create a new look and feel for its brand.
Why do you need to Rebrand?
Toyota Motor Corporation was established in 1933. Many years after, some of the renowned car companies like Benz, BMW, and General Motors were founded. Although the Toyota brand was already seeing positive reception in some international markets, it was still unable to compete effectively, especially in America. To do so, Toyota executives decided to create a luxury brand. After about eight months of market research and over 200 names, the company executives decided to go with the name LEXUS, which, according to some theories, stands for“Luxury Exports To The US.” But rebranding is more than a shiny new name and logo, after all, luxury is an experience.
To attract new customers, Toyota had to do much more than come up with a name. They needed something that would embody luxury. Omotenashi, the spirit of hospitality, the unparalleled craftsmanship of the Takumi and Kaizen - the quest for continuous improvement. You can call these the triple treat, the not-so-secret ingredients that have turned Lexus into one of the best-selling luxury car brands in America and the rest of the world. The Lexus RX was the best-selling luxury car brand in 2022, topping famous brands like BMW and Mercedes Benz.
Businesses often need to rebrand as they grow. The goal of rebranding differs from business to business. For Toyota Company, the goal was to expand into new markets and, of course, get new customers. But that’s not to say these are the only reasons why rebranding is sometimes required. Here are six reasons you may consider rebranding your business.
To expand into a new market or industry
To attract new customers
To adjust to changing market conditions/trends
To stand out from the competition
To provide more value to its customers
To rebuild the brand image
That being said, rebranding a business can be challenging. One wrong decision could cost the business millions of dollars in losses, as was the case with Coca-Cola. In what has become known as the worst blunder ever by the company, coca-cola, for some reason, decided to rebrand itself by changing the formula of the drink. The consumers didn’t like the idea, and within 79 days of introducing the new brand, Coca-Cola was forced to rebrand a second time and relaunch its previous formula under the brand name Coca-Cola Classic. This mistake cost the company millions of dollars.
The Coca‑Cola Company took arguably the biggest risk in consumer goods history, announcing that it was changing the formula for the world's most popular soft drink, and spawning consumer angst the likes of which no business has ever seen.
Here are four things you can do to prevent mistakes when rebranding
#1 - Why do you have to rebrand?
As I mentioned, rebranding happens for various reasons and before you start rebranding your business, you should know exactly why you are doing so. Is it to attract new customers and penetrate into a new market, or is it to rebuild your company’s image? Whatever it is, having a clear reason will help you know what the end goal is and when you have achieved it.
#2 - Know the cost
Rebranding can be expensive. So before you start, make sure you have taken stock of what and how much it will cost the company. Yes, I said “what”, because apart from the financial cost, there are other costs to the company. For example, a company may lose some of its previous customers after rebranding. This happens, so it is important to know if it is worth it and prepare a countermeasure against any challenge that could arise.
#3 - Market Survey
How would the market react to your new brand identity? Not every rebranding effort had a positive reception. There are situations where a company has to rebrand again just after rebranding. Famous examples of rebranding gone wrong are; Tropicana, Mastercard, Gap, and Pepsi. Read all about it here. Market surveys may cost the company a few bucks compared to the millions of dollars that could be lost if the rebranding fails. So yes, it is important to know what your customers think of the new brand before making it official. One way to do this is through focused groups.
#4 - Pre-Launch preparations
If there’s one thing you can learn from tech companies like Apple and Samsung it will be their pre-launch preparations. They build enough hype around the launch of their new products and organize events to show their customers what they should be expecting months before the product is launched. This is a very effective way to get genuine reactions and firsthand feedback from your customers. If anything goes wrong, this pre-launch preparation should make it clear and also allow you to make necessary changes before it’s too late.
That said, click the link below to read our previous publication about the center game and how to use it to grow your business.
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Best Regards.
Alex