Many companies and organizations are using the current economic downturn as an opportunity to solidify their position within the marketplace, or to expand into new areas. While much thought and planning goes into the acquisition of other companies, especially with regard to finances and operations, it is surprising that most organizations do not consider the impact it will have on branding for the combined company. After all, a strong, recognizable brand that has a loyal customer base is part of what attracted the companies together in the first place.
There needs to be strong consideration given prior to launching a re-brand for a merged or acquired company. First, evaluate the overall brand strategy for the new organizational structure. Are you trying to build a monolithic brand, in which all divisions and organizations fall under one umbrella name (such as General Electric or Caterpillar), or are you creating a conglomerate of brands such as Procter & Gamble or Unilever? In the latter example, P&G and Unilever own several household item brands, but the customer doesn’t necessarily know that they are part of the much larger, international organization. In this case, each of the separate brands holds greater value and brand equity than the larger organization. More often than not, sub-brands (subsidiary brands) are created to ease the transition into the larger organization.
Common pitfalls of branding a combined or acquired company
Organizations sometimes try to assimilate the smaller of the companies into their organization, even when there exists a clash of cultures and values. In order to alleviate the fears employees or customers might have about a merger or acquisition, develop a consistent brand message that addresses any misconceptions or negative perceptions. Clearly communicate what process is taking place, how it will affect the organization as a whole, and what, if any, changes there will be to the end customer in terms of product or service quality. Deliver this message through press releases, direct mailers to core customers, company newsletters to employees, and prominently display it on each company’s web site.
Another stumbling block to rebranding a merged or acquired company is to rush the process by assuming customers or employees will automatically embrace the change and accept the new brand freely and without reservation. This happens when the larger company tries to impose its brand name on the smaller one, even if is less known or respected by existing customers. When FedEx purchased the Kinko’s franchise, this is exactly what happened. The copy and office stores suddenly became FedEx-Kinko’s, and virtually all brand equity was eliminated. Besides being a mouthful to say, it was not as memorable or convey the same personality as the original brand name, which came about because of the founder’s kinky red hair. Now simply known as FedEx Office, the brand is stale and even more generic, and an example of monolithic branding gone awry.
Strategies for extending a merged or acquired Brand
First of all, don’t change the company name (whether the one being acquired or the acquirer) over night. This will simply confuse customers and make them question the quality of services and products they will receive. Instead, modify the brand over a period of time—the larger, or less known (the combined company), the longer the brand should take to reach its final identity.
Evolution over time makes more sense than a complete revolution, and there are several tactics that brand or marketing managers can take. For example, use the acquired company name with the larger organization’s logo mark, or begin to change the color palette and typography so that it matches the graphic standards of the acquiring firm. Use all company logos side by side for a while and then phase one or more of them out, or perhaps a sub-branded approach would be more appropriate.
While the current economy is taking its toll on all businesses, there does exist a tremendous opportunity to extend or expand your brand. Struggling companies that need capital investment or resources for continued growth are more agreeable to mergers or acquisitions. It has been proven time and again that organizations that continue to invest in marketing and branding, even during rough economic times, emerge from the downturn as stronger leaders within their industries. As you make plans to grow your business and market share, be sure to develop a sensible strategy for re-branding the organization as well.
—Ryan Hembree, principal/brand strategy