Factors Influencing Rebranding and its Impact on Brand Equity

Critical literature review on rebranding with regards to factors influencing rebranding and its impact on brand equity

Purpose of the study

The purpose of this paper is broadly to explore and describe the rebranding phenomenon in details. As observed in literatures there is an apparent lack of any substantial body of academic literature relating to this topic, although interest in this area is growing. A range of online databases were searched to provide a comprehensive listing of academic journal articles on rebranding. In the initial part of literature generalized discussion regarding studies done till now in literatures of rebranding, different models in rebranding, types of rebranding and rebranding strategies would take place and then in the later part I would suggest to conduct studies so as to answer the following research questions:

Aims and Objectives

Following are the aims and objectives of this paper:

1. Identify the impact of rebranding on brand equity of a firm
2. Identify the impact of brand loyalty on brand equity
3. Influence of consumer’s innovativeness on rebranding

Introduction

Rebranding is basically changing an organization’s name, targeting and repositioning the organization’s offer to its customers and other publics. Rebranding can have far-reaching implications because it can be introduced on a minor or major scale. Major rebranding often results in structural changes in the company as a result of, e.g. name change. Minor rebranding, on the other hand, is only concerned with aesthetics, such as a logo change, and as such does not affect the company at a corporate level. However, the process can be costly to implement, and there is the risk of losing customer loyalty which negatively affects brand equity.

Researchers have tried to formulate effective rebranding strategies to expand target markets and retain loyal customers. Yet, research done by researchers seems largely based on qualitative studies rather than on research evidence as observed while reviewing the other literatures.

To fill the gap, I would study using a quantitative approach, and examine the above objectives.

Rebranding

Few of the studies regarding rebranding phenomenon explored the effect of rebranding towards the act of the corporation(Koku, 1997a, 1997b). (Boyle, 2002) ,(Causon*, 2004) , (Daly & Moloney, 2004), (Kaikati, 2003), (Lomax, Mador, & Fitzhenry, 2002), (Muzellec, Doogan, & Lambkin, 2003), and (Stuart & Muzellec, 2004) reviewed in detailed the major reasons behind the rebranding practice and procedures based on specific organization experiences. (Melewar, Hussey, & Srivoravilai, 2005) study is more kind of based on process of rebranding and also it describes the impact of rebranding specifically towards consumers preferences of the new image, sales and the share price. (Balmer et al., 2006) study was more on exploring the overall impact of rebranding on brand equity. (Kaikati & Kaikati, 2003) study mainly focused on developing major strategies for implementing a rebranding campaign. These are few of the studies which are majorly done in the topic of rebranding.

The act of rebranding appears to go against standard marketing and branding theory (Stuart & Muzellec, 2004). (Muzellec et al., 2003) states that to give out with an established brand which is result of years of continuous investment and replace it with new one, would create a sense of disagreement with a century of marketing theory and practice. They state that choosing to give out a long-held brand name and restart again from scratch, in fact trying to create a altogether new brand overnight would appear to run counter to the principal adages of advertising and marketing.

Many organizations experience rebranding practices in the conviction that the organization is misjudged in the market place, and the execution of a name change is seen as a technique which will proclaim a fresh start for the organization(Stuart & Muzellec, 2004). (Kaikati & Kaikati, 2003)observe that rebranding is relied upon to give a great opportunity to an entire change, and that any use on rebranding is considered completely reasonable and at times, practically basic to survive.

Definition of Rebranding

In past studies repositioning, revitalization, brand extension, and brand transfer are the terms used to portray the acts of changing a brand. (Muzellec et al., 2003) showed that the wordings to portray changes in brand components have dependably been confusing and misleading.

(Muzellec et al., 2003) states that repositioning is not the same as rebranding. Brand is not changed in repositioning, but rather the view of the brand changes. In other words it states that throughout the repositioning of brand, brand identity remains unchanged(Muzellec et al., 2003). (Balmer et al., 2006) clarified later that repositioning is just a small part of rebranding; another part of rebranding alludes to changing a section or all components in brand.

Rebranding concept can be also defined by the term revitalization. Revitalization refers to act of renewal in order to counter changes in the marketing environment. (Daly & Moloney, 2004) refers that the first step in the rebranding process could be revitalizing and rebranding may be done by changing some part of tangible and intangible elements of a brand. Two main reasons for revitalization in rebranding are Repositioning and Brand Extension.(Aaker) 1991 specifies seven paths for revitalization of brand: increasing usage, finding new uses, entering new markets, repositioning the brand, augmenting the product/service, obsolescing existing products with new-generation technologies, and brand extension. This study of brand revitalization often leads to misunderstand of the concepts as both aspects i.e. repositioning and brand extension are included.

(Muzellec et al., 2003) in order to make concepts more clear defines rebranding “the practice of building anew a name representative of a differentiated position in the mindset of stakeholders and a distinctive identity from competitors”. This is the lone definition available in literature which specifically reflects renaming of the brand.

(Hankinson, Lomax, & Hand, 2007) says that rebranding leads to changes not only in visual identity of a firm, but also it brings about actual change within a firm. Also it states that rebranding is about changing overall image of an organization and also its long term goal.

(Balmer et al., 2006) so as to rethink the definition expressed rebranding as a change in an organizations self-identity and/or an endeavor to change view of the image among external stakeholders. According to me the confusion in the rebranding definition occurs as rebranding is a continuing action and rebranding includes steps that can be alluded to as the way toward changing a brand identity and image.

Types of Rebranding

(Muzellec et al., 2003) states three levels i.e. the corporate level, the business unit level, and the product level on which rebranding in a firm can take place and cites the corporate level as the most critical out of the all three levels which represents a company’s corporate identity as a whole.

(Daly & Moloney, 2004) displayed a rebranding continuum comprised of three primary classes: minor changes, intermediate changes, and complete change. Minor changes majorly focus on aesthetics and differ from a basic face left, to restyling, to renewing the brand appearance or feel which may have dated and are in need of change. Intermediate changes concentrate on repositioning and uses “marketing strategies particularly communication and customer service systems to positively reposition a current brand name, along these lines giving it a new image.

A complete change includes getting another name and brand and all the necessary marketing communication required to make all stakeholders aware of this change.

Mainly rebranding has been categorized into different types based on various aesthetics such as name, logo and slogan change. (Stuart & Muzellec, 2004) states major five types of rebranding:  a new name and logo, a new name, a new logo and slogan, a new logo only, and a new slogan only.

REBRANDING MODELS

(Balmer et al., 2006; Muzellec et al., 2003; Stuart & Muzellec, 2004) were the main studies directed on the rebranding and they proposed the term ‘rebranding mix.’ Let’s have a look at these studies one by one

Rebranding process model by (Stuart & Muzellec, 2004) recognizes three stages in the model: (1) rebranding variables, (2) rebranding objectives, and (3) rebranding process as seen in the figure below. Two of the main rebranding objectives here are Image and to create new identity.

In the rebranding process, this model underlined the importance of involvement of the internal workers or internal employees in creating the social image or the cultural image and the external partners or external stakeholders in creating the image. This model has a significant contribution altogether in getting a better understanding of the basic concepts of rebranding.

Source: (Stuart & Muzellec, 2004)

A Model of the Rebranding Process (Lomax et al., 2002) working paper was an early review recommending a conceptual model of the rebranding process, which has not yet been spoken of in any major articles or major journals. This model is altogether unique and is significantly different in relation to (Balmer et al., 2006) model.

The model gives a bigger idea of major strategic issues of rebranding and recommends involvement of the all the stakeholders in rebranding to redevelop the brand. The model underlines the significance of all the partners’ inclusion, both internal and external partners.

• The initial step of this rebranding process is to distinguish and address the cause, which prompts reasons to rebrand. This is very similar as compared to (Balmer et al., 2006) model, which alludes to the choice to rebrand as the one of the factor of influence. The next step of this rebranding process is assessing the first brand or the original brand.
• The next step is to recognize the objective of rebranding either to build up a brand new image or to increase or gain greater involvement of employees
• The last step, the involvement of project management team in monitoring and controlling and follow-up, contrasts from (Balmer et al., 2006) model. This rebranding process is a reasonable key strategic step. Nonetheless, this model did not clarify the role of rebranding in making brand equity, which has been perceived as more essential concept in brand management. In this review the rebranding idea was not talked about inside and out and the conceptualization of the ideas was not examined.
• One of the things missing in this study was rebranding concept in particular was not discussed in depth and the conceptualization of the concepts was not properly investigated.

Source:(Lomax et al., 2002) Integrating Conceptual Model of the Rebranding Process

(Lomax et al., 2002) And (Balmer et al., 2006) models have a couple of similarities: the model starts with recognizing the inspirations or the reasons to rebrand followed by all the stakeholders’ involvement in the rebranding process. (Lomax et al., 2002) model was represented as a structure or a continuous process; in any case,(Lomax et al., 2002)  model presented clear purposes of the rebranding process and has given more clear study of rebranding process. The most important thing overlooked by the (Balmer et al., 2006)  model, was checking and evaluating of rebranding process in all the stages.

Various studies have recognized and discussed specific issues and problems from different case studies of firms that have experienced the rebranding process. These studies recognized important issues, for instance, internal brand, brand identity, and building significant brand equity an incentive in rebranding.

Here it can be observed that from both the above rebranding process models, one major thing is always neglected i.e. Brand Equity, the end result of rebranding. Therefore, this study of rebranding process model is very important and also it is very much needed to link rebranding to brand equity, as brand equity is the ultimate goal of brand management.

(Merrilees, 2005) highlights the importance of brand evaluation as a key component of successful marketing strategy. Three key constructs are used as a framework for evaluating rebranding decisions, naming brand vision, brand orientation, and brand strategy implementation, it is prescribed that the key to successful rebranding is the need to manufacture each of these three components and moreover ensuring that they are interlinked and properly coordinated as seen in the figure below:

Source:(Merrilees, 2005) Evoiving Conceptualization of Brand Evolution

Rebranding Strategies

(Kaikati & Kaikati, 2003) proposed six strategic options for the implementation of successful rebranding campaign as follows:

• Phase-in / Phase Out
• Combined Branding
• Translucent Warning
• Sudden Eradication
• Counter- Takeover
• Retrobranding

The ‘phase-in / phase out strategy’ refers to matching of new brand with existing brand in some way for specified introductory period. After some time once the transition period gets over, the old brand is phased out.

Combined Branding strategy takes place when existing brands in a line are together combined in some way or another. One of the examples for combined branding strategy would be by using an umbrella brand globally.

Translucent warning strategy is one of those strategies where consumers are very well made aware of a change in name before and after the event.

In Sudden eradication strategy, a sudden call is taken to drop an old name almost overnight and immediately replaced with a new name.

Counter takeover rebranding is normally used when an acquisition takes place and this strategy involves the acquirers dropping their own brand name and accordingly adopting the name of the acquired brand.

Lastly Retrobranding occurs mainly wherein companies after having implemented unsuccessful rebranding campaigns decide to reinstate the original name.

Later (Kaikati & Kaikati, 2003) stated seven basic requirements which is normally must for successful rebranding campaigns and they can be as follows:

• Adequately assess customer perceptions
• Ensure to retain a reputable brand consultancy
• Maximize and reward employee input
• Cultivate a distinctive logo
• Explore the significance of color
• Promote the new name aggressively
• Monitor and track reactions periodically
• Plan for the worst-case scenarios
• (Daly & Moloney, 2004) four renaming possibilities as follows:
• Interim / Dual: In this strategy there is some form of prior arrangement well in advance before the new name is been replaced by the old name.
• Prefix: This Strategy is usually appropriate when there is an merger between two or more brands. Major condition in this strategy is none of the existing brands will be used as the new brand.  In this strategy, the new brand is added as a prefix to the legacy brand and after a period the legacy names are removed and the prefix name remains as the new brand.
• Substitution: As name suggests, this strategy involves substituting from old brand name to new brand name
• Brand Amalgamation:  This Strategy is mainly suited when there is a merger between two big or two strong brands. The two names are amalgamated in an attempt to strengthen the values of two brands together.

Brand Equity

Business practices, academic research, and brand management all in all, contain a noteworthy part known as brand equity (Zeithaml, Berry, & Parasuraman, 1996). A systematic framework created by (Aaker)proposes that brand equity creates value for the business and the client both; as the incentive for the client increases, the incentive for the firm increases too simultaneously; and that brand value includes different dimensions.

Brand Equity empowers a business to differentiate its products keeping in mind the end goal to gain a competitive edge, henceforth expanding the money inflows (Yoo, Donthu, & Lee, 2000). As referred by Aaker, positive brand equity influences the firm positively in the long haul.

The brand equity concept has been referred a lot of times in the analyzed models. Yet, what precisely is brand equity? As defined by(Farquhar, 1989), brand equity is “the ‘added value’ with which a given brand endows a product”. Aside from Farquhar’s definition of brand equity, different definitions have showed up. As per (Lassar, Mittal, & Sharma, 1995), brand equity has been analyzed from a financial perspective (Farquhar, Han, & Ijiri, 1991; Simon & Sullivan, 1993) (Doyle, 2001), and also a customer based viewpoint as mentioned by(Cheng-Hsui Chen, 2001; Keller, 1999; Shocker & Srivastava, 1991).

Brand Equity has likewise been described as “the improvement in the apparent utility and desirability a brand name gives on a product” (Lassar et al., 1995). High brand equity is thought to be a competitive advantage since: it suggests that organizations can charge a premium; there is an increase in customer demand; brand extension becomes much easier; communication campaigns are more viable; there is better trade; increase in margin; and the organization turns out to be less vulnerable against competition (Bendixen, Bukasa, & Abratt, 2004).

In short, high brand equity creates a “differential impact”, higher “brand knowledge”, and a bigger “consumer response” (Keller, 1999), which typically prompts better brand execution, both from a monetary related and a customer viewpoint.

Consumer innovativeness

Rebranding into new images can likely be an easy route to recapture market’s attention towards the brands. Customer innovativeness, which has been talked about widely in literature on branding techniques, may influence how clients assess rebranding strategies. (Midgley & Dowling, 1978) defined Consumers Innovativeness as a personality trait that speaks to an individual’s inclination to attempt new things. Inventive individuals may enjoy buying and trying new items; in contrast, conservative individuals may display more resistance to brand curiosity.  (Hem, De Chernatony, & Iversen, 2003) find that customers who view themselves as innovative persons have a tendency to respond all the more positively towards brand extensions which brings novelty to the brands. Inferentially, innovative customers may have more favorable attitude towards rebranding as they appear to be more responsive to new ideas and changes related to the brand(Salinas & Pérez, 2009).

Brand loyalty and evaluation of rebranding

Brand loyalty is characterized as a sort of behavioral reaction (e.g. to buy) with biased brand selection (i.e. repurchase the specific brands) which is communicated over time. A few studies expose that brand loyalty can be harmed because of a few modifications made in the brand, of which core values and advantages can’t be safeguarded and kept up amid such changes.

However, a few analysts find that dedicated or loyal customers appear to be more tolerant towards the changes made if there are high likenesses prior and then after the changes made in brands. (Pimentel & Heckler, 2003) state that, with the familiarity effects, customers have a tendency to acknowledge slight changes of visual identities of brands.Key marketing efforts are altogether planned majorly on the basis of customer loyalty towards the brand. Brand loyalty of the target market makes a business substance more grounded and empowers it to accomplish more prominent market share(Jacoby & Kyner, 1973).

Brand Loyalty is the measure of how heavily one brand is favored in contrast with different brands offering a similar product or service, in light of price sensitivity and recurrence of procurement (Chaudhuri & Holbrook, 2001).

Proposed Methodology

Sample Size

• Sample size would be 100 – 150 participants.

Data Collection Method

• Questionnaires would be used to collect the quantitative data. Questionnaires would have two sections: the personal data and the research questions. The questionnaires would be developed on the basis of independent and dependent variables. The scale for measuring the impact is 7 point likert scale. The sample size is between 100 – 150 respondents.

Analysis

• Analysis will be done by using SPSS software. Correlation analysis and Regression analysis would be mainly used so as to get the results and conclude accordingly.

Discussion and future scope

This study makes contributions on both aspects practical as well as theoretical aspects. With regards to theoretical aspects, this paper contributes greatly to help the readers understand the basic concepts of rebranding, also readers get a clear view of definition for rebranding as earlier there was some kind of confusion with regards to definition of rebranding was observed. Later on through this paper we can get clarification on various other aspects of rebranding such as different types of rebranding, better understanding of the main three models of rebranding and also different kinds of strategies in rebranding.

As observed in the review it is very apparent that previous researchers mainly focused on qualitative research methodology so as to study these concepts and as a result to fill this gap a quantitative method was used in this literature. In future as mentioned in proposed methodology,

I would conduct Correlation Analysis and Regression Analysis so as to reach to a conclusion with regards to study our objectives of this paper and accordingly we would conclude the paper by reporting the findings out of the studies that would be conducted later.

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