A company requires to rebrand when it decides to change any of its brand elements such as brand name, logo, slogan, or even a small change in the message for better communication and more relevant brand promise. Rebranding is extremely important, expensive to execute, and risky.

Why do Companies Rebrand?

There are multiple reasons behind why companies initiate rebranding. These reasons can be categorized into two types − proactive or reactive. Let us take a deeper look.

Proactive Rebranding

It happens when a company anticipates and prepares for future changes in the market.

●      To prevent or prepare for future potential threats by competitors.

●      To plan for international growth, rebranding the products and services into a consolidated brand thereby saving money over time and creating a greater sense of brand unity.

●      To enter into a category of business, product, or market which no longer remains cohesive to the existing brand identity. In case of Apple Inc., as the company evolved into new businesses beyond computers, the original brand name Apple Computers became too restrictive. It was then changed to Apple Inc. At the same time, Apple Inc. updated its logo depicting its progress.

●      To attract new audience, or want to appeal to it. In case of McDonald’s ads, it refers to itself as McDonald’s to target a different demographic from its traditional audience.

●      To increase the brand relevance in consumer’s mind, the company might decide to rebrand. For example, when the use of printed Yellow Pages directories started declining, Yellow Pages rebranded to YP.

Proactive Rebranding

Reactive Rebranding         

This branding occurs when the companies need to react to a significant change. Reactive rebranding might happen in the following situations −

●      When companies need to work on negative brand image.

●      For example, during 1990-2000, the London based men’s clothes making company Burberry’s public image was associated with hooliganism and violence. The brand had lost its image so badly that the clubs and pubs in UK had started banning entry for the people wearing Burberry. The company worked to disassociate itself from such an image by changing styles of the product, changing their logo, and applying excellence in everything.

Reactive Rebranding

●      When companies merge or acquire other companies, or when they separate. For example, California based Intel rival and chipmaker, Advanced Micro Devices (AMD) is considering to split shortly.

●      When there are legal issues with branding. Trademarks are often the root cause for rebranding. For example, an Australian business tries to expand into USA and finds that its existing name is already trademarked and not available for use in USA.

●      When a competitor manifests a company’s brand as useless or outdated, then rebranding helps to get an opportunity to facelift the brand to effectively strike back in the market.

●      When changes take place in business regulations, laws, competitors, etc.

●      When a company lands up into a significant controversy or negative publicity, it considers rebranding to rebuild the trust of consumers and stakeholders. It cuts up all the ties with the issues in picture and moves on with the new form of brand.

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