Changing brands without losing customers
12/08/2015
Professor Véronique Pauwels-Delassus
Based on an interview with Véronique Pauwels-Delassus and the article “The impact of consumer resistance to brand substitution on brand relationship” co-written with Raluca Mogos Descotes (Journal of Consumer Marketing, Vol. 32 No. 1 pp. 34-42, January 2015).
When a company decides to change the name of one of its brands, the principles of resistance to change used in management also apply to consumers. Limiting resistance is the decisive factor for transferring trust from the old brand to the substitute brand. How can you evolve your brand while minimizing the risks? Véronique Pauwels-Delassus explains the way forward.
Biography
Véronique Pauwels-Delassus (PhD) is associate professor of marketing at the IÉSEG School of Management – Université Catholique de Lille (LEM – CNRS). Before entering the world of academia, Dr Pauwels-Delassus worked as marketing director for an international food group.
Her research focuses on strategic brand management, creating brand value, and consumer resistance to change. Dr Pauwels-Delassus is author of the Handbook of Brand Management Scales (Routledge, August 2015).
Methodology
Véronique Pauwels-Delassus and Raluca Mogos Descotes (University of Lorraine, CEREFIGE) conducted a preliminary qualitative study among 18 customers to test the factors that promote transfer of trust and loyalty from an old brand to a substitute brand. The two researchers were particularly interested in the renaming of the Taillefine and Petit Déjeuner brands, which became Belvita and Belvita Petit Déjeuner respectively after Kraft Foods (Mondelēz International) took over LU, the biscuits division of Danone. A second quantitative study was then conducted among 313 consumers.
Danone’s Bio is now called Activia; France Télécom has become Orange; and Champion changed its name to Carrefour Market. The reasons behind name changes are numerous, from the purchase of companies or brands, to changes in legislation to economies of scale to market globalization. While there are gains to be made, companies also have a lot to lose. Although brand change is becoming increasingly commonplace, it is a risky strategy that can reverse years of marketing investment. How can you limit the dangers?
Leverage an umbrella brand
As the brand is, by definition, the “marker” or symbol for a range of products, any change of name weakens the relationship with customers. It inevitably leads (at least temporarily) to the loss of a familiar landmark, which then generates confusion and resistance to change. With consumers not yet trusting the new brand, they may turn to an alternative product. This is all the more likely to be the case if the new brand is not associated closely enough with the original brand in the mind of consumers, who may think that a new range of products is replacing the old.
In this context, an umbrella brand is a first key factor for success, and the discontinued brand may temporarily fulfill this role. This approach minimizes perceived risks by providing a quality guarantee across the entire product range. It is not enough in itself, however, to ensure the success of the rebranding.
For example, when Kraft Foods acquired Danone’s LU biscuit division, it was obliged to give up the Taillefine branding on some cookies because the Taillefine brand name still belonged to Danone (used for its yogurts in particular). The product and the umbrella brand LU remained the same; only the name and packaging changed, with Taillefine giving way to Belvita. In spite of numerous communication efforts to publicize the Belvita brand, the change was such a failure that Kraft decided to drop this original line of biscuits. What strategy should be deployed in such circumstances?
Minimize the resistance to change
According to organizational change theory, resistance decreases if change is gradual, and if employees are kept informed and see a benefit to it. The study by Pauwels-Delassus and Mogos Descotes shows that these ideas also hold true for consumers. Trust — a mixture of credibility, integrity and goodwill — must be transferred from one brand to another. Once consumers have trust in a brand, they will also be loyal. It is, therefore, a question of doing everything possible to ensure that consumers adopt a positive attitude and opinion towards the new brand.
Pauwels-Delassus recommends that companies be transparent and keep consumers informed, providing an explanation for the change in brand. Companies should also show how the rebranding benefits consumers. Thanks to social networks, it is relatively easy to involve customers in the process; for example, a company could unveil the plans for new packaging and then take consumer opinions into account before moving ahead in order to preserve the relationship and trust while optimizing products.
Successful rebranding
Within this framework of informing and involving, Pauwels-Delassus adds that it is essential to observe a transition period by linking the two brands. The change, in other words, must be gradual. But be warned: this phase should not be too long, otherwise consumers will end up assimilating the two brands, as was the case with Gemey Maybelline in France.
Finally, for the rebranding to be successful, other changes should be kept to a minimum; a brand change is not the time to start innovating on the packaging or product quality! And, as the first purchase is decisive, it may be helpful to offer encouragement by using promotional activities. It is then a matter of finding the best way to prove to consumers that the quality has not changed. Subsequently, the more often a consumer buys products from the new brand, the more he or she will trust it and loyalty will increase.
Business applications
A brand change is never neutral. It inevitably weakens the consumer relationship, at least temporarily. It is a long, risky and expensive process, and it requires substantial investment in communication.
It is important, therefore, to examine the overall budget of the rebranding carefully before embarking on the adventure. Although economies of scale are not always reliable, success is possible, provided that the change is gradual and carried out properly to help consumers with the transition to the new brand. This highly practical study by Pauwels-Delassus and Mogos Descotes will help marketers who want to carry out rebranding gain maximum benefit.