The influence of corporate rebranding on consumers' attitudes to the brand

Irina Petrova, u4484642 Consumer Behavior – MKTG 7050

Rebranding:
Levels
Drivers
Processes
Consumers’ attitudes to rebranding:
Multi-attribute model
Commitment to the brand
Resistance to change
Implications

Rebranding – ‘the creation of a new name, term, sign, symbol or design or a combination of them for an established brand with the intention of developing a differentiated (new) position in the mind of stakeholders and competitors’.
Evolutionary modifications  Revolutionary changes
Source: Muzellec & Lambkin 2004.

Corporate branding - the process of creating and maintaining a favorable image and reputation for the company by sending signals to the stakeholders by managing behavior, communication, and symbolism.
Corporate rebranding:
BSN  Danone
Andersen Consulting  Accenture
Eircell  Vodafone
Source: Muzellec, Doogan, Lambkin 2003; Einwiller & Will 2002. Individual product Business unit Corporate

The main drivers for rebranding: ‘ decisions, events and processes causing a change in a company’s structure, strategy or performance of sufficient magnitude to suggest the need for a fundamental redefinition of its identity’.
Include:
changes in the ownership structure (M & A transactions)
changes in corporate strategy (diversification, internationalization)
changes in competitive position (outdated image, reputation problems, erosion of market position)
changes in the external environment (legal regulation, crises)
Source: Muzellec, Doogan, Lambkin 2003

Rebranding: renaming, repositioning, redesigning.
R epositioning – creating a radically new position for the company in the minds of consumers.
R enaming – creating a new name and communicating the values and image of the new brand name to the consumers. The new brand name should be simple, familiar to consumers, distinctive.
R edesign – creating brand identities, appealing to consumers, that are consistent and mutually reinforcing
Sources: Muzellec, Doogan, Lambkin 2003; Keller 1993.

Consumers’ attitudes to the brand – ‘consumers’ overall evaluations of the brand, which form basis for consumer behavior’.
Multi-attribute model (Fishbein):
Attitudes are a function of
1 – salient beliefs of consumers about an object;
2 – object-attribute linkages, or the probability that the object has an important attribute;
3 – evaluation of each of the important attributes.
Sources: Keller 1993, Solomon et al. 2007.

Consumers become attached to various brands and form relationships with them.
Commitment to the brand – one of the major attitude strength dimensions.
Consumers with a positive attitude and a high level of commitment to the brand are likely to be more sensitive to rebranding; form a negative attitude to the new brand identity.
Emotional bonds with the brand  denial of changes due to defense motivation .
Defense motivated consumers use heuristics selectively to protect their attitudinal commitments.
Biased information processing.

Consumers’ commitment to the brand – cont.
To make rebranding less dramatic for the consumers, committed to the brand, the transitional phase (an interim brand) should be used.
Consumers who are not committed to the brand analyze information in a more objective way.
For them rebranding is more likely to lead to the positive reevaluation of the brand.

Consumers’ resistance to change
Change is a situation when the normal patterns are interrupted and consumers have to enact new patterns.
Consumers rationalize their existing attitudes and beliefs , and discount or neglect the information that contradicts them.
Consumers need to understand why the change is necessary.

Implications
Before making a decision about rebranding research should be conducted to find out customers’ attitudes to the current brand.
Rebranding is costly and risky: in most cases, it damages brand equity; the new brand name may not be accepted by consumers; customers, loyal to the initial brand may be alienated.
Factors such as consumers’ commitment to the brand and resistance to change play an important role.
Corporate rebranding should not be undertaken without sufficient reasons, and the company should have a clear idea of what it wants to achieve.

References:
Ahluwalia, R, Burnkrant, R, Rao Unnava, H 2000, ‘Consumer response to negative publicity: The moderating role of commitment’, Journal of Marketing Research , 37 (2), pp. 203-214.
Einwiller, S, Will, M 2002, ‘Towards an integrated approach to corporate branding - an empirical study’, Corporate Communications, 7 (2), pp. 100-109.
Keller, K 1993, ‘Conceptualizing, measuring, and managing customer-based brand equity’, Journal of Marketing , 56 (1).
Koslow, S 2000, ‘Can the Truth Hurt? How Honest and Persuasive Advertising Can Unintentionally Lead to Increased Consumer Skepticism’, The Journal of Consumer Affairs , 34 (2), pp. 1-41.
Muzellec, L, Lambkin, M 2004, ‘Corporate rebranding: destroying, transferring or creating brand equity?’, European Journal of Marketing , 40 (7/8).
Muzellec, L, Doogan, M, Lambkin, M 2003, ‘Corporate rebranding – an exploratory overview’, Irish Marketing Review , 16 (2), pp. 31-40.
Solomon, M, Dann, S, Dann, S, Russell-Bennett, R 2007, Consumer Behaviour: buying, having, being , Pearson Education Australia.
Walsh, M 2005, ‘Consumer response to logo shape redesign: the influence of brand commitment’, University of Pittsburgh.

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The influence of corporate rebranding on consumers' attitudes to the brand

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