When Black & Decker Corp. bought General Electric Co.'s household appliances division in 1984, it took several years for Black & Decker to put its name on the popcorn poppers and toasters: The manufacturer first wanted consumers to become comfortable with a brand that had been associated with the garage making an appearance in the kitchen. The gradual roll-out of the re-branded products began with the strongest sellers, and the shift entailed a $100 million, three-year advertising blitz to promote the appliances.
Holding onto an old name carries its share of risk, as well. When the business behind the name changes, consumers might not get what they expect from the brand and feel alienated as a result.
Toys R Us has said it is considering getting out of the toy business to focus on its profitable baby accessory unit.
(Brian Branch-price -- AP)
One company that many observers credit with successfully making the shift while keeping its name is IBM. That's despite the fact that, among average consumers, the brand continues to be heavily associated with the personal-computing division it agreed to sell last month to Chinese PC maker Lenovo Group Ltd.
PCs account for just a small percentage of IBM's revenue, and the company had actually exited the consumer PC business altogether several years ago. But because IBM helped pioneer the PC and poured countless sums of money into advertising it, the association has stuck.
Still, the people who most matter tend to get what IBM is all about. Those include the chief information officers and other executives who decide which technology to buy and with whom to consult on how to use it.
That last piece has been the focal point at IBM for the past decade, as it migrated from manufacturing to services. The transformation was necessary when a growing number of companies were able to match IBM's products. Plus, the company's brand had gone stale.
"IBM was in trouble," said Ross, who helps manage IBM's brand for Ogilvy. "The image of what IBM stands for had become pretty indistinct and had failed to keep up with the times. It was seen as stodgy."
Ogilvy learned this through the "brand audit" it performs on its clients. The process includes an extensive evaluation of how customers, potential customers, business partners and employees perceive the brand. Ogilvy then compares those perceptions with how the company wants to be seen. When the two don't match, Ogilvy works with the company to develop a strategy for bringing them into line.
In IBM's case, the prescription was to introduce more humanity into the company's ads and seize on the idea of "solutions" as a way to bridge IBM's old reputation for quality manufacturing, with its goal to be known primarily for quality services.
"Solutions for a small planet" became the company's tag line. More recently, ads have focused on the idea that IBM serves as a global "help desk," at the ready to assist with any questions a business may have.