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Branded for Life

"We try to strike a point of empathy that says, 'We understand your business's problems. We understand how difficult this is.' And people respond to that," said Lisa P. Baird, IBM's vice president for worldwide integrated marketing communications.

Today, Interbrand ranks IBM as the world's third-most powerful brand, at $53.8 billion.


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)

While IBM has won plaudits for evolving its brand as its business changed, AT&T has received more mixed reviews. The company, which once had a monopoly on phone service throughout the United States, was forced to back away from the consumer business last year because of unfavorable regulatory changes and intense pressure from regional competitors. Instead, AT&T has concentrated on serving large businesses with networking services.

Harvard Business School professor John A. Quelch said AT&T has been slow to figure out its niche, with several false starts that have damaged the brand.

"The AT&T brand has been messed with repeatedly in the last 15 years. As a result, I don't think it commands much respect, except among a very small, aging, loyal segment of the marketplace," he said.

AT&T contends that its reputation remains as strong as ever among large business customers and that that filters down to the average customer, too.

"People feel that 'if it's good enough for the big guys, it's good enough for me.' There's a halo effect that spills over," said John Polumbo, president and chief executive of AT&T Consumer.

AT&T isn't the only communications company facing major branding challenges. As telephone and cable companies invade each other's space by offering all-in-one phone, television and Internet packages, consumers have had to get accustomed to the idea of one company providing several formerly disparate services, said Yankee Group senior analyst Kate Griffin.

Customers may also have to adjust to the idea of Toys R Us no longer selling toys. The company said in August that it was considering selling off its toys division and focusing instead on its Babies R Us line. A company spokeswoman declined to discuss how a potential sale would affect the company's branding, but several observers say a transition wouldn't be easy because the brand name literally says what the company sells.

"It's much harder for a Burger King to expand its range of offerings than it is for a McDonald's," said Quelch. "It's terrific to have a brand that says very clearly what your business is all about. But if you want to expand or diversify or get out of the business, it makes it almost impossible to do the migration."

Ogilvy's Ross said it can be done. It just takes patience and a willingness on the part of consumers to adapt their impressions as the business adapts.

"It's very hard to change a brand quickly because people don't change their perceptions that quickly," Ross said. "As much as companies would like to have complete control over the way their brand is perceived, the customer has a lot to do with it, too."


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