They say that you can tell a lot about a person by the kind of name their parents gave them.  Scholastica, for instance, is meant to be a name that communicates academic success. A name like Minerva exhibits an air of mystery and intrigue. Other names are more commonplace and say little about a person’s background.

Such principles contribute to the kind of name a company chooses. A company name with a tagline like ‘International’ inspires a sense of power and global reach. Likewise, a name like ‘Shah and Sons’ points towards a family business. One of the best things about company names is the fact that they can be changed whenever a re-launch is deemed necessary.

Rebranding is fast becoming a trendy thing to do among companies.

There are, however, risks to consider when a company decides to rebrand. Customers can lose faith in a product and profits may fall. Quite a number of locally-based companies have made attempts to boost their revenue by changing their names and marketing strategies. Maybe others can learn from their mistakes:

Big Losers

Take Chartis for instance; the company recently announced that it would be rebranding for the second time since 2008, changing its name back to AIG. The firm, which is Kenya’s 3^rd largest general insurance company in terms of market share, has faced tough times due to the global financial crisis. It took on a whole new direction when it sold some of its businesses and changed its name to Chartis. According to an annual report, the change did little to help the Chartis because the company still yielded poor results, making an underwriting profit of USD 218 million for the first quarter of 2012 down from USD 405 million for the same period in 2008.

Airtel went through a similar situation shortly after entering the Kenyan market in 2000 under the name KenCell. In 2004, the company spent USD 30 million re-branding to Celtel. In 2008, the company spent an additional USD 28 million to shift from Celtel to Zain.

In 2010, the company opted to save money by using Corporate Social Responsibility (CSR) as a campaign strategy. The service provider used community empowerment to re-launch the brand in 2010. The move may have created jobs for people living in rural communities and opened a market for hundreds of street vendors; but the company’s market share still plummeted from 46%, in 2001 as KenCell to 18% in 2005 as Celtel, to its current 15.3% as Airtel.

The Winners

Econet Wireless also re-branded in 2009, changing its name to Essar. The company which operates locally under the name YuMobile, has the lowest general service rates across all networks. Its subscription has since grown to 2.5 million from 200,000 customers.

Kenya Power re-branded in 2011, changing its name from KPLC in a bid to improve its service delivery. The company’s new strategy has seen obsolete wooden electric posts replaced with more durable concrete poles. According to a press release, the company has since signed KES 3.7 billion worth of power distribution contracts and has less downtime.

Lesson Learned

There is more to re-branding than simply changing a company’s name. Some company’s do it because their growth and expansion has made the old name seem irrelevant. Such was the case with AIG which stands for American Investment Group. The name seemed redundant because the company also has subsidiaries in the UK, the Middle East and some parts of Africa. Looking back, AIG realised that brand loyalty can be determined by what customers consider to be familiar.

The major reason for re-branding is to rekindle the relationship between the service provider and the consumer. It creates a sense of progress and expansion. In spite of how appealing re-branding may seem, the fact remains that it should only be done if the potential gains outweigh the expenses. Schimeck himself said that, upon assessing the overall response from its consumers, AIG saw fit to stick with their original brand name. It seems that question has been answered. What's in a name?