- A brand is one of the most important intangible assets and therefore, utmost care should be taken during the transition, which is why it is essential to build an effective brand strategy for the merger.
- Shashwat Das, Founder, Almond Branding writes a few strategies a brand can adopt while merging with another company.
Mergers are known to be a complex process as it involves aligning finances, and a shift of the brand image and transition of the consumer segment. In the case of brand mergers, the loss of just one company isn’t at stake but a potential death of both is involved. Thus, during brand mergers, it is extremely important to pay attention to the minutest of details before launching or announcing the brand merger.
Along with many challenges, one of the biggest threats is the competitors that can swoop in and take away your targeted segment, market value, and even the brand image. Unfortunately, a lot of brands focus on the financial aspect rather than mapping out strategies for its branding. Although, history has it that most successful brand mergers were possible because an equal priority was given to combining balance sheets and branding.
A brand is one of the most important intangible assets and therefore, utmost care should be taken during the transition. Thus, it is essential to build an effective brand strategy for the merger. When different companies and/or belonging to different domains merge, setting an identity for the new entity often creates a lot of problems. Overlapping identities, conflicting cultures, variations in consumer segments, individual reputation, and market value are at high risks. A clearly designed branding strategy wouldn’t only lessen the risk curve but also help give a tough competition to other players of the industry.
Brand Architecture Strategies
Conventionally there are four brand merger alternatives viz. The brand remains independent/No change, Combined/Fusion Branding, Lead brand overshadows another/Stronger Horse, and creates a completely new brand. The best way to assess the branding strategy for a successful transition is to underpin the brand architecture option. This will also help you decide whether the conservative or aggressive strategy is needed for the brand merger.
- The brand remains independent/No change
This is a traditional strategy that most of the brands adopt, which not necessarily separate individually but the market space looks at it as two separate entities. The strategy is pinned with an aim to serve various consumer segments of the same market.
A well-known example is the Tata taking over Jaguar and Land Rover. This merger proved to be really fruitful for Tata as the company wanted to jump into the international automobile market and create a diverse line-up from the cheapest to the most expensive automobile options. Both Jaguar and Land Rover, are known for best engraining as well as have luxurious brand image. Thus keeping the brand names intact helped Tata to appeal to the up market consumer segment after the acquisition.
2. Combined/Fusion Branding
Combined is perhaps the most popular branding strategy. It is suitable or the brands having similar visions, which serves as a link for the merger giving it a fresh identity and reputation.
This strategy involves different approaches:
Straight Fusion – the combination of names of both entities, the best example is the merger of Exxon and Mobile, which became a joint company and came to be known as ExxonMobile.
Refreshed Fusion – a new name and new brand logo is launched. ConocoPhillips is the most talked about case, as the logo signified the merger but the equity was not sacrificed by either of the brands.
Hybrid Fusion – mix logos. United acquiring Continental airlines would be a precise example, which was a mixture of brand assets representing particular elements of both the brands.
Lastly, Endorsed Fusion – Lead brand endorses the transition. An explicit case would be when Gannett Company started endorsing CareerBuilder.
3. Lead brand overshadows another/Stronger Horse
This strategy involves elevating the better brand, which only happens if the lead company has a finer consumer base, potential, and equity. In most cases, the acquiring company is the lead brand and also at the top of the branding manifesto. Two case studies that significantly explains the stronger horse category is DHL acquiring Airborne Express and Allied Signal acquiring Honeywell. Allied Signal also used Honeywell’s brand name after the merger.
4. Creating a completely new brand
Creating a new brand/entity is the most aggressive option but it proves necessary for the brands, who want to undergo a significant transition. It is the most expensive, time-consuming, and risky option as it affects the consumer relations and equity of both the brand, greatly. The most recent case is the establishment of the brand Vi. The Vodafone and Idea merger is the talk of the hour.
Implementing the Brand Architecture Strategy
Planning out and implementing a branding strategy needs a rigorous amount of focus and time. The right kind of plan will help emphasize the right angle and further ensure that office culture and marketing are well-coordinated.
- Zooming out and getting a 360° viewIt is important to know the strengths, weaknesses, history, internal culture, etc. of both the brands. It helps to identify the link between both the brands, which elements to underline while branding to create a perfect brand merger.
- Keeping the customer in mind
The best strategy is the one that prioritizes the target customers. During a brand merger, two different customer segments are combined thus working on USP will help tempt all kinds of segments.
- Engaging the workforce with the new culture
One of the main reasons behind the failure of the brand merger is the inaccurate integration of work culture. Thus, a proper strategy defines office cultures, workforce, and thought-process within the new entity.
- Convey the new brand’s story
It takes a lot of time for the audiences to identify the new brand therefore creating a brand narrative and purpose is very important. It will help create brand awareness and reach the target segment, effectively. A well-defend brand purpose will make your targeted segment to support your brand through the unpredicted new journey.
- Re-fining/Re-branding the Image
A brand is often remembered by the way it looks. So, the design language and visual assets will make your brand more recognizable. Your logo will be noticeable if the old elements of both brands are combined.
Devoting a great deal on the branding strategy will ensure smooth amalgamation of both the brands in the mergers, making it a key factor for a successful transition. If branding is ignored, it can create a huge mess for both brands. Great branding architecture will create an evolved brand that will definitely stand true to the test of time.