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Many people see this as a simple change in logo or a simple change in the brand image; bottom line: it’s a simple brand image change. No biggie. While this is true, there’s actually a lot of things going on under the hood than simply changing a company’s colour or logo. For a brand, rebranding...

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Rebranding

Many people see this as a simple change in logo or a simple change in the brand image; maybe the old image doesn’t fit the current trend and the brand is looking to be more appealing to consumers.

Bottom line: it’s a simple brand image change. No biggie.

Under The Hood Of “Rebranding”

While this is true (I mean, rebranding is a change in brand image, after all) there’s actually a lot of things going on under the hood than simply changing a company’s colour or logo. For a brand, rebranding is a big thing and shouldn’t be taken lightly.

When a company rebrands, the company doesn’t only change its name or logo – it also changes its philosophy, market sector, and possibly even its vision for future growth. Rebranding is a major change and could potentially make or break a company .

Risks Of Rebranding

These changes could be due to the company’s objective to enter a new market or tap to new industries; or because of mergers and acquisitions. According to the economic times:

“There are two types of rebranding: one is Proactive rebranding and the other is Reactive rebranding. Proactive rebranding is done when a company recognises that there is an opportunity to grow, innovate, tap into new businesses or customers, and to reconnect with its users… Reactive rebranding is done in a situation when the existing brand has be discontinued or changed. Possible reasons for such an action could be mergers & acquisitions, legal issues, negative publicity such as fraud, aiming to beat the competition, or create your own niche.”

Rebranding Can Cause Confusion

Whether rebranding is proactive or reactive, there is a risk that comes with the change.

Changing one’s brand image is very risky, especially in a volatile consumer market that can be very fickle and brand-conscious. If you’re thinking of rebranding, here are some risks you might run into.

Rebranding Is Costly

One of the big risks of rebranding is causing confusion to consumers, especially when your brand makes a major overhaul. This is especially true when you are opening yourself up to a new market sector that is not familiar with your brand.

Most of the time, companies rebrand because they have a new product line in tow, for example:

When Should You Rebrand?

An electronics hardware company making appliances has acquired a mobile software company and have begun creating a new AI-controlled appliance, completely decommissioning their old product lines. Of course, this means rebranding for the company.

If the company doesn’t plan their rebranding efforts properly, the market for AI-controlled appliances will not be able to familiarise themselves with the new brand since the brand is associated with traditional, non-AI appliances . As a result, the company will have fewer sales for their new product line and would cause them revenues. Ouch.

When Your Brand Is Targeting A New Market Sector

Another risk of rebranding is the cost behind the marketing of the new brand.

When a company makes a change in their brand image, that means a major overhaul of marketing materials and marketing image . That means changing billboards, commercial ads, ad placements in newspapers and online.

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