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The trials and tribulations of rebranding
Transcript...
ALAN KOHLER: In recent years Australian businesses have invested millions of dollars, thousands of hours, and reems of new
stationery trying to reinvent themselves.
Now, the reasons for rebranding are many and varied - some companies sense they're losing touch with a market and need a fresh
start, others are emerging from poor results, or even scandal, and they want to leave their old corporate clothes behind.
But as Geoff Hutchison reports, getting it right can be a difficult business.
GEOFF HUTCHISON: What's in a name? Well, along with the company logo, everything - it's the way businesses create an impression and
get inside our heads.
KARL TREACHER, BRAND BEHAVIOUR: If we look at what a brand is, it's an organisation's or a company's attempt to have a connection or
relationship with people.
GEOFF HUTCHISON: But when that relationship is fading and customers are no longer engaged, it could be time to rebrand - and that is
risky business. In recent years, it's estimated Australian companies have spent more than $150 million changing who they are.
KARL TREACHER: Now if a company is deciding to relaunch, rebrand or change its personality or corporate identity, it's doing so in
an admission almost that it has not been successful or hasn't been optimal at establishing that relationship.
GEOFF HUTCHISON: It brings to mind the American telecom giant WorldCom. Embroiled in a $14 billion accounting scandal - it now goes
by the name MCI. And cigarette manufacturer Philip Morris - owner of Kraft Foods, makers of Vegemite - now defers to a parent
company, the Altria Group.
No doubt to help get rid of the smell of tobacco litigation from its vast wardrobe of corporate clothes. Last month Myer announced
it was going to rebadge its Grace Bros department stores in NSW and the ACT with the Myer name.
For more than a century Grace Bros had been an iconic but fading fixture in Sydney retailing, and clearly Myer boss Dawn Robertson
no longer saw profit in sentiment.
DAWN ROBERTSON, MYER: It was all part of our strategy that we would be one national department store, and we believe it's a clear
and more consistent message for the customers.
GEOFF HUTCHISON: Michael Grace, grandson of the company founder and a former managing director, believes Myer's rebranding is
putting a lot of goodwill and customer loyalty at risk.
MICHAEL GRACE, GRACE BROS: I think they have lost market share and will this help them gain market share - good luck to them.
TIM RICHES, FUTUREBRAND: The process of change, the positive way to view the process of change, is not so much taking something away
from somebody, as offering them something different and better in return.
GEOFF HUTCHISON: The challenge now is to prove the Myer shopping experience is more rewarding than shopping at Grace Brothers, to
deliver on promises and justify change. Sometimes, though, companies have no option - when two big entities merge, like BHP and
Billiton.
PAUL ANDERSON, BHP BILLITON: The brand is how we want to project ourselves to the outside world and how we want the outside world to
look at us.
GEOFF HUTCHISON: It's August 20, 2001, and BHP Billiton boss Paul Anderson is unveiling a new look for a new company.
After long months of consultation and an estimated $400,000, there it was - a symbol of a resource company discarding its stiff
conservatism and charging to a bright new future. It was either that or three blobs of something oily.
Tim Riches is managing director of FutureBrand, which helped create the new company look.
TIM RICHES: There was an enormous sort of controversy around our launch of the BHP Billiton mark and a lot of criticism about the
perceived cost and the nature of the solution, but if one of the reasons for making a change of this sort is to get people to
question their conceptions about who you are as an organisation, then that really should be viewed as a positive rather than a
negative.
GEOFF HUTCHISON: Australians are famously sceptical about this kind of change, but getting it right is incredibly difficult. Logos
and brand marks are obviously open to immediate and brutal ridicule - but what about names? BHP is believed to have rolled out $20
million to develop BlueScope Steel.
TIM RICHES: The bottom line is, it's pretty unusual to be able to pick up an English language word now and adopt it as a name.
GEOFF HUTCHISON: Amazingly, most candidate words in the English language have already been registered as domain names. So these
days, your new-look company will probably need a new-look name.
TIM RICHES: You look at some fairly high-profile recent examples. Accenture - accent on the future was the rationale behind that
name. The recently released Zinofex - zinc and spinifex. It's an amalgam of elements rather than a distinct word.
GEOFF HUTCHISON: Perhaps the most ambitious rebranding in recent Australian corporate history was the simple red dot of Mayne. Known
to most of us as a transport company, it owned a multitude of businesses but didn't have a brand And so in 2000 it aggressively
began to push its credentials, most notably as Australia's largest private hospital group.
ROBERT COOKE, AFFINITY: One of the things it did achieve was brand recognition and there were certainly surveys done that no-one
really knew that Mayne was Mayne Health and by the end of that branding process, they certainly knew about Mayne Health.
GEOFF HUTCHISON: But beyond the new look, there was big trouble within. Hospitals were losing their autonomy to a centralised grand
plan which alienated doctors and created turmoil. Robert Cooke was brought in to try to stem the bleeding.
You then had changes imposed or perceived being imposed from a corporate level with little or no input from the hospital level and
no managers there to explain the changes, even if they were justified and of benefit. So you had a total backlash at a local level.
GEOFF HUTCHISON: The red dot became a symbol of dramatic and unhappy change - the company share price halved. What did those
mistakes cost Mayne in the end?
ROBERT COOKE: I think that's a question for Mayne, but it cost them their hospital division. Today Robert Cooke is the managing
director of the group which bought all 53 of Mayne's hospitals. The new incarnation is called Affinity and its colour is blue and
calm.
So what's in a name? Everything. And if you're thinking of changing yours, just remember - coming up with a good one is only just
the start. Giving it meaning and value is the real challenge.
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