Naming Brands – Individual or Company Name?

It should now be clear that we seek to reduce the complexity of buying situations by cutting through the vast amount of information to focus on a few key pieces of information. A brand name is, from the consumer’s perspective, a very important piece of information and is often the key piece. It is, therefore, essential that an appropriate brand name is chosen which will reinforce the brand’s desired positioning by associating it with the relevant attributes that influence buying behavior.

A brief consideration of some very well-known brand names shows that rather unusual reasons formed the basis for name selection. However, in today’s more competitive environment far more care is necessary in naming a brand. For example, the Ford Motor Company was named after its founder; Lloyd’s of London because of its location; Mercedes because of friend’s daughter; and Amstrad after conjuring various letters together ( Alan M. Sugar Trading plc). Today, however, because of the increasing need to define markets on a global basis, idiosyncratic approaches to naming brands can lead to failure. For example, General Motor’s Nova failed in Spain because the name means ‘doesn’t go’, while Roll Royce’s plans to wrap a new model in mysterious fog because of the name ‘Silver Mist’ were fortunately halted when it was noted that ‘mist’ in German means ‘dung’, which obviously would have elicited different images.

When examining brand names, it is possible to categorize them broadly along a spectrum, with a company name at one end (e.g. British Telecom, Halifax), right the way through to individual brand names which do not have a link with the manufacturer ( e.g. Ariel, Dreft, Daz, Bold and Tide emanating from Procter & Gamble). There are varying degrees of company associations with the brand name – there are brand names with strong company endorsement, such as Cadbury’s Dairy Milk, Castrol GTX, Sainsbury, Baked Beans and brand names with weak company endorsement, such as KitKat from Nestle.

There are many advantages to be gained from tying the brand name in with the firm’s name. With the goodwill that has been built up over the years from continuous advertising and a commitment to consistency, new brand additions can gain instant acceptance by being linked with the heritage. We feel more confident trying a brand which draws upon the name of a well-established firm. For example, building upon high awareness and strong associations of the brand with healthy eating and children’s tastes, Nestle’s Shreddies was rebranded Original Shreddies and augmented by two brand extensions, Frosted Shreddies and Coco, Shreddies. The heavily promoted new brands were able to benefit from similar associations built up over the years by the Shreddies name. In this example, however, the brand name was extended to a sector not dissimilar from that where the original brand’s strengths were built. If this is not the case, the company’s image could be diluted by following a corporate endorsement naming policy.

Nonetheless, whilst a brand can gain from an umbrella of benefits by being linked with a company name, the specific values of each still need to be conveyed. For example, whilst organizations such as Midland Bank have been promoting the benefits associated with their corporate name, there is a danger of not adequately promoting the benefits of the individual brands (e.g. Meridian, Vector ,Orchard) leading to possibility of confusion for us. Interestingly, when a corporation has developed a particularly novel concept, then the brand is launched without such a strong corporate name tie. Midland’s First Directs a very different approach to banking and the brand was launched very much as a stand-alone brand using the black and white logo to communicate the no-nonsense approach.

There are obvious advantages in all aspects of communication to be gained from economies of scale when an organization ties a brand name in with its corporate name. This advantage is sometimes given an undue importance weighting by firms thinking of extending their brands into new markets. This whole question of brand extension is a complex issue which involves more than just the name. However, it is worth mentioning here that in the 1990s more products and services were marketed under the same corporate-endorsed brand name. Nonetheless, to help the brand fight through the competing noise in the market, it is still essential to know what the brand means to the consumer, how the brand’s values compare with competitive noise in the market, it is still essential to know what the brand means to the consumer, how the brand’s value compare with competitive brands and how marketing resources are affecting brand values.

When striving to have coverage in each segment of the market as, for example, Seiko do with their watches, it is important that in dividable brand names sufficiently reinforce their different brand positioning. Some firms try to differentiate their brands in the same market through the use of numbers. When this route is followed, however, the numbers should be indicative of relative brand performance – in the home computer market the ‘2000’ model could have approximately double the functional capability of the ‘1000’ model. In some markets, firms do not appear to have capitalized on naming issues. For example, in the telephone answering machine market where it has a notable presence, Panasonic brands four of its models as T1440BE< T1446, T2386DBE and T2445BE. Consumers cannot infer much about relative differences from these brand nomenclatures.

Another advantage of using individual brand names is that if the new line should fail the firm would experience less damage to its image than if the new brand had been tied to the corporation. The following example shows how a failed brand extension damaged the whole company’s image. Continental Airlines, inspired by the success of Southwest, decided to enter the low-budget no-frill cheap flights market using the brand, Continental Lite. However, at the same time it continued to offer a full service under the original Continental brand. The company believed that it was possible to serve both markets and ignored the inevitable trade-offs on cost, service and efficiently. When Continental Lite was ultimately forced to with draw from the market, consumers became aware of the failure of this venture and, due to the common use of ‘Continental’, there would have been some adverse perceptions about the parent corporation.

Any one of the intuitive concerns below could have been enough to keep these powerful names from ever seeing the light of day, if those making the decisions had forgotten that names don’t exist in a vacuum –

Virgin Airlines