What is Rebranding and Why Does a Company Need It?

August 22, 2023

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A growing business faces the fact that its brand needs to go through a transformation process sooner or later. For some, this need is associated with entering new markets, while others change due to reviewing the list of products or services.

Rebranding can be a transformative journey that propels a business to new heights, but it can also be a stumbling block that leads to reputational and financial losses. To ensure the former, it's crucial to discern whether there's a genuine need for rebranding and understand its potential benefits.

If so, you should correctly formulate its goals, outline a work plan, and be sure to study examples of both successful and unsuccessful rebranding so as not to repeat other people's mistakes. We will tell you about all this in this article.

What is rebranding in simple terms?

Rebranding is a set of actions to transform a brand and make it more relevant to the target audience. Changes include:

  • visual elements of the brand (restyling, redesign);
  • communication strategy or even brand philosophy (repositioning).

Even the most successful brands change in parallel with the way the world changes, which is why rebranding is a natural phenomenon.

For example, the Microsoft Windows logo has changed eight times since 1985. With each new iteration, fewer elements remained from the first version. At the same time, the icons of the operating system's programs and applications have also changed.

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Fanta's visual identity has also changed many times over the years. In 2023, the company designed a new version of the logo, which, according to the designers, became more playful, simpler, and versatile.

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Reasons for rebranding

The rebranding process takes a lot of time and money. For example, the oil company British Petroleum spent more than $211 million on rebranding in 2008. Such a complex and multi-stage process should be carried out only if there is a genuine and justified need.

Common reasons for rebranding include the following.

1. Correcting mistakes. Sometimes, positioning and branding were initially developed incorrectly, and it becomes clear that changes are needed in the work process. For example, the target audience does not understand the essence of the company's offer, and it needs to be rephrased. Or the logo is associated with the agricultural business, not with green energy, as planned. In this case, consider making the branding more understandable to potential customers and partners.

2. Structural changes. When new lines of business emerge or a merger occurs, for example, this should affect brand communications.

Subtle changes to a logo or slogan are not always enough. Sometimes, you have to make major changes to branding components to convey the new essence of your offer to your target audience. For example, after a series of acquisitions and mergers, British Petroleum wanted to reflect its responsibility for the environment in its new logo. To do this, the team developed a drawing that resembles a sunflower.

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3. Reputation management. Sometimes, the reputation may be negatively affected by some events, which build wrong associations with the brand. In this case, rebranding can mitigate the negative and help attract a new audience. It also happens that a brand is affected by certain events in the world. For example, against the backdrop of protests against racism, multiple brands in the United States have changed their logos and names. Among them is a PepsiCo product, pancake syrups. The company explained that the packaging of Aunt Jemima syrup has depicted freed slave Nancy Greene since its inception. Now, this fact does not play in favor of the brand, so work on rebranding began.

4. Changes in the preferences of the target audience. When it becomes clear that customers expect something different from a brand, it is worth updating it. An example is the Foxtrot electronics chain. In 2018, it turned out that a significant portion of the company's potential customers were born in the late 1990s and early 2000s. For this audience, the chain's branding turned out to be outdated and unattractive. In 2019, the brand was "rebooted" to meet the needs of a young audience but retained its identity not to lose customers of older age. As part of the rebranding campaign, everyone in Ukraine got used to hearing a "Full Price Gouge" ad.

5. Entering new markets. While branding for the local market, you should take into account the cultural and other peculiarities of the target country or region. For instance, Crest toothpaste is sold in Ukraine and some other countries under the name “Blend-a-med.” The reason is the name, pronounced "cross," evokes the wrong associations for the brand.

6. Moving to another price segment. Over time, the company's product line may change, as well as its price. As a result, the target audience of the brand changes as well. These innovations should be reflected in branding.

7. Fending off powerful competitors. The emergence of new strong players on the market is a good reason to revise your branding. Against the backdrop of prominent competitors, your brand must look bright and convincing to continue developing.

8. Changing the internal philosophy and ideology of the company. A new round of development or a change in its direction should also be reflected in branding. If we go back to British Petroleum, over time, the company has realized the importance of caring for the environment. This fact is reflected in the new branding.

To see clearly if the rebranding is needed, answer the following questions:

  • What do we like about our brand?
  • What problems do we have with the brand now?
  • What should our logo and other visual communication elements say about us?
  • Does the branding convey the essence of our services?
  • How are we currently working on brand awareness, and what do we plan to do in this direction in the future?

Asking these questions will help you understand whether you should consider rebranding as an option. If you do, it will also serve as a basis for deeper work.

Goals of rebranding

The main goals include the following:

  • increasing the company's recognition;
  • expanding the audience;
  • improving the company's reputation and increasing loyalty to it.

Types of rebranding

Rebranding can be dosed and even barely noticeable to a customer, or radical when almost nothing remains of the original concepts, not even the name (for example, Google was originally called Backrub).

Usually, the scale of rebranding depends on its reasons and goals.

If you plan to "refresh" the brand and revive sales due to customer interest in new products, it is logical to choose a partial visual update without excessive changes and rejection of elements familiar to the audience.

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The changes can be more extensive if the goal is to expand the audience by attracting new customers.

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Stages of rebranding

To minimize the risks for a brand while rebranding, you should include the following steps in the process:

1. Analyze the market. You need to collect as much information as possible - about customers and competitors. You can conduct focus group surveys or order market research from a specialized agency. Competitor analysis will also come in handy. Studying how they present their product on the market and communicate with the audience is very important.

2. Develop a strategy and tactics. First, you need to draw up a global plan and then decompose it:

  • define the global goal of rebranding;
  • make a list of elements that need changes;
  • create a work plan;
  • provide time for testing and correction of the mistakes;
  • define the criteria by which the success of the rebranding will be assessed.

3. Implement the plan. At this stage, it is necessary to develop a new positioning, and design (or its elements), update the communication strategy for all channels, and adapt the brand voice to the change.

4. Demonstrate the result to the target audience. Sometimes rebranding is presented in the local market to understand how successful it is. Another option is to launch a large-scale advertising campaign with the new branding so that people can establish positive associations with the updates.

5. Get feedback. Sales will, to some extent, tell you about the effectiveness of rebranding. But audience surveys are also important. They are the literal indicator of whether everything went well and where improvements are needed.

The most common mistakes

Sometimes, mistakes occur during the rebranding process. They can also lead to negative feedback from the target audience and even losses. Here are the most common mistakes.

1. Lack of an integrated approach. If you simply order a new logo and try to integrate it into the corporate identity, the result is unlikely to be good. A partial rebranding should be well thought out, and innovations should be implemented harmoniously and dosed.

2. Rebranding too frequently. You should not immediately update your branding if you have just entered the market or the previous changes were quite recent. Consistency is essential for a customer to fall in love with a brand. If not, people simply do not have time to get used to your company and connect with it.

3. Lack of a real reason for rebranding. It happens that there have been no global changes in the company, and there is no reason for rebranding. However, a new marketer wants to get an interesting case for their resume. This approach is unlikely to yield positive results for the business.

4. Unexpectedness and lack of communication. When you suddenly change everything at once, it is difficult for a customer to identify the brand they are used to. This mistake can be fatal even for the image of well-known brands. It is also very important to convey to the target audience how branding updates will improve their lives.

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More examples

Rebranding of Dunkin' Donuts

In 2019, the Dunkin' Donuts confectionery chain officially became Dunkin'. The company announced this in all communication channels.

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Previously, the company was associated only with donuts, but now this word has been removed from the brand name, focusing on drinks. It was important for the company to emphasize that the range of its establishments is much wider than just donuts.

To prepare the audience for the changes, advertising campaigns with the slogan "America Runs on Dunkin'" have been running since 2006. The emphasis was on the fact that the brand's products energize all Americans. In these campaigns, the name was used in a shortened form, and its change was tested in New England, which is a priority region for the brand.

The large-scale changes affected the website, social media, and stores. In the first year after the rebranding, the company's revenue amounted to $1.37 billion, compared to $1.31 billion in 2018. This may indicate that the rebranding was quite successful.

Pringles: the new image of Mr. P.

In 2022, on the eve of the 30th anniversary of the Pringles brand in the UK, the company decided to change the logo. There were fewer colors, Mr. P lost his lush bangs, and the logo was made flat for better perception.

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Moreover, the character now shows a wider range of emotions:

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The updated logo was part of a large-scale advertising campaign for the brand in 2022. Overall, the company announced that annual sales increased to 16.2%.

Another example of successful rebranding is the GoDaddy hosting service. In 2020, the company changed not only its logo but also its communication system and advertising strategy. Now, the promotion is based on the stories of real users. In addition, the company is positioned not as a seller of cheap domains and hosting but as a friend, partner, and consultant to small businesses.

Judging by GoDaddy's sales growth, the rebranding was successful: in 2020, the company's revenue amounted to USD 3.31 billion, and in 2022, it was already USD 4.09 billion.

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And, of course, let's mention the textbook example of unsuccessful rebranding - Tropicana juices.

Although the new design was brighter than the old one, it did not resonate with the target audience and was harshly criticized. The rebranding resulted in losses of $50 million. And yes, the old design had to be returned because consumer opinion is crucial in rebranding.

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Rebranding is an effective tool that can help a company increase audience interest, attract new customers, and boost sales. Here are the key factors for its success:

  • in-depth analysis of the market and the company's position at the time of the rebranding decision;
  • understanding of the audience's tastes and needs;
  • willingness to act gradually and conduct testing;
  • acceptance of the fact that rebranding may not be successful, and that previous formats may have to be returned.


When is it necessary to rebrand?

The reasons may be different: correction of the initially incorrect positioning, adaptation of branding to structural changes in the business, improving the company's reputation, reformatting in favor of the preferences of the target audience, etc. Rebranding is also advisable when a company enters new markets or moves to a different price segment. Another good reason for rebranding is to build off powerful competitors.

How does rebranding differ from redesign?

A redesign is part of a rebranding - a set of actions aimed at transforming the brand to make it more relevant to the target audience. Here, redesign is a change of some visual elements of the brand.

How to announce a rebranding?

It can be done gradually, introducing changes little by little and looking at the reactions of the target audience. Also, some companies announce a complete rebranding a certain time before it actually takes place, for example, writing about it on social networks or the website and showing what the brand will soon become.