In 1898, BJ Johnson Soap Company introduced Palmolive Soap, which descriptively communicated the unique ingredients of palm and olive oils in the soap (versus animal fats) to keep hands nice and soft. The product and name were a smashing success. So much so that BJ Johnson Soap Company became Palmolive and eventually Palmolive-Peet. After merging with Colgate to become a global leader in oral care, personal care and household cleaning products, the Palmolive name may have moved down a notch by coming at the end of the name, but across three centuries, it is notably still present.
Across the ocean, two French glass companies, Souchon-Neuvesel glassworks and Glaces de Boussois merged in 1966 to become Boussois-Souchon-Neuvesel or BSN, boasting an annual turnover of one billion French francs (€ 1.5M). By the 1970s, after more mergers and acquisitions, BSN Gervais Danone was the largest food group in France, offering everything from ready-to-eat meals to drinks, pasta and packaged foods.
By the early 1990s BSN Gervais Danone looked to emerging markets such as Asia, Latin America and South Africa for millions of fresh, untapped consumers. To position itself as a global food powerhouse, the company realized that the cumbersome and lengthy name of BSN Gervais Danone was not evocative enough to match its new objective at the global level.
The company recognized that BSN wasn’t known and didn’t have any inherent meaning beyond the company itself. From a consumer standpoint, the initials were completely invisible. According to Margaret Youngblood, former executive creative director of Landor Associates, BSN wanted to stand for three things: purity, wholesome, and natural.
After extensive research, it was determined that the Danone brand captured the three attributes best. At the time, the yogurt brand enjoyed brand equity in over 30 countries and contributed to one-quarter of the company’s total revenue. The name also tied into company history in that the dairy product was originally named after the founder’s son, meaning Danny or “little Dan.” (The brand is referred to as Dannon in the US.)
Potential downsides of bumping the product brand up to the corporate level were considered and drew on real-life examples such as Pepsi the cola product and PepsiCo the company. In the end, the company was christened Groupe Danone and a visual mark of a little boy gazing at a star in the sky was created.
It was decided that products in the portfolio that captured the trinity of values would carry a primary endorsement of the Danone name and the little boy visual mark, serving as a verbal and visual link between all of the product lines, the corporate brand and its associated values. On the back of Evian water or Lu cookies, for example, you’ll find the mark. Products that may not quite cover all values, such as Kronenbourg lager, sport a plain text endorsement, linking the product back to the company brand.
In the case of Bledina, a natural baby food that is so well known in France the name had become synonymous with “baby food,” another strategy was devised. To leverage the brand and associate its “natural” equity with the corporate brand, a migration plan was put into place to slowly transfer the name to “Bledina by Danone” and then to “Danone Bledina,” as its currently known.
A decade later, the re-branding strategies have largely been successful. In 2003, Groupe Dannone’s net sales growth was up 21.7 percent to US$ 1.055 billion (€ .85B).
Of course leveraging a successful, existing brand name is not without risks. As is the case with any single-brand strategy, putting all your eggs in one basket can be perilous.
“One risk is that if something goes wrong with that product or it starts to tank, and the corporate brand is completely associated with that product brand, the corporate brand will take the hit,” says Patrice Kavanaugh, an independent brand consultant with over twenty years experience.
Youngblood agrees, “[The downside is] if a product or line doesn’t have positive goodwill, it will rub off on the corporate brand. For example the Phillip Morris company changing their name to Altria – even though they were the largest consumer product company in the world, their corporate name actually shared the name of their cigarette division which had a terrible reputation and was rubbing off on the corporate brand. It was an impediment to the other brands that they owned like Kraft and Nabisco.”
Another example of a product adversely affecting the corporate brand is Perrier. The French sparkling water in the famous green bottle was a product named after its founder, Dr. Louis Perrier at the end of the 1800s. After enjoying a century of illustrious associations from English monarchy to Manhattan yuppies, by 1992, the company Source Perrier was no more. Unfortunately for the company and its consumers, traces of benzene, an industrial solvent and a carcinogen, were found in samples of the mineral water.
Unlike the Tylenol contamination earlier in the 1980s, the Perrier contamination was from the actual spring source rather than a misguided person outside of the company. Seventy million bottles and several hard-learned PR lessons later, Perrier’s stock price fell one-third by the end of 1990. In 1992 it was acquired by Nestle Waters and has yet to regain its emperor-like status.
In the end, choosing to re-name a corporate brand from a portfolio of existing brands requires the same benchmark process as creating a brand new name. Advises Kavanaugh, “You have to establish the strategic criteria of what you want the name to communicate – in essence the core values that are meaningful and differentiated from your competition. And, of course, it has to be short, memorable, pronounceable, and not mean anything negative in different languages.”