Rebranding is becoming fashionable. The first to start talking about the need to update brands were the retailers. Recently, CRE has learned that in anticipation of market growth, more than 20 companies working in the real estate market, have decided to clean up and update their "signage".
About twenty companies, working in the real estate market, have recently conducted or are actively preparing to carry out rebranding. Galina Maliborskaya, director of commercial real estate at Colliers International, credits this ardor for rebranding to the tough competition in the marketplace. Today, those companies that are going to reach new qualitative levels, to win another segment of the market, to expand their audience or product line are implementing rebranding.
According to Vladimir Zhuravel, president of the PR and branding agency, PR2B Group, "Rebranding is not always mandatory for companies, but it may well become necessary when merging corporations. It is also necessary to carry out 'anti-aging procedures', if the brand is not relevant in the market anymore or has changed its role in the portfolio of brands, or a more successful brand, focused on the same target audience just appeared." Changes are also needed when a brand wishes to increase its sales, and the target audience, for which it was originally working, is not sufficiently large enough, and it requires re-orientation to different audience. Reasons for rebranding can be divided into three types – structural, strategic and functional.
When rebranding is caused by structural changes, such as a merger of equal corporations, it is often necessary to emphasize the best "identifying features" associated with each of the companies. When merging, the surviving brand is usually transformed, or a new vision is created, with a deletion of the negative past. "For example, a multi-holding company, providing services for land, construction and maintenance of development projects that combines the companies Geokart LLC, Interholding LLC and Ekokonsalt LLC, chose the name Radetely," mentions Vladimir Zhuravel about a case from his own practice. "The etymology of the word dates back to Old Slavonic 'rado', meaning both work and satisfaction from the results of labor." Since the first inventory of lands were carried out in Ancient Egypt, the logo of the company uses a stylized ancient Egyptian hieroglyph meaning "horizon". In general, the logo symbolizes competence, stability and transparency – qualities that correspond to the positioning of the company.
Strategic rebranding is carried out if it is necessary to achieve a different positioning of the company. In this case, it is necessary to coordinate the perception of the brand with the new goal. When rebranding is caused by a strategic change, as a rule, the "identifying features" associated with the scope of activities of the enterprise are changed.
Savage without the snowflakes
The majority of changes occurring to retailers are caused by the active development of new strategic goals of the companies. In early 2010, Savage Company announced the start of its rebranding process. Ksenia Balabanova, director of PR-service at Savage, says that the campaign was designed to reposition the brand towards a new target audience – 25 to 35 year olds, whereas previously the target audience age ranged from 18 to 45 years. Narrowing the target audience was first a response to the fact that buyers aged 25 to 35 are the most solvent part of the audience, and secondly, a response to the opening of the new brand People, designed for the younger generation – between 17 to 24 years old. "In essence, the company has undergone rebranding several times. The first one took place in 2004, and was associated with the expansion of the product line of the store," says Ksenia Balabanova. "Before 2004, the Savage brand had produced warm winter clothing, but later the brand became a fashion store.” In 2008, the company signed a contract with an international brand consultancy firm – Fitch, which handled several tasks associated with rebranding, including the design of the fashion store. Bronze and black colors, as well as photography and installations were used in the design of the store. Men's and women's zones in the store are now separated by the so-called central "zigzag", which is formed by light boxes placed in a special way. Since the company expanded its range to include light clothing, the snowflake, which was the symbol of winter clothes, has been removed from the Savage logo. Under the new concept, Savage is a store that offers clothing using the total look principle, allowing the buyer to choose a complete wardrobe. The corporate colors have changed too. In addition to bronze – the color of the brand, now each direction has its own color: cyan – for the women's collection, rich blue – for the men’s collection, red – for sales specials. The first store of the new format was opened in the Europeyskiy Shopping Center. Today in Russia and CIS countries, there are 17 stores in this new format.
Along with the rebranding, a large-scale advertising campaign has been carried out, part of which was bringing in Ksenia Sobchak as an expert on style. "It is still too early to appraise the effectiveness of the rebranding, but now we see that our brand has become more understandable and accessible for our customers. Customers’ positive responses about the new interior of the store suggest that the changes were beneficial for the company," says Ksenia Balabanova.
Almaz Shireev, business development director at Colin's Russia, says that two years ago his company re-designed its logo. This was needed because of the active development of Colin's. The brand is constantly entering new markets. Today, it is represented in 32 countries around the world, and by 2015, stores should open in another 18 countries, with the number of stores increasing from 600 to 1500. In addition, the new brand is expanding its product range. "Today Colin's is not just jeans and casual clothing, but accessories and sportswear too. A children's line is also in the plans," says Almaz Shireev. "Young people aged from 18 – 35 years are still the target audience of the brand, but we are working to expand our audience, in particular, we want to attract young families. We have improved the interior design of the stores and increased the areas of or retail premises. Now every store occupies at least 300 sqm.”
Incity, a Russian producer of fashionable women's clothing, along with the carrying out of rebranding, is trying to ensure that the interior design of the store, shop windows and merchandising quality will enable the company to compete with Western brands. "The need for a rebranding arises when a company requires a new stage of development, when the company's management understands that it is starting to think in new ways, it is doing business in new ways, and it has new values and new goals," says Anastasia Podakina, director of marketing at HALS. "And the new brand is then expressed in stylistic forms and the logo, designed to broadcast information to target audience and to provide an innovation feeling in the company. The name and logo are the first things that speak for themselves – they form the image of the company."
Thanks to rebranding, the company went away from its old name, which was based on the word "system". The Latin transcription of HALS, with a big red "A" in the middle, has now become the basis for the new logo. Andrey Nesterenko, the president of the company, headed the formation of the new ideology of HALS; it was his idea to make the logo of the brand in the form of a stylized letter A. This symbol is always written in red, it is always larger than the remaining letters of the logo, it is more noticeable, and in the future, the company intends to use it together with the logo – and without it, as a symbol of style and quality.
According to the experts, in the West rebranding is often done to enhance the corporate culture. During such a change, they tend to change the internal culture, to enhance the pride and confidence, to update the competitive energy, to transfer the ownership of units to the parent company.
The need for rebranding can be caused by changing rules in the market, as in the case of Gars Telecom. Here rebranding defined the system changes in the company, and was a response to the new changes in the market landscape as of the autumn of 2008. "Before the crisis, our business was propelled by two powerful engines – the growth of business activity and the office real estate market," says Mikhail Sergeev, director of communications at Gars Telecom. "We developed the so-called premium segment in the corporate sector – quality services, quality customer service with above market rates."
However, under the changed conditions, the company had managed to discover new opportunities. "There is only one way to survive – to grow faster than the market shrinks, and this is done by 'squeezing out the competitors'," says Mikhail Sergeev. It just happened that the basic processes of rebranding – updating business processes and introducing new mechanisms for cooperation with partners occurred in an evolutionary way at Gars Telecom. The image change and the updating connected with this rebranding was the final touch. The company says that they put in a lot of effort, time and money to create the brand's reputation, which services the premium level, ensuring that the word combination "Gars Telecom" would become synonymous to "quality" and "reliability". "Riot of colors, characteristic of retail brands (now our competitors – Beeline, which has swallowed up Golden Telecom, and MTS, which in its turn has absorbed Comstar) could label us as the 'pops', and keep away serious older customers from the mega-corporations, as well as cause distrust among potential new customers represented by tough IT people," says Mikhail Sergeev. "At the same time, during a crisis, when the price began to take precedence over quality, new customers became suspicious of our "golden chair" on the booklet and the tagline "special company", assuming that the expensive promotional materials are followed by unreasonably expensive services." The company had to hastily withdraw from the "gilt" and show that first class service and premium service is now available to companies in any market segment.
Therefore, in the rebranding of the company, the key objective was to maintain the strong feelings of a reliable partner, and at the same time to create even more comfort in the relationship. Gars Telecom is planning that rebranding process will be complete within 7-9 months. It began in December 2010. Despite the positive responses from the customers, the evaluation of the effectiveness of the process will be possible no sooner than in mid-2011.
Lack of merit
A few years ago, a decision was made to convert Bekeron, a concrete and expanded clay slabs plant, which built exclusively administrative buildings, into a factory producing residential housing buildings. "When I was approached for advice on how to do this, I told them that there was no need to convert the plant itself – this would be too costly, but rather change its products, and accordingly, the positioning of the company's 'identifying features'," says Vladimir Zhuravel. "It was necessary to turn the "shortcomings" of the products produced in Bekeron – into merits. Concrete and expanded clay plates are not designed for high-rise buildings. Then we must build low-rise buildings. The rooms in the apartments are too large? Therefore, an improved design is needed! Want to have more rooms? A designer will show you the various options for re-planning." The Bekeron Buildings were sold just like expensive cars, as “prestige” items. The first building was erected on Dmitrovsky Highway, not the most prestigious of locations. However, the builders improved the territory by laying supply pipelines and building good engineering works; it turned into a low-rise building with an improved design. By the second floor construction stage, all apartments in the building had already been sold.
Sometimes rebranding requires a correction of the brand's functionality. If the name of the brand name is too long, or it does not define and is not associated with its activities, it is necessary to enhance the impact of the name and its memorability. If the design is weak, the visual impact is low or the quality leaves a bad impression, we must seek to strengthen the power of the visual impact.
"When rebranding a children's clothing store chain, Rikki-Tikki (carried out by the Soldis Communications Agency), the main objective was to draw attention to the updated brand and to make it stand out from its competitors," says Ilya Krasilnikov, leading expert on working with brands at NAI Becar. "The Agency decided not to use any pictures offered by photo banks, but rather do their own photo shoots, since the protagonists of the brand were to be recognizable Russian children playing in a world of things. Thousands of shots were made in order to catch the sincere emotions of children – smiles, surprise and cunning." This resulted in a catchy new corporate identity, which took second place at the Moscow International Advertising Festival in the "Corporate Identity" category.
Vladimir Zhuravel mentions the example of working on changing the logo for the SUI-Holding. "Originally the logo was a commonplace building. We came up with a logo that would be perceived as the image of a modern multi-level building, and the image of three pillars of coins," says the expert. "Thus, at the same time, it emphasizes the innovative and the investment nature of the company. When we created the brand for Uchinskaya Sloboda Residential Complex, the apartments sold out like hotcakes. A pleasant association was created by using the word Sloboda (freedom), first time to be used in the name of a residential complex. Another successful example of branding was created by the designer Sergei Yakovlev, who used a snail in the logo of the Ekoofis Company. In my opinion, this was brilliant – a snail, first of all, symbolizes environmental friendliness (snails do not live in poor environmental conditions), and secondly, the small house on the back of the snail denotes coziness and comfort." The transfer of brands from one category of the International Classification of Goods and Services (ICGS) to another, also allows a company to stand out and to use iconic symbols that saves money on brand promotion. Typically, in this case there is a focus on the rational and the emotional component of the proposal. "For example, the name of the village Smartville derives from the English word 'smart' meaning intelligent," says Vladimir Zhuravel. "I am personally very impressed by the idea of a smart village. If I could, I would just steal this idea. At the same time, the word Smart is associated with a prestigious city car."
Saving one's reputation
Rebranding is often used by companies to change the negative attitude of the consumers towards a brand. The most striking example of this is the rebranding conducted two years ago by the MIAN Company, in which it "took the surname" of its landmark residential project and turned into the Copernicus Investment Group. At that time, many people associated the rebranding of the company with tax claims and considered the name change as an attempt to escape from a negative image. However, it was obviously difficult to implant into the mind of consumers the fundamentally new name of the company, so in 2009 they organized a mass advertising campaign for the brand AN MIAN.
"Now we are developing more than two dozen brands, related to real estate. Most of the orders concern the rebranding of development companies. The names of many real estate companies today have a negative perception, it is necessary to change the attitude of consumers towards these brands," says Vladimir Zhuravel. Although sometimes, it is enough just to change the management and to get a smart PR representative, in order to correct a notorious reputation of a company. For example, the name of Mirax is a very good one for a real estate development company. Mirax had problems not only with the use of assets, but also with the PR. It said, "We are the Mirax Company, we need no one else." However, in the development business cooperation with the financial community, government and so forth is very important. Reputation is a valuable asset, one of the most whimsical and just, says Mikhail Sergeev. Reputation has a direct impact on a business's capitalization. The so-called "premium to the price” or goodwill is still one of the most difficult coefficients to calculate.
Rebranding as a reflection of a company's evolution is certainly one of the archetypes of its reputation. However, the new graphic elements – that which is primarily seen by consumers, cannot directly affect the reputation. Especially, if some negative events in the company were the motive behind the change in the image.
Growth in sales is one of the key indicators of the success of the new motif. However, a quick result is traditionally achieved only in the retail business, where the effect of rebranding is enhanced by massive advertising support.