Brand Change By Other Names:

Merger: Two similar size companies come together to form a new entity. Both companies typically cease to exist, forming a new company/brand.

Acquisition: One company purchases another company. The acquired company may continue to operate under its original name, as a subsidiary, or be absorbed entirely. The acquired company loses its autonomy.

Consolidation: When two or more companies combine to form an entirely new company/brand. Different from a merger because both original companies are dissolved, and a new brand is created.

Horizontal Integration: When companies in the same industry and at the same stage of production or service combine. Horizontal integration often reduces competition and leads to economies of scale. For example, two flooring companies merging would be horizontal integration.

Vertical Integration: When companies at different stages of production or the supply chain consolidate. For example, a flooring manufacturer acquiring a retail chain is a form of vertical integration. This helps control the supply chain and reduces costs.

Conglomerate: A conglomerate is a type of consolidation where companies in unrelated industries combine. This can help diversify a company’s business interests and reduce risk since poor performance of one industry won’t negatively impact the entire conglomerate.

Culture vs. Strategy

Regardless of the motivation for undertaking their consolidation strategy, management will first come face-to-face with one simple truth articulated by Peter Drucker: “Culture eats strategy for breakfast.” Culture is all about the people. Culture influences behavior. Culture informs the belief in what works and what doesn’t. People haven’t changed that much—at least not over the last 100,000 years. We’re still tribal. And we’re wired to survive by being risk averse.

The Risk Of Failure

Almost 40% of M&As end in failure, so says McKinsey & Co.. Consolidation programs fail to achieve their goals due to employee resistance. In addition, 5.6% of organizations label themselves “resistant to change.” While we can intellectually agree with the Greek philosopher Heraclitus that “the world is in constant flux” emotionally we are highly suspicious about the “flux” that could impact our career path or our livelihood. Many would argue that “Three Cs of Marketing” (Company, Customer, Competition) should add a fourth C: Culture.

Brands create their own culture, internally and externally. The stronger the brand, the stronger the brand culture. When a brand merges, acquires or is acquired, the culture and its status quo are disrupted. Since brands exist through the lens of internal and external perceptions, marketing must be part of the change strategy. Without factoring in informative and persuasive marketing communication, along with transparent and supportive leadership, you run a high risk of fermenting an internally toxic “we don’t do things that way” environment that is counterproductive, or an externally alienated “who are these people now?” customer base that challenges continued loyalty and sales.

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Brand Culture Struggles

As a leader, you must be aware of the impact change will have on your employees and how to help:

• Job insecurity and anxiety
  • Help by communication and realistic timelines
• Cultural clash and identity confusion
  • Help by bridging gaps and team building
• Increased stress
  • Help by defining roles and preventing burnout
• Reduced job satisfaction
  • Help by rewarding contributions to the transition process
• Loss of key talent
  • Help by retention programs, employee engagement
• Negative impact on Work-Life Balance
  • Help by flex hours, remote work options

Jane Gentry, a well-known business consultant, addresses the high stakes in her article “Unveiling the Hidden Impact of Toxicity on Your Business” by citing a recent study: “… a company stands to lose $12,489 in costs from replacing one toxic worker, which is almost double the figure a company gains from hiring a “superstar”. This figure does not include savings from avoiding litigation, regulatory penalties, or decreased productivity as a result of low morale.” How often have we heard that people, be they employees or customers, are the most important asset to the brand. Some will never adapt to the change for whatever reason. But as for the good ones that do, they need to be kept.

Creating A New Brand Culture

Derrick Daye, a brand consultant with The Blake Project observes: “Most organizations neglect the importance of developing a strong brand culture before communicating their value to the outside world. Management from these companies haven’t thought about how they can expect their employees to deliver a consistent brand experience to their customers when they are not offered a culture of brand consistency themselves.”

During a recent rebrand of a large floor covering company that had acquired two of their competitors, the understanding that employees were at the center of competitive advantage led my partners and I to put as much emphasis on the internal marketing and training for the leadership team as we did the new name, tagline, logo, website, etc. It’s that important. Given that the most trusted source of information during change is the employee’s immediate supervisor, internal marketing must permeate all the way through—from the C-Suite to the warehouse floor. And as with any marketing effort, continuity, consistency, and reinforcement are key.

The Role Of Marketing

Rather than glossing over or paying lip-service to marketing support for the change, smart management will give it careful consideration and additional budgeting, thus increasing the probability that they will succeed. In addition to hiring a brand consultancy to guide the process, marketing plays an indispensable role in creating:

• New brand strategy
  • The goal here is to augment or increase brand equity—not lose it. Does the brand follow a transition phase or a complete departure? And what is the brand story that supports it? Better to have an unbiased third party to help you sort that out.
• New brand integration
  • Portraying a unified identity is vital through name, design. This includes a brand standard, signage, uniforms, give aways, etc.
• Communication strategy
  • Coordination of internal and external campaigns that are key for morale and customer retention and growth. Careful consideration should be given to timing, with internal stakeholders first, followed by customers, then the public at large.
• Customer retention and relationship management
  • Listening to and addressing pain points. Understanding that most assume the worst (price increases, limited selection, loss of representation, etc.) and not the benefits to them.
• New marketing position
  • Refine and enhance, based on new product and service offering. You did this for a reason. Now you have a clean slate to communicate that.
• New value proposition
  • Analyze opportunities and articulate for competitive advantage. What differentiates your consolidation in the marketplace? What can you offer now?
• Sales and lead generation
  • Align with sales to develop new pitches and campaigns. Discover new markets not available to you before and introduce your new brand.
• Digital and content strategy
  • Prioritize online presence, PR, blogs, videos, social media, and website(s) to promote and inform. Remember, it will take frequent reminders to alter perception regarding your new entity.
• Reputation and crisis management
  • Be ready to address misinformation or bad publicity. Be proactive in addressing potential concerns, such as customer overlaps and conflicts.

Managing a consolidation correctly can ultimately mean a strategic advantage for your brand growth. Managing it poorly can create a cultural wall it cannot overcome.

Paul Friederichsen is a partner and brand strategist at The Blake Project.

At The Blake Project we are helping clients from around the world, in all stages of development, redefine and articulate what makes them competitive at critical moments of change from the inside-out. Please email us for more.

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In studying the success of Home Depot you will find that this 46-year-old home improvement warehouse category leader employs both powers to fuel its steady growth and dominance. As with any large retail chain, its exercise of hard negotiations and expectations in tiny vendor conference rooms is raw hard power at work. From there, walk down the hall at its store support center HQ, and you’ll see the brand’s soft power on display in a state-of-the-art exhibit showcasing the brand’s beginnings, preferences, beliefs, and charitable causes. The juxtaposition can’t go unnoticed. Creating a proprietary brand of building supplies or tools that can’t be comparison-shopped elsewhere is the leverage of hard power. Endearing the brand by its generous support of Habitat for Humanity (and inspiring its vendors to do the same) is the flexing of soft power.

In the late 1980s, Joseph Nye of Harvard University examined the concept of power from a geo-political perspective and wrote “Soft Power: The Means to Success in World Politics.” He coined the term “soft power,” which has become a staple of political discourse ever since. But don’t let the label fool you. Soft power is equally powerful, and some would argue more powerful than hard power.

This brings us to the supreme irony of power. Every brand desires it, plans and strategizes for it, and supports its attainment because power means security and prosperity. Yet, the more powerful brands become, the more difficult it is for them to relate to their customer constituency. As with powerful people, powerful brands can become self-absorbed, “believing their own press,” and becoming less empathetic to the very customers that made them powerful. In Home Depot’s case, as with other retail chains, customer alternatives such as Amazon keep the brand’s focus on customer service to stay competitive.

Organic growth is usually a better course than mergers and acquisitions, but often, that’s simply not practical in a rapidly changing marketplace. However, over-emphasis on hard power growth is not the best path to brand building, either. While brands may find power in numbers, soft power balance, as exemplified by Home Depot’s approach, is the combination for ultimate brand dominance.

Paul Friederichsen is a partner and brand strategist at The Blake Project.

At The Blake Project we are helping clients from around the world, in all stages of development, redefine and articulate what makes them competitive at critical moments of change. Please email us for more.

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Until recently, the most infamous of these backlashes was Coca-Cola changing the formula of its flagship product in April 1985. Its rival Pepsi was threatening Coke’s #1 position, starting with the Pepsi Taste Challenge campaign launched ten years earlier. “New Coke”, with a sweeter, more Pepsi-like taste, was met with the instant backlash of public outcry, boycotts, and even support groups formed by disgruntled fans. For almost 40 years, the New Coke debacle has served as a model for the awesome power of brand loyalty and the importance of understanding consumer preferences.

In the meantime, other brands have had their share of troubles, all of which were self-inflicted, unforced errors. The Volkswagen emissions cheating scandal in 2015. Chipotle Mexican Grill E. coli outbreak in 2015. Samsung Galaxy Battery Recall in 2016. United Airlines’ involuntary passenger removal in 2017. My Pillow boycotts due to outspoken conservative politics in 2020. Norfolk Southern train derailment in East Palestine, OH in February 2023.

The latest high-profile brand backlash involves the #1 beer brand and a transgender social media celebrity Dylan Mulvaney. We may never know why or how this decision was made that caused the backlash, but we do know the consequences. According to news reports, in the first three weeks of April, U.S. sales of Bud Light dropped the equivalent of 1% of the company’s overall global volume for that period. For the week ending April 22, Bud Light sales in retail stores fell 21.4% compared to a year ago, whereas rival brands Coors Light and Miller Lite each saw their sales grow by about 21%, according to an analysis of Nielsen data by Bump Williams Consulting. It is similar in backlash ferocity as the New Coke debacle but stimulated by a different decision: choice of media.

Dylan Mulvaney is a powerful social media influencer, made possible by over 10 million of her loyal followers. No doubt Bud Light marketers saw tapping into that as a Big Idea, a brilliant strategic maneuver around rivals to grow the brand’s appeal—especially to a younger audience. However, they seemed to prove that their loyal Bud Light customers were not as enlightened as they thought. It was a miscalculation of epic proportions, with anger and outrage amplified by the very media they intended to use for the brand’s marketing advantage.

Was the risk of hiring Dylan Mulvaney to endorse Bud Light worth it? If you ask Anheuser-Busch management and shareholders, the answer would be no. Is the damage permanent? No again. Consumers have short memories, and eventually most will come back around in time and give the brand a second chance. But there are lessons to be learned from all these examples for managing any brand, large or small.

Prevention Is Worth A Pound Of Cure

Always remember, your customer is the true owner of your brand. That’s because the true purpose of companies is to make more customers. To facilitate that process, the company identifies itself and its product or service as a unique and desirable experience. In essence, that becomes the brand people want to own. Backlashes occur when brands forget that, disregarding the importance of customer’s ownership role. That invariably leads to a loss of trust in the brand and subsequent replacement by a competitor.

Marketers Are Just People, Too

As Derrick Daye of the brand consultancy The Blake Project is fond of saying, brand development is too important to be left up to just the marketers. That means everyone in the organization, from the top down, needs to participate in defining the brand: mission, vision, values, promise, essence, customer journey, culture, and story. Internal marketing is just as important than external marketing, so the meaning of the brand is clearly understood and unmistakable. Circumstances that result in customer backlash, whether it be insensitivity to the customer’s values, changing formulations, cheating standards, or cutting corners are usually the result of forgetting what the brand stands for, and what the customers have come to expect.

Brand Causes Should Reflect Customer Values

There is a growing wariness among consumers of business’ attempts at supporting causes. For example, Disney, My Pillow, and Bud Light have trodden dangerously close to controversial political and social issues that have been polarizing. Backlash can occur when consumers perceive a company’s cause support appears inconsistent with its core business practices or the customers’ own belief system. This can lead to accusations of “virtue signaling” or “woke-washing.” Once again, the bond built on trust between brand and customer is broken, sometimes irrevocably.

Arrogance Can Be Expensive

Marketing creatives are always striving for the Big Idea to gain attention for the brand and themselves. That is not bad. But in an effort to be daring or different, it can also take you over a cliff. Management must stay involved and engaged. In the case of Bud Light, you must wonder if those decisions that led to its backlash were reviewed at all. Brands must be a beacon in the marketplace, not just more noise. They must stand out in the morass of competing claims to its best customer profile.

As we’ve examined, most backlashes are the result of good intentions but poor judgement. While mistakes and missteps are inevitable, every manufacturing company, distributor, retail chain, or contractor should always be reminding their teams what their brand stands for and who their customer is.

The difference between a quick recovery or permanent loss is how you handle it. If public in nature, here are six steps you should follow in the face of bad publicity resulting from a backlash:

1. Act quickly: When bad publicity arises, it’s important to act quickly to address the situation. Delaying a response can make the situation worse and lead to further damage to the brand’s reputation.
2. Assess the situation: Before responding, it’s important to assess the situation to determine the severity of the crisis and the potential impact on stakeholders. This will help determine the appropriate response and allocate resources accordingly.
3. Communicate openly and honestly: Clear and honest communication is essential in any crisis situation, especially when dealing with bad publicity. The brand should acknowledge the issue, provide accurate information, and show empathy for those affected.
4. Take responsibility and apologize: If the brand is at fault for the bad publicity, it’s important to take responsibility and offer a sincere apology. This can help rebuild trust and demonstrate a commitment to addressing the issue.
5. Develop a plan for addressing the issue: After acknowledging the issue and apologizing, the brand should develop a plan for addressing the issue and preventing similar incidents from occurring in the future. This may involve implementing new policies and procedures, providing additional training to employees, or making other changes.
6. Monitor the situation: After responding to the crisis, it’s important to monitor the situation to ensure that the issue is fully resolved and to address any new concerns or issues that arise.

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Brands Are Meant To Serve

As we know, well-defined brands make it easier for companies to separate themselves from their competitors and reach their markets in a more influential and compelling way. From the customer’s perspective, however, the real purpose of brands is to serve them. Traditionally, brands serve their customers by making their purchase decisions easier, satisfying their needs with greater value, and improving the quality of life with trusted, reliable consistency. However, those things are no longer enough.

Resetting Brands To A New, Sustainable Role

In the new reality of climate change, global warming, and social ethics, the traditional four Ps of marketing (Product, Price, Place, Promotion) lack sufficient relevance to connect and motivate most consumers. The great reset for brands requires companies to also consider “People, Planet, and Profit.” This “Triple Bottomline” informs how companies achieve a sustainable direction that goes beyond simply maximizing profits as the end-all, be-all of strategic goal setting. That is because the reset of brands that these companies create, manage, and market must appeal to a new, dominate consumer force: Millennials.

Generational Imperative

Millennials, defined as a group born between 1982 and 1996, have now surpassed the Baby Boomer generation in terms of population (72.12 million vs. 70.68 million). More so than Boomers, Millennials tend to prioritize environmental wellness, human health, resource security, fair trade, and social equity above all else. The adage in business that “all things being equal, a brand with a sustainable reputation is a tie-breaker and nothing more” is becoming less and less true. Millennials are having children, buying homes, and selecting products in a world they are inheriting – and where many believe is a world in crisis. They want brands that are on the same page with them so they will be willing to part with some of the billions in annual spending power they possess. In fact, almost 1/3 of Millennials are worried about climate change and 70% of them will pay more for brands that support a cause they care about, according to recent studies.

The difference in approaching the Millennial market is best summed up by this quote from “sustainability solutionist” Solitaire Townsend: “…talking about your own values isn’t enough, consumers want you to help them live theirs. And that’s the secret to true purpose – serving the consumer rather than talking about yourself. Too much of the cause-related-marketing, sustainability or CSR activities of brands promote what the company is doing, rather than helping the consumer to make their own difference.”

Sustainable Marketing

In our new reality, evidence of sustainability must be more than bulleted product features, and certification badges. You may have successfully checked a box, but have you truly communicated your brand’s commitment to what 88% of Millennials want—for the brands they purchase to help them make a difference. Aside from avoiding the notorious tendency to engage in “green washing,” brands should instead embrace ways to engage their consumers in People, Planet, and Profit issues that hit home. It is not enough to say you are green. You must practice green. And show ways your customers can do so, too.

According to Green Business Bureau.com, this is often easier said than done. “In 2019, a mere 16% of executives stated sustainability as a built-in business function. The majority (50%) of organizations thought sustainability was ‘fairly well’ integrated, as opposed to an ideal ‘extremely well’ target.” The article goes on to observe that the lack of integrating sustainability into the corporate mindset “stems from defective structure, planning and discipline.” And to “… bridge this gap, businesses need a clearly defined sustainability program.” No doubt these percentages have changed since 2019, but the many businesses have work to do, even now, and their brands must reflect their mission.

How ‘Reset’ Brands Work

Helping your consumer to live more sustainably and make a difference can involve any number of methods for reset brands. This can range from developing products with lower environmental impact, to supporting local community groups, and/or advocating for a healthy work-life balance for employees.

What reset brands have in common is that they are doing more than achieving an environmental certification (as important and costly as that is) or touting their own environmental credentials (as necessary and impressive as they are). They are showing by example, how they value environmental wellness, human health, resource security, fair trade, and social equity. These activities, events, and commitments are the genuine outgrowth of corporate consciousness for helping consumers, employees, and communities to live more sustainably.

How You Can Do A Brand Sustainability Reset

Brands that have been successful in sharpening their sustainability reputation and connection with their customers are led by a sustainability officer—someone who is dedicated to the direction, implementation, and marketing of the sustainability efforts – and in coordination with the C-suite, HR, and marketing departments. But you need not be a multi-million or billion-dollar corporation to operate as a sustainable brand. You need a plan, determine what initiatives to tackle, make social responsibility initiatives part of your plan, and communicate your stance and your activities to everyone. For an in-depth look at a 10-step plan, see How to Create a Sustainability Program: A 10 Step Guide to Creating a Purpose-Driven Business.

Brands that are not empathetic to their consumers’ priorities are not positioned to succeed, long term. They will increasingly become irrelevant and lose market share to other brands that are. On the other hand, brands that reset their sustainability posture and helping their customers to live that way by leadership and example, will continue to grow.

It is time to reset.

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Am I running the risk of overstating the obvious? Yes. But, someone needs to in this overly analyzed marketing culture.

How do you see the Big Picture?
When we embark on meeting client needs, we begin the process of Discovery. For many agencies and consultants, this will involve a look at historical data, sales figures, past marketing efforts, competitive assessments, current plans, social media performance, and so on. This is all worthwhile, of course, because often a fresh set of eyes from an outside perspective can easily spot where a problem or an opportunity may manifest itself. Uninfluenced by previous perspectives is key to seeing the unseen.

Every brand has a story.
Brands have a creator—a human being. And brands are “owned” by their customers—also human beings. So without knowing what motivated the creation of the brand or the loyalty to it, you simply cannot see, experience and appreciate the true story behind it. Discovery must probe and challenge clients for the “why” a brand exists and what, if anything, would happen if it never existed at all. You’ll never get this from a S.W.O.T. analysis. As my friend and partner Derrick Daye has often quipped, brands and their perceived value must be “put on trial for their lives” in order to fully understand them. Without that understanding, how can you possibly market them effectively?

Brand stories are built on decision, upon decision.
By asking the right questions, you’ll learn why and how brands are the way they are.

• What was the reason the brand was created in the first place?
• What problem was intended to be solved?
• What challenges were overcome along the way?
• Where did the inspiration come from?
• Who was instrumental in its creation or innovation and what were they like?
• Why did the brand go down THAT road?

You get the idea.

Don’t be judgmental.
Brands find themselves where they are for any number of reasons. If they’re being challenged, it most often is due to:

• Under-funding growth and competitiveness
• Lack of marketing investment
• No or weak innovation
• Cultural irrelevancy or tone-deafness
• Ill-advised extensions
• Sales vs. Management Wars
• Brand identity tinkering or inconsistency
• Disregarding the customer
• Bad press due to a self-inflicted mistake

And so on. Remember, you are being called upon to overcome these parts of the brand’s story, not exacerbate it.

The story is the foundation.
It is vitally important to explore the brand story to ascertain the course of corrective action or exploitation of opportunity. “Getting to the roots” of a brand may yield its most valuable asset—the story itself: the protagonist and antagonist, the struggle and the victory. And always the articulation of the differentiating Big Idea along with the Big Picture.

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