Learn Blog

Why do companies change their names?

Written by Ideon | Apr 16, 2021 12:39:54 AM

 

“Because it is my name! Because I cannot have another in my life!”

The Crucible (1953)

So cried John Proctor at the climax of Arthur Miller’s Salem Witch Trial-cum-Red Scare classic, in existential turmoil over the prospect of affixing his signature to an untruth. While the playwright’s protagonist was soul-tormented over his name being associated with a falsehood, a surprising number of giant corporations—from Google and JCPenney to KFC and now Dunkin’ Donuts—seem all-too-willing to alter or abandon their hard-won names. Why?

Dunkin’ Donuts’ recent and very public experiment is instructive here. In early August 2017, the Massachusetts-based chain rolled out in Pasadena, CA, its first test storefront bearing a new name and slogan: “Dunkin’: Coffee and more.” In a statement announcing the trial run, the company referred to itself as “a beverage-led brand and coffee leader.” As The Washington Post reported, Dunkin’s tentative renaming seems all about the fast food chain pivoting to a healthier menu and its aim to go head-to-head against Starbucks for morning coffee dollars.

Is Dunkin’s potential desertion of Donuts a dumb move? If the company’s long-term strategic plan is to lean hard into both healthier dining options and position itself as the blue collar alternative to worker bees’ morning cup of Joe, a renaming might make good sense. And, to its credit, the chain is being careful with its rollout, seemingly gauging customer reaction before committing to an irrevocable, international name change affecting thousands of branches.

That wariness is warranted: a company or product name is the most perfect and essential part of its brand. Executive leadership comes and goes, markets fluctuate, fads spike and fade, but one’s name is perhaps the fundamental attribute of a brand. One’s name is where brand loyalty and equity resides. And one’s name should never have a real reason to change unless there is something that truly undercuts its meaning. (This is especially true in an age of globalization, given the legal complexities of “owning” a name and having it registered worldwide, as well as the fluidity of market category issues.)

Some recent examples exist of significant corporate name changes done right—and for good, if differing reasons. There’s simple shortening, as in the historic case of International Business Machines reverting to its popular acronym IBM and, more recently, Kentucky Fried Chicken distilling its essence down to KFC. In both these cases, the companies’ abbreviations had supplanted their proper, legal name in the public imagination. (The latter example fueled urban legends that the moniker swap occurred because the fast food giant’s product did not contain actual chicken, which is ironic because recently, KFC in the UK actually did run out of chicken and half of their outlets closed their doors.)

Sometimes a brand’s essential offering stretches beyond its name, and a mature company outgrows its original identity. In the nonprofit world, the YMCA rebranded itself the Y because the iconic nonprofit had simply outgrown its name and offerings: it was no longer a male-only, religion-focused organization, and had moved well beyond a traditional “gym & swim.” Similarly, the American Association of Retired Persons, in 1999 officially changed its name to its abbreviation, AARP, in acknowledgment that more than half its nearly 40 million members were not in fact retired.

On the other end of the naming spectrum are crisis and issues management situations in which a company’s name has become so tarnished, so inextricably associated with a reputational debacle, that it’s best for all stakeholders involved for the original name to be jettisoned. An historic case of this type of thing occurred in 2003 when tobacco products giant Philip Morris Co. Inc.—makers of cigarette brands including Marlboro and Chesterfield, but at the time also holding company of other, more innocuous brands like Kraft—changed its name to the generic-sounding Altria Group. (In the event, the move didn’t really fool anyone.)

Other times, a corporate name change becomes necessary to avoid confusion and/or to fend off litigation. Though many have fond memories of George “The Animal” Steele, the World Wrestling Federation still ran afoul of the World Wildlife Fund (another WWF), and was forced to tweak its name to World Wrestling Entertainment, Inc. in 2002.

In the case of historic corporate recall crises such as Tylenol and Toyota’s unintended acceleration and sticky pedal controversies of the late aughts, so entrenched in popular consciousness were these brand names, and such reputational capital had both companies created over the years, that it likely never occurred to these giants to mess with their names.

Reinvention—especially in the realm of pop music, where idols like David Bowie, Madonna, Lady Gaga, and P. Diddy (or Sean Combs or Puff or Love), regularly toy with and retool their identities—can be refreshing and liberating. It’s a uniquely American art form. But, as Arthur Miller’s flawed protagonist reminds us, most people and corporations are stuck with just one name in this lifetime.

Before considering a major name change like Dunkin’, companies would be well advised to undergo a simple stress test: Are we being swayed by trends of the moment? Is this just a short-sighted PR move? If this is crisis related, is the issue something we can overcome? Or, has the company’s essence changed and grown beyond its current name?

Putting your most essential ID process through that kind of rigor is the kind of thing that gives branding a good name.