There exist innumerable reasons why a company decides to change its corporate identity. Perhaps the identity has become dated and is inconsistent with the company’s strategic marketing objectives. Or management wishes to signal a change in competency or culture. Maybe a new company is created as a result of a merger or acquisition. The reasons are many. One scenario that comes up frequently is that a company changes its name because the name has become self-limiting and no longer reflects the company’s positioning.
Examples of this go way back. NCR no longer sold cash registers exclusively. International Business Machines became better known for manufacturing computer hardware. Northwest Orient began flying beyond the East to destinations around the world.
However, there are instances where the brand name has so much strength that it is worth keeping despite apparent deficiencies: 7-11, for example, is open twenty-four hours and you’ll never get a room at Motel 6 for that price.
The food industry, always fluid, is particularly keen on communicative name changes as a means of re-positioning. An IHOP restaurant was a ghost town from noon to midnight because International House of Pancakes suggested that all it served was breakfast.
One of the more successful examples is Kentucky Fried Chicken’s change over to KFC; a strategic migration away from “fried” and associations with high-cholesterol, greasy foods. Importantly, the move to KFC provided an open door for the chain to expand its menu to include more “wholesome” options for the newly emerging healthy lifestyle audience.
Occasionally these attempts at re-definition through name change fail. For some time Radio Shack was suffering from the fact that the overt association with radios belied the fact that the company sold contemporary electronic accessories. As a result, the company was losing market share to Best Buy, Circuit City and other competitors. Despite a new, more progressive identity developed by Landor Associates, sales remained flat.
Thus the most expedient, if unimaginative, option was for the firm to simply drop the “radio” and become “The Shack.” Cited by the company as a herald of its reinvention, the gloss-over of chronic management ills failed to sew a silk purse.
Which brings us to Pizza Hut. Long associated with fast-serve, middle-tier pizza, the company found itself fighting for survival among a glut of mainstream and artisan competitors. To better differentiate itself, the company began to serve a wider variety of food items. However, sales remained sluggish because, despite aggressive advertising to the contrary, consumers still thought the restaurants were limited to pizza.
Following the trail blazed by Radio Shack, the company in around 2009 opted for dropping its core competency from its marquee, becoming simply, “The Hut,” a proposed rebranding of specialty locations offering a limited menu of items not found at traditional Pizza Huts. Another approach was the slightly upscale “Pizza Hut Bistro.” All of these “baby steps” to reposition the company may have simply confused customers, leaving them to wonder what’s behind still another logo refresh (right) and a new positioning, “the flavor of now.” How long this tack will last remains to be seen.
Companies considering name changes as a means to reposition, even reinvent, themselves would be wise to understand that a name change alone is not a panacea for solving real managerial and communication ills. Only when change within a company becomes systemic, from top to bottom, can a name change be anything other than cosmetic or possibly damaging. As Shakespeare might have written, a shack by any other name is still a shack.