In these days of economic challenges and an ongoing interest in building brands, an important naming trend for multibrand companies is developing: the elevation of one existing brand name to become the new company name.
This trend is provocative. It represents a change from the decades-old practice of starting over with a newly created name, when the parent company grew beyond the business or geography represented by its old name, or when it was not feasible to adopt the name of either of two or more merger partners.
In fact, these two circumstances are the root of much of the enormous "corporate identity" industry that sprang up in the 1960s, resulting in an avalanche of work for trademark attorneys and for design and branding firms.
The phenomenon has given us such company names as 3M (formerly Minnesota Mining and Manufacturing), Starwood (e Sheraton, Westin, Ciga and W), and Verizon (formerly GTE, Bell Atlantic and Airtouch), among hundreds of others.
The strategy is aimed at avoiding the creation of entirely new company names, and for a parent company to adopt the name of one of its businesses, divisions or brands instead. Old arguments about limiting shareholder value, investor confusion and employee disloyalty (if you work for a different division), all caused by having a name that does not reflect the breadth of a company's offerings, obviously no longer apply in the eyes of these companies.
A recent U.S. example of this trend is the Target Corp., adopted in 2001. Formerly Dayton Hudson Corp., the renamed parent encompasses prominent retailers Marshall Field's, Mervyn's, Target and SuperTarget stores. Another example is the former Woolworth's, which adopted its newly created company name, Venator, in 1998, but changed again to become Foot Locker Inc., one of its brands, in 2001. And from the convenience store category we have the Southland Ice Co., which in 1927 began selling milk, bread and eggs on Sundays and evenings, when grocery stores were closed.
The stores were originally called Tote'm stores (customers toted away what they'd bought), and renamed to 7-Eleven in 1946 to reflect their expanded hours, but the parent company remained Southland. In 1999, the corporate name was changed to 7-Eleven Inc., finally acknowledging its primary brand.
An early example of this trend is the former Consolidated Foods, which chose to become Sara Lee Corp., despite its ownership of many other prominent brands including Ballpark, Jimmy Dean, Chase & Sanborn, Chock Full o' Nuts, Hills Brothers, MJB, Bali, Hanes, Playtex, Wonderbra, L'eggs, Kiwi, Meltonian, AquaVelva, Brylcreem and Badedas. Who would have ever guessed this empire of branded goods was owned by a frozen poundcake company?
From Europe, a good example is Boussois-Souchon-Neuvesel, the 1966 merger of two French glass companies (soon shortened to BSN), which took control of Evian in 1969. Merging with Gervais Danone in 1973, the company name became BSN Gervais Danone. Acquisitions in the '80s and early '90s added prominent brands General Biscuit, Jacob's, Lea & Perrins and Volvic, but the company name remained unchanged. And what did they choose in 1994 as their new company name? Simply the Danone Group, elevating just one of its brands.
Trademark issues raised by this strategy are fairly minimal; because the holding company continues to sell product under the names of its different individual brands, wider trademark protection for the newly elevated parent company name, beyond its own trademark classes, is typically not sought. More challenging can be corporate name-availability issues in relevant jurisdictions, but this is also usually fairly easy, assuming the brand name being elevated is well-known enough to have scared off other users, even in other businesses.
But this new naming trend may be difficult to implement from a marketing perspective. Its success is contingent on the scope and flexibility of the brand selected as the new parent. Certainly a brand such as the U.K.-based Virgin, which always defined itself more as a lifestyle or set of values than as a particular class of goods, has been able to extend itself across categories as varied as travel, banking, music, beverages and telecom.
In contrast, brands such as Sara Lee, Citi or Campbell's Soup are more loosely associated with specific classes of goods, and face a tougher challenge as holding company names. Does Campbell's Soup Co. get credit for owning Pepperidge Farms, Prego, Swanson and V8?
Executives who must make a decision regarding a new parent company name need to carefully weigh the advantages of elevating an existing brand name -- familiarity, awareness, established trademark rights -- with the brand baggage and limitations that name may bring along. This assessment must then be compared with the positives and negatives of creating an entirely new parent company name and image.
SB Master is president of Master-McNeil, a company that creates brand names. It has offices in locations including Berkeley, Calif.
