Corporate change of name can be a risky venture

Whats in a name? That which we call a rose by any other name would smell as sweet, Shakespeare famously said in "Romeo and Juliet". But in the corporate world, a name change can be a risky venture.

Witness Eircom, formerly Telecom Eireann, which is spending £6.5 million to get its transformation right, in what is the largest corporate identity change in Irish history.

"A name change is something no company undertakes very lightly," says Mr John Fanning, managing director of McConnells Advertising Service. "It can be extremely expensive and disrupting. And its always difficult to get new names into the public mind, especially today with so many names screaming at the public for attention."

Mr Gerry O'Sullivan, director of corporate relations at Eircom, agrees. "The fundamental downside that can accompany any name change is that the marketplace doesn't absorb the message," he says.

Eircom is hoping its massive advertising and promotional campaign will prevent that. The company is spending £800,000 on a three-week television and newspaper advertising campaign and millions more on re-branding everything from phone kiosks and vans to notepaper, employee uniforms, nameplates and signage on buildings, marketing literature and websites.

So far, the results have been encouraging. "We are tracking familiarity with the new name," says Mr O'Sullivan. "After the first week, awareness was running at 93 percent, which is phenomenal. My information is that if you were hitting 65-70 per cent after week one, you'd be doing pretty well. This is quite amazing."

Corporate names are now an essential part of the corporate brand and branding is a central building block in marketing a company's products or services. Branding allows companies to differentiate themselves from competitors and to build relationships with customers. But what exactly is a brand?

"A brand is a concept," says John Casey, chief executive of The Marketing Institute. "It is an image or a message that a supplier wants a customer to have in their mind when choosing a particular category of product or service from a range of products or services. Essentially, its a complete feeling about a product."

Brands are now considered to be one of a company's most valuable assets. Think of such lifestyle brands as Big Macs, Coca Cola or Nike. Without the name and the values associated with it, they'd be just another hamburger, fizzy drink or pair of runners.

But branding, once associated primarily with products, is becoming increasingly important in the services sector. In some cases, manufacturers with established credible brands have used the brand to extend into other products and services.

Marks & Spencer, for instance, has moved into financial services, Coca Cola has created a clothing range and Virgin, one of the strongest brands around, has extended its brand to cover products and services as diverse as music, airlines, financial services and cosmetics.

Until recently, former state-owned phone companies, which operated in highly regulated, monopolistic environments, did not have to worry about branding. They were the only player in town.

But deregulation and the move from state to private ownership has changed all that.

"Branding is becoming hugely important in our industry," says Gerry O'Sullivan. "We're trying to reposition the company in the public's mind as a full-service, multi-media, company and not just a telephone company. It's very important for former telephone companies to move away from a technology focus."

In general, marketing experts advise against changing successful, established names, unless there is a compelling reason. Given the massive changes facing Eircom and its need to reposition itself in the market, a new name, look and feel were probably essential, they say.

The word Eircom (eir and com) was a clever choice. It signifies both Irishness and the transformation from a phone company to a communications group, as the company intended. It is also short, easy to pronounce and has no negative connotations for an international market, all essential attributes of any corporate or brand name. Apparently, many Europeans had difficulty pronouncing Eireann while some Americans assumed Telecom Eireann was an Iranian phone company.

According to Mr Fanning, the name a company chooses is actually less important than people might think, provided it meets the key tests of pronounceability, clarity and lack of negative connotations. "The public is not all that concerned over what you call yourself. The only thing of issue is whether they remember it," he says.

The name does not even have to be connected with the product or service. Think of Shell. It has nothing to do with petrol, but as a result of heavy and prolonged advertising over many years, it is firmly established in the public mind as a petroleum brand.

Some names fare better than others. Nua, the name chosen by the Irish Internet services company, is a good name, Mr Fanning says. It is easy to pronounce, has an Irish connotation, most people know it means new, and it ties in well with the newness of the emerging Internet economy.

By contrast, Diageo, the name given to the company created from the merger of Guinness and Grand Metropolitan, is difficult to pronounce, hard to remember and has no clear connection with anything.

Diageo derives from two words: dia, a Latin word meaning every day, and geo, a Greek word meaning world. It is meant to convey a group with brands which are enjoyed every day, all over the world. But, other than classical scholars, how many people will understand the name? Or, more importantly, remember it?

"A name is merely a kind of holding device. A name itself isn't important. Its what you do with it, the values and associations that you surround it with, that are important," Mr Fanning says.

For Eircom, the challenge in the months ahead will be establishing those values and associations in the public mind.

Sandra Burke is a freelance journalist