When marketers chit-chat with non-marketers, the discussion often will touch on what marketers do as part of their regular responsibilities. In most conversations, the marketer will explain they do the activities usually associated with marketing such as advertising, doing research, talking with customers, etc. What is often not included in this discussion is the role marketers play when an organization faces a crisis environment. By “crisis” we are referring to a potentially critical situation that could result in a significant financial and, in some cases, legal predicament for the company. Some examples of situations that may lead to a crisis include: a health or injury issue resulting from using a product sold by the company; a scandal that leads to public mistrust of the organization’s top managers; or a violation of governmental rules leading the company to be blamed for causing environmental damage.
In some cases, the public has clearly decided the name of the product or company that is frequently mentioned in news reports is to blame to the point that when the public is exposed to this name they instantly associate this with the damage that was caused. When this happens for an extended period, the company’s marketers turn to crisis management marketing. In many cases, their work will eventually bring the brand back to being accepted. However, in other cases, where the damage is beyond repair, marketers may recommend only two options to the top decision makers: 1) get out of business or 2) stay in business but change the product or company name.
For instance, the diet product Ayds enjoyed strong sales in the 1970s and early 1980s until the AIDS disease was discovered. The similar sounding names created significant market confusion that eventually led to the product being withdrawn. Another example is Philip Morris, which changed the overall company name to the Altria Group after facing a long period of negative publicity for it tobacco products. While the company retained the Philip Morris name for its tobacco product line, other company product lines are no longer directly associated with Philip Morris.
We now see another company experiencing a crisis that may lead to a name change. As discussed in this CBS News story, Malaysian Airlines, faced with two dramatic events in the space of a few months, may be looking to rebrand. The airline believes a name change is needed if it wants to move beyond the recent accidents.
It is important to understand that changing a brand name can be quite expensive. Not only because of the new graphics and product labels that are required but also the amount of time and money needed to re-establish a relationship with customers. Additionally, whatever brand equity that still exists with the original name will be lost. So companies will only go this route if they view it as the last chance to remain in business.