What’s in a name? Firms splash cash on rebranding despite crisis

At just two months old, 2009 has already seen three rebrandings made public. Real estate consultancy firm Atisreal will operate under the name of BNP Paribas Real Estate from June. According to Ioana Momiceanu, president of the board and CEO of the firm, the rebranding in Romania is meant to produce better networking with international players and reputable real estate groups. Company representatives told BR the change would result in integrated services, promoted under a sole worldwide brand. The strategy comes as a natural move in a field like real estate which has became more sensitive to recommendations and to group power since the second semester of 2008.
On the hotel market, after three changes in 2008, this year brings another one, as Radisson SAS globally changes its name to Radisson Blu. The rebranding practically means “only changing the blue box on the hotel's sign, with no significant financial efforts,” Yilmaz Yildirimlar, general manager of Radisson SAS, told BR.
“The hotel's operations will see no change, the rebranding will only better reflect the board's current structure, as SAS is no longer among the company's shareholders. SAS sold its shares in the Radisson SAS, after the company was listed on the Stockholm exchange market. SAS decided to sell its shares because this was not its core business – its core business is the airline. So the new brand reflects the ownership of the company. The process will be done in time, with the new-branded corporative materials gradually replacing the old ones. The entire procedure is in line with Rezidor group's responsible business division,” Yildirimlar said.
This year, the hotel management expects an increased occupancy rate but also a higher price for rooms which will supplant the promotional tariffs in place so far. The hotel expects 60 percent revenues to come from hospitality, while 35 to 40 percent will be derived from the food and beverage segment.
One of the most expensive rebrandings announced this year will involve the insurer Interamerican, which has changed its name to Eureko Romania. Dutch financial products provider, and major shareholder at Interamerican, Eureko took over the firm in 2001.
Following the change, the firm will focus on private pensions, health and life insurance locally, according to an official statement announcing the change. By the middle of 2009, Eureko says it will have completed the takeover of Bancpost's pension fund, and the company will launch a new life insurance deed of the unit-linked type and enter on the optional pension funds segment (Pillar 3) with Eureko Activ. Last year, Interamerican launched optional pension fund Eureko Confort.

Costly indulgence or essential exercise?
At a time when most firms are cost-cutting, expensive re-branding seems like an indulgence. But there is a point to such a strategy. The independent Ethos supermarket chain, owned by businessman Ioan Soloman, will trade expansion plans for a consolidated exiting network through a general facelift. The owner said he would assign EUR 100,000 to creating a new brand image, with the last four supermarkets opened displaying this change. According to the businessman, it is far less risky making “finesse” changes to the supermarkets' image, colors or sales area than expanding in secondary Romanian cities, which involves a long-time investment return.
Some marketing and image consultants say that even in time of crisis, facelifts, investments in corporate image and aggressive advertising are the best strategies for a company that wants to differentiate itself from the competition. However, many firms are avoiding any luxury of this kind in 2009 and instead focusing on sales and investments with a quick return, since the fast cashing-in might boost further investments or even ensure survival in a hard year. A strategic change involves high costs – in 2008, no company paid less than an estimated EUR 500,000 for a rebranding campaign – and doesn't necessarily lead to concrete returns in sales figures, or changes in consumer behavior.
It is instead a natural move dictated by corporate logistics which can follow board changes or a takeover. At least six rebranding strategies were announced for companies in the financial business in Romania in 2008, and most were prompted by takeovers rather than image concerns. In Q4 2008, the local division of ABN Amro Bank re-branded as RBS Romania, following ABN Amro's 2007 takeover by a consortium made up of Royal Bank of Scotland (RBS), Fortis and Banco Santander.
Gemini Capital Consult, the credit broker leader on the Romanian market, changed its name to Kiwi Finance in 2008, following a consolidation and complex rebranding strategy after the Swedish fund Oresa Ventures acquired the company in 2007, in a deal estimated at EUR 3 million. And insurer Asiban will be re-badged as Groupama Asigurari within the year, after the the French insurance company acquired it in 2008. Another expected rebranding this year will see Unita become Uniqa. The change is a result of Vienna Insurance Group (VIG) selling the controlling share package of the insurance company Unita VIG to the Austrian group Uniqa in 2008.
Besides finance companies, the hospitality market has undergone major changes in Romania, with Bucharest-based hotel Sofitel rebranding as Pullman Bucharest World Trade Center, a change put into effect in January. Similarly, the company Parc Hotels Bucuresti has invested EUR 12 million in upgrading the Turist Hotel and its affiliation to Ramada chain. Now the hotel is officially known as The Ramada Plaza Bucharest. One year before, Sky Gate airport hotel in Bucharest rebranded as Angelo Airporthotel, as a result of the hotel's takeover by the Austrian hotel investor Warimpex Finanz-und Beteiligungs AG from the the Romanian-American Enterprise Fund (RAEF), the hotel's main former owner.
Retailers also got in on the act. Carrefour rebranded the 21 Artima supermarkets it acquired as Carrefour Expres at a cost of EUR 6 million, while Mega Image put EUR 3.5 million into rebranding the la Fourmi chain.

Brewing up a rebranding
And 2008 also saw another, rather expensive rebranding. Coffee producer Strauss Romania, controlled by Israeli investors, announced in 2008 a global investment of EUR 15 million in the consolidation of its already existing brands and the launch of a new one, and rebranded Elite and selected brands as Doncafe. The video rebranding campaign throughout 2008 alone left the company's coffers EUR 4 million lighter, according to representatives.
Also in 2008, businesswoman Camelia Sucu decided to rebrand Class Mob as Class Living, and promote this name and a new slogan through a campaign worth EUR 500,000 which, at least from the outdoor point of view in Bucharest, was widely visible.

By Magda Purice

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