The Campbell Soup Company – make that The Campbell Company – recently made headlines when the 155 year-old company announced it was rebranding and dropping "Soup" from its name, pending shareholder approval in November.
Mark Clous, Campbell's president and chief executive officer has been quoted as saying that the rebrand will better reflect the "full breadth of the company's portfolio."
While it may have shocked consumers, Yanliu Huang, PhD, a professor of Marketing in Drexel University's LeBow College of Business, explains what goes into a brand's decision to refresh and why it makes sense for Campbell's.
Campbell's Soup is 155 years old. Why rebrand now? What are the potential risks and benefits associated with a brand refresh?
Campbell's recent rebranding strategy, which involves dropping the word Soup" from its name, represents a significant shift in its brand identity. The goal of rebranding is often to reposition a brand in the minds of its target customers. In Campbell's case, the rebranding aims to change consumers' perceptions by highlighting that the company offers a wide range of products beyond its iconic soup. In recent years, Campbell's has successfully expanded its offerings to include a variety of meals and snack brands, including popular ones such as Goldfish, Kettle Brand, Pepperidge Farm, Prego, Cape Cod, Lance, Milano, V8, and Snyder's of Hanover. Sales of these snack brands now account for almost half of the company's total sales volume. As a result, this rebranding move better reflects Campbell's increasingly diverse product lineup.
There are both pros and cons associated with a brand refresh. On the one hand, rebranding is an effective way to update a brand's image and refresh the associations customers hold in their minds, which could positively impact firm performance. On the other hand, rebranding carries the risk of diluting or losing the original positive brand perceptions, potentially leading to customer confusion and reduced brand recognition, which can negatively affect firm performance.
What can other brands learn from this?
Similar rebranding efforts include Starbucks removing the word "Coffee" from its logo in 2011 to signal its offerings beyond coffee, and Dunkin' Donuts dropping "Donuts" from its name in 2019 to emphasize other options such as coffee. These examples, along with Campbell's case, suggest that in today's rapidly evolving competitive environment it can be beneficial for companies to update their brand identity and strategy in response to shifting customer preferences and the company's changing focus. Failure to adapt to the dynamic market could quickly render brands outdated and cause them to lose their competitive advantage.
Why do brands periodically refresh their identity?
Rebranding is often necessary due to changing market dynamics, which can come from both internal and external factors. Internal drivers might include changes in business structure or strategy resulting from acquisitions or mergers. External factors could involve government regulations, external stakeholders, economic conditions, or shifts in consumer preferences. However, companies must carefully consider various factors when making rebranding decisions, such as whether the benefits outweigh the costs, how and to what extent the corporate brand should be changed, and the potential internal and external resistance to the brand change.
How can a brand refresh impact consumer loyalty or other areas of the business?
A brand refresh can positively impact consumer attitudes, customer loyalty, brand equity, and stock market returns. Specifically, an updated brand identity and improved brand strategy can help customers better understand the company's offerings, leading to increased demand and loyalty, ultimately driving higher revenues. Rebranding can also signal to stakeholders improved product standards and value, which can result in positive stock market reactions.
More importantly, what customers know about a brand, often referred to as the brand's knowledge structure in the customer's mind, is the foundation of brand equity. Brand knowledge is reflected in customers' minds as an associative network, where each node stores information related to the brand's associations. These associations are shaped by a customer's experiences with the brand, including its past performance, word-of-mouth, advertising, and more. The strength of a brand, or the degree of brand equity, is related to these associations; stronger brand associations lead to greater brand equity. Therefore, rebranding efforts can positively influence these brand associations, thereby impacting the existing brand equity. Strong brand equity and positive brand attitudes often result in favorable purchase intentions.
What else should people know about rebranding?
Rebranding efforts are often multidimensional and can involve changes of varying magnitude, from modifications to the brand name, logo, or slogan to adjustments in the value proposition or target customers. The effectiveness of rebranding depends on various factors, such as the intensity of competition. For example, firms may undertake rebranding to mitigate uncertainty in a highly competitive market. Such a change in brand identity can enhance investors' confidence in the firm's ability to maintain a competitive advantage, particularly in industries with intense competition.
Media interested in speaking with Huang should contact Annie Korp, assistant director, News & Media Relations, at 215-571-4244 or amk522@drexel.edu.
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