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Understanding Why Companies Rebrand

Amidst all the conflicting opinions on Dunkin’ Donuts’ strategy to drop the word “donuts” from their name, there has been a rising interest in trying to understand why companies decide to rebrand their entire franchise. Sometimes it’s a new logo, sometimes a different name, but no matter what the case, it causes a rift between the company and its consumer base. Brand loyal consumers feel they’re being betrayed by the franchises they’ve stood by their whole life, so what exactly are the pros and cons of rebranding?

Pros
Some companies rebrand simply because they’ve decided to take their initiative in a whole new direction. For example, Dunkin’ Donuts wants to be known more for their beverages and coffee, as some of the locations sell a very limited amount of donuts. Other companies rebrand in order to help consumers forget about previous marketing or business mistakes. For example, Uber changed its icon and font in order to divert attention from the tension their company was getting due to sexual misconduct allegations. Lastly, rebranding can be a way for a company to bring in a new clientele, or its a forced change due to being bought out by a larger corporation.

Cons
The number one con with rebranding is losing familiarity. You’re taking a huge risk by changing the core aspects of your business. Some customers may feel detached from your business because the rebranding makes the company more corporate. Other times, their brand loyalty and customer lifetime value drops because they no longer like what the new mission statement or purpose of the company is. Lastly, the cost of rebranding is ridiculously high, because sometimes it includes changing all promotional and marketing materials, location designs, and, in Dunkin’s case, dropping the word “donuts” from every single store they own.

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