Rechristened
thus
Business Today — September
28, 2003
When
it comes to announcements regarding people or
companies changing names or addresses, print rules.
One glance at the classified section of dailies
should be adequate proof of this. So, it wasn't
altogether surprising that one of the most high-intensity
print campaigns of August and September had everything
to do with India's largest truck-maker changing
its name. The campaign itself was nice in a touchy-feely
sort of way: soft focus visuals, a complete absence
of the predictable cars or trucks, lots of text,
a few subtle pats-on-the-back and a few more not
so subtle ones, and the announcement about the
change in name.
For
those who missed the campaign, this was all about
Tata Engineering changing its name to Tata Motors.
The company had originally been christened Tata
Engineering & Locomotive Company when it was
founded in 1945, but the name had been rapidly
abbreviated to TELCO (tell ko, phonetically) and
then changed, not too long ago, into Tata Engineering.
Tata Motors isn't a bad choice: After selling
2.2 million trucks and buses, putting India's
first indigenously developed car on the roads,
and establishing a presence in 70 countries, any
company can be pardoned a little hubris; and Tata
Motors may well have adopted its present name
to indicate its aspiration to be a global car
maker of note.
Every
car major in the world loves the suffix 'Motors'.
General Motors. Ford Motor Company. DaimlerChrysler
Motors. Honda Motors. Hyundai Motors. Suzuki Motors.
Tata
Engineering isn't alone. Not too long ago a clutch
of Indian cellular phone companies in which Hong
Kong's Hutchison Whampoa had a controlling stake
changed its name to Hutch, creating in the process,
what was then the country's second largest cellular
network. VAM Organics morphed into Jubilant Organosys
in late 2001, replete with a logo redesigned by
Shombit Sengupta's Shining Strategic Design. Chennai-based
FMCG upstart Chik India turned into Beauty Cosmetics,
and again into CavinKare — whether this was a
play of its founder CK Ranganathan's initials
or Calvin Klein, or both isn't known — in 1998.
Tobacco major ITC dropped its dots (it was I.T.C.
before) in 2001. Then there's the by-now well-chronicled
example of Asea Brown Boveri becoming ABB — and
how the company used the change in name to create
a new organisational culture — internationally
and in India, in 1993. More recently, Philip Morris
became Altria, a play on the Latin word for height.
So,
why do companies change names? And does it really
make any difference to the way they do business
and the people they do it with? "Well, some
(old) names give out wrong equities," explains
marketing consultant Harish Bijoor. "ITC,
now, isn't just about tobacco." His reference
is to the fact that the company's old name I.T.C.,
drew attention to the dots, normally used in abbreviations,
thereby harking back to the full form Imperial
(and then Indian) Tobacco Company. That wouldn't
do, not when the company was diversifying into
hospitality, food, infotech, and other services.
Bombay
House, the Tata Group's nerve centre, has been
abuzz with proposals to change TELCO's name since
the mid-1990s. First, the company had to focus
on improving its own skills, in design, manufacturing,
and marketing. Then, between 2000 and 2002, with
its performance flagging (and bottomline bleeding),
the company couldn't change its name — any move
would have been seen by shareholders as an effort
to deflect focus from financials. Now, says a
Tata Motors spokesperson, "It's all about
growth and a bit of international aspiration."
"We are driving a change in mindset through
this new name, embarking on a journey that will
be increasingly global," he adds. That may
sound strikingly superficial, but spin-doctoring,
it isn't: Tata Motors is in the middle of an exercise
that involves cost reduction, business restructuring,
quality upgradation, and product development.
The
desire to use the occasion to communicate a change
in direction, reckon experts, is the best reason
for a company to want to change its name. Consider
the case of 20-year-old VAM Organics. VAM is an
abbreviation for vinyl acetate monomer, not exactly
the most creative name for a company. Still, until
the mid-1990s most of the company's revenues came
from this bulk chemical, and the name was fine.
By the end of the same decade, though, things
had changed: specialty chemicals accounted for
half of VAM Organics' revenues. And so, after
much soul-searching, the company changed its name
to Jubilant Organosys. "The new name reflects
a change in our focus from bulk chemicals to being
a knowledge-driven company," says Shyam Bhartia,
Chairman and Managing Director. That, he explains,
is much like an internal mission statement, a
statement by the company that it is no longer
a mere dabbler in commodity chemicals. The new
name, and the new tack, helped the stock soar,
and it enabled the company hold its own against
international competition.
Indeed,
companies that merely change their names, without
doing any of the other things they need to do
to convince customers and other stakeholders that
something about them is different, will, more
often than not, fall flat in their effort. "Rebranding
isn't something that spills out of the billboard,"
says Harit Nagpal, Vice President (Corporate Marketing),
Hutch. For Hutch, which was launching its eponymous
brand for the first time anywhere in the world
in Delhi in June 2002, the exercise went back
to late 2001. "We brought all our billing,
product, customer services, feedback and supplier-led
processes around what the consumer wanted, and
not what we had to offer," says Nagpal.
So,
will Tata Motors' new image go down well with
customers? Only its next quarter's sales will
tell.
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