For Companies, The Right Name Means a Lot

As the Mamas and the Papas once sang, "Monday, Monday, can't trust that day."

Let's hope those lyrics aren't prophetic for PricewaterhouseCoopers' consulting arm, PWC Consulting. That firm plans to change its name to Monday once it separates from its parent company later this summer.

PWC Consulting isn't the only company embarking on a name makeover.

Philip Morris, the conglomerate that owns Kraft Foods but is probably best known for its cigarettes and costly tobacco litigation, recently decided to change its name to Altria to reflect the diversity of the company's brands.

And Enron, which is in the process of moving its core energy assets out from under bankruptcy and into a separate company, is looking for a new name for that entity.

The recent name changes highlight the importance for companies of choosing a moniker that is relevant and authoritative while still being catchy and appealing to consumers, say marketing experts. A rose by any other name might smell as sweet, but if a company chooses a name that doesn't work, the stench can hover for quite some time.

"Every time you think of a company, you think of their name," says Anthony Shore, senior director who leads the naming and writing practice at San Francisco-based brand consulting firm Landor Associates. "A name could be singled out as being an absolutely critical element."

Royal Blunder

Companies often decide to change their names in an effort to re-brand themselves after a merger or a spin-off.

For instance, Andersen Consulting changed its name to Accenture shortly after that firm split from parent Arthur Andersen — a move that turned out to be fortuitous, given Andersen's troubles.

And Aventis, the pharmaceutical company that makes allergy medicine Allegra, chose its new name after it was formed from the merger of German pharmaceutical company Hoechst and French drug firm Rhône-Poulenc.

Companies may also want re-invent themselves after a scandal has tarnished its name, as Enron is doing.

Or perhaps they simply want to give their image a makeover. Restaurant group Tricon Global Brands, which owns Pizza Hut and Taco Bell, recently changed its name to the tastier-sounding Yum! Brands.

But a new name that doesn't work can be a mistake that can cost a company customers, credibility and millions of dollars.

One example out of Britain last year was the U.K. Post Office's decision to change its name to Consignia. The postal service, which reportedly spent 2 million pounds (around $3 million U.S. dollars) to support the name change, recently renamed itself once again to Royal Mail plc, capping off a year of steep job and revenue losses for the entity.

A Mercedes or a Daimler?

Though a hefty advertising and marketing budget will help to make a new name successful, other factors, such as familiarity, a coherent message from the company and a name that simply makes sense, help to embed a new name in people's minds.

Jim Gregory, chief executive of CoreBrand, a branding firm based in Stamford, Conn., tracks the public's perceptions of new corporate names after mergers. When U.S. automaker Chrysler merged with German company Daimler-Benz to form DaimlerChrysler in 1998, Gregory found that a year after the deal, the familiarity of the newly merged company dropped to a score of 65 from a score of 89 when the company was just called Chrysler. Gregory based his consumer perception scores on a survey of 10,000 households.

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