Does A Rose Really Smell As Sweet?

Survey Says Corporate Name Changes On The Rise;
Ten Best And Worst New Names Cited

NEW YORK--(BUSINESS WIRE)--Dec. 15, 1997--The name game was played at a fever pitch in 1997 with a record 185 publicly held companies changing their corporate name, according to the 17th annual Interbrand Corporate Name Change Survey.

The increase -- a whopping 46% over 1996 and a 20% increase over the previous record set in 1987 -- was led by financial corporations with 39 and manufacturers with 33.

"The volume alone is extraordinary," said Interbrand Chairman Alvin Schechter, "but the reasons behind many of the name changes offer even more telling insights. Name changes affect a corporation's identity on all levels from the financial forecasts to the public perception of products and services."

Schechter, whose company is the world's leading branding consultancy, noted that the investment in a name goes well beyond signage, stationery and business cards. "People are acutely aware of the power of branding. Brands can convey a product's benefits, cement a corporation's positioning, and contribute enormous value to the bottom line."

Mergers and acquisitions were the leading agents of name change in publicly traded companies this year. Significantly, the 39 name changes in the financial industry more than doubled the 1996 number; changes in the manufacturing segment rose more moderately from 29 in 1996 to 33 in 1997. Other industries leading 1997's list are high tech with 18 (up from 10 in 1996); oil and gas at 16 (compared with six in 1996); healthcare/pharmaceutical with 11 (down from the 1996 total of 15); and telecommunications and utilities (11 name changes each, up from seven each in 1996).

Brand Awareness

For the first time in the history of the Interbrand survey, branding has played a highly visible role in corporate name selection. "Two companies -- Fortune Brands (formerly American Brands) and Canandaigua Brands (formerly Canandaigua Wine) even chose to include the word 'brand' in their name," said Interbrand's Schechter. "In another brand-driven name change, Wholesome & Hearty Foods, a manufacturer of low-fat meatless food products, was renamed Gardenburger Inc., after its top-selling product."

The merger of Bay Bank and the Bank of Boston this year yielded a new company with global reach and some $60 billion in assets this year. In this instance, the company consulted with Interbrand, which recommended a single-brand strategy and the name BankBoston. That name has been successfully rolled out across the entire region.

For some companies, distancing themselves from past negative associations can be the driving force behind a name change. American Brands, the Connecticut-based manufacturing company, first made a name for itself in the tobacco business. In 1994 it ceased tobacco operations and continued with its other products. But continuing public perception of American Brands as a tobacco company moved the board to change the name to Fortune Brands this year.

Of course, distancing oneself from the past can sometimes go awry. Witness the transformation of ValueJet into AirTran following the highly publicized air crash in Florida's Everglades. Observes Schechter: "Most passengers and industry insiders are still explaining AirTran as the "former ValueJet" which just transfers the old perceptions to the new name."

Enter Mr. Namewell

As pioneers in branding and specialists in naming for nearly 25 years, Interbrand is uniquely suited to evaluate 1997's best and worst renamed companies. Here are the booms and the busts:

The Year's Best Names

Zi Corp -- Zi means "character" in Chinese. This distinctive and memorable name is the perfect identifier for a company that specializes in Chinese character language technologies. Formerly Multi-Corp.

Alaris -- From the Latin word for wing, this company chose a name that conveys its commitment to soar to new heights in the healthcare industry. It was Advanced Medical Inc.

Ikon -- This office furniture company created a name that is short, strong, and memorable. Its twist on the word "icon" connotes industry leadership. Formerly Alco Standard.

Chrysalis -- This pharmaceutical development firm's new name suggests growth, evolution, forward movement, color and personality. Formerly DNX Corp.

The Year's Worst Names

AirTran -- The name is not distinctive and lacks personality. Rather than suggesting a great way to fly, it has a "cargo" feel, which was where ValueJet had its problem before.

US Airways -- In and of itself, not a bad name. But this is too subtle a change to alter the airline's positioning. The question is: is it really worth the huge expense to simply add four letters? Formerly USAir.

Medtox Scientific -- Sounds like toxic medicine. Formerly Editek Inc.

Interbrand is the world's leading branding consultancy, offering a full array of services to assist in the creation, enhancement and maintenance of a company's most valuable assets: its brands. Corporate and product positioning and brand naming are among the company's core strengths. Interbrand has helped name such market leaders as Prozac, Slice, Gillette's Sensor Excel Shaving System, IBM's Aptiva, Expedia from Microsoft, Nuprin and many other products, services and companies. A wholly owned subsidiary of Omnicom Group, Interbrand underwent its own name change in November 1997 when it unified its name from Interbrand Schecter to Interbrand.

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(Source: Interbrand)