FIVE EXAMPLES OF FAILED REBRANDING THAT COST COMPANIES MILLIONS

Many mistakenly perceive rebranding as a cure for all business communication problems. Yes, rebranding is actually a fresh start. If handled correctly, it will help to increase sales, stand out among competitors and add value to the product. However, sometimes companies make mistakes that have the opposite effect. This is what happens when a brand violates the values that consumers love it for. 

We have put together five examples of the biggest rebranding fails in marketing history. Let’s figure out the reasons and consequences of their failure. 

1. Gap 

GAP is an American clothing brand known for its basic T-shirts and classic jeans. 

In 2008, the company, like many other retailers at the time, faced a drop in sales and revenue. The indicators decreased by 12% and 7.8% respectively. The share price had dropped by more than 40%. The global financial crisis known as the "Great Recession" was the reason for this. To refresh the company's image and attract new customers, GAP decided to rebrand in 2010 and updated its logo. 

What changed?

In October 2010, consumers saw a new logo: The word Gap written in bold black letters on a white background with a gradient blue square. Laird and Partners Creative Agency (New York) developed this design. The rebranding cost the company $100 million. 

GAP clothes have never been super trendy. Customers loved it for its convenience, good quality, and low prices. The old logo reflected these qualities perfectly. It has served the brand for over 20 years (since 1990) and has become iconic. 

The company’s consumers did not like the new design. They left more than 2,000 negative comments on Facebook and created a Twitter account, which gathered almost 5,000 subscribers, in protest. They also launched a "Make Your Own Gap Logo" website, which went viral and generated more than 14,000 parody versions of the new logo. 

Main rebranding mistakes

1. GAP did not warn their customers about the new logo. The company did not explain why it had changed and what was the main idea of this rebranding. 
2. The brand name was written in Helvetica, which was already considered obsolete in 2010. Hundreds of companies, including GAP's main competitor American Apparel, used it as well. The font was in no way a unique brand feature.
3. The company changed only the logo. It did not launch any new clothing lines along with the rebranding. Nothing has changed in shops or on the GAP website either.

Barry Enderwick, former Netflix Marketing Director, commented on GAP's rebranding:

"Rather than make a strategic shift followed by a signal to consumers, they signaled first. Which only served to confuse consumers. People saw the same website, same stores with the same merchandise but with a new logo. It didn’t make any sense, and the resulting backlash was instant, as well as intense."

How it all ended

In response to the backlash, Gap claimed they were simply considering ideas for rebranding. However, it sounded implausible. Six days later Gap returned the old logo. Mark Hansen, the company's president for North America, said:  

"We learned a lot in this process and we are clear that we did not go about this in the right way. We acknowledge that we missed the opportunity to engage with the online community… There may be a time to evolve our logo, but if and when that time comes, we’ll handle it in a different way."

2. Tropicana 

Tropicana is a PepsiCo brand that sells fruit juices worldwide. In 2009, they decided to change their image to be more in line with market trends. Tropicana redesigned the packaging and logo for its premium product, Tropicana Pure Premium Orange Juice. Revenue from its sales reached more than $700 million a year.

What changed?

Designers removed the orange and straw from the packaging, replacing it with a large clear glass of juice. They positioned the logo vertically. Designers also removed the "No pulp" inscription, which proved the uniqueness of the product. The new packaging emphasized the message 100% Orange Pure and Natural. Arnell Advertising Agency (USA) developed this design. The rebranding cost Tropicana $35 million. 

A few days after the launch, consumers started criticizing the new design, calling it "ugly" and "silly". Many said that Tropicana's premium juice resembled "an ordinary discounted product from a cheap supermarket".

Two months later, sales dropped by 20% and Tropicana suffered a $30 million loss.

Main rebranding mistakes

1. Although the juice in the pack may not be freshly squeezed, the image of a ripe orange with a straw gave people a sense of naturalness. A glass of yellow liquid did not evoke such feelings. People looked for an orange on the juice boxes and did not find it. Designers failed to take into account the emotional attachment of consumers to the image. 
2. The glass took up two sides of the box. Indeed, it looked nice on the box at a 45-degree angle. However, on supermarket shelves, juices are usually lined up side by side. Thus, people only see the front side of the box. 
3. Packages became unrecognizable. Customers had to tilt their heads to read the name because of the vertical Tropicana logo. When the customers saw the "100% orange juice" label, they wondered whether it was the product they had always trusted.  

How it all ended

In February 2009, Tropicana announced it would return to its original packaging design. A new "orange" cap was the only thing left after the fiasco.

3. Leeds United

The history of British football club Leeds United goes back to 1919. The emblem logo was part of their history. The club decided to rebrand in 2018 to update the logo for its centenary. 

What changed?

Leeds United presented a new emblem in January 2018. The main symbol was the Leeds salute (hand near the heart), which the players often display on match days when they sing Marching on Together. It inspired the designers to create a new logo. They kept the blue and yellow team colors but removed the white rose, the club symbol. They replaced the short name LUFC with Leeds United. The cost of the rebranding has never been officially announced. However, according to estimates, it could be as much as £1 million.

Managing Director Angus Kinnear explained to Radio Yorkshire that the Leeds Salute gesture on the emblem signified unity between the club, players, and supporters. It was the fans that were to be the center of Leeds United's new identity, as shown in the promo video:

In theory, everything seemed to make sense. The new emblem was the result of a 6-month study involving 10,000 people. The club worked out well with the communication that accompanied the rebranding. The renewed logo also symbolized the end of an unsuccessful period for Leeds United and the beginning of a new era. 

However, contrary to all expectations, fans met the new emblem with criticism. Many found it too generic, as the Salute gesture can be attached to any team. Some compared the logo to the Gaviscon heartburn medicine label. 

Fans started creating their own logos and offered them to the club:

In addition, they created a petition to boycott the rebranding, which was signed by 77,000 people. 

Main rebranding mistakes

1. The club underestimated fan loyalty. The new logo had nothing to do with the heritage, history, or team spirit. No fan could find a catchy visual element on the emblem that would say, "Yes, this is my team". 
2. The club must have surveyed the wrong users as the survey was ineffective. For example, the main Leeds United supporters' fund insisted that no one consulted with them. In a statement, they said they saw the new logo for the first time a few hours before its presentation.

How it all ended

In January 2018, the club resumed consultations with the team and fans regarding the logo change. As a result, Leeds United decided to return the old emblem, which is still in use today. 

4. Mastercard 

The logo of the international Mastercard system has already become iconic. Everyone recognizes it by the two intersecting red and yellow circles. However, few people remember that Mastercard had an unsuccessful attempt to add a third circle. The company decided to rebrand to emphasize its global reach.

What changed?

Using gradients and shadows, Mastercard added a third translucent circle to its logo. The company also changed its name to Mastercard Worldwide and shifted it down, using a new font and color.

The press release stated that the circles reflect the company's unique three-level business model, which includes franchising, processing, and consulting. Mastercard also presented a new slogan – The Heart of Commerce. It outlined Mastercard's commitment to developing commerce globally.    

The company conducted the rebranding in June 2006. It cost Mastercard $10 million and the logo itself – $1.5 million. Futurebrand Agency (UK) was engaged in rebranding.

The controversial emblem immediately drew sharp criticism from consumers. People complained that the redesign made the logo "messy and cluttered". In addition, users did not understand why the third circle was not centered, but shifted to the right.

Users' reactions to the new Mastercard logo.
Source: Two Forty Eight Am

Main rebranding mistakes

1. The Mastercard logo has not changed since 1996 and certainly needed a change. However, the redesign should simplify the emblem, and not vice versa. The Mastercard logo was minimalist before the upgrade. The third circle made it complicated and less recognizable.
2. The company did not take audience opinion into account during the rebranding process. The decisions were made at the board level. 
3. There was no consistency in Mastercard's actions. The company did not carry out communication activities or prepare users for the restart.

How it all ended

Mastercard returned the old logo to custom products. The company used the new logo only for corporate communications. Mastercard upgraded the logo once again in 2016.

In 2018, Mastercard removed the name completely from the logo, citing the fact that most people already recognize the two circles. They have become the sole constant focus of the company's identity.

5. Royal Mail

In 2001, Royal Mail, the UK's national postal service, decided it no longer wanted customers to associate its name with "parcel delivery", as the company was also involved in logistics. In addition, the service planned to enter international markets and acquire new companies. The Royal Mail decided to merge all its units and rebrand itself.

What changed?

The process of creating the new identity lasted for 2 years. After that, the company CEO John Roberts announced that the brand would get a completely new name – Consignia. According to Roberts, "the name, unlike Post and Office, describes their whole range of activities". The iconic company logo got a new modern design. Rebranding cost Royal Mail £2 million.

The new name became a bad brand for the company. Firstly, it has never succeeded in its plans to conquer foreign markets. Secondly, people believed that the Royal Mail should not stray from the British heritage and values it has held for more than 500 years. Customers had trouble pronouncing, remembering, and associating the Consignia name with the British Post Office. 

Main rebranding mistakes

1. The company ignored the fact that people were attached to Royal Mail's historic name.
2. The new "name" was radically different from the previous one and did not cause associations with postal activities.

How it all ended

The wave of criticism did not subside for about a year. Then the Royal Mail returned to its former name, adding one word – Royal Mail Group. This reverse rebranding cost the company £1 million.

*ELVTR is disrupting education by putting proven industry leaders in a virtual classroom with eager rising stars. ELVTR courses offer 100% instructor driven content designed to give you practical knowledge within a convenient time frame. Choose the right course for you!