Brands have a special place in our minds. Brands can be loved and hated. Hint: Wal-Mart vs. Target; Microsoft vs. Apple; mayo vs. Miracle Whip.
We often get asked the following questions: “Do I need a new brand?” “Should I freshen my brand?” “Should we change our name?” “Are we becoming a commodity?” “Do we need an overarching brand like Procter & Gamble with unique sub-brands like Tide?”
In some cases we say “yes” and in others, “no way, you have created too much equity.”
You may have heard that one of the most sacred American brands is making a significant shift. It’s the one behind the blue box of macaroni and cheese, Oreo, Cadbury (chocolate eggs that magically appear on Easter), Maxwell House and a slew of other household brands from A1 to Wheat Thins.
Kraft claims they can make a bigger impact, to the tune of $35 billion, with the name Mondelez. Mondela-what? It is likely Kraft has spent a pretty penny conducting in-depth research. After all we’re talking $35 big ones backed by stockholders who raise their hand like a guy who hit his funny bone at an auction. However, we noticed shares were only up .2 percent this week.
Now before all you mac & cheese lovers get your noodles in a spiral curl, Kraft will retain the Kraft brand for its grocery products. The name will mainly impact its snack items.
Kraft’s reason for the major shift in its corporate name is to divide and create two industry-leading public companies: a high-growth global snacks business and a high-margin North American grocery business. The North American grocery company will become Kraft Foods Group, Inc., retaining the Kraft brand for its corporate identity and as the brand for many of its consumer products (mac & cheese lovers, rejoice)!
The global snacks company, Mondelez, will launch later this year. It will likely carry Cadbury Eggs and other snack brands. “Monde” derives from the Latin word for “world,” and “delez” is a fanciful expression of “delicious.” “International” captures the global nature of the business. However, it has been reported that the first part of the name is very close to “manda,” a vulgar word, and the second part translates to a sexual act in Russian. Competitors seem to be most happy with Kraft’s decision so far.
Is the branding and naming strategy correct? It’s too soon to tell. We do know that Kraft is a much larger international player than it was in the 1903 days when J.L. Kraft delivered cheese with horse-drawn wagons. It has more horsepower now with brands in 170 countries, 127,000 employees and loyal consumers helping the company gobble up $54.4 billion in annual revenue.
If you feel your brand needs a refresh, before you make a swift change, ask yourself these three questions:
- Whom do we need to reach most? Kraft is seeking more international sales so it may make sense for a change.
- Whom or what do we need to beat? It could be competition as big as P&G, a misperception of your brand in the market or your current advocates may be your strongest adversaries.
- What is the best way to do it? This is where strategy needs to rise above tactics. Naming can be both a strategy and a tactic.
Whether you brand your macaroni and cheese, operate a manufacturing company for chocolate eggs, whip up mayo miracles or have a cool whip, always keep a finger on the pulse of your brand. When in doubt, call us; we’ll help you craft your message.
– Jeff Madden, Account Supervisor