How to Name Your Brand Post Merger & Acquisition?
Mergers and Acquisitions (M&A) in Nepal have lately grown as a trend with multiple companies looking to collaborate for a common cause. Especially, the banking and finance sector companies have joined hands following the central bank’s mandate that requires a higher paid-up capital. The country has seen several mergers that end up with a larger brand acquiring the smaller one or multiple parallel brands fusing their names. However, there are other naming strategies that brands seem to overlook in Nepal. Brand naming strategy can have a significant impact on the success of the new company. There are a few different options for brand naming during an M&A, each with its own set of benefits and drawbacks.
Name Fusion
One option is to simply retain the existing brand names of both companies. This seems to be a go-to option for financial institutions of parallel status in Nepal. This can be beneficial because it allows the companies to continue to leverage the established brand equity and customer loyalty of each brand. However, this strategy can also create confusion among customers and may not effectively communicate the value proposition of the new company. Also, companies need to be wary when using this strategy since the new name might receive backlash from people citing a lack of creativity (*cough cough… Nepal Investment Mega Bank).
Name Creation
Another option is to create a completely new brand name. This allows the company to create a new brand identity that can effectively communicate the value proposition of the new company, and the name should be unique and memorable enough to be easily recognizable and easily differentiated in the market. However, this strategy can be costly and time-consuming, and it can be difficult to ensure that the new brand name resonates with customers.
Retain Stronger Image
A third option is to retain the name of the stronger brand involved in the merger. In most cases, larger institutions that acquire smaller ones follow this strategy. Here, the brands getting acquired are at a loss since they virtually lose all the legacy they have fostered in the past.
No Change
A merger does not necessarily mean that the brands need to combine, change or create new names. Brands can operate normally under their individual names post-merger without compromising on their past legacy. This strategy is mostly used by holding companies that combine institutions to build a brand architecture comprising of several brands.
Conclusion
Overall, the brand naming strategy during M&A should be carefully considered, as it can have a significant impact on the success of the new company. While the specific strategy will depend on the goals and objectives of the new company, it is important to conduct market research and carefully evaluate all options to ensure that the new brand name effectively communicates the value proposition of the new company and resonates with customers.
