Question

Topic: Branding

Re-branding: Phasing Out One Brand Of Two

Posted by Anonymous on 7/23/2005 at 12:26 PM ET 250 Points
Hello everyone! I hope that I have not misrepresented the level of difficulty associated with this question. I feel that I have come up with a good solution to this issue, but I would certainly appreciate your expertise on the matter. Also, I regret that I can only disclose information regarding the industry rather than the actual names of the products or the company.

THE CLIENT:
My client is a software development company, currently offering the #1 recommended product in its industry. At this time, they offer two different software options for customers to choose from.

THE ISSUE:
This client gained its recognition from the introduction of it's 1st software product. Most of the customers in the industry only know the company by the brand name of its first product. Only the customers that actually use the 2nd product are aware of it as an option/brand, and NONE of the customer are aware of the company's actual name.

The 1st product has become outdated for two reasons: 1] it doesn't work as well as the new product; it is specific to only the tanning industry. 2] The CEO of the company recognizes the opportunity to expand to other industries and has therefore given the 2nd product a completely different name so that the product will be recognized as relevant to those related industries [beauty, spa, etc...].

He plans to phase out the 1st product. But...His idea is to convert existing customers over to the new product. However...The 1st product is still currently being sold! At this rate, it is never going to be phased out, as the more people keep buying it, the more development efforts will have to take place to keep the customers happy when things 'break' - when these issues would not otherwise occur if they were using the NEW product to begin with.

The Sales people are having an easier time selling the 1st product because it is less expensive than the new product - which guarantees them a sale [this in and of itself is a separate issue]. Of course, the cost difference is negligible.

SUMMARY:
Because the NAME of the first product is so widely recognized, the CEO is very hesitant to step away from it. Yet, he wants to try to switch everyone over to the new product gradually one customer at a time. However, they are still selling the OLD product. If he keeps selling the old product, then hitting them up to convert [which is not without cost, mind you], I feel that this will eventually begin to negatively impact the company's integrity if they don't just phase the first product out and begin building brand recognition for the new product.

MY QUESTION:
In your opinion, should we simply STOP selling the original product? I suggest appeasing the current clients using the 1st brand by offering them DEEPLY discounted upgrades, then offering only the 2nd brand to new clients. Of course, we would have to keep our customers informed via marketing communication and the like.

I would certainly appreciate any feedback that any of you may have regarding this issue.

Thanks!!
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RESPONSES

  • Posted on 7/23/2005 at 6:18 PM Accepted
    Your gut instincts are correct, it is a mistake to keep selling the original product in hopes of later converting satisfied user to the new product...especially if there is a cost involved. I can see that the company itself is confused over this tried-and-true brand name. However, you risk creating unrest among both old and new customers if you don't end the sales of the original, out-dated product. If they have an overage of original product onhand, I would recommend wholesaling it to an exporter to send oversees at a deep discount and provide after-market service. Immediately begin campaigning to existing and prospective customers about the benefits of this new product, possibly giving a replacement or upgrad discount.

    Hand-in-hand you need to get the word out to the general marketplace and related industries about this big change and re-branding of this new product with your client's company. Ads and other forms of marketing should be consistent with your client's new product. The only mention of the original product would be along the lines of "from the makers of..." footnote.

    Good Luck,
    Debi Brady
    Technical Writing & Marketing Consultant
  • Posted by wnelson on 7/23/2005 at 7:29 PM Member
    I believe that the segmentation between product 1 and 2 might be a legitimate and I don't see any reason to spend the money to break it. I believe that you could revise the old software with the new software code - maybe take some functionality out of it, if need be, to make it different, and just brand it under the old name. That way you keep the old customers happy, no switching cost, sales keeps selling it, but you don't have the possible dissatisfaction or cost associated with it breaking.

    Hope this helps!

    Wayde
  • Posted by Mushfique Manzoor on 7/24/2005 at 7:00 AM Accepted
    hi AdMania

    IMHO, you should STOP further selling of OLD product and focus on selling the NEW product to all the industries including the Tanning industry for which the OLD product was specialized. that is applicable for irrespective of existing and prospective customers.

    while you do that, you simultaneously do the following.....

    1. Develop a "patch" which will make little-upgrade to the OLD product users want a upgrade to the NEW product. The patch will be of temporary nature valid for 1 year only and will be cheaper than a a full-scale upgrade. after 1 yr expiry of the patch you can give the customer option of procuring NEW product all together or opt for a 18 month valid upgrade.

    2. undertake a communication campaign to instill in the existing and prospective customers of the NEW product name. it will also cover the "patch" and "Upgardes" also. i mean when one uses the "patch" or "Upgrade" the software will show the NEW product name instead of OLD name.

    3. when you are going for a sales call to new prospective customers, you only communicate about the NEW product. all communication materials, ads, brochures etc. will only talk about the NEW product. you can use "from the makers of...." for a certain period of time and later withdraw that. this also applies for even when you are makig call to exisitng customers of OLD product.

    hopw this helps.

    cheers!!
  • Posted on 7/24/2005 at 6:11 PM Author
    Thanks to everyone who responded, particularly debrady and Mushfique Manzoor - you guys completely confirmed my instincts!!

    Unfortunately, to answer the question posed by Virago, marketing the new product under the old brand doesn't seem like the way to go because the name of the first product would not carry over to the other industries in which he plans to market the software - it simply wouldn't be relative at all, which, IMO, would certainly cause it to be overlooked as an option.

    To wnelson's point, they have already gone too far for that, I think. It would be a development/CRM/admin nightmare trying to keep up with which versions of the 2nd product people are on if they are in the tanning rather than one of the other industries, as it pertains to patches and fixes, since they have different names and builds. At least, this is what I think b/c so many people are already on the 2nd version AND in the tanning industry. Basically, I see very bad things happening in that scenario.

    I will let you all know how the proposal goes and what he decides to do. I have my suspicions, but I will keep those silent for now. :)

    Again, thank all of you so very much - your insight and expertise is much appreciated!
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