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As Vodafone Idea becomes Vi, a look at the challenges with rebranding

From a new name to a new logo, Vodafone Idea is off to a fresh start with a new brand identity

September 08, 2020 / 10:48 PM IST
 
 
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In a major announcement on September 7, telecom firm Vodafone Idea rebranded itself as Vi.

From a new name to a new logo, Vodafone Idea is off to a fresh start with a new brand identity.

But all this will come at a cost. Experts say that rebranding is an expensive affair.

When Snapdeal in 2016 had revealed its new brand identity, the company had spent Rs 200 crore for rebranding.

Airtel in 2010 had spent around Rs 340 crore for a new corporate identity - a new logo.

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When Hero parted ways with Honda, it spent around Rs 175 crore in May 2011 for a new brand identity - Hero MotoCorp.

“New brands are expensive to launch. Vi is not entirely new but even replacing the past - signages, dealer boards, graphics will be a costly affair. Plus, building awareness for the new brand in consumer minds is not easy,” Sandeep Goyal, chief mentor, Indian Institute of Human Brands, told Moneycontrol.

Vodafone Idea announced that from September 7 onwards, Vi ads will be on TV and digital platforms, followed by a high decibel intensive multi-media campaign.

In 2000, when BP, an oil and gas company, changed its logo to Helios flower, it cost the company $211 million.

Experts say the cost is high for rebranding because companies have to pay for everything. This includes cost of consultants and market researchers, who test whether the rebranding move is a good idea. Then comes the actual implementation, which includes signage on buildings, change of company letterheads, websites and name tags.

Along with the high cost which drains most of the marketing budget, rebranding can also lead to losing existing customers as a new brand identity could be confusing.

For example, Kencell, a telecom company, was rebranded to Celtel in 2004 and then to Zain in 2008. Zain was acquired by Bharti Airtel and was rebranded to Airtel Kenya in 2010. Experts say that too many changes in the brand confused consumers.

Another rebranding effort that was unsuccessful was when the French telecom bought Telkom Kenya and rebranded to Orange. This led to a big population in Kenya staying away from Telkom’s new brand name as they confused it with a political party. And ultimately Orange Kenya was rebranded to Telkom Kenya.

Even Vodafone has seen many name changes from Max Touch, Orange, BPL, Hutchison Essar to Vodafone.

But Goyal points out that in case of Vodafone Idea, a new brand name should have come after the two companies merged at a corporate level.

“Vodafone was an urbane, sophisticated global brand. Idea was more about rustic intelligence and native humour. When these two diverse entities came together, a unified new personality was a challenge. That challenge remained kind of unresolved for 2-3 years. Now the new brand is an opportunity to create a common new identity, but also define the personality of this new avatar,” added Goyal.
Maryam Farooqui
first published: Sep 8, 2020 10:47 pm

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