The Hurbicide Guru

Acquiring another corporation usually means that the acquiring company’s name will be the name of the newly merged entity. There is one factor that can change that — one that is stronger than anything else. What is it? It is you, the consumer.

There is nothing that stirs fear in corporate boards of directors more than negative consumer feedback. The way a company is perceived — through marketing of its product line to community involvement — will determine whether the company ultimately succeeds or fails. Thus, it is the buying public — consumers — who truly determine the direction a company moves. Lost sales = a sinking business.

In acquiring another company, usually the larger company does one of two things:

1. It takes the smaller company and absorbs the company within the body of the parent organization. The acquired company retains its name and, for all practical purposes, appears to be a separate company. Consumer confidence in the brand remains static in this case. What is an example of this? Check out the companies/products owned by Beatrice Foods.

2. The acquired company is absorbed in totality; the name, assets, product line are all folded into the acquiring company. Little or nothing of the old company’s name remains. An example of this is Cingular Wireless’ takeover of AT&T Wireless.

In the second example, consumer confidence can be shaken especially if the Board of Directors missteps and fails to anticipate the public’s reaction to the acquisition. A time honored brand, loved by consumers, disappears and consumers react negatively.

What are some good alternatives for Boards to consider? Basically there are two options:

1. Rebrand the name to reflect the joining together of two perceived equals. A case in point is the oil industry where you have ExxonMobil and ChevronTexaco to name two. Obviously, the first name is the premier name, but consumers still see the “loved” second name and are reassured.

2. Rebrand the name to reflect the more popular name even if the acquired company is smaller in size. KMart and Sears got “hitched” and the company was renamed Sears Holding. KMart was the acquiring company but the Sears name has less baggage than the bankrupt KMart name. The combined entity has gone one step further by maintaining separate stores with separate names, at least for now. Consumers who like the venerable Sears name can still be confident that it is “business as usual” for the retailer.

There are variations of the two options that Boards may need to consider. Witness BP’s acquistion of Amoco: the name says BP, but the pumps say Amoco. Guess whose gasoline is perceived to be the better of the two?

In summation, the consumer ultimately decides whether your rebranded product will succeed or fail. Not bringing consumer sentiment into the mix early on in the acquisition process is potentially dangerous and can be expensive to remedy later on.

Matt Keegan’s writing site can be viewed at http://thearticlewriter.com

The Sabon bath and body brand operates in the international arena in the cultivation of body and mind under the brand SABON, whose deep grip lies in East Asia. The company recently announced the opening of a second concept store in Japan with an investment of several million dollars.

The new store, which covers approximately - 90 sqm will be located in the center of amusements and shopping in prestigious Roppongi Hills, which became popular in 2003 where many visitors frequent every day. The area is characterized by a variety of restaurants, theaters, cafes, galleries, hotels and luxury residential buildings, along with shops international luxury brands such as Louis Vuitton, Tiffany & Line, Escada, Max Mara, Boss and more.

About six months ago, the company launched SABON’s First Concept Store in Tokyo at an investment of 800,000 Euros, in the magical street of the fashionable shopping area nex to the familiar prestigious brands stores such as Calvin Klein, Chanel, Prada, Gucci, Christian Dior, Donna Karen, Jean Paul Gaultier, and the unique 4 story concept store: “Paul Smith Space.

Products of Sabon deepened further in the Japanese market and have received excellent responses from all sides. Not only market approval but also an impressive presence in the lifestyle pages of international magazines such as the “L.”, “Azar” and “Marie Claire” Japanese magazines. And let us not forget Japan’s leading magazines such as: “Spring”, “Vivi”, “Oz”, “Mina” and more.

Ronen Zohar, the CEO of Sabon’s morality says: “Our success and commercial media in Japan is the most significant step for further expansion for Sabon East Asia.

SABON Japan became the store chain’s world’s most successful story since the first 6 months since opening and reinforces our decision to invest in network expansion in East Asia. This move is another step in strengthening the Network Sabon ‘leading Israeli network worldwide.”

And there you have it, another successful story on the so called country hating foreign countries.