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LETTER FROM DAR
Re-branding in the 21st century
Anne Mucheke
Published: 28-JUL-06

If the corporate world were to live by Shakespeare’s ‘a rose by any other name would still smell as sweet’, no doubt name branding and re-branding would be the order of the day.

In business, however, name changes can sometimes be detrimental to the company’s image and portfolio. Studies have even shown that companies usually decline after re-branding, this being on a worst-case scenario.

Yet, there remains a case for re-branding especially in the wake of mergers and acquisitions where companies see the need to consolidate their products to reflect their new ownership. That’s what recently happened when Millicom International Cellular (MIC) Tanzania launched a new high-tech cellular network, Tigo. “Buzz is now Tigo”, the headlines proclaimed. Simply stated, MIC re-branded its product almost overnight, creating a stir among its customers and those who had not seen the changes coming. Tigo was picked from a Spanish word, contigo, which means ‘with you’. The product was first launched in the South American region.

With the new name came new faces on its billboards in a new advertising campaign. New colours stood in place of the single pink colour that previously defined Buzz. Subscribers are now enjoying a splash of colour with a predominantly blue background and the additional red, yellow and green colours.

The Assistant Marketing Manager at Tigo, Bhavna Pandya says the new look and feel is more vibrant, its younger, its new and their adverts reflect this. MIC states that its new brand is in line with their international brand strategy, a move that has been felt in many countries. Formerly known as Mobitel, the group is now owned by Millicom International Cellular (MIC) SA, a leading operator of cellular phone services.

The group is listed on both the New York and London Stock Exchanges and has its headquarters in Luxembourg. In March this year, Millicom, which was the majority shareholder in Mobitel, bought out all the local shareholders.

The company now enjoys 100 percent shareholding and more changes could still be in the pipeline. In Africa, Tanzania was probably the last country in the Millicom stable to go Tigo after Chad, Senegal, Sierra Leone and Ghana.

Generally, people are averse to change especially with products they are so familiar with. So how did MIC pull it off? Customers were informed via sms and media campaigns began in earnest before the change.

Pandya says the company deliberately avoided use of the word ‘change’. “We told them that there was something new coming, which worked for us,” she explains.

With the change, the company promises even lower rates of all local, national and international calls. Additionally, Tigo is set to install 300 new sites to offer subscribers the widest coverage as well as launch new services. The change from Buzz to Tigo is perceived elsewhere as a strategy by the company to save face, having lost out on market share. In the last five years, due to aggressive campaigns by competitors Celtel and Vodacom, MIC Chief Operating Officer, Wasim Ahmad says that over the last eight months, the company has reclaimed the share back by growing over 100 percent. Additionally, he says the company’s spare capacity at night has allowed them to give their subscribers the added incentive of free night calls and still remain the network with the lowest tariffs in the country. Industry analysts argue that the free calls can be seen as targeting a younger market segment, which does not have a large spending capacity, otherwise they would not need to stay up all night making calls.

Companies choose to re-brand when they reach a watershed period whereupon they have to go back to the drawing board and come up with something new.

Re-branding is not an overnight venture and will require time before customers can appreciate the change. Re-branding is more than a change of names, it involves research and adequate funding otherwise there can be serious consequences for the fortunes of a company. It is also the start of a change in culture and mindset for the organisation.

For a company like MIC, the changes may not require a massive change in policy but other mergers require a re-think of ideas. Think of the Barclays-Absa deal where both brands command power in their respective capacities. In what is perhaps the largest deal in Africa’s banking industry, the two will sooner or later have to deal with the issue of names when the deal is complete. Mobitel was the first licensed mobile telephone operator in 1994 and introduced GSM services in 2001.

In 2005 the company changed its brand from ‘Simu Poa’ to ‘Buzz’, which became a buzzword as subscribers would easily go, ‘just buzz me’. Indeed, the introduction of Buzz saw subscriber numbers doubling from 300 000 to 700 000.



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