Out of the Box

Tropicana’s Rebranding Sours Quickly

By Menachem Lubinsky on April 06 2009

As a Snapple addict, I couldn’t help but notice the redesigned modern label that frankly made it more difficult to pick up the name of the flavor. Part of the Dr. Pepper Snapple Group, owned by Cadbury Schweppes, Snapple was apparently involved in the kind of rebranding that ended in disaster for Tropicana, which saw the company loose 20% of its business in about 6 weeks after it redesigned its container.

Rebranding, say marketing experts, should be a positive exercise for well established brands, but as the Tropicana debacle clearly illustrated, is not without risks. Tinkering with a well established brand can be costly, if not handled correctly. In most cases care is taken to update a logo, for example, without totally departing from the look that has given the brand its awareness in the first place. Both Coke and Pepsi, for example have embarked on similar exercises in recent years but managed to blend the old and new very effectively without losing their basic identity.

Owned by Pepsico, the new Tropicana Pure Premium packaging, moved swiftly to pull the packaging after losing some $33 million in less than two months. According to Ad Age Daily “several of Tropicana’s competitors appear to have benefited from the misstep, notably Minute Maid, Florida’s Natural and Tree Ripe.” Varieties within each of those brands posted double-digit unit sales increases during the period. Private-label products also saw an increase during the period, in keeping with broader trends in the food and beverage space.

Tropicana like many icon brands announced their rebranding with a great deal of fanfare. It is in most cases an opportunity to put new life into a brand, particularly in the highly competitive world of beverages. Marketing experts are hard-pressed to recall any brand that pulled a rebranding program after just two months. The question that immediately comes to mind is whether the rebranding program could have ultimately succeeded and did Tropicana pull the plug too early?

Tropicana officials cannot be blamed for doing such a quick about face when faced with the dismal numbers. They feared that giving the rebranding more time might cause them to lose market share to their competitors and even risk never winning back defecting customers. They also could not afford to allow sales to plummet any further. Hence, the quick decision to hopefully cut their losses and return to their former position of strength.

The Tropicana story is certainly not new in corporate America. At least in Tropicana’s case it wasn’t the launch of a product that the consumer did not want like the Edsel from Ford or the New Coke from Coca Cola. But packaging can be as important to the consumers as the product itself. Research has shown that consumers often “revolt” over a changed image that robs them of the familiar. This has also been the case with name changes that the consumer simply did not take to.

Rebranding may sound like a remedy to a brand that needs revitalization. While it is frequently the case, in most cases it is meant to reinforce a brand and perhaps take it to the next level. I have seen products that do well when launched but then seem to reach a plateau. Rebranding can help the brand recapture its initial shine and move forward. Many dormant popular brands also can make a comeback if handled correctly.

Rebranding should also not be confused with modernization. A company that simply redesigns its logo to make it look more contemporary might be said to be involved in rebranding, but that is not the way marketers look at it. In their book rebranding is much more than the redesign. It is part of an aggressive marketing program that calls attention to the rebranding and seeks to position the brand in a much stronger position than previously.

While there may be marketers that criticize Tropicana for not giving the rebranding more time, management is to be congratulated for moving quickly to cut their losses. One of the key elements of a successful business is the ability to look in the mirror, admit that a mistake was made, and move on. Companies who wallow in their misery are doomed to fail.

Rebranding is not just for the major brands. Every entity should seek to update its image with a more modern look. Research has clearly shown that customers tend to shy away from brands that look antiquated and outdated, especially when the competition is more up-to-date.

People often ask when the right time to consider rebranding is. In most cases, the consumer will let you know when it is time for a change. When a brand stops growing or reaches a status quo in sales, it is time for rebranding. The trick is to pick up the early warning signals. A balance must also be struck between updating an image and modernization. What you don’t want is for people not to recognize a brand that they have become familiar with.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.