Branding is not a recent phenomenon: the practice of using brand names to establish reputation and attract customers has been around for centuries. It is no doubt a great fortune that many of these brand names have survived the passage of time to become classics on the market. Many, whether it be Ford, Coca-Cola, or the many Chinese 老字号 (time-honored brands), has earned consumers’ trust at least partly because of the reputation for excellence and longevity they have established in the up and downs of the changing marketplace.

Such a brand attribute is especially relevant for the insurance company. Insurance is a largely-reputation-based industry: people trust a company and its policies because there are many examples of the company fulfilling its claims for many unfortunate clients. Repetition of the fulfillment generates the trust. A sudden name change can undermine all this trust: the consumer thinks, “Why would the company change the name if it didn’t have problems?”

Yet, Norwich Union, a British insurance company established in 1797 , suddenly changed the brand name it had used for more than two centuries to “Aviva.” The company is determined to achieve “global impact” with the new brand, and the reasoning can be well-understood. Aviva, with an abstract modern feel, can be accepted worldwide, while Norwich Union retains a strong local attachment and establishmentarian tendency with Norwich, its town of founding, and “Union,” which has strong association with an large corporate institution. The attributes associated with the new brand is necessary for Norwich Union to break out of its British niche market.

A brand that survived times of hardship in the past acts as a “double-edged sword”: on one hand, it has an almost sacred place in the heart of the loyal consumers, who buy the products because of the brand and regard the brand as the identity of the company. To them, a brand name change is equivalent to killing the company outright. Yet, on the other hand, it acts as an obstacle for a company to attract new customers who do not adhere to the tradition. The name change should be given a go-ahead when the consumers to be gained from the appeal of the new name can outnumber the potential losses of the current clients.

Source: thisismoney.co.uk