B2B Marketing Blog

Mergers and the branding conundrum

June 26, 2009 12:21 PM | By Joel Harrison
As any good marketer knows, no brand can last forever: sooner or later even the strongest will fall from grace, be replaced or superseded… or possibly all three. And in B2B, where there is less of an emotional brand relationship to drive longevity than for consumer brands, shelf lives will be shorter.

Certainly one of the most common catalysts for brand reappraisal is merger or acquisition, as identified by Edward Appleton and further highlighted by Oracle’s agreed acquisition of Sun. Quite what the brand or marketing implications of this landmark deal will be, remains to be seen. Given the strength of the Sun brand, it would seem unlikely to disappear any time soon, yet it might not sit entirely comfortably within the Oracle stable given the parent’s (how can I put this) less ‘cuddly’ organisational persona.

Closer to home, the issue of branding and mergers in B2B was also highlighted by the announcement by Santander that it was rebranding UK subsidiaries (Abbey, Alliance & Leicester and Bradford & Bingly) under its parent identity. However Santander is still unprepared to comment about the future of its highly successful B2B operation Alliance & Leicester Commercial Bank (ALCB). Will the B2B arm embrace the global brand? Or will it be given an entirely separate bespoke identity? It’s a fascinating branding challenge, particularly given the Bank of Scotland/ Lloyds TSB merger.

Of course, it’s not unthinkable that, even though Alliance & Leicester disappears, the ALCB brand is retained. This may seem counter-intuitive, but there is a precedent: Virgin Media’s B2B operation is still called NTL Telewest Business, despite lingering ‘NT-Hell’ associations.

With the recession rumbling on, further consolidation seems certain, and consequently more brands will be confronted with this conundrum. Some will recognise branding as crucial to a successful merger, whilst others will see it as an expensive and time-consuming headache, best avoided where possible. Those that take the former view – whether that means holding on to the old brand for the right reasons, or launching a new one – will be best-placed to exploit the upturn, when it happens. 

1 Comments

Heather Westgate, TDA said:

Interesting comments, Joel. Clearly, there is merit, not to mention money in the subject of Santander realigning the brands in its portfolio under the main Santander brand. But it’s worth making a case for Alliance & Leicester Commercial Bank, particularly in these times of prudence.

Over the last six years this brand has been a thorn in the side of the major UK clearing banks. It is rumored that it was one of the main reasons for the Santander purchase of A&L in the first place.

The reasons for ALCB’s success are not the degree to which massive budgets have been brought to bear on the business banking market. Quite the opposite in fact. It is the degree to which modest budgets have been made to work very hard using a challenger brand strategy that can deliver a dynamic, more nimble series of propositions to a market sector that is hungry for them.

That’s not to say Santander shouldn’t consider using its own considerable brand power to challenge the main UK clearing banks on their own terms. Indeed it should. But the economies of scale do not apply to ALCB - this is a business bank that conducts most if not all its business direct rather than through the branch network. Continuing to support and maintain this as a separate brand could be done efficiently and most importantly, without diluting the overall Santander retail proposition.

So there is little to gain and much to lose it seems to me. Far from firing off the big guns at the banks by closing down the ALCB brand, it's just possible that Santander could be in real danger of shooting itself in the foot.

June 30, 2009 5:36 PM

Leave a comment