Mergers and acquisitions hold great importance for a company since they create an uncertainty not only for customers but also for employees. Therefore, post-merger marketing initiatives should focus on providing a sense of security. Whenever a merger and acquisition takes places, there are numerous critical decisions that have to be made to direct the future. Leadership especially has to make choices about combined portfolio and branding as goodwill is the most important non-tangible asset of company.
The much hyped merger of two telecommunication giants, Mobilink and Warid merger can be termed as the biggest event in telecom sector of Pakistan
The much hyped merger of two telecommunication giants, Mobilink and Warid merger can be termed as the biggest event in telecom sector of Pakistan. It is one of its kind in Pakistan and will surely shape the future of the industry in coming years. This merger is not only important from business point of view but it will also serve as the stepping stone in the digital revolution in the country. Mobilink has announced some big plans for future, now that it has completed its merger. According to Vimplecom’s own statement, the combined Mobilink and Warid entity will be the leading telecommunications provider of 2G, 3G and LTE services in Pakistan, providing higher quality national voice and data coverage, faster downloads, and a wider portfolio of products and services.
Merging the Brands and Branding the Merger
Mobilink has decided to go with “Jazz-Warid” brand to announce its new identity with a bang-on tagline, “Dou Network, Ik Awaz”. How effective this new branding strategy will be for Mobilink in the future is the main idea behind this article. So let’s explore what other options Mobilink had as far as branding is concerned and if Mobilink has made the right move or not. Mergers are the turning point for any organization. That’s the time when organizations reinvent their strategies and business portfolio. After finalization of merger deal, Mobilink had to go through similar process. One of the most important factor in re-strategizing practice is branding the new business. The decision is crucial because company not only has to take a decision that will be profitable for them in the future but it also has to make sure that customers and employees are also satisfied with the changes.
There are few branding options that companies can opt after merger, where each option has its unique pros and cons. Big companies do an extensive research to gauge customers’ response before selecting any option. Rebranding is the number one reason that creates brand confusion; to avoid that marketers and leaders have to come up with a solid strategy.
There are three main options that companies pick from the post-merger planning.
Backing the stronger horse
In this strategy the combined entity adopts the identity of one of the brands. Normally the brand that is stronger in the market is selected as the new identity. We have seen some big companies opting this strategy in the past. DHL when acquired Airborne Express used its own brand for merged entity whereas, NorthWest used WellsFergo’s brand as its new identity after merger.
In telecom industry, acquiring operators mostly use their own brand as new identity. When American mobile operator AT&T Wireless merged with Cingular in 2004, it used AT&T as its merged brand identity.
Business as usual
Following this strategy, both brands continue to use their names on products and services, but only one is used at corporate level. For example even incorporated in P&G, Gillette and P&G still use their own brands in the market. Sprint after acquiring Nextel, renamed its business to Sprint Nextel Corporation but When Softbank acquired the company it returned to using simply Sprint Corporation.
The third option for companies in terms of rebranding is fusion. It is technique through which elements of both brands are incorporated in the new brand name. Famous example of this type of rebranding include HP, ExxonMobil and AOL Time Warner. In some cases, combination of one company’s name and other company’s symbol is also incorporated to create a new brand identity i-e United Bank of Switzerland (UBS) with Swiss Bank Corporation symbol, Citigroup with Travelers’ logo.
Mobilink has also used this rebranding strategy and came up with “Jazz Warid” brand. In the current situation this was certainly the best possible option for Mobilink.If Mobilink had opted for first strategy of “Backing the stronger horse” and used its own brand name, it would have lost all Warid brand equity and associated goodwill of customer and employees. Besides that, their immediate cost of rebranding would have also increased. Whereas, if it had continued its business as usual with separate identities it would have not only impeded the post-merger integration but would have also resulted in increased long-term cost to maintain two separate brands.
Mobilink has decided to go with “Jazz-Warid” brand to announce
its new identity with bang-on tagline, “Dou Network, Ik Awaz”
So, using the fusion strategy, Mobilink will not only get greater market power but will also manage to cut down its long-term cost. But the most important advantage that Mobilink will achieve while going forward with fused identity is that it can preserve the brand equity and goodwill of both brands. Using both names in parallel will also help to create awareness among the less aware customer base of far flung areas who do not have access to advanced media. Besides, the “Dou Network,