The Impact Of Rebranding On Organisational Sales Volume Of Organizations
Organizations throughout the world have had to use one strategy or another, in order to improve their performance. This is as a result of the emerging trends that have intensified the level of competition among different firms, causing them to strategize in order to stay ahead of competition. The banking industry globally has witnessed intense competition and the Nigerian banking industry has not been spared. The sector is undergoing a period of major upheaval and restoring customer confidence has emerged as priority as customers are increasingly demanding higher quality of service from their banks. The purpose of this study was to examine the impact of rebranding on organizational sales volume in Zenith Bank PlcAlimosho, Lagos State, Nigeria. The objectives of the study were to determine the relationship between the rebranding strategy and performance and organizational sales volume, and the challenges of rebranding. The research was designed as a case study. Primary data was collected from managers through in-depth interviews using an interview guide, while secondary data was obtained from the Zenith Bank library and other literature. Data collected from the study was analyzed qualitatively using content analysis and presented herein. The study revealed that Zenith Bank has recently undergone a transformation drive where it has rebranded and not only created a new vibrant look, but has also radically changed the way they carry out their operations. This study established that several departments have been actively involved in the process which touched on the bank’s corporate colors, advertising, corporate social responsibility, staff development, customer service, their slogan, mission and vision. As reiterated by the interviewees, rebranding has helped the bank in implementing its overall strategic plan by enhancing the image of the organization and bringing out the organization’s competitive positions in the industry. The challenges faced were many and included resistance by employees who were demotivated and unskilled, poor communication and high costs. These challenges were well addressed and the study confirms that indeed rebranding can affect performance of an organization. The study recommends that the industry regulator needs to understand the relation between rebranding and performance and consider it as a policy option. The study also demonstrates the application of the Resource based theory and the Dynamic Capabilities theory and that Zenith Bank and indeed other players in the industry are encouraged to keep improving their resources in order to stay ahead of competition. Availability of interviewees was a major limitation to this study, however, those interviewed were most helpful. From this study, other areas that can be researched on include rebranding in other industries and employee involvement in rebranding. This research conclusively confirms that despite the challenges involved, rebranding does have a profound effect on performance.
Table of Content
- 1.1 Background of the Study
- 1.2 Statement of Problem
- 1.3 Research Objectives
- 1.4 Research Questions
- 1.5 Research Hypothesis
- 1.6 Significance of the Study
- 1.7 Scope of Study
- 1.8 Limitation of the Study
- 1.9 Definition of Terms
- 1.10 Organisation of the Study
2.0 Literature Review
- 2.1 Conceptual Framework
- 2.2 Employees Participation in the Rebranding Process
- 2.3 Management Commitment in the Rebranding Process
- 2.4 Advertisement of the Rebranding Process
- 2.5 Rebranding Strategy and Performance of Organisations
- 2.6 Rebranding Strategy in Organisations
- 2.7 Theoretical Framework
- 2.7.1 The Resource Based View
- 2.7.2 Dynamic Capabilities Theory
- 2.7.3 Goal Setting Theory
- 2.8 Empirical Studies
3.0 Research Methodology
- 3.1 Design of the Study
- 3.2 Area of the Study
- 3.3 Sample and Sampling Technique
- 3.4 Instrument for Data Collection
- 3.5 Method of Data Collection
- 3.6 Method of Data Analysis
4.0 Results and Discussion
- 4.1 Results
- 4.2 Discussion
5.0 Summary, Conclusion and Recommendations
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendations
1.1 Background of the Study
Rebranding has been described as the repositioning, revitalizing, or rejuvenating of a brand and in some cases, even having a brand being totally “reborn.”Mutzellec et al. (2003) presented their paper as “a first attempt to explore the issues of relevance to the rebranding phenomenon”. They defined rebranding as “the practice of building anew, a name representative of a differentiated position in the mind of stakeholders and a distinctive identity from competitors.
This study is founded on two theories. The Resource Based View encourages organizations to identify and develop resources that give them an edge over their competitors. The theory postulates that a firm‟s ability to enjoy a position of advantage solely relies on the resources it possesses which may be human, financial, technological or physical (David, 2002). The second theory, The dynamic capabilities theory will help the organization to develop the ability to integrate, build, and reconfigure internal and external competencies to address rapidly-changing environments.
The banking industry in Nigeria comprises commercial banks, microfinance institutions, foreign exchange bureaus and credit reference bureaus. National Bank of Nigeria, one of the forty three commercial Banks in Nigeria was incorporated in 1968 and officially opened later that year. The bank has 68 branch outlets spread in major towns throughout the country and is currently undergoing a restructuring strategy which will see the bank create six different divisions to transform the 48 year-old bank into a profitable and competitive banking entity (Anyanswa, 2013).
The motivation behind this study is the prior poor performance of the commercial Banks in Nigeria. According to Sinclair (1999) business the world over acknowledges the value of brands. Internationally, McDonald‟s food chain, Southwest airlines, Citibank has successfully undergone rebranding. Royal Bank of Scotland is rebranding with the new name being William and Glyn. As such, companies in the 21st century, National Bank included, have found it necessary to relook their brand in terms of its relevance to consumers and the changing marketplace. It is therefore hoped that this strategy will boost banks, and that the new brand will outperform the „old brand.‟ This study will be of help to organisations that may be considering rebranding as a strategy.
Adopting the definition proposed by Mutzellec and Lambkin (2006) rebranding refers to the creation of a new brand element aiming at creating a new image or position in the mind of customers. According to Pearce and Robinson (2010), by strategy, managers mean their large-scale, future-oriented decisions and plans for interacting with the competitive environment to achieve company objectives.
Corporations often rebrand in order to respond to external and/or internal issues. Companies also utilize rebranding as an effective strategic tool to hide malpractices of the past, and shed negative connotations that could affect profitability. In some cases, companies try to build on any perceived equity they believe still exists in their brand through differentiation and rebranding. Companies differentiate themselves from competitors by incorporating practices from changing their logo, revamping their operations, to even going green.
The need to differentiate and rebrand is especially prevalent in saturated markets such as the financial services industry. A Rebranding Strategy involves setting up goals, determining actions to achieve the goals and mobilizing resources to execute the actions within a specified period of time. However, rebranding is a strategy involving considerable risks, as strong brands take years to be successfully built in order to provide higher margins, loyal customer bases and a continuous stream of income for the institution representing the brand.
Performance is the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost and speed (Brumbach, 1998). Firm performance therefore is the accomplishment of given goals by an organization, with value addition that is quantifiable.
Firm performance is a collective effort by all the resources within the firm. How these resources are put to use will determine the performance. Human capital is one key resource that if well selected, trained, rewarded and motivated, will contribute to improved performance. Organizations have come up with different ways of measuring and rewarding individual performance which is in itself the key component to firm performance. Reward systems have been put up not only by individual organizations but also by industries to recognize and award good performance.
Barambah (1998) observed that firm performance should incorporate both behaviorsand results and not just results. In an economy where knowledge and service are key, competitive advantage comes not only through results, but also through the behaviors people demonstrate when carrying out their roles.
Therefore, if effective performance is to be encouraged in organizations, there is need to focus not only on what people do but also how they do it. Effectiveness and efficiency have to be incorporated into all operations within an organization.
In a study of 165 cases of rebranding, Muzellec and Lambkin (2006) found that, whether a rebranding follows from corporate strategy or constitutes the actual marketing strategy, it aims at enhancing, regaining, transferring, and/or recreating the corporate brand equity. This in turn has a direct impact on the performance of a firm. The success and economic rationale of corporate decisions may be judged by identifying its impact on firm value, i.e., the impact on the firm‟s performance. A Corporate rebranding strategy signals to the market that something in the firm has changed, hopefully implying a more positive outlook.
Since the 1980s the world economy has experienced significant structural changes as a consequence of the liberalization and globalization influenced by rapid technological development, and the Banking industry and financial markets have been central to these developments due to increased capital movements between countries.
The banking industry throughout the world has been undergoing major consolidations in recent years. The sector is undergoing a period of major upheaval and restoring customer confidence has emerged as priority. Customers are increasingly demanding higher quality of service from their banks. At the same time, new technologies developed in the recent years are modifying the way customer’s access banking services. Competition is so high with the increased number of banking institutions and non-traditional players who are now offer competing financial services. So much growth has been witnessed so far and banks continue to reinvent and better themselves so as to remain relevant and gain an edge over their competition.
1.2 Statement of Problem
Sometimes, despite the high budgets spent on corporate positioning, firms fail to create a distinctive image and have to rebrand. The reasons for rebranding are varied. Dellattre (2002) finds four categories of reasons to rebrand: new corporate image, new management or shareholding structure, new activity, and change of legal status. All these are aimed at improving a firm’s performance. In this sense, rebranding is one of the strategies that if well planned and executed, can give a firm a competitive edge that it requires to up its performance within its industry.
The world over, the banking sector has experienced a challenging business environment in recent years given the cut throat competition within the industry and the frequent currency fluctuations, coupled with slow growth of many world economies. Nigeria has in fact in recent years seen the closure of banks. Commercial Banks in particular has been operating below its capacity due to increased bad debts in loan portfolio, which was politically motivated and pushed the bank into massive losses in the late 1990s and early 2000. However, the situation has changed and it has started recording profits in the recent years. The need to carry out this study therefore is motivated by the knowledge that, despite the fact that the commercial banks has come up with strategic management practices aimed at improving its competitiveness, it has been observed that the bank has so far not achieved the desired results as intended.
Despite the growing use of rebranding in practice, little empirical research has been conducted on the topic. Hardly any studies have been done on the relation between rebranding and performance, particularly in the banking Sector.
Internationally, El De Chernatony et al. (1995) conducted a study on drivers of rebranding and Kavaratzis (2003) researched on city rebranding. International dimension of rebranding was done by Onkvisit and Shaw (1989) while Kimberly (2012) researched International Brand Identity. Locally, Chemayiek (2005) studied consumers‟ perception of rebranding strategy by Nigeria Airways. Gloria, (2005) investigated the influence of rebranding on attitudes& perceptions in the banking industry in Nigeria. Kwena, (2002) studied the impact of branding on consumer choice and Mutua (2013) researched on Competitive strategies adopted by National Bank. Although studies on various aspects of rebranding have been done, no study, to the researcher’s knowledge, has been done on the way rebranding influences organizational performance.
Businesses become successful because they possess some advantage relative to their competitors. Having seen that very little research has been done on rebranding and performance, it is in this light that this study sought to determine the rebranding strategy and performance of an organization with reference to Zenith Bank.
1.3 Research Objectives
The purpose of this study is to examine the impact of rebranding on organizational sales volume in Zenith bank Plc Alimosho, Lagos State, Nigeria. Specifically, the objectives include:
- To establish the effects of rebranding strategy on the performance and organizational sales volume of Zenith bank Plc Alimosho.
- To determine the challenges faced by Zenith bank Plc Alimoshoin its rebranding strategy
- To identify the coping strategies to deal with challenges of rebranding in Zenith bank Plc Alimosho
1.4 Research Questions
This project is designed to tackle the following reach questions;
- What are the effects of rebranding strategy on the performance and organizational sales volume of Zenith bank Plc Alimosho?
- What are the challenges faced by Zenith bank Plc Alimosho in its rebranding strategy?
- What are the coping strategies to deal with challenges of rebranding in Zenith bank Plc Alimosho?
1.5 Research Hypothesis
The following null hypotheses were formulated to guide the study the hypothesis is to be tested at 0.5 alpha levels.
- HO: There is no significant influence of rebranding on the performance and organizational sales volume in Zenith bank Plc Alimosho, Lagos State, Nigeria
- HA1: There is a significant influence of rebranding on the performance and organizational sales volume in Zenith bank Plc Alimosho, Lagos State, Nigeria
1.6 Significance of the Study
The study will be of importance to the Banking industry at large as it will enable them come up with viable policies and practices to strengthen rebranding strategies, promoting efficiency and competitiveness. It will provide the sector regulator with information on challenges in undertaking rebranding in financial institutions in Nigeria and how to work around the challenges for the benefit the sector.
An understanding of rebranding strategieswill encourage organizations to identify and develop resources that give them an edge so as to enjoy a position of advantage over their competitors. The Theories on the other hand will equip the organization with the ability to integrate, build internal and external competencies to address rapidly-changing environments. The study will most certainly add to the current scope of knowledge and theory in relation to corporate rebranding.
All in all, Rebranding is one of the key factors that institutions have to pay attention to in order to revive a brand that is becoming obsolete. A prestigious brand image gives the company a competitive advantage, since it allows consumers to perceive enjoying greater benefit associated with the characteristics and quality of the product or service. A well-conceived, solid, strong rebranding strategy provides management with a holistic framework to integrate the firm’s activities, its vision and mission; it allows the firm to express its distinctiveness, that is, to differentiate itself in the relationship with stakeholders and represents an opportunity to increase the future incomes of the firm. A successful rebranding project can in the ends yield a better brand than before.
In practice, Academicians and/or Researchers would find the results of the study useful in filling existing gaps in literature as regards strategic rebranding and performance. The findings will act as a guide to future research in related fields, becoming a valuable source of knowledge, and a basis of new research to both students and researchers.
1.7 Scope of Study
The study was conducted in Zenith bank Plc Alimosho, Lagos State, Nigeria. The content of the study will be limited to the impact of rebranding on organizational sales volume in Zenith bank PLC Alimosho, Lagos State, Nigeria.
1.8 Limitation of the Study
In the course of the study, the researcher was faced with several constraints. One of the constraints was the short time period within which the research was to be completed. Another factor was shortage of financial resources which prevented the researcher from traveling to source the data. Also, most of the rebranding strategies criteria in commercial banks were not disclosed to offer the necessary data required. Their frequent postponement of appointment coupled with the fact that commercial banks in Nigeria are vast in population i.e. Zenith Bank Branches. The researcher could not get to all of them, therefore a sample was taken to represent all (Alimosho Branch, Lagos state).
1.9 Definition of Terms
Rebranding is a marketing strategy in which a new name, term, symbol, design, concept or combination thereof is created for an established brand with the intention of developing a new, differentiated identity in the minds of consumers, investors, competitors, and other stakeholders.
Is the manner in which a corporation, firm or business enterprise presents itself to the public. The corporate identity is typically visualized by branding and with the use of trademarks, but it can also include things like product design, advertising, public relations etc.
Is the number of units sold within a reporting period. This figure is monitored by investors to see if a business is expanding or contracting. Within a business, sales volume may be monitored at the level of the product, product line, customer, subsidiary, or sales region.
Is defined as the achievement of the objectives set forth by the firm (the bank) within the agreed time and with minimal costs while using the available resources.
1.10 Organisation of the Study
This study is organized into five chapters. Chapter one included the background of the study, research problem, research objectives and questions as well as limitation of the study. Chapter two contains the literature review. Chapter three includes the methodology. Chapter Four contains the results and discussion of key findings of the study. Chapter Five finally looks at the summary, conclusions, and recommendations based on the findings.
5.0 Summary, Conclusion and Recommendations
The study revealed that Zenith Bank had recently undergone a transformation drive where it rebranded and not only created a new vibrant look, but has also radically changed the way they carry out their operations. The restructuring has been necessitated by declining profits registered by the bank mainly due to non- conformance to the emergent customer demands and the changing trends in the financial sector in the country and the world at large. This study established that several departments have been actively involved in the process, although all staff members are seen to have participated in one way or the other through this ongoing process. The process not only touched on the bank’s corporate colors but also advertising, corporate social responsibility, staff development, customer service, their slogan, mission and vision.
As reiterated by the interviewees, rebranding has helped Zenith Bank in marketing itself. It has played a role in helping the management of ZENITH BANK to implement its overall strategic plan and long term goals by enhancing the image of the organization and bringing out the organization’s competitive positions in the industry.
Profitability, a key objective in the firm is being realized even before the completion of the five year strategy. This has been realized through increased sales, cost reduction and increase in revenue growth. The study further revealed that rebranding strategy as adopted by National Bank of Nigeria has helped increase the bank’s market share, customers delight index, customer retention levels and even attracting new customers.
The study further found that the key determinants of successful implementation of the rebranding strategy at Zenith Bank were corporate strategy, top management support, organizational culture, pace of innovation, availability of resources, brand vision, qualified personnel, customer loyalty and trust on the company’s new brand. Rebranding strategy has helped in achieving the overall organizational objective which is to be industry leaders. Through its corporate strategy, it is able to place itself strategically within the market, enhance efficiency and effectiveness of the organization through attaining an advantage over its competitors thereby resulting in higher profit margins and attainment of broad organization goals.
This study revealed that employee involvement in strategy helps in ensuring successful implementation through assigning responsibility and ownership in the process, thus improving the adaptability and effectiveness in any task that is assigned to teams and individual employees. Through closer interaction with customers, employees are able to identify customer needs and advise them accordingly while giving feedback to the relevant department for action. The research further revealed that the strategy has greatly improved employee morale and commitment towards the employer and towards the attainment of the organization’s goals. The employees are also better remunerated as well as well trained and skilled for their respective duties.
The study found that there have been challenges that have faced the implementation of the strategy. It established that implementation was initially met with some resistance by employees, who feared the anticipated changes. It was also noted that communication between the management and other staff members was quite wanting in the initial stages. Other challenges cited were that it was a very costly undertaking whose intended funding was initially delayed hence delaying the entire process. Training and motivation of staff by way of clearly outlined compensation criteria further contributed to the already exorbitant high cost involved. Maintaining relevance and matching their competition has been difficult and the management has had to keep reinventing new ways of carrying out different operations and creating value proposition so as to bring out distinct and benefits of their brand.
The solutions to the challenges faced by Zenith Bank in the implementation of rebranding strategy were allocation of adequate resources, top management support and involvement of all stakeholders, particularly staff members. Training of staff in customer service, communication, proper management and other skills has greatly helped the process. Better remuneration and reward systems as an effort to retain staff has cut down on turnover and subsequent costs of re-hiring. Increased automation has made work a lot easier and the customers more satisfied, while Continuous Research and Development has helped the bank to keep re- inventing itself and constantly introducing new products to the ever changing market.
From the findings, it is clear that rebranding has had a profound effect on the performance of Zenith Bank. Rebranding has contributed to the bank’s implementation of long term goals and has enhanced the image of the organization at large. Through rebranding, Zenith Bank has managed to place itself strategically within the market, enhance efficiency and effectiveness of the organization and attain an advantage over its competitors thereby achieving the organization’s goal of profitability. The study found that rebranding has improved organization performance through creating company and product awareness, pushing up sales, enhancing customer satisfaction and seeking to create a unique position for its product and services. This has contributed towards ensuring that both product and organization create value beyond that of their competitors.
The findings of the study confirm that rebranding is a very costly and delicate undertaking that is also subject to a lot of challenges. However as in the case of Zenith Bank, these challenges can be overcome to ensure success. Employee involvement in rebranding is important in ensuring successful implementation of the strategy through ensuring ownership and individual responsibility. A shared vision also improves adaptability and effectiveness.This study also established that rebranding as a strategy is a continuous process which has to be well thought out before its implementation commences. It however requires some degree of flexibility to ensure that the strategy remains relevant and adapts to the dynamic environment in which it is being implemented. If this is adhered to, then an organization can most certainly reap the benefits of rebranding, key among them being improved performance.
Based on the findings from this study, the following recommendations were put forward:
- There is need for the banking industry at large to come up with viable policies to support and strengthen rebranding efforts so as to promote efficiency and competitiveness within the industry. The banking industry needs to understand the relation between rebranding and performance and consider it as a policy option for those players who are struggling to stay afloat and improve their performance.
- The sector regulator could also use this research as a guide on the challenges expected in undertaking rebranding in financial institutions in Nigeria and how to work around the challenges for the benefit the sector.
- This study demonstrates the application of the Resource based theory and the Dynamic Capabilities theory. It confirms that organizations need to identify and develop valuable resources that give them an edge so as to enjoy a position of advantage over their competitors. This is because a firm’s ability to enjoy a position of advantage lies in the resources it possesses which may be human, financial, technological or even physical.
- As highlighted by The Dynamic Capabilities Theory, organizations need, to develop their ability to integrate and build internal and external competencies to address rapidly changing environments. The resources and capabilities of a firm are the first basis of the firm’s performance, that is, before a firm looks at other avenues, it must first work with the resources it owns. It is the efficient utilization of these resources that gives the firm the power to defeat its competition and therefore Zenith Bank and indeed other players in the industry are encouraged to keep improving their resources in order to stay ahead of competition.
- This research has clearly established that there is indeed a relationship between an organizations’ rebranding strategy and its performance. Rebranding is one of the key factors that organizations can apply to turn a weakening brand into a prestigious brand. Brand image gives the company a competitive advantage, since it allows consumers to perceive enjoying greater benefit associated with the characteristics and quality of the product or service.
- According to the study, rebranding can vary from very subtle and barely noticeable initiatives to large and very costly undertakings. Either way, it is important that organizations plan ahead and consider the possible challenges, and ways of dealing with them before undertaking the task. If it is well executed, rebranding most definitely results in improved performance of an organization.
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