Another product, the same name: who wins?

The name of one product is one of the very first elements that catches the consumer’s eye and makes the difference among competitive offers. The problem appears when on one particular market different brands bearing the same name are competing against each other. The discussion on naming and on the process by which one product or service is being associated one name can turn into a long and complex one. No longer than the process itself. The big companies abroad – specialized in this field – in the context of the fight for the best position in the mind of the consumer becoming tougher and tougher. For example, a few years ago the manufacturer of Citroen vehicles paid several hundreds euro to one company specialized in naming for the purpose of getting the name of one of his models: the Xantia. In Romania too companies have started to be more careful when choosing the name of a new product. Nevertheless, there are fields where products of one particular class have similar names. One example is the field of mineral and natural bottled water where the fight is between no less than 4 ‘sources’: Izvorul Alb by Coca-Cola, Izvorul Minunilor by European Drinks, Izvorul Ascuns and Izvorul Zanelor by Apemin Tusnad. Personally I think it is a mistake that the same producer launches at very short distance 2 mineral water brands named Izvorul Ascuns and Izvorul Zanelor, it would have been enough for him to look up in the DEX (Explanatory Dictionary of Romanian Language), says Sorin Psatta, Strategy and Research Manager by Graffiti BBDO. Is there a simple coincidence or lack of inspiration from the marketing specialists? In either case the situation is not a very positive one, just because, according to Sorin Psatta, the similarity of name between the four brands can generate confusion among consumers. ‘A common name, too less differentiated from the names of the competitors, can become an obstacle in the way of brand communication and can make the branding process even more difficult’, says Sorin Psatta. Moreover, name resemblance can be dangerous, because tough competition can result out of such a minimum differentiation, whereas the efforts that should normally go towards brand promoting and strengthening are in this case oriented to measures of communication for protection purposes and imposed differentiation towards competition. At the time market specialists think that the resemblance between the names of brands is up to a certain extent normal; this is the situation where there is no ‘pioneer’ product to open the road for other products to follow it and reach the mind of the consumer. But the resemblance between the names of brands is also atypical, given the fact that nowadays products are counting more and more on differentiation. What will be the effect on the four mineral water brands bearing similar names? At one particular moment the need for protection against the others will appear. Given the fact that only Izvorul Alb and Izvorul Minunilor benefit from the ATL communication budgets and the audience on HoReCa channel – like a very good way of brand promotion and strengthening – the other two brands shall have to go down to lower prices and go for massive presence in key accounts, that will ultimately result in lower profits’, says Bogdan Branzas, general manager by Branzas consulting and design company. Cristian Paul, Creative Manager and partner by Brandient, says that the small differentiation between the four mineral water brands is dictated by the lack of naming strategy. ‘Usually consumers tend to shorten long names, resulting in a name that can easily be pronounced. Thus we have Harley for Harley Davidson, Mac for McDonalds, Cola for Coca-Cola. One possible scenario in this case could be the intent to make only one or two of these names easy to be stored in the consumer’s memory and used while the others should be ignored. It is possible that not even these brands or this brand stored in the consumer’s memory reach a dominating position in top of mind, says the Brandient representative. ‘The name resemblance between the four brands is not correct and is dangerous. The leader position occupied in time on the market determined other bigger or smaller competitors to copy partially the name of our brand with the intent to benefit from the name on short term and to win the initial purchase. Time proved that the initial brand - if it keeps intrinsic quality unchanged on a constant basis - doesn’t lose market shares in favor of other derived brands. The danger can be on the level of consumer perception. These brands can, at one moment or another, affect the image of our brand. Consumers having a less developed brand culture are the most likely to confuse the brands and to consequently get deceived by consuming another water brand. But this is going to be a short term confusion. It is sure that in this competition small and recent brands will lose. In their case the re-branding and repositioning must be done now, otherwise their lack of personality will annul them in time’, said Danut Munteanu, brand manager by European Drinks. The name resemblance between brands generates a series of risks but also challenges for the brands concerned. The risks imply reduced differentiation, positioning problems or large costs for communication. On the other hand, challenges for the companies are package innovations or creating derived products, such as natural lemon tasting water or wild fruit tasting water, etc. However, which is the most affected of the four brands and why? Sorin Psatta from Graffiti BBDO says that ‘in these situations the most affected is the market leader. Having also the strongest voice, its activity will result in fame also for competitors with similar name’. Bogdan Branzas opinions that the most affected brands are the first two that entered the market with this name, that is Izvorul Alb and Izvorul Minunilor, because these must sell under increasing pressure whereas the other two players can attack in a ‘subversive’ way. Under these circumstances which is the best solution for all the four brands to be able to survive on the market? According to specialists, one solution would be a better understanding of the branding process and more attention paid to the first step – naming. ‘For Izvorul Alb and Izvorul Minunilor it is difficult to give up and this would highly affect the production. The other two brands, having a reduced acknowledgement and almost exclusively based on the price advantage and commodity, can make a re-branding effort or a repositioning of brand values, says Branzas. Another example similar to the mineral water brands with similar names is the one of the company Antefrig that launched a few years ago on the market the so called ‘Poiana Antefrigului’ – an economical pate, whose name referred directly to the premium brand, the only pate without additives on the market by Scandia. Following a long process OSIM (The State Establishment for Brands and Inventions) agreed with Scandia. With or without a ‘name source’ the market agents can say that the average yearly mineral water consumption level per consumer in Romania is around 34 l, which is bellow the EU average consumption of 140 l / consumer. In other words, there is still place enough for progress and development on this market and if the players know how to stand out on the market their profits are sure to increase within the next few years.