Brand equity retention after rebranding: a resource-based perspective

In recent decades, the substitution of corporate brand names has been spurred by mergers, acquisitions, and corporate spin-offs. When a business unit is divested, brand equity must be transferred from an established brand name to a new brand name. The central research question addressed in this study is how a spin-off retains brand equity after rebranding. The study is based on a case study of the divestment and rebranding of a subsidiary of a multinational firm. A thematic analysis is conducted based on semi-structured in-depth interviews and archival data of the rebranding campaign. The case analysis grounds brand equity retention after rebranding in the resource-based theory. The findings indicate the perceived continuation of the spin-off’s intangible, tangible, and relational resources as the primary condition under which the spin-off retains the brand equity associated with the former parent company’s corporate brand name. This central insight raises theoretical and practical implications for the conceptualization of brand equity and brand names and the value of brand names. The ability of a brand entity to rebrand suggests that the value of a brand name can be based on the replacement costs of a brand name instead of the entire financial value of brand equity.