Power of Branding

For those who doubt the power of branding, here is a story that shows how a brand name built over years can be a powerful tool in marketing.

All of us know about how Bell Labs was disbanded into ATT the long distance company, and smaller regional Bells doing local business. ATT did very well in the age when hard hard-wired long distance service was the king. However, newer internet technologies which make IP telephony possible resulted in ATT losing market share and eventually deciding that it couldn't survive on its own.

In 2004 ATT sells its wireless business to Cingular, a wireless entity formed by a partnership between SBC Commnications and BellSouth. Cingular decides to keep its name and converts customers over to Cingular brand name.

Fast forward, ATT continues to go down and decides that short of a merger survival would be difficult. So, ATT decides to merge with Bell South, one of the original Baby Bells (in a reverse merger), and new entity decides to take on the ATT brand name which still held a lot of value and name recognition.

So, in the end, the merged entity ATT becomes the owner of Cingular and today, the new ATT announced that they will rebrand Cingular into ATT wireless.

Here is what Whitacre, the CEO of ATT said in the press release...
“Around the world, our customers recognize the AT&T brand for meaningful innovation, a commitment to customer service, high quality and exceptional reliability. AT&T, BellSouth and Cingular are now one company, and going to market with our services under one brand is the right thing to do.”

I guess its a testament to ATT's global visibility that such an event should occur. For those who had any doubts about why companies should invest into building brands, and the power of a well recognized brand, this is a case study to pay close attention to.
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