What's in a name? Can a changed name cause an apoplectic fit? Yes, well almost. The initial reaction to Avonmore Waterford Group's plans to change its name to Glanbia was greeted with almost disbelief in some quarters. Since Avonmore and Waterford were amalgamated a year ago, the new name, abbreviated to AWG, was settling down nicely. Even its head office is called AW House, so why change all that now? The reaction to the new name which has cost £400,000 plus (#508,000), and will cost a further £1.2 million (#£1.5 million), was reminiscent to that which greeted Diageo - the new corporate name for the amalgamated Guinness/Grand Met group, introduced at a cost of £250,000 sterling (#357,000).
That name came in for plenty of ridicule. This was often caricatured with an imbiber, in a pub, pleading with a bewildered barman, for a pint of Diageo.
With AWG changing its name, could one see a cartoon of a sceptical Avonmore milk drinker, going into a food store, and asking a perplexed assistant, for a litre of Glanbia milk?
The cynics could point to the similarities between the makeup of the names and the personal link between the two companies. Mr Ned Sullivan was a senior international executive with Diageo, and last July joined AWG as managing director designate - he replaces Mr Pat O'Neill as group managing director in July.
AWG admits that Mr Sullivan was heavily involved in the new name, but stressed the process was started before he joined the group. It is also adamant that the similar way the names were derived is a coincidence.
Glanbia, like Diageo, surprisingly enough, has a meaning. It is derived from two Gaelic words - glan meaning pure or clear, and bia meaning food. AWG justifies the use of the new name because it is "a new, single word, usable internationally, and easy to pronounce in all major languages".
Diageo was also derived from two words. Dia, a Latin word meaning every day, and geo, a Greek word meaning world. So in the minds of those who conceived Diageo, the message was meant to convey a group with brands which are enjoyed every day, all over the world!
The brand names of Diageo's products (and Glanbia's) have, of course, been retained. So the name change will, of course, have no impact on the general consumer.
However, IWG is going further than Diageo which merely changed the name of the plc. IWG is changing the name of all its subsidiaries to Glanbia which should make it easier for the group to create a uniform image.
IWG claims the new name "reflects the organisation's focus on food production and marketing and its fundamental commitment to the highest standards of food quality and safety. It also reflects the group's commitment to dynamic growth and innovation". However, ask any investor what the name Diageo stands for, and it is a safe bet that the vast majority will not have a clue, but equally they will readily identify it as the Guinness and Grand Met company.
The same will hold true for Glanbia - the origin of the name will be forgotten and the group will be seen as the Avonmore Waterford company. There is no doubt that many amalgamated companies need a new name to reflect the separate companies. However, all too often, the result can be an unfortunate outcome, with each company tussling to have its name first. The get-together of Price Waterhouse and Coopers, illustrates this all too clearly. The compromise is the rather cumbersome PricewaterhouseCoopers, abbreviated to PcW.
Other companies have also changed their names. The amalgamation of Irish Life Assurance and the Irish Permanent will have the uninspiring, but adequate, name of Irish Life & Permanent. Irish Life, the bigger of the two, is, of course, the first named.
In the UK, Cowie Group, the transport company, moved away from the family Cowie name, and renamed its group Arriva (pronounced a-reev-a). There is a good ring to that name. That re-branding made a lot of sense as the Arriva (a derivation of arrive or arrival) will be the tag used on all of its 140 different named brands. It is now half way through its three year target. Telecom Eireann's position is similar to Arriva's because the name change goes right down to the brands/products/logos. It will be re-branded this spring at a huge cost of between #5 million (£3.9 million) and #8 million (£6.3 million), as Eircom.
Although the new name has come under fire from Opposition politicians, it has at least real ring to it. Nevertheless, changing a name that consumers have identified with for years, has it own inherent dangers, particularly in a much more competitive environment. There have been many other name changes but the new one coming up will be TSB Bank and ACC Bank. The possible permutations are endless. A new name has not yet been on the agenda but what about TrustACC, or......, or....
So what's in a name? At the end of the day it does not really matter so long as it does not have bad connotations. This view, of course, would be hotly refuted by marketing executives, who would vigorously justify new names under the banner of change. Diageo, (as will Glanbia) for example, has settled down well, but would it not have equally done so under any other name, such as GrandGuinness, as was advocated at the time? What really matters is performance, and that means financial performance. That is how Glanbia will be judged.
(# - Euro)
