MOLI VIEW™

One of the unintended consequences of consolidation is that brands fall by the wayside. When companies with similar products merge, some of their brands become redundant.

Years ago, I used to gargle with Cepestat upon the recommendation of my doctor because I had (and still have, in fact) my tonsils and was susceptible to infections. But the firm that made the stuff was bought by a company that sold the similarly-named Cepecol, and from then on, the Cepestat name was used just for lozenges, not gargle. The original product vanished.

Sometimes, a company will acquire another, and then assume their name because there's more value in it. That's what happened when NationsBank bought Bank of America, First Union grabbed Wachovia, and SBC Communications took over AT&T. In each case, the acquired companies' names possessed more value — brand equity — than the acquirer.

Many product names evoke fond memories or possess some other intrinsic values but no longer fit in with the rest of the companies' offerings or budgets. After all, it's inefficient to advertise and market duplicate products, so the weaker ones are either discontinued, abandoned, or sold off.

One company's specialty is adopting and revitalizing these orphaned brands. Now, Mrs. Butterworth's syrup, Lender's Bagels, Vlasic Pickles, and other once-famous names have a new home.

Another company recently picked up the Post Cereal brands from Kraft, who acquired them when General Foods purchased Post.

These are all testaments to the power of brands. As someone recently pointed out, the value of Coca Cola is its brand, not sweet, brown, carbonated water.

Richard Pachter is the MOLI View's contributing editor for Business.

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