5 Reasons That Companies Change Their Name When Expanding Abroad

If you’ve traveled abroad recently, you may have noticed something strange when wandering the aisles of a local grocery store. You may have seen products with familiar branding, colors, and logos, but with one big difference – the name.

Ask for a bag of Lay’s Chips in Brazil, and you’ll get blank stares. People of Quebec frequent PFK, not KFC. If you get a whiff of strong cologne on the tube in the U.K., it’s Lynx, not Axe.

We know that a name is important in determining the success of a brand and fostering customer loyalty. So, why would companies go through the effort of renaming and rebuilding a brand from scratch in other countries? Here are five reasons why brands change their name abroad:

1. Different target market

As brands expand internationally, their target market will also shift. What may be a great name locally may be mediocre or completely meaningless to their foreign target market.

A good name should be easy to say, spell, and remember. It also needs to be both evocative and contextual. If a business’ name does not check all those boxes with their target audience abroad, a name change is necessary to ensure their success in the chosen foreign market.

2. Legal barriers

All companies must jump through legal hoops to ensure that their chosen name is not trademarked by another business or product in their home country. However, as many businesses learn when expanding internationally, a name that is unique and legal at home may already be trademarked abroad.

Axe, which launched in France, had to rename their product in certain companies due to trademark violations. The U.K., Australia, New Zealand, and China know the product instead as Lynx.

3. Word connotations

People in different countries, even if they speak the same language, may read the same word and take away entirely different meanings. A word that may describe your product perfectly in the U.S. could be unrelated or even offensive in another country.

Coca Cola discovered this discrepancy when expanding Diet Coke to the EU and Mexican markets. In these countries, the term “diet” is not used to describe low-calorie food and beverages. For this reason, people in the EU and Mexico drink Coca Cola Light.

4. Similarity to competitors

Sometimes, changing a product’s name aboard is for reasons as simple as similarities. Even if a name isn’t trademarked abroad, companies may find that their name is too similar to another competitor in their chosen foreign market, making it difficult for consumers to differentiate their brand from the more established competitor.

In the U.K. and Germany, T.J. Maxx is known as T.K. Maxx for this reason. The marketing team decided to make change their name to avoid confusion with the retail chain T.J. Hughes, which was already established in those markets.

5. Local laws

When expanding abroad, sometimes companies will be forced to change their name due to strict regulations in the new market. Some countries or regions, like Quebec, require businesses to translate their name into the local language. As a result, Quebec is the only place in the world where you’ll eat Poulet Frit Kentucky (PFK), instead of Kentucky Fried Chicken (KFC).

While it may seem like a risky and labor-intensive process for a company to change their name when expanding internationally, it will likely to prove beneficial in the long run. A name is an essential piece to a company’s long-term success, and sometimes that success may be best achieved by a brand-new name abroad.

Grant Polachek is the Director of Marketing at Squadhelp–transforming the way names, logos, and taglines are developed by combining an affordable agency-level brainstorming process with the unmatched creativity of “the crowd.” His book How to Develop the Perfect Name for Just About Anything is available to readers for free.