COMMENT, NZ Herald, 2 April 2021.
Westpac’s recent announcement to the sharemarket that it was mulling the sale of its New Zealand arm could lead to the disappearance of one of the most recognisable brands in the local market.
This according to MinterEllisonRuddWatts partner Kate Lane, who noted in her commentary last week that, while not inevitable, it seems likely the demerger might result in renaming and rebranding of Westpac New Zealand.
Whether this comes to fruition will depend on numerous factors, not least the demands of the Australian arm of the business, which will ultimately retain control of the brand’s intellectual property.
Should the local arm be permitted to continue trading under the Westpac name, a marketing expert advises the bank should proceed with caution before discarding the red W and all its associated imagery.
Ben Goodale, the founder of marketing firm Quantum Jump, says that rebrands of this scale do not come cheap.
“Very few major corporates go through the process of renaming themselves unless it’s absolutely necessary,” Goodale says.
The most prominent recent example in the local market was the rebranding of Telecom to Spark in 2011 – an arduous task, which cost an estimated $50 million.
Goodale notes there’s enormous equity with the Westpac brand, which is largely trusted by consumers to look after their most valuable assets.
This, he contends, is a world apart from the toxicity that had come to be associated with the Telecom brand, ultimately leaving the executive team with little choice but to reshape the corporate image of the telco from the ground up.
It’s also worth noting that while Westpac is currently owned by an Australian parent company, there’s nothing overt that screams Australia about the brand. If Westpac was still called the Bank of New South Wales, as it was from 1927 to 1982, then the New Zealand management would have little choice but to alter the name to reflect the local ownership model.
Goodale says that the hefty budget that would have to go into an unnecessary name change could be better used trying to coax customers at competing brands out of their inertia.
With banks now integrated into so many aspects of daily life, customers tend to be very hesitant to switch from one company to another. This is a major contributing factor in the struggle smaller banks face in increasing their scale and customer numbers.
When it comes to marketing strategy, the objective among banks is ultimately to convince customers at competing entities that making the switch will be worth the effort.
On this topic, Westpac will have a powerful bargaining chip at its disposal should it come under local ownership.
It would enable the bank to trade on the idea of being fully New Zealand-owned – a tool that could prove valuable in light of the foreign ownership structures of the remaining big three (ANZ, BNZ and ASB).
This should send a reverberation of concern through Kiwibank, which has built its entire brand on the point of difference in its local ownership.
Kiwibank now faces a potential future of having a far bigger competitor, with much greater market power, encroaching on a space it had spent years working to occupy.
The ensuing marketing battle between these two organisations alongside the enduring fight against the Australian-owned juggernauts could deliver some popcorn-worthy intrigue in the coming years.
By Damien Venuto.