4/06/2005

Getting Eaten Up

In today’s business environment companies are getting eaten up by each other all the time. In the 1980’s and 90’s, it was quite clear who you were purchasing a product from. A trend started in the late 90’s of larger companies purchasing smaller ones and keeping the merged companies name on the product. This has helped keep strong customer loyalty and market share of the product. One major company that has been absorbed into another while retaining its market identity is Keebler. Is it dishonest by the acquiring company to keep the old company name on a product when the company no longer exists?

6 comments:

Marie said...

Companies are going in and out of business faster then consumer can recognize. I think it make things like investing hard as well. A company may seem like it is strong and doing well for a few year, and be completely out of the market.

Eric said...

I don’t think it is dishonest in the least! If the purchasing company pays the big bucks for a name, logo, or patient it’s theirs they can do with it what they want.

Eric said...
This comment has been removed by a blog administrator.
Fred said...

I don't think that is dishonest at all. When a company sells to someone else, they are selling not only the product, but the name and the reputation that the company had prior to selling. If a company name is the reason for a product success, why would you change it?

heather said...

I think it is important to keep the name and reputation intact as much as possible whenever a merger occurs. For instance, with Keebler it would incredibly stupid and worthless for the new parent company to change the name and start fresh establishing the new brand and new product. Also, it would be frustrating and confusing for consumers who are brand loyal. I like certain Keebler products and if it changed its name I most likely would have stopped buying from the newly-named merged product.

Dr. Tufte said...

-1 on Marie's and Jacques' comments for spelling and grammatical errors.

I don't think this is dishonest at all. Name recognition is just one more asset that a firm can acquire from another one. I don't know any examples off the top of my head, but I have heard that there have been takeovers where the name was the only asset.