What Kraft and Harley Teach Us: Four Tips for Avoiding the Pitfalls of the Corporate Naming Process
Soon-to-be parents often spend countless hours deliberating names for their offspring. They consult books, the ‘Net, and various lists, among other sources. They draw up their own lists of likely candidates. They weigh the pros and cons of each entry. They solicit the views of family and friends and so on. For some, the process is fairly easy… They opt to name the child after the source of family money, if that is the case, in the hopes that the youngster gets remembered in the will.
My late father-in-law had a fairly simple process for testing a name for an unborn child: If you see a group of children playing outside, open your window and call out the proposed name. If the kids stop and laugh, go back to the drawing board…
I was reminded of his approach when reading about Kraft Foods. As previously announced, Kraft Foods is dividing to create two public companies before the end of 2012: a high-growth global snacks business and a high-margin North American grocery business. The North American grocery company will become Kraft Foods Group, Inc., retaining the Kraft brand for its corporate identity and as the brand for many of its consumer products. The global snacks company will be Mondelez International, Inc. Huh?
According to the company, “” (pronounced mohn-dah-LEEZ’) is a newly coined word that evokes the idea of “delicious world.” “Monde” derives from the Latin word for “world,” and “delez” is a fanciful expression of “delicious.” In addition, “International” captures the global nature of the business. Got it?
The folks at Kraft should have opted to follow my father-in-law’s advice for the proposed name has come in for some criticism. Is it warranted? I don’t know…
In discussing the new name, Kraft Chairman and CEO Irene Rosenfeld said, “For the new global snacks company, we wanted to find a new name that could serve as an umbrella for our iconic brands, reinforce the truly global nature of this business and build on our higher purpose – to ‘make today delicious.’ Mondelez perfectly captures the idea of a ‘delicious world’ and will serve as a solid foundation for the strong relationships we want to create with our consumers, customers, employees and shareholders.”
“It’s quite a job for a single word to capture everything about what we want the new global snacks company to stand for,” said Mary Beth West, Executive Vice President and Chief Marketing Officer. “I’m thrilled with the name Mondelez International. It’s interesting, unique and captures a big idea – just the way the snacks we make can take small moments in our lives and turn them into something bigger, brighter and more joyful.”
Naming a company or a child requires planning and lots of work…
Some companies seem to do the naming thing reasonably well. For example, YUM! Brands, Inc., (their eateries include KFC, Pizza Hut and Taco Bell) was itself spun off from PepsiCo a number of years ago. The company was formerly known by the unappetizing moniker, TRICON Global Restaurants, Inc., and changed its name to YUM! Brands, Inc. in May 2002. They got the added bonus of linking their stock symbol “YUM” to the corporate name.
Having an iconic brand as well as a single-focus business makes life easy… For example, Harley-Davidson, Inc., purveyors of the eponymous motorcycles. They, too, benefit from a link between the company and their stock symbol, “HOG.” For the uninitiated, a “hog” is slang for a Harley motorcycle. In addition, the acronym, “H.O.G.” stands for Harley Owners Group.
In naming companies, I offer some advice:
- Make it easy to spell. It will be easier to find your company in web searches, etc.
- Make it easy to pronounce. Some years back a producer for a TV show I was pitching told me: “If he can’t pronounce it, he won’t use it.” Harsh, yes… but that’s reality.
- Make it short and memorable.
- Try to make it all-encompassing. This is perhaps the most difficult aspect of all and it appears that Mondelez was chosen because of the diversity of the new company’s offerings (the other part of the company will become Kraft Foods Group as the Kraft name appears on many of its brands).
Ed. note: My friend, Adam Epstein, who acts as a special advisor to numerous small-cap company boards and investment funds through his firm, Third Creek Advisors, has authored an article entitled, “The Constraints of Thin-Cap Company Boards,” which appears in the current issue of Directorship (go here: http://www.directorship.com/the-constraints-of-thin-cap-company-boards/). The article is a must-read for those of us in a position to advise small-cap companies as it examines the fact that governing small-cap companies is a different proposition than governing mid and large-cap companies. You can reach Adam at firstname.lastname@example.org.