Under the Influence with Terry O'Reilly - S11E09 - Tornados & Lawsuits: Why Companies Wrestle with Name Changes

Episode Date: March 5, 2022

This week, we look at the reasons why successful companies suddenly change their names. Sometimes those name changes are for legal reasons, sometimes it’s because the old name has too much negative baggage, sometimes it’s to boost a stock price and sometimes a name changes because of a tornado. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling. Subscribe now and don't miss a single beat. We'll see you next time. new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. This is an apostrophe Podcast Production. You're under the influence with Terry O'Reilly. When celebrities travel for work and play, they often stay in hotels.

And staying at hotels can attract the attention of paparazzi and super fans. So when checking in, celebrities often change their names to conceal their identities. But the names they use to hide are often revealing. According to

travelandleisure.com, there was a leak of fake celebrity names due to a hack back in 2014. While I'm sure the celebs have all changed their fake hotel names since the leak, seeing the names they were using is very amusing. Some celebrities chose names from characters they have portrayed, others used family names, and still others went for the humor of it all.

When Kim Kardashian traveled, she often used the name of one of her favorite Disney characters, Princess Jasmine. Tom Hanks alternated between

the name Harry Lauder, who was a vaudeville performer, and Johnny Madrid, who was a trumpet player with blood, sweat, and tears. Actor Johnny Depp steered towards quirkier choices,

often traveling under the name Mr. Drip Noodle. Paul McCartney dipped back into his past and checked in as Apollo C. Vermouth, a pseudonym he used when he produced the Bonzo Dog Band back in the 70s. His buddy Sir Elton John travels covertly under the name Sir Humphrey Handbag. Even his fake name has been knighted. Daniel Craig's experience as 007 has taught him a thing or two about traveling incognito.

He used the name Williams, Olwen Williams. It was his grandfather's name. Actor Kate Beckinsdale is a fan of the Alien movies and clearly a fan of humor. So she chose the name Sigourney Beaver. There are some comic book fans in the celeb world. Kid Rock often used the alias Dick Grayson, a nod to the boy Wonder, and basketball great Michael Jordan preferred Clark Kent.

George Clooney must have a difficult time traveling without getting noticed, but who has a better sense of humor than old George? Instead of making up an ordinary, unremarkable name, he often checked into hotels as Arnold Schwarzenegger. He said he just loved it when the staff was forced to call him Mr. Schwarzenegger. Jennifer Aniston may be the smartest of them all. She slips in and out unnoticed under the very neutral name of Mrs. Smith.

But my favorite name change belongs to Justin Timberlake. When he checked into hotels, he signed the register as Mr. Woodpond. Get it? There have been a lot of interesting name changes in the world of marketing, too. Some don't travel well due to major lawsuits. Sometimes a name change is in order to shed negative baggage. Sometimes a name change can help a company succeed on the stock market. And once in a while, a company changes its name because of a tornado.

You're under the influence. Once upon a time, retailer Best Buy had a different name. It was called Sound of Music. Then one day, a tornado changed all that. On June 14, 1981, a tornado tore through the Minneapolis suburbs. It churned for over 25 minutes, flattening everything in its path north and east for 15 miles. The Sound of Music stereo store was in the path of that tornado. Its roof was sheared off

and the showroom was destroyed. Speakers, turntables, and VCRs were strewn all over the parking lot. But somehow, the storeroom survived. Within a few hours, all 65 Sound of Music employees rallied together to help sort, clean, and salvage the items that could be saved. While many of the products were too damaged to sell, quite a few could be sold as is at reduced prices. The store owner, Richard Schultz, decided to hold a big sale just six days after the tornado.

He set up a trailer in the original store parking lot where the devastation had taken place. Then he decided to take the sale one step further. In addition to the salvaged products, he offered other great deals on open box items, display models, discontinued products, and overstock that could all be marked down. And Sound of Music advertised the sale as the place to get the best buy. Richard Schultz watched customers as they moved through the temporary setup and merchandise. He observed that people weren't that concerned with brand names. They liked the no-pressure style of shopping the tornado sale offered.

They liked that they could pick up and actually handle the merchandise. Most of all, they loved the best-buy prices. By the end of the day, almost everything was gone. So the store brought in additional products from its warehouse and staged a second tornado sale. Sound of Music made more money in four days than it usually made in a month. With that, Sound of Music not only changed the way it did business. It changed its name. Schultz was inspired to create a superstore format, one of the first examples of big-box retailing. All the products were put on the store floor instead of back in the stockroom,

so customers could actually touch the items. The store did away with commissioned salespeople to create a no-pressure environment. And most importantly, Sound of Music changed its name to become Best Buy. Last year marked the 40th anniversary of the tornado. Founder Richard Schultz said it was both the worst and best thing that ever happened to them.

The tornado changed the way they did business and ended up changing the business's very name. Last year, Best Buy had revenues of $43 billion. Back in 1911, the Kwaishinsha Motor Car Works Company was founded in Japan. The first vehicle it produced was dubbed the DAT. DAT was an acronym created from the initials of its first three investors. In 1925, the company formally changed its name to the DAT Motor Car Company. Eight years later, another car company called Nihon Sanyo purchased the DAT Company and used it as the foundation to build what would become the Nissan Motor Company. The first car it launched was a more compact version of the original DAT model. So, it was called Son of DAT, or Datsun.

But because the word S-O-N means loss in Japanese, it was changed to S-U-N, hence Datsun with a U. When Nissan launched in North America in 1958, it chose to enter the market using the Datsun nameplate. Historians suggest there was a reason for that. It was a way to distance the brand from memories of Nissan's involvement with Japan in World War II. By 1975, Datsun was a top-selling import brand in the U.S., beating out Honda, Toyota, and Volkswagen. Then, in 1981, Nissan made a bold decision. It was going to spend $500 million to destroy the Datsun brand name.

In 1981, Datsun had 45% brand name recognition in North America, a very healthy number for that time. Nissan only had 6% awareness. But Nissan was determined to unify its image around the world. The marketing industry considered it a giant mistake. Brand names are gold, and it takes years to build up equity in a brand. People put their trust in trustworthy names. So when Nissan said it was going to shed Datsun, and all that name stood for after 23 years, it was a huge gamble. There were over 1,100 Datsun dealerships in the U.S. alone.

The name change meant new signs, stationary brochures, business cards, and legal expenses, as dealerships now had to reincorporate. To throw it all away was going to cost hundreds of millions of dollars. But remarkably, sales went up. Nissan's revenues jumped 11% the following year and kept going up. Its marketing became streamlined. The calculated risk paid off. And today, the name Datsun is just a speck on the horizon in Nissan's rear-view mirror. One day, a man named Horace Smith went into business with D.B. Wesson to manufacture rifles.

The Smith & Wesson Company was born in Connecticut in 1852. Smith & Wesson sold its business to the Winchester Rifle Company three years later, but Messrs. Smith & Wesson reformed to create a revolver company in 1856. The timing was fortuitous, as the American Civil War broke out in 1861. Demand for their first revolver was so high, the company had to build a second factory. Over the years, Smith and Wesson had become one of the most high-profile firearm manufacturers. Then, after 164 years, the powerful Smith & Wesson brand made an announcement. It decided to change its name.

According to the CEO, the name change was to reflect the company's diverse family of products. It no longer just sold firearms, he said. It now sold a multitude of products aimed at the, quote, rugged outdoor enthusiast. So, on November 7, 2016, the holding company for Smith & Wesson changed its name to become the American Outdoor Brands Corporation. Smith & Wesson would still be the firearms division, but American Outdoor Brands would be the umbrella company and stock symbol.

The timing of the name change was significant for several reasons. First, the decision was announced one day before the U.S. presidential election in 2016. Second, gun violence was a hot topic leading up to the election. The mass shooting at an Orlando, Florida nightclub in June of 2016 had resulted in 49 deaths and 53 injured.

Protests against gun violence spread across the country. The NRA came under attack. Third, the stock price of Smith & Wesson was always volatile. When talk of gun regulations heated up, sales would spike. When gun-friendly administrations were elected, gun sales would drop. Lastly, American Outdoor Brands is moving its headquarters from Massachusetts to Tennessee, as Massachusetts legislators had proposed a bill

that would prohibit the gunmaker from manufacturing military-style assault weapons. Tennessee was cited as being, quote, a friendlier business environment. By becoming American Outdoor Brands, the company could not only expand into other areas in outdoor gear and apparel, but it could distance itself

from being immediately associated with firearms without losing gun profits, thereby smoothing the waves on the stock market and moving the umbrella company out of the line of fire. We'll be right back with a story of how the WWF beat the WWF. In case nobody's told you, weight loss goes beyond the old just eat less and move more narrative and that's where felix comes in felix is redefining weight loss for canadians with a smarter more personalized approach to help you crush your health goals this year losing weight is about more than diet and exercise it can also be about our genetics hormones metabolism felix connects

you with online licensed healthcare practitioners who understand that everybody is different and can pair your healthy lifestyle with the right support to reach your goals. Start your visit today at Felix.ca. That's F-E-L-I-X.ca. Whether you're in your running era, Pilates era, or yoga era, dive into Peloton workouts that work with you. From meditating at your kid's game to mastering a strength program, they've got everything you need to keep knocking down your goals. No pressure to be who you're not. Just workouts and classes to strengthen who you are.

So no matter your era, make it your best with Peloton. Find your push. Find your power. Peloton. Visit Peloton. Find your power. Peloton. Visit Peloton at onepeloton.ca. Bet MGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, you're always taken care of with the sportsbook born in Vegas.

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The World Wildlife Fund was founded in Switzerland in 1961. That same year, the fund trademarked its Panda logo with the letters WWF. Meanwhile, across the pond, a wrestling operation called the Worldwide Wrestling Federation

began two years later in 1963. It would eventually shorten its name in 1979, rebranding as the World Wrestling Federation or WWF. The two organizations seemed to coexist in their separate worlds until 1989, when the

World Wildlife Fund noticed that the World Wrestling Federation had applied for an international class trademark. The fund opposed that application and won a settlement stipulating that the Wrestling Federation could not use the initials WWF in bold type when standing alone or when not used in conjunction with the Federation's logo or its wrestling magazine. With that, the matter was resolved. Until another battle occurred five years later.

In 1994, the World Wildlife Fund claimed the wrestling organization had violated the deal by flagrantly using the letters WWF in a multitude of areas again. Another court battle was waged. This time, the court stated the wrestling organization could not use the letters WWF in printed, verbal, or visual form and could only use the acronym when referring to older archived events, not new ones. Then, three years later, the Wrestling Federation launched a new website, WWF.com, and was allegedly selling WWF merchandise.

The fund saw this as a breach. First, it was too close to the fund's domain name of WWF.org. Second, it didn't want to be linked with wrestling, saying the perceived association hurt the fund's ability to fundraise because of the various drug and harassment scandals the wrestling company was facing at the time. So, the World Wildlife Fund sued in a British court and the court sided with the environmental group The wrestling organization appealed, but the case was dismissed With that, the wrestling company finally submitted In 2002, it changed its name to become the WWE, World Wrestling Entertainment. The cost to rebrand at this late stage would be over 50 million

dollars. When it finally unveiled its new branding, it launched with a campaign that centered around the phrase, get the F out. Which is exactly what happened. The F was out, and the E was in. The WWE now says the change was made to reflect its diverse entertainment business, which includes wrestling events, television deals, video games, movies, and merchandise. On the other side, a spokesperson for the Canadian arm of the WWF summed it up saying, it's been the wrestlers

against the cute little panda bear and the panda won. The Philip Morris Company was incorporated way back in 1902 in New York. Over the years, Philip Morris grew to become one of the major cigarette companies in the world. While it has several brands under its corporate umbrella, Marlboro generates the most profit. Even as smoking declined around the world, the Philip Morris Company continued to grow at the expense of its rivals. As a matter of fact, the 97-year-old Marlboro brand alone outsells the combined brands of all of its competitors. Today, Philip Morris commands nearly 50% of the U.S. cigarette market and a 15% share worldwide.

Almost no other brand, in any category, around the world, enjoys that kind of dominance. For over a century, the company used all of its resources to weld the name Philip Morris to cigarettes, including being the main sponsor of the top-rated I Love Lucy show in the 1950s. Whether you've been smoking for 10 months or 10 years, something wonderful happens. You'll feel better when you change to Philip Morris. Then, after all those years and the hundreds of millions of advertising dollars, Philip Morris decided to change its name.

On January 27, 2003, the Philip Morris Company changed its name to Altria. At the time, the company also owned Kraft Foods and had a sizable stake in the Miller Brewing Company. Philip Morris said the reason for the name change was to reflect its diverse family of products. But internally,

it knew the association with tobacco was keeping its share price down. The company said the new name, Altria, was a way to deliver on the promise to become a better corporate citizen. According to company spokespeople, the name Altria came from the Latin word altus, meaning to reach higher,

to suggest peak performance. But critics were more than skeptical. Many thought Philip Morris was simply changing its name, not its business practices. That the real intent of the name Altria was to sound like altruism, which was a central message in the company's donations to the arts and in a new corporate advertising campaign. A few months ago, this neighborhood in Richmond, Virginia, needed some help. And with the help of PM volunteers, it has been rebuilt, repainted, and re-energized with a new

sense of community pride and accomplishment. And I think it stands as a shining example of what we, the people of the Philip Morris family of companies, can accomplish when we set our minds to make a difference. While the company denied it was purposely trying to link itself to altruism, the timing of the name change needs some context. In 1998, the government of the United States negotiated the Tobacco Master Settlement Agreement with the four major tobacco companies.

In this landmark settlement, the states settled their lawsuits against Big Tobacco to recover smoking-related health care costs. Tobacco companies agreed to pay $246 billion over the next 25 years, and, in addition, they were to cease or curtail certain marketing practices, namely, marketing to young people.

And it was in the aftermath of this sweeping settlement that Philip Morris decided to change its name. To navigate the name change, Philip Morris hired branding consultants. The findings were clear. The name Philip Morris had entirely negative connotations with the public, and it was a target for boycotts. According to internal company documents,

the new Altria name was neutral and offered the possibility of masking the negatives associated with the tobacco business without sacrificing tobacco profits. Philip Morris had seen its major competitor, R.J. Reynolds, achieve the same goal with a merger, coming out the other side as R.J.R. Nabisco. The president of the National Center for Tobacco-Free Kids said the name change was a, quote,

hypocritical ploy to divert attention from the fact that Philip Morris is, first and foremost, a cigarette company whose products are used by more children than the products of any other cigarette company. Philip Morris understood the power of branding. In the 1950s,

it came to the conclusion that there was really no discernible difference between cigarettes. The only meaningful difference was in the marketing and packaging. So it took Marlboro, a failing brand aimed at women, and changed the conversation by altering its branding to appeal to men, using the rugged imagery of the Marlboro Cowboy. The same thinking was brought to the new name Altria. It was an empty vessel that could be filled with any meaning.

Knowing there would be blowback, Philip Morris reportedly purchased domain names such as AltriaStinks.org, AltriaSucks.net, and AltriaStinks.org, AltriaSucks.net, and AltriaKills.com. Nearly two decades later, Altria still gets most of its profits from smoking products.

As recently as 2019, surveys revealed that 31% of the public still have a negative perception of Philip Morris. Yet, only 4% of the public still have a negative perception of Philip Morris. Yet, only 4% felt the same way towards Altria. In case nobody's told you, weight loss goes beyond the old just eat less and move more narrative. And that's where Felix comes in. Felix is redefining weight loss for Canadians with a smarter, more personalized approach to help you crush your health goals this year.

Losing weight is about more than diet and exercise. It can also be about our genetics, hormones, metabolism. Felix connects you with online licensed healthcare practitioners who understand that everybody is different and can pair your healthy lifestyle with the right support to reach your goals. Start your visit today at Felix.ca. That's F-E-L-I-X.ca. Whether you're in your running era, Pilates era, or yoga era, dive into Peloton workouts that work with you. From meditating at your kid's game to mastering a strength program, they've got everything you need to keep knocking down your goals. No pressure to be who you're not. Just workouts and classes to strengthen who you are.

So no matter your era, make it your best with Peloton. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. It has been said that names determine our destiny. That labels drive outcome. Changing a brand name is a very expensive and risky venture. When a company is willing to throw away years of equity, there is usually an instigating factor. Nissan wanted to enter the North American market

by shedding past associations. Smith & Wesson was looking down the barrel of mounting gun protests. Philip Morris was coming out the other side of the landmark Big Tobacco settlement.

And the World Wrestling Federation had been pinned by a panda. You can see similar things happening in the digital world right now. Google has been the target of antitrust hearings and has recently changed its name to Alphabet. And while Facebook is in the hot seat with Senate hearings, it has changed its name to Alphabet. And while Facebook is in the hot seat with Senate hearings, it has changed its name to Meta. One way to change an outcome is to change the conversation. It's an age-old

strategy. When an existing name has too much negative baggage, a new name offers a way to zero the board. Because a new name has no baggage whatsoever. Sometimes it's the only way to survive the tornado

when you're under the influence. I'm Terry O'Reilly. This episode was recorded in the Terrastream Mobile Recording Studio. Producer, Debbie O'Reilly. Sound Engineer, Jeff Devine. Theme music by Ari Posner and Ian Lefevre. Research, Allison Pinches. If you're enjoying this episode, you might also like The Times They Are a-Changin', Brands Crushed by Zeitgeist, Season 10, Episode 1.

You'll find it in our archives wherever you listen to your podcasts. Follow me on Twitter and Instagram at Terry O. Influence. See you next week. Fun fact. Philip Morse was an actual person. He operated a tobacco shop in London, England, way back in 1847. Bet MGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, you're always taken care of with the sportsbook born in Vegas.

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