Creating New Brand Names: Effects of Relevance, Connotation, and Pronunciation

Yeqing Bao
University of Alabama in Huntsville

Alan T. Shao
University of North Carolina at Charlotte

Drew Rivers
North Carolina State University

When a company decides on a brand name for a new product or service, it establishes the foundation of the brand's image (Kohli and LaBahn, 1997). The selection of the proper brand name is one of the most vital marketing decisions an organization will make because it is typically the centerpiece of introductory marketing programs (Keller, 1993; Lee and Ang, 2003). While there is little doubt the brand name is an integral piece of an organization, its precise contribution to the organization is usually difficult to quantify. Indeed organizations are often befuddled when attempting to understand the incremental utility or value added to a product by its brand name (Farquhar, Han, and Ijiri, 1991; Park and Srinivasan, 1994; Yoo, Donthu, and Lee, 2000). But the potential potency of a brand name is undeniable, as evidenced from John Stuart, former Chairman of Quaker Oats Ltd.: "If the business were split up, I would take the brands, trademarks, and goodwill, and you could have all the bricks and mortar-and I would fare better than you" (Dyson, Farr, and Hollis, 1996). This view is further corroborated by several recent financial studies which found that firms with certain names (e.g., easy pronunciation or better sounding) outperform firms with names otherwise in the stock market, and such effect is robust even after controlling firm size, industry, growth opportunity, profitability, and firm age (Alter and Oppenheimer, 2006; Howe and Xing, 2006).