In the current economic climate, corporate mergers and takeovers are happening frequently for many reasons. Many companies cannot afford to stay afloat, while others have shareholders wishing to maximize profits. Either way, we are seeing the rapid consolidation of businesses everywhere. To some, this issue is not bothersome at all, but to others, who worry about monopolies, corporate competition and consumer sovereignty, there is great concern and confidence is slowly starting to vanish.
Today, while driving down the streets of Wilmington, NC, we noticed that two banks have changed names within the last year. Both banks were native to the Southeast, and one even shared its name with our state.
Some customers identified those banks as area staples, since they were both based in the Carolinas, but now one is owned by a company from California, and one by a company from New Jersey. In a snap, two banks from our region, gone and without a trace.
Though many experts rightfully argue to the contrary, we have been hearing in the news that hefty government spending has led to our monstrous national debt and deficit, and that we must rely on private sector spending to spark the economy. But private sector spending only takes place when consumers are confident that the markets are stable, otherwise, they hold onto their money in preparation for downturn. When you notice familiar companies disappearing and being replaced by institutions from across the country, do you feel that all is well with the economy? Probably not, which is why we ask: Why didn’t the companies retain the banks’ original names? In our opinion, we do not feel like the world looks highly on only a few corporations controlling the majority of an industry. In addition, the loss of thousands of jobs due to the takeover of a certain investment bank by the largest financial institution in the world is still fresh on the minds of many even though it happened almost four years ago.
From an IMC standpoint, we understand that companies try to communicate consistent messages for branding reasons to encourage familiarity, but in this case, it may have been more important to keep things close to the way they were. Some consumers are not welcoming to change, and others know that consolidation is indicative of a bad economy; therefore, they may not want to spend their money. Could keeping old names around despite new ownership benefit consumer confidence?
-Stephanie Bakolia, Claire Outlaw, David Glaubach