Markets

J&J Execs Admit Company Name Change Will Achieve Nothing

By Jim Edwards

Updated on: June 24, 2011 / 6:48 PM EDT / MoneyWatch

Most people will scratch their heads at the news that Johnson & Johnson (JNJ) is renaming its Centocor biologics unit (best known for the anti-inflammatory drug Remicade) "Janssen Biotech." J&J also owns the Janssen Pharmaceuticals network of companies, which are best-known for the antipsychotic medicine Risperdal.

Why bother? Neither Centocor nor Janssen are household names. Their brand equity with consumers is close to zero. And neither name gives any clues to the fact that they are one and the same as the parent company, J&J. (Centocor in Europe became Janssen in February. It's safe to say no one noticed.)

J&J executives admit that the change -- which also brings J&J's Tibotec Therapeutics HIV division under the Janssen name -- will achieve precisely nothing: Robert Bazemore, president of Janssen Biotech, told the Pennsylvania Mercury:

Our new name will not change our products, services, solutions or the valued relationships we have with our customers.

Craig Stoltz, director of product communications for Janssen, added:

Except for the name, "there will be no changes whatsoever" to operations at what had been Centocor, Stoltz said.

Waste of resources
Drug company renamings are at best marginal affairs. J&J is a jumbled archipelago of 250 companies in 57 countries; this change reduces that archipelago to ... 248 companies. They're distracting to management to. When Sepracor was acquired by Dainippon Sumitomo Pharma it used a legal entity named Aptiom, and then renamed the whole shebang "Sunovion," just to avoid, er, confusion. Surely there were more important things for the top brass to worry about?

At worst, rebrandings waste resources by allowing marketing services companies to cream cash off the company by "assisting" it with the rebranding. It's a form of ad agency rent-seeking: Every outdoor sign, logo and delivery truck will now need to be redone. Centocor has 1,700 employees -- they will all need new letterhead.

The Centocor-Tibotec-Janssen rebranding is a wasted opportunity. J&J's name has a deep well of consumer trust that's decades-old to draw from (despite its recent troubles). It would make more sense to rename J&J's units after what they actually do: "J&J Biotech," "J&J Consumer Brands," etc. It's almost as if J&J doesn't want consumers to figure out who's on first.

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Image by Flickr user Natalie Maynor, CC.