In 1985 the Coca-Cola Company tested a new formulation. This formulation was perceived to be better than Coke and Pepsi in the "blind" taste tests. Five years and millions of dollars later the product refused to sell. The consumers, even those who could not tell the difference between "new" Coke, "old" Coke, and Pepsi, demanded that the "old" Coke be brought back! They wanted it not because of its taste, but because of their loyalty to the brand name. And Coca-Cola Company knows that. The Coca-Cola company is valued at about $125 billion. It's combined physical assets, however, add up to only about $25 billion. The rest is explained by the value of its brand name. Such high worth is not surprising considering that Coca-Cola is the world's best-known brand. Tremendous amounts of time and money, however, have been invested to create this popularity and strong image. While large advertising and promotional expenditures can build the image for a brand, a small investment and careful planning can go a long way in creating a brand name that has high inherent strengths.

Also, over the last 100 years, Coca-Cola has changed its packaging, advertising themes, and slogans. But the name cannot be changed without losing all the "equity" that has been built into that name in terms of brand awareness and brand loyalty. The conclusion is clear. Select the name carefully. It's an important decision with which you have to live – forever! So, choose a name that would have been contemporary fifty years ago, is contemporary today, and will remain contemporary fifty years from now. A brand name should not age with time.

Good names are effective across product categories. Today's pace of information and technology diffusion has made it easier to imitate a product. As a result, it is more difficult to maintain a competitive edge on performance attributes alone. Thus, names provide a source of competitive edge. In a survey conducted by the advertising agency BBDO, brand parity was higher for products such as paper towels and dry soup (which emphasize performance benefits) than for products like cigarettes, coffee, and beer, for which imagery was the norm. Brand image sells. The approval rating for Kellogg's Corn Flakes increased from 47% to 59% when the consumers were told the brand name. Similarly, the Armstrong name increased preference for tiles from 50% to 90%. "Double-blind" trials have indicated that branding accounts for a quarter to a third of pain relief in patients!

Even the drug industry is realizing the power of simple names. The reason is clear. Doctors may have as many as 50,000 drugs to choose from, and to reduce the resulting confusion, they often limit their range of prescriptions to no more than 100. An attractive brand name can stick in the doctor's mind and make or break a new product. If the power of a brand name can influence medical doctors, its efficacy in the mass market cannot be questioned.

Why are names so important? Every year more than 20,000 products are introduced in the supermarkets alone. However, 80% of all new products introduced in the market will last for less than three years. About half of these fail because they are not marketed properly, and not because of their inferior quality. They fail to reach their target markets effectively. In today's crowded marketplace, it is becoming increasingly difficult to attract customers' attention. An average individual may be exposed to 1,000 commercial messages each day, so it is not surprising that only 23% of television viewers can recall a given commercial 24 hours after they view it. A name that commands attention enhances recognition and brand awareness, and research has consistently shown high correlation between brand awareness and market share.