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Why Risk Isn't Always Bad - IHOP vs. IHOB
Jun 12, 2018

Provoke Insights was quoted in an article in NBC yesterday — you can check it out here. The article discusses International House of Pancakes (IHOP) decision to rebrand as IHOb — International House of Burgers. The temporary name change shows that the restaurant is serious about its burgers not just its pancakes.  

Carly Fink, the principal and the head of research and strategy at Provoke Insights, was asked what she thought of the famous breakfast chain’s strategic move. She noted that it is risky. However, risk can have both positive and negative results. Risk is not necessarily a bad thing; it can often pay off!

A name change is a major shift in a marketing strategy. IHOP is one of the top names that consumers think about when they think about breakfast. Changing the name will impact this perspective and result in consumers’ association shifting away from breakfast and to lunch/dinner instead. The key here is to avoid losing its association with breakfast.

IHOP has been trying to increase sales for lunch and dinner for some time for many reasons, one of which is because a restaurant can often charge more for meals later in the day. We can be sure that IHOP marketing team spent a lot of time weighing the pros and cons of changing the brand name for this marketing initiative. One way this risk can pay off is by causing controversy. There is value in controversy - it gets people talking. This has proven true for the IHOP strategy, as it has already caused a huge stir on Twitter, with Burger King changing their name to Pancake King and other burger vertical leaders commenting on the name change. The initiative has been somewhat successful, with an influx in press and chatter very visible.

There is a need to be careful. Acronyms can cause complication. Acronyms are often engrained in people’s memories and consumers find it difficult to stop using old ones. It is important to conduct research in order to determine if the name change will cause confusion among consumers. Will people be aware that the chain still sells pancakes? How else, besides the acronym, will IHOP promote burgers? It will be key to see how their advertising focus, such as its television commercials, changes in the following months. If ad spend is less focused on breakfast would this impact the brand overall equity?

It is also important to remember that this is a global brand, and as such, each market/country may react differently.

The burger market is very saturated. Entering the direct competition with the burger industry will be difficult as IHOP is not known as the king of this vertical and there are many brands competing for the crown.

The risk may pay off, though. A name change could help their positioning. People might start to think of IHOP when they think about lunch and dinner. The key when a brand is changing their name or acronym is to conduct thorough research about their consumer, the brand, and their advertising initiatives to make sure no wrong turn is taken! Will the name change really move the needle? Or will this simply take away from breakfast spending, resulting in loss of revenue? Check out more about naming research on the Provoke Insights blog.