Wednesday, May 1, 2013

What in a Company's Name?


I've recently watched a video about the re-branding of American Airlines. They presumably paid their agency a fortune to come up with the idea of painting a big American flag on the tail and re-positioning the brand as "American" to replace the old "AA". Pretty lame!

It made me wonder though: is there any kind of pattern among the names of the best companies? I took a look at the 40 biggest firms by market cap on the S&P 500 and classified them by the origins of their name:
  • Random - a variety of trivial reasons
  • Descriptive - The core business is described in the name. E.g. "Theo's Pencil Company"
  • Suggestive - a word that suggests some quality about the company
  • Founder - named after the original founder
  • Product - related to its core product, or re-branded to the same name as the product.
Here's what I came up with:
  1. Founder - 33.8%
  2. Descriptive - 28.8%
  3. Random - 20%
  4. Suggestive - 15%
  5. Product - 7.5%
I wonder: if I started a new company tomorrow, and paid AA American's brand agency a million bucks to come up with a name, would they tell me to call it "Sanders"?

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