When AT&T Wireless Services Inc. introduced its Digital PCS brand name in 40 digital cellular markets last October, many carriers expressed anger at the attempt to steal the thunder of personal communications services providers.
Southwestern Bell Mobile Systems was one adamant protester, says AT&T Wireless. But it quietly followed suit later that October by using the Digital PCS name when it launched digital cellular service in Chicago. It now has six digital cellular markets where it uses the name Digital PCS.
Although both companies are using Interim Standard-136 Time Division Multiple Access technology and their parent companies reportedly are in merger talks, the similar branding was not a collaborative effort, said AT&T Wireless. In fact, both companies already are competing head to head with the name in Tulsa, Okla., where Southwestern Bell launched service at 1.9 GHz late last month and AT&T Wireless is the cellular carrier. The companies eventually will use the same name in some big markets, including Chicago, Baltimore/Washington, D.C., and Boston. Both companies also are planning to use the name in their PCS markets.
Southwestern Bell said it is not afraid of confusing consumers with a similar brand name. “This makes it more simple for customers to understand wireless,” said Julie Ludlow, Southwestern Bell spokeswoman. “They are already familiar with the term digital and PCS. We didn’t want to confuse the issue by bringing in another name” into the marketplace.
But Southwestern Bell’s strategy could hurt both companies. Russell Meyer, director of naming for Landor Associates, a branding firm in San Francisco, believes consumers will become confused.
“Consumers are used to thinking about brands coming from one company,” he said. “With the same name, both companies are not delivering on the same promise. That’s guaranteed to make someone unhappy.” Even though AT&T Wireless uses the name AT&T Digital PCS, customers most likely will drop the AT&T name and just remember Digital PCS, he said.
Meyer was the brains behind the naming of Lucent Technologies Inc., AT&T Corp.’s former infrastructure manufacturing subsidiary. His company has come up with names like Touchstone Pictures and Sun Chips.
Consumers are likely to look for the cheapest service rather than the premium service, so promising quality may be tough with the same name, he said. “Brand commands a premium. If yours is Digital PCS and so is that one, you’re telling people to play the price game. We as consumers assume it’s the same name.” The same phenomenon is evident in all industries, said Meyer. For instance, if Coca Cola and Pepsi Cola used just the name “cola,” customers would only look for the cheapest cola.
The second company coming into a market using the same brand name runs the risk of looking like a “me too,” said Meyer. And as time goes on, consumers will forget who came out with the name first, erasing a sense of one company being the technology leader. AT&T Wireless was unable to trademark the Digital PCS name because it was too general.
Southwestern Bell already has stolen AT&T Wireless’ marketing game plan in markets like Chicago, Baltimore/Washington, D.C., Boston and St. Louis, where AT&T Wireless plans to launch PCS service in the near future. But AT&T Wireless may be able to ride on its own name in the marketplace. The name AT&T has one of the strongest brand recognitions in the country.
Analysts have hailed AT&T Wireless’ branding strategy as a brilliant idea because the company was able to reduce the impact of PCS launches before most PCS carriers had rolled out their networks. Bukasa Tshilombo, analyst with Northern Business Information Inc. in New York, believes the strategy is still a good one because “it takes away from the confusing issue of whether cellular is better than PCS,” he said. “In the end, I think it won’t matter whether service is cellular or PCS.”
But, AT&T Wireless’ brilliant strategy may come back to haunt the company if other carriers begin to follow suit as well.
“Maybe that’s the punishment for surprising everyone last year,” said Tshilombo.
