The Rise of Eponymous Brands

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If you believe you have a certain level of influence. The kind that inspires others to take action. Then you should be considering doing the following thought experiment.

Imagine somebody wipes out your bank account, strips you off of whatever rank, designation, or title you hold, and throws you on a random street in an unknown country. Will you be able to survive?

More importantly, will you be able to rebuild what you’ve lost?

True influence is ultimately defined by the ability to build an eponymous brand.

Replace yourself with Taylor Swift, Joe Rogan, or Dwayne Johnson in the same thought experiment, and you know they will bounce back in no time. They have a very specific skill set that they have leveraged to build eponymous brands.

What is a Eponymous Brand?

Eponymous is something or someone that gives its name to something else. An eponymous brand is created when an individual uses their own name to develop the business. This is very common in the fashion industry. Many fashion designers have used their own names to create eponymous fashion brands.

Kylie Jenner, Cindy Crawford, Anita Dongre, and Satya Paul are all examples of eponymous brands.

The last few years have seen a tremendous rise of eponymous brands in industries like cosmetics, fashion, health, nutrition, finance, etc. Traditionally eponymous labels were restricted to the fashion industry. The rising distrust among consumers for brands endorsed by corporations has led to the rise of eponymous brands.

What is fueling the rise of Eponymous Brands?

The fashion industry has more eponymous labels than any other industry that you can think of. Most traditional businesses usually had eponymous labels considering most of them were named after the founder. Walt Disney, Dell, Heinz, Tata, Birla are all eponymous brands that we are familiar with.

But somewhere in the last fifty years, organizations started adopting descriptive, acronymic, associative, or suggestive labels. There are two primary reasons which are responsible for this trend.

1. Separating Founder’s Equity from Brand’s Equity

Organizations shifted away from being named after their founders because they did not want the brand’s equity to be inextricably linked to that of the founder. What happens to your brand if your founder is a technology specialist and your organization chooses to enter the grocery business? This is a common issue that many organizations face.

A brand like Tata’s can transition seamlessly from technology to groceries without jeopardizing its brand value. The brand’s fundamental quality of trust extends smoothly to its other companies. But not all eponymous labels have this advantage.

2. Derisking and Ensuring Business Continuity

Adopting a different label/identity also allowed them to derisk themselves by ensuring business continuity even if the founder’s image takes a hit. For example, Dior suspended John Galliano in February 2011 after being arrested for an alleged anti-semitic rant at a Paris club.

Citizenside, a Paris-based citizen journalism site, got footage of Galliano swearing at the same pub in December of the previous year. This degraded the brand image of John Galliano and Dior. John Galliano was fired and replaced by Italian Designer Maria Grazia Chiuri.

Consumer’s Trust Eponymous Brands

Fast-forward to 2021, and if you happen to check Forbes list of America’s List of Richest Self-Made Women, the chances are that you will notice that a large percentage of them are Eponymous Brands.

Rihanna, Cindy Crawford, Oprah Winfrey, Kim Kardashian, Kathy A. Fields, Katie Rodan, Kylie Jenner are some of the names that appear on the list.

If you consider the trend back home in India, the story is very similar. Gautam Adani, Uday Kotak, Murali Divi, Byju Ravindran are few names that come to mind. While the rise of unicorns might have led to a rising number of start-ups increasingly choosing to opt for descriptive or suggestive names instead of eponymous labels.

But as a country, we have always been comfortable buying from Sharma’s corner grocery store and Agrawal’s pharmacy store. There is a certain level of comfort that you experience, knowing that it is coming from individuals you can trust.

One study from the University of Oklahoma and another from Duke’s Fuqua School of Business came to contradictory findings on how eponymous firms fare compared to those that don’t. Firms with eponymous names produce a 3% greater return on assets than those without. Eponomyus firms are valued at 8% less than their peers, whereas founder-named and managed enterprises are valued at 21% less.

However, I’ve always viewed such international studies with skepticism since the Indian landscape has always had its own finer subtleties.

It takes longer to establish trust with non-eponymous labels since attaching a face to the name is harder. People continue to consider shopping at their neighborhood supermarket or pharmacy store for the same reason. There are few drivers for this behavior which has led to the emergence of eponymous brands.

1. Distrust

It is incredibly difficult to earn consumer trust in India, but it becomes easier to do category extensions or even venture into new businesses once you do. It is easier for individuals to earn trust by providing value.

For millions of homemakers choosing a sachet of Masala from Madhura’s Recipe becomes a no-brainer. Because you can relate with Madhura Bachal and, as a housewife, she would never sell you anything she would not use herself.

2. Value-Focused

If you consider all the eponymous firms that have emerged in recent years, they would have one thing in common. They are all focused on delivering value. That’s why when an individual name brand pitches you a product or service; it doesn’t feel like a transaction.

Because by the time you are pitched the product or service, you are already exposed to a lot of content that the individual has already created. This is why even larger brands also want to collaborate with influencers to launch private labels.

3. Specific Knowledge

Almost all eponymous firms have founders who have very specific knowledge which can’t be replicated. For instance, consider the knowledge that someone like Elon Musk brings to the table. He can context switch easily from rocket propulsion to autonomous driving without much effort.

The specific knowledge that these individuals bring to the table makes them difficult to replace. You can practically empty their bank accounts and dump them on a random street in an unfamiliar country, and I’m certain they’ll resurface as wealthy people in no time.

4. Leverage

As an eponymous name brand, your leverage is derived from your specific knowledge and the value you represent. When such values are universal in nature, it becomes easy to extend to other brands or categories.

In India, brands always leverage individuals, either celebrities or influencers, to portray the brand’s qualities. When a bank appoints Amitabh Bachchan as a brand ambassador, it is trying to project itself as a trustworthy establishment by leveraging the values that Amitabh represents.

As an individual, you have to build that leverage to ensure that you can separate input from the output. You could practically give your name to a product, and it will have a life of its own. 

Final Thoughts

If you consider Brand Finance’s list of top 100 brands in India, nearly 10-15% of them are eponymous brands. As a country, we have always preferred buying from eponymous brands, which will never change. Even when a business has a descriptive or a suggestive label, it can still take advantage of the founder’s equity.

As the recent research from American Economic Review points out, Eponymy is ultimately a signal. It affects the degree to which the firm is associated with the entrepreneur herself. They suggest that a stronger association between the entrepreneur and firm is not costly; instead, it has increased the reputational impact of the firm.

The best case in point is that of SpaceX and Tesla; while both firms have a non-eponymous label (Tesla is named after Nikola Tesla), they still have a strong association with Elon Musk. They are strongly associated with Elon’s personal brand, which also explains why it doesn’t have to spend on marketing.


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