Xerox Gets a Brand Makeover

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Artist's representation of how the new Xerox identity might look in a physical environment.

The new identity, created by Interbrand, comprises a wordmark and sphere logo.

The old logo, designed in the 1960s by Chermayeff & Geismar, was deemed inappropriate for the Internet age.

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During 18 months of research preceding this week's launch, customers already made strong connections between the brand and attributes such as "dependable, traditional, and established." The company's challenge will be to reinforce those while improving impressions of the other characteristics, which currently separate Xerox from its rivals in a negative way.

Xerox, despite the ubiquity of its brand, operates at a brand-building disadvantage to rivals like Canon, Hewlett-Packard (HPQ), and Toshiba in that those brands have strong consumer franchises to buttress their business-to-business images. "The research shows that this gives our competitors an advantage in communicating innovation and modernity," says Wergan.

Xerox famously fumbled an opportunity to pioneer personal computing in the mid-1970s as it sat by while Microsoft (MSFT) and Apple (AAPL) ran with technology developed by Xerox. And that sad episode has dogged Xerox's reputation in the tech world. Nonetheless, for most of its history, certainly up until the 1990s, the $15.9 billion maker of copiers and printers so dominated the market that it could put a product out with little to no customer input and still get sales.

Lots of competitors

When the complaints rolled in, the company would make changes in subsequent versions but do little to deal with products already in the market. But in the past five years, under the leadership of CEO Anne Mulcahy, who took over in 2001, Xerox has been refocusing on customers, creating business solutions rather than just reproduction and digital imaging services and products. And it's been working harder to serve a customer base no longer captive and that can just as easily buy or lease Canons, IBMs, HPs, or Kodaks (EK) to meet their needs.

Xerox has long been strong in research and development, investing 5% or 6% of revenue in R&D annually. In 2006, $922 million, or 5.8%, of its $15.9 billion in sales went to research, development, and engineering. Such spending has returned 558 U.S. patents and allowed the company to refresh 95% of its product line in the last two years. Indeed, Wergan notes that two-thirds of Xerox's revenues in 2007 will come from products introduced in the last two years. One of Xerox's latest innovations grabbing customers by the collar is the Phaser 8860, introduced last September, which makes printing a page in color as inexpensive as black-and-white. Xerox is hoping to build on its 10% share of color copiers, a market in which it has greatly underperformed, ceding 40% share to HP.

Xerox has a better and clearer image in North America than it does in Europe, Asia, and developing markets. One of the reasons, Wergan believes, is that the brand's graphic and communications palette hasn't changed as those markets have come of age. The menu of colors, images, and graphics, he says, had gotten too big: As each geographic region and business unit matured, communications and marketing evolved on the fly. The result, he says, is marketing material, from ads to brochures, that were "often disconnected from a central brand idea depending on where you are in the world." Rather than reinvent advertising all over the world, though, Xerox will evolve advertising and other marketing channels over the next several months to absorb the new brand look.

Innovation at Its Core

The hope, of course, is that the makeover will spur customers and investors to take a look at Xerox through a different set of glasses. In the past six years, Xerox's global brand value (a figure arrived at through a proprietary formula that looks at market capitalization and how much can be ascribed to the value of the brand), as measured in the BusinessWeek/Interbrand Top 100 Global Brands (BusinessWeek, 8/6/07), has stagnated, going from $6.02 billion in 2001, good enough for 51st place, to $6.05 billion in 2006 and 56th place. Canon, by comparison, has gone from $6.68 billion in 2001 and 43rd place to $10.58 billion in 2006 and 36th place.

But any company that can generate two-thirds of revenues from products launched in just the last two years has a certain amount of innovation at its core. Perhaps this new way of communicating that to the world will move Xerox's brand image into the 21st century.

Kiley is a senior correspondent in BusinessWeek's Detroit bureau.