BofA's decision to spend $20M on Merrill relaunch a bullish idea
Filed under: Ford Motor Co., Bank of America
In the hectic days that led up to Bank of America's (BAC) shotgun wedding with Merrill Lynch last year, lots of mistakes were made. Not the least of those was the nondisclosure of $3.6 billion paid in bonuses to Merrill executives prior to the $29 billion deal's closing, which has led to both federal and state investigations.Another bone-headed decision on the part of Bank of America's management was to kill off Merrill's iconic bull logo, an image so associated with optimism and prosperity on Wall Street that a 7,000 pound bronze sculpture of a charging bull graces a nearby park in Manhattan and has become a popular tourist attraction in its own right.
Now, Bank of America will spend as much as $20 million to bring the bull back along with the Merrill Lynch name. The old Merrill will now be christened Merrill Lynch Wealth Management, and become one of two primary units within Bank of America's Global Wealth and Investment Management division. (The Merrill purchase made Bank of America the largest wealth manager in the country.)
The then-stricken Merrill Lynch may have been a ripe takeover target, but to ignore the value of the bull logo and hastily dispose of it was a move likely driven by egos, said Paul Kurnit, professor of marketing at Pace University in New York and co-author of When The Going Gets Tough, Tough Businesses Get Growing.
"It will probably cost them a whole lot more to do that relaunch than if they would have had the insight and the wherewithal at the point of that acquisition to understand the equities and the assets they were acquiring," Kurnit said.
Management at the bank, which includes soon-to-depart CEO Ken Lewis, is supposedly some of the best in America, and should have been able to make smart decisions quickly, he said.
The fact that Bank of America, which received some $45 billion in taxpayer bailouts, will spend $20 million to relaunch the Merrill name and logo may not sit well with some people, but Kurnit believes the amount isn't all that extraordinary. "It's just not a huge sum of money in the advertising arena to what is basically a reintroduction of a brand," he said.
Bank of America's announcement isn't unlike the one made by Ford Motor Co. (F) in 2006 to bring the Taurus (which, by the way, is Latin for "bull") nameplate back into its fold of passenger car brands.
Long before CEO Alan Mulally was hired in September 2006, the Dearborn, Mich.-based automaker had decided to stop making what once was the most popular car in the U.S., a decision that perplexed Mulally. "How can it go away?" he remembered asking. "It's the best-selling car in America."
As was the case with the Taurus, the Merill brand and bull icon have built-in recognition, Kurnit said, "Whether $20 million is enough to really burnish the brand in terms of the relaunch for wealth management remains to be seen."
Why is Oprah going to cable? Hint: It's nothing to get teary about
Kisses from Hershey: Candymaker may court Cadbury with $17 billion bid
D-Day for Harry Reid: Can he wrangle 60 votes for Senate health reform bill?
Reader Comments (Page 1 of 2)
10-06-2009 @ 2:28PM
John said...
I wonder why BofA can't get any of the James Polk gold dollars for their customers? Are their suppliers holding out or is it a matter of having the funds to buy them?
Reply
10-06-2009 @ 2:55PM
Ron Kahler said...
It doesn't matter, it's still the rip-off company, Bank Of America. Too bad the government (us taxpayers) bailed these A**h***s out. There was a glimmer of hope when they took over Countrywide, but BAC is worse than anything. They lie on their TV ads, an don't expect that if you ever contact them, you will speak to anyone that speaks English. The American Taxpayers bailed out something that can described as the "Bank of India". Everyone you speak to will be from India. It would be great to know how many of their employees are American based versus India based. One example - I had over $1400 in escrow in April. I had a $400 tax bill to pay, leaving me $1000 in escrow. Because winter bills were so high this last year, I was faced with having to pay utility bill or having them shut off. I contacted BAC to see if I could just pay principal (I had not missed any payments up till then) and they wouldn't allow it. After transferring from one Indian to another, they allow me that they would agree to it if I had payment in their hands in 2 days. Payment was received in 3 days, to I was late. I had to make huge payment to catch up in May, taking my whole paycheck. To top it off, 2 months later, they sent me a check for nearly $700 for "excess" escrow!!!! Their nothing but a bunch of idiots whose only goal is to see who they can process foreclosure on next!!! My advise is, do anything but go with BAC.
Reply
10-06-2009 @ 7:25PM
rob said...
B of A + BUNCH of ASSHOLES
10-06-2009 @ 2:50PM
Chuck S said...
I think the government (Bush, Paulson) forced B of A to acquire Merrill and loater blamed them for it.
Reply
10-06-2009 @ 2:52PM
Chuck S said...
I think the government (Bush, Paulson) forced B of A to acquire Merrill and later blamed them for it.
Reply
10-06-2009 @ 2:55PM
bob said...
THEIR LOGO SHOULD COME FROM THE OTHER END OF THE BULL
Reply
10-06-2009 @ 6:11PM
CARLA J said...
YOU GOT THAT RIGHT!
Why is it these people don't feel guilty? Are they so heartless as to feel absolutely NOTHING for the general public and taxpayers who have lost their homes and businesses, so they can get their million dollar BONUSES? If it weren't against the law to make a terroristic threat, I would stand at the corner of Wall St. and Broadway and start picking off executives. But, then again...they don't come to work anyway. The just sit home or play golf or travel to Rio DeJaneiro or just sit and watch the country going to Hell in the handbasket they have created. May God have Mercy on their souls!!
10-06-2009 @ 2:59PM
Chuck S said...
I meant that later other branches of government blamed them for it.
Previous post:
I think the government (Bush, Paulson) forced B of A to acquire Merrill and later blamed them for it.
Reply
10-06-2009 @ 3:02PM
Anita said...
My question is how can they spend $20 MILLION for something like that?!?!?
Advertising is expensive, I understand that. However, as a BoA and Merrill Lynch customer. I would prefer they not spend that money on something so STUPID!!
We all know that the BULL is a logo of Merrill Lynch, so what's the big deal? Use all the current inventory, stationary, brochures, etc., THEN produce NEW items for advertising. That alone would save another $20-30 million, not including the trees it will waste!! (No I am not a nature conservative) I am someone that has been in advertising on BOTH sides of the business and have seen some stupid moves companies make to be in the "now"! When customers were asked: they did NOT care if the stationary, brochures, etc., were slightly outdated, especially if their cost did not increase after the NEW items were produced. Trust me customers KNOW when their cost has increased and realize after a large expenditure like this, they know they helped fund it with increased cost to them. This doesn't make them very happy, because they have to pass the increase on to their customers who of course are not happy about yet another increase on cost to the.
This is part of what is wrong with businesses of today. They waste so much money on stupid things like this!
If it is SOOO important to have the "BULL" logo on stationary & stuff, then print a SMALL logo to insert into the letters being sent out!! The cost WOULD NOT be part of MY (as a customer or both companies) $20 million.
So if there was a vote today concerning spending #20 MILLION dollars to put the Merrill Lynch "Bull" back in -- My vote is NO!! Don't waste MY money on stupid ideas like this.
-A
Reply
10-06-2009 @ 3:26PM
Steve Holben said...
$20,000,000?! New stationary and web site changes can't be that expensive. Believe me. I am seeing this sort of thing done ALL the time for about $100,000.
Reply
10-06-2009 @ 3:27PM
Ocean Willie said...
Bank of America needs to be shot dead and buried. This company has not done anything positive and for the good of itself, its customers and the public in at least 15 years.
Everyone I speak with seems to hate them.
Reply
10-06-2009 @ 7:18PM
Tom said...
I've been banking @ B of A for the last 30 years. My mortgage is there. Two of my credit cards are with them. My personal line of credit is there. I even have a home equity line of credit with them that I have yet to use. I have a checking and a savings there. I have never had a problem. Ever.
10-06-2009 @ 3:27PM
Edd said...
Now would be a good time for all BoA customers to withdraw their money before the management team squanders what is left. The common man [woman] are being nickel and dimed to death while these bank execs throw money around like it was water. Time to put a stop to it.
Reply
10-06-2009 @ 3:33PM
Russ said...
Who does the accounting for all this free spending of taxpayers money. Nations Bank took over Bank of America in the late 90's because they wanted the name and familiar blue logo. They just spent 100 million changing the color to red making their banks look like Texico gas stations. Most of the Public does not associate B of A with wealth management more like fraud management.
Reply
10-06-2009 @ 4:20PM
L.T. said...
wtf is bofa in the first place
Reply
10-10-2009 @ 5:06PM
Rae said...
BOA is not a bank i choose to do biz with.
Reply
10-06-2009 @ 4:29PM
haveletgothecoat said...
$20million for this?
How about just giving away $20 million to unemployed Americans, who are suffering thanks to the BofA's contribution to the financial crisis.
These guys can't even be trusted with their own money - like the $125 million they're going to give the imbecile Ken Lewis who helped drive the bank over a cliff.
Reply
10-07-2009 @ 12:32AM
confused said...
can a poor person get a checking #acct# .a person that can put money into there #acct# but has to pay 9.50 a month for fees.with out any thing else. i cant find a bank like the old days.they take your money for free.but they are getting are tax money.we help them .cant they help the unemployed.we put the check in there bank.
10-06-2009 @ 4:55PM
John F.C. Taylor said...
Definitely a smart move in bringing back the bull. Too bad they were stupid enough to dump it in the first place. Too many famous and/or popular names/logos were done away with over the years. I think before any such decision is made, the corporaqte heads should poll their customer base first.
Reply
10-06-2009 @ 4:56PM
banknbuster said...
I think all of these large banks should be broken-up. there should be a size/wealth limit on banks or our grandchildren will go through this all over again just like our grand parents.
Reply