The Marketing Doctor says:

Merrill Lynch Needs To Keep Its Brand Identity

Folks, in the face of unprecedented market turmoil, I want to inject some marketing stability.

Bank of America’s purchase of Merrill Lynch should not mean that Merrill Lynch disappears.  

Unlike the Bear Stearns debacle, Merrill is not being rescued —after all, Bank of America was willing to pay almost double what Merrill’s stock was trading for.  

Moreover, toxic rumors were not yet hurting the Merrill Lynch brand.  Wall Street might have known that Merrill would soon be facing some trouble, but the majority of people did not.  This means their decades-old reputation remains virtually untarnished.

From a marketing standpoint, the way forward is clear. 

Like what happened when Whirlpool bought Maytag, Merrill Lynch should keep its own name and brand identity.  

The combined BOA and Merrill will be the largest brokerage in the world with an estimated 20,000 advisers and 2.5 trillion dollars in client assets, but this doesn't mean their brand identities need to merge.  The companies can still reap all the benefits of merging (back office efficiencies, etc.) while profiting from the value of separate brands.  From my perspective ML becomes a superbrand —the advantages of great street cred (ML), along with the stability of a great bank brand— BOA.

Preserving Merrill Lynch as a distinct brand will also buck the trend that has created unwieldy banking giants like Citigroup.  Citigroup has been criticized (and suffered market-wise) from the perception that it’s too big.  It absorbed Smith Barney yet never really capitalized on the brand identity of that brokerage firm.  

Keeping the Merrill Lynch brand will show that Bank of America is being smart and forward-looking about its marketing bottom line as well as its financial bottom line.  

Bank of America won’t be simply absorbing another brand, they’ll be partnering with an established brand.  And as some of these banking giants come apart at the seams, this move will telegraph “streamlined” and “efficient” to the target market rather than “bulky” and “ungovernable.”