There are just about as many reasons to rebrand a business as there are ways to do it. Some of those reasons are positive (two organizations have merged or a company has significantly expanded its offering), while others are less rosy (the current brand has been tainted in some way or has become outdated).
Regardless of the reason for rebranding, there are right and wrong ways to go about it. The first step is determining the extent of the rebrand, which will typically be determined by the reason for wanting to change market perception.
In situations when a brand has been firmly established yet is simply outdated or needs to be refreshed due to the addition of new products or services, tweaking is required, rather than a full-blown rebrand. In these cases, you don't want to eliminate the brand value that's been developed over the years, but merely make subtle changes to update it or make it representative of an expanded offering.
Aunt Jemima is a great example of tweaking a well-established brand to update it. The image used for years on its products--an African-American "blue collar" woman--was simply out of step with today's mores. Rather than completely change the brand, Aunt Jemima updated the woman to reflect a more professional image.
Corporate mergers will often result in complete rebrands. When organizations have failed to establish a brand, or have been through any kind of scandal, total rebranding may also be in order. In these cases, the intent is to erase any previous brand identity and replace it with completely new imagery and messaging.
Sprint is an excellent example of a total rebrand, necessitated when the company merged with Nextel. The company eliminated the angular logo (and red corporate color) that seemed indicative of inflexibility and replaced it with a more fluid logo--placed on a cheerful gold background--that reflects the company's friendliness and flexibility.
Not all rebrands are successful. Do you remember New Coke, for instance?
While it's impossible to know for certain what the outcome of a rebrand will be, you certainly can put yourself in a position to be successful by making solid decisions, beginning with building a brand-planning team. Trusted employees should be included, and perhaps even some valued customers, so you can receive external input.
Next up is reviewing the way the company operates, to ensure that internal processes and procedures are appropriate given the new brand messaging, or determine that they need to be altered in some way. Following that exercise, an exciting rollout needs to be orchestrated; employees must be passionate about the new brand, so they can generate passion in the marketplace. Every department should be involved, since rebranding isn't merely a marketing function, but a companywide endeavor.
Once the initial excitement dies down, it's important to sustain the new brand by instituting an ongoing program for measuring employees' consistent and complete use of it. Maintaining brand integrity within a company puts you on a path to market buy-in, which is the very reason for rebranding in the first place.