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By Andrea Orr

STANFORD GRADUATE SCHOOL OF BUSINESS—Visa, the world’s largest electronic payment system, credits much of its global success to its name, born through a happy accident years ago when it rolled off the tongue of an employee.

Speaking at the Graduate School of Business in October, John Elkins, executive vice president of global brand marketing at Visa International, told students how the Bay Area company has enjoyed tremendous goodwill because of its name, which is simple and easy to remember. It has an elegant, international ring to it that leads residents of many countries to regard it as a local business.

“We are probably the number-one local brand,” Elkins joked. “Even the French think we are a French company. “The Visa name not only resonated from the start, but at a time of rapid globalization when country-specific labels have become a liability in corporate names, it has become even stronger, said Elkins, whose talk was sponsored by the School’s Global Management Program. While many companies from America Online to British Telecom have had to adopt acronyms like AOL or BT to gain worldwide acceptance, Visa has benefited from its country-neutral name.

But while the name provided Visa with a head start in building an international business, the company today is striving to make sure its early branding success does not backfire. The growing use of technology around the world has created a wealth of new business opportunities, from cell phone-based payment systems to services that transfer money between individuals in different countries. The challenge for Visa today is to make sure it is welcomed into those emerging markets.

“The problem with strong brands is that they can become too anchored in their classic attributes—in our case, a consumer credit card,” said Elkins. “It happens to a lot of brands. They become so well known that they are an anchor around the company’s neck and can prevent it from entering new markets.”

The dilemma is the same challenge that caused IBM to come up with the eBusiness brand to sell its Internet services and led Apple Computer to update its image with the iPod brand.

Visa, by contrast, has resolved to stick with its one original brand and make only minor cosmetic changes to its corporate logo to give it a more modern feel. Still, it is constantly challenged to educate the public about its mission and the array of services it offers. Surveys have consistently shown that few people know Visa is a standalone company and not a subsidiary of a bank. Adding to its obscurity is the fact that it is not publicly traded.

Moreover, the entire consumer credit sector is what Elkins describes as a “low interest” category that may have strong recognition but enjoys little loyalty. “People care more about their pet food brand than their credit card brand,” he said. “We are very substitutable.” Visa today enjoys a 65 percent share of the consumer credit market versus MasterCard’s 26 percent, but Elkins said those numbers “can absolutely get flipped around.”

A final challenge: Although Visa is most widely known as a consumer credit card service, Elkins suggested it is probably better defined as an IT company with a sophisticated worldwide network that completes some 6.5 million transactions per second while monitoring for theft and fraud.

“We are a sophisticated IT system with a great brand slapped on top,” he said. “There are lots of ways to use electronic payment beyond the traditional credit card format.” In fact, he said, all the payments Visa handles today represent a mere 9 percent of personal consumer expenditures, and many more cash and check-based payments stand to be transferred to credit.

Behind all of this subtle but critical brand and identity building are the media and the ad agencies that help craft a corporate image. On this point, Elkins said, Visa has found a surprising lack of assistance in recent years in adapting its message to the Internet and new media outlets.

“Not a single ad agency out there has helped us address our shift into new media,” he said in some frank closing remarks. He urged students interested in advertising careers to consider small startups that understood the power of new media instead of big established ad agencies.

“It is a huge shift, and it is going to come from new companies,” he said.

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Also on Stanford Knowledgebase:

  1. Calculating the Dollar Value of Brand Equity
  2. A Brand Is a Promise to a Customer
  3. Too Much Choice Can Hurt Brand Performance

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