The Wall Street Journal-20080111-Matsushita to Become Panasonic in Branding Push
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Matsushita to Become Panasonic in Branding Push
TOKYO -- Matsushita Electric Industrial Co. said it will change its name to Panasonic, its best-known brand, highlighting the growing importance of branding and marketing in the technology industry.
The consumer-electronics company, whose products range from state- of-the-art television sets to vending machines, also said it plans to invest 94 billion yen ($856 million) to expand chip production in Japan as it targets overall revenue of 10 trillion yen for fiscal year 2010. The target represents a 14% increase from the company's revenue forecast of 8.78 trillion yen for the year ending March 31.
The move to adopt the Panasonic name, under which many of its products are sold in major markets, including the U.S., means the Osaka company is dropping the name of its founder as it ramps up branding efforts outside Japan to help combat stagnant demand for its goods at home.
The change, effective Oct. 1, will cost the Japanese technology company 30 billion yen. It comes 90 years after Konosuke Matsushita started the company at age 23, making electric sockets and insulator plates.
In its statement, Matsushita described the name change as a "step forward to make the company a truly global corporation." The plan will be submitted to shareholders for approval at the company's ordinary general meeting in June.
President Fumio Ohtsubo made it clear at a news conference that the switch was related to perceptions of the company's brands.
"Our brand value has unfortunately not developed as we hoped in recent years," he said. "This is absolutely not about changing the structure of the company."
A major part of Matsushita's drive to lift revenue will come from efforts to boost overseas sales. Mr. Ohtsubo said the company is determined to meet its 10 trillion yen target: "We will absolutely not stray from our goal."
In order to achieve it, the company is targeting double-digit percentage growth in overseas sales, which account for more than half of total revenue. That is a step up from the 6% growth rate in overseas revenue the company reported for the fiscal first half. With domestic sales more or less flat, the importance of exports to Matsushita is clear.
While analysts note that the weakness of the dollar against the yen continues to make Japanese goods less competitive in the U.S., Matsushita said it is targeting revenue of more than 500 billion yen from emerging markets like Brazil, Russia, India, China and Vietnam over the next fiscal year.
Investors and analysts have fretted that Matsushita's revenue might be undermined by the weaker U.S. dollar. The target for fiscal 2010 was published after the Tokyo stock market closed yesterday. The company's shares finished down 0.5% at 2,160 yen each, valuing the company at 5.3 trillion yen.
Flat-panel TV sets are set to become an increasingly large part of Matsushita's business under the targets announced yesterday. The company is a leader in manufacturing plasma displays, but it said yesterday that it would build a new plant to make liquid-crystal displays, with output starting in fiscal 2009.
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Jay Alabaster contributed to this article.
