As I have said before on this blog, I do always try to be constructive when writing about brands. But as an experienced marketer, I also know that it’s easier to be destructive rather than constructive when one is critiquing events. Which is why I held back from commenting about the recent United/Continental marriage. However, a week has passed by and I still don’t have many good feelings about the brand component of this deal but lest I become obsolete, it’s time to put the finger to the keyboard with a few thoughts.
1. The Allure of Savings
There are some deals that are strategic and some that are driven by financial factors and the United/Continental deal seems to be primarily about the cost savings. And as these are estimated at $1.2bn, there’s nothing wrong with that. Apart from the fact that these savings will be substantially reduced if fuel costs rise dramatically in the next few years. But I was left asking myself, apart from the savings, what customer benefits will this marriage deliver? And I can’t think of any because in order to achieve the cost savings, an improved customer experience cannot be funded.
2. The Branding of Equals
In my experience, this is a concept that is convenient in many financially-driven transactions but incredibly difficult to manage unless both brands are individually successful in their own right and both have a clear sense of mission…the Nike + Apple tie-up, for example. But these two airlines are both relatively weak brands (especially United) with little meaningful differentiation. And this does not bode well for the future. Weak brands that have to compromise end up being weaker and this becomes exponentially much more serious when there are two weak brands involved.
3. Someone Has to Lead
When weaker brands get together, it is critical that one is selected to lead. In other words, it is imperative that the brand strategy be single-minded, even to the extent of being autocratic. But all the evidence here is that United and Continental have democratically carved up the pie in a “one for you, one for me” approach. As in “we’ll keep our name but you get to keep your brand identity”. Now ironically, this tactical approach might even save money over the short-term but the confusion and distrust that it will cause among many of the traveling public is likely to be significant. And it feels to me that they are building the world’s biggest airline on a base of quicksand.
4. Employees Take Sides
By retaining key elements of each brand’s DNA, the negotiating committees are probably feeling pretty good about the outcome at the moment. But in any major joining of forces in the business world, it is critical to get all of the employees marching in the same direction, as quickly as possible, in order to achieve those cost savings that underpinned the deal. The current compromise arrangement has just massively complicated the likelihood of that happening. People are loyal to a brand and a culture and a way of doing business. The construction of this deal might unintentionally have made the employee loyalty to each of the two individual brands involved, that much stronger. And wouldn’t that be ironic?
The question that I have been asking myself in all of this is “where was marketing”?
I would love to think that brand equity and the current and future customer experience played a central role in the decision, driven by some rapidly-obtained, intelligent market research. But I am not that naïve and I suspect that the truth is that this was a deal engineered in the offices of smart lawyers and CPA’s and that splitting up the brand in a fair and equitable way became one of the final executional tasks. Becoming the world’s biggest airline has now been achieved, albeit maybe only temporarily. Becoming the world’s best airline may now be further
out of reach than ever for both United and Continental.
Simon Williams
Tweet this | Tags: airline, brand, branding, Continental, positioning, United
About a month late on this, but such is the power of a random google search.
Let me give you the perspective of a frequent, loyal Continental flyer (100k miles/year) who also pays attention to brands…
Continental needed this merger to get a large enough route structure to compete with the newly large Delta for corporate contracts.
My first reaction to the even steven mishmash was disgust. They threw away a nice United identity from a great design shop.
But my second reaction was…..looks like the Continental product I know and am loyal to is here to stay.
It’s hard to see on the surface, but Continental has prided itself on doing a lot of things on the service side just a hair better than the competition — for a frequent flyer. Their planes are cleaner, the staff generally less grumpy on board, food a bit more generous, and generally the organization seems to have a common culture. Read about ‘Gordon Bethune’ their former CEO and you’ll get a sense…
So, that legacy Continental paint job on the United planes will give me assurance ‘my guys’ will be calling more shots than not. As we know, visual identity is often more important to the mind than the name itself.
One of the biggest risks for them is losing their loyal base to fears that United’s way will trump. Keeping that legacy Continental paint scheme, ugly as it is, goes a long way to saying to current Continental customers ‘the reliable old Continental you’ve trusted is still running a big part of the show.’
As for United, well United killed its brand by cutting corners on service, keeping unpainted, dirty planes, running a late operation, and treating its employees badly through bankruptcy for several years this decade. Continental has proven itself superior on every financial and operating metric over time, but just didn’t have the scale needed now that Delta and Northwest merged.
It’s a shame because it was a beautifully designed identity, going back to the Saul Bass days.