Boeing Brand Battered

By January 8, 2020Marketing
The Hutch Report

The Boeing saga is an excellent example of the essence of branding and marketing. Marketing is not simply coming up with clever ways for somebody to buy your product. It is much more than that. Marketing is about value and values. 

Within the sphere of marketing is branding. The history of branding dates back more than 4,000 years. The term is derived from the old Norse word “brandr” or “to burn”.  During times of moving cattle or selling livestock, cattle were branded, or marked with a branding iron, in order to identify their owners. 

In 1901, James Walter Thompson published a book called “The Thompson Blue and Red Books of Advertising. In it he explained the concept of trademark advertising, or an early definition of what became branding. 

Brand management was developed further around the 1950s, when companies such as Proctor and Gamble began to tell stories in their ads. It became more than just a logo or trademark. Companies began to create strategic personalities. Customers who never gave much thought to what kind of soap they were using suddenly became very brand conscious. 

Companies such as Nike and Apple pushed the idea of brand even further by asking “Who is Apple, who is Nike and what do we stand for?” It suddenly became more about values and core values. Apple did this with a bang when they presented their 1984 commercial. 

Today, companies communicate these core values in order to demonstrate social responsibility and emotional connections with their customers that in turn drive loyalty. Well-known marketing thinker Seth Godin expresses the idea by saying that, “People like us do things like this.”

Developing a brand is not an easy objective. Consumer perceptions about a company are based on experience, stories and memories. The company’s ability to deliver on its promises that represent its values is what creates trust and builds loyalty amongst its customers. 

In 2000, Boeing engaged Vivaldi to develop a unifying vision, brand identity and positioning strategy for the company that would help it move beyond the perception that it was a US-based airplane manufacturer and position it as a global aerospace company.

Vivaldi stated, “The leadership team recognised how a strong brand could improve sales, government relations, recruiting, employee retention and partner negotiations, and hence decided to invest in the strategic positioning of the Boeing brand for the future.”

This was done with much success as Boeing regained economic strength as a company and once again built up a loyal following.

On their website under vision statement they list their enduring values:

At Boeing, we are committed to a set of core values that not only define who we are, but also serve as guideposts to help us become the company we would like to be. And we aspire to live these values every day.

Integrity 

We take the high road by practicing the highest ethical standards and honouring our commitments.

We take personal responsibility for our own actions.

Quality 

We strive for first-time quality and continuous improvement in all that we do to meet or exceed the standards of excellence stakeholders expect of us.

Safety 

We value human life and well-being above all else and take action accordingly. We are personally accountable for our own safety and collectively responsible for the safety of our teammates and workplaces, our products and services, and the customers who depend on them. When it comes to safety, there are no competing priorities.

Diversity & Inclusion 

We value the skills, strengths and perspectives of our diverse team. We foster a collaborative workplace that engages all employees in finding solutions for our customers that advance our common business objectives.

Trust & Respect 

We act with integrity, consistency, and honesty in all that we do. We value a culture of openness and inclusion in which everyone is treated fairly and where everyone has an opportunity to contribute.

Corporate Citizenship 

We are a responsible partner, neighbour and citizen to the diverse communities and customers we serve. We promote the health and wellbeing of Boeing people, their families and our communities. We protect the environment. We volunteer and financially support education and other worthy causes.

Stakeholder Success 

By operating profitably and with integrity, we provide customers with best-value innovation and a competitive edge in their own markets; enable employees to work in a safe, ethical environment, with a highly attractive and competitive mix of pay and benefits, and the ability to further share in the company’s success; reward investors with increasing shareholder value; conduct business lawfully and ethically with our suppliers; and help to strengthen communities around the world.

In addition to these core values, Boeing also presents a list of behaviours with which they conduct themselves:

Boeing Behaviors

  • Lead with courage and passion
  • Make customer priorities our own
  • Invest in our team and empower each other
  • Win with speed, agility and scale
  • Collaborate with candor and honesty
  • Reach higher, embrace change and learn from failure
  • Deliver results with excellence – Live the Enduring Values

On October 29, 2018, Lion Air Flight 610, a 737 MAX 8, on a flight from Jakarta, Indonesia to Pangkal Pinang, Indonesia, crashed into the sea 13 minutes after takeoff. The crash killed all  189 aboard. It was the deadliest air accident involving all variants of the Boeing 737 and also the first accident involving the Boeing 737 MAX. On March 10, 2019, Ethiopian Airlines Flight 302, a 737 MAX 8, on a flight from Addis Ababa, Ethiopia to Nairobi, Kenya, crashed 6 minutes after takeoff, killing all 157 people aboard. The plane was only 4 months old at the time of the accident. 

In response, numerous aviation authorities around the world grounded the 737 MAX, and many airlines followed suit on a voluntary basis. On March 13, 2019, the FAA became the last authority to ground the aircraft, reversing its previous stance that the MAX was safe to fly. In the following months of investigation Boeing said it had no idea that a new automated system in the 737 Max jet, which played a role in two fatal crashes, was unsafe, until transcripts revealed that a senior Boeing Co. pilot raised concerns about a 737 MAX flight-control system three years previous. The company didn’t alert federal regulators until 2019, months after two deadly crashes involving the same system, according to the Federal Aviation Administration. The report essentially indicated that Boeing’s own employees lied and concealed the truth. 

As the company’s stock crashed and shareholder value evaporated the company was under tremendous pressure from Wall Street to just get the planes produced and not open the door to further pilot training.

Lawmakers, regulators and pilots responded with swift condemnation. “This is the smoking gun,” Representative Peter DeFazio, Democrat of Oregon, said in an interview. “This is no longer just a regulatory failure and a culture failure. It’s starting to look like criminal misconduct.”

CEO Dennis A. Muilenburg, nonetheless repeatedly made overly optimistic projections about how quickly the plane would be allowed to fly again in the face of all the current turmoil about the company. Trump called Mr. Muilenburg to discuss Boeing’s problems and the chief executive assured the president that a production shutdown would only be temporary, even though he was far from having a secure handle on the situation. 

As the company struggled to manage the worst crisis in the manufacturing giant’s 103-year history, Boeing said on Dec. 23 that it had fired its chief executive, Dennis A. Muilenburg, who was unable to stabilize the company. He walks away with an estimated $30-$40 million package and another supplementary executive pension worth $11 million according to statements. 

If you compare the previous few years of Boeing’s deliberate actions to their list of core values and behaviours it is clear that they have disregarded many of them. A brand is an intagible and can’t be valued in financial terms (those that try are working with purely subjective figures). However, a tarnished brand represents a loss of trust and is replaced with new negative perceptions and expectations. This translates to customers going elsewhere, which in turn translates to investors loss of confidence and liquidation of stock. Only time will tell how much true damage has been done. 

Companies have to start realising that values are not independent of their actions. They are not just feel good statements to keep others occupied while they concentrate on their principle objectives of maximising shareholder enrichment. Brand loyalty takes a long time to develop and a very short time to be destroyed, as Boeing has just learned.