the hallway
Job cuts hit the Qantas brand
The Australian Feb 17 2012
The Australian , Friday, February 17, 2012
Job cuts hit the Qantas brand
Nic Christensen
Marketing experts are divided on whether the job losses announced by Qantas yesterday will have a long-term effect on the airline’s attempts to revive the brand, following last year’s grounding of its fleet.
Jules Hall, managing partner with creative brand agency The Hallway, which works with brands such as Zuji Asia-Pacific, UTS Insearch and Roche, said Qantas was having to manage its brand across a variety of stakeholder groups, including customers, employees and investors, and that each of these groups presented various challenges.
“The brand in this context has a variety of stakeholder groups: customers, for example, have bounced back, according to (Qantas chief executive Alan) Joyce, with the return of forward bookings following the industrial action and grounding last year,” Mr. Hall said.
“With their employees there are obviously outstanding issues and then the third group is investors and what has now changed is that the investor community took the share price up 8 per cent, so they appear to be endorsing what’s happened today.”
Mr. Hall said the Qantas brand was going through a transition but it was in a healthier state than it was three months ago despite the airline announcing it would cut 500 jobs and slash spending.
“There are two positives in what’s happened: one is that the projected figure is up on what was projected and the second thing is job losses but no jobs going overseas. There is a difference here compared with, say, Mortein, which closed factories and moved jobs offshore and created a lot of negativity and brand damage.”
Marketing analyst Barry Urquhart argued that the job losses were generating further bad publicity in addition to the consumer anger that was generated following the airline’s October grounding. “When you have Qantas on the front page and is the story you raise anxiety and you raise doubt in people, and that will affect its profitability and appeal to customers,” the Marketing Focus managing director said.
While Qantas may try to limit the damage cause by this latest round of negative publicity, Mr. Urquhart said there would be a cumulative effect on the brand.
“I think this will be a long story but we have to remember brands aren’t logos, brands are values and belief systems that are recognized and appreciated by the consuming public. When stories about you are emotionally based, like job losses, that will always have negative connotations.”