*Branding Strategy: Establish Rosewood as a true brand incorporated into the name of each hotel.
*Problems: How far can management push this branding strategy without undercutting the distinctiveness of each individually branded hotel?
Traditional Emphasis on Individual property brands:
Pros:
-the company became known for its ability to enhance a property’s value by creating unique, one of a kind properties with a small ultra-luxury residential style that differentiated it from other chain-like luxury competitors. Competitors include 2 groups of luxury hotels: corporate branded (Ritz-Carlton and Four Season) and “collections” of individually branded unique hotels (Orient-Express).
-“Sense of Place” philosophy- each hotel has a local character and culture of the given location. Architecture and history in implemented in each individual hotel which is very different approach than chain-like competitors. This was a power tool that Rosewood had!
Cons- Rosewood is considering a new brand strategy because:
-“Emphasis on individual property brands was not working from a number of fronts. Guests are seeking a unique Rosewood property experience and are not making the connection between Rosewood properties and are increasingly indentifying with other strong hotel brands.” –Scott and Boulogne
-Competition in the luxury hotel segment is intense and it was becoming difficult to position Rosewood’s collections of properties in an increasing crowded field of luxury operations.
-Current brand positioning substantially limits our market.
-Guests had a very low brand awareness of Rosewoods Hotels and Resorts.
**2 possible approaches: Frequent stay program or adopt a corporate branding approach.
Corporate branding approach:
Pros
-Status symbols: Sophisticated customers who value the distinctive, exclusive collection seem to value the corporate-branded version of luxury. –Philip Martiz, chairman of the board
-Frequent stay program: According to Market Metrix, a provider of market research services for the hospitality industry, the number of guests enrolled in frequent-stay programs grew by nearly 12% and were believed to double repeat business. Few Luxury hotels had adopted them.
**Some options of gaining awareness and building growth within the Hotels and Resorts:
-Learn more about guest’s habits and profiles in order to improve guest recognition and promote cross properties cross property usage. (How much customers spent on the room, food, beverages, activities, etc)
Cons- Outright full branding carried some risks.
-High marketing and operating expense. Would this new approach justify how much money Rosewood would be putting forth?
- It might alienate some guests at well established properties (ex: The Carlyle or The Mansion on Turtle Creek).
-1/3 of the Carlyle is owned by co-ops (private owners).
Schott and Boulogne came up with two approaches to reach their new goals. One being corporate branding, while the other being a frequent-stay program. In corporate branding, all Rosewood properties would have the brand name Rosewood integrated in all hotel and resort features, from hotel name to guest towels. So, the plan is,
The opportunity cost of not adopting corporate branding is relatively high, because selecting corporate branding will possibly increase brand awareness and customer loyalty to the greatest extent, and by using a frequent-stay program, Rosewood will potentially forgo these benefits. The most significant strength of Rosewood is their uniqueness of each property. Because Rosewood had already established uniqueness of each hotel, the transformation will not conflict with the “Sense of Place” philosophy. The location specific design and services will contribute to the development of brand sincerity, which will consequently stimulate consumer loyalty. This is equivalent to a circulating loop mechanism in which brand sincerity generate consumer loyalty, and consumer loyalty motivates sincerer brand. Equally important, the company is recommended to do a thorough financial forecasting on corporate branding. As for now, the company has had a rough expectation of customer life values, but further considerations such as estimated cost of implementation, estimated revenue and change in marketing expense need to be included. Furthermore, the company is recommended to simultaneously change its advertising strategy
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