*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).
Rosewood is a hotel and resorts company. It is mostly known for its self-branded hotel strategy. They currently own 13 properties worldwide, and planning for expansion. John Schott, who is the president and CEO, and Robert Boulogne, who is the Vice President of Sales and Marketing, had a new goal for Rosewood future. They wanted to increase cross-property reservations to 10%, create Rosewood junkies, build a recognizable brand name, and strengthen their Rosewood brand equity.
There are several reasons that explain the traditional lack of branding in the real estate industry. One of the most important reasons is that the real estate industry has been seen as a commodity business for hundreds of years; the main focus was on the property ' and so the product was considered as a tangible aspect only ' not about the customer. E.g. SCPT did not even know who its customers were (Fournier & Thorp, 2001). There was almost no information on their key customer segments, the key drivers of customer choice, preference and satisfaction. Also, branding is seen as a natural process, what assumes extra attention to branding is not necessary. Besides, because competitors neither focus on branding, and organizations tend to imitate each other (Levitt & March, 1988), branding seems less important. Hence, real estate businesses can be seen as financial organizations, in which it is difficult to come up with a look and a feeling. These are essential to position a brand and to create a certain brand image in the consumer’s mind. Moreover, this look and feeling are needed to create a clear brand identity and purpose in the employee’s mind. By mainly focusing on the tangible aspect itself, the unique selling points (USP’s) can be communicated clearly, while the emotional selling points (ESP’s) are often forgotten. For the creation of a branding strategy, these ESP’s are most important (De Pelsmacker et al., 2004). With the addition of emotional aspects, the consumer will get a certain feeling or emotion towards the brand and its products, while with the use of USP’s only, this goal of setting a certain brand image will be almos...
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
The Holiday Inn brand is part of IHG’s diverse family of brands in nearly 100 countries and territories. The scale and diversity of the IHG family of brands means that its hotels can meet guests’ needs whatever the occasion – whether an overnight getaway, a business trip, a family celebration or a once-in-a-lifetime experience. The Holiday Inn brand participates in IHG® Rewards Club. The industry’s first and largest hotel rewards program is free. The hotel also participates in IHG Green Engage® and offers unique programs to ensure
The hotel industry performs within a saturated market, driven by customer loyalty and competitive pricing to stand-out. This competitive nature makes it extremely important to capitalise on strengths while improving on
Moreover there is a strategy involved, in which is stated where Marriott has to focus on (those focus points are listed in picture 1.2).
The high pressure luxury brand industry has evolved over the last few decades from a small and selective to a multibillion dollar arena offering significant potential and growth opportunity for the luxury brands that compete within its realm. With many luxury brands competing for over $225 billion (The Economist, 2009) in revenue each year it is easy to see how strategy plays an important role.
A brand is utilized by a company to differentiate its products from others in the market. Some techniques for accomplishing this are through the use of distinguishing logos, names, color schemes, and slogans. An effective branding strategy is one of the most important components for gaining a significant advantage in a progressive market. Basically, a company brand is its promise to its customers about what can be expected from its product and how it differentiates from the competitors. The branding strategy is the part of the marketing plan that explains how and to whom the company proposes on conveying its brand messages. It will also explain where the company plans to advertise and what it will publicize both visually and verbally (Williams, 2013). Home Depot’s marketing plan will contain domestic and global branding strategies and will be a collaboration of brand messages from both Home Depot and Reach the Top®.
However, when looking to create a luxury brand, one must go beyond what is required of an ordinary brand, to create something of high value and therefore high prices. So instead of just having brand values, it should have brand beliefs, as this will create a stronger emotional connection with its customers. It should aim to go beyond having a logo, but rather a set of distinguishable icons and the brand’s points of sale needs to be somewhere that connects with its customers and becomes something of a pantheon among other retail outlets. Similarly the customer segmentation should have role reversal, so the customers want to buy their products. Luxury brands should instead of actively promoting their advantages over their competitors, never push the customers into buying their products, thereby offering mystique and letting the customers make the value creation. Lastly, a true luxury brand not only offers products but rather a way of life, allowing them to branch out over several product categories, into every aspect of their customer’s
The Ritz-Carlton Hotel Company has achieved so much fame in their marketplace that they have attained what is referred to as “The Ritz Mystique.” Among the grand hotels of the world, The Ritz-Carlton hotels and resorts are famous for luxury, spectacular surroundings and legendary service. They have gained this title with dedication and award-winning hotels that reflect the 100 years of tradition that stand behind them. Discovering the fascinating history of Ritz-Carlton hotels, illustrates their commitment on relentless training to improve their quality in service and their strategy. Ritz-Carlton has achieved a Gold Standard of value and philosophy by which they operate.
Thanks to these factors, pricing becomes one of the primary uses with which hotels attract customers. However, due to customers’ independent nature, there influence over industry players is limited. In the high-end segment of hotels, price influence becomes even less as hotels find it easier to differentiate themselves from the competition and customers become less price sensitive coming to expect higher prices as a symbolism of superior quality and services. Lastly, corporate business and tour operators can exert more influence due to their large purchases but this affect is of a limited nature and does not extend across the whole
History of Hilton hotel has been very interesting as it started as Mobley Hotel in year 1919 a small building. Because, when the company started it had no plans or ideas of expanding, the sole purpose was to serve as a place for the travelers to stay where they can comfortably enjoy a night or few and carry on towards their journey. After twenty-seven years of business and hard work, this small hotel went nationally in eleven states within United States, known as Hilton. Currently they have four thousand worldwide properties, either directly owned or franchised (including third party), in seventy-eight countries. Hilton even though allows franchises but there policies remain the same and direct Hilton officials do all the upper level management. The company name Hilton understands for Hosp...
Company. Rosewood is a 25 years old luxury private hotel management company having 12 hotels in different countries. The company is known by unique, “one-of-a-kind properties” with very luxury style. The total rooms capacity worldwide is 1513 rooms. The company has only 5% of cross-selling rates, which is one of the lowest in the industry compare with corporate branded hotels (10%-15%) and individually branded hotels (5%-10%).
The next vulnerability for The Ritz-Carlton is the competition in the hotel industry. The hotel industry is very competitive and there are numerous options for customer to choose from. Hotel chains are always attempting to provide the lowest price, best service, or best customer stay. In direct completion with The Ritz-Carlton is the Four Seasons, as lower priced hotels are really not in competition (www.galup.com).
The top leading hotel bees are the Hilton, Choice Hotels, the Best Western, Accor and the Marriott. They all strive to offer luxurious, accommodating environments, which puts a struggle on the economy. Due to the various splurges and lavish venue spaces required, an increase in real asset prices has been the result. Intense capital has been the solution for many of the hotel chains, to be able to acquire the necessary properties.