Banyan Tree ± Branding the Intangible

Banyan Tree ± Branding the Intangible Synopsis Banyan Tree Hotels and Resorts had become a leading player in the luxury resorts and spa market in Asia. As part of its growth strategy, Banyan Tree had launched new brands and brand extensions that included resorts, spas, retail outlets, and even museum shops. Now, the company had to contemplate how to manage its brand portfolio and expand its business while preserving the distinctive identity and strong brand image of Banyan Tree, its flagship brand.

Study Questions 1. What are the main factors that contributed to Banyan Tree¶s success? 2. Evaluate Banyan Tree¶s brand positioning and communications strategies. Can Banyan Tree maintain its unique positioning in an increasingly overcrowded resorts market? 3. Discuss whether the brand portfolio of Banyan Tree, Angsana, Colours of Angsana, as well as the product portfolio of beach resorts and city hotels, spas, galleries, and museum shops fit as a family. What are your recommendations to Banyan Tree for managing these brands and products in future? 4. What effect does the practice of corporate social responsibility have on brand equity? 5. What potential problems do you foresee in bringing Banyan Tree to the Americas, Europe and the Middle East. How could Banyan Tree address those issues? Discussion of Case Questions 1. What are the main factors that contributed to Banyan Tree¶s success? Banyan Tree¶s success might be attributed to an overall well designed and executed external and internal marketing program, and in particular: ‡ Choice of target segment ‡ Positioning and branding strategy ‡ Product/service design and delivery ‡ Aggressive internal marketing ‡ Winning the support of local communities and public interest groups ‡ Pioneer status: first mover advantage ‡ Pro-environmental business practices Choice of target segment (Pages 60) ‡ The large price gap in the luxury resorts market mean that middle upper class consumers must either stretch to pay for ultra luxurious resorts such as Aman, or settle for resorts, though luxurious, are catered to the masses. ‡ Ho recognized the business opportunity presented by the gap in the resorts market: there was room for something pricier and more exclusive that would better cater to these middle upper class consumers, who had better spending power than had the average consumer in the mass market, and would be able to afford and willing to pay for a more exclusive premium service offering. ‡ Moreover, as a result of today¶s generally more hectic and stressful lifestyles, many well-to-do couples would appreciate Banyan Tree¶s value proposition of a memorable, romantic holiday

such a service feature was also difficult to imitate. this would not be a sustainable competitive advantage. This was further enhanced by the feel-good factor that guests¶ patronage helped to contribute to various social and environmental causes. even regular guests of a particular resort would have a different experience and may be pleasantly surprised every time they checked in. That the company consistently delivered on its promise further reinforced what Banyan Tree stood for in the minds of its customers. their friendly and respectful attitudes towards guests more than made up for it and actually provide an element of surprise even to the most regular guests. which motivated them to achieve service excellence. Aggressive internal marketing ‡ Generous staff welfare policies created a strong sense of brand ownership among employees. and successfully set Banyan Tree apart from other resorts in the market. ‡ Repeat patronage was also encouraged by the different services offered at different locations. ‡ As employees were given freedom to decorate the villas and in serving guests.Banyan Tree ± Branding the Intangible experience that would both provide relaxation and create quality time for them to spend quiet moments together. and respectful. as most tangible products could be easily copied by competitors. would serve to distinguish Banyan Tree from competitors when they do jump on the bandwagon. 2 . thereby building both brand loyalty and emotional bonds. contributing to the entire customer experience. ‡ The whole Banyan Tree experience was engineered to appeal to one¶s senses. Such practices. which the company consistently delivered. Service staff served guests with passion and sincerity that could not be bought or easily copied by competitors. kept the Banyan Tree experience fresh and interesting. these being timeless attributes valued by many couples. Such personalized service delivery warmed guests. which gave satisfied guests an added incentive to visit Banyan Tree resorts around the world. and helped them feel comfortable and relaxed. together with continual service innovations. ‡ Positioning as a sanctuary for romance and intimacy was well thought out. knew guests by their names. Establishing a strong service brand. Positioning and branding strategy (Pages 65) ‡ Although Banyan Tree¶s service offering was unique when it was first launched. also helped it achieve a clear and distinctive market position. employees may not always provide the standard service across all the resorts nor always similar to that commonly found in five-star establishments in developed countries. sincere. which in turn gained the company new customers. Product/service design and delivery (Pages 86) ‡ The luxurious villas and distinctive native settings provided an excellent backdrop for guests to create memorable holiday experiences. ‡ A clear brand promise of romance and intimacy. Satisfied guests not only became loyal customers but also helped spread positive word-of-mouth. however. and remembered their preferences. to experience authentic flavors and practices of various local communities. giving guests a unique value proposition unlike the regular room stays offered by competitors then. ‡ Service employees were warm.

Establishments that were interested in providing similar spa services naturally approached them to establish an outlet in their premises. such as environmentalists. and this saved the company from having to deal with any potential trouble that might have arisen from their development of the natural habitats of various flora and fauna for business purposes. a novelty which proved to be popular. and these not only helped increase the brand awareness of Banyan Tree but also generated much interest among potential customers. ³to prevent today¶s darling from becoming tomorrow¶s has-been. Such service capabilities were extremely difficult for competitors to imitate.Banyan Tree ± Branding the Intangible Winning the support of local communities and public interest groups ‡ The company¶s considerable investments in conserving/preserving/promoting the social/cultural/natural environment beyond what was required of the company (without sacrificing on service quality) showed proof of corporate ethics that were driven by the management¶s personal values. consistent with its positioning of a romantic brand. So.´ ‡ Such pro-environmental business practices also generated a lot of positive publicity and won the company several awards. the company got the support of various public interest groups. and money by the firm to gain the trust and respect of both staff and the local community alike. Such acts projected the Banyan Tree brand as being caring and sincere. ‡ Even when guests wander beyond the resorts¶ compounds. Overall. ethical. requiring lots of investments in time. local communities. The lack of competition in the beginning also helped in consolidating the company¶s position in the spa and resorts market. Pro-environment business practices ‡ Although being environmentally conscious sometimes resulted in costlier business decisions. the genuine feelings of hospitality and appreciation showed by the local communities at the villages made guests felt welcome and at home. for Banyan Tree. pioneering the concept of tropical spas and Asian therapeutic massages. caring. Banyan Tree invested in tropical garden spa pavilions. Banyan Tree was viewed by guests. 3 . staff. or as Banyan Tree put it. it made economic sense to protect and preserve the resorts¶ surrounding environment to ensure that it remained an attractive tourist destination in the long run. ‡ Being the first in the market gave them a head start in penetrating the market. which helped further promote the concept of tropical garden spas beyond the regional markets. making the entire stay pleasant and memorable. effort. Pioneer status: first mover advantage ‡ At a time when clinical spas were the norm. and responsible company. and public interest groups as a warm. a major part of the resorts¶ attraction was in the natural beauty of the location in which the villas were located. sincere. ‡ At the same time.

the personality of a brand is less so. where many couples are busy with their careers and have little time to spend together. such publicity also drew attention to the natural beauty of the resorts and their environments. wastage in advertising exposure is minimized. the overall service experience at Banyan Tree can still be unique. ‡ Showcasing the awards and accolades won credibly enhanced the brand¶s reputation. and the same can be said of the attitudes of staff and the local community at the resort destination. ‡ Although service innovations can be copied easily. given its location specific service offerings and the uniqueness of the natural environment that Banyan Tree resorts are located. such as sponsoring various environmental conservation programs and community outreach programs. Unique positioning sustainable? ‡ Whether Banyan Tree can maintain its unique positioning in the market would depend on how well it can keep its identity distinct and prevent competitors from encroaching into its turf. the positioning is timely and appropriate in today¶s increasingly hectic and stressful lifestyle. 4 . Evaluate Banyan Tree¶s brand positioning and communications strategies. Focused promotion efforts with minimal wastage ‡ Banyan Tree¶s communications program focused mainly on public relations and publicity. ‡ Banyan Tree¶s offering of an avenue to get away from it all and spend quality time together while relaxing and de-stressing would appear to be valued benefits sought by today¶s busy couples. so is the concept of individual villas and any tangible offering. with little emphasis on advertising. ‡ Promotion through agents specializing in exclusive holidays adequately exposed Banyan Tree to its target segment of wealthy consumers. which helped the company to advertise its villas. ‡ Being the first and only resort to be positioned as such. ‡ Positioned on such timeless attributes as romance and intimacy between couples. ‡ As advertisements were selectively placed in only high-end travel magazines that targeted the higher income and more sophisticated segment of the market. Banyan Tree occupied a unique position in the luxury resorts market when it first started. ‡ But. ‡ Much positive publicity and public interest was generated as a result of the company¶s investment in pro-environmental business practices. Can Banyan Tree maintain its unique positioning in an increasingly overcrowded resorts market? Brand positioning is timely and appropriate in today¶s hectic and stressful lifestyles ‡ Banyan Tree was positioned as a sanctuary that offered couples an exclusive romantic and intimate holiday experience.Banyan Tree ± Branding the Intangible 2. and direct marketing through its web site and sales offices that targeted wealthy consumers. ‡ Besides being viewed as a caring and pro-environmental company. coming from a neutral third party. the positioning of providing romantic and intimate holiday experiences is not difficult to imitate. as well as the genuine feelings of hospitality shown towards guests. ‡ Generally. ‡ Efforts at obtaining and increasing editorial coverage on Banyan Tree both increased brand awareness in the industry and helped to sell the ³Banyan Tree experience´ credibly.

Banyan Tree Bangkok. Perceptual mapping could be used to visualize the market positions of Banyan Tree and its sister brands relative to competitors in the industry. did not fit well with the Banyan Tree family of beachfront resorts and the individual-villa concept. with its urban location and standard hotel rooms. targeting the wider market ‡ The Colours of Angsana range of boutique hotels catered specifically to the soft adventure tourism segment. What are your recommendations to Banyan Tree for managing these brands and products in future? From luxurious six-star Banyan Tree resorts to small. made distinct by price and benefits offered. as well as the product portfolio of beach resorts and city hotels.Banyan Tree ± Branding the Intangible ‡ Banyan Tree had tried to appeal to ³the senses. Angsana. Discuss whether the brand portfolio of Banyan Tree. it is unlikely that they would be able to replicate the total Banyan Tree experience so quickly. individual Colours of Angsana branded hotels in exciting locations. galleries.´ focusing on the overall customer experience and working on what the customer will ultimately bring home²memories. and Colours of Angsana. An example of a positioning map with the attributes price level and romantic versus sporty image is shown below: EXPENSIVE -AMAN RESORT -BANYAN TREE SPORTY -HILTON -ANGSANA ROMANTIC COLOUR OF ANGSANA LESS EXPENSIVE 3. Judging from its success so far. ‡ Banyan Tree targeted the higher end of the luxury resorts market ‡ Angsana was more mainstream and contemporary. 5 . locating in remote and exotic places that cannot justify the premium prices charged by Banyan Tree villas The various brands thus served to cater to different segments of the hotels and resorts industry. and museum shops fit as a family. spas. it appears that even if competitors come up with similar lower-priced service products. these properties were bound together by one central theme: the romance of travel and the beauty of discovering the world.

Could be done to help Colours of Angsana fortify its market position before competition built up in the market segment. Notes on recommendations ‡ Make recommendations on brand extensions and product development. clubs. In particular. the lounge could also be used to host wedding receptions and other parties. and retail shops. spas. such as spas and retail outlets. the brands¶ personalities may also need to evolve and new products be offered to suit the changing market environment. Just as tropical garden spas have become more popular than clinical spas.Banyan Tree ± Branding the Intangible BUT THIS might explain the differences that: ‡ The city hotel was also positioned similarly on romance and intimacy although it additionally catered to business travelers. ‡ Recommendations for the future might also consider changing market tastes and whether the brands and products would still be relevant as new products emerge and consumer tastes change. ‡ The retail shops augmented and helped to extend the overall service experience through the sale of products that consumers might use at home to replicate and remind them of the Banyan Tree experience. Achieving branding consistency through management by brand Management of the portfolio by brand would achieve more consistency in branding and positioning. and retail outlets ‡ Banyan Tree¶s products and services could be classified into essentially four product lines: hotels and resorts. ‡ The various facilities. found across Banyan Tree resorts. or market development to introduce current brands globally. the Colours of Angsana brand was also a pioneer in the soft adventure tourism segment. ‡ Banyan Tree¶s properties and spas could be classified under the business of travel and leisure. with the sales of indigenous products that tourists could buy as souvenirs. ‡ Like Banyan Tree. ‡ Note that the business had been profitable even after huge investments in protecting and preserving the cultural and natural environments because the company operated mostly in business environments where cost structures were favorable. the arts and crafts sold at the shops not only served to reinforce Banyan Tree¶s brand personality. the recommendations made should take into consideration the location and cost constraints that Banyan Tree may face for its different brands. However. ‡ There is a heavy emphasis on spa. As consumer taste changes. and so could enjoy first mover advantages. spas. Such a strategy might not be possible in developed countries where labor costs might be prohibitive. and also make it easier to cross-sell and bundle products. some day. Four broad product lines: accommodation. were also available at Banyan Tree Bangkok. Vertigo. although such an arrangement would require duplication in resources for various functions. designed to provide an escape from the hustle and bustle of the city. Also. 6 . under various brands and sub-brands. the hotel had an open-air rooftop lounge. but also fitted in the travel industry. ‡ It also offered various getaway/wedding packages for couples to indulge in romance and intimacy. clubs. competitors might come up with yet another concept that might overtake the garden spas. at the top of the building. where guests could get a good view of the city.

consumers. y Business would embrace responsibility for the impact of their activities on the environment. also known as corporate responsibility. stakeholders and all other members of the public sphere. 7 . y y From one perspective. but having too many individual brands might confuse potential customers: they may wonder about the differences between the various brands. Positive brand equity is created by effective marketing including via advertising. So try to make differences arrangement to employees at other place. responsible business. 4. y Form of corporate self-regulation integrated into a business model. there is also the need to ensure the consistency of service quality across a large number of service outlets. Also. or corporate social performance. Some students might suggest training all employees at a central academy however that some employees might be uncomfortable with such an arrangement. y Some marketing researchers have concluded that brands are one of the most valuable assets that a company has. communities. Good examples of companies with strong brand equity are corporations such as Nike and Coca-Cola. brand equity cannot be negative. employees.Banyan Tree ± Branding the Intangible ‡ Multiple brand extensions might result in brand dilution. whose corporate logos are recognized worldwide. there is a risk of losing the personal touch and unique service culture of the locality. ‡ As the number of service outlets grows. What is Corporate Social Responsibilities (CSR)? y Corporate social responsibility (CSR). PR and promotion. sustainable responsible business (SRB). corporate citizenship. What effect does the practice of corporate social responsibility have on brand equity? Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name Investopedia Says: y Brand equity is created through aggressive mass marketing campaigns.

(e.1 million in cumulative unrecognized revenue at the end of 1Q 2008 o Enhance Banyan Tree brand equity (e.: well-known 5 star hotel and resorts in the world) o Increase Banyan Tree profit of the year and increase customer.g. since the organizations itself could won so many award.g. From my point of view.g.: environment and eco friendly) o Revitalizing local communities (e. 8 .: being awarded for many award) The company has based its brand on the two main beliefs of the organization. headed by Claire Chiang who is also the CEO of Banyan Tree Holdings focus on issues such as: o Actively caring for the natural and human environment (e.: take a good care on staff welfare) y y y Example of positive effect: o Give positive image to Banyan Tree Holdings (e. y In the case of Banyan Tree Holdings. so it shows how positive and effective the practice of CSR have on Brand Equity.g.Banyan Tree ± Branding the Intangible y A second perspective is that negative equity can exist.: give job to local communities) o Pride and respect among staffs (e. and vice versa.: on the first quarter 2008. The company has chosen exotic locations with exclusive access to sun-bathed beaches.g.g. the effect by practicing CSR is positive to the Brand Equity. the facilities offered. Banyan Tree has placed a strong emphasis on the locations as a key element of the brand identity. o Example: y Looking at a political "brand" example. The dedicated committee of CSR. Branding is started right from the locations of the Banyan Tree resorts and has been consistent through the designs. exciting environments and a good transportation infrastructure to connect the resorts to main destination highlights. the "Democrat" brand may be negative to a Republican. Banyan Tree earns S$90. and the ambience created in each of the resorts. In line with the " a sense of place" theme. Banyan Tree resorts would become a "Intimate moments" and Banyan Tree would be an environmentally sensitive and a socially responsible organization.

and exotic places. 5. and yet locate the resorts in attractive. True to its belief that environmentally sustainable and socially responsible tourism is compatible with making profits. From the 3 countries. where cost structures were low and labor was relatively inexpensive compared to the developed countries. Europe and the Middle East. MIDDLE EAST o Since Banyan Tree is a leading player in the luxury resort and spa in Asia. the most problem could be seen is actually same but what can BTHL do in order to expand their hotel and resort all over the worlds. It proved to be a successful way of breaking away from an Asian commodity business and changed the focus onto its brand on the two main beliefs. Banyan Tree resorts were built in places that were a few hours¶ flight away from major cities in Europe and America. So. such as Mexico and Morocco. the costs of setting up shop in such places were also high and very expensive. 9 . matter arising is in Middle East they cannot bring their tagline marketing as ³a senses of place´ to reflect and enhance the culture and heritage of the destination o This is because in Middle East environment is more to dessert and not same as Asia where the environment is tropical rainforest or Green World.Banyan Tree ± Branding the Intangible Concern for the nature and environment surrounding the resorts has been a trademark of Banyan Tree. exciting. Is the strategy that had brought fame and success to BTHL in Asia workable in the rest of the world? How could Banyan Tree mindful in the brands¶ focus and to be careful so that it will not dilute the brands? y y y y y y y Notice that though Banyan Tree also tried to appeal to travelers from developed countries. It has also taken a conscious decision to minimize damage to the natural environment when building new resorts. Many environmentalists appreciate their efforts to burture and protect the surroundings of their resorts. The company built villas around trees and boulders rather than cutting or excavating them. Banyan Tree has established the Green Imperative Fund to extend financial assistance to environment conservation and community projects.What potential problems do you foresee in bringing Banyan Tree to the Americas. specifically the States and Europe. o How to compete with legendary hotel and other luxury hotel EUROPE Same problem with America where it is more to the investment cost and competitors. How could Banyan Tree address those issues? AMERICAS o The potential problem is more on the cost to be invested since in America the cost of living is higher than Asia. o Another problem is the government policies at Middle East is differ to Asia. to make them more accessible to their target market in the developed countries.

y They also need to search result of a study how they could attract customer and to show that their product is best and good. ‡ Other locations may not offer the low-cost structure that Banyan Tree is currently familiar with. and norms? 10 .. y To make sure they can compete with other competitors they need to stay with their brand equity and CSR to show the quality of their products by observation of all competitors at the country.Banyan Tree ± Branding the Intangible Concerns to address in expanding operations y Even though they have to face with all the potential problem but still through researches done they still can address those issues and settle down the matter arising. ‡ The culture. culture. Europe or America. the compatibility of Asian hospitality in nonAsian settings is suspect. and norms of service staff in other non-Asian countries may be distinctly different from those of Asian countries. Would these be compatible or appropriate in a non-Asian location. with different settings. and so the relevance of the Banyan Tree brand in such locations would be lost. Therefore how Banyan Tree¶s strategies could be replicated in other countries where cost structures might be different alike is goes to 3rd country which is need developing. values. y Promote something new to the customer so they wont fell regret to come again. e. Thus. y Need to make sure that Banyan Tree marketing tagline is still the main focus and careful not to dilute the brand. A possibility would be for the company to launch a new brand name that would reflect the temperate settings of such locations should the company be interested to venture into temperate countries.g. current services of Banyan Tree are based on Asian therapies and remedies. ‡ Further. y Try to differentiate product from the local luxury resort and hotel. ‡ Tropical forests might not be available in temperate countries. heritage.

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