CASE 4 • BANYAN TREE HOTELS & RESORTS

CASE 5 • GIORDANO: POSITIONING FOR

INTERNATIONAL EXPANSION
“CASE SOLUTIONS”

SUBMITTED TO: DR. SAMMAR RAHI

SUBMITTED BY: RANA AMEER HAMZA

E20MBA038, SECTION: ‘A’

 C A S E 4 : BANYAN TREE HOTELS & RESORTS

Q1: What are the main factors that contributed to Banyan Tree’s success?

The success of Banyan Tree arises from a good plan and presentation in its marketing programs.
The marketing programs were both interior and peripheral. The internal marketing programs
focused on the need for a friendly communal and monetary working area where external
marketing strategies focused on tapping into the affluent class that needed a green conscious
environment that was as reasonably priced as other resorts but quite exceptional in their delicate
tastes.

Market Target

Before its establishment, there existed a gap in the hotel industry between the giant chain
international hotels like Hilton and other luxury resorts like the Shangri-La. The big difference in
the accommodation costs created an invented market. Ho provided affordable individual villas,
well-designed romantic escapade for guests, tailor made customer packages as well as a skilled
personnel that would influence upon the visitors

Marketing Strategy

The choice of the brand name was well tailored by the international advertising agency. The logo
plan of the Banyan Tree and the marketing phrase “Sanctuary for the Senses” promoted the
merchandise and procedures of the resort. Focus was not on luxurious accommodation but on
romantic experiences that was valued by its clients. This anchored well with the need for
international tourists seeking such services.

The design and delivery of the products and services

Some of the merchandise and procedures offered were unique for example the Banyan Tree Spa
that offered aromatic oil for face together with body massage. The services tailored by
employees were dynamic and according to the natives’ culture and traditions complying with the
brand that focused on relations and closeness. Dinner could be offered in a Thai boat
accompanied by Thai musicians, wedding packages that Buddhists officiated and even wedding
ceremonies conducted under water in the corals. These are some of the unique services in a
natural setting. The services aimed not only at customer satisfaction but also the business reaped
maximum profits from the customers.

Aggressive internal marketing

The locals got employment from the resort from which they earned a living and retained the
special heritage. The employees were trained fundamentals to good service delivery with some
accorded the “Banyan Tree Experience” to build the brand in them. Lucrative welfare policies
motivated the employees to consistent good performance.

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Incorporation of the local communities and the interest of the public

The villas were developed from indigenous material provided by the locals. The local artisans
were engaged in the manufacture of local art and handicrafts. This merchandise encompasses
garments, jeweler, clannish art compounded with spa frills like incense candles. The
merchandise was availed for sale at the “Banyan Tree Gallery”. By incorporating the local
artisans in the drawing and assembly projects, the locals identified with the brand as a means of
earning an income.

Environmental practices

The villas were totally from indigenous material in the remote areas. The merchandise used in
the resorts, as toiletries were recyclable. The resort initiated “The Green Imperative Fund” that
supported community-based programs like building schools, promoting crafts of the locals and
restoring devastated coral reefs. The fund also set up a marine conservation office to oversee
current and potential areas susceptible to degradation.

Q2: Evaluate Banyan Tree’s brand positioning and communications strategies. Can
Banyan Tree maintain its unique positioning in an increasingly overcrowded resorts
market?

The following few points is what makes up the company’s brand positioning: The use of local
flavors and construction of property designed to blend into the natural landscape of the
surrounding environment is the key to why the resort attracts the travelers that it does. The
company also lets its employees to vary the service delivery according to local culture and
practices, as long as they were consistent with the brand promise of intimacy and romance.
“Products and services were conceived with the desired customer experience in mind.” The
company makes sure to create an individual experience based on who the customer is. For
example, the “Intimate Moments” package, was a surprise gift that was presented to couples
upon their return to the villa. The company also created other ways to draw the guests in and
make sure they keep coming back. Although some of these things seem like small gestures,
that’s what made the difference for their guests.

Banyan Tree brand is also known for its spas, which relied on human touch, rather than high tech
equipment. This was another way that Banyan Tree differentiated its brand from the countless
other resorts and spas. According to the case, brand awareness was mainly generated through
public relations and global marketing programs. The case also makes a point that apart from
heavy advertising at the conception of the company, the company kept it minimal and targeted.
Another way to communicate their brand was through relationships with travel editors and
writers which helped increase editorial coverage of Banyan Tree. The company’s marketing and
communication techniques are appropriate considering the fact that this is a luxury resorts
market and Banyan Tree did not want to flood the market with advertisements and seem
desperate for customers. The fact that they strictly on focused on high end travel magazines and
invited top notch writers is also evidence to why they wanted to ensure the high end feel of the
product.

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Q3: Discuss whether the brand portfolio of Banyan Tree and 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?

The main idea of Banyan Tree is the delight in romance when travelling and the wonders present
in dissimilar sections in the world. Marketing programs and public relations were the ways
through which the firm used to create awareness about its brand. Globally, “Banyan Tree became
a member of Small Luxury Hotels” and the foremost hotels in the world The target consumers
for Banyan Tree were well-off customers.

To achieve this, it decided to use agents who specialized in exclusive luxury holidays. Angsana
was introduced after the lavish resorts were stable. This brand was more reasonably priced and
fashionable than the Banyan Tree. It ran as a stand-alone spa business in other hotels. The colors
of Agsana, a merchandise line of Agsana, were to enter the tourism trade.

A fine way of marketing is positioning. It refers to finding strategic ways of creating awareness
about your brand in ways that will place it different from the competitive entities. A sturdy brand
means a better image quality for a firm thereby keeping the competitors at bay. For effectual
administration of a brand, the characteristic aspect of the brand ought to be managed. This refers
to the real characteristics like the merchandise, pricing, and wrapping among many others. The
elusive aspects refer to procedures that generate emotions about the merchandise or service.

Brand positioning aims at detailed consumers for the merchandise or procedures introduced.
Activities involved in the brand must have a fundamental aim. Therefore, it must be exclusive
and dissimilar from the competitors. Its sustainability, significance to the market, and
appropriateness must be ensured. Firms should also profit from brand positioning. Brand
positioning should realize support and financial goals for the entity.

Brand identity plays an essential role in marketing the merchandise and procedures of an entity.
It reflects what the audience easily identifies because of the logo, color, and symbols. It creates a
clear difference in the mind of the audience from other competitors. It gives a full impression of
activities of a firm. Brand equity relates to the value a firm receives from the brand.

Q4: What effect does the practice of corporate social responsibility have on brand equity?

In the case of Banyan Tree, it had a profound effect on Banyan’s brand equity. In line with the
company ethos of conserving local culture and heritage and promoting cottage crafts, the
company founded Banyan Tree Gallery, a retail store showcasing indigenous crafts. The crafts
were made by the locals, which not only created jobs for the local population but also showed
Banyan Tree’s stance on social responsibility. Overtime, there was a Banyan Tree Gallery across
all of the company’s resorts and the community outreach extended across multiple countries.
Being socially responsibly also helped them establish a stronger brand. Customer praises were
generally directed towards the fact that it was a private, exclusive experience with sense of place
and romance. Company’s socially responsible policies also had a huge impact on their
employees, who in turn had pride and respect for the company. Furthermore, the effect of
corporate social responsibility is also evident in the fact that the company has won countless
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awards for just that, social and environmental responsibility. People loved the fact that the
company was engaging local communities, associates and guests to share the cause of climate
change and actions to reduce the carbon footprint. Involving the guests and the local community
is at the forefront of Banyan Tree and this has enormous impact on their brand. With countless
initiatives in the works and already in place, many guests know Banyan Tree resorts as a place
that only provided top notch service but also deeply cares about how it does business.

Q5: What potential problems do you foresee bringing Banyan Tree to the Americas,
Europe, and the Middle East? How could Banyan Tree address those issues?

The cost of doing business will definitely be the number issue that the company will face in the
Americas and Europe. Parts of Banyan Tree’s success comes from cheap labor and Asia’s
hardworking and dedicated workers. Although there are ways around the financial issues that the
company faces, it will be harder to replicate the success they had in Asia as it was their home
territory and they are closely familiar with how the “authentic” experience would look/feel like.
As it already mentioned in the case, it is important not to dilute the brands, purely striving to
open as many resorts as possible would not be the right strategy. It would imperative for the
company to stay focused on Banyan Tree and Angsana brand promises. Furthermore, it will be
important the company finds the right talent to manage its hotels and resorts in the Americas and
Europe as the culture is distinctly different than that of Asia, and it would be important to stay
the course but make sure that there are tweaks made into their products in order to cater to the
local population. All Banyan Tree hotels and resorts were designed around the concept of
providing a sense of place to reflect and enhance the culture and heritage of the destination.

Q 5: What potential problems do you foresee bringing Banyan Tree to the Americas,
Europe, and the Middle East? How could Banyan Tree address those issues?

The cost of doing business will definitely be the number issue that the company will face in the
Americas and Europe. Parts of Banyan Tree’s success comes from cheap labor and Asia’s
hardworking and dedicated workers. Although there are ways around the financial issues that the
company faces, it will be harder to replicate the success they had in Asia as it was their home
territory and they are closely familiar with how the “authentic” experience would look/feel like.
As it already mentioned in the case, it is important not to dilute the brands, purely striving to
open as many resorts as possible would not be the right strategy. It would imperative for the
company to stay focused on Banyan Tree and Angsana brand promises. Furthermore, it will be
important the company finds the right talent to manage its hotels and resorts in the Americas and
Europe as the culture is distinctly different than that of Asia, and it would be important to stay
the course but make sure that there are tweaks made into their products in order to cater to the
local population.

All Banyan Tree hotels and resorts were designed around the concept of providing a sense of
place to reflect and enhance the culture and heritage of the destination.

CASE 5:

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 GIORDANO: POSITIONING FOR INTERNATIONAL
EXPANSION

Q1: Describe and evaluate Giordano’s product, business and corporate strategies.

Product Strategy: Giordano sees itself as being more than just a retailer of casual
apparel. Besides its brand name, logo, style and quality, excellent service has become part of
the tangible products sold at Giordano stores. Customers have come to associate service
excellence as an integral component of Giordano's merchandise. Giordano is constantly
aiming to improve the value of the product. Being customer-oriented allows Giordano to focus
on what the company's products mean to the consumer. Another example is Giordano's
invitation to customers to set the price of its jeans. Giordano's other product strategy is to sell a
small number of core products in its stores. Maintaining a restricted range of core products has
allowed Giordano to respond to market changes faster than its competitors, and to keep costs
down. Business Strategy: There are three generic strategies advanced as business strategies
(Porter): cost leadership, differentiation and focus, and combinations of these three pure
strategies.

The primary source of differentiation comes from Giordano's commitment to quality,

in terms of the products it sells and the service it provides to customers. However, this is done
carefully to prevent a loss of existing customers who may become confused by the value
proposition that Giordano provides to them. For instance, its launch of the Blue Star Exchange
(BSE) line clearly indicates its commitment to the existing value-for-money segment, but at
the same time it is upgrading its core brand's position so that customers may perceive that
Giordano stands for more than just 'low priced' apparel. Corporate Strategy: Giordano initially
adopted a tapered vertical integration (backward) strategy, as it had manufacturing plants in
the Philippines and Mainland China, while also sourcing from external suppliers. In fact, in
1999, the Philippines plant was closed down, and Giordano is now concentrating on their core
business in retailing/ distribution.

Q2: Describe and evaluate Giordano's current positioning strategy. Should Giordano
reposition itself against its competitors in its current and new markets, and should it
have different positioning strategies for different positioning strategies?

Giordano's current positioning strategy is value for money. This means that Giordano believes
in creating and maintaining customer satisfaction. Consumers are given more preferences in
their business. However, at operating level it is the employees and sales people who are
attending these customers, but they are not paid as they are supposed to get paid. For this
Giordano provides its employees bonuses all over the year and different kind of leaves. These

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 kinds of services are also known as service differentiation. Other kind of positioning strategy
followed by Giordano is merchandise to their customers in such a way that the price is still
affordable and their product remains unique because of their quality.

Giordano should reposition itself in the current market and the new markets because they have
enough fame with the brand “Giordano”. The management has ways to make money and to
work on the concept of value for money. Employee's efficiency and speed up when out of
stock has brought a good reputation in the existing market. Giordano is not going to face any
kind of risk involved if they are willing to expand their business or reposition in new markets.
However, creating the same value of customers and customer satisfaction will take some time
which is not at all specified. At the same time, it can also cause troubles to existing market due
to the target segment. This might be being up some issues for repositioning themselves in the
new market and the customer's respond is hard to predict. The only concept and idea they have
is the customer services which are given to all its customers from different part of the world.
Secondly, they should maintain the quality and the merchandise of affordable cost towards its
customers. Lastly, they should bring up and improve their service differentiation in the
markets as compared to the existing markets. This will lead them to create customer awareness
to their product and keep them happy. Company might also improve their services in this way.

We think that if Giordano is ready to position them self in new market and reposition in the
existing one then they should also create different kind of strategies so that they can
experience different kind of respond. They should work on those strategies which are not
followed in Asian countries. However, looking at the economy and if its booming then they
consumers spending power increases because their income also increases. At this point
Giordano can actually come out with new products and new strategies so that customers are
aware of company's existence in bad and good times of the economy. Apparently, this will
increase Giordano product prices and higher value brand. They should position them self in
the new market slowly as the economy rises. Due to economic crisis it will be hard for
Giordano to catch up with customer's attractions which lead to company to not understand and
the customer and customers will be confused with their brand in the new market.

Q3: What are Giordano’s key success factors and sources of competitive advantage? Are
its competitive advantages sustainable, and how would they develop in the future?

Designs-Fast and market-driven NPD:

Systematically collects ideas from customers, front line and experienced designers - Relies on
effective organizational communications and other intangible sources of Advantage, which
are difficult for competitors to copy and implement effectively -Competitors could
increasingly use technology to assist in their design process. On Giordano’s part, effort must
continually be made to obtain and utilize feedback from target customers and Attracting and
retaining good staff in design is important.

Operations, Logistics and IT

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Excellent management of systems and integration of activities Minimized due to: - Daily sales
reports (facilitated through IT& systems). Limited stock in shops that are daily restocked.

Rapid market-driven manufacturing.

Needs to continually look for new ways to improve and build its advantage inside and outside
its industry. example: benchmarking against retailers like The Gap and Liz Claiborne, which
are well-known for their integration of IT systems and efficient operations.

Branding and Marketing Giordano’s Brand:

Positioning - helps instant transfer of key values Giordano offers (value-for-money, good quality
casual wear, and excellent service) - Excellent brand recognition due to high advertising budget
Brand equity helps to build customer loyalty. However, Giordano faces threat of strong
competitors with similar positioning and also from brand dilution (e.g. ³cheap image´) as the
market in general shifts upward along with increasing incomes. Biggest threat comes from
reputable players like The Gap. Giordano should continue to invest in strengthening its brand
equity through heavy advertising and excellent customer service - It could acquire another brand
to serve higher end segment.

Customer Service Fantastic customer service:

Service orientation is pervasive in many of its activities - Recruitment, selection and training of
staff.

 Empowerment and motivation of staff somewhat sustainable.

A service culture is one source of advantage that competitors would find difficult to copy -
However, Giordano needs to ensure that this culture can be maintained as it expands rapidly
in existing and new markets - Other competitors have not yet attempted to follow Giordano’s
service strategy Location.

 Good, high traffic shopping and convenience locations

High contributions allow aggressive retail location acquisitions Difficult to sustain - Giordano’s
sites are an important source of advantage, but other competitors could Also do the same.
-Competitors and new entrants will successfully compete for good locations

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Q4: Could giordano transfer its key success factors to new markets as it expanded both in
Asia and the other parts of the world?
Giordano Company’s main competitive strengths which can be transferred to other
market are: the experience of the employees, inventory controlled system, HRM practices but
the policies should be different for each country and can use the established distribution,
marketing and inbound channels members in order to market their product outside the home
country. IT strategy which is currently used by Giordano, it should not adopt the same strategy
for other countries where they are planning to expand their business. The marketing mix
strategies that are followed by the Giordano for the existing market should not be the same for
new markets where the company is willing to enter. So the strategies regarding product price,
price, place and
promotion should not be the same for all target countries as the market differs in terms of their
economic, cultural, social and political environment. But the successful strategies which are
currently used for other market can be used by Giordano as guidelines and can develop tactical
strategies for different market according to the market situation and customers’ requirement.

Q5: How do you think Giordano had/would have to adapt its marketing and operations
strategies and tactics when entering and penetrating your country?

When Giordano entered Malaysia they had to follow the same marketing strategies as they did
in Hong Kong when they started operating their business. At first there wasn't anything which
concerned them for customer service. As they started operating in other countries it rapidly
became a trend for Giordano. However, every country has different scope of growth. In
Malaysia, consumer taste and style differ from other countries. Thus, the marketing strategies
might be the same but the scope of response is different.
At operational level every country has different strategy of convincing and satisfying their
customers. However, this depends on the management as per how they develop and train
their employees. Normally at operational level it is the employees interacting with the
consumers every single day.

These strategies take huge planning and investment on a particular project. Tactics depends
on the marketing style of that particular country. Every store, management, country follow
their own tactics to get customers. Some come up discounts and some come up with sales.
These are tactics which are done by their management to attract customers. It normally
depends on how well that particular store is in making money. However, it also depends on
the economy of that particular country and what actions is the management taking towards
their business.

Giordano's main strategy of value for money, service differentiation, inventory record and
fast distribution centers are a remarkable and spectacular strategies for any country.
However, transmitting the transaction in other branches is cheapest and the fastest way to
report the headquarters.

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 Q6: What general lessons can major clothing retailers in your country learn from
Giordano?

Giordano's reputation in Asian countries is at a very good level. They have plenty of branches
in Malaysia. The basic concept of value for money can be a good lesson to other clothing
retailers. This concept can make them realize the importance of customer satisfaction. Product
differentiation is another concept created by Giordano and to maintain the inventory.
Basically, anything which includes Giordano strategies can be a general lesson for other
retailers because their outstanding strategies has leaded them to success and making profits.

Customer service is another strategy followed by Giordano. Apparently, this has become one
of the most powerful and efficient strategy followed by Giordano and hence, Malaysian
clothing retailers can learn and experience it in this country. As per the market in Malaysia,
consumers are normally looking for services. They are clever enough about the market and
they have the knowledge of other clothing retailing shops too. However, it has been analyzed
that Giordano is one of the leading clothing retailing shop in Malaysia. So normally other
upcoming firms will follow the same steps and the same strategies to stand in the market.

The other strategy which is followed by Giordano is the pay to their employees with bonuses.
To give services to the customers these employees should be well trained and should be given
bonuses so that they are always happy with the firm. Malaysian clothing retailers should
recruit good employees and skilled one this will save their time of training. However, these
employees should have at least one-year contract so that they don't leave the company and the
company is committed to their employees. Most of the businesses experience this problem in
Malaysia that they train their employees and the quit the job after few months. Even if the
employee needs training, then a strong training and development program should be created by
HR department through which they can train their employees which mainly includes customer
service.

Lastly, the concept of other retailing shop should be to understand the customer as Giordano
does. This has lead Giordano to gain profits and customer satisfaction. And this can be a
strong strategy from the management to the employee of any business in Malaysia.

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