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, Caribbean, Latin America, Middle East, and Asia Pacific with plans for a thirty-three percent growth within the next three years. Each luxury hotel is known for its own one-ofÐ²ÐÃâ¼ a-kind brand, and the reflection of the local character and culture in itsÐ²ÐÃâÄ¢ architectural details, interiors and culinary concepts. RosewoodÐ²ÐÃâÄ¢s current brand marketing strategy has been to place the Rosewood name secondary to the individual property brand which has resulted in a lack of market awareness of the Rosewood brand. Guests who have stayed at Rosewood properties were aware only of the property brand and not of the corporate brand. Given this lack of brand awareness, Rosewood has not been able to capitalize on repeat and multi-property guest stays in the way that a corporate-branded hotel with clear brand recognition such as that of Ritz Carlton or Four Seasons. RosewoodÐ²ÐÃâÄ¢s leadership saw an opportunity to increase their market share in the number of repeat guests and multi-property guests. Two possible approaches were considered: a frequent stay program Ð²ÐÃâ¼ an idea which they quickly rejected; and a corporate branding approach Ð²ÐÃâ¼ which they believed would encourage both repeat guest stays and multi-property guest stays. The corporate branding approach would require a marketing and operations investment of one million dollars per year. To assess the long term financial implications of the required investment to implement the corporate branding strategy, Rosewood needs to compare the forecasted Customer Life Time Value for six years with and without the branding campaign (Appendix A). The cumulative six-year-forecasted CLTV with the corporate branding campaign is $109.5 million compared to that without the branding campaign of $86.3 million; yielding a net gain of $23.2 million dollars. Working with the constraint that the only cost information we have is aggregate and is averaged across the number of unique guests, we are taking a conservative approach and including the new guest acquisition cost in the cost per unique guest. We are also assuming the average number of visits per year per guest remains at 1.3 from year one through year six and the number of multi-property guests and repeat guests also remain constant. With these assumptions, Rosewood can expect to realize a 27% greater cumulative CLTV with the corporate branding campaign than without. The actual gain however, is likely to be greater in magnitude as a successful branding campaign will result in retention rate growth and thus higher multi-property and repeat guests over time. Given the CLTV analysis, Rosewood Hotels should move forward with the corporate brand marketing strategy. However, building brand awareness and recognition will first require that Rosewood define a clear brand identity. The Strategic Marketing Solutions Report revealed Rosewood had a lack of brand identity with guests, travel agents and employees. Therefore, it will be crucial to the overall success of the corporate branding campaign for Rosewood to invest in learning how their guests and employees define the Rosewood brand culture and brand value, and then draw from that to develop the corporate brand identity. Without this assessment of guest and employee views, any brand identity Rosewood leadership develops will be meaningless. They will also need to ensure that the corporate brand identity continues to allow for individual property Ð²ÐÃÑ flavorÐ²ÐÃÑ as
cox. this approach may also lessen the buy-in from the same group of people as they will have more time to be disgruntled about the change. The Ð²ÐÃÑ Phase-InÐ²ÐÃÑ approach will also lead to inconsistent branding across the portfolio at any given time and thus would negate any attempts at clear brand identity. Secondly. get buy-in from employees and guests alike. The success of this strategy however.this is what sets them apart from the RitzÐ²ÐÃâÄ¢ and Four SeasonsÐ²ÐÃâÄ¢ of the world and is their differential advantage.edu/Rosewood. and have an implementation strategy that has the greatest impact and does not denigrate their differential advantage http://gvoss. Additionally. travel agents will need to be educated on the Rosewood brand and portfolio. and they will need to be educated on other Rosewood properties so they can promote those properties as well as their own. ManagersÐ²ÐÃâÄ¢ and employeesÐ²ÐÃâÄ¢ concerns about loss of autonomy with a corporate brand structure will need to be addressed. Rosewood will have to plan an implementation approach. depends on their ability to define a clear and strong brand identity. the Ð²ÐÃÑ Day OneÐ²ÐÃÑ approach would ensure that branding at all properties within the portfolio is consistent from that day forward and support the evolution of clear brand awareness. or they could establish a Ð²ÐÃÑ Day OneÐ²ÐÃÑ date and have all corporate branding be in place on a specific date. This action alone would help mitigate some of the backlash they might experience while transitioning to a corporate brand. Guest concerns about moving to a corporate brand will also need to be addressed. Once a clear brand identity has been defined and potential lack of buy-in issues have been addressed.htm . Rosewood may see an immediate negative reaction from guests and employees who were against the change. They could Ð²ÐÃÑ PhaseInÐ²ÐÃÑ the corporate branding over time.smu. Rosewood should consider some type of incentive for travel agents who consistently have repeat bookings at Rosewood properties. Rosewood will need to contend with the potential lack of buy-in from hotel managers. employees. particularly in the case of specific Rosewood properties that have permanent residences. and even guests. but they can mitigate this with timely and appropriate public relations measures (much like MacyÐ²ÐÃâÄ¢s did when they bought Marshall FieldÐ²ÐÃâÄ¢s). However. I would recommend the latter approach as it will have a much greater impact Ð²ÐÃâ¼ there is a clear change in brand identity and there is a clear demarcation in time of when the change occurred. they also stand to make significant financial gains in doing so. allowing for more accurate measures of the effects of the change. Rosewood would benefit from meeting with this group of unique guests and hearing their concerns. Alternatively. Rosewood Hotels & Resorts will not only increase their number of repeat guests and number of multi-property guest stays by investing in and implementing a corporate branding strategy. Rosewood should also consider some type of incentive for managers to encourage their guests to stay at other Rosewood properties. they will need to be empowered to continue to anticipate and meet guest needs. A Ð²ÐÃÑ Phase-InÐ²ÐÃÑ approach would allow for subtle changes over time and may help allay concerns of guests and employees.
Canned and cookie cutter".49 per guest while with branding that number jumps to $461. The average gross profit.000. approach Increased brand recognition No ". overall net present value totals $378. approach of individual branding to a collective strategy of corporate branding.702.305. as well as the overall pros and cons. That being said. based on repeat guests. is $2.Rosewood Case Analysis For Rosewood Hotels to successfully move from the ". This has the potential to not only increase revenues but also brand awareness. first the pros and cons have to be weighed and measured.sense of place".00 with corporate branding.500.00 without branding and $5. So as not to lose any current brand equity in those properties.09. A full complement of pros and cons to converting to a corporate brand strategy for Rosewood is outlined in the table below: Pros Cons Increased brandwide usage ". and also to appease the management of those . as demonstrated in Exhibit A. Based on the calculations. I believe that Rosewood should definitely move from individual brands to a corporate brand. recognition and word of mouth referrals. such as the flagship location. The Mansion on Turtle Creek in Dallas and also The Carlyle in New York. the most obvious and immediate pro to a corporate branding strategy is the projected increase in multiproperty stay guests from 5% to 10%. From the research conducted by Rosewood. Without corporate branding. the company currently has some powerhouse locations under its overall corporate climate. philosophy Connection amongst properties Loss of uniqueness Good positioning for competition Less differentiation Increased market/share Potential loss of current brand equity Increased brand awareness Loss of discretion Promotion of cross-property usage Resistance to change (guests and management) Increased return visits Increased marketing costs Brand loyalty ± less property specific Competition tougher among corporate branded hotels Increased revenues Change in the corporate culture is challenging Building customer lifetime values Overall customer lifetime value is higher with corporate branding than without.canned and cookie cutter".
I would recommend the name become ".000 Average Daily Spend $750. The company also needs to strive to establish the same service levels across all properties that the patrons of locations like The Carlyle and The Mansion at Turtle Creek have come to expect.00 $150.0 2.locations who are probably more resistant to the change to corporate branding than any other locations.919 Of which: Total Number of Multi-property Stay Guests 5. or something similar.67% 21.169 24.000 115. This will associate the properties with the Rosewood name without detracting from the brand equity already built within the current naming framework. Rosewood needs to maintain the core company philosophies and impeccable standards established by Mrs.00 increasing at 6% Number of Days Average Guest Stays 2.0 Average Gross Margin per Room 32% 32% Average Number of Visits per Year per Guest 1.70 increasing at 3% Average New Guest Acquisition Expense (systemwide) $150.00 $750.00 Total Number of Repeat Guests 19.500 Average Guest Retention Rate 16.3 Average Marketing Expense per Guest (systemwide) $130.67% Average Gross Profit per Guest $470 $461 Without Rosewood Branding .00 $138. The changes to the corporate culture will be difficult enough to traverse without adding undue stresses. I would recommend a modified corporate umbrella plan using a combination of new and existing brand elements. and Rosewood definitely does not want to alienate current customers with dramatic and immediate changes. Exhibit A Rosewood: Brand-wide Customer Lifetime Value Spreadsheet Model Without Rosewood Branding (2003) With Rosewood Corporate Branding Total Number of Unique Guests 115. All new properties could be named under the Rosewood umbrella.The Carlyle. Hunt when she rescued The Mansion from demolition and made it the worldclass hotel and restaurant that it is today.750 11. Rather than renaming The Carlyle to The Rosewood Carlyle.2 1. a Rosewood Property".
28 $543.10) ($160. From the research conducted by Rosewood.19 $686.469 1.92) ($142.00) $476.05 With Rosewood Branding Year 0 1 2 3 4 5 6 Gross Profit per Guest $661.080 1.35 $72. approach of individual branding to a collective strategy of corporate branding.82 $817.000 1.61) Net Profit per Guest ($150.05 0.469 1.00 Discount Factor 1.56 $647.01 0.587 Net Present Value ($150.360 1.22 0.000 1.05) ($146.64 $631.00 1.00) $518.03 0.68 $674.080 1.260 1.19 $770.16 Acquisition Expense per new Guest ($150.03 $727.27 $719.canned and cookie cutter".14) ($151.00 0.00 Discount Factor 1.260 1.72 $1.78 $12.00 0.01 $0.00 1.Year 0 1 2 3 4 5 6 Gross Profit per Guest $610.166 1.97 $580.92 $22.00) $441.13 $743.56) ($156.00 0.44 $701.17 0.00) Marketing Expense per Guest* ($142.79) ($165.00 0.66 $509. This has .00) $480.00 $1.23) Net Profit per Guest ($150.05 $885.00) Marketing Expense per Guest ($133.98 $0.55 Retention Factor 1.19 $787.71) ($155.33 $0. first the pros and cons have to be weighed and measured.07 Acquisition Expense per new Guest ($150.32) ($150.98 $591.22 Rosewood Case Analysis For Rosewood Hotels to successfully move from the ".17 $102.58 $553.166 1.587 Net Present Value ($150.79 $835.11 $661. the most obvious and immediate pro to a corporate branding strategy is the projected increase in multiproperty stay guests from 5% to 10%.360 1.84 Retention Factor 1.00 0.05 $4.86) ($147.90) ($137.87 $620.
That being said.500. Based on the calculations.09... overall net present value totals $378.00 without branding and $5.sense of place". A full complement of pros and cons to converting to a corporate brand strategy for Rosewood is outlined in the table below: Pros Cons Increased brandwide usage ". The average gross profit. .49 per guest while with branding that number jumps to $461. philosophy Connection amongst properties Loss of uniqueness Good positioning for competition Less differentiation Increased market/share Potential loss of current brand equity Increased brand awareness Loss of discretion Promotion of cross-property usage Resistance to change (guests and management) Increased return visits Increased marketing costs Brand loyalty ± less property specific Competition tougher among corporate branded hotels Increased revenues Change in the corporate culture is challenging Building customer lifetime values Overall customer lifetime value is higher with corporate branding than without.702. approach Increased brand recognition No ". is $2.000. recognition and word of mouth referrals. I believe that Rosewood should definitely move from individual brands to a corporate brand. as demonstrated in Exhibit A.00 with corporate branding.the potential to not only increase revenues but also brand awareness. the company currently has some powerhouse locations under its overall corpor. as well as the overall pros and cons.305.Canned and cookie cutter". based on repeat guests. Without corporate branding.
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