Rosewood Case Study
Problem Statement
Rosewood Hotels currently has 12 iconic luxury hotels worldwide with a total of 1,513 room capacity. Each property thrives on its own name and the corporate brand name, Rosewood, has been muted to preserve the distinctiveness of each individually branded hotel. Rosewood faces competition from corporate branded giants e.g. Ritz-Carlton, Four Seasons etc who follow “canned and cookie cutter” approach of maintaining a consistency across all hotels. Rosewood’s management believed that the individual property branding strategy would help them differentiate from these corporate giants. However, in the wake of fierce competition in the luxury hotel industry, CEO of Rosewood, John Scott and VP of sales and marketing, Robert Boulogne are considering incorporation of Rosewood as a brand in name of each hotel and use Rosewood as the house of brand in all of their advertising campaigns.
Rosewood brand suffers from low brand recognition while Rosewood’s customers are increasingly getting attracted towards hotels with strong corporate brands as highlighted by the Strategic Marketing Solutions report in 2003. John and Robert are considering switching to corporate branding to increase brand awareness amongst Rosewood’s guests and promote cross property usage to increase customer retention. In 2003, property specific loyalty is high amongst Rosewood’s customers with 40% return visits, however; only 5% of them had stayed in more than one Rosewood property while corporate brands enjoy cross property usage rates of 10-15%.
Pros of Corporate Branding
Following are some of the advantages of using corporate house of brands:
1. Increase cross property usage and enhance customer loyalty.
2. Position corporate brand as a status symbol for customer to counter competition
3. Provide consistent service and experience across all properties
4. Increase customer retention and customer visits
5. Increased customer lifetime value and increased revenues (discussed later)
Rosewood Hotels currently has 12 iconic luxury hotels worldwide with a total of 1,513 room capacity. Each property thrives on its own name and the corporate brand name, Rosewood, has been muted to preserve the distinctiveness of each individually branded hotel. Rosewood faces competition from corporate branded giants e.g. Ritz-Carlton, Four Seasons etc who follow “canned and cookie cutter” approach of maintaining a consistency across all hotels. Rosewood’s management believed that the individual property branding strategy would help them differentiate from these corporate giants. However, in the wake of fierce competition in the luxury hotel industry, CEO of Rosewood, John Scott and VP of sales and marketing, Robert Boulogne are considering incorporation of Rosewood as a brand in name of each hotel and use Rosewood as the house of brand in all of their advertising campaigns.
Rosewood brand suffers from low brand recognition while Rosewood’s customers are increasingly getting attracted towards hotels with strong corporate brands as highlighted by the Strategic Marketing Solutions report in 2003. John and Robert are considering switching to corporate branding to increase brand awareness amongst Rosewood’s guests and promote cross property usage to increase customer retention. In 2003, property specific loyalty is high amongst Rosewood’s customers with 40% return visits, however; only 5% of them had stayed in more than one Rosewood property while corporate brands enjoy cross property usage rates of 10-15%.
Pros of Corporate Branding
Following are some of the advantages of using corporate house of brands:
1. Increase cross property usage and enhance customer loyalty.
2. Position corporate brand as a status symbol for customer to counter competition
3. Provide consistent service and experience across all properties
4. Increase customer retention and customer visits
5. Increased customer lifetime value and increased revenues (discussed later)