“Rosewood Hotels and Resorts” is considering a branding strategy to drive growth. The President & CEO, John Scott as well as the VP of marketing and sales, Robert Boulogne are considering 2 options; namely * Carry out corporate branding effort to create an umbrella brand, linking all of their individual properties and increasing cross sales and retention rate * Introduce a reward system to encourage customers of one location to visit other Rosewood properties. The reward system does not seem to work in the Luxury Hotel segment that Rosewood finds itself in. For Corporate rebranding, although the financial analysis based on Exhibit 8 in the case seem positive, there is a threat of diluting existing individual brands and alienating existing loyalists apart from operational resistances.
Ideally, Rosewood should consider maintaining a softer branding of its corporate entity in its iconic locations and focus on unifying the other properties under a strong corporate brand. The corporate branding, however, has to be carried out in a manner where “Sense of Place” guiding mantra remains unchallenged. Operationally, Rosewood should ensure autonomy of operations in all aspects except centralizing human capital management and In-direct procurement. Rosewood could also explore options of introducing reward schemes similar to those used in the airline industry; partnering with similar luxury hotels in locations outside of their existing markets to tap into a larger market and ensuring growth.
Positive and Negative implications:
* Based on Exhibit A of this report and Exhibit 8 provided in the case, it is evident that guest retention rate increases from 16.67% to 21.67%. Average number of visits is also expected to increase from 1.2 to 1.3. The NPV per customer for the $1M rebranding effort is calculated (As shown in Exhibit A) to be 98$. * The rebranding will also make it easier to standardize several operational aspects, such as...
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