Sustainability of a Brand During Rapid Global Expansion

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Strategic Marketing Case Analysis

Banyan Tree: Sustainability of a Brand
During Rapid Global Expansion

[pic]

Prof. Julie H. Yu
The Chinese University of Hong Kong
February 2011

A project by:

Keevin Wong
Ian Leung
Daniel Lam
Ada Leung
Enoch Ma
Anna Laura Riemann

Table of Contents

1. Introduction1
1.1 Company Background1
1.2 S-T-P Strategy2
1.2.1 Segmentation2
1.2.2 Targeting3
1.2.3 Positioning3
1.3 Success Factors4
1.3.1 Strong Brand Recognition4
1.3.2 Integrated Capabilities4
1.3.3 Triangular Business Scope5
1.3.4 Experienced and Multi-disciplinary Management5
2. Decision Situation6
3. Proposed Alternatives7
3.1 Banyan Tree Flagship Resorts in Europe7
3.2 Strategic Partnership with Hotel Schools8
3.3 Expansion of Spa Academy to Resort Branch9
3.4 Spa Business Partnership10
3.5 Creating a Sub-brand “Business Tree”10
4. Decision Criteria and Evaluation11
4.1 Flagship Resorts11
4.2 Strategic Partnership with Hotel Schools13
4.3 Expansion of Spa Academy to Resort Branch13
4.4 Spa Partnership14
4.5 Creating a Sub-brand “Business Tree”14
5. Implementation and Recommendation15
5.1 Spa Partnership16
5.2 Strategic Partnership with Hotel Schools17
5.3 Flagship Resorts18
6. Conclusion20
1. Introduction
1.1 Company Background
Banyan Tree Hotels and Resorts is a private manager and developer of premium boutique hotels, resorts and spas around the world. The first Banyan Tree resort opened in 1994 and was primarily targeting at highly affluent travelers expecting a luxury retreat. In 2000, Angsana was launched as the sister brand of Banyan Tree. Angsana targeted at a younger segment than Banyan Tree and pricing was typically 20-30% lower than at Banyan Tree resorts.

As of May 2006, the company manages and holds ownership interest in over 18 resorts and hotels, over 49 spas, more than 53 retail galleries and 2 golf courses. The company has six operating businesses: hotel investment, hotel management, spa operations, gallery operations, property sales, and design fees and others (design services, office rental income and golf course operations).[1]

The company has gone through some milestones in the years of development. Below is the timeline which highlights major event regarding the growth of the company. [pic]
1.2 S-T-P Strategy
Banyan Tree has evaluated its marketing by looking into marketing segmentation, target the selective market segment and formulate the brand positioning after investigating the major market players.

1.2.1 Segmentation
1. Service Level
Travelers expect different standards of service for accommodations. One of the major segments was created according to the customers’ expectations regarding the service level. Service standard can be evaluated by looking at various aspects such as attitude of staff and level of personal/ customized service.

2. Environment
Environment refers to the physical situation of the hotels, including the room size, the locations, landscape nearby and the privacy provided to the customers.

3. Entertainment Facilities for Rejuvenation
Different resorts and hotels come with different entertainment facilities which provide additional rejuvenation to their customers. Travelers have different expectations towards these entertainment infrastructures according to their personal needs.

4. Spending Power
Spending power can be clearly reflected in the price customers are willing to pay for the accommodation facilities.

5. CSR
Corporate social responsibility becomes more and more appreciated. A favorite brand shall promote a philosophy in line with customers’ values and believes so as for customers to be able to identify themselves with the brand and express their own wish to act socially responsible by using the brand.

1.2.2 Targeting
The table below shows the characteristics / demands...
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