Following Rosewood through this case study we have seen the company come to a crossroads. The company had to redefine itself to stay relevant in an evolving space. Rosewood had a reputation for managing uniquely distinctive properties without widespread corporate brand name awareness. Each individual property enjoyed vast success in particular from repeat guests who mostly stayed at only one of their distinctive properties in their growing portfolio. Now the company is looking to the future and specifically evaluating whether or not to incorporate the Rosewood brand into the name of each hotel. Rosewood’s senior management is engaging several tools to make their decision. Implementing this new strategy could lead to a bright future or spell disaster.
Pros and cons of Rosewood moving to a corporate brand
What is branding? According to Entrepreneur magazine “The marketing practice of creating a name, symbol or design that identifies and differentiates a product from other products.” Creating a corporate brand can come with positive and negatives. Rosewood’s objective will be to leave an imprint that no one else can leave and to create magic moments that their guests will never forget. Such as when the guest goes down memory lane years later after their stay, they will recall the positively outrageous service, the amenities, the food and the atmosphere created by Rosewood. No other hotel will duplicate what they experienced at their properties. Another positive to branding, Rosewood will create standards to measure the overall performance of all their properties. Such as curb appeal, beautiful landscaping, manicured green grass, flowers in season, to beautiful shrubs and trees.
Additionally, as the guest arrives the people become part of the standard set, from the doorman, to the desk clerk, to the bellman, to housekeeping, to the engineering team that keeps the building and room temperature comfortable. This is where Rosewood can benefit from differentiation and drive performance. For that reason Jack Welch states in a World Press article, “Companies win when their managers make a clear and meaningful distinction between top- and bottom-performing businesses and people, when they cultivate the strong and cull the weak”. Some of Rosewood’s property managers, as mentioned in Harvard Business Review: Rosewood Hotels and Resorts: Branding to increase customer profitability and lifetime value, many had “mixed feelings” about moving to a corporate brand. When you are measured against other hotels there is only so much room at the top. Naturally, there will some managers that will be asked to “ship up or ship out”.
Thus, the upside is each hotel pushes each other to be the best they can be. Finally, the guest could anticipate what experience they will have at each Rosewood if they moved to a uniform brand. On the other hand, the down side or cons of moving to a uniform brand for Rosewood could be that data gathered from properties could be skewed or demographic information could not apply to all hotels across the brand. According to Phillip Kotler in A Framework for Marketing and Management “The data collection phase of marketing research is generally the most expensive and the most prone to error” (p.39). Also, some management after differentiation is established and measured could be dismissed if their hotel is at the bottom. Finally, another con could be that some management and employees are not good team players and are not able to uphold the standards charted by management.
Customer Lifetime Value Calculator
Using a tool like the Customer Lifetime value calculator can be helpful to Rosewood management as they crunch the numbers. This tool helps management take quantitative information and funnel it down to several outcomes. However, garbage in garbage out must be considered here. The CLTV is only as good as the information provided. If one Rosewood hotel provides flawed information or has not collected the data properly, the assumptions arrived to by the CLTV are not accurate. Perhaps as JWMI 518 W2, L2 states “The best approach is often to make use of both qualitative and quantitative research”. This approach considers the ever changing market conditions, tangibles and intangibles contained within qualitative and quantitative research. They are both valuable and have their place. Finally, within all the data and assumptions gained from the CLTV, there is one factor not considered. The relationship factor.
In order to carry out the legendary service brand Rosewood wants to create, the most critical factor the team should be focused on is building relationships. The data, the CLTV, the amenities and a uniform brand all revolves around the staff building meaningful relationships with the guests. The standardized expectation of how the guests are served is the most important ingredient and the CLTV does not factor this into the equation. According to INC Magazine, “The truth is that entrepreneurs too often get caught up in the details of the kinds of products or services they are selling to notice how critical it is to build relationships not just with your customers, but also with your vendors, employees and–gasp–even your competitors. “Without strong relationships, it is impossible to have success as a business owner,
My recommendation is that Rosewood should move to branding their hotels using the Rosewood brand immediately. Without setting standard foundations the guest will not know what to anticipate. Rosewood could use standardized data to help anticipate the needs of the guest before they even asked. Also, creating a uniform brand will help everyone come together as one team. When you are a consummate team player you elevate the performance of everyone around them and then there is no limit to what you can do as a team.
When Rosewood has everyone on the same page going in the same direction they can create a wow factor the guest will be telling the world about. To most of the world, getting good service is common versus giving positively outrageous service is uncommon. Having a satisfied customer is common versus taking that satisfied customer exceeding his or her expectations and then taking the service one percent beyond that now Rosewood can create a raving fan that is uncommon.
Entrepreneur Magazine, (2013) http://www.entrepreneur.com/encyclopedia/branding Harvard Business Publishing, (2007), Rosewood Hotels and Resorts: Branding to increase customer profitability and lifetime value, P. 5 INC. (2013) http://www.inc.com/guides/201101/how-to-build-better-business-relationships.html Kotler, Chapter 3: Collecting Information and Forecasting Demand, P.39 World Press, (2012) http://frrl.wordpress.com/2009/10/31/jack-welch-on-differentiation-or-making-winners-out-of-everyone/
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