Brand Awareness and Recognition: whether the strategy can make both Rosewood as the parent brand and its individual properties known and accepted by more customers. b. Customer Loyalty and Retention: whether customers’ loyalty for the brand Rosewood will increase and therefore more likely to stay in one of Rosewood’s hotels or customers lose interest in Rosewood and previously favored individual hotels because of the loss of emotional bond. c. Customer Lifetime Value vs. Expenses: the customer lifetime value must outweigh the overall expenditure in carrying the strategy-change.
Rosewood Hotels is a privately managed Hotel that is looking to increase their global reputation. In order to achieve this, a new branding strategy was going to be considered. Rosewood currently has the luxury segment but has low loyalty due to high prices and low cross usage. The two options for the branding strategy were, corporate branding or individual branding. The positive‘s to individual branding were: it would represent each individual unique culture and not be a cookie cutter version of the other hotels.
Rosewood’s management used property specific advertising because it believed that using a marketing strategy based on the individual property brand would best distinguish Rosewood properties from its corporate branded competitors. However, Rosewood’s competitors are not exclusively corporate branded luxury hotels, they also include collections of individually branded unique luxury hotels. Although the company is doing well, the luxury hotel segment is highly competitive and becoming inundated with competition. In response to this, Rosewood’s new president and CEO, John Scott, is considering a new marketing strategy that will allow the company to enhance profits and boost growth. The new strategy would allow Rosewood to claim a portion of the changing market by creating consumer awareness of its brand, thus enhancing customer loyalty.
Also, the depreciation and amortization expenses will not have any impact on the net income of Marriot. This could support its growth objectives of increasing the sales and EPS. However, as a result of this strategy, Marriott would have to wait for investors to earn a prespecified return before it could receive its 20% share of the profit. This may limit the profits it can reap from the hotel business. b.
Now that the luxury hotel market is becoming quite crowded, the new CEO/President and Vice President of Sales and Marketing, John Scott and Robert Boulogne respectively, are finding it more difficult to compete with corporate branding such as the Ritz Carlton and Four Seasons hotel. Several surveys as well as travel agents have confirmed that although individual Rosewood properties are well-known, Rosewood’s brand itself has little brand awareness and connectivity of Rosewood properties. Management has also relied on the model, the Consumer Lifetime Value tool which helps determine the value of a customer over a lifetime. With that said, John and Robert are considering transforming the customary strategy of individual branding into corporate branding by incorporating Rosewood’s brand into each individual property. Completing this transformation will create several positive and of course, negative factors that will need careful consideration.
Debt servicing will need to be examined in detail to discover if one, both, or neither of these financing decisions will force the firm into bankruptcy. Finally, we shall like to look at the effect to equity holders. What are the real costs of dilution and is dilution always costly? With all of this in hand, the student will make recommendations to Wathen regarding this acquisition and the financing of it, covering all of the pertinent issues and considerations. PRELIMINARY TASKS The Preliminary portion of this case will be particularly important in that it has repercussions to the valuation of the synergy as well as to the bid process.
Priceline.com: Name Your Own Price Case Analysis Recommendations As part of Priceline’s strategy for enhancing its brand, expanding its franchise, growing revenues to over $1 billion, reducing operating losses, and improving operating margins, the company should implement the following strategies: 1. Focus on Travel -- Channel resources to focus on established travel markets that target budget-minded leisure travelers. Stronger brand recognition will be realized if they focus on travel industry offerings and avoid products that do not support the core brand identity or are less conducive to the “name your own price” methodology. Priceline should discontinue products that require a high degree of complexity, “hands on” involvement, or numerous decision variables such as mortgages, auto sales, and grocery offerings. Implementing this strategy will simplify the purchase experience by streamlining Priceline’s offerings and will eliminate fulfillment costs associated with non-core products.
One strategic initiative presently contemplated is to reduce company costs by consolidating financial advisors in 5-10 person offices in large metro areas. While this strategy offers some benefits, we believe the opportunity costs outweigh the cost savings. On the other hand…..”thesis……did we decide to consolidate just a few offices or leave all of them the same and focus on expansion?” Compared to other financial investment firms, Edward Jones is relatively small with limited resources and limited access to cash (Exhibit 5). Since its foundation it has remained a limited partnership. While remaining private has yielded benefits, it also limits its access to cash- not sure if I should just erase this.
Some Marriott franchises are shirking their responsibility to maintain high quality hotels, and this shirking damages the reputation of all Marriott franchises. b. Poorly run franchises damage the Marriott reputation and reduce the profitability of hotels owned by Marriott. c. Where there is little repeat business, there is less incentive for a hotel to provide quality service. Where there is a lot of repeat business, franchises will have an incentive to maintain quality to attract repeat
This is then linked to local destination image. Therefore, there is growing demand for the measurement of the conceptual relationship between hotels design and destination image. Understanding travelers’ images of destinations allow hotel managers to make decision in different levels in order to distribute channels to fit customer’s needs and improve guests’ experience through design and amenities (Skogland & Siguaw 2004). Also, as the hotel industry becomes more global, the concepts of differentiation and regional/national identity are significant for destination image measurement. The aim of this essay is to identify and discuss some examples of cooperative marketing and how these initiatives have contributed to destination competitiveness.