Why is Rosewood considering a new brand strategy? What is the key issue that prompted them to rethink their brand strategy? Rosewood is considering a new brand strategy, because the individual branding strategy is not responding their objectives any more. Rosewood’s new president and CEO, John Scott is considering a new strategy to boost the company’s growth. The management team thinks that it is the right time to establish Rosewood as a corporate brand. A known corporate brand name will encourage hotel guests to stay at some of other Rosewood hotels.
Rosewood wants to compete with the corporate and individual branded luxury hotels. As indivudual branded company, is is hard to compete with the corporate brands that benefit from cross-property usage. Their current strategy limits their market and objectives. They see the power of corporate branding, and Discuss the pros and cons of individual branding and corporate branding strategy. Be comprehensive on your analysis. Individual branding has many posivitive aspects.
In this approach the company operates different properties, hotels in this case, with different brand names.
In this collection strategy, each property has its own unique name, image and identity. This allows a company to position its properties or brands differently. In Rosewood case, we see that the company created its own unique philosophy, “ Sense of Place”. Each hotel that Rosewood owns reflects the local culture. Each hotel has its unique characteristics such as architectural details and interiors. Individual branding strategy was a way to be different from corporate brands.
This strategy create brand equity for each property.
Each hotel itself becomes a big brand, and thus the hotel logo becomes even profitable. The logo provides a profotable souvenir business by selling high-profile amenities such asa towels and bathrobes. In addition, in a highy competitive business environment it is much easier to launch an individual brands, if the company does not operate under corporate branding strategy. To establish a strong corporate brand name, big investments are required. However, to establish an individual one is less costly. Individual branding brings some limitations besides its positive aspects.
Low recognition and brand-wide usage among people are some of them. The low recognition of Rosewood brand is an obstacle to make high profits. Guests cannot make a clear connection between the Roseewood hotels, and thus they do not prefer to go to other Rosewood properties. In addition, the luxury hotel segment is becoming more and more competitive. It is getting harder for the Rosewood company to compete with powerful corporate brands. The individual branding strategy is much harder to implement, because companies have to create a number of different brands, which takes time and big effort.
Corporate branding has many positive aspects. This strategy can create a big world-known brand name, which helps to propel new investments easily with a strong presence in the market. If Rosewood company has a strong corporate name, it will be easier to create a hotel chain. Apart from this, a strong corporate brand has high credibility, and guests will prefer to go to trustworthy brands. As a corporate brand, Rosewood can develop Rosewood junkies, who go only to the Rosewood hotels and reject other corporate brands, which means that the number of repeat guests will increase.
Corporate branding helps Rosewood to create loyal customers. Loyalty is the key for corporate brands in this segment to have a high percentage of cross-property usage. Corporate branding will boost multiproperty visits. Loyal guests will prefer to stay at Rosewood hotels, when they visit different places. In addition, corporate brands will generate more revenue from their loyal customers, and they will benefit from frequent stay programs and the customer lifetime value, which means that the brand guarantees some future revenues.
Another positive aspect is that the brand name becomes ubiquitous, which is a kind of a free advertisement. This makes the brand easy to identify, and it brings new guests to Rosewood hotels. Corporate branding strategy has some negative aspects. If a branch of the company fails or corrupts in a way, the whole corporate brand can be affected in a negative way. In addition, a big amount of marketing expense would occur to build and promote the corporate brand. A significant amount of marketing investment is required to boost guest retention and cross-selling.
Imposing the brand can alienate some guests at well-established properties. The company can face some resistance to branding coming from guests and managers. Most of the cooperative owners do not want to go see a more visible Rosewood brand, because they do not see a bigger organization as positive. Each individual brand is powerful according to them, and a corporate brand is unnecessary. In addition, if all the properties operate under the same umbrella and are promoted through same advertisements, the properties lose their unique characteristics and identities.
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