Harvard Case Analysis

1. Rosewood Hotels and Resorts:
Branding to increase Customer Profitability
and life timeValue
Harvard Business School Case

2. What is Rosewood?
Where is it ?

3. • Established in 1979, Rosewood Hotels and Resorts is a
privately held, ultra-luxury hotel management company
based in Dallas, Texas.
• With more than 20 properties around the world, including the
U.S., England, Mexico, Saudi Arabia, Dubai and the Caribbean,
Rosewood is a recognized leader in the resort industry
• It has 12 hotels worldwide and 1513 rooms
• Room Tariffs ranging from $120 to $9000
• John Scott is the new president and CEO
• Robert Boulogne is VP of sales and marketing
Robert
Boulogne John Scott

4. Rosewood’s Executive Officers as of
2003
• Caroline Rose Hunt, Honorary Chairman
• Philip Maritz, Chairman of the Board
• John Scott, President and Chief Executive
Officer
• Robert Boulogne, Chief Operating Officer
• James McBride, Managing Director of The
Carlyle, New York

6. SITUATION ANALYSIS.
Executed through SWOT Analysis. We will look
through the
• Strengths
• Weakness
• Opportunites
• Threats

7. STRENGTHS(1/3)
• Monetary assistance provided
• Global positioning with one kind of its’s
properties
• Strong emotional bonds through current
successful hotels
• Unique competitive advantage and
differentiation versus competitors-”Sense of
Place”
• Global Flexible data warehouse system
• RevPAR is 17.62% higher(exhibit 5) than the
luxury hotel market average(look at the next
slide(strengths(2/4)).

8. STRENGTHS (2/3) :THE CARLYLE
•Impressive Icon
•Rich history
•One third of the carlyle rooms bought by
private owners-forming coop

9. STRENGTHS(3/3)

10. WEAKNESS(1/2)
• Tax structure
• Future profitability
• Investments in research and development
• 83.9% fewer rooms than market average in luxury hotel
industry
• Inconsistent view of corporate culture across company
• Internal resistance in changing corporate branding strategy
• Low brand recognition and low recall ability of guests
• Mixed branding of signals-inconsistent use of rosewood logo

11. WEAKNESS(2/2)

12. Opportunities(1/2)
• Growth rates and profitability
• New acquisitions
• Growing economy
• Implementing a corporate branding strategy
• Cross property usage
• Brand wide performance development
• Implementing Reward scheme for loyal
customers
• Growing trend in seeking more experiential
hotels

13. Opportunities(2/2)
Type of Reward Immediate Reward Delayed Reward
Directly supports the
Product’s Value
Proposition
Retailer or Brand
Manufacturer
promotions
(Price promotions)
Airline Frequent-Flyer
Cube
Coupons and tokens
(GM Card)
Other indirect type of
rewards
Competitions and
lotteries(Instant
Scratches)
Multiproduct Frequent
Buyer Clubs (Fly Buys)

14. Threats(1/2)
• Increase in labor costs
• External business risks
• Tough competitors
• Increasing rates of interest
• Customers are increasingly connecting with
Corporate

15. THREATS(2/2)
• Tough competition from corporate as well as
individual brands
• Corporate brands:
St.Regis,One and Only,Regent,Peninsula,Raffles,Four
Seasons,Ritz-Carlton,Fairmont,Park Hyatt,Mandarin
Oriental (check the next slide).
• Individual brands:
Orient Express,Rock Resort,Rocco Forte,Auberge
Resorts Collection,Dorchester Collection

17. What is the problem?
Rosewood brand was muted, not very well
known but it was not clear what is the best
corporate branding strategy without
destroying the value of each individually
branded hotel and loosing a customer. A new
branding strategy proposing an increased
customer profitability and lifetime value is
needed.

18. What needs to Change?
• There is a need of innovation and transition in the
brand. If you don’t, it will be lost in the clutters of the
competitive environment.
• Executive Team is looking forward to elevate and
boost up Rosewood.
• Brand Audit was done and opinion of customers,
travel agents and employees were taken

19. Goals
• Building Strong Brand Equity
• Create Rosewood Junkies
• Increase Connection between Rosewood
properties
• Increase cross property usage from 5%
to 10%

20. Strategies

21. Target Market(1/2)
• Customers:
Wealthy families
Business travellers,
Private Owners
• Collaborators: The main collaborators are travel agencies
and travel agents promoting the hotels. These are the
guys recommending to the customer , hotel and are very
important in communicating the competitive advantage
and value added to a customer. Rosewood employees also
act as collaborators.

22. TARGET MARKET(2/2)
• Competion: Compare Rosewood % property growth 1996-2003 it is
15% above the average of corporate branded properties and 20%
below the average of individually branded ones. This number is
pretty high taking into consideration that within the sector of
individually branded hotels. Rosewood is the second biggest in a
number of hotels.
• Context: Within the industry the number of guests enrolled in
frequent-stay programs grew by nearly 13%. This is a non-explored
opportunity for Rosewood and some other hotel companies. A
brand-wide customer lifetime value was becoming an important
issue and within this context management of Rosewood felt a need
for a change in the branding strategy as competitors were taking
long time customer loyalty improving initiatives threatening
Rosewood to loose some opportunities (customers) in a long term.

23. Tactics
• Products:Packaging and hotel attributes include should both
the name of individual hotel and corporate brand.
• Price.: No big changes in pricing policy are recommended.
• Place:. All Rosewood hotels globally and offices of the
collaborators such as travel agents. Also if there is enough
budget advertisement in media (local and global) would be
recommended.
• Incentives : An incentive system to increase overall
Rosewood profitability for managers of individual hotels
should be established .
• Promotion: Discount rates for current guests going to another
Rosewood hotel should be recommended.

24. Implementation

25. • From the previous slide it is calculated
that that the customer lifetime
value(CLTV) is higher for corporate
branding.
• Therefore its logical to go for corporate
branding

26. CORPORATE BRANDING
• Collective experience
• Consistent service
• Better brand
recognition
• High customer loyalty
• Internal resistance
• Increased short term
marketing costs

29. CONTROL
• The key performance indicators will be
the %increase in cross-property usage
and the number of loyal costumers
acquired per year. Tracking customer
behavior and adjusting marketing
tactics is very important

30. SUMMARY
We have seen:
• Executive summary
• Situation Analysis
• Problem faced
• Goal
• Strategy
• Tactics
• Implementation
• Control

31. • Created by Tejaswini Sandapolla, NIT Surat
during a marketing internship under
PROF.SAMEER MATHUR,IIM LUCKNOW