Rosewood

Q.1) How would a corporate a corporate branding strategy relate to “The four things a service business must get right” framework. Feel free to use other operations concepts if they are relevant.

Before implementing the corporate branding strategy, Rosewood needs to consider the following issues:

External Competition: Rosewood is now competing with other chains and individually branded property such as Four Seasons, Ritz Carlton, Fairmont, Rocco Forte etc.

Agent Participation: Since the hotels operate as an individual entity without using the Rosewood brand, the agents have the following perception: 1) The importance of the Rosewood brand pales in comparison to the individual hotel’s brand identity, 2) Clients don’t come asking for the Rosewood as a brand and only know it when the travel agents informs them 3) Once the guests are made aware of Rosewood, they can make a connection with the brand.

Employee’s Perception: The employees of the individual hotels perceive that Rosewood 1) is a brand of dilemma and has limited business opportunities, 2) is a secret club known by a few regular guests and the tourism industry, and 3) has very low awareness, mostly amongst past guests

Guest’s Perception: Majority of the guests 1) didn’t know that the individual hotels were a part of the same group, 2) didn’t know the name Rosewood even after staying at the property, 3) weren’t motivated to stay at different properties because of the Rosewood brand, and 4) weren’t aware of the brand before the travel agent mentioned it.

As for implementing the “The four things a service business must get right” framework for the corporate branding strategy, Rosewood needs to determine what its service offering consists of. In this case, in order to meet the needs of its primary customer base, Rosewood needs to subtly add the corporate brand to it and make sure that it doesn’t dilute the individual brand persona. The next step would be to manage employees. It is understood that there is some internal resistance from some co-op owners and hotel managers as they are reluctant to adopt a corporate branding and are inclined to promote their own hotel rather than promoting rosewood. This can be addressed by empowering the hotel managers by showing the bigger picture and the effect of the customer life time value. The third aspect is the funding mechanism, which can be achieved by investing now in return of higher profits in the future as the CLTV increases with higher number of multi-property users. The last aspect- customer management can be done effectively by making sure that customers who are looking for the ‘Rosewood Experience” are aware of, and have access to all the Rosewood properties. One way to achieve this would be by partnering with travel agencies and incentivizing them to push the brand.

Q.2) Using info from the case and exhibit 8 as a guide, calculate Customer Life Time Value for six years with and with out Rosewood corporate branding.

Please refer to Figure 1

Q.3) Is the difference in CLV with vs without corporate branding significant/ meaningful? Is it worth pursuing?

After switching to the automated data gathering through CRS, consolidated data revealed that rosewood only had 5% multi-property return visits, while corporate branded hotels enjoyed 10-15% cross property usage rate. With the individual branding, rosewood was at the low end of the scale and there remained an opportunity to for increasing cross property usage with corporate branding.

Looking at the CLV analysis (Refer to Figure 1), it is seen that the NPV of CLV with no change to brand strategy is $ 378.49, whereas with the new corporate brand strategy, it is $ 461.09(Refer to Figure 3). Thus with the new corporate brand strategy, even with the investment