Rosewood Hotels And Resorts free essay sample

Check with your professor for any additional instructions. o Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. The specific course learning outcomes associated with this assignment are: o Analyze the importance of customer life time value. o Evaluate the role of consumer behavior and perception in the marketing mix. Use technology and information resources to research issues in marketing in a global environment. o Write clearly and concisely about marketing in a global environment using proper writing mechanics. Grading for this assignment will be based on answer quality, logic/organization of the paper, and language and writing skills, using the following rubric Abstract Rosewood hotels Resorts, a privately held company was established in 1979 by Caroline Rose Hunt Trust Estate. In 1980, rosewood managed its first hotel, The Mansion on Turtle Creek, and old mansion in Dallas Texas. The Mansion was saved by Ms. Hunt, the daughter of H. L. Hunt, a Texas oil Tycoon. Rosewood, with the help of Hunt transformed the property into a world class hotel and restaurant. They ventured on to transform many existing properties to include Little Dix Bay, Virgin Islands, the newly built Lanesborough in London, and Las Al Paraiso in Mexico. This paper discusses the pros and cons of the Rosewood Hotels moving from individual brands to a corporate brand, discusses the general concept of CLTV and a wide variety of elements to differentiation, operational issues, and brand management. Additionally, this paper discusses how one assumption affects the results with an explanation that demonstrates an understanding of the concepts being applied Pros and Cons of Rosewood Hotels moving from individual brands to a corporate brand Rosewood hotels Resorts were so distinctive; each could thrive on its own name, without any corporate identification, in other words, the â€Å"cookie cutter approach†. John Scott, Rosewood’s newly appointed CEO and Robert Boulogne, vice president of sales and marketing considered a new brand strategy to boost the company’s growth. Since Rosewood Hotels Resorts had minimal brand recognition with its guests, John Scott and Boulogne decided to unifying the hotels owned by the company are to promote the corporate Rosewood Brand prominently. To effectively show results of individual versus corporate branding strategies, Scott and Boulogne conducted a qualitative analysis considering pros and cons of each branding strategy, and a quantitative analysis to estimate the impact of Rosewood’s corporate branding strategy on customer lifetime value (CLTV). From the research conducted by Rosewood, the most obvious and immediate pro to a corporate branding strategy is the projected increase in multi property stay guests from 5% to 10%. This has the potential to not only increase revenues but also brand awareness, recognition and word of mouth referrals. other advantages of Rosewood Hotels moving individual brands to corporate brand are increased brand wide usage, increased brand recognition, connection among properties, good positioning for competition, increased market/share, increase brand awareness, promotion of cross property usage, increased return visit, brand loyalty, increased revenue and building customer life values However, there are disadvantages of moving from individual brands to a corporate brand for Rosewood Hotels. This moment canned the â€Å"cookie cutter approach† of doing business. Other disadvantages of having a corporate brand is â€Å"no sense of place† philosophy, loss of uniqueness, less differentiation, potential loss of brand equity, loss of discretion, guess and management resistance to change, increased marketing cost, competition tougher among corporate branded hotels, and change in the corporate culture is challenging. To ensure they were making the best decision to move corporate branding for Rosewood Hotels, Scott and Boulogne used the guest revenue and expense data to show the potential benefits, greater customer life value (CLTV) would outweigh the marketing a n operations cost connected with corporate branding. To accomplish this, Boulogne calculated and forecasted the CLVT for six years with and without a Rosewood brand to determine how the branding strategy would affect profit per quest. CLTV can be separated into three categories, aggregate metrics, program evaluation metrics, and customer-level targeting tools. Aggregate CLTV metrics is an ideal metric for identifying the profitability of customer segments and for tracking segment performance over time. Segments with high CLTV represent the most important customers. Segments with low or negative CLTV indicate that change is needed in the way the business markets to and services these customers (Koppock, 2002). Calculating the CLTV impact of a proposed marketing program is essentially the same as running a business case by calculating the ROI of the program. The important thing to remember is that positive incremental CLTV is the key criteria for program valuation. Avoid thinking, If these customers are worth $500 in CLTV, then I can certainly afford to spend $100 on retention. The purpose of marketing is to increase CLTV, not to spend, (Koppock, 2002). And Customer Level CLTV was previously mentioned for cable TV providers include several elements that represent customer-level actions (retention, upgrading, cross-purchasing, payment, servi ce calls). Building predictive models for each of these customer actions allows an individual level assignment of CLTV. This information can be used for differentiated marketing in several ways: Identify individual customers who are not profitable and change the customer relationship to improve profitability (reduce service levels, increase price, etc. ) or minimize the customer relationship (accept attrition, end proactive marketing). Customer Lifetime Value Calculator Rosewood hotels Resorts used a value calculator to show how the assumption affects the results of moving from the â€Å"cookie cutter approach† to corporate branding Rosewood Case Analysis http://www. cribd. com/doc/64121596/MKT-Rosewood-Case-Analysis ROSEWOOD HOTELS AND RESORTS CASE Strategic issues and problems: The following report will describe and analyze the case of a private hotel management company called â€Å"Rosewood Hotels and Resorts†. Rosewood hotels have 12 distinctive hotels worldwide with a strong brand image that makes each property unique. The dilemma found in this case is whether to keep the current i ndividual branding strategy or create a corporate branding strategy, without undercutting the distinctiveness of each hotel. To do so the following points will be covered: ( ( ( Recommendation on individual versus corporate branding strategies. Qualitative analysis considering pros and cons of each branding strategy Quantitative analysis estimating the impact of Rosewood’s corporate branding strategy on customer lifetime value (CLTV) Recommendations: As we will observe in the qualitative analysis there are many disadvantages if the new strategy is implemented. However from an economic point of view we will see that implementing a new branding strategy is better for the company as the NPV per guest is higher (see quantitative analysis). Taking into account the Customer Lifetime Value Model Rosewood should implement a corporate branding strategy. However to minimize the disadvantages it would be essential to keep the name of some emblematic hotels such as â€Å"Carlyle† in order for the clients to remain loyal. These hotels can add the name â€Å"Rosewood†, to keep its clients aware that they belong to this chain. I find it useful to separate the uses of CLTV into three categories: 1) aggregate metrics, 2) program evaluation metrics, and 3) customer-level targeting tools. Aggregate CLTV Metrics:  CLTV is an ideal metric for identifying the profitability of customer segments and for tracking segment performance over time. Segments with high CLTV represent the most important customers. Segments with low or negative CLTV indicate that change is needed in the way the business markets to and services these customers. CLTV for Program Evaluation:  Calculating the CLTV impact of a proposed marketing program is essentially the same as running a business case by calculating the ROI of the program. The important thing to remember is that positive incremental CLTV is the key criteria for program evaluation. Avoid thinking, If these customers are worth $500 in CLTV, then I can certainly afford to spend $100 on retention. The purpose of marketing is to increase CLTV, not to spend it. Customer Level CLTV:  The definition of CLTV previously mentioned for cable TV providers includes several elements that represent customer-level actions (retention, upgrading, cross-purchasing, payment, service calls). Building predictive models for each of these customer actions allows an individual level assignment of CLTV. This information can be used for differentiated marketing in several ways: Identify individual customers who are not profitable and change the customer relationship to improve profitability (reduce service levels, increase price, etc. ) or minimize the customer relationship (accept attrition, end proactive marketing). †¢ Identify the drivers of CLTV and create programs that improve CLTV (marketing triggers, retention programs, etc. ). †¢ Identify high value prospects by cloning the profitable customer base (find prospects with similar characteristics)