Rosewood Case Analysis
For Rosewood Hotels to successfully move from the “canned and cookie cutter” approach of individual branding to a collective strategy of corporate branding, first the pros and cons have tobe weighed and measured. From the research conducted by Rosewood, the most obvious andimmediate pro to a corporate branding strategy is the projected increase in multiproperty stayguests from 5% to 10%. This has the potential to not only increase revenues but also brandawareness, recognition and word of mouth referrals.A full complement of pros and cons to converting to a corporate brand strategy for Rosewood isoutlined in the table below:
Pros Cons
Increased brandwide usage
“Canned and cookie cutter” approach Increased brand recognition No “sense of place” philo sophyConnection amongst properties Loss of uniquenessGood positioning for competition Less differentiationIncreased market/share Potential loss of current brand equityIncreased brand awareness Loss of discretionPromotion of cross-property usage Resistance to change (guests and management)Increased return visits Increased marketing costsBrand loyalty – less property specific Competition tougher among corporate brandedhotelsIncreased revenues Change in the corporate culture is challengingBuilding customer lifetime values Overall customer lifetime value is higher with corporate branding than without, as demonstratedin Exhibit A. Without corporate branding, overall net present value totals $378.49 per guestwhile with branding that number jumps to $461.09. The average gross profit, based on repeatguests, is $2,702,500.00 without branding and $5,305,000.00 with corporate branding.Based on the calculations, as well as the overall pros and cons, I believe that Rosewood shoulddefinitely move from individual brands to a corporate brand. That being said, the companycurrently has some