Case study 2

Case study 2

• 1.
  Rosewood Hotels & Resorts Brandingto Increase Customer Profitability and Lifetime Value.
• 2.
  What was the scenario ? Thissection talks about the situation pre-corporate branding. 1
• 3.
  Distinctiveness of individual brand Establishing rosewoodas a brand
• 4.
  • Property luxuryhotel • 1513 rooms, prices ranging from $120- $9000!! Corporate brands Ritz carlton,4Seasons,St Regis, One and Only Individual brands Bubeye,Rock resorts,Orient express COMPETITORS
• 5.
  “Sense of place” philosophy From themenu design to how a guest is greeted, the styles are imbibed from local culture and architecture
• 6.
  WHAT WAS THESCENE High profile amenities- Individual hotel name(phone greetings included) Low profile amenities- ROSEWOOD was displayed
• 7.
  What was the issue? Itlooks at what the main issue was and what were the underlying problems? 2
• 8.
  THIS IS THEISSUE CARYLE MY ONLY CHOICE! NEW YORK MEXICO
• 9.
  SOPHISTICATED CUSTOMERS WHO VALUE DISTINCT EXCLUSIVE COLLECTION,BUTARE SMALL IN NUMBER Corporate branded version of luxury, and form the majority! SO FAR… GO FOR THE MAJORITY
• 10.
  WHY CROSS PROPERTYIS NEEDED ? Return visits 40% More than one rosewood properties 5% single property 40% Individual brand/collection hotel brand 5-10% Corporate branded hotel cross property 10-15% expense per visit was high loyalty was typically property-specific the number of visits per year was usually only one or two. While the proportion of repeat guests at a
• 11.
  Now what doI do?H o w t o g o a b o u t t h i s i s s u e ? Click here to learn more! 3
• 12.
  HOW DO WEGO AHEAD? Frequency stay programs are not the only effecting factor,there are umpteen factors to improve the overall brand. Then why not just go ahead and declare Rosewood as THE BRAND? Because that will eventually disdain loyal individual hotel customers (they lose their sense of belongingness with the instant change) The stakeholders in individual hotels are not ready for he change as they find it unnecessary and are skeptical about it. Same goes the case with hotel managers of established hotels. Now the task before the CEO and COO is to present before this unconvinced panel a persuasive case to take up this task by showing them beautiful figures of profit and progress!!
• 13.
  Questions to be answered Willthe profits aftermath make up for the extra expenses incurred? What will be the gross profit per guest? Net profit per guest. v b
• 14.
  For this ,theyanalyzed the CUSTOMER LIFE TIME VALUE(CLTV) using 9 factors and variables including room,market,guests. ASSUMPTIONS •Total number of multi property stay increased to 10% from 5%. •Repeat visit per year per guest -1.2 -1.3 •Total number of customers is 1,25,000 •Investment required is 1 million dollars. •Marketing costs increase by 3% per year •Guest revenue increases by 6% per year
• 15.
  • Average marketingexpense per guest for the year 2003 (WITH CORPORATE BRANDING): [{(115,000*130)+1,00,000}/115000]=$138.69
• 16.
  Figures in 2003with CORPORATE BRANDING • Total number of multi property stay guests doubles = 5750*2 =11500 ; Therefore, Total number of repeat guests = 19169 + 11500 = 24919. • Average retention rate in 2003 (Without CB)=16.67% ; Average retention rate in 2003(With corporate branding)=21.67%
• 17.
  Let’s fill inthe blanks Let’s fill in the blanks in the case study with the above calculated data.
• 18.
  $138 24,919 11,500 21.67% 576 624
• 19.
  - Lewis Thomas Itis only when you watch the dense mass of thousands of ants, crowded together around the Hill, blackening the ground, that you begin to see the whole beast, and now you observe it thinking, planning, calculating. It is an intelligence, a kind of live computer, with crawling bits for its wits. “
• 20.
  YEARS 0 12 3 4 5 6 Gross profit per guest 624 661.44 701.126 743.19 787.78 835.05 885.155 Marketing expense per guest 138 142.14 146.404 150.79 155.32 159.97 164.779 Acquisition expense per guest 150 150 150 150 150 150 150 Net profit per guest. 336 369.3 404.722 442.4 482.46 525.08 570.376
• 21.
  THANK YOU!