The new Brand that Ian Schrager in a partnership with Marriott International is going to introduce for a range of his ultra hip boutique hotels is relevant for both clients and owners; for provided hotel and accommodation services its especially crucial because Brand will help to concretize the abstract essence of the services and branding is effective when its necessary to get to customers a message about this unique and innovative hotel chain. Additionally to many valuable reasons for branding one shows that the value of two hotels linked by the same brand is not only the sum of the values of these two but combined price by multiplied the cost of brand.
There are benefits:
- Risk reduction for customers to get the proper and high-quality hotel services, functional advantages, hence future loyalty to the Brand and strong brand awareness;
- To some extent the juridical protection of the ‘product’ because production processes and constructional features are easy to imitate, but consumers’ perception to the innovation is difficult to copy;
- Competitive advantage in terms of uniqueness and originality in the industry strengthened by one-brand approach;
- Getting the premium for distinctiveness from the ‘standard’ services and decrease of price elasticity to price raise;
- The role of innovation and innovative approach to traditional hotel business makes a possibility to profit from both innovation and brand presentation.
Possible branding strategies
If planning to open several (or several hundred) new hotels with proclaimed value based on differential advantages within Schrager-Marriott partnership some possible variants that have their pros and cons exist:
- The usage of Marriott’s corporate brand for a new hotel chain, for example Exclusive Resorts by Marriott. The main plus here is the benefits from already existing valuable brand with all sensitive associations it already has. Minus: the linkage with Marriott will create the possibility of minimizing the value of new unique and exclusive boutique hotels.
- Or what was made — to introduce a new apart standing brand (“Edition”. Source: Edition Hotels official web site, http://www.editionhotels.com/en-us/) and add a name of the city where it is situated. Brand introduction and creation is more costly but fresh brand has the ability to capture its gain through creation of new associations.
Several important and fundamental facets on branding in hotel industry should be taken into account when forming a Brand and its individuality.
- The name. Name should be something really simple but at the same time capturing and exiting, showing all the specific and wondering features of lifestyle hotels. The chosen brand name for Schrager and Marriott project is ‘Edition’ that is simple, easy to pronounce, understandable and appropriate. From the other side it differs from the counterparts’ names, is unique and something made specially.
- Logo/Symbol. New way of thinking and presenting distinguishing hotel services should be reflected in the symbol of the Brand. Natural and harmonious symbol will accumulate pleasant feelings and memories. In the long run it will help to increase the Brand recognition by creating strong visual image.
- Slogan serves to create positive emotions connected with this hotel chain. They enhance customers’ awareness and improve the brand positioning, strengthen the point of differentiation of the Brand and moreover forming the stable verbal connections between clients and hotels, arising enjoyable impressions about the vacations and rest.
- Internet address. Registering the URL should take place as soon as possible; it’s better if descriptive names are not used; additionally memorable and expressive www will attract more clients raising the value of the Brand. Furthermore, inviting web site with perfect booking system will contribute to the creation of positive emotions and anticipation of the stay in the hotel long before people have come.
To form the brand equity besides from the usage of every element of marketing mix precise attention is paid to the development of marketing programs, distribution channels integration and adequate pricing policy. The concentration should be made at first place to create and implement necessary positive feelings about leisure and entertainment in the minds of prospective clients, the idea of the trendy boutique hotel welcome, stylish even luxurious spend time. Experiential marketing here raises the brand awareness and unique features advantages from the one hand, and shows the diversity of obtained impressions thought its services. Social aspect is not only to chase the aim of delight and uniqueness gain but also modeling the feeling of being home and being protected among customers. Another valuable point is to profit from the quality: quality of service, food and beverages, hospitality and charm of staying. To build strong contacts with clients everything should be made to communicate with them, exchange options and develop different adherence programs. With regard to pricing main recommendation in order to facilitate accumulation of brand equity is to set such a price that equals to the consumers’ thoughts and perceptions about its value, and due to the high interconnectivity with luxury category because of exclusiveness of boutique hotels to choose the optimal price you need to solve between the desire to reduce the price and make some discounts and the desire to present and protect the impressions about high quality and value. The task is to raise the buyers’ incentive and constantly emphasis on the value offered. On the other hand, no matter direct or indirect sales channels are used but their image should affect the Brand positively, secondly, brands of mediators and re-sellers (such as traveling agencies and tour operators) should support the Brand itself and advance to its strength, pleasure and uniqueness of associations, giving the clue of the Brand, its services and specifications, so it’s evident that extremely creative approach to stimulate and combine distribution channels should be implemented.
To raise brand awareness and recognition through the ‘voice’ of Brand or marketing communications is the final step in marketing program. The effectiveness of advertisement and other media should be estimated according to the potential to form a desirable system of knowledge about the Brand and special sensations about it. We should take into account the initial stage of Brand’s lifecycle and aim primarily at focusing on Brand’s sole feature (one forming emotion) and secondly to operate with all means of communications to create, support and strengthen favorable unique associations in the way that the resulting whole is greater than the sum of its parts and each part is influencing another to increase consumers’ motivation through ‘tips’ and reminders about the Brand.
Secondary brand associations…
… are very helpful in expanding Brand value. For hotelier of Schrager’s scale who is developing a line of high-end hotels with a single brand approach such activities as special events and/or sponsorship with the use of hotels can contribute to making value and benefits. Heightened attention to Ian Schrager’s personality and his partnership with J.W. Marriott already started building tension around the project and the Brand that “requires the reach, resources and expertise of a global player like Marriott, while the innovation necessary calls for the experience and originality of the category’s most accomplished entrepreneur, Ian Schrager” (Source: Mariott News (2007), http://www.marriott.com/news/detail.mi?marrArticle=174362).
These four blocks should be carefully integrated forming a strong brand with positive image that shares values with customers.
Positioning a Brand
Here we should decide what the potential client, existing competitors and competitive advantages are. The answer to first question is “people on a vacation, business people who want a heightened experience, something unique, something special, something original and I think that just about appeals to everybody” (Source: J.W. Marriott, Ian Schrager on CNN – Interview (2010), http://findarticles.com/p/news-articles/analyst-wire/mi_8077/is_20100608/jw-marriott-ian-schrager-cnn/ai_n54002860/). All people deserve the excellent accommodation and can afford it – this can be a basic idea about meeting customers’ expectations so that after looking at requirements, clients expect from a hotel when choosing one, several distinctive features that can be transferred to marketing advantages in Schrager-Marriott idea are introduced in the following chart (see below). The rivals among boutique hotels are W Hotels by Starwood, single lifestyle hotel in London by Hilton, Hilton Inn at Pen, Kimpton Hotels and a lot of others in the USA and Asia that started to position themselves as boutique. After looking closer at them consideration can be made that W Hotels are the strongest competitors but the trend is expanding and it’s important to catch it.
To summarize, the start-up of a Brand for boutique hotels is very hard business that requires consideration and control about plenty of elements to make a success from the one hand, but from the other – a basis for compelling and credible value. However, creating a Brand at international level involves several restrictions as well as additional benefits. One should remember that its vital important to support combination of localization and standardization, to implement global marketing monitoring system and to integrate elements of a Brand to reach economy on scale, decrease marketing costs, use good ideas faster and to take into account local peculiarities while providing global purposes realization.