Integration of Theory and Practice

 Branding is a concept that happens in a consumer’s mind( (Herbert 2011). These days, with increased globalization and competitive forces, all business units are vying to carve a niche for themselves in the market. Here comes the importance of branding. But a company doesn’t create brands exactly; it only creates tools to formulate brands.

Some of these tools are:

• Designs
• Positioning Statements
• Value Propositions

Often, people mix these tools with branding itself. Are designs brand? Not exactly.  These are just the logos and colors to make people recognize the brand. Similar is the case with positioning statements and value propositions. These are close to brand, but not brands yet.

A brand is just a perception people make about a company based on the experience they have with the company( Herbert 2011).

Hospitality sector is undergoing transition . Gone are the days when they were just meant to offer a comfortable stay to travelers. These days, visits are made for different purposes including business, family, vacation and others. To cater to these different needs of travelers, hotels must differentiate their brands and services. In addition, effective branding and marketing strategies help them take advantage from different conditions arising out of  business alliances, pricing structure, outsourcing services and product extensions.

Hotel industry has accepted and embraced branding in their whole marketing process(Dev et al,2009).

Let’s have a look on different strategies hotels can adopt.

Price-Based Strategy

To align to different budgetary requirements of people, hotels create price-based strategies. For example, a student on a visit and a high-profile businessman have a sea-difference in their budgets. Hotels can make differentiation with cheap rooms and high-end business suites to cater to these different group of people. Of course there will be difference in quality of the rooms and amenities provided!

Differential and dynamic pricing is very effective in retaining clients and branding(. If you don’t have high priced rooms for high-end people, you may lose them. Similarly, you must have cheaper rooms to cater to students and other lower-budgeted people.

Thus, pricing strategy is very crucial in branding and marketing in general.

Alliances and Affiliations

As stated, we are living in a world of high competition. The contour of all businesses has changes and they can  no longer afford to remain isolated. If  a hotel make alliances and affiliations with a group having similar focus and strategies, it is more likely to make recognition for itself( (Saxena 2010).

For example, a ‘trendy’ hotel can group itself with creative associations and other designer events. This will help to get referrals and increase customer base.

Brand Extension

Brand extension may take two forms in case of hotels( (Kazmi 2011):

• Translation of brand-name into products
• Product extension to hospitality by non-hotel-oriented products

For example, in some hotels, you will find the shops selling the same products that you get in your room. This is first case of brand extension.

Another case is where some non-hotel oriented products like stationary, towels etc are branded with hotel’s name.

Nowadays, fashion groups are frequently associating their products with hotels to increase recognition and customers’ attention. Brand extension, if done effectively, plays a positive role in making brand environment and enhancing sales.

Co-Branding With Outsourced Services

Hotels are co-branding with other industries in the products they use and services they provide. It is a win-win situation for both. For example, instead of using generic products, branded products are being used for spa, facial etc inside the hotels. Services of designers are being taken to stitch staff uniform.

Though co-branding is not a new concept; it has become fashionable these days to make alliances visible( (B.Shennu 2011). It is done to make positive impact on customers but that doesn’t happen always. So, due care should be taken while adopting co-branding and related strategies.

Branding- Does relation with guests matter?

Customer satisfaction is somewhat a new concept guiding the businesses. Plethora of efforts, differentiation, strategies that are being adopted have a major objective:

customer satisfaction.

This is the reason “ a home away from home” is a new tagline for many players of hotel industry. Though old theories seem to give less value to customer satisfaction, present day operators can’t afford to neglect their customers. In fact, the major objective of branding and marketing strategies is to keep the customers informed.

These days, hotels try to make “emotional links with guests” through personalized care. These are some aspects that can make one hotel different from the other.

I remember a case study published in a newspaper(The Times of India 2011) just few days back. A senior executive from Microsystems  thanked the staff  and the general manager after her stay in Pan Pacific Hotel, Vancouver.”They read my mind very well“, she uttered in happiness.

This group has 17 hotels under it and the president, Ichigo Umehara, is a champion of branding. The group works quite harder to stand away from the crowd of hotels.

The statement  “to take people successfully to places they have never been before” clearly exhibits the difference they want to make. Teamwork, respect and equality, family like atmosphere have deeply embedded in their culture.

So, customer satisfaction takes the prime stage in branding as per the new trend. The more the satisfaction of customers, more are the benefits derived in terms of sales and revenue.

Examples From The Industry : Brand’s Franchising Strategy

Seen from the view of corporate strategy, market share can be increased (Mattila 2004) though there is a difference in the approaches taken by parent companies to manage their brand identity.

Marriott International, a renowned hotel chain, adds corporate name with most of the brands. Ritz-Carlton is an exception though. Other such as Choice Hotels International  and Starwood, use ‘house-of-brands’ strategy. They use individual brand name for hotels without the use of parent company( Mattila 2006).

Choice International uses similar logos and designs for different segments like Comfort Inns, suites, sleep inn, quality inn etc. There are also instances of different designs and logos by a hotel for its different segment.

Whatever is the branding strategy, it’s importance is obvious indeed! Effective branding creates a different identity for hotel and a different personality altogether. Gobe(2001) has rightly said that  branding is more concerned with mind and emotions rather than market share. Guests rely on particular brand name to avoid risks that could have arisen  in their stay( Neill 2006).

Brands should be communicative, should well interact with guests and  remind joyful experience.

In nutshell, branding in hotel industry implies’ relation with the guests’. The relationship builds when consumers come in the contact of any brand, have an experience of the products and services provided, use the facilities and judge those experiences.

A study(Kim and Kim 2004) has suggested four components in brand equity:

• Brand awareness
• brand loyalty
• perceived quality
• brand image

With regard to hotels, brand equity relates to the expansion through franchise, geographical expansion  and development of sub-brands. These factors have enough potential to bring high cash flows(Agarwal 2004).

Finally, branding in hotels are widely accepted but there are issues related to ineffective management(Simon and Sullivan 1993). Hotels should pay more emphasis to long term strategies rather than short-term planning.  Further research is required to analyze long-term equity measures. It is hoped that these measures will refine further with the growth of hospitality.

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