Brands Need to Be Part of the Strategy, not Spin

One of the cases I love teaching in my classes is the Rosewood Hotels case from Harvard Business Review. The case outlines a situation when the CEO and chairman of the board both decide that they want to transform themselves from a House of Brands into a Branded House in hopes of increasing cross-property stays and increase lifetime customer retention. At the time of the case, the name Rosewood in not known, but the individual Rosewood properties (Mansion at Turtle Creek, the Carlyle, Inn at Little Dix Bay, and others) are highly regarded, individualized properties loved by their clientele. When studies are done, it is found that the hotel managers and clients do not see any value in touting the Rosewood name.

Students often move quickly to a sensible solution of a sub-brand strategy, linking all the hotels to the Rosewood name, similar to the architecture used by Marriott, e.g., Fairfield Inn by Marriott. However, then the fun starts because I start to push the students to consider what the damage could be and how this strategy, without the proper understanding of the corporate strategy, could backfire.

For example, consider the the type of hotel managers Rosewood had hired would likely be entrepreneurs who love running their own high quality hotel. Ritz Carlton, Four Seasons and other hotel chains the Rosewood CEO covet would likely hire corporate types who want to be part of a large, "cookie cutter" hotel chain. Consider also the promise made by the individual brand properties--to be individualistic, tailored to the local community and culture. Could linking these to Rosewood damage the brand promise and loose customers? Think about travel agents who had not incentive to push the Rosewood name and whose help would be needed if the masterbrand or branded house plan was implemented.

The case illustrates that branding is not about spin, but rather about making certain that a company maintains its brand promise at all touch points. If changes are made, there also need to be structural or process changes. For example financial incentives for the hotel managers to cross-sell properties rather than relying purely on the marketing and advertising of the Rosewood name. Or, incentives for travel agents to push more Rosewood properties. What about getting more hotel employees to the other Rosewood properties so that they can help sell the virtues of the other Rosewood hotels? What about software like CRM that would help each hotel to know more about the customer so that they have knowledge of the visitors Rosewood property visitations.

The case is a great one for use to highlight that brand management is not as easy as it seems. They has to be an infrastructure and strategy that supports the brand and its promise. The case is great for students in brand management classes. I also use it in MBA and Executive MBA classes so that general managers and future general managers understand the complexities of brand--it is not about a logo or slapping a name on a sign.