Branding Strategies - Shangri-la Hotel - Literature review Example

? Issues for Multi-National Organization - Branding Strategies: The Case of Shangri-la Hotel - Chapter I – Introduction Since 1971, Shangri-la hotel became one of the world’s most established luxury hotel brands. As a sign of success, Shangri-La managed to establish total of 72 world-class hotels not only within the Asia Pacific region but also in Middle East, North America, and Europe (Kuhm, 2011; Shangri-La, 2013b). To serve the needs of customers who do not want to pay a premium price for hotel accommodation, Shangri-la is decided to create other hotels like Kerry and Traders (Kuhm, 2011). Considering the branding strategy of Shangri-la, the hotel’s competitive advantages, how this company was able to gain from its branding strategies, the importance of branding at the back the success of Shangri-la, and the significance of brand positioning within the modern international tourism were discussed in details. In general, this study presumes that the potential success of Shangri-la hotel was very much dependent on the company’s ability to meet the needs and wants of prospective clients. Therefore, this study aims to address the following research questions: (1) What are the branding strategies currently being used by Shangri-la hotel?; (2) How does Shangri-la hotel benefit from its branding strategies?; and (3) What is the significance of brand positioning and branding within the modern international tourism industry? Chapter II – Literature Review 2.1 Current Branding Strategies of Shangri-la Hotel First of all, it is essential to take note that the target customers of Shangri-la are the influential people who are able to pay first-rate price for its food and lodging services. Meaning, this particular hotel company has positioned its brand as one that offers luxury hotel products and services (Shangri-La, 2013a). This explains why Shangri-la continuously serve the best quality products and maintains its stylish, modern, and motivational architectural and interior design (Shangri-La, 2013c). As a result, Shangri-la created a competitive advantage which allows them to charge its customers with hotel accommodation fee much higher than the fee of other hotels worldwide (Schmitt and Rogers, 2008, p. 79). Generally, multinational companies such as Shangri-la uses a global advertising strategy as part of their global campaigns (Jiang and Wei, 2012). To establish and reinforce Shangri-la’s brand image, the top management of this particular hotel group uses either social networking sites or e-mail when advertising and promoting their special offers on bridal packages among others (Facebook, 2013). In some cases, Shangri-la has posted its special offers on bridal magazines (Shangri-La, 2013d). Customers’ satisfaction is strongly influenced by its brand image. In most cases, customers who are satisfied with what they receive from the hotel may end up developing a stronger brand recognition and eventually remain loyal to the brand (Clottey, Collier and Stodnick, 2008). To bring high quality service, Shangri-la offers important training and development programme for the benefit of its employees (Shangri-La, 2013e). Not all people can afford the high price of Shangri-la’s accommodation rate. Associated to the brand of Shangri-la, this particular hotel company created a separate brand and eventually positioned it as a hotel that offers cheaper and more affordable rate for its hotel service (Kerry Hotels, 2013). For example, “Traders Hotel” was established to serve the lodging needs of the price-sensitive clients worldwide (Traders Hotels, 2013). To serve the Chinese community in Beijing, Shangri-la established the “Kerry Hotel” sometime in 2011 (Kerry Hotels, 2013). 2.2 Advantages of Shangri-La’s Existing Branding Strategies Advertising is necessary to create brand familiarity or make Shangri-la’s target customers feel special and associated with the brand (Fuchs, 2008). Often times, brand familiarity increases not only the customers’ ability to remember the brand but also develop a positive outlook with the brand (Delgado-Ballester, Navarro and Sicilia, 2012). Through the use of efficient advertising and branding strategies, Shangri-la able was able to set up a strong brand image being “one of the world’s finest hotel and resort company” (Shangri-La, 2013b). As one of the common constituents of brand equity, perceived quality is strongly related to brand value (Yaseen et al., 2011). Depending on how the people would perceive or feel about the quality service they have received from the staff of Shangri-la hotel, the clients may end up developing either a high-perceived brand quality or low-perceived brand quality (O'Neill and Mattila, 2004). In most cases, the capability of Shangri-la to create a high-perceived brand quality makes its clients become more willing to pay a higher price for its hotel services (Yaseen et al., 2011). Developing a strong brand is essential in terms of creating a higher preceived value, brand quality, and equity to Shangri-La (Taghipourian, 2013; Hilgenkamp and Shanteau, 2010; Cai, Gartner and Munar, 2009, p. 52). Likewise, having a strong brand value can make Shangri-la increase its ability to catch the attention of more investors (Uysai, 2013; Jacobsen, 2009) and tourists to stay at Shangri-la hotel (Uysai, 2013). Creating a powerful brand name could somehow make Shangri-la’s clients loyal to the brand (Yaseen et al., 2011; O'Neill and Mattila, 2010; Cai, Gartner and Munar, 2009, p. 52). Due to customers’ loyalty and continuous support, Shangri-la hotel can become more profitable at the end of the day (Yaseen et al., 2011). 2.3 Significance of Brand and Brand Positioning within the Modern International Tourism The modern international tourism analyzes the interrelationships among the customers and hotel companies including the diverse client experiences that were created in the past (Cooper and Hall, 2008, p. 5). With regards to brand positioning, Shangri-la would positioned its brand as the world’s finest hotel. Using this particular brand position, Shangril-la was able to generate brand awareness, brand familiarity, and brand loyalty amongst its target clients (O'Neill and Mattila, 2010). In general, brand positioning allows the company to build a niche in the mindset of its target market (Manhas, 2010, p. 18). Likewise, a strong positive brand image could somehow increase the customers’ satisfaction (Ranjbarian et al., 2012; O'Neill and Mattila, 2010). On the other hand, having a high-perceived value increases the clients’ goal to repurchase (Ranjbarian et al., 2012). As a result of effective branding and brand positioning, Shangri-la hotel was able to expand its global customer-base and brand equity (Manhas, 2010). Branding and brand positioning can strongly affect the interrelationship between Shangri-la’s products and services and the satisfaction of its target customers. By conducting a market segmentation study, it is possible for Shangri-la to create not only a positive brand value but also enables its target customers to develop a positive association with the brand (O'Neill and Mattila, 2010). In the process of being able to satisfy the customers, Shangri-la was able to increase its total market shares (O'Neill and Mattila, 2004). Chapter III – Conclusion Brand extension is one of the branding strategies that intentionally extends the use of the existing brand name to create a new one (i.e. Shangri-la Lodge, etc.) (Moss, 2007, p. 41). After examining the current branding strategy of Shangri-la, one can easily conclude that the company was not able to make the most of the benefits of using some kind of brand extension strategies. By using brand extension strategies, Shangri-la hotel could have banked a lot of money from opening its associated hotels. Likewise, the use of brand extension strategy could have enabled Shangri-la easily promote and enhance the brand image of its secondary companies (Yeshin, 2006, p. 123). Among the benefits of brand extension include: (1) instant identification of the new brand; (2) less costly for Shangri-la to endorse the new product line; (3) easier to create a new brand image for the new product line; (4) people are well-informed of the brand’s status and value including its service dependability and consistency; and (5) easily increase the number of potential clients for the new hotel (Yeshin, 2006, p. 125). Unlike hotel brands like Kerry Hotel, Shangri-la is already well-established and widely known by billions of people in different countries around the world. Therefore, the use of brand extension such as Shangri-la Lodge could have made a lot of difference particularly when it comes to gaining public recognition. Likewise, using brand extension can make people easily recognize and differentiate the price differences between Shangri-la and its subsidiary hotels. With this in mind, the presence of Shangri-la’s subsidiary hotel can easily attract people who are price-sensitive but are constantly looking for hotel companies that can provide them with outstanding hotel services. In terms of price and quality service, millions of travellers worldwide are constantly looking for some hotel brands they can trust. With this in mind, the use of brand extension technique could have made it easier and more affordable for Shangri-la to convince the price-sensitive individuals to patronize the hotel products and services offered by its subsidiary hotels. The use of multi-branding strategy can create confusion on the part of the public consumers. Often times, the use of multi-branding strategies could result to brand dilution (O'Neill and Mattila, 2010). To avoid the adverse effects of multi-branding strategies, Shangri-la should limite the use of brand extension to a maximum of three (O'Neill and Mattila, 2010). 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