SWOT of Taj Hotel - Case Study Example

Content Introduction 3 Literature Review 3 Brand Value 4 SWOT of Taj Hotel 5 Brand Value of Taj Hotel 5 Brand architecture 6 Brand Concept maps 6 Brand Community 7 Theories of Brand Management 8 Relationship Model 9 Customer Perspective Model 10 Techniques to find Brand Value for Taj Hotel 11 Target Market 14 Product Range 14 Brand Image 15 Recommendation 16 Conclusion 17 References 18 Appendix 21 Introduction Today, brands are becoming prominent. Companies are working towards getting a trade mark. This is helping to build customers. Customers are able to pick that brand easily. This is also building goodwill. It is helping companies earn greater revenue. Customer retention also has become easier. This has ensured that companies develop a market. Today, companies are concentrating on it. Branding is thus “distinguishing the company’s product or services from the competitor and creating a long lasting impression on the minds of the consumer”. (Kotelnikov, 2007) Branding helps is different ways. It improves employees’ satisfaction. As the product is recognised loyalty builds. It is basically creating perception. It is the image a customer has. This helps the company to sell its product easily. In recent times it is seen that every sector be it banking, tourism, manufacturing or services are looking towards it. Literature Review A research shows that “branding luxury items increases challenges and opportunities for the management and to ensure a trade off it is necessary that brand equity measurement and brand architecture are measured correctly and regularly”. (Keller, 2009) This will help to build strategy. It will help company sell more products. A study shows that “brands are valued in different ways and the efficiency is ensured when the right way is selected by using the correct technique so that the equity calculated is not misguiding”. (Salinas & Ambler, 2009) Thus relevance becomes importance. Companies need to ensure it. Even a research show that luxury brands like hotels need to “ensure that luxury brands come before the luxury customers and this can be done through discoveries of providing services in a newer and better ways thus assuring the long term success of the brand”. (Atwal & Williams, 2009) This will build loyalty. A study demonstrates that “to build a brand in a competitive environment it is important that organisations follow a conceptual model which falls in line with the objective of the company and is applicable to their model of business”. (Ghodeswar, 2008) This will ensure the same model continues. It will emphasise that companies need to do it in a similar way. Even a research shows that “luxury brands in recent times have started using customer relationship management techniques to retain customers for the future”. (Cailleux, Mignot & Kapferer, 2009) This will build loyal customers. It will help the company. They can work on other areas. This will improve management. Thus, studies also highlight the importance of it. It also suggests that companies need to improve it. This will generate future earnings. Brand Value Companies work to find brand value. It is done by finding the brand equity. Brand value is “the extra amount which the company gets due to perceived image of the product which might have not been possible in case the product was not branded”. (VanAuken, 2007) The difference is because of quality. Consumers rate the product high. It has resulted in getting extra benefit. This is what companies prefer. They work towards it. The analysis of SWOT helps to analyse fators contributing to the brand value. SWOT of Taj Hotels Taj Hotels brand value has increase because of it. The SWOT for Taj Hotels is Strengths Weakness Opportunities Threats Rich Culture Heritage Poor Support Infrastructure Rising Income Event Risk Demand Supply Gap   New Ventures Increasing Competition Wide Presence   Economy Recovering   Government Support       Brand Image       Good Penetration       Product for all segment       The SWOT analysis helps to find the brand value. It helps to find the areas which add to it. It also takes care of areas which would affect it. Thus the brand value for Taj hotel on the above basis is shown below. Brand Value of Taj Hotel Taj has been able to generate good value. This is because of the services offered. It is been said that “Taj has a brand value of over Rupees 4,000 crores”. (Zachariah, 2008) This has been done by looking into various things. The company has considered both “hard aspect and soft aspect which includes property and perception about the product and services rendered by the company”. (Zachariah, 2008) Brand Architecture Taj group has good brand architecture. “Brand architecture is the structure of brands within an organisational entity which helps to relate the product or differentiate from the other”. (Button, 2008) This helps to build a group. “It helps to link the main and the sub brands the company has with the parent company which helps consumers to recognise the product easily”. (Button, 2008) This is helping in growth. Taj as a group has family brand. It has many products in the group. The different products it has are “hotels in the entire segment having different brand names like Taj Residency, Ginger, and The Taj Palace and so on which is using the parent companies name Taj”. (Company website) It is also present into other fields which are sub brands like “the Taj safari, Taj Spa, Taj Gym and so on which are branded and are sub brands to the Taj”. (Company website) This is helping Taj to market. It is marketing everything under one name. This is helping create brand architecture. “It has ensured that Taj has its name everywhere thus creating architecture”. (Company website) Brand Concept Map This is a technique which is widely used. “Concept map is a diagram showing the relationship among concepts and are graphical tools which helps to organize things in a better way and shows knowledge”. (Novak & Canas, 2006) This is widely used. It helps to know areas to market. The marketing and all departments know area of concern. The brand concept map of Taj Hotels helps marketers. It helps them decide their strategy. The concept maps looks as follows Figure 1 Concept Map Thus, we see that it helps to identify areas to work on. It also helps to decide the course of action. Taj on the basis of concept maps knows how to improve brand value. This is helping them to decide strategies. This helps to decide ways in which the company can move. Brand Community This helps to attach customer to the product. It is a concept which companies are working on. This is building royalty. “Brand community is a community formed on the basis of attachment to a product which helps to build identity for the product”. (Susan & Lee, 2008) This helps to remember the product easily. Taj hotels have been successful in it. Taj has built it due to “the culture heritage and good service through proper hospitality which has helped them build a market in India and abroad”. They know the customers wants. This is helping Taj work on those. The culture is also helping them. The hotel has ensured that it continues. Where ever Taj has its presence they have reflected it. This is helping them to integrate people. The group has also been created “due to standards and values that Taj has”. It has been consistent in those. Thus loyalty has grown. Customers prefer it. Thus, Taj has been able to use it well. Theories of Brand Management: Brand management has many theories. This makes the application of it easier. It helps to ascertain the value. Some of them are Brand Personality- The Relationship Model: Brand personality is gaining ground. This makes the brand being recognised easily. “Brand personality is something which adds value to a brand and makes it easy for consumers to recognize brands in a similar way as it does human”. This is making more companies work towards it. This helps to establish relationship. It is making people establish with the brand. People who use this find themselves with the brand. They find themselves associated to it. It makes brand to be recognised. Brand Equity from customer perspective: This helps to understand customer. It helps to know their mindset. It includes “everything that exists in the minds of the customer with respect to the brand like feelings, experiences, brand, belief and attitude which covers both the quantitative and qualitative aspect” (Keller & Lehman, 2003). This helps to build strategies. It helps the marketers. They know areas to eye. The efforts can be directed. This helps to build value. It helps companies as they know customer wants. They are better prepared. Brand Equity from firms’ perspective: This looks into the financial angle. It measures “brand equity as the value of the brand to the firm and encompass most of the outcomes related to product and finance”. (Keller & Lehman, 2003) This helps the companies. They know the value they are getting. This helps the companies as they know “their efforts are being valued”. It looks into “financial outcome from the perspective of the share holders and firms place the value of the brand as financial asset through various indicators which helps the companies to know the equity that has been generated”. (Keller & Lehman, 2003) This helps to calculate equity in a better way. It gives direction to calculate. The calculation for the various techniques has been provided. Relationship Model Relational approach helps to measure the value of a company. The relationship model tries to “develop a link between minds of the current and potential buyer by trying to establish a relationship between the two so that measuring the equity is determined by the method”. (Pekka, 2006) Previously, these methods were not used. Today, with customer relationship management it has become a bit simplified. This model tries to “describe, analyse, and understand the relational approach to manage service brands”. (Pekka, 2006) Here, “first the model tries to establish the characteristics of the existing brand and then tries to link this characteristics to the context of service branding and then finally come with managerial implication as to the value of the equity”. (Pekka, 2006) Here, Taj has also used this model. It has tried to find it through concept maps. This helps Taj to know what customer looks first. This helps the company to know the relation they have. It helps Taj to know areas of concern. It helps Taj to know the ways to grow equity. Customer finds it easy to relate to the product. Thus, we see Taj is using this model efficiently. Customer Perspective Model This model looks into ways to what customer perceive. Companies are working to use it. This model considers the “physical characteristics of the product, marketing mix variable, and consumer perspective on the quality and standard associated with the brand”. (Kartono & Rao, 2005) This helps to find areas which consumer like. It helps to build value on this basis. It doesn’t look into what the company offers. This makes its usage less especially for services. Service has some emotional quotient so this has not been very successfully used. “It uses an econometric model of demand and supply on account of product characteristics, price, and advertising thus trying to find value through this method”. (Kartono & Rao, 2005) Taj practices this model. This helps them to find consumer per perspective. This models but lack the usage. This is so, as Taj has varied customer so it gives many option. This makes it difficult to come to a conclusion. While giving “different value to the factors based on price and perspective is difficult it makes it tough to gauge the actual brand value and the calculations are not true in every sense”. This has affected Taj using it. This doesn’t give conclusive answer. When we compare both the relationship and customer perspective model we see that both are very near to each other. Relationship model works better. This is because “it looks into service sector”. This helps Taj to ascertain value more accurately. It helps to build concept map. They are better able to find the value by relationship model. This looks from the companies’ perspective and help them to build strategy. Techniques to find Brand Value for Taj Hotel There are various ways which help to find the brand value. All this are integrated in the system. The following methods will help to see how it has added to the brand value of Taj. The techniques are Price Premium: It is “the difference the company charges for the product or service in contrast to the generic equivalent”. (Neumeier, 2008) This helps the company to earn extra. This helps to build loyalty. Taj hotels have also been able to do it. It has been able “to generate more than its competitors which is reflected in the margins” (White, 2007) below Figure 2 Profit comparison It is seen that “Taj hotels has a higher profits despite having lower revenues that Orient express one of its competitors highlighting the fact that customers are willing to pay extra money more the services as they perceive it high”. (White, 2007) A study conducted shows that “brands create an halo affect around the product as consumer have a perception that the product is better compared to its competitor in terms of quality, price and usage” (Lance, Katrin & Chiranjeev, 1995) Thus, Taj has been able to get high value. This is because of service. It is helping build good reputation. Brand is improving. Customer Preference: it is used when “prices of the product are very similar but consumers prefer a particular product or service in contrast to its competitors and this is due to past experiences”. (Neumeier, 2008) It is seen that customers prefer Taj. A rating by 5500 customers on a random show the following Figure 3 Ratings from consumer Source: Trip Advisor It is seen that 83% recommend Taj. This is due to the fact of service. Even the other products added to it. This shows that consumer prefer Taj. People perceive it superior. This has made Taj a destination preferred by people. It will ensure smooth flow of funds. When we look at the reasons for such a preference shows what customer value as important. It is seen below Figure 4 Customer Preference Chart Source: Travel Guide We see that consumer prefer service. This is very high on the consumer preference. Value or price is low. Thus we see that “consumers are willing to pay an extra sum for the services they get and this is because they perceive the value as high”. Thus, customer preference enhances value. The other techniques are provided in the appendix. The above brand value has been achieved because Taj has been able to market well. This will help to understand how this value was achieved. Target Market Taj Hotel has a very good target base. It is eyeing every sector. It is as Luxury Segment: Taj has hotels in this segment. “These are people who are willing to pay higher charges for the services they have used because they want lavish accommodation, restaurants, bars, health care amenities”. (Williams, 2008) Leisure Segments: Taj has done extremely well here. “These are people who want to spend time in leisure activities and prefer something new and are the youth which has been handled well by Taj hotels”. (Williams, 2008) Business Segment: This is the most profitable of the lot. Taj has “many hotels which target business professionals and they pay heavily for the services”. (Williams, 2008) This is a major revenue generator. Economy Segment: Taj has a presence here. This eyes the lower middle class. This has “increased the consumer base and has made people become a part of the group thereby contributing to growth”. (Williams, 2008) Thus we see Taj targeting every market. This has helped them have a high brand value. Products Range Taj offers a variety of products. This has made its value rise. Consumers get variety. Taj has “luxury full service hotels which provides tour and have resorts at most tourist places”. (Company website) Taj also offers its customers “spa which is differentiated from the others on the quality and the service provided”. (Company website) Taj also has economy hotels with the name Ginger. This is gaining market. It has a brand Taj which is making it have many takers. This hotels have all “modern amenities and service and cleanliness has been given high priority”. (Company website) The company has given maximum stress on “guest service, ambience and decor which has made more people use the services as it is creating an environment where consumers can find almost everything they desire at a place”. (Divakar, 2008) Taj hotels have ensured that customer gets everything. They have taken care of every requirement. This has helped the company as they have been able to give variety. By offering variety Taj has been able to lure customer. They have taken the onus and also provided them with varied services. With Spa, gym, food, lodging and other amenities have helped. This has helped them meet international standards. Thus, Taj offers most products. Being in the service industry has contributed. This has made the brand value increase. Brand Image The brand value, product offered and the different range has improved the image. This has helped the “company to sight a growth of Rs 1800 crore expansion plan” (Desai, 2008). The image is adding growth. This is making Taj open more hotels. The image has contributed more takers. The customer base has grown. The image is perceived over the competitor. Even Taj coming out of the recent attacks has helped. It has shown a brave face. This has improved its image. Taj image has been due to service. The people are more willing to have a share in it. The image Taj has created has been due to the fact that “Taj hotels worked with the objective of providing quality which has translated into the brand image which is further adding to the brand value”. The brand image is also going to grow. This is because they are diversifying. By entering the economy segment Taj will find new takers. The area of horizon will increase. They will have wide markets. This will create better image. Recommendations “Taj should look towards more ventures. It should work towards alliances. This will give them created market. It will help them market the name easily as people know about this brand and the heritage it has”. Taj should eye two tier cities. They have presence in big cities. This will increase its penetration. The “customers out there are willing to spend and bringing the economy hotels out there will help them increase their brand value”. Taj should look towards improvement. They should upgrade the service. This will make staying more pleasant. People loyalty will improve. Taj can also work towards loyalty programs. They have it in place but the penetration is low. This will help them. It will give them loyal customer. It will also impact their brand value. Conclusion Taj hotels have been able to develop well. It has provided proper services. This has ensured that people prefer this company. Also, the cultural heritage has helped. Taj has always relied on service. This has contributed towards its success. It has helped them to grow their base. Today, Taj hotels are looking for new ventures. It is moving abroad. This has helped the company. Taj due to its sheer desire to serve better has gained value. The brand image of the company has grown. Today, it has many takers. This is bound to grow. With increase in middle class it is bound to increase. References Atwal G & Williams A, 2009, “Luxury brand marketing: experience is everything”, Journal of Brand Management, Volume 16, page 338-346 Aiello G, Donvito R & Godey B, 2009, “An international perspective luxury branding and country of origin effect”, Journal of Brand Management, Volume 16, page 323-337 Aurora N, 2010, “Taj Hotels”, top news.in Bickson R, 2007, “Taj: The story so far”, The Telegraph, India Button B, 2008, “The future of brand architecture”, Business to business marketing research Cailleux H, Mignot C & Kapferer J, 2009, “Is CRM for luxury branding”, Journal of Brand Management, Volume 16, page 406-412 Cherin T, 2007, “Marketing tie ups between hotel chains enhance brand awareness”, The Hindu Business Line Company website, retrieved from < /product range/2_0_4_December2009.htm> on January 16, 2010 Das S, Stenger C & Ellis C, 2009, “Managing tomorrow’s brand: moving from measurement towards an integrated system of brand equity”, Journal of Brand Management, Volume 17, page 26-38 Desai T, 2008, “Taj Brand Value”, the information company private limited Divakar, 2008, retrieved from < Taj_Bengal_Hotel_-_Calcutta-139729-1.html> on January 16, 2010 Forgacs & Gabor, 2003, “Brand asset Equilibrium is Hotel Industry”, International Journal of Contemporary Hospitality Management”, Volume 15, Issue 6, page 340-342 Ghodeswar B, 2008, “Building brand identity in a competitive market”, Journal of Product and Brand Management, Volume 17, Issue 1 Haxthausen O, 2009, “Valuing brands and brand investments”, Journal of Brand Management, Volume 17, page 18-25 Jacob N, 2008, “Brand Value of Taj”, Expedia Inc Kartono B & Rao V, 2005, “Customer Perspective Model to brand equity”, Zyman Institute of Brand science Keller K, 2009, “Managing the growth trade off: Challenges and opportunities in luxury branding”, Journal of Brand Management, Volume 16, page 290-301 Kotelnikov V, 2007, “Brand and Brand Management”, Business e-coach Lance K, Katrin H & Chiranjeev S, 1995, “Brand equity: the halo effect”, European Journal of Marketing Neumeier M, 2008, “What’s your brand worth”, Neutron Engagement Training Working Books Novak K & Canas A, 2006, “the underlying theory of concept maps”, Institute for Human and Machine Cognition Pekka T, 2006, “Relational Model to managing service brand relationship”, Germany Salinas G & Ambler T, 2009, taxonomy of brand valuation practice”, Journal of Brand Management, Volume 17, page 39-61 Shah K, 2007, “Indian Hotel sector: SWOT”, equitymaster.com Susan F & Lee L, 2008, “Getting brand communities right”, Harvard Business Review Trip advisor, retrieved from on January 16, 2010 Travel guide, retrieved from < brandvalueoftaj/p-hotel-394904-taj_palace_hotel-i.htm> on January 16, 2010 VanAuken B, 2007, “Brand Equity measurement”, Cool Marketing Inc White P, 2007, “The Indians Hotel Company Limited”, Business World, Mumbai Williams V, 2008, “Indian Hotels Company: Taj Hotels”, India Zachariah R, 2008, “Taj brand is valued at Rs 4,000 crores”, The Economic Times Appendix The other techniques to measure equity are as follows Replacement Cost: it is used “when a company decides to purchase or sell a brand as it helps to the company to find the present cost that would be associated to start a product from scratch”. (Neumeier, 2008) Taj hotels have a high cost. It was difficult to ascertain it as there were constraints relating to the availability of information. Stock Price: it helps to find the value of stock. The present value reflects the actual stock price. It thus helps to find the people perception. The value determines how much the consumer value it. Taj hotels have a good rating. “The share is traded at Rs 161.80 and giving a current EPS of 5.45 and P/E ratio of 28.75”. (Aurora, 2010) This shows a good growth. The earnings per share are strong. Even the price to earnings ratio speaks high. A study shows that “brand valuation and return on investment have a link for businesses thus bringing an approach articulated with the financial, marketing insights and strategic brand value to a single framework thus highlighting the value of brand”. (Haxthausen, 2009) This helps to define success. Future Earnings: model is used “to predict the future earnings by calculating the various multipliers so that the future earning capacity can be ascertained and it also shows the value customer gives to the product”. (Neumeier, 2008) The future earning for Taj is strong. It can be seen by the fact that “the stock market is quoting it to have a price of Rs 200 and is urging people to buy it as the company has entered into various contracts and will help in the future growth”. (Aurora, 2010) A study shows that “to manage brands in the future it is important that companies comply to the equity metrics, brand positioning, price and loyalty of consumers so that the total evaluation of brand asset value is better”. (Das, Stenger & Ellis, 2009) This will help in the future. It will give direction. Emotional Connection: it is used “when a consumer has already used the product and realizes the value he gets for the same would prefer to use the same service or product thus having an emotional connection with the product”. (VanAuken, 2007) Taj has achieved this. This is due to proper CRM techniques. People prefer this chain of hotels because “they get an atmosphere which is similar to their homes and especially people of Indian origin find feel that the culture effect is there which helps them to be connected to their motherland”. (Forgacs & Gabor, 2003) A study conducted also showed that “people rated it 4.2 on a scale of 5 for the emotional connection they had with Taj”. (Jacob, 2008) This shows that emotions help. It helps to build reputation. Even a research shows that “luxury brands in recent times have started using customer relationship management techniques to retain customers for the future”. (Cailleux, Mignot & Kapferer, 2009) This will build loyal customers. Brand Awareness: it helps the company as it “creates awareness about the company and makes people aware about the products and service”. (VanAuken, 2007) This is done so that people know the product or service. Taj has used various ways to do so. The company has “tied up with Okura group of hotels to give it a global presence”. (Cherian, 2007) This is helping to have a presence everywhere. Previously, the company had “tied with Raffles group of Singapore which increased its presence in that country”. (Cherian, 2007) This helped in penetration. People started liking the service. This was due to that Indian companies are good at hospitality. Even a study shows that “brands are affected by the country of origin as it affects the perception of the consumer as they perceive the product from the originating country on the basis of his experience, learning, listening and his own feeling”. (Aiello, Donvito & Godey, 2009) Thus country plays a role. Read More