Branding Plays a Very Essential Role in Every Business - Essay Example

Branding is becoming the prime marketing concern for the international hotel industry. Branding plays a very essential role in every business. Management of products and brand play a very essential role in the marketing success. A brand helps the consumers differentiate between two competitors and the name, packaging and design of the products becomes the brand of the product. Creating a brand image and name for a company ensures that customers are able to differentiate the products and recognise the product that satisfies their needs the most and thus improving the customer loyalty. In simple word branding is the process of creating a different image from that of the competitors (Jobber, 2004). This report aims at understanding branding for international hotel industry and the concerns faced by the hotels for branding. The group of hotels and resorts that has been chosen for this report is the Starwood Hotels and Resorts Inc. The following section will firstly give a brief background about Starwood hotels to help understand the hotel a little better. The sections following this would deal with the relevance of branding in the hotel industry and the main concern faced by the hotels in regards to its branding strategy. Starwood Group of hotels was incorporated in 1980, and two of their largest brands Sheraton hotels and resort and Westin Hotel and resorts have been serving the market for over 60 years (Starwood, 2008). Starwood group of hotels and resorts stand 8th as per the worldwide hotel ranking 2007 on the basis of rooms (Hotel-Online, 2007). Starwood has a large number of hotels worldwide naming a few: St. Regis, The Luxury Collection, Westin, Sheraton, Le Meridien, Aloft, Four Points, W and Element. As of 31st December 2007, Starwood group’s portfolio included a total of 897 Hotels with 275,000 rooms across 100 countries that primarily cater to the upscale markets of the lodging industry. Starwood has a total of nine brands namely: Sheraton, Four Points by Sheraton, W hotels, Aloft hotels, The Luxury collection, Le Meridien, Element, Westin Hotels and Resorts, St. Regis Hotels and resorts (Data Monitor, 2007). With the vast brand portfolio Starwood has to make a lot of efforts to ensure that all the brands are given equal importance and marketing (Starwood, 2008). Branding plays a very important role in the marketing of a company. Strong brands are normally both products category leaders and is very important for both the company as well as the customers. Companies benefit from the strong brand name as customers would increase the customer perception towards the brand and act as a barrier to competition. The customers on the other hand gain from the branding since it acts as a form of quality certification which helps ensure trust. It is important to firstly understand the importance of branding to Starwood. The company value will increase with better branding and will make the company more famous among the customers of the various hotels, by ensuring the consumer perception is that of a strong brand image for Starwood (Fuchs, 2005). This would help the company create a barrier to competition and thus lead the company towards higher revenues and profits. Also branding can be used as a base to expand brand into different fields say like travel and tourism. A company that has a strong brand image is certified automatically for its quality, since brand image cannot be increased without good quality. Lat but not the least the brand will help the group gain the trust of the customers and will hence increase customer loyalty (Hammond, 2008). The group has concentrated on ensuring that all the brands are well marketed to ensure the customers are aware of the brands of the group. The importance of branding however has not been understood well by a few companies. Branding ensures that the customers are able to relate to a particular product or service provided. The expectations from the customer are high, in terms of quality, when they pay such high prices (Fisk et al, 2000). A lot of offers can be given to customers in the form of gift vouchers in magazines, discount vouchers in newspapers. This would enable the company to improve the brand awareness and it would allow the people to relate to the company. It is very important to have a brand that is well known and well marketed (Ferguson and Hlavinka, 2006). Take for instance the Starwood hotels the group has around 9 different brands. Starwood has created a brand name for itself worldwide and has been able to gain a high number of loyal customers. The group has provided good service to customers and has received a number of positive feedbacks from the customers. The popularity of the group is seen clearly by its ranking in the Worldwide Top 10 hotels. The company has created a brand image of the various hotels to be business travellers’ hotel and mostly all business travellers book even the one day trips made. Starwood has not been able to position its brand well in the market and the image of the brand is a little mixed since the brands are extensive and cater to almost the same type of customers (Clifton, et. al., 2004). Even though Starwood group has tried to encourage all the brands, there have been instances where the hotels are known yet the Starwood name is not known i.e. customers are aware of the different hotels however cannot relate to the group as a whole. This is one of the biggest issues the group faces in relation to the branding. Even though the group has a strong market position which is supported by the vast network of hotels and properties, it is to be noted that in a lot of instances the customers of the hotels in most cases are not aware of the different hotels that fall under the same umbrella of the Starwood group. Thus from the above discussion it is clear that Starwood is facing a very difficult time correctly branding and positioning the brand to the customers because of the various aspect of differentiating. The group has found it difficult to differentiate itself in its websites, online services, common supplementary service, public relations, sponsorship and co-branding and direct market campaigns. Also the group has not set its target market right which has created confusion and issues with the brand image of the group (Cutler, 1999). References Clifton, R., Simmons, J., Ahmad, S., 2004, ‘Brands and Branding’, The Economist, Febuary 2004, 2nd edition, Bloomberg Press, London Cutler, S., 1999, ‘Issues in Branding’, Business Insights, MBA Group Limited, MBA House, London Datamonitor, 2007, ‘SWOT on Starwood’, 15 June 2007, http://www.datamonitor.com, (accessed 15 September 2008) Ferguson, R. and Hlavinka, K., 2006, ‘Loyalty Trends 2006: Three Evolutionary Trends to transform your Loyalty Strategy’, Journal of Consumer Marketing, Nov 5, 2006, Vol. 23, p292-299 Fisk, R. P., Grove, S. J. and John, J., 2000, Interactive Services Marketing, Houghton Mifflin, Boston Fuchs, C., ‘The importance of branding: Can it really Make a difference?’, 04 August 2005, Accessed on 1 November 2008, Retrieved from http://ezinearticles.com/?The-Importance-of-Branding---Can-It-Really-Make-a-Difference?&id=56697 Hammond, J., 2008, ‘Branding your business: Promoting your business, Attracting customers ans standing out in the market place’, 28 May 2008, Kogan Page, London Hotel-Online, 2007, ‘Hotel Ranking’, June 2007, Accessed on 1 November 2008, Retrieved from http://www.hotel-online.com/News/PR2007_2nd/Jun07_HotelRanking.html Jobber, D., 2004, Principles and Practice of Marketing, 4th Edition, McGraw – Hill, Berkshire Starwood, 2008, ‘Company Info’, Accessed on 1 November 2008, Retrieved from http://www.starwoodhotels.com/corporate/company_info.html Read More