Consumer awareness and associations lead to perceived quality, inferred attributes, and ultimately brand loyalty. This perspective is called customer-based brand equity. A strong brand provides a number of benefits to a service business, such as increased customer loyalty and resilience to withstand crisis situations, higher profit margins, more favorable customer response to price change and licensing opportunities, and brand extension.
Successful brands provide consumers with a variety of functional and emotional benefits that positively influence their perceptions and subsequent behavior related to that brand. It has been shown that such brands can be important intangible company assets with demonstrable economic value.
A distinctive brand personality can create a set of unique and favorable associations in consumer memory and thus enhance brand equity. Coca-Cola estimates that only about 4 percent of its value can be attributed to its plants, machinery, and locations. The real value is in your intangible assets, and the first of these is your brand.
Hilton Hotels has used the brand to expand its market share by introducing new brands, such as Doubletree, Embassy Suites, Hampton Inn and Conrad, when existing markets have become saturated. This has allowed each different brand to establish its own position within the market. The supported brand strategy puts a well-established name on a group of products or services. By endorsing a range of products, the parent brand can lend its good name and image to the entire family of brands. Marriott estimated that adding the Marriott name to Fairfield nn increased occupancy rates by 15 percent.
Hotel organizations have managed to franchise their brands, whereby the owning company allows others to sell the product using its model and specifications in exchange for royalties. The Intercontinental Hotels group has successfully franchised Crowne Plaza hotels, enabling rapid expansion of the brand.
There are some skeptics as to the effectiveness of the hotel brand. It has been argued that the plethora of hotel brands and branding strategies can lead to confusion among consumers. The UK market is now becoming saturated with many budget brand name chains such as Premier Inns which at the moment are ideal for surviving the current economic downturn.
The national ad campaign featuring a well-known celebrity has also clearly targeted its audience as a quality budget brand that has the potential to steal many customers from the more luxurious brands. The most prominent factor is the price at the moment. However, the Premier Inn brand stands for quality at a low price. Consumers may also receive other benefits in your advertising, such as convenience and fun from your advertising images.
CASE STUDY – MALMAISON BRAND
Hotels have traditionally focused on describing their services and facilities. Malmaison focuses its marketing on the ‘bad life’ experience and eat, drink and sleep philosophy, which again creates certain images and expectations, known as emotional branding.
Loyal guests may place more importance on perceived brand image and associations as a reflection of themselves than of hotel services. A testament to the power of customer-based brand equity. Malmaison has more recently enjoyed a more publicized brand image due to the increasing number of celebrities frequenting the brand in various cities and the growing trend of celebrity advertising in the media. Exposure to this advertising strengthens the brand within your market and can also expose it to others.
The brand also helps motivate team members to really deliver, because working for a well-known and well-known brand is much better than working for one that isn’t. The growth of the hotel market in Europe will be driven by the brand and franchises. As the brand continues to grow as more Malmaison properties open, consistent quality may be one of the biggest challenges facing the brand.
The continued success and growth of the brand must be carefully managed through constant monitoring and adaptation to the environment of your target market. The product must continually review its added values and remain innovative in order to differentiate itself from its competitors, particularly as the market expands or becomes saturated. The brand imagery must continue to adapt and appeal to the values and associations of the target market. Malmaison must continue to deliver a consistent product to be first in the consumer’s mind, as inconsistency can quickly damage years of a positive image. There is no doubt that brands play a crucial role in gaining a competitive advantage. It’s fair to say that a brand can be one of the most valuable assets a company can own. It is also perhaps the most vulnerable asset.