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Managing Hotel Brand Equity Essay

1589 words - 7 pages

Managing Hotel Brand Equity


This research article examines what constitutes brand equity in the hotel industry and demonstrates a method for how that brand equity can be measured. It first states that the chief reason for building brand equity as the cornerstone for business success is that it helps offset competition by differentiating the product, allowing brand owners to charge a premium, and fostering customer loyalty. The brand embodies all that the business stands for. A brand’s strength develops over a long period of time, and a strong brand is expensive to create. Managing brand equity is made increasingly difficult by the rapid proliferation
of new brands, dramatic ...view middle of the document...

Using customer-research data from brand awareness-and-use (A&U) studies, a hotel can collect and analyze the data from a national panel. The first step in computing brand equity is to quantify customers’ satisfaction ratings of five key brand attributes in two sets of indicators, brand performance and brand awareness. By classifying these customer ratings for a specific brand and its principal competitors, one can develop indices for performance and awareness. Then by combining the two indices a brand manager can develop a unified measure, which we call the brand-equity index. The software used to measure brand equity describes the strength of the hotel brand in terms of satisfaction, return intent, price–value, and preference. That index allows the manager to make a further comparison with competing brands and can be a benchmark for analyzing customer-preference trends over time. Any changes over time
or in relation to other brands could spur diagnostic questions that en- courage the brand manager to address opportunities and challenges to keep the brand’s performance on course. The diagnostic questions could help pinpoint problems that require remedial action in marketing or in operational areas. The effectiveness of these remedial actions could then be tracked easily after implementation by using the same BrandTracker model in the following year or earlier as considered appropriate. The brand-awareness, brand-performance, and brand equity measures offer a way to learn about changes in competing brands’ positions relative to each other.

The BrandTracker model can be used to classify the hotel brands in a four-cell typology based on high or low awareness plotted against high or low performance. The authors designated the brands in each cell as brand champions (high performance, high awareness), rising brands (high performance, low awareness), troubled brands (low performance, high awareness), and weak brands (low on both indices). A hotel brand with high ratings on awareness, satisfaction, return intent, positive price-value perception, and brand preference has, by definition, strong brand equity. BrandTracker expresses as percentages customers’ quantitative ratings of satisfaction and of other positive ratings. These percentages are then converted into the two indices of brand performance and awareness.

Based on their investigation and analysis on hypothetical hotels, they suspect a a positive correlation between brand equity and financial performance. Hotels with strong brand equity should command higher occupancy and rates. Thus, this translates into higher earnings.

Managing Brands in Global Markets: One Size Doesn't Fit All


According to Wharton marketing professors George S. Day and David J. Reibstein, note that only a handful of truly global brands exist today, despite the increased globalization of markets. In addition, experience has shown that companies need not always create one-size-fits-all global brands just...

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