Banyan Tree: developing a powerful service brand

Banyan Tree Case Study

While it was not until the 19th century that the term "brand" had the connotation of meaning a commercial trademark, the idea of individual styles and types of merchandise have been around at least since the written record. For instance, there are ancient documents commenting on a certain type of wine, jewelry, dye, or clothing as far back as Egypt and Babylon. However, using the term to mark a specific type or image in the minds of consumers did not really become popular until the mid-20th century (Wheeler 2006).

Branding, then, is really information -- it is the sum of all the information about a product, service, or organization that is used to communicate a certain image or relationship to the consumer. It uses logos, visual clues, verbal messages, and is far more than a name: Coca-Cola is a brand because of the connotation of the name and what products, ancillary and otherwise, are offered, while Jones & Company is a name, but not a brand (Vaid 2006).

Within the subject of branding, however, there are four major myths that will help us understand our analysis of a single branding example:

Myth #1 -- Brands are built only through advertising. Instead of just advertising, as it may have been in the past, brands are now built through customer "experience," which can be intangible, but it the sum of all the customer's interactions with said company.

Myth #2 -- The purpose of the brand is primarily to influence the customer. Yes, brands are developed to influence purchasing, but also to build a larger mystique for employees, investors, and the general public, even if non-buying.

Myth #3 -- The key to an effective brand understands that brand in the contemporary marketplace. Instead of this rather outmoded view, the key to effective branding is to anticipate a brand's relevance to future purchasers (e.g. Zenith and Cadillac were great brands, are they now?) (Randall 2000).

Myth #4 -- Brands are symbols and imply emotions and should be managed by creativity rather than analysis. Yes, brands are emotional, but in order to accurately judge their position, it is important to analyze their performance with consistent benchmarks. Many companies get too caught up on the 'emotional side' of their brand, and neglect the quantitative side.

Myth #5 -- Branding is the responsibility of the marketing department. All departments in a company are crucial, but in the contemporary world, brand building and even retention are qualified more by delivering on the brand promise. This means that R&D, customer service, and most especially, design and production are key components to a more cynical consumer mindset (Almquist & Roberts 2009).

Banyan Tree

Banyan Tree Hotels and Resorts evolved into a leading player in the luxury resort niche in Asia. As part of its strategic growth strategy, Banyan Tree launched new brands that included resorts, spas, retail facilities, and even culturally relevant museum shops. The company is desirous of continued growth, and believes with the new propensity towards globalism that it must manage its brand portfolio and expand its business organization while, at the same time, preserving the strong brand image and distinctive identity of the flagship brand, Banyan Tree (Wirtz 2011; The Banyan Tree Experience 2012).

Factors for Success

Banyan Tree's success is likely attributed to attention to the details of a well-designed tactical and strategic marketing plan with the focus and design of developing a brand over the long-term; a brand with significant cultural appeal. There have been several excellent external and internal avenues of success for the company that has allowed it to prosper within a competitive, but niche market. Too, globalism and the opening of numerous other markets combined with easier access to international tourist dollars results in continued success. Some of Banyan Tree's more successful choices have been:

Choice of target segment -- found gap in market

Positioning and branding strategy

Products and Services -- from design to delivery

Aggressive and focused internal marketing

Using local and regional access and groups (public and private) to expand brand

Taking the lead as the first mover (pioneer status)

Sustainable and ecologically sound business practices (McElhiney 2011)

Perhaps the most innovative move towards success came with the realization that there was a considerable pricing gap in the luxury resort nice. Middle class consumers (a growing demographic trend) must either save and stretch their budgets for top-of-the-line resorts or settle for resorts that cater to the masses, which tend to be more crowded and less exclusive. Banyan Tree found the gap within this niche and exploited it so that there is a memorable holiday experience that is relaxing, provides luxury services, is less crowded, and still has the exclusivity feel for many middle and upper-middle class travelers.

Brand Positioning and Communication Strategies

When first launched, Banyan Tree's service offerings were unique. However, the branding is not really set up to be a long-term competitive advantage because many organizations could copy merchandise, products, etc. However, by establishing the Banyan Tree service brand, and backing it up with exceptional service and follow-through, prevented some competitors from entering the market and allowed Banyan Tree to remain unique.

One particular strength for Banyan Tree has been the positioning of its services as a "sanctuary" for romantic get aways. Looking at the demographics and psychographics of the new middle class, Banyan Tree found that the hectic and stressful lifestyle of the up and coming also translated into a need for a calm, luxurious get away spot. By branding "romance and intimacy," certainly intangibles, Banyan Tree was able to deliver an experience and redevelop a clear and unique marketing position. The success of Banyan Tree, however, has been reinforced because the organization consistently delivers on the promise of clean facilities, exemplary service, unique dining and romantic experiences, and rooms designed to comfort and pamper its guest. For some companies, branding must be something tangible -- for Banyan Tree, it is the brand loyalty and emotional bond that created the success of the organization (Trip Advisor 2012).

Brand Portfolio

Brand personality is a set of human characteristics associated with a particular brand -- the way the brand behaves if it were a human entity. For instance, we tend to see the Marlboro Man as masculine, the Virginia Slims woman as feminine; IBM as older and establishment, Apple as younger and hip; Coke conforms, Pepsi is for a new generation. Brand personalities, much like humans, are built overtime. It is important because it refers to the outcome of the consumer's total experience with the brand. Thus, in the consumer's mind, the brand personality merges over time to form an overall concept of what they might expect. McDonald's, Apple, Levis, Nike, etc. all have this emotional and ethereal feeling that transcends their current marketing message and becomes iconic. Brand equity, on the other hand, is vital strategically but extremely difficult to quantify. Brand equity is a totality of the marketing effects and outcomes that accrue over time. Done correctly, this allows a more premium view of the product, more loyalty, and as such, fiscal validity and recognition to where new launches, ancillary products and services, and brand extensions are far easier than without brand equity. The manner in which brand equity is build, however, is a combination of the consumer's views and the influence of the advertiser via sales promotion and consistency of message., recent research into the issue of impact on brand equity shows that there is indeed a relationship between brand personality, sales promotion, and the formation and actualization of brand equity in the minds of consumers (Insead - Knowledge 2011).

Aggregated, there appears to be a positive impact of brand personality and negative impact of sales promotion intensity (volume and number). It seems that when customers already view a brand personality as positive, they begin to become irritated by what they consider to be too much pressure, or push, to convince them of the efficacy of the brand. Using square path modeling, the research shows that there are a series of structural relationships that occur between brand personality and brand equity -- and that, at times, aggressive sales promotion tactics can actually have a negative (and undesired) effect upon the consumer's perception and indeed belief about the brand.. Thus, while one would think that continuous promoting of the brand within the media would have a continually evolving positive effect, it turns out that money spent on aggressive promotion may actually drive the consumer away from brand loyalty (Valette-Florence, Guizani & Merunka 2011).

For Banyan Tree, the brand portfolio is a combination of tacticle and emotional attributes. If we look at them as unique components of the brand, we find:

Location -- luxurious villas, native settings, pristine and comfortable accomodations provide guests with the idea of a unique "island" location.

Services -- Employees are trained to be warm, sincere, and respectful; employees learn to greet guest by their names, recognize preferences (mineral water, or drinks, timing of appetizers, wine, etc.); this is designed to help the client feel important and a unique experience.

Eco-friendly -- guests know that their patronage helps to contribute to various social and environmental organizations, part of the feel good factor while still enjoying luxury.

Incentives -- Guests are encouraged to try other Banyan Tree reorts based on different services and different locales; by rewarding clients for trying something within the organization, loyalty is increased and fiscal dollars are kept within the group. This is also engendered by allowing guests to experience a more "authentic" cultural experience based on location.

Trust in staff -- Employees are given freedom to decorate and redecorate villas so that even returning guests are assured of a unique experience each time they check in. Employees get to know guests and clients are treated like family with special ammenities once staff gets to know them.

Experience -- The Banyan Tree experience is both tangible (rooms, pool, spa, dinners, massages, etc.) and intangible. The intangible is designed to appeal to the emotions and senses of the gues -- giving them a feel that their money is spent well and that the services provided are a great value. The unique and customized experience is not easily duplicated, and with the right staff, allows the consumer to be wowed by the experience, engendering positive word-of-mouth advertising, and helping to gain new customers.

Aggressive internal marketing -- Banyan Tree realized that in order for its model to succeed, it had to count on employees to maintain the experience level with the clients. They have generous staff welfare policies, hire for service personalities, and reward generously for success. They look for people who are about genuine interest and empathy.

Community -- Banyan Tree reinvests in the local communities of its resorts, sponsors events, and donates time and dollars to good causes. Banyan Tree is aggressive in helping to conserve and preserve natural environemtns and culture/customs, and has this written into its mission statement as part of its core corporate values.

Eco-Friendly -- Sustainable, pro-environmental business practices can be, at times, more expensive to implement. In the long run, though, Banyan Tree has found that these practices generate awards, increase brand awareness, and generate a great deal of positive publicity. In fact, their views of cultural and environmental sustainability are more of a marketing investment than expense. This has also engendered support from a number of public interest groups who support the manner in which Banyan Tree develops their resort areas with respect for the natural environment and local culture.

Look and Feel -- color choices cater to soft adventure tourism that hints of exotic but comfortable. The decoration and branding of products and services unique to that particularl cultural venue allows for a great branding experience as well. Spas and services also contribute to the luxurious feel of the client's stay (Roll 2009).

Corporate Social Responsibility and Brand Equity

Within the modern corporate structure, from non-profits to multinational organizations, the manner in which decisions are made is one of the fundamental keys to the organizations survive in the global marketplace. Of course, decisions are made regularly during business, but it is the manner in which those decisions are made, how those decisions impact stakeholders, and more so in the 21st century, how those decisions impact society (Porter). Managers, in particular, realize that if their organizations are to survive in this dynamic and uncertain environment, they have to make moral and ethical decisions concerning new business opportunities, products, customers, suppliers, markets and technical developments. This clearly indicates that the most important managerial attribute is the ability to make the right decision within an ethical rubric. The outcomes of the decisions will be used as the benchmark to evaluate whether managers are successful or even whether that organization will be able to prosper long-term (Drucker 2001).