In this report, Banyan Tree and its development was evaluated.

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Banyan Tree

Report

BMA5505 Services Marketing

NUS BUSINESS SCHOOL

Aug ’04

Agrawal Manoj Kumar

Das Indranil

Goel Sudhir

Thia Chang Liang

        Toshniwal Ritesh


TABLE OF CONTENTS

Executive Summary ……………….………………………………………………………………..…1


Executive Summary

In this report, Banyan Tree and its development was evaluated.  Under the leadership of Mr. Ho Kwon Ping, Banyan Tree was positioned to cater to a niche market segment that wanted private and intimate accommodations without the expectation of glitzy chain hotels.  After that, Banyan Tree started operations in the luxury resorts market in Phuket and subsequently expanded to Bintan and Maldives.

Its success can be attributed to that it knew what the customers value, created the brand and applied that understanding to shape a truly differentiated customer experience with the “Banyan Tree Experience”.  After establishing a foothold in the luxury resorts market, it introduced other services.  Each time, a different brand, like the Angsana brand, to provide the spa services, is launched, care is taken so that the original brand focus is not lost.  In the same period, it has also trained a good team of staff to uphold the brand and the values that it carries, so that the customer experience would be the best.

The marketing communications strategy is a highly effective one.  When Banyan Tree was first launched, extensive advertising was carried out for a short period of time to generate brand recognition in the industry. Later, global exposure was also achieved through Banyan Tree’s membership in the Small Luxury Hotels and Leading Hotels of the World. Subsequently, the advertising was mainly in high-end travel magazines in key markets.

With a good brand portfolio like Banyan Tree and Angsana, the company would be in a good position to explore American as well as European shores.  Other service brands that give the “Banyan Tree Experience” should be looked into as well.

On the whole, the team feels that the company has performed well with a good branding strategy and sound marketing communications strategy.  


  1. Main Factors that Contributed to Banyan Tree’s Success

For a company to be successful, there can be quite a few factors. However, in case of Banyan tree, the real reason is having a good experienced leader, who can chalk out good strategies and subsequently see them through to completion.

Banyan Tree was setup by Mr. Ho Kwon Ping, an experienced leader, someone who has had his share of mistakes and learnt from his mistakes. We can make out from his attached interview of June 2004, or his interview in business times of 23rd August, that he is a very practical man who understands the intricacies of setting up global business. He considers Education to be a tool, took nine years to get his Bachelors degree and now heads Universities.

What has worked well for him and Banyan Tree resorts are the key service strategies, which were thought off and implemented well. Its key success factors have been:

  • Well-thought Market Segment: Before the hotel was setup, its founder Mr. Ho, realized that competing just on price is not a sustainable proposition. Hence, he analyzed the market and found that there were no luxury hotel offerings, offering individual villas, exotic in design and positioned as romantic and intimate escapades, in the range of US$300 to US$600. So he decided to address this market segment for wealthy, rather than compete in mass market.

It was indeed a good market segment to be in, since competition in the market segment was low, the barriers to entry were high owing to high investment costs and the customers were willing to pay.

Once the Market Segment was clearly identified, it was an almost perfect alignment of the following strategies, which resulted in Banyan Tree being successful:

  • Service Pricing - The services were priced based on the value that they create for customers, rather than cost. The price was high enough to keep it out of reach of general market, keeping in mind that the resorts were not targeted at mass market. The price itself indicated that the resorts are exclusive/high-end luxury resorts to cater to private romantic getaways.

  • Service Offerings - The service offerings by the resort are all geared to pampering the guests and giving them a romantic holiday that is probably the best they can get. The Individual villas complete with high walls and individual pools, soft lighting rather than normal lighting, along with packages like “Intimate Moments” all go to enhancing the experience for the guests and giving it a luxurious feel. The customers for this segment are also usually well settled and feel good working for a cause like environment. The native décor of the resorts, local flavor & luxurious feel as well as strong emphasis on the environment protection, all helps make the guests feel good.
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  • Branding & Market communication - Over a period, Banyan Tree has build up a brand image that is synonymous with exclusive, high-end luxury resorts with private villas, tropical garden Spas and promoting traditional crafts and environment. In order to ensure that the brand “Banyan Tree” is not diluted, it has also introduced another brand “Angsana” to cater to larger consumer base. The result – A well defined brand that goes in line with its consumer segmentation.

Furthermore, in order to communicate its brand image consistently, it has advertised minimally. And when it does, it is only in ...

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