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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 high-end travel magazines. Travel editors and writers are cultivated to encourage visits, and write as if they are writing from a neutral perspective.
A review of Banyan Tree – Phuket is attached. Although it appears to be written by a user, from a neutral perspective, the last part of the review is almost clearly an advertisement for the resort. Nevertheless, it does explain the service offerings of the resort quite well. Global exposure, by being a member of “Small Luxury Hotels of the world” and “The leading Small hotels of the world”, just goes to enhance the brand value proposition.
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Service Distribution Strategy - The hotel does not cater to mass market and based on its consumer segmentation, wants to maintain an exclusive feel. Hence, It sells its rooms only through agents specializing in exclusive luxury holidays, targeted at wealthy customers. Unlike many hotels, it is also possible to book its rooms directly over the web. And strangely, whenever I searched on the web in Yahoo, unlike most hotels, the website of Banyan Tree Hotels always appeared as one of the top 3 results. A well though out service distribution strategy indeed.
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Good motivated workforce - No business can ever be successful, without a good committed workforce. Banyan Tree has managed this very well. Based on the attached interview, the founder felt very strong sense of satisfaction when he finds motivated and satisfied employees. However, even the employees feel a strong sense of attachment, given the fact that Hotel has not had to retrench anyone despite gloomy times like SARS outbreak, and does provide good benefits to its staff. Without this, it is indeed difficult for an employee to feel motivated when their monthly salary is less that a day’s room rate. However, given the sense of belonging employees have, they provide excellent service resulting in high customer satisfaction service levels.
Overall, it has to be agreed that the company seems to have done well on all fronts and thus ensured a place in leading hotels of the world.
Banyan Tree’s Brand Positioning and Communications Strategies
Banyan Tree was promising its customers, a romantic getaway that will be close to an out of the world experience. It delivered its promises because the product was designed keeping in view the customers needs rather than what Banyan Tree can offer. Since the promise and the delivery were balanced equally, the brand equity became stronger and the company achieved Branding Excellence.
‘Banyan Tree Experience’ was the unique proposition Banyan Tree was offering to its customers. This experience was close to a dream and there were not many hotels which were providing that kind of an experience. Banyan Tree knew that it had to do intelligent selling since the brand equity was to be maintained high as its target customers were wealthy people. Banyan Tree was offering a product which appealed to senses more than anything. Customers would carry memories of the time spent in Banyan Tree resorts and the impact of the experience was maximum in post-consumption period. Advertising campaign would help in creating only brand awareness. But brand selling would happen only through word of mouth publicity and one on one selling.
Brand positioning of Banyan Tree was based on the following unique offerings of its resorts:
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Romantic getaways - Gap in hotel industry existed which could not be filled by giant chains such as Hiltons and Shangri-La. There existed a segment that wanted private and intimate accommodations without the expectation of glitzy chain hotels. Ho hit upon the idea of building a resort comprising individual villas, exotic in architectural design and positioned as a romantic and intimate escapade for guests.
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World class quality - Service standards at Banyan Tree were determined in terms of customer satisfaction rather than typical service standards in the industry. Products and services offered were also conceived with the desired customer experience in mind.
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Exotic, local experience – Banyan Tree maintained a brand association with culture and heritage. In Banyan Tree Spa found at every Banyan Tree property offered a variety of aromatic oil massages using traditional Asian therapies. The spa products were natural, indigenous products made from local herbs and spices.
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Environment friendly - All Banyan Tree resorts and villas were designed around the concept of providing ‘a sense of place’ to reflect and enhance the culture and heritage of the destination. The furnishings of Banyan Tree villas were deliberately native to convey the exoticism of the destination with its rich local flavor and luxurious feel. The resorts reflected local flavor in the services they offered, which were unique to certain resorts.
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Strong Corporate Social Responsibility – Banyan Tree helped promote cottage crafts through its retail outlet known as Banyan Tree Gallery, which was setup in each resort. The items sold were hand made by local artisans and included traditionally woven handmade fabrics, garments, jewelry, handicrafts, tribal art, and spa accessories.
Banyan Tree has always been aware of its value proposition and target market segment. This comes out clearly in its intelligent marketing communications’ strategy. It knew that it was targeting the segment that wanted private and intimate accommodations without the expectation of glitzy chain hotels. Hence even though Banyan Tree resorts were furnished luxuriously, they were promoted as providing romantic and intimate “smallish” hotel experiences.
When Banyan Tree was launched, for two years, the company’s marketing communications was managed by an international advertising agency to reach the global audience. 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.
Banyan Tree’s value proposition was romantic and intimate getaways, away from the real world into a private world. Thus to avoid over-exposure of the brand to the audience and to avoid dilution of brand name, subsequently, the company scaled down on advertising and kept it minimal. The advertising mainly was done in high-end travel magazines in key markets. For a better appeal and to generate credibility, the advertisements were visual in nature with succinct copy or showcase the awards and accolades won.
Banyan Tree experience was different than anything else anybody had imagined for romantic escapades. Banyan Tree was aware of this and knew that they will get good word of mouth publicity if they delivered the dream they were promising. Banyan Tree hit upon an effective way of generating publicity so that ‘Banyan Tree Experience’ can reach wider audience. It started developing relationships with travel editors and writers who were encouraged to visit the resorts. This helped increase editorial coverage on Banyan Tree, which was more effective in conveying the ‘Banyan Tree Experience’ from a neutral party’s perspective.
To keep consistency in the brand building exercise, management of marketing activities was centralized at the Singapore headquarters. To avoid dilution of the brand name, a few key wholesalers in each targeted market were appointed and Banyan Tree worked closely with them to promote sales.
Banyan Tree has always put in efforts to encourage environmental conservation and help save the environment. To effectively and succinctly communicate this to its customers, Banyan Tree organized activities that involved guests’ participation to create more interest in environmental preservation. Thus the guests left Banyan Tree not only with good memories of the romantic time spent on its resort, but also with a sense of gratification towards Banyan Tree for being a corporate that understands its social responsibilities.
Thus we can see that Banyan Tree’s marketing communications strategy is a highly effective campaign that focuses on attracting customers through the unique ‘Banyan Tree Experience’ which not only means romantic moments experienced at its resorts but also means a wholesome experience of peace and tranquility, away from the real world and still doing its part of responsibility towards the society.
Resorts and spas are totally service-oriented businesses that depend heavily on the way of implementation. Banyan Tree has been able to successfully differentiate itself from the similar service offerings in the market through a thoughtful strategy. The strategy focuses on making the experience of its customers a unique one. Banyan Tree has also added a lot of different perspectives to its business through the Green Imperative Fund, Banyan Tree Gallery, Banyan Tree Spa, Angsana, Colors of Angsana. These make the experience of staying in a Banyan Tree resort, a wholesome experience which is unique to Banyan Tree. It will be very difficult for any other company to replicate Banyan Tree’s model and it will take a long time before they match the quality levels of Banyan Tree. Hence Banyan Tree wouldn’t be threatened by the entry of newcomers in this field as it can leverage on its experience and move ahead of others swiftly.
Analysis of the Brand Portfolio of Banyan Tree, Angsana, Colours of Angsana, and Allamanda
The Banyan Tree brand was built around the notion of providing a romantic escapade to travelers, an experience which would create lasting memories of intimacy. Spas, which enhanced the experience of a romantic getaway, were an intrinsic part of Banyan Tree since its inception. Banyan Tree resorts and villas were created around the concept of providing a sense of place to reflect and enhance the culture and heritage of the destination. Caring for the ecology and developing a sense of environment consciousness amongst guests was also very much a part of Banyan Trees brand positioning. The galleries and museum shops were also developed as an enhancement to the Banyan Tree experience, to allow guests to recreate their escapade like Banyan Tree, at home. It also supported local craftsmen and gave an opportunity to showcase their talents. Banyan Tree was projected and priced as a premium product, and its communication strategy reflected the same. Banyan Tree was an exclusive resort for the well heeled, where privacy and unique experiences were coveted.
The Angsana brand was created in response to the demand of the natural spa experience that Banyan Tree provided. Angsana initially operated as spas within hotel properties owned by other chains. It later developed into a fully functional resort and spa chain. Angsana was developed as a more contemporary and affordable alternative to Banyan Tree. This allowed Banyan Tree to capture a larger segment of tourists. However since this range would not fit with the positioning of Banyan Tree it was promoted and treated as a different brand, an affiliate brand of Banyan Tree. This distinction was well maintained as is evident from their website, so as not to dilute the equity of the Banyan Tree brand, while at the same time allowing the group to increase revenues, and cater to a larger audience. The Angsana chain though is priced well below that of the Banyan Tree chain resorts it stresses on providing the same or similar experiences, romantic and intimate while being closer to nature. Not all travelers have the same financial resources as the typical clientele of Banyan Tree, though most would be interested in a Banyan Tree experience was the rationale behind the opening of the Angsana resort chain. The fact the first Angsana resort was opened close to the Banyan Tree Bintan goes to show that though it did not cater to the same clientele in terms of purse strings, it wanted to attract travelers with a similar mindset.
With the growth of the soft adventure and cultural tourism market, Banyan Tree saw the potential for capturing a growing market segment. ‘Colours of Angsana’ a sub brand under the Angsana brand umbrella was established to cater to this market. The ‘Colours of Angsana’ also allowed Banyan Tree to venture into new geographical territories like Sri Lanka thus increasing its footprint and allowing the brand to take a step forward towards achieving its vision “ to string a necklace of Banyan Tree Resorts around the world”. This product line of Angsana was developed to keep their own unique identities, in keeping with their offbeat and exotic locales, as Mr. Ho wanted them to “remain individual, each with their own colour and name, like an artist’s palette.” Mr. Ho has said “The places we have established Colors of Angsana tend to be remote and very exciting areas including World Heritage sites, which don’t justify US $600 to $1,000 per room night. But if we do these well and charge rates that are accessible we believe people will come away from their experience and see logic behind the Banyan Tree brand establishing Colors of Angsana and they’ll see that the values are the same.” These boutique hideaways have an intensity of character that complements the spontaneous simplicity of Angsana Resorts & Spa, The local cultures are prominent and colourful, and respected as an integral part of each hotel’s unique design, which is an integral part of the ‘Banyan Tree’ experience.
Allamanda however is more of a typical luxury resort, with suites instead of private villas, and hence probably is not able to capture the spirit of the ‘Banyan Tree’ brand to its fullest. In keeping with its parent brand it however provides natural spa treatments under the Angsana Spa brand and tries to leverage the brand equity from the same. The Allamanda is therefore not a perfect fit in the product portfolio.
The Banyan Tree city hotels as in Bangkok or the Angsana Spa at Bangalore have also tried to recreate the romantic and intimate experience unique to the brand and are in line with the desired portfolio.
Galleries and museum shops developed as a brand extension and to help guests recreate their ‘Banyan Tree’ experience at home. It also reinforced Banyan Trees association with culture and heritage, as items sourced from local artisans were sold. The online gallery and museum shop also helped cater to a wider audience while allowing loyal guests to a source their requirements from the comfort of their home. The galleries also provided employment opportunities and income for local tribes, which was a sign of ‘Banyan Tree’ being a good corporate citizen, while at the same time developed good press and word of mouth publicity.
A summary of the above can be seen in the appendix.
As a whole, with the possible exception of Allamanda, the product portfolio of the group is very much in sync with its vision of providing guests with unique, romantic and intense experiences.
Recommendations to Banyan Tree for Managing its Brands and Products in future
From the case and some guest’s reviews, it appears that Banyan tree is doing every right thing to create value for it’s brand year after year. As it grows bigger and adds other brands in its portfolio, the followings are specific recommendations:
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Stick to the fundamentals- The key recommendation is to stick to the fundamentals of 7Ps of services business. The key driver behind tremendous success of Banyan tree was a holistic approach of delivering brand promise to the customer and exceeding their expectations. Simultaneously, delivering brand promises to its employees (creating a sense of ownership) and the world it belongs to (I care for the environment/community I live in) wherever it is located.
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Flagship Brand is the “sacred cow”- While it’s good to have total market coverage via several product offerings, it is of most importance not to loose sight of the flagship brand. There are three key reasons why it’s important:
- Engine to Fuel Other brand’s growth: It’s the brand that gave investments (both Capital as well Intellectual) and success to launch other brands. Losing focus on “Banyan Tree” might result in severe profits/as well as reputation hurts which hurt other brands as well.
- Target consumer of Banyan Tree: If read carefully, the profile of most Banyan Tree guests, it would be a couple looking for special intimate moments at now renowned Banyan tree. Just meeting expectation is no longer the norm, and guests expect more then just what they have heard others experience. This set of consumer is influential (as evident from their economic profile) and can be an effective “negative brand ambassador” if unsatisfied. He/she could be an executive, senior executive, or business owner who could influence others’ decisions who are in the process of choosing holidaying resorts.
- Flagship is what sets the expectations for other brands as well: Customer have zone of tolerances for services experience. Just by having a different brand doesn’t allow Banyan tree to deviate too much from its core offerings i.e. it’s a brand/group that believes in nature and enhances the culture and heritage of destination. There is a minimum tolerance limit that Banyan tree should keep in mind while delivering other brands’ promises that would keep its customers loyal while expanding customers base as well. If not all, then at least basic core values should blend well amongst all brands.
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Leverage Expertise from one brand to another- Learn the “Magic Moments” that excites customers from one brand and review if those are relevant to other brands as well. Before implementing, it’s necessary to research and find out if the other brand’s customers find it worth investing resources in.
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Treat Individual Brand as individual business- Though the basic core values should blend well, financially treat each brand as individual business so as to evaluate performances accordingly. This will help finding ailing business/ brand, if any, and fix the issues accordingly.
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Explore New Shore - Banyan Tree has become a quality holidaying icon in Asia. It should now explore American as well as European shores in order to be a truly global player. Or even touch grounds in Africa to cater to the need of those looking for unexploited natural places. Banyan Tree is not playing on cost based pricing, therefore it shouldn’t worry much about the cost of entering into either American or European markets. Just try to replicate its Asian business model of starting small. It’s in the services offering business that is the toughest business to emulate. Banyan tree should use insights it might have generated with its American/European guests to expand into Europe/America. The Banyan tree guests, with unforgettable experience, but infrequent visitors to Asia, might be pleased and can be “return guests” to its locations in Americas/Europe. A loyalty program to make them brand ambassadors’ might be a good additional start-up strategy.
Conclusion
The success factors for Banyan Tree has been studied and listed in this report. Having a sound brand positioning and good communication strategy, Banyan Tree is still expected to maintain its unique positioning in an increasingly overcrowded resorts market. The full brand portfolio of Banyan Tree, Angsana, Colours of Angsana with exception of Allamanda, they fit in the company’s vision of providing guests with unique, romantic and intense experiences. Under the leadership of Mr. Ho Kwon Ping, the company should be able to remain the leading manager and developer of niche and premium resorts, hotels and spas in Asia Pacific. For the future, Banyan should stick to the fundamentals and leverage its expertise to explore other brands as well as other American and European shores for good sites.