Brand management is the process of influencing the perception of a company’s brand among the people who are targeted by the company. A successful brand strategy measures and controls brand awareness, customer loyalty, satisfaction, and perceived customer value. Creating a framework to improve brand reputation necessitates a thorough understanding of the brand, its target market, and the organization’s overall vision. To understand the various brand strategies and the brand elements that help build brand equity in the hospitality and luxury industry, this report concentrated on brand management in The Ritz-Carlton Hotel Company, an American multinational corporation founded in 1983 that owns and operates The Ritz-Carlton hotel chain. The report established that Based on the company’s business model, which renders uniqueness and quality the main aspects of the company’s distinction and brand image, it targets capital cities and high-end locations, allowing the company to provide exceptional customer experience.
This report reflects the contributions of many people, and I want to thank them all. The first is that I am grateful for my family’s support and encouragement in my studies. Secondly I appreciate and express my gratitude to my instructor and supervisor for providing me with the direction and assistance I needed to complete this report successfully.
The term “brand” is becoming more common in boardrooms responsible for attracting and retaining customers in the hospitality and luxury sector. Previously viewed solely as a tool for differentiating one hospitality service from another, the brand is now riding on a wave of market recognition that can be the driving force behind marketing decisions and the organization’s operations. Although this awareness is not limited to the hospitality sector, the sector’s reaction to the growth of brand management appears to be divided (Mmutle and Shonhe, 2017). The role of the brand has shifted in the hospitality industry over the last decade, with the rise of new brands and the restructuring of existing ones indicating a lack of confidence in the brand’s power beyond its tangible and visual cues.
The present hospitality market forces companies to work more to differentiate their brands and promote their offerings. The internet markets of the 21st century, and fundamental shifts in customer habits, have driven companies to modify their business practices. Growing customer demand for improved service necessitate a rethinking of organizations’ business environments. Significant changes in consumer habits and purchasing behavior underscore the necessity for businesses to adapt to their consumers’ new mindsets in order to maintain effective market domination. Furthermore, branding can help hotels take advantage of opportunities such as, pricing structures, and service offering diversification. The hospitality sector encompasses a wide range of businesses that offer services to customers. It is centered on customer satisfaction and providing unique experiences for them. Although consumer behavior experts agree that the concept of luxury value may have several underlying dimensions, there is little agreement on the number and types of dimensions (Oskam and Zandberg, 2019).
History of Hospitality
Hospitality is the courteous reception and treatment of visitors. In a business context, hospitality refers to a particular type of interrelation between a guest and a host. In this interaction, the host identifies what would bring the guest joy and improve their comfort and provides it lavishly and seamlessly in face-to-face interactions, using politeness, social ritual process, and courtesy. It aims at improving guest satisfaction and encourage repeat business (Golubovskaya, Robinson, and Solnet, 2017). Traveling was dangerous in ancient times, and being without shelter for the night animals, or being robbed and murdered by highwaymen, was even riskier. A code of hospitality obligated a host to protect his guest from robbery or bodily harm. Originally, places of hospitality were distinguished solely by the presence or absence of overnight accommodation.
The first evidence of hospitality may be found in the Lascaux caves in France, which were erected to shelter members of neighboring tribes around 15,000 BCE. Japan’s first two hotels, known as Ryokans, were legally registered in the early 700s. By the 1600s, England had over 600 recognized inns, and the first modern hotel was erected in the early 1800s. The accommodation of aristocrats in the 18th century evolved into modern commercial hospitality (Kunwar, 2017). Hospitality has played an important role in the evolution of communities since the ancient period. It’s a stimulus that’s aided human actions, including civilization-enhancing ones. It is also recognized as the essential aspect of human endeavor and celebration from the beginning of time to the end of time. Hospitality has never been universal, and its delivery has been more formalized from its inception. As communities evolve, the formalization of hospitality offers guidelines for how to treat a range of visitors based on various of characteristics.
The report seeks to uncover variables that influence customers’ value perception in the context of luxury hospitality service using Ritz-Carlton Hotels as an example. Since Ritz-Carlton is well-known globally, its powerful hotel brand is useful to examine in terms of brand management. Furthermore, it has already established many hotels and resorts around the world; it would be impossible to handle the brand similarly in different states. This enables us to investigate what steps Ritz-Carlton has taken to address them. The report will also identify and explain the brand elements that help build brand equity in the hospitality and luxury industry.
The Ritz-Carlton Hotel Company was selected as the subject of this study. The Ritz-Carlton Hotel Company is an American multinational corporation founded in 1983 that owns and operates The Ritz-Carlton hotel chain. Humans, experience, and associated partnership are the three key strategic pillars of the Ritz-Carlton business strategy that may be identified. The selected business model necessitates a high level of attention to the quality and preparation of hotel personnel, and therefore human resource management is at the core of the organization’s strategic planning.
Furthermore, Ritz-Carlton embraces a market customization strategy, allowing each hotel to provide a uniquely customized experience, ensuring that every customer has a different experience. Human resource management and marketing strategies are integrated into partnerships with local governmental and non-governmental organizations, improving the company’s hiring and distinctiveness of service offerings such as exceptional restaurants, bars, and other amenities on the hotel’s property (Kalra, Ghazal, and Afifi, 2020).
Branding in Services
Branding has been regarded as “the foundation of 21st-century services marketing.” Because of the intrinsic qualities of services, research suggests that the concept of branding is more significant for services than for physical goods (Swani, Milne, and Miller, 2019). New marketing approaches have emerged in which the provision of services instead of commodities is central to financial transactions. With this view in mind, organizations must understand how to successfully advertise the service component of their business model in order to gain a competitive edge.
While the growth of technology and its support of more consumer access to diverse consumption-related information has greatly transformed customer pre-purchase evaluation of services, service-marketing intrinsic challenges are yet to be addressed. Better access to information can lower a consumer’s perceived risk level regarding service purchasing decisions. Nevertheless, for services with strong experience attributes, such as a hotel stay, access to information is unlikely to replace the actual experience. In cases like these, having a strong brand is essential for mitigating the difficulties consumers may experience when choosing a hotel. Thus, a strong service brand builds customer trust in the intangible purchase, allowing them to see and comprehend the intangible goods.
Strong brand equity can result in considerable revenue increases, whereas a lack of brand equity in hospitality and luxury brands might affect prospective sales flow. All aspects of brand equity positively influence perceived value. From the customer’s perspective, brand equity is prioritized. The argument for such a strategy is from the assumption that the organization’s valued objective of making a profit is primarily derived from clients’ awareness that the brand has favorable, strong, and distinct brand associations (Joseph, Sivakumaran, and Mathew, 2020.). As a result, without customer understanding, customer brand equity may lack the ability to provide extra value to the organization.
Customer-Based Brand Equity
A brand’s worth can only be recognized when it is relevant to consumers. This report, following earlier studies, takes a customer-based perspective to identify customer variables affecting brand equity and explores the implication of brand equity on customer behavior. The majority of consumer-based brand equity research is based on two theoretical frameworks: Aaker’s consumer-based brand equity model and Keller’s consumer-based brand equity theory. Keller (1993) defines consumer-based brand equity in terms of marketing, explaining brand equity as the impact of customers’ awareness of a certain brand on responses to that brand’s marketing efforts and programs. Perceived quality, brand image, brand awareness, and brand loyalty are the standard Consumer-based brand equity dimensions used in this literature review. Consumer reactions provide brand perceptions and buying intentions. Buying intention describes the chance that a customer plans to buy a service or a product, while brand attitude is an inclination to respond positively or adversely to a brand. Organizations gain a competitive edge as a result of these factors (Çınar, 2020).
Strong brand equity arises when the consumer reacts more favorably to a marketing action for the brand than to the same activity for a non-branded service or product in the same class. Visualizing brand equity from this perspective is beneficial since it provides clear guidelines for marketing strategies and techniques as well as areas where research can support management decision-making. The importance of diversifying contributing aspects to hotel brand equity rests in identifying the drivers of brand equity and assigning responsibilities for improving brand equity across the organization (Winzar, Baumann, and Chu, 2018). The analysis of brand equity enables management to assess the strength of brands in a market position, monitor a hospitality brand’s equity over time, and devise corrective marketing techniques.
Brand loyalty is defined as “a customer’s attachment to a brand.” Customers that are loyal to a brand are ready to pay extra for it. Strong brand loyalty can boost brand performance and sales-related outcomes. Loyal customers are more likely to recommend a brand than nonloyal or switching customers. Loyal customers buy their preferred brand on a regular basis and are less inclined to switch. Brand loyalty has a positive correlation with feelings about cobranded products. As a result, good brand loyalty can help to foster a positive brand image and increase purchase intent for luxury hotel brands. Consumer word-of-mouth is the most significant outcome of brand loyalty. Since services cannot be tried before purchase, positive word-of-mouth has a significant impact in the service context. Consumer perceives word-of-mouth information as reputable since the organization cannot control it, therefore it piques the interest of potential clients as a dependable source of information.
Customers’ brand awareness is their ability to remember or identify a brand. Customers’ decision-making processes are influenced by brand awareness, and famous entities have higher chances of being included in customers’ consideration lists. Though market presence is not a key component of brand equity, customers aware of their brand make initial decisions faster than those who are not. A positive effect of high brand awareness is that it is more likely to encourage purchasing behavior. From the standpoint of data processing, brand awareness increases the accessibility of information, and known information is more important for judgment formulation, resulting in a positive brand evaluation. According to empirical research, brand awareness appears to positively impact brand choice and market dominance, customer loyalty, and profit margins. Brand awareness can reflect brand loyalty and encourage consumers to think about the brand while making a purchase, resulting in a positive attitude and strong purchasing intention.
Perceived quality is tied to consumer judgements, which are generated after customers compare their expectations with their judgment of actual service performance. This report represents perceived quality as a brand’s business model that makes consumers inherent to value creation and adopts a process-oriented service encounter that outperforms other hotel brands. Since perceived high quality can promote brand loyalty and inspire buyers to settle for that brand over rivals, organizations that provide exceptional services have a competitive edge and are more lucrative. Furthermore, since perceived brand quality is highly connected with brand attitude, buyers are usually motivated to purchase particular products by perceived brand quality, distinguishing the brand from competitors.
Brand image and brand association are used interchangeably. Brand associations are concepts that link customers’ memories to the name of a particular brand. Customers usually make purchasing decisions based on their impressions of an organization’s brand image. A strong brand image correlates positively with customers’ willingness to pay higher prices. An exceptional brand image separates the brand and its value and establishes a specific position in customers’ minds, contributing to possible brand equity improvement. From a cognitive standpoint, brand image is reflected in the resources connected with visitor-drawing functional features. When customers have a good perception of a brand, they usually equate it with benefits and high-quality expectations.
The Ritz-Carlton Brand Management
The company performs competitive analysis on visitor needs, satisfaction, and operations in order to better understand their needs and desires. It also requests opinions and suggestions from guests. By understanding consumer preferences and the shortcomings of day-to-day operations, Ritz-Carlton can easily discover, solve, and improve problems and make improvements. Ritz-Carlton communicates best practices to staff via e-mail. The Quality newsletter communicates results and improvements. The newsletter discusses what the organization is doing and what it plans to do so that staff understands the company’s direction. They understand that customer happiness is their top priority and strive to meet their guests’ needs and desires. Because the hotel has a unified brand image worldwide, the advertising campaign’s goals are standardized: (1) boost brand awareness and (2) maintain a constant positioning theme by communicating the “ultimate lifestyle customized” concept.
The hotel focuses on value and quality consistency. Because service is an intangible asset, price is an important factor in determining service perceived value. The high average hotel rate indicates a good quality of service to its consumers. Each department at Ritz-Carlton is accountable for the brand’s success. It ensures an effective flow of information throughout the hotel and fosters the sharing of important expertise and knowledge. In theory, the brand image represents the organization’s mission and values, whereas the sub-brand focuses on building different product brands. Because Ritz-Carlton targets wealthy business guests, it differs from other hotels that cater to the general public. Thus, it developed key competencies in providing the absolute best in home-like and personal service, which are tailored to the needs of business people. This has established a reputation for unsurpassed excellence and refined elegance. Customers may be willing to pay a greater premium for a more personal experience. The Ritz-Carlton mission, culture, and values are all linked to the brand. The hotel offers the best personal service, providing clients with a superb royal experience and demonstrating privileged customer class (Kalra, Ghazal, and Afifi, 2020).
Mediating Effect of Brand Attitude
Customer behavior intentions toward a brand are practically related to brand attitudes and assessments. Customers’ willingness to choose specific service providers is dependent on their general assumption about the organization. According to (Liu et al., 2017), if a brand’s attitude is more accessible and visible, information cues linked with that brand are more likely to affect a person’s decision-making process. Brand attitudes influence the choice of a brand by customers. Therefore, attitude is a stable cognitive component that can be used to predict future consumer behavior. Sense, good mood, cognition, and behavioral interaction are all important factors. Consumers’ senses can be aroused when more than one of their five senses is involved in their judgement, resulting in aesthetic enjoyment, pleasure, and contentment. For example, the flavor of food, or the aesthetic value of the hotel’s ceiling will impact brand loyalty and customer judgment of the sensory experience. The stronger a consumer’s affiliation with an organization, the more likely the consumer is to be satisfied with the company’s services, willingness to recommend and be resilient to negative reporting associated with the company.
Moderating Effects of Brand Performance
Customer attitudes toward a brand and corporate social performance may be influenced by contextual factors such as brand awareness. Though brand performance results from brand equity and brand attitude, this report looks at it as a contextual aspect that shows a brand’s marketing competency. The concept of brand performance refers to a company’s brand’s competitiveness, as measured by market share, sales volumes, and revenue. Brands’ primary goal is to establish distinctions amongst businesses that have the capacity to satisfy requirements. Nevertheless, those distinctions can add value to both the brand and its clients. For the consumer, brands serve to reduce search costs and risk perceptions. Since brands enable customers to clearly distinguish offerings, they facilitate both customer retention and loyalty as well as the addition of new service offerings, marketing initiatives, pricing policies, and positioning by allowing the brand to convey a consistent message to a target consumer segment. Brand performance is supplementary information about a brand that influences consumers’ brand attitudes by improving brand value confidence and minimizing perceived uncertainty and risk in decision-making (Sürücü, Öztürk, Okumus, and Bilgihan, 2019).
Favorable customer experiences are facilitated by the uniformity and trustworthiness of brand image and market performance. When context information does not match anticipation, customers tend to judge the target adversely rather than positively. According to research, the rise of distribution channels is among the primary drivers of luxury hotels’ good performance. But, such high performance may negatively affect the link between brand attitude and purchasing intention. Customers with high-class requirements have a negative perception of luxury hotel companies and are less likely to come back if the company uses price promotions through discount websites, according to empirical findings.
A more systematic and comprehensive brand management approach will be necessary as the market share of brands continues to grow. From a competitive standpoint, it is more important than ever to make it clear to customers what Ritz-Carlton company as a collection of tangible and intangible assets and resources stands for and does not stand for, which core values and messages the brand wishes to convey, and how problem-solving competence and brand advantages should be visualized. Strong, profitable brands require a fully established brand image and culture as part of a corporate strategic concept, rather than relying on communication parts of brand management (Gardini, 2015).
The necessary shift in the hospitality industry from a dominant operative sales and communication orientation to holistic and strategic brand and customer orientation that encompasses all stakeholders, processes and operations involved in the brand value chain is a major mindset shift that must be taken seriously by both chain and independent hospitality businesses. Global market competition has increased the relevance of customer loyalty as a strategy of achieving long-term competitive edge. Thus, management must adopt new ways to acquire the trust and loyalty of their customer base. A critical concern for Ritz-Carlton company can remain relevant for their intended target markets through their brand strategy and identities (King, 2017). Finally, Ritz-Carlton management must strive to make internet and technologies a vital business facilitator. Customers purchasing choices go far beyond mere financial luxury, allowing them to pursue a passion or identify with the brand’s image and vision. In such a digitalized and standardized environment, the company must be able to reflect the same feeling that buyers can. Though they appear to be fundamentally opposed, technological innovation and emotional involvement can be coupled to help organizations get the most out of their luxury branding initiatives.
The report has uncovered measures that influence customers value perception in hospitality and luxury brand management using Ritz-Carlton Hotels as an example. The brand elements that help build brand equity in the hospitality and luxury industry have also been identified and explained. The report provides marketers and managers with valuable insights into the dynamics of the luxury hotel market. It also provides suggestions on how to improve their marketing efforts. Marketing managers should develop a strategy that fits the needs of their consumers and promote positive messages that can stimulate higher levels of behavior.
The significance of brand attitude in mediating the relationship between brand equity and purchase intention should assist managers in appreciating the aspect of brand equity in consumers’ evaluation and decision-making processes. Since every consumer-based brand equity aspect has a varied impact on different customer attitudes, marketing activities for each facet must differ. The brand image of a luxury hotel chain is very important to the success of a hotel’s marketing campaign. Aside from optimizing the facilities and services of the hotel, marketing managers also have to ensure that their guests are satisfied.
The report places a strong emphasis on the integration of brand attitude and brand management. It is critical to consider brand attitude when designing a services portfolio as well as successful marketing campaigns. Although a consumer may associate with a certain luxury brand, hotel loyalty is still based on the consumer’s favorable attitude of service-related characteristics. Nevertheless, because a customer’s brand awareness influences their appraisal of these variables, managers should use customer product awareness to encourage favorable consumer perception of the luxury brand and, as a result, build customer loyalty.
Çınar, K., 2020. Customer-Based Brand Equity Models in Hotel Industry: A Literature Review. Strategic Innovative Marketing and Tourism, pp.281-288.
Giardini, M.A., 2015. The Challenge of Branding and Brand Management: Perspectives from the Hospitality Industry. In Tourism and Leisure (pp. 247-268). Springer Gabler, Wiesbaden.
Golubovskaya, M., Robinson, R.N. and Solnet, D., 2017. The meaning of hospitality: do employees understand? International Journal of Contemporary Hospitality Management.
Joseph, J., Sivakumaran, B. and Mathew, S., 2020. Does Loyalty Matter? Impact of Brand Loyalty and Sales Promotion on Brand Equity. Journal of Promotion Management, 26(4), pp.524-543.
Kalra, D., Ghazal, T.M. and Afifi, M.A., 2020. Integration of Collaboration Systems in Hospitality Management as a Comprehensive Solution. Integration, 29(8s), pp.3155-3173.
King, C., 2017. Brand management–standing out from the crowd: A review and research agenda for hospitality management. International Journal of Contemporary Hospitality Management.
Kunwar, R.R., 2017. What is hospitality? The Gaze: Journal of Tourism and Hospitality, 8, pp.55-115.
Liu, M.T., Wong, I.A., Tseng, T.H., Chang, A.W.Y. and Phau, I., 2017. Applying consumer-based brand equity in luxury hotel branding. Journal of Business Research, 81, pp.192-202.
Mmutle, T. and Shonhe, L., 2017. Customers’ perception of service quality and its impact on reputation in the hospitality industry.
Oskam, J. and Zandberg, T., 2019. The hospitality industry. In Hospitality Experience (pp. 66-96). Routledge.
Swani, K., Milne, G.R., and Miller, E.G., 2019. Social media services branding: The use of corporate brand names. Journal of Business Research.
Sürücü, Ö., Öztürk, Y., Okumus, F. and Bilgihan, A., 2019. Brand awareness, image, physical quality and employee behavior as building blocks of customer-based brand equity: Consequences in the hotel context. Journal of Hospitality and Tourism Management, 40, pp.114-124.
Winzar, H., Baumann, C. and Chu, W., 2018. Brand competitiveness: Introducing the customer-based brand value (CBBV)–competitiveness chain. International Journal of Contemporary Hospitality Management.