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Brand management in the hotel industry: from company to network brand.
Opportunities and limits of networking for small-sized hotels
Aureli S. - Forlani F. - Pencarelli T.
Ancona – 17/07/2014
THE 13th INTERNATIONAL CONFERENCEOF THE SOCIETY FOR GLOBAL
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Agenda
1. Background and objectives and of the study
2. Literature review
3. Methodology
4. Findings from empirical analysis
5. Concluding remarks
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Background
� Importance of intangibles resources in the tourism sector and the hotel industry in particular (Pencarelli and Gregori, 2009; Krambia-
Kapardis and Thomas, 2006; Nemec and Mihalic, 2007; FitzPatrick et al. 2013).
� Brand is a key success factor and source of competitive advantage which leads to revenue (O’Neill and Mattila, 2004, 2010; Hong-
bumm Kima and Woo Gon Kim, 2005; O'Neill and Carlback, 2011).
� Doubts about SMEs’ capability to design and manage a brand (is brand management a too complex activity?)
� Italian SMEs collaborate through consortia, associations, product clubs and network contracts to attract customers; sometimes creating brand alliances (Aureli and Forlani, 2013).
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� RQ1 – Do small-sized hotels consider hotel brand a key success factor?
� RQ2 – Do small-sized hotels devote attention to brand management?
� RQ3 – What’s the role of hotels’ networking strategies in brand management?
Research Questions
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Literature review:Brand and Brand Management
� Brand is a name, sign, symbol, etc. used to identify the seller’s products and distinguish them from those of its competitors (Kotlerand Scott, 2002) which embodies tangible and intangibles attributes that are relevant for the customer
� Brand management refers to the process by which the brand is laden with meanings and the combination of actions carried out to maintain and improve the brand’s reputation and distinctiveness (Pratesi and Mattia, 2006) :
- Design of the brand identity
- Brand positioning
- Brand Marketing and Monitoring
- Brand architecture
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Literature review:Brand usage in tourism
� Attention on how the hotel brand relates to the brand of the chain, association or network the company belongs to and to the brand of the destination (Pencarelli and Splendiani,
2008; Pencarelli, Betti and Forlani, 2009; Aureli and Forlani, 2013).
� When territorial/place brands are consonant with the local business actors’ values and brands, the effectiveness of the marketing policy of these businesses augment and the potential benefits achievable increase
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Literature review:Networking strategies among
tourism actors
� Italian hotels are used to collaborate but mainly informally or through consortia, associations and product clubs; whereas abroad we can find large multinationals and multiple brand affiliations (Bailey and Ball, 2006; Lomanno, 2010)
� One of the key benefit of brand affiliation is obtaining a strong brand which translates into higher occupancy rates deriving from customers attracted by the hotel chain brand’s promises
� However individual hotel owners need to be sure that the chain’s branding strategies are appropriate for its property (O’Neill
and Mattila, 2006) -> brand consonance
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Methodology
� Focus on the Province of Rimini
� Identification of formal networks through the national dataset of the Chambers of Commerce -> one network contract named “Made in Rimini-Holidays” formed in May 2013 by three hotel consortia (network of networks)
� “Made in Rimini-Holidays” groups more than 100 hotels, which represents about 10% of the total lodging offer.
� Random selection of three hotels for each consortium
� Face-to-face, semi-structured interviews with hotel owners/mangers at each hotel premises
� Topics investigated: HOTEL BRAND; BRAND MANAGEMENT; NETWORK PARTECIPATION
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Hotel characteristics
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Selected hotels :- are exclusively three- and two-star hotels (50% each)- run by owners- small-sized: with less than 50 rooms (63%) or a number of rooms comprised
between 50 and 100 (37%); employing less than 20 people- targeting mainly Italian tourists (foreigners represent 12% of total guests)
The three consortia are:- “Hotel Tipici Riminesi” (Typical hotels of Rimini) which groups hotels located in
some fractions of Rimini aiming to promote themselves and the territory where they are located emphasizing the local traditions and culture, make joint purchase and offer staff training to the associated hotels
- “Torre Pedrera Hotels” which groups hotels located in a fraction named Torre Pedrera aiming to promote this specific area by providing information about lodging firms, public services and events to both tourists and inhabitants
- “Piccoli Alberghi di Qualità” (Small Quality Hotels) which groups hotels located in Rimini and other nearby cities (Riccione, Cattolica, Misano) aiming to improve their efficiency and combine it with the local culture of hospitality (small family-run hotels with high quality standards)
Findings
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11111113Hotel brand popularity (international)
21111114Hotel brand popularity (national)
23224454Hotel brand popularity (local)
54554545Impact of financial resources on brand popularity
43443533Brand as key success factor
RQ1 – Do small-sized hotels consider hotel brand a key success factor?
5-point Likert scale (1= strongly disagree; 5= strongly agree)
- Small hotel owners consider hotel brand an important key success factor whose popularity strongly depends from the amount of financial resources invested.- However, hotel brand is scarcely recognized sometimes even in the local area of Rimini.
Findings
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5,00%20,00%5,00%2,50%2,50%7,00%3,00%3,00%Financial investments in promotion (% of annual turnover)
Content management
on FB, Twitter,
Google+; partecipation
to the consortium's websiste and
other local tourism portal
(i.e. Riminibeach)
; seasonal greatings; trade fair
participation
Content management
on Hotel website, FB, creation of
newsletters; limited
advertising on
newspapers
Advertise on free press;
content management
on Hotel website, FB,
Twitter, Pinterest, Google+;
participation to the
consortium's website and local tourism portals (i.e.
Riminidamare)
Content management
on Hotel website, FB,
Flickr, Twitter,
Youtube; promotion on the local free
press and internet portals
Renewal of the Hotel website;
presence on the tourism
portal "Rimini beach";
presence on OTA
(Venere.com, Booking.com), FB, Twitter
Theatrical setting, use of mascot
representing the summer;
content management
on Hotel website, FB,
Pinterest, Google+; seasonal greetings
cards; trade fair
participation
Content management
on Hotel website, FB,
Twitter; presence on Travel web
site (Tripadvisor
& OTA); advertising
on newspapers;
trade fair partecipation
with the consortium
Content management
on Hotel website, FB,
Youtube; trade fair
partecipation(alone and
with the consortium)
Activities carried out to support the hotel brand
Systematic use of logo in
hotel communication; payoff: "A small jewel just a few steps from the sea"
Registered trademark; familiar and
easy to remember
name; payoff: "Your house by the sea"
Revision of the logo to evoke the sea and summer
(inserting a boat and the
sun)
Revision of historical name to
communicate the concept
of beach and the sea
Revision of historical name to
emphasize hotel's
location by the sea
Improvement of historical
logo and hotel name
from a brand management perspective;
seasonal slogans
NoRevision of the historical name in the
phase of requalificatio
n and enlargement of the hotel
Brand identity system (Logo, Naming, Payoff)
YesYesNoYesNoYesNoNoCreation of a brand identity to communicate the hotel
RQ2 – Do small-sized hotels devote attention to brand management?
Findings
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- Creation of a brand identity is rare: three hotels declare to have created it, but they are not always able to describe its components (which are absent) nor they have identified the intangible attributes associated to the brand; moreover hotel name have all historical roots linked to personal owners’experiences
- Management activities are limited to web marketing, social network communication, advertising on traditional media and internet. They are not implemented with the aim to exploit hotel brand but they are more similar to traditional promotional activities.
Findings
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Rimini is a large city;
the fraction indicates customers
that the hotel is walking distance from the
beach
Emphasize hotel's
location in the city of Rimini and not in any
of its fractions
Rimini is the hotel location
Rivazzurrabecause it is the specific
hotel's location
Rimini is the hotel location
Rimini has a greater visibility
while Torre Pedrera is small and not well known
To highlight the area around
Rimini and its
characteristics
(tranquillity)
Torre Pedrera is a very quiet place and
its image is more
consistent with the hotel's target
Reasons for the choice of the territorial brand
Miramare -fraction of
Rimini
RiminiRiminiRivazzurra -fraction of
Rimini
RiminiRimini Torre Pedrera –Rimini –
Romagna's Coast
Torre Pedrera –Rimini's
Coast
Territorial (place) brand associated with the hotel
Piccolihotel diqualità
Piccolihotel diqualità
Hotel TipiciRiminesi
Hotel TipiciRiminesi
Hotel TipiciRiminesi
Torre PedreraHotels
Torre PedreraHotels
Torre PedreraHotels
Network participation
Hotels’ brand architecture does not emerge as the outcome of an analytical process
Findings
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Creating a strong network brand is not a priority in hotels’ networking strategies. Nor hotels seem to question about brand coherence (with one exception)
No, the two brands are placed side
by side
No, high investments are needed to achieve this effect
No, the two brands are placed side
by side
No, however it could be a benefit if it
works like for hotel chains
No, however the network
brand represents
an opportunity
NoYesYes, if the network brand
functions it will prevails
(like for hotel chains)
In customers' perception, the network brand replaces/could replace the hotel brand
21111131Network brand popularity (international)
21111232Network brand popularity (national)
33234552Network brand popularity (local)
Yes concept of co-
branding
NoNoNoNoNoNoNoChanges in brand management derived from/after the collaboration
To inform customers about the quality of
small hotels by using the
network brand; Share experiences
and problems
To increase and
communicate hotels'
quality; to strengthen the whole
category of small hotels
in Rimini
To increase the capacity
of communicati
on; Cost savings; Create
activities and services for
guests (guided tours)
To differentiate
from competitors;
Create events and activities for
clients; Reduce costs
First to enhance the territory, its
traditions and products; Second to
participate in trade shows; Cost savings
Cost saving; Communication and trade
fair participation; Use of the booking portal
Promotion and
commercialization (with
on-line booking); To liven up the fraction of
Torre Pedrera
Cost saving, promotion
and marketing;
More recently also internationali
zation
Reasons for joining formal networks with other tourism enterprises
RQ3 – What’s the role of hotels’ networking strategies in brand management?
Findings
� In hoteliers' opinion the network brand does not increase their recognizability nor it could replace individual hotel brands in the customers’ mind.
� What occurs for hotel franchising chains is considered impossible by the majority of respondents because it would require too much financial resources and it is believed to works only for proprietary chains.
� Hotels communication and hotel brands mainly leverage on the brand of the territory where they are located underestimating the opportunities deriving for synergies with the network brand.
� In conclusion there are several challenges for small-sized hotels at both the organizational and network level and several potential improvements to achieve.
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Limitations & Future research
� Results are limited to the case studies here analyzed and the local area investigated.
� Future research steps will involve a greater number of hotels and possible comparisons with medium-sized and large hotels of the same tourism destination could be help identify possible difference due to hoteliers’ personal mindset and managerial approach.
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Info and contacts:
Ancona – 17/07/2014
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[email protected]@uniurb.it