Global Branding

GLOBAL BRANDING

1.  Executive Summary 2.  Background:

i.  The Business ii.  The Brand to be Globalise/Regionalise

3.  Analysis: i.  Global Environment ii.  Regional iii.  Potential Countries Comparison iv.  Destination Market

4.  Strategies: i.  Luxury Segmentation & Positioning ii.  Luxury Market Entry iii.  Key Challenges iv.  Global Brand Objectives v.  Brand Pyramid vi.  Country Marketing Programmes

5.  Budget and Schedule 6.  Control Methods 7.  Conclusion

1. Executive Summary

1.  Impiana Hotels & Resorts is a Malaysian home grown group established in 1994 by its chairman Datuk Seri Ismail Farouk Abdullah.

2.  The group currently owned and/or managed five in Malaysia and three in Thailand

3.  Created it’s latest business hotel, the Premiera brand located at Menara Mara

4.  Impiana is not yet truly a global brand in terms of physical properties presence but a brand which known globally in the travel and hospitality industry.

5.  Thailand, in particular Phuket, is chosen as the destination to regionalize the brand for the luxury segment

2. Background - The Business

1.  Impiana Hotels & Resorts Management Sdn Bhd (IHRM), is Asean’s leading luxury boutique and award winning 4-Star collection of hotels, resorts and spas.

2.  The group first property was the Subang International Airport Hotel in the 1980s. Today, the properties serves mid to top-tier travellers and is defining a new standard in the hospitality industry.

3.  Under the brand name IMPIANA, the Group manages and owns three city business hotels & a resort in Malaysia, two resorts (Patong, Phuket & Koh Samui) and a Private Villas (Kata Noi, Phuket) in Thailand. The city business hotels are set in premium business locations and the resorts, in spectacular beach front.

4.  Impiana KLCC voted as “Top Customer Choice 2012 in Malaysia” in HotelClub Hotel Award 2012


• Impiana KLCC

• Premiera Hotel Kuala

Lumpur

• Impiana Ipoh Ipoh

Impiana Business Hotels

Impiana Resorts & Villas

• Impiana Resort Cherating

• Impiana Resort Patong • Impiana Private Villas Kata

Noi Phuket

• Impiana Resort Chaweng Noh

Koh Samui


1.  The Group owns an award winning 5-star spa, namely Swasana Spa. Swasana Spa well acclaimed plush wellness retreat specializing in Asia’s treasure trove of spices to create a holistic tranquil body and mind experience for guests.

2.  Swasana Spa are located in: 1.  Impiana KLCC Hotel Kuala Lumpur, 2.  Impiana Resort Chaweng Noi 3.  Impiana Resort Patong


1.  The group previously provided hotel development consultancy services to 3 hotels in Putra Jaya until the government decided not to proceed with the hotel construction due to Asia Financial Crisis.

2.  The group also provided services that was the completion of one hotel in Port Dickson and Kuala Lumpur that were subsequently taken back by the property owners

3.  Hotel management team comprises of foreigners and locals, led by the brand owner himself whose career began in the hotel industry before becoming a businessman


2. Background - The Brand to Be Globalise / Regionalise

1.  The brand to be regionalized is IMPIANA a name derived from the Malay word “Impian” which means dreams.

2.  Its first resort property is located in Cherating, Kuantan and hence it adopted a blue color shell logo. The “shell” blue logo was changed to gold color in 2004 to reflect an image of upmarket or premium for its city business hotels and resorts.

3.  As Impiana’s business is in hotels, resorts and spas, its services levels as well as its properties offerings in terms of facilities, décor, and comfort are critical to its brand.

4.  Impiana first regional venture was the acquisition of a 2 star resort in 1995 that subsequently was re-branded to be a 4 star resort property

Gannon and Johnson (1995) suggest expansion strategies of such global chains falls into three main groups:

1.  Asian hotel companies had relatively few properties 2.  European Chains - more international than Asian 3.  American Chains - least international

Internationalisation and size are not related. Some hotel chains have decided to be represented outside their home country as a matter of deliberate policy and others have concentrated on their home market. Hotel Development in Southeast Asia and Indo-China / Aug 2000 http://www.hotelonline.com proposition: 1.  Hotel chain penetration will be greatest by Asian chains, followed by

European, and then American. 2.  Hotel chain market entry is most likely in those countries that provide

the highest potential return at the least perceived risk. 3.  Hotel market entry mode will reflect the perceived level of return and

risk.

3. Analysis - Global Environmental

However, there is evidence to suggest that hotel companies do not rely solely on these general criteria but take account of other specific factors. For instance, hotels do not solely rely on internally generated demand:

1.  Occupancies may be greatly influenced by international travel behaviour.

2.  It may also be the case that criteria used to determine general market potential, such as market receptivity, are not deemed significant for hotel market entry.

Dunning and Kundu (1995) identify a number of industry specific variables such as size and nature of host city, availability of appropriate inputs such as labour supply, and economies of supply. Ref: Dunning, J.H. and Kundu, S.K. (1995) The Internationalisation of the Hotel Industry, Management International Review, 35:2, 101 - 133 Dunning, J.H. and McQueen, M. (1982) Transnational Corporations in International Tourism, UNTC: New York


Other studies have adopted a qualitative approach to entry mode choice by hotel chains: 1.  Saunders and Renaghan (1992) investigated hotel development by

interviewing 28 hospitality executives working in Southeast Asia. •  They stress the potential importance of socio-cultural

difference. •  In their view, it is this factor that will ultimately ensure the success

or failure of an American or European chain's market entry strategy.

2.  Zhao and Olsen (1997) also identified socio-cultural concern as one of

eleven factors influencing entry mode choice. •  Other external (i.e. country specific) factors were political,

economic, technological, and ecological. •  They also found some factors, which they described as task

environmental factors, namely competitors, customer, property location, partner characteristics and human factors.


Hotel chains have to make a basic decision as to whether to have representation in a country or not. There are a number of ways for countries to be indexed in terms of their potential for market entry such as The MSU-CIBER Index.

3. Analysis - Regional

China emerges as the most attractive country for hotel entry. Korea is an attractive country for general investment, it is less attractive to hotel chains; whereas Thailand is more attractive to hotel entry than general investors. Indonesia has the least potential in both cases. MSU-CIBER = Michigan State University – Centre for International Business Education and Research

Hong Kong Malaysia

China Thailand

Singapore South Korea

India Philippines Indonesia

1 owned 2 joint venture 3 franchised 36 contracts

1 franchised 29 contracts

16 contracts

27 franchised 28 contracts

High

RETURN

Low

Low RISK High

3. Analysis - Regional

Relationship between Entry Mode Choice and Country Risk and Return

•  Management contracts are by far and away the most dominant form of entry. •  Franchising is significant in those countries that have the highest risk and

lowest return, which may reflect this mode's characteristics.

3. Analysis - Potential Countries Comparison

THAILAND VIETNAM INDONESIA

Population 66.72 million 87.84 million 73.6 million

GDP per capita income

2698.41 USD 757.40 USD 1206.99 USD

Religion & Cultural Forces

•  89% Thai/Thai Chinese

•  34.2% Northeastern (Isan)

•  33.7% Central •  18.8% Northern

•  14.0% Thai

Chinese

•  13.3% Southern •  11% Other (incl.

Malay, Khmer, “Hill tribes”)

•  86.2% Kinh (Viet)

•  1.9% Tay •  1.7% Tai •  1.5% Muong •  1.4% Khmer

Krom •  1.1% Hoa •  1.1% Nung •  1% Hmong •  4.1% Others


Political Stability or Risk

7.0 High Risk

4.3 Moderate Risk

6.8 Moderate Risk

Crime Index Safety Index

40.53 59.47

53.02 46.98

40.49 59.51

International connectedness (by major airlines)

Thai Airlines

Good

Vietnam Airlines

Low

Garuda Airlines

Fair

Language Thai Vietnamese Indonesian

Climate/ Tourist Months

Peak: Nov -Apr Low: Jul-Aug

Peak: Jul-Aug, Low: Nov-Mar

Peak: Dec-Jan & Jul-Sep

Low: Feb-Jun

Currency Baht Dong Rupiah

Currency Exchange Rate 1MYR

9.44334 THB 6,885.05 VND 3,197.63 IDR



Slogan Amazing Thailand

Vietnam Timeless Charm

Wonderful Indonesia

Number of tourists between 2011 to 2012

Increased by 16%

(22 million)

Increased by 13%

(6.84 million)

Increased by 9.24%

(7.65 million)

Tourist spent/day

50 USD 105 USD 140 USD

Tourist length of stay

9 6 3

Country Major attractions

Bangkok, Pattaya, Chiang Mai, River Kwai, Phuket Island, Koh Samui Island and Krabi.

Ho Chi Minh City, Dalat, Nha Trang, Danang, Hoi An, Hue, Hanoi and Halong Bay

Jakarta, Lake Toba, Bali, Medan, Ubud, Kuta, Seminyak, Yogjakarta, Nusa Dua, Bandung, Medan


�  2012 is the 5th year since the Global Financial Crisis (“GFC”) began �  Although prices of hotel properties in many locations in Europe and

the USA have fallen, they remain unattractive to Impiana. �  Impiana is concerned with the rate of return on its investment,

inability to manage faraway properties, declining global demand which affect occupancy and other hotel revenue

�  Manpower issues- although most global countries face high unemployment, the right talent is difficult to recruit.

�  As a result of the GFC, capital is still difficult to raise to partly fund the new hotel

�  The political stability is uncertain if unemployment rate continue to rise

�  Hence, Impiana chooses to expand in a growing market, ie. Phuket

3. Analysis - Impiana Regional Expension

1.  Population of 503,000 million (as of 2013) local Thais.

2.  Highest per capital income in country

3.  Tourists growth in Phuket impressive over last 20 years (see chart ___)

4.  Tourist spent in dollars and length of stay highest in the region (see chart ___)

5.  Religion & Culture: the majority of the population is Buddhist, but there is a significant number of Muslims (30%). Buddhists – moderate, caring, “sabai-sabai”, hospitable…

6.  4Ss attractions, liberal and tolerant government policies

7.  Ease of access – direct flights from many major tourists originating countries to Phuket

3. Analysis - Destination Market : Phuket, Thailand

8.  Tourist arrivals in Phuket grew__% over the last __ years compared to other destinations in Thailand (see chart ___)

9.  Despite no of rooms grew by___ over __ years, occupancy remains attractive (see chart__)

10.  Average room rates for 5 star hotels and resorts have grown from __ in 20XX to ___ in 20XX (see chart__)

11.  Large pool of well-trained employees in the industry



Phuket continues to be an attractive destination after Tsunami because it is politically stable and relatively safe from compared to Bali. Phuket is well known compared to resorts in Vietnam which still lack depth and variety in terms of entertainment, shopping and services.


Phuket has a wider range of liberal attractions compared to Bali, offer fun to all segments of tourists. Phuket is a strong brand known worldwide.



Stronger growth in Phuket: 2010: 30% cf 2010 > 44% cf 2009 For Bali : YTD May 2012 growth rate of 8% year-on-year Bali infrastructure problems have slowed its growth.


Infrastructure development plays a very important role in making a destination attractive to tourists. The on-going projects and projects proposed have a direct positive impact on the tourists, thus making Phuket even more accessible. The value / size of the projects signify the growing importance of Phuket as a tourist destination

The GFC has affected / reduced many tourists from European countries China accounted for 22% of tourist arrivals in Phuket. There are 1,020,000 millionaires in China (US$1.6M up) and 63,500 “super-rich” Chinese (US$16M) The average Chinese millionaire is 39 years old, and 60% of them are male, 50% are business owners, 20% are professional investors, and 15% each are real estate investors and high-level senior executives.


Phuket International Airport, gateway to Phuket Island, a paradise for tourists in the southern part of Thailand. 10 airlines are on service, 27,000 flights and 12,000 tons of cargo per year are handled at the airport. Direct flights from Shanghai, Beijing, Guangzhou, Chengdu to Phuket

ARR in the luxury segment held on well in 2011 / 2012 and outperformed the overall market despite GFC and fewer arrivals from Europe. Hence it seems the luxury segment is not that price sensitive given the limited number of rooms in this segment ( 9% of all segment rooms supply). > This is the segment targeted by Impiana


A healthy growth rate of 9% between 2013-2016 . However, the luxury and upscale segment account for 29% and 9% respectively only It allows Impiana an entry into the luxury segment of ARR between US$300-US$400, boutique resort with 50 rooms, costing some US$400K (RM1.2M) per room

Physical Positioning Impiana aims to differentiate from its competitors by offering a smart mix of conventional with minimalist cum modern in its designs and finishings used for rooms, public areas, food & beverage outlets.

Each suite has its own spa and massage private rooms, and opens to a private pool that is also connected to a larger pool should the guests like to swim full length.

In-house dinning served from its own private kitchen that also house a personal cigar and wine cellar. The suite is technologically advanced and operable using tablet.

4. Strategies - Luxury Segmentation & Positioning

Perceptual Positioning Excellent service is a subjective or relative matter. Impiana aims to set a new bar for service standards. All service staff (including an assigned butler on call 24 hours) will be trained to serve every guests are royalty. The food and beverage served will be of the highest quality (and famous luxury brands). A selection of wines. The suites will also be “oxygenised” to give it constant freshness. Reserved the same suite for returning guests.

4. Strategies - Luxury Segmentation & Positioning

1.  Target Product – Product designed to redefine the meaning of luxury resort and spa experiences

2.  Target Market - Premium guests- individuals or small corporate groups with a minimum stay of 3 nights and spend of US$300- US$400 per room night

3.  Goals Of The Target Market - Guests seeking a different hospitality experiences whether on holiday and/or business

4.  Mode Of Entry – Fully owned property for brand and capital appreciation, with a hotel management contract for operating performance delivery, flexibility & control

4. Strategies - Luxury Market Entry

The Entry Strategy is based on the following decisions:

5.  Time Of Entry – Decision to enter is made after qualitative and quantitative factors are met and property can deliver brand promise. Target opening early Q3 to target year end holiday travelers (Q4) and corporate meetings at start of new year (Q1)

6.  Marketing-mix Plan - Pre-determined guest-mix in terms of country of origin, Rooms revenue mix and F&B spent

7.  Performance Control Check – comparison of marketing mix vs industry vs comparable properties, qualitative and quantitative controls (see PPT #14.)

4. Strategies - Luxury Market Entry

1.  World Economies 2.  Stability of Selected Country Political & Economy 3.  Tourist Arrivals 4.  Construction Cost & Completion Control 5.  Funding availability - Capex, Pre- and Post-opening 6.  Market-Mix, Revenue Forecast 7.  Culture, Religion, Financial and Taxation system 8.  Staff of different backgrounds, experience, core values 9.  Recruitment & Training 10.  Service Standards 11.  Reshaping service delivery, sales & marketing mindsets 12.  Delivering the brand physical and perceptual

positioning

4. Strategies - Key Challenges - Uncertainties

�  The company’s business depends on local and foreign guests. Expanding globally allows it to enjoy economies of scale, attract foreign and local talent (who are attracted to chain properties) and diversify its business risks

�  The brand has to be recognized not by its logo but a clear brand promise and tagline which are currently missing. Previously, the brand promise and tag line was “Rest Assured. Always”.

�  Rest Assured is a promise to the guest that no matter what their needs are (sound sleep, fully equipped meeting facilities, high service standards, delicious meals, wide variety of beverages etc), they can be assured the needs will be met always. It is fulfilling, coherent and consistent delivery aimed at all points of guests contacts

4. Strategies - Global Brand Objectives

The 5 steps to making the Impiana brand strong:

LOW

HIGH

Like

lihoo

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att

ract

and

re

tain

/rep

eat g

uest

s

4. Strategies - Brand Pyramid

Regular personalized follow up even after guests checked out

Offers product and emotional benefits –as per physical and perceptual positioning

Strict measure of actual delivery. Extensive use of testimonies of highly satisfied guests and repeat guests

Communicate only those who can afford to indulge without asking price as luxury is assured

Communicate only those who can afford to indulge without asking price as luxury is assured

Bonding

Advantage

Performance

Relevance

Presence

Programs Pre-Opening

Post-Opening

International Trade Shows & Travel Agents Y Y

Local (Thailand) Trade Shows & Travel Agents Y Y

Local Press Releases, Advertisements , Bill Boards Y Y

Foreign Advertisements Y Y

Guess & Be My Guests -Quiz on Air Y Y

Hotel Intimate Joy Hunt Y

Hotel Opening Cocktails Y

Corporate Sign Up Programs Y

Happy Business Happy Family Membership Y

Online Challenge Deals Y

4. Strategies - Country Marketing Programmes

ACTIVITY BUDGET

BUDGET RM

(MIL)

MONTH (M)

1-6 7-12 13-18 19-24 25-28 29-33 34-36 36-42

Feasibility 1.0

Consultancy 5.5

Land Acquisition 20.0

Construction 50.0

FFOE 6.0

Pre-marketing 2.5

Pre-opening 5.0

Operating 5.0

5. Budget & Schedule

6. Control Methods - Quantitative

ACTIVITY BUDGET

BUDGET RM

(MIL)

MAJOR COST COMPONENTS TO CONTROL

(sub-budgets)

Feasibility 1.0 Internal, experts, travelling

Consultancy 5.5 Architects, M&E, C&S,

Land Acquisition 20.0 Acquisition cost, Authorities

Construction 50.0 Building development, ID, Landscape

FFOE 6.0 Furniture, fittings, operating equipment

Pre-marketing 2.5 Sales trips, collaterals, websites, agency, advertising & promotions

Pre-opening 5.0 Staff, training, operating cost

Operating 5.0 Staff cost, selling cost Gross Operating Profit (GOP)

Room Revenue & Occupancy

Average Room Rate and Occupancy vs Industry and comparable hotels

FOCUS AREAS PARAMETERS MEASURE &

CONTROL

Local Customs & Culture Turnover rate,

Hotel Building & Facilities Layout, easy access, completeness of relevant facilities, operating efficiency

Customer Facing Staff – F&B, Front Office, Housekeeping, Recreation

Service standards , Communication skills

F&B Outlets Menu- variety of food & drinks, Interior Designs, Layout,

Sales & Marketing Guests -mix in terms of country of origin, individual vs corporate mix, efficiency response

On-line Booking Social Media Tracker, Tripadvisor

Reservation and paid bookings Number of clicks, likes, posted comments, compliments & complaints

Guests Satisfaction Guest Satisfaction Survey

6. Control Methods - Qualitative

7. Conclusion

�  Today’s environment is not static but highly dynamic.

�  GFC demonstrated the volatility of business and socio-cultural implications might also affect entry mode decisions.

�  Hospitality industry specific variables such as size and nature of host city, availability of appropriate inputs such as labour supply, and economies of supply are equally important for consideration

�  Hotel projects typically take three years from conception to opening, during which time country and market conditions may have changed dramatically.