#brandedhouse

[buyinghouses]

buying houses, buy house, global-jobs.com, https://www.global-jobs.com

[jsmackie-blog-blog]

Starwood’s Successful House of Brands

Brand architecture matters. A well executed architecture can allow a single firm to effectively appeal to multiple different market segments with targeted offerings. However, a poorly executed architecture can potentially lead to ineffective product lines and dilute or damage the parent brand.

The hotel industry is a particularly interesting case study in brand architecture. It is striking that although major hotel chains such as Starwood, Marriott, Hilton, IHG and Hyatt largely target the same consumers, they occupy a range of positions along Aaker and Joachimsthaler’s Brand Relationship Spectrum (from House of Brands, to Endorsed Brands, to Branded House). 

In my view, the hotel industry is particularly well suited to a "House of Brands" strategy, and one of the most successful exponents of this strategy is Starwood. Starwood has established an independent set of nine unique standalone brands (including St Regis, W, Westin and Sheraton) that each appeal uniquely to a particular market segment. This strategy allows Starwood to: 

Target its value proposition: Tailor its value proposition to a particular niche segment (for example, Starwood’s W brand effectively targets “trendsetters” with its stylish decor and lighting, hip restaurants and “downtown” locations);

Avoid incompatible brand associations: The House of Brands strategy allows Starwood to avoid incompatible brand associations. For example, Four Points could adversely affect the aura of luxury and exclusivity of St Regis if the brands were linked, and the House of Brands avoids such associations.

By contrast, Hyatt occupies a position at the other end of the Brand Relationship Spectrum, pursuing what is primarily a “Branded House” strategy (Andaz is an exception). In Hyatt’s case, the Hyatt “master brand” operates as the primary driver across its many hotel offerings.

While this offers certainty and consistency for the consumer, it has drawbacks. In particular, it limits the ability of Hyatt to differentiate its product and target different niche groups of travelers. While I’m certain that I’ll stay at a W when I want something trendy, a Westin when I’m travelling on business and (hopefully) a St Regis for my honeymoon, I certainly don’t have the same clarity about when I’d choose to stay at a Park Hyatt, Grand Hyatt or “regular” Hyatt. 

In hotels, the House of Brands reigns supreme.