immersive experiences. Tiffany & Co. is a good example of a brand that is faltering somewhat as a result of its loss of focus on service. By trying to serve different tiers of customer in the same location (something that no luxury brand has really succeeded in doing), it has tarnished the captivating experience from its consumers’ perspective. On the other hand, Rolex has supported the continued appeal of its product with investment in after-sale services that extend the relationship with the customer and enhance interactions with the brand. This extends to personalization too; people’s willingness to pay top dollar comes with an expectation that special efforts will be made to accommodate them. This makes investing in employee management, examining the brand’s promise in a service context in excruciating detail, and training employees to deliver accordingly, all vitally important. While positive service experiences are often attributed to the particular service person involved, negative experiences are most often attributed to the brand. Get all of this right, and you can charge what you like.
Hospitality Combined = more individual?
There’s nothing new about guests looking for hotels with a distinctly individual feel. But we’re seeing new approaches from hotel operators and developers anxious to meet the needs of demanding, wellheeled consumers. Partnership with big name fashion icons is the current favorite. We’ve known about Ritz-Carlton’s association with Bulgari for some time, but this year we’ve seen Marriott hop into bed with Ian Schrager to create the new Edition boutique hotel. Armani also opened its first hotel at the start of 2008 in a venture supported by Emaar Hotels in Dubai. Other entrants into the sector, such as Ikea, and even the rapper, Jay-Z (under J Hotels), confirm that hospitality is a natural stretch for lifestyle brands. The result, of course, is an increasingly aggressive market in which establishing new brands is becoming more difficult. That’s on top of tougher economic conditions in general. Fewer people are travelling due
to recession fears and rising oil prices – especially in the US and Western Europe. So it is more important than ever for hotels to ensure their brand has a clear proposition that matches consumer expectations. A surplus of rooms across the sector makes brand the critical factor in driving choice. The green issue is another hot topic. But the winners in this year’s ranking have moved beyond encouraging guests to re-use towels and to reduce their use of water and energy. Marriott’s microturbine farm in New York catches the eye – it’s the first hotel in Manhattan to use ultra clean technology to provide its own electricity, cooling, and heating on site.
Food Health, wealth and packaging
The “perfect storm” of rising oil prices, economic decline, and pressure on land through increased population and affluence has put serious price pressure on food companies. The heightened cost of commodities has been passed on to consumers in an attempt to stay profitable. To justify the hike, larger brands are seeking innovative ways to keep their products relevant and available. New packaging choices and brand extensions, new distribution channels, acquisitions to increase product access, and partnerships to get the products onto the shelves have all enabled brands to get in front of all consumers. In response, consumers are being more selective with their spending. Healthier foods have become a major priority. Marketing focus has shifted towards the healthier products in a portfolio in an attempt to bolster credentials. This is also backed up with real product development, as the big brands follow the success of niche players in this area. As well as leading to acquisitions, the quest for new, differentiated products, formulations, and formats has led many companies to increase their research and development budgets. In addition to reactive measures at home, all the brands featured have pushed hard in overseas markets.
Restaurants Better for everyone?
Healthy eating is the dominant theme in the restaurant sector. No surprise here, but we’re not just talking about concerns over obesity in Europe and North America. Restaurants are diversifying menus to attract customers with improved nutrition and reduced fat content. And many governments are introducing new legislation relating to health issues, such as a ban on trans-fat. Sourcing natural ingredients has been an obvious response to demands for healthier meals. It seems inevitable the sector will turn green sooner rather than later. Diners are increasingly concerned about the environmental impact of eating out, and the growing trend to support local farmers, manufacturers, and restaurants looks set to continue. Brand owners will have to manage their sustainability credentials increasingly carefully. In the race to respond to changing consumer lifestyles, the big brands are exploring a variety of options. We’ve seen a rapid rise in the fast-casual segment. “To go” options from casual dining restaurants present one of the fastest growing segments in the US, eating into market share from fast food brands. Grocery chains and even convenience stores are offering meal replacement options with food cooked in store. McDonald’s is poised to stretch its brand and introduce premium coffee bars with lower price points across the US, an interesting move given predictions of a production deficit in global coffee markets and increasing prices this year. But it’s still a clear challenge to the likes of Starbucks. Starbucks isn’t sitting still however, and has introduced breakfast sandwiches in a bid to connect with the eating habits of its customers. The question remains: is Starbucks diluting their brand by going too far? Store closings and decreased sales seem to indicate so. In an interesting aside to the health craze, brands like McDonald’s and KFC are planning aggressive expansion into emerging markets. China and India are especially attractive given their growth potential.
Best Global Brands 2008
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