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Rosewood Case Study Analysis Revised Copy

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Rosewood case study Analysis
The Rosewood case study analysis compares the change in Customer Lifetime Value (CLTV) of
the new brand strategy from the no-brand strategy. Excel software has been used to conduct the
analysis. To obtain the Present Net Value (NPV) of expected cash flow from the customers using
the new brand strategy on CLTV, we have used 125000 as the new number of guests. The
following calculation was carried out.
Annual Marketing Cost per Customer for 2003, it will be (total number of guest x Average
Marketing Expense per Guest (2003) + 1000 000) / total number of guests. In this way, we obtained
$ 138. From 2004 to 2009, we multiply the Annual Marketing Cost per Customer of the previous
year by 1.03 to obtain for the current year.
“Additional Marketing Cost per Customer” for each year from 2004 to 2009 was calculated as 3%
of the previous year, whereby for 2003 was calculated as (1000 000/125 000).
Data management and analytics fee per customer” for the current year was calculated as 1.04 of
the previous year, whereby $ 9 was assumed to be the fee for 2003 and (1.04 x previous year fee)
was used to calculate that of 2004 to 2009. The "cost of an inflight advertising campaign with
Delta Air" for each year was kept constant at $ 5.
The total Net Present value of CLTV (for the new brand strategy) after all the costs were calculated
reflected $ 465.40 per customer. Further, this resulted in an $ 87 increase in CLTV per customer
as a result of a new marketing plan compared to the value of CLTV with no change in brand
strategy. The new brand strategy increased the average retention rate of guests by 5% (from
16.76% to 21.67%). Further, the new strategy resulted in a $10,863,142.53 increase in profit, while
revenue increased by $33,947,320.41. Hence the New brand strategy has increased the CLTV for
Rosewood Hotels and Resorts by a significant margin, and therefore it is advantageous.
Some of the possible reasons for the reduction in customer acquisition cost from $150 to $125
with the new brand strategy include; Increased number of customers as a result of new brand
strategy, and hence the average acquisition cost per customer goes down. The inflight advertising
campaign with Delta Air has also created business awareness of the business to more customers,
increasing the number of customers visiting Rosewood Hotels and Resorts.
Building consumer awareness perception of the Rosewood Brand, the management should
continue financing for massive advertisement with $ 1 million every year for at least five years.
Rosewood should also fund the Delta Air inflight advertising campaign for the same period of five
years, and this will ensure that a large number of potential consumers are a way of the brand.
Improving booking, including cross-property stays in Rosewood Hotels and Resorts, can be
initiated by offering discounts for all clients who achieve at least three bookings or cross-property

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Surname 1 Student name Professor’s name Institution Course Date Rosewood case study Analysis The Rosewood case study analysis compares the change in Customer Lifetime Value (CLTV) of the new brand strategy from the no-brand strategy. Excel software has been used to conduct the analysis. To obtain the Present Net Value (NPV) of expected cash flow from the customers using the new brand strategy on CLTV, we have used 125000 as the new number of guests. The following calculation was carried out. ‘Annual Marketing Cost per Customer’ for 2003, it will be (total number of guest x Average Market ...
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