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Rosewood Extension Create a CLV model based on new hotel and hospitality industry trends using the starting assumptions and frameworks established in the Rosewood case. Marketing managers often do not...

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Rosewood Extension
Create a CLV model based on new hotel and hospitality industry trends using the starting assumptions and frameworks established in the Rosewood case. Marketing managers often do not have the luxury of textbook CLV questions where all known variables needed are provided to solve a CLV problem; instead, they must rely on a combination of prior experience and a bit of creative "playing around." You will need to "play around" with hypothetical marketing options to increase CLV.
 
Deliverable
· A short memo not to exceed 3 pages (memo format, single-spaced, 12-point font, memo format) with no limits on exhibits (tables, diagrams, etc.).
· Grading: Grading will be out of 50 points (grading outline provided below).
· You can work with up to ONE other student for the final exam. Only one submission needs to be posted. Make sure both contributors' names are on the document.
Instructions
1. Articulate a growth strategy for Rosewood for the next six years. Research demographic, social, and cultural trends in travel and lifestyle. In addition, research the hotel, hospitality, and resort industries and attempt to locate new trends (or new target market segments like Allegiant Airlines) that have a quantifiable impact on CLV. 
2. Identify and define a target segment to implement this strategy - create a segment profile. What is the value proposition? What is the positioning?
3. Build CLV models to support strategy.
1. State trends and assumptions in your CLV calculations (I.e., XYZ research indicated that Customer Loyalty programs had increased customer retention rates by 10%). These numbers need to be provided by some credible source. You must cite the source of the trends in your memo.
2. Compare the new CLV (as well as profit and total revenue) to both Corporate Branded CLV and Individual Branded CLV in Case 1. Put all tables for assumptions and CLV calculations in an Exhibits section at the end of the memo. Also, please make sure you include an Excel (XLSX) with your final memo submission showing all work. 
4. Summarize your recommendations (strategy and marketing ideas). In addition, outline marketing mix consideration and launch ideas.  Don't forget BLUF!
Submission Details
· Please post your memo as a PDF or DOCX file using this link.
· Please attach an Excel (XLSX) copy of your CLV model along with the memo.

Rosewood Extension
Create a CLV model based on new hotel and hospitality industry trends using the starting assumptions and frameworks established in the Rosewood case. Marketing managers often do not have the luxury of textbook CLV questions where all known variables needed are provided to solve a CLV problem; instead, they must rely on a combination of prior experience and a bit of creative "playing around." You will need to "play around" with hypothetical marketing options to increase CLV.
 
Deliverable
· A short memo not to exceed 3 pages (memo format, single-spaced, 12-point font, memo format) with no limits on exhibits (tables, diagrams, etc.).
· Grading: Grading will be out of 50 points (grading outline provided below).
· You can work with up to ONE other student for the final exam. Only one submission needs to be posted. Make sure both contributors' names are on the document.
Instructions
1. Articulate a growth strategy for Rosewood for the next six years. Research demographic, social, and cultural trends in travel and lifestyle. In addition, research the hotel, hospitality, and resort industries and attempt to locate new trends (or new target market segments like Allegiant Airlines) that have a quantifiable impact on CLV. 
2. Identify and define a target segment to implement this strategy - create a segment profile. What is the value proposition? What is the positioning?
3. Build CLV models to support strategy.
1. State trends and assumptions in your CLV calculations (I.e., XYZ research indicated that Customer Loyalty programs had increased customer retention rates by 10%). These numbers need to be provided by some credible source. You must cite the source of the trends in your memo.
2. Compare the new CLV (as well as profit and total revenue) to both Corporate Branded CLV and Individual Branded CLV in Case 1. Put all tables for assumptions and CLV calculations in an Exhibits section at the end of the memo. Also, please make sure you include an Excel (XLSX) with your final memo submission showing all work. 
4. Summarize your recommendations (strategy and marketing ideas). In addition, outline marketing mix consideration and launch ideas.  Don't forget BLUF!
Submission Details
· Please post your memo as a PDF or DOCX file using this link.
· Please attach an Excel (XLSX) copy of your CLV model along with the memo.

No Change to Strategy
    Year    2003    2004    2005    2006    2007    2008    2009    Sum
    Number of Nights per Stay        2    2    2    2    2    2
    Number of Stays per Guest        1.2    1.2    1.2    1.2    1.2    1.2
    Revenue per Night        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ 1,003.67
    Revenue per Customer        $ 1,800.00    $ 1,908.00    $ 2,022.48    $ 2,143.82    $ 2,272.46    $ 2,408.81
    Gross Profit per Customer        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX
    Less: Cost of Customer Acquisition    $ XXXXXXXXXX
    Less: Annual Marketing Cost        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX
    Cash Flow from Customer    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX
    Probability of Being Retained    1    1    0.1667    0.0278    0.0046    0.0008    0.0001
    Expected Cash Flow        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ 2.50    $ 0.46    $ 0.06    $ XXXXXXXXXX
    Discount Factor    1    1.08    1.1664     XXXXXXXXXX     XXXXXXXXXX     XXXXXXXXXX     XXXXXXXXXX
    NPV of Expected Cash Flow from Customer        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ 1.84    $ 0.32    $ 0.04    $ XXXXXXXXXX
Change in Strategy
    Year    2003    2004    2005    2006    2007    2008    2009    Sum
    Number of Nights per Stay        2    2    2    2    2    2
    Number of Stays per Guest        1.3    1.3    1.3    1.3    1.3    1.3
    Revenue per Night        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ 1,003.67
    Revenue per Customer        $ 1,950.00    $ 2,067.00    $ 2,191.02    $ 2,322.48    $ 2,461.84    $ 2,609.54
    Gross Profit per Customer        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX
    Less: Cost of Customer Acquisition    $ XXXXXXXXXX
    Less: Annual Marketing Cost        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX
    Less: Additional Marketing Cost        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX
    Cash Flow from Customer    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX
    Probability of Being Retained    1    1    0.2167    0.047    0.0102    0.0022    0.0005
    Expected Cash Flow        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ 6.04    $ 1.39    $ 0.34    $ XXXXXXXXXX
    Discount Factor    1.00    1.08    1.17    1.26    1.36    1.47    1.59
    NPV of Expected Cash Flow from Customer        $ XXXXXXXXXX    $ XXXXXXXXXX    $ XXXXXXXXXX    $ 4.44    $ 0.95    $ 0.21    $ XXXXXXXXXX
Answered 1 days AfterMar 12, 2022

Solution

Parul answered on Mar 13 2022
63 Votes
Introduction
Rosewood Resorts as well as Hotels is a business that incorporates twelve establishments all across the world. Prior to 2004, the organisation was managed with individual
anding strategy, but recent series of events like incorporation of a new President and CEO, have the company considering a strong corporate
and strategy. The company seems to have encountered a major ba
ier with cu
ent
and strategy that leaves them conflicted with the overall idea of their customer not completely comprehensible and cripples’ overall mission of the
and.
Essence of the Case
Rosewood, operating in the hospitality business essentially believes that they can develop a recognizable corporate
and which can attract customer foothold and generate tremendous loyalty from their guest which can in turn enhance the bottom-line, support profitability and advance revenues for the business. This can only take place if company looks in building strong lifetime value of the customers.
    Yea
    2003
    2004
    2005
    2006
    2007
    2008
    2009
    Sum
    Number of Nights per Stay
    
    2
    2
    2
    2
    2
    2
    
    Number of Stays per Guest
    
    1.2
    1.2
    1.2
    1.2
    1.2
    1.2
    
    Revenue per Night
    
     $ 750.00
     $ 795.00
     $ 842.70
     $ 893.26
     $ 946.86
     $ 1,003.67
    
    Revenue per Custome
    
     $ 1,800.00
     $ 1,908.00
     $ 2,022.48
     $ 2,143.82
     $ 2,272.46
     $ 2,408.81
    
    Gross Profit per Custome
     
     $ 576.00
     $ 610.56
     $ 647.19
     $ 686.02
     $ 727.19
     $ 770.82
     
    Less: Cost of Customer Acquisition
     $ -150.00
    
    
    
    
    
    
    
    Less: Annual Marketing Cost
    
     $ -130.00
     $ -133.90
     $ -137.92
     $ -142.05
     $ -146.32
     $ -150.71
    
    Cash Flow from Custome
     $ -150.00
     $ 446.00
     $ 476.66
     $ 509.28
     $ 543.97
     $ 580.87
     $ 620.11
     
    
    
    
    
    
    
    
    
    
    Probability of Being Retained
    1
    1
    0.1667
    0.0278
    0.0046
    0.0008
    0.0001
    
    Expected Cash Flow
     
     $ 446.00
     $ 79.46
     $ 14.16
     $ 2.50
     $ 0.46
     $ 0.06
     $ 542.65
    
    
    
    
    
    
    
    
    
    Discount Facto
    1
    1.08
    1.1664
    1.259712
    1.360489
    1.4693281
    1.5868743
    
    
    
    
    
    
    
    
    
    
    NPV of Expected Cash Flow from Custome
     
     $ 412.96
     $ 68.12
     $ 11.24
     $ 1.84
     $ 0.32
     $ 0.04
     $ 494.52
By leveraging a strong corporate
and, Rosewood can develop strong competitive advantage over their rivals. The primary challenge with their present
anding is lack of awareness and poor Go-To market strategy. Hence, it makes it all the more important for Rosewood incorporate the fundamental customer engagement program and
anding for better market penetration. If Rosewood needs to blend their
and that can attract more guests will select their hotels over the rivals. With the new growth strategy, they will be able to enhance the cross-selling and up-selling rate. According to data shared in excel, corporate -
anding strategy came out to be 10%-15% higher in the cross-selling rate since it will advance around 40% of their customers. Furthermore, we compare the overall numbers with those of individual-
anding' up-selling and cross-selling rate by 5% to 10%
Growth Strategy for Rosewood...
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