I have worked for a couple of
organizations that comprise a portfolio of brands under one
corporate umbrella, and I've noticed that there tends to be a
predictable cycle regarding brand strategies.
If the portfolio is
managed as a centralized unit, eventually a strategist will suggest
that the brands be assigned to individual managers who will be
empowered to do whatever it takes to maximize the growth of their
individual brand, up to and including competing with other brands
in the portfolio.
Typically, after a
few years down that road, the brand strategist (or her/his
successor) will decide that the group should again be managed as a
solitary unit, relegating individual brand managers to the role of
implementing a centralized strategy.
A few years later,
the cycle repeats. I call it the strategy pendulum.
I have seen virtues
and pitfalls in either direction of the pendulum, but a recent
conversation I had with Ed Fuller, president and managing director
of international lodging for Marriott International, provided some
insight into what can happen when one end of the swing really gains
Ed is the architect
of Marriott's global "billboard strategy," which avers that the
best way to interest non-U.S. travelers in staying at a Marriott
when they travel abroad is to really wow them with their Marriott
In other words, if
the JW Marriott in Shanghai is designed to draw in and impress
local Chinese residents, they will be more likely to want to stay
in a JW Marriott when they travel overseas.
described the strategy to me three years ago, and when we met up
again last week, he said it was going extremely well.
strategy sounded as if it would serve the JW Marriott, Renaissance
and Ritz-Carlton brands well, but I wondered whether it might
suppress international growth among the lower-end products in the
company's 20-brand portfolio.
Fuller said that
you could add other brands if there was a demand for other brands'
attributes, but all in good time.
"If we started out
with Courtyard by Marriott in a new country, the residents'
impression of the whole corporation is that we are three-star. That
would hurt us when we try to come in next with a JW Marriott or
when they're looking for something nicer abroad for their own
But it's not a
matter of simply putting in a high-end property first, either. In
the 1980s, Fuller said, Marriott would sometimes open a very nice
resort as their entry into a destination.
"That won't work
either," he continued. "It's fine for visiting Americans, but the
folks who live in that country's cities won't be familiar with the
brand and will have no reason to consider Marriott either
domestically or abroad. That's why we open the billboard hotels in
the largest cities first."
He outlined how his
overall approach worked in the U.K. "First we covered major cities
with high-end brands, then spread out to secondary cities with
Marriotts. Now we're introducing Courtyards in earnest in smaller
markets, and they're all doing fine."
exceptions to the pattern, he said, notably in the Caribbean.
Though the islands are independent countries with their own
cultures, they pay close attention to what's opening on other
islands, so there's no need to establish a first-presence with a
high-end brand on every island.
"In a sense, San
Juan is the capital of the Caribbean, and that's where we put up
[the billboard hotels]. On the other hand, the only hotel we have
in development on Trinidad is a Courtyard. You have to match what
the market's after."
With similar logic,
he has introduced Residence Inns outside the U.S. only in South
America "because business is done similarly to how it is done in
the U.S., and business travelers' needs for lodging are
Has he ever made a
mismatch? Brought the wrong brand to a country? Opened a JW
Marriott in Papua New Guinea, for instance, and found there were no
occasional hotel ..." He broke off in mid-sentence. "I'll never
admit to a mistake. But I can tell you one thing: We're not going
to put a JW Marriott in Papua New Guinea."
Fuller appears to
have jumped free of the pendulum strategy for the foreseeable
future or, at the very least, he's having fun discovering just how
far it can swing in one direction.