Banyan Tree Hotels and Resorts had undoubtedly achieved a distinctive position in the luxury resorts industry. One of the main challenges that lay ahead of the company was how it could retain its competitive advantage to safeguard its market position.
Though Banyan Tree enjoyed a prominent status among its competitors when it first started out, with time it has been facing increased competition from various contenders offering similar products and services.This paper attempts to focus on some aspects of how Banyan Tree has achieved its leading player status in the luxury resorts and spa market in Asia and how it can leverage its strengths and unique competencies to deal with its market rivals. Blue-Ocean Thinking and The Market Nicher: It is interesting to note how Banyan Tree’s founder hit upon the idea of creating an innovative niche product in the luxury resorts market. He created a product that had no direct competitors at that time.The value proposition of exotic individual villas providing romantic and intimate escapades for guests at an untapped price range was unique, innovative and something the industry had never offered before.
In my opinion, this would be Blue-Ocean thinking. Subsequent to its inception, Banyan Tree focused on its target customer segment which was high-end wealthy customers looking for exclusive luxury holidays. Banyan Tree knew exactly which customers they wanted to target and carried out its brand positioning accordingly.The advertising was very minimal to maintain“exclusivity” and it was carried out in top-of-the-line travel magazines that targeted its preferred customer segment. It never went in for a mass market strategy by selling through wholesale and retail agents.
It became so successful and profitable owing to the fact that it ended up knowing its target customers so well, it met their needs better than other giant chains such as Hilton and Shangri-La. The major risk Banyan Tree was now facing was that its market niche was being attacked and the onus was to expand and protect its niches.Multiple niching could be an option wherein it could develop its strength in two or more niches. In line with the Blue-Ocean thinking of Banyan Tree’s founder, as a suggestion, it could perhaps also offer guests an option of “Natural Health Restaurants” to complement their rejuvenation at the resorts, providing exclusive healthy meals designed along naturopathic principles extracting the medicinal value from local herbs and spices. Brand Values and The Feel-Good factor:Another key differentiator or Point-of-Difference for the positioning of the Banyan Tree brand could be its emphasis on environmental conservation. It has all along focussed on minimizing its impact on its location’s natural eco-system.
With climate change and “going green” being watchwords gaining prominence, they could perhaps weave this concept into their marketing programs giving it more awareness. A second factor that could provide marketing mileage is how Banyan Tree supports the local communities in its locations by providing them employment, business opportunities and hence, a better standard of living.For prospective customers, there is nothing like providing a “Feel-Good” factor as a bonus while on a luxurious holiday, and by letting them in on the above two factors, Banyan Tree would certainly achieve this. In conclusion, Banyan Tree has always seemed to have gotten things right throughout its journey in so far as to even completely isolate its mass market brand “Angsana” from the parent brand lest it gets diluted. What remains is how they use their strengths and innovative thinking to consolidate their position in the highly competitive luxury resorts market.