Naked Retreats: Evolution of a Brand

Naked Retreats, a hotel management company that adhered to a localized brand positioning strategy, made its debut in the Chinese hotel market in 2007. To allow customers to experience the restorative effects of closeness to nature, it launched Naked Stables, the first resort in China to have obtained a Leadership in Environmental Energy Design (LEED) Platinum certification. The founder of Naked Retreats, Grant Horsfield, was a South African who felt deeply connected to nature. Horsfield subsequently launched a series of explorative projects related to holistic living, including catering, education, and a co-working space. While the brand had success in some areas of its brand extension, it experienced failures in others. In 2018, Naked Retreats must decide whether to continue its horizontal extension or to focus on its most successful projects.

The case is suitable for an undergraduate or a graduate-level marketing course that helps students to understand brand extension and to analyze the key factors influencing strategic corporate-level decision making. The case is also suitable for courses on brand management, strategic management, or hotel management. By studying Naked Retreats’ process of brand establishment, brand extension, and diversification, students are expected to achieve the following objectives:<ul><li>Describe the development process of the boutique hotel industry in China over recent years as well as the state of market competition.</li><li>Analyze the initial motivation of entrepreneurs, and explain the logic entrepreneurs employ to advance a brand’s core value.</li><li>Identify and examine the connection between entrepreneurs’ initial motivation and a brand’s core value.</li><li>Define the two types of brand extension strategies: vertical and horizontal.</li><li>Assess the benefits and risks of each strategy, and describe the relationship between corporate decisions on brand extension strategy and brand life cycle.</li><li>Outline the critical factors that determine the success or failure of a brand in the process of vertical and horizontal extension, and analyze the internal and external factors affecting horizontal extension.</li><li>Explain how to adjust corporate strategic planning for the sake of adapting to rapidly changing macro and micro environments, particularly when the extended product itself has changed in the process of brand development.</li></ul>

• brand extension, lifestyle platform