Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Case Study

Rocky economy can't derail train company Add to ...

THE CHALLENGE

Rocky Mountaineer is a British Columbia-based, family-owned luxury train line, which offers travel through some of the most spectacular scenery in Western Canada. As a premium priced travel brand, the company was forced to reexamine how it did business during the recent economic downturn, which caused an industry-wide reduction in discretionary consumer spending.



During this time, other prestige train travel companies around the world experienced major volume and revenue declines, and competitors such as cruise lines resorted to heavy discounting in an attempt to bolster business.



Rocky Mountaineer came under strong pressure from travel trade partners to join the discounting. This is a familiar story in many industries. Companies throw strategy out of the window - doing anything that will generate short-term revenue. This often includes a great deal of deep price discounting, which may or may not help in the short-term, and nearly always causes fundamental long-term problems for the brand.



THE BACKGROUND

The Rocky Mountaineer management team did not panic. Instead, they went back to their core brand values, and did further research to better understand their core target customer, and motivations for choosing a multi-day, premium-priced, unique travel experience.



Fundamentally, they refused to join the discounting frenzy. Rocky Mountaineer understood that this would devalue their brand and cause major long-term problems. Instead, they underwent a wide range of specific, targeted activities from counter season promotions in the Australian market, to a B.C.-Based campaign focused on persuading residents to try the one-day trip to Whistler, B.C. in order to encourage word-of-mouth recommends to friends and families.



Perhaps the most daring and successful element of the campaign involved the innovative partnership with ABC's "The Bachelorette" TV show, which put Rocky Mountaineer in the spotlight during two episodes in June 2009. This greatly raised awareness and interest in the important US market.



Throughout this series of activities, the company focused on a positive, innovative and concerted strategy to share its story and brand value. Rocky Mountaineer was the little engine that could - the little engine that zigged when the rest of the market zagged.



THE RESULTS

At a time when major competitors in the prestige train travel and cruise ship markets saw volume and revenue drop, and during a major economic recession, Rocky Mountaineer's business grew. The vast majority of Rocky Mountaineer's customers are international travellers, and they were persuaded to come by a focus on telling the company's unique story and an emphasis on the brand experience.



The company's innovative campaigns saw a strong rise in direct bookings. Furthermore, given the longer planning and decision cycle time of premium, long-haul travel, it is likely that there will be a continued positive halo effect for the following years. This will be amplified by the positive word-of-mouth from the growing number of new customers that have experienced the brand in this recent growth period.



It is exciting to be able to witness and report a brand building success story like this. But why do more companies not take this approach? They panic. They become reactionary. They let competitors or other outside forces drive their decisions. They abandon their brand positioning.



The moral of the Rocky Mountaineer story is to understand what your brand stands for, develop a clear value proposition and understand your target audience intimately. Then, you can be flexible about the initiatives that you take, knowing that they will always be informed by clear values. This will guide your organization on what you should and should not do with your brand, regardless of changing external circumstances.



Rocky Mountaineer is the BC Chapter of the American Marketing Association's 2010 Marketer of the Year Award winner. Paul Cubbon sat on this year's BCAMA MOY judging committee.

Paul Cubbon is a Marketing Instructor at the Sauder School of Business and Robert H Lee Graduate School at the University of British Columbia

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Your Business website.

 

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular