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It is natural for CEOs to constantly search for ways to leverage assets. A brand is an asset. A
decision to leverage brand equity is, of course, always a good idea but deciding how exactly to
do that should not be made without very thoughtful consideration.

The brand extension strategy has become a very popular phenomenon in the hospitality industry.
Building and managing strong brands is considered one of the key drivers of success in the
hospitality industry. This trend towards strong brands is also developing at the local as well as
global level for better market recognition.

A hospitality company can use an endorsed brand extension strategy to extend the power of well-
accepted brand identity to a number of diverse concepts differentiated by market segment. The
endorsed brand strategy puts a well-established name on a cluster of products or services. By
endorsing a range of products, the lead brand can lend its good name and image to the entire
brand family. In the hospitality industry, customers often base their purchase decisions on their
perceptions of a company's brand. That is, customers develop company brand associations rather
than the brand association of product items.

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In case of Pearl Continental there is an opportunity to leverage its brand equity when it comes to
foreigners. It¶s the onlyfront where PC is lacking its grip. Being a local brand PC has
disadvantage when it comes to foreigners¶ preference. Foreigners prefer Sheraton for staying
because it is an international brand and has brand recognition throughout the globe.

This is the opportunity which PC can avail and change the preference. But this will not be so
easy. It will be a battle against an international brand name. For this PC will have to increase its
international brand awareness.

PC will have to use both push and pull strategy in order to create international brand awareness.
They have to target both the international travel agencies and foreigners travelling to Pakistan.
The first step will be to target international travel agencies and tourism bodies. Travel agencies
of the countries whose travellers frequently visit Pakistan will be targeted. PC has to create
awareness and promote its brand to these travel agencies. This will help in creating international
brand awareness in the long run because once a travel agent is convinced, it will promote PC to
the travellers coming to Pakistan.

Simultaneously it will have to promote PC on international tourism forums. Further they have to
analyze the preferences of foreigner travelling to Pakistan. What are the key areas which they
consider before choosing a hotel to stay? After analyzing the preferences, they should analyze
their services and see in what areas of service they are lacking.

Further, the existing foreigner customers can be used as brand ambassadors to promote the brand
name in their respective countries. This can be done by giving extra ordinary services to these
customers so when they travel back they will recommend PC to other travellers.

PC should also target government of Pakistan and other multinational companies in Pakistan to
convince them to hold seminars and other functions in PC. Another advantage of attracting GoP
and multinational companies will be that they have frequent foreigner visitors.

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Long-established brands such as Hilton and Marriott have all grown through brand extensions
over the past twenty-five years. The brand-extension strategy works for the hotel industry in part
because guests choose different types of hotels depending on their purpose of travel, and a brand
extension with a familiar name allows consumers who depend on trusted brands to economize on
time and search costs.

PC should also devise a similar brand extension category as that of Marriott. Having different
hotels for different segments. This will help in attracting more customers. But the extension
should not be too much or else it will dilute brand name.