Section 1: Company Mission/Vision/Values
Hilton Hotel Corporation, now known as Hilton Worldwide, was founded in 1919 when Conrad Hilton purchased his first hotel in Cisco, Texas and is now headquartered in McLean, Virginia. Hilton Worldwide is the third largest hotel corporation in the hospitality industry. At the end of 2017 the company had 14 different brands to offer its multiple different market segments. Of the 14 brands, there are over 5,200 properties in 105 countries (Hiltonworldwide.com, 2018).
Hilton’s website states their mission is “To fill the earth with the light and warmth of hospitality by delivering exceptional experiences – every hotel, every guest, every time” (Hilton.com, 2018). In order to do this they use their hotel name “Hilton” as an acronym to spell out their company values. These values are being Hospitable, having Integrity, being Leaders (both in the industry and community), Teamwork, Ownership (both in properties and actions), and Now (sense of urgency and discipline) (Hilton.com, 2018).
Section 2: Current Marketing Situation
For example, Hilton is one of the first in the hospitality industry to allow guests control their entire stay from their mobile devices, tablets and computers (Rouhani, 2014). To achieve customer satisfaction, Hilton maintains a relationship with its customer before and after a customer visits a hotel to foster a more personalized relationship.
Over 23 million stayed at least one night in a Hilton hotel in 2017 (statista.com, 2018). With 14 different brands, Hilton offers a wide variety of price and accommodation segments to offer its guests. There are themed hotels, extended stay hotels, luxury and economy hotels. Hilton has many competitors.
Competitive Analysis Worksheet
2017 Gross Revenue
2017 1-Year growth
# of properties/locations
- 6,500 properties
- 5,200 properties
Wyndham Worldwide Corporation
- 8,400 properties
- 600 properties
Basis for Position (e.g. product leadership, cost leadership, innovation, core competencies, etc.)
Differentiation/Cost leadership: Caters to multiple different market segments by offering different pricing structures
Product Innovation: Digital hospitality which focuses on guest experiences and their privacy using digital technology.
Product Leadership: world’s largest point based vacation ownership company.
Cost leadership: Lower prices to serve economy and middle class guests as well as the rise of traveling millennials
Product Diversification: new market and new products. New offerings of personalized travel experiences to high end travelers
Hilton has many factors that will affect the marketing plan such as the demographic, economic, environmental, technological, political and social-cultural trends. The market trends are the preferences of consumers to purchase a product based on features and accessories. Basing one’s future product development and manufacturing activities on market trend projections can be risky, but it is also an integral part of becoming an industry leader (Root, 2018).
Furthermore, Hilton has effectively achieved a high level of service customization via technological integration. These include a partnership with Uber to create a seamless travel experience for customers, introduction of digital hotel room keys integrated into customer smartphones, an ability to select rooms and customize the hospitality experience using smartphones and others. Although other hotel chains appear to be following this suit, Hilton still retains the first mover advantage in this important direction.
Multi branding strategy enables the company to pursue multiple market segments. Full service hotel brands are operated through Hilton Hotels and Resorts. The multiple brands qualify Hilton to compete across different price segments, lifestyles and offer differentiated services to attract consumers seeking variety. Having multiple brands enables the company to develop products related to a particular market segment, sales and merchandising and differentiating its products from its counterparts to gain competitive advantage.
Total Occupancy worldwide was 75.5% in 2017 (Statista, 2018).
Section 3: Target Market
Because of the unique way that the hotel industry is designed, a unique approach to market segments and target markets must be used. Hilton is a global brand, which advertises globally for a product, and contrastingly, specific to its geographic location. While some customers travel the world, different geographic backgrounds affect where people travel just as money and life-stage do (Sattel, 2016).
The industry is divided into two main groups: business and leisure travelers. Within these groups, there are various sub-groups. For example, “bleisure” travelers are travelers who mix their business with a vacation and another group as Sattel terms it “ethical travelers,” who base their vacations on the ethical factors concerning a location or brand (2016).
The largest differences between segments are geography and life-stage/generation. These segments vary from leisure to business. Within the business travel category the biggest segments consist of traditional business guests aged 26-65 and “techie male business guests” aged 41-50 and place a high importance on being connected while away (Murphy, 2005). Within the leisure category, life stage is a bigger determining factor. Leisure travelers generally breakdown into three groups: Solo/backpackers, couples, and families. While geography can determine where these segments will travel, these segments have consistent needs (Capozzi, n.d.).
Generational differences seem to correlate with demographic and psychographic attributes. For example, Millennials will go for a leisure trip based more on localized experiences than opting for an all-inclusive hotel or resort package (Brown, 2017). While Millennials are younger people aged 21- 37 (Dimock, 2018) they are also more likely to choose adventure and a “social media worthy experience” (Silver 2017). Older families in contrast, prefer to stick to traditional hotel brands and are more likely to choose an all-inclusive type of vacation (Sattel, 2016).
Another profitable segment in the business aspect of travel is groups/conference attendees. This segment is usually rigid in its travel plans and looks for hotel loyalty to build a relationship within the business-to-business side of travel (Meier, 2017).
Of all of the aforementioned segments, Millennials—both solo and couple travelers—should be the primary focus of future marketing campaigns. The Millennial segment has the largest buying power of any generational segment. They are also the segment more likely to use non-traditional accommodations when traveling. Hilton does offer a product, Tru, to focus in on
According to the latest annual report by Hilton, “Tru by Hilton is a new brand designed to be a game changer in the midscale segment. By focusing on the brand’s three key tenets of simplified, spirited and grounded in value, every detail of the property is crafted for operational efficiency and to drive increased guest satisfaction—from the activated, open lobby to the efficiently designed bedrooms. As of January 31, 2017, Tru had 383 properties in the pipeline or in various states of approval. The first property is expected to open in the second quarter of 2017” (Hilton, 2017).
As Greenburg states in Silver’s article, “If we attract young people, old people will show up. But if you build a hotel for old people, young people never show up.” Furthermore, by appealing to the Millennial segment, Hilton can convince the experience seekers to come back to a traditional brand and at the same time not worry about losing the traditional travelers in the process. This focus should not be a global segment, but separated into geographic segments. Millennials in Europe are more likely to travel abroad for vacation compared to Americans (Sattel, 2016). This means Hilton should market themselves differently to Millennials in different regions to be the most effective.
While the Millennial generation is also the generation more likely to use a sharing-economy service like Airbnb, they conversely prefer staying at a hotel (Montevago, 2018). The Millennial target market is also made up of more affluent individuals and families. These people have more money to spend on their travel; both business and leisure. They will have the psychographics that fit the risk-seeking, try new things, and social person attributes. In the VALS system these would be the experiencers and achievers. This adventure, Millennial segment will only grow in the next decade. It will require a different approach when compared to advertising to traditional guests, but has the potential to be the most profitable.
Section 4: Strategic Marketing Plan Objective
Increase customer awareness of all brands by 4% by the end of 2020.
From the analysis of the marketing strategy adopted by Hilton Hotel, it is evident that in order to achieve success, Hilton should be focus on middle-income, Millennial aged people worldwide. This would include emerging markets as well as developed nations. However, there are various improvements that can be initiated in the current status of the hotel so that it increases the scope of the customer base, but also enhances its competitiveness. Below are some of the areas that hotel should focus on as way of fostering its competitiveness:
Hilton Worldwide has generated over 5,000 properties in 105 countries (Hilton Worldwide, 2018). Hilton Hotels should take advantage of the willingness to travel by Millennials and desire for experiences when advertising each hotel brand. Hilton Worldwide would be looking to increase this advertising campaign, which can run into 2020 or perhaps beyond with a reassessment after two years. It should be noted that the market of UK and China are facing issues because of economic uncertainty and new projects are stuck in pipelines (Quaintance, 2017). However, this can be overcome by directing customers to the already successful properties in those locations until the new products are up and running.
Increase sales year-over-year by 3% for the next two years by advertising to middle-income Millennials aged 25-35.
Studies analyzing the general populations globally indicate the emergence of huge numbers of middle class income earners in the developing economies and emerging economies (Luck & Lancaster, 2003). The focus of this objective should be the growing number of tourists from developing and emerging economies, as they are the largest growing middle-class (Enz, 2009).
Furthermore, middle class tourists travel evenly throughout the year unlike the high-end travelers that mostly travel during specific times of the year and holidays. This presents an opportunity that will guarantee high customer turnout throughout the two-year plan. As a result, introduction of services targeting Millennial middle-class earners will enhance profitability of Hilton Hotels.
All in all, Hilton should prioritize advertisements directed towards Millennial middle-class customers with a strong desire for experience. A selling point for Hilton should be its prolific use of the newest technology, which can be used during all stages of the buying process. With this focus, there should be an at least a 3% increase in sales year-over-year into 2020, as this is the average of Hilton’s revenue growth.
Section 5: Product Strategy
Travel trends are constantly changing. What consumers need one day could completely change the next day. It is the industries job to predict these changes and implement these changes to stay competitive. Millennial travelers make up around one third of all the world’s hotel guests and by 2020 it is reported that that percentage will be over fifty percent (Stein 2016). Millennials are spending less on physical items and spending more time and money on experiences and traveling. Millennial travelers are also more environmentally conscious and look for ways to give back to the world. Hilton which is normally known as a luxury hotel company is planning ahead by introducing new brands to their already successful lines of hotels to accommodate this new category of travelers.
One of Hilton’s newest brands is “Tru by Hilton”. These new hotels were founded in 2016 and are designed to compare with lower end hotel brands like Comfort Inn and La Quinta. The rooms are smaller but more space efficient. There are no desks in the room as these new hotels have a large lobby that is designed for work, games, lounging or eating. There are board games, video game systems and interactive games in the lobby to encourage guests to relax and interact with each other. Breakfast is offered for free and comes with over 30 different options that include healthier breakfast choices. Tea, coffee and hot chocolate in a variety of flavors is also complimentary 24 hours. All the Tru brand hotels have free WiFi, charging stations throughout the hotel and free wireless printing.
As of the beginning of 2018 there are only 44 of these uniquely branded hotels that are up and running and they are all located in the United States (tru3.hilton.com, 2018). There are 102 hotels signed and 30 more in other stages of development across the U.S. “More than 40 percent of all U.S. hotel stars are within the midscale and economy sectors and Tru by Hilton addresses a gap in this marketplace by appealing to the youthful mindset demographic (Hughes, 2017). The hotels themselves are very modern looking and everything inside is bright and colorful.
Technology is a big deciding factor when consumers are choosing a hotel. As technology changes so will the consumers expectations. Most guests will bring smart phones, tablets and laptops and expect their rooms to have Wifi. Advanced technology such as digital wall art, mobile apps for room control and virtual reality are the future for the hospitality industry. These new technologies make guests stay more personalized and more like home.
Section 6: Pricing Strategy
The pricing strategies are considered to be of immense importance as they help in increasing the number of the customers for an organization. The pricing strategies bring out the differentiation between the services offered by the competitors of the concerned hotel within the targeted market segments. It is supposed to be very important for any firm to look upon the desired pricing strategies along with the products features it increases the satisfaction of the customers. The pricing strategies used by most businesses are divided into four broad categories within the framework of pricing strategy matrix: economy, penetration, skimming and premium pricing strategies (Prestholdt, 2017).
Figure: Pricing Matrix
Economy pricing strategy involves selling products of basic features and characteristics to consumers with low budgets. Penetration pricing strategy, on the other hand, involves offering high quality products and services in low prices than the competition in order to increase market share. Skimming, as a pricing strategy is opposite to penetration in a way that products and services are offered in a higher price levels than the competition. The main rationale for the choice of skimming pricing strategy may include the desire to associate products or services with exclusiveness and a high quality.
The premium pricing strategy involves charging high level prices for products and services that are perceived to have excellent quality and additional characteristics and features. From the above strategies provided above, we can specify the type of pricing strategy adopted by Hilton Hotels & Resorts can be specified as premium. Hilton only offers five star and four star rooms and the company is able to charge its customers at premium levels because beyond the core product, Hilton also ‘sells’ a set of intangible benefits such as sense of achievement, high status and luxury.
Having different pricing strategies are important because it makes sure that the prices of services given should be competitive in the hotel business. The management considers cash and early payment discounts by following the policies underplayed. Seasonal and flexibility pricing are also looked into to enable the business to be fair in their prices throughout the year.
The recent global financial recession greatly affected the business of the hotel lowering its profits significantly. As a measure to handling the effects, the hotel introduced seasonal pricing where the price of services in the hotel are reduced during low season and raised during high season (Enz, 2009).
The flexibility of the hotel’s prices is determined by the profile of its customers. Potential customer classes also receive special prices as a means of retaining them as customers (Enz, 2009).
This is a common approach in most subsidiaries of the hotel. The locals are offered services at lower costs as compared to tourists. This is done as a way of utilizing its global coverage and brand image to maximize its profits.
It is recommended that the pricing strategies should be as per the expectation of the clients and should be affordable for them. Moreover, the analysis of the prices offered by the competitors is important. Development of the framework for the determination of the effective pricing strategies will help in expanding the business process of the firm.
Section 7: Distribution Strategy
The ultimate aim of the distribution strategy for a hotel firm can be defined as making available the products and services to consumers where, when and how they prefer them. Hilton Hotels and Resorts distribution strategy heavily relies on information technology and Internet in various formats. Firstly, the official website of the company serves as an effective platform for service distribution as it is supplied with a wide range of features and capabilities providing practical assistance to customers such as booking a room, planning events and weddings, scheduling meetings and booking airport pick-ups.
Additionally, the distribution of Hilton Hotels and Resorts products and services is also facilitated through mobile convenient applications made available for IPhone and Android platforms. Social media is adopted as another effective instrument by Hilton Hotels & Resorts in distribution of its products and services. For example, the official page of the company in leading social networking website, Facebook has been ‘liked’ by more than 405,300 people who receive latest news about the company and special offer announcements through the website.
The main reason behind the selection of Internet platform as the base of Hilton Hotels and Resorts distribution strategy relates to a wide range of conveniences associated with Internet. Internet presents Hilton Hotels & Resorts customers with the possibilities of purchasing products and services in advance on the go and within a timeframe of a few seconds.
Section 8: Marketing Communications Strategy
Hilton Hotel may aim to achieve certain marketing communication objectives in order to attract the desired target market. As mentioned earlier, the target market for the hotel group is business and leisure travelers. The AIDA (attention, interest, desire and action) model shall be followed. In the first stage- Attention- the primary objective shall be brand awareness where the travelers must be made aware of the top notch services of the hotel.
In the second stage- Interest- the objective is to generate interest among the target consumers using customer ratings, videos of hotel infrastructure and amenities and graphics on the website. The third stage-desire- shall help in making the products and services desirable. Hilton Hotel may aim to create an emotional connection by following strategies such as immediate response on social media sites. In the last stage- action- Hilton Hotel may increase engagement by using marketing channels across emails and inbound phone calls (Applegate, Piccoli, & Dev, 2008).
The marketing mix or promotional mix is the interaction with its prospective customers using the various tools such as advertisements, personal selling, public relations, direct marketing and sales promotion. Both traditional and integrated marketing communication tools shall be used. The brochures shall be distributed by the travel agents so that the consumers who book through them are aware of the hotel. Email marketing and blog marketing may be used to generate interest among the target consumers. Further, social media sites such as Twitter and Facebook shall help in creating an emotional connection (Eggleston, 2012).
Another promotion strategy is Push or Pull marketing where Push marketing means promoting the product or services towards the target customers. Pull marketing works on establishing a loyal following towards the brand and drawing the customers for the services or products. Hilton Hotel may apply pull marketing where loyalty of the customers shall be enhanced (Capozzi).
The Unique selling proposition (USP) needs to be the strength of the hotel industry. Hilton shall manage to offer similar service as competitors with a keen focus on customer satisfaction. The experienced management team is the USP where the customers shall be assured of high quality amenities and services at the hotel.
The media plan needs to be directed towards the potential customers and generate new ones at the same time. There are various choices such as print media, television, social media pages and other websites. The goal of Hilton Hotel marketing is to increase the reach of brand. Print media or brochure shall be distributed by the tour and travel agents thereby increasing reach of the brand. The new customers may be increased using social media sites such as Twitter and Facebook.
The following schedule shall be followed in the first year of marketing for Hilton Hotel:
Section 9: Marketing Program
MARKETING PROGRAM: Service Component
The Hampton Inn properties, which are one of Hilton’s more successful brands, currently implements a 100% guest satisfaction, in which the stay is completely free if the customer is not 100% satisfied. The 100% Guarantee gives people the confidence to stay at the properties and return in the future. The 100% Guarantee, which began in 1989, continues to be a key driver of incremental business for the brand and 30 percent more guests are likely to be loyal and return (Hilton, 2014).
During the first ten years of the Guarantee, the brand saw $6 million in free rooms given away, but was able to track $41 million in repeat business over the same time (O’Brien, 1999). Offering this Guarantee in other brands will create awareness in those particular brands as well as the company as a whole. People will gravitate towards any brand that offers this Guarantee because of the confidence that the company has in that product, and the company is willing to offer a full refund to prove it.
Mobile Customer Satisfaction Surveys
Reaching out to customers after their stay is important to measure customer loyalty. Sending guests surveys after their stay will show that the company cares about their product and/or service and are always looking at ways to improve them. Normally these surveys are sent through email by random selection. Hilton can look at sending these surveys through text message with the guest’s approval. This will help in getting feedback about the properties and it will make the subscribers feel valued and included in the companies’ plans to improve, thus increasing customer loyalty (SMS, 2017). Offering an incentive to fill out these surveys will help with the engagement and feedback. The incentive can also help with repeat customers if the incentive is geared to the customer’s next stay at the property.
Hilton’s loyalty program is one of the best in the hotel industry and is one of the main reasons that they maintain their customers. The loyalty program offers free night stays, airline miles and the opportunity to shop online, either through their Hilton Honors Online Store or through Amazon. Having a loyalty program such as this one has many benefits such as drive repeat sales, lower customer acquisition cost, reduce discounts to customers and it increases the average order value (Forer, 2017). The Hilton Honors application has a ‘contact function’ that allows guest to talk about their stay, give app feedback, call Hilton Honors or make a reservation, which are good qualities to help with loyalty. Focusing more on the Hilton Honors program and offering more incentives, such as additional Hilton Honors points for stays, will create more awareness with the customers and entice them to try more of their products.
Section 10: Financial Plan
With the main objective of targeting Millennials and increasing our brand awareness internationally within the 25-35 age group, our financial backing will consist of increasing the marketing budget and extending ad campaigns to advertise Tru, as that is the product most relevant to this segment.
Instagram influencers are a great means to this goal and according to Lexie Carbone, the average cost for a sponsored post by an Instagram influencer with more than 100,000 followers is $1,000 for one post, or around $3,000 for 5 posts and a blog mention (2018). As the goal is for a longer term advertising campaign, $3,000 a month for a partnership with an Instagram influencer is reasonably accurate.
Hilton’s advertising budget has been decreasing over the years. The advertising budget for Hilton dropped from $269 million in 2012 to $189 million. As this is only 1.7% of the annual revenue in 2014, it is safe to say that another push toward the 2012 marketing levels would be sufficient for Hilton’s marketing needs as well as within reasonable marketing budget standards (Statista, 2018). Furthermore, the average marketing budget for large corporations, such as Hilton is anywhere from 6%-12% of annual revenue (Flannagan, 2016).
As Millennials have the largest buying power of any consumer segment, this allocation of funds would be justified with the goal of increased sales from this segment. Moreover, Tru is a relatively new brand for Hilton and an increase of marketing for a new brand is always needed. As there is a reputation with Hilton, increased marketing needs will be required to allow customers to place Tru in the same reputation status as Hilton’s other products.
It is important to note, that our other competitors have larger marketing budgets in relation to their annual revenue, and to properly compete with them, Hilton must narrow the gap in the marketing budget (Hilton, 2018).
Section 11: Marketing Metrics
Generally, the financial perspective is to improve shareholder value, with revenue and profit growth as a goal, enabled by enhancing customer experience and leveraging value-added services to retain them. Hilton Hotels continuously revises its cost structure and engages in smart growth all around the world, especially in the USA, which has remained a long-term productive strategy for the chain.
Hilton Hotel is known for its premium quality and service, its focus remains on the quality of service, which can never be compromised. Therefore, the public relations officer continues to implement strategies designed to develop and maintain long lasting relations with loyal customers.
Internally Hilton tries to adopt the latest technology, update their services, improve customer management process, achieve the excellence and optimal level of service and become a socially responsible brand name in Hotel segment.
Hilton Worldwide knows that having motivated team and employee’s will only serve and take the brand to the new heights, to achieve this corporation invest millions in training and maintaining the quality. It is important to have every kind of license to provide A to Z facilities in their premium-selected hotels.
The increase of revenues in Hilton Hotels has been as a result of attracting many customers from diverse parts of the world. It is important to note that the number of customers it attracts mostly determines the amount of revenue in a hotel company. This means that incase the number of customers coming to a particular hotel declines, the revenue of the hotel will also decline. Hilton has been able to maintain the number of customers through its operation management principles and franchisee fees.
It strives to strengthen the relationships with customers by addressing key issues and concerns, successfully responding and proactively forecasting for future resolutions. The operations in Hilton are efficient in terms of costs, contract terms, marketing strategies and common objectives. This enables the company to expand faster because capital acquired is used to build and maintain a global distribution network and infrastructures.
As technology and world economy develops, the hotel industry is expected to experience great change, competition, and greater need for coordination and integration. While branded distribution companies will continue to emerge, worldwide competition is expected to stiffen; however, the operating efficiencies and planned growth in profitability of the brand will enable Hilton to maintain its status as the world’s leading hotel company. Its capability to apply cutting-edge customer data technology, matchless market expertise and provide high quality guest services has contributed to its current success. All the same, how to develop as well as train personnel and retaining able workers, and to enhance their operations, further to enhance company operations, should be the future key concerns for Hilton in this competitive market.
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Answer:- INTRODUCTORY Eldo center cafeteria is aregistered commercial Cafeteria thatserves customers’ needs found in St John of Murdock Hospital in Perth, Australia (Shown in appendix ii). The Hospital deals with Emergency response for patients center area. Its reputation is known in providing excellent services as one of the private campus found in Western Australia. For a long time the hospital as served clients located in sou...Read More
Answer: Advantages of e-commerce There are number of views being given by different authors in regards to the advantages to be gained from initiating ecommerce. According to Niranjanamurthy, Kavyshree, Jagannath and Chahar (2013), one of the major advantages that can be gained by the business organizations from initiating e-commerce is increase in the traffic of customers. This is due to the reason that e-commerce helps the business o...Read More
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