Marketing Audit of Hilton Hotels - Essay Example

?An Individual Report That Offers a Marketing Audit/Assessment of Hilton Hotel Based Within Field of Hospitality Study Table of Contents Table of Contents 2 Introduction to the Organisation/Brand 3 External Environmental Analysis 5 Porter’s Five Forces Model 5 PEST Analysis 7 Competitor Analysis 7 Customer Profile 8 Product Strategy 9 Pricing Approach 9 Place, Access and Distribution 10 Promotion and Advertising 11 Impart of 'e' Marketing and Social Media 11 Conclusion (SWOT) 13 Recommendations 15 References 16 Appendices/Evidence of Research/ Supporting Information 20 Introduction to the Organisation/Brand Hotel and hospitality industry mainly deals with varied aspects related to service delivery. Services are quite a wide collection of intangible assets that fulfils the customer needs and demands which include accommodation of the visitors, as well as providing foods and beverages, leisure and entertainment to them, along with offering them a vast set of business solutions (Gronroos, 2007). Hilton Hotels is one of the largest companies in the hospitality industry. It is spreading opportunities globally by expanding its business worldwide at a tremendous rate. Conrad N. Hilton made his debut in hospitality industry merely with 40-room in his hotel in a little town named Texas in 1919. In Texas, he wanted to start a brand new hotel. In due course of time, Hilton Hotels has become one of the most trusted brands throughout the world. Presently, Hilton is operating worldwide in around 90 countries with its ten brands along with 3900 hotels comprising 650,000 rooms. Its values comprise Hospitality, Integrity, Leadership, Teamwork and ‘Ownership and Now’ among others. Hilton Hotels aim to achieve its vision by filling up the earth with a combination of light along with warmth of the hospitality service. In its mission statement, it clearly stated that it wants to be chosen by the team members, owners and guests in terms of their first choice. Every business organisation needs to maintain certain extent of Corporate Social Responsibility (CSR) for the benefit of the society and for ensuring its long-term sustainability. In this regard, Hilton provides huge employment opportunities to the world at large by adding 140000 organisation members. With the help of its youth apprentice and hospitality scholarships programs, Hilton group has been educating youth in the hospitality industry. Hilton Hotels always strive for maintaining diversity amid its team members, owners, guests and partners to respect all communities throughout the world. Hilton Worldwide within its global portfolio has now achieved certification from the International Organization for Standardization in terms of their quality management (ISO 9001:2008) and for the environmental management (ISO 14001:2004). Hilton Worldwide has introduced an energy efficient system named “The LightStay” to minimise the consumption of the energies by its learning, continuous improvement, measurement and reporting along with verification. On using this system, Hilton Worldwide reduced its energy consumption such as energy use (6.6%), water use (3.8%) and carbon output (7.8%), waste output (19%) in the year of 2010 in comparison to the year i.e. 2008. Its ten brands include Home2 Suites, Homewood Suites, Hampton, Hilton Garden Inn, Embassy Suites, DoubleTree, Hilton Hotels and Resorts, Hilton Grand Vacations, Conrad Hotels & Resorts and Waldorf Astoria Hotels and Resorts (Hilton Worldwide, 2012). Organisational structure of this hotel is quite flat. It follows decentralised organisation model by which it is able to ensure control of its each specific region efficiently. There is another initiative taken by the Hilton authorities to provide its customers a balanced work and leisure culture. Customer experiences can be evaluated by using hierarchy of customer value model where basic, expected, desirable and memorable are various steps required to be acted upon (Bowie & Buttle, 2011). With these considerations, the report aims to provide a marketing audit/assessment of Hilton Hotels, operating in the hospitality industry. External Environmental Analysis An organisation needs to exercise certain analysis on its external environmental factors for the operation of its business. For the analysis of external environment of Hilton Hotels, there is a need to study certain models and theories related to its external environmental aspect. In this regard, Porter’s five forces model and PEST analysis are discussed below. Porter’s Five Forces Model Porter’s five forces model mainly deals with the different kinds of interactions of a company with its competitors, suppliers and buyers (See Figure. 1). In the case of Hilton Hotels, threat from the new entrants is quite low. The main reason behind this is very few hotels are there which can compete with the standard of services provided by this hotel. Secondly, there is an involvement of very high cost establishment in hotel industry and new entrants will be required to evidently consider this aspect for the existence of very big players (Dobbins, n.d.). Source: (Dobbins, n.d.) In case of threat of substitute products and services, the main threat will be business hotels and eco-friendly hotels. However, the risks generated from such segments have already been minimised substantially with the operation of Hilton’s ten different brands. Hilton Hotels has been operating with a bunch of suppliers so for this hotel threats from the respective suppliers can be considered to be significantly minimal. Bargaining power of buyers in respect of Hilton Hotel is quite moderate as it serves the customers with a wide range of its products and services. Thus, the customers possessing varied requirements can be addressed by the hotel. The main competitors of Hilton Hotels are Wyndham Worldwide, Marriott International and Starwood Hotels & Resorts Worldwide among others which are continuously threatening Hilton Worldwide with their premium class services (Dobbins, n.d.). PEST Analysis Political risk is always there in the operations of Hilton Hotels as there is an investment of huge capital in its fixed assets. Change in the political administration leads to changes in the rules and regulations for tourists throughout the country. In addition, changes in the banking regulations also affect the visitors’ numbers in premium hotels like Hilton. Economic downturn can adversely affect Hilton Hotels in terms of the spending by its tourists and guests. Creation of huge employment opportunities in hospitality sector is the main social contribution made by Hilton Worldwide group. It is a technologically developed organisation which provides online education to certain section of students throughout the world through its e-learning module. Its recruitment process is also conducted in online process. Customers can interact with the hotel authorities online and get information. It provides well furnished rooms with high technological facilities (Dobbins, n.d.; Hilton Worldwide, 2013). Competitor Analysis The main competitors of Hilton Hotels are Marriott International, Wyndham Worldwide, and Starwood Hotels & Resorts Worldwide. These all are the topmost luxurious and premium quality hotel branches operating throughout the globe. Rapid global expansion is the common goal of all these hotels (Reid & Bojanic, 2009). There are total of 17 and 29 brands available of Marriott International and Wyndham Worldwide respectively. Marriott operates in 74 countries. In addition, Starwood Hotels & Resorts Worldwide has been operating with its 9 major brands globally. Starwood Hotels & Resorts Worldwide has planned to decrease the consumption of energies by 30 percent and water by 20 percent across the globe in its all hotels and resorts. It is going to expand its business by building 330 new hotels in the next two years (Starwood Hotels & Resorts Worldwide, 2013). In its website, it provides a unique option to search a destination hotel with dates for check-in and check-out. On the other hand, Wyndham Worldwide is another big brand in the premium hotel industry. It has won a variety of awards and recognitions till now. Fortune’s World Most Admired Companies for 2013, NAFE Top Companies For Executive Women 2013 and Latina Style 50 among others have been the key facilitations. Marriott International is another leading name in hospitality industry. The 2008 bombing in Pakistan in its brand hotel i.e. JW Marriott affected the premium hotel industry worldwide with regard to safety is concerned (Wyndham Worldwide, 2013; Gall, 2008). Customer Profile Customer profile segmentation is mainly done to offer different requirement possessing customers with the specialised services. Targeting the high profile customers can lead to maximisation of profits for the Hilton Worldwide. The needs and the requirements specially depend upon the customer segmentation. After the segmentation, it gets easier for the Hilton Hotels to differentiate them as per their requirements. Specifically, only premium customers target Hilton as their vacation destination because it delivers much expensive products and services. The hotels intensely focus on Customer Relationship Management (CRM) to satisfy its customers meeting its demands (Applegate & et. al., 2008). Product Strategy Hilton Hotels offer a wide variety of dining option from room dining to world class restaurants. It always serves healthy and hygienic foods to its customers. Hilton Hotels offers the essential requirements for the workout of the guests. This workout solution includes free weights, cardio with the personal television screens with headphones, courtesy towels along with a room for the stretching. Certain other unique products available in Hilton Hotels are “Hilton Curved Shower Rod”, “Hilton MP3 Clock Radio” and “La Source Bathroom Amenities” among others. It also provides 24*7 business solutions for the business professional residing in its hotels (Hilton Worldwide, 2013). Pricing Approach Price is one of the important components of the 4Ps model and the customers always desire to consider the aspect of pricing before they purchase any product (John, 2007). In case of pricing, Hilton uses seasonal pricing approaches. In seasonal pricing, price always changes with the alterations in situation or product. Seasonal pricing is executed by it when there is an occurrence of any event or festival in a particular country of operations of the hotel. A few other companies in hospitality industry reduce their prices in the seasonal time to maximise their profit. In this context, it is observed that Hilton Hotels also applies price flexibility in its price strategy where there is an absence of the fixed price for a particular product. In this circumstance, it offers two different prices for two customers as per their relationship with the customers. In terms of the price strategies of Hilton Hotels, it is determined that it applies market penetration and market-skimming pricing to maximise its sales. With regard to market skimming approach, it puts a quite high price on its differentiated product for targeting high income groups because this segment of consumers remain indifferent on price hike. On the other side, market penetration includes putting quite low price on its products for increasing its demand from the market which tends to maximise its sales, finally maximising its profits (Kotler & Armstrong, 2006). Place, Access and Distribution Place is a vital ingredient of the 4Ps. Before setting up its operation, a company dealing in hospitality segment should evaluate the annual number of visitors in that particular place and also the income level of the visitors should be taken into consideration. Another few parameters for setting up the plant should comprise communication and transportation. The plant should be set up on a particular location where the level of transport facilities is quite high. International airports should be available that ought to be fully connected throughout the globe. Hilton Hotels are duly takes care of such requirements in terms of its place strategy. It also provides information based interactive services that are readily accessible on website. Hilton Reservations & Customer Care (HRCC) can help Hilton hotels for building high rated distribution channels for the reservation process and customer services on a local basis (Hilton Worldwide, 2013). Promotion and Advertising With its advertisement campaign namely “Stay Hilton. Go Everywhere” Hilton Hotels has shown the world its great presence in the hospitality industry. Hilton’s print advertisements depict different kinds of experiences. This advertisement insists on the aspect that the visitors will experience a different taste while choosing brands from a range of Hilton’s portfolio (Hilton Worldwide, 2012; Haywood, 1989). Hilton Hotels experienced marketing professionals are consistently working in its advertisement and promotional segments for ensuring the better profitability of the organisation. Implementation of advertisements is done differently in two diverse locations. For example, any advertisement campaign conducted within the United States and in South Africa differs. As in the US, mostly online advertisements are used, whereas in South Africa television and local advertisement are used more (Hilton Worldwide, 2012). Impart of 'e' Marketing and Social Media Social media impacts travel decisions to a great extent. Potential tourists analyse the tourist destination through social networks watching videos and images from the website. In this case, Facebook, Google Plus and the Instagram are used frequently. Along with this, big hotels all over the world outsource their ticketing assignment to online ticketing agencies such as TravelClick. Advertisements also are viewed on the social networks. With the revolution in online industry now visitors can contact with the hotel officials through company website (Hotel Marketing, 2013). In this regard, Hilton Hotels also engage in using social media and e-marketing through the incorporation of “The Hilton Worldwide eCommerce Program” (Hilton Worldwide, n.d.). Moreover, its uses a strategically focused social media approach through the use of Facebook along with Twitter. It facilitates to increase consumer engagement (Brafton, Incorporated, 2013). Conclusion (SWOT) In order to comprehend an overall assessment based on the marketing audit of Hilton Hotel in respect of hospitality industry, conclusively there is a need to conduct a SWOT analysis. In terms of strengths, Hilton Hotels is focusing on its travel and tourism management sector in the emerging markets such as China along with India. It also has a plan on pipeline development. In the year of 2008, it announced to build around 300 new hotels in the region of Asia Pacific. Hilton Hotels is a well established leader in the field of hotel, gaming industry and hospitality. In its product mix, it combines both high end products as well as medium priced products. It has a strong integration with the online ticketing partners as well as furniture manufacturers. It has franchised smaller companies as well that facilitate to increase its market share by expansion or acquisition. As real estate sector in the countries like China, India and Vietnam are becoming expensive day-by-day so it becomes quite tough for the organisations such as Hilton Hotels to invest in lower cost brands in these emerging markets. In terms of weaknesses, global economic downturn can affect the hotel financially. As it provides major work force so with the workers’ strike the operation of Hilton may crack down. The main opportunities of this company will be the introduction of wedding planning and wedding hosting. Hilton Hotel should expand its cruise line business and other business lines and mid priced market segments. Its threats can originate from certain main competitors or the terrorism. 9/11 attacks in New York in the United States and 26/11 attacks in Mumbai in India decreased the number of tourists in the following months, which significantly affected hospitality industry of these countries. Thus, similar scenarios in future can affect the hotel (Kotler & et. al., 2013). Conclusively, it can be stated that Hilton Hotels has a huge potential for becoming the market leader. Marketing is the biggest vehicle for any organisation to reach its customers and show them its brand values. Marketing is a communication process between its customers and the organisation itself. Thus, without the use of proper marketing tools, it would be a tough task for a company to earn profit. The improvement in the use of sales promotion will surely motivate new potential customers to join Hilton family along with visited tourists or guests, who will think more about visiting again on Hilton Hotels. The major obstacle of Hilton Hotels for the expansion in East Asian countries is the inadequateness of infrastructures. Sales promotional tools like incentives, coupons, free gifts and the specials discounts can motivate customers to take the buying decisions for certain services. Unique demands from each of the customers such as experiences on unique lodging have made the task quite difficult for the Hilton Hotels to attract more and more customers. This is because in the United States there are several kinds of unique hotels that are establishing. In this regard, Hilton Hotel is now entering in new businesses of boutique hotels (Hilton Worldwide, 2012). Recommendations Finally, it can be recommended that the proper use of the marketing tools can help Hilton Hotels a lot to touch the sky and become the leader in the hospitality industry along with increasing its market share. Advertising and sales promotion of Hilton Hotels is not up to the mark as per its desired standards. Before launching a promotional campaign, it needs to aware its potential customers so that they can gain certain advantages from the promotional campaigns. It also can distribute some free gifts to its guest visitors in terms of any product related to the company which will keep their memory refreshed about the visit to Hilton. Not only in print media, advertisement promotion needs to be carried out through local television and radio stations. It can focus more on international advertising. There is a requirement of more initiatives for corporate social responsibility. Child education programmes can be organised in underdeveloped countries such as India and Nigeria (Williams, 2010). Marketing is all about the understanding of the human wants. If Hilton Worldwide wants to expand its businesses more rapidly then it needs to focus more on the emerging economics like China and India. The reason behind this is that both these markets are opening up their wings in front of the globe (Roper & Brookes, n.d.). New foreign direct investments are coming into these countries. In the period of globalisation in each single day a lot a foreign delegates, industrialists and investors are visiting in these two markets. For this reason, these courtiers would require huge premium class accommodations (Cross, 1007). Meeting these requirements can facilitate the company to expand its market share by a considerable extent. In terms of the application level of newer models of technologies and the usage of internet in quite high, so the organisation can be a leader with the use of high tech mechanism which can enable to render better customer service (Gilbert & et. al., 1999). References Applegate, L. M. & et. al., 2008. Hilton Hotels Brand Differentiation. Harvard Business School, pp.1-18. Bowie, D. & Buttle. F., 2011. Hospitality Marketing. Routledge Brafton, Incorporated, 2013. Social Media Stays For Longer Than One Night In Hotel Industry. About Us. [Online] Available at: http://www.brafton.com/news/social-media-stays-for-longer-than-one-night-in-hotel-industry [Accessed May 15, 2013]. Cross, R. G., 1997. Revenue Management. Broadway Books. Dobbins, C., No Date. Strategic Planning: External Environmental Scanning. Strategic Business Planning for Commercial Producers.pp.1-5 Gall, C., 2008. Bombing at Hotel in Pakistan Kills at Least 40. The New York Times. [Online] Available at: http://www.nytimes.com/2008/09/21/world/asia/21islamabad.html?_r=0 [Accessed May 15, 2013]. Gronroos, C., 2007. Service Management And Marketing: Customer Management In Service Competition. John Wiley & Sons. Gilbert, D. & et. al., 1999. Approaches by Hotels to the Use of the Internet as a Relationship Marketing Tool. Journal of Marketing Practice: Applied Marketing Science, Vol. 5, Iss. 1, pp. 21-38. Hilton Worldwide, 2012. Countless Opportunities to Delight. About Hilton worldwide. [Online] Available at: http://www.hiltonworldwide.com/about/ [Accessed May 15, 2013]. Hilton Worldwide, 2013. Hilton HHonors Launches Teacher Treks Travel Grant Competition. Global/Corporate News. [Online] Available at: http://news.hiltonhhonors.com/index.cfm/newsroom/detail/22724 [Accessed May 15, 2013]. Haywood, K. M., 1989. Managing Word of Mouth Communications. Journal of Services Marketing, Vol. 3, Iss. 2, pp. 55-67. Hilton Worldwide, 2012. Go Everywhere Offers. Find a Hotel. [Online] Available at: http://www3.hilton.com/en/about/go.html?WT.mc_id=zkdCSAA0US1HH2REP3Go4Go7BR841469 [Accessed May 15, 2013]. Hilton Worldwide, No Date. The Hilton Worldwide eCommerce Program. Assets. [Online] Available at: http://www.hiltonmanagementservices.com/assets/files/Hilton%20Worldwide%20eCommerce%20Brochure.pdf [Accessed May 15, 2013]. Hotel Marketing, 2013. Doubletree by Hilton and Google Launch First Hotel YouTube Channel. Article. [Online] Available at: http://hotelmarketing.com/index.php/content/article/doubletree_by_hilton_and_google_launch_first_hotel_youtube_channel [Accessed May 15, 2013]. John, D., 2007. Measuring Marketing (103 Key Metrics Every Marketer Needs). John Wiley & Son (Asia) Pte Ltd. Kotler, P. & Armstrong, G., 2004. Principles of Marketing. Pearson Education, Inc. Kotler, P. & Armstrong, G., 2006. Marketing an Introduction. Pearson Education, Inc. Kotler, P. & et. al., 2013. Marketing for Hospitality and Tourism. Prentice Hall. Reid, D.R. & Bojanic, D.C., 2009.Hospitality Marketing Management. Wiley Roper, A., Brookes, M., No Date. Abstract To Standardise Or Not To Standardise? Marketing International Hotel Groups. Starwood Hotels & Resorts Worldwide, 2013. History. News. [Online] Available at: http://www.starwoodhotels.com/corporate/press/history.html [Accessed May 15, 2013]. Williams, C. O., 2010. Case: Transcorp Hilton Hotel, NIGERIA. Marketing Process of Hotel Service. pp.1-40. Wyndham Worldwide, 2013. Our Awards. Media. [Online] Available at: http://www.wyndhamworldwide.com/media/our-awards [Accessed May 15, 2013]. Appendices/Evidence of Research/ Supporting Information Concept Relating To Core Marketing (Kotler & Armstrong, 2004) Read More