Sales & Marketing - Hilton Hotels - Case Study Example

Sales & Marketing Contents Overview of the company 3 SWOT Analysis 4 PESTEL 5 4Ps 7 Competitors Analysis 8 Promotional Plan 9 Overview of the company The hospitality industry is one of the major service sectors which contribute in the global economy. The industry includes variety of services such as food services, hotels and tourism. But the hospitality industry tends to suffers from fluctuations every year due to the fall in the economy (Economy Watch, 2010). Hilton is one of the most recognized names in the hospitality service industry. The hotel stands as the stylish, global leader in the hospitality industry. Hilton has spread all over the world and has about 540 hotels as well as resorts in almost 78 countries spread over six continents (Hilton, 2012). In UK, Hilton Hotels are divided into four operating areas such as Midlands and west London, Scotland, and South east and South cost of the region. The regions have own operating tams such as the finance department, HR, sales and marketing. Thus the organizational structure of Hilton groups relies on the brand direction which comprises of strong behavior and values (Green, 2004, p.94). The target market for Hilton is all the people who can afford it and who want to live life in a luxurious way. The accommodation provided by Hilton is world class and tends to targets the new craze in the market. The Hilton hotel in Britain has targeted the existing demand and not only by competing with other hotels and services. The quality, facilities along with the component and experienced management under the brand of Hilton provides an opportunity for the brand to attain sustainable market position by the year end of 2012 (Grosvenor, n.d). Hilton Hotels has gone one step ahead in the ranking and currently ranks fourth with revenue of $393million. The Hilton group ranks 56 in the service sector and has a turnover of $105.3 million dollars in 2011 (BDI Code, n.d). SWOT Analysis A SWOT is conducted in order to analyze the strength, weakness, and opportunity threats of the organization. Therefore it can be said that by conducting SWOT, organization can maximize its strength, minimize the weakness, overcome its threats and take extensive advantage of its opportunity (Fine, 2009). Strength: One of the core strength of Hilton is its brand name. It has got a huge brand name and with a strong portfolio of brands under its banner ads effectively to its strength. Hilton operates in 78 countries and has about 540 hotels and resorts all over the world. The brand image of Hilton has led to the strong and loyal customer base and at the same time has a strong brand recall and awareness among its customers which has provided it with a competitive advantage over its competitors. In addition to its brand awareness and brand image, the wide range of services provided by the hotel also ads onto is strength. Weakness: Hilton exposure towards the premium end has led the company incur huge cost in order to operate and maintain its premium resorts and hotels. This might prove to be a weakness especially in the situation of economic downturn and the customers reducing their expenses on lavish services which would affect the premium segment of the hotel. Opportunity: Hilton Hotels has a huge opportunity towards the developing and emerging countries. With the rise in the disposable income, in the emerging countries people are willing to spend more on luxurious services and Hilton being one among the best service industry will be greatly accepted by the new and potential customers in emerging countries. Apart from it, with the introduction of iPhone application it has opened up opportunity to become the most popular travel application. The Hilton hotel application has attracted about 6000 downloads. It offers many features such as request on arrival, and other facilities attracting more customers through iPhone applications (BAR-AV, 2009). Threat: Hilton Hotels face an intense pressure from its competitors mainly in the pricing decisions and their expanding growth strategy into emerging regions such as Asia. Therefore the trend of high competition might impact the fee structure of Hilton hotels, forcing it to reduce its price which would affect the growth of the economy. In addition, the sluggish recovery of the global economy is also one the major threat for the hospitality industry. PESTEL The PESTEL analysis is a framework which is often used by organization to identify its future trends by analyzing the political, economical, social, technological, environmental and the legal factors. PESTEL analysis is a part of the macro environment and plays a major role in the development of the organization (Johnson, 2008, p. 65). Political Factors: It is necessary for service industry to deal in with stable political factors and especially when it is a big brand like Hilton Hotels. Hilton hotels have expanded all over the globe and behind its success lies stable political condition of its country and rest of the world. It is essential for the better performance of the company and mainly the service sector. With rise of Arab spring , where the investors of hotel believes that Middle east is the best option to invest but due to the impact of rising parties of Islamist on the tourism industry which is a matter of concern for all the hotels industry (Yousef, 2012). Economical Factors: The economical plays have a vital role in the service sector. With a fall in the economy the hospitality industry has been affected to a great extend and still not recovered from the economic downfall. Hilton Hotels are located all across the globe and its premium segment of hotels and resort has been badly affected. Thus with a stable economic condition, the service sector has much brighter chances of growing in the future. Hilton also faces a stiff competition from its rivals based on its pricing structure and is forced to cut down the fees. The impact of Euro zone crises on the performance of hotels around pan Europe has affected the hotel industry badly. Social Factors: With a rise in the disposable income of individuals and with high standard of living, people prefers luxurious and comfort stay even when they are travelling abroad and here the hospitality industry plays the perfect host. Social factors has affected the hospitality industry in a positive manner but at the same time with a fall in the economy customers would not like to spend more on luxurious hotels and resorts, thus recording a loss for the hotels. Technological Factors: Hilton hotels have recently launched an iPhone application which helps its customers to book rooms and avail to all such facilities while residing in the hotel and also when they are outside. This technological advancement has helped Hilton hotels to gain competitive advantage over its rival and remain ahead in the competition. Also, with the growth of online booking through individuals bypassing the travel agents has added up to the technological factors. Environmental factors: Hilton hotels in order to deal with the environmental issues has earned a green lodging certification for one of its hotel based in Florida and has also installed carpets which are made out of recycled products. It has incorporated sustainability into the building and design of its “Home2Suites”, a commitment towards the environmental goal which was set in 2008 and aimed to reduce the CO2 emission, energy consumption by 20% and water use at a rate of 10% by 2014 (Environmental Leader, 2009). Legal Factors: Hilton hotels needs to comply with the legal factors as it is an international group of industry and has marked its presence into various countries by way of expansion through franchising options and other relevant option. Therefore it becomes extremely necessary for the hotel to comply with all the legal rules and regulation before starting its operation and maintaining it throughout. 4Ps Product: Hilton hotels are a flagship brand of Hilton Worldwide and under its banner there are several other brands such as the double tree, home2suites and others. Hilton hotels provide its customers with spacious as well as stylish suites and the community space offers the guest with a casual and friendly environment. This type of hotel is committed towards sustainability and best practices in the hospitality sector (Hilton Worldwide-a, 2011). Therefore this shows that the Hilton hotels and resort is committed towards its customers by providing them with friendly environment and at the same time committed towards sustainability issues. Place: Hilton hotels have opened up seven hotels in Layton, Baltimore, Fayetteville, San Antonio, West valley, Lexington Park and North Charleston. Among the established Home2Suites, 8 hotels are under construction and about 60 properties re in the pipeline (Hughes, n.d). Hilton hotels aim to open up one such hotel in very part of globe and provide its customers with the comfort and eco friendly environment. Price: The price charged for its accommodation is pretty high as compared to other hospitality organizations. Hilton hotels have a huge brand portfolio and offer a variety of comfort and luxurious zone to its customers. Hilton hotels and its brands has been developed keeping in mind the sustainability issues and thus the price charges is pretty high. Promotion: Hilton hotels are the award winning brand which promotes its brand through publicity and also by means of advertisements. The mid tier extended brand joined hands with Parkway Corporation for its ground breaking ceremony. Apart from its there are other activities where Hilton hotel takes parts as a means of its promotional activities. In addition to publicity, Hilton hotels also perform mobile marketing in order to promote its services and features offered by the diversified range of hotels. Competitors Analysis Hilton Hotel faces a tough competition from many global hotels which has an equal presence all over the world. Some of its competitors include Hyatt Hotels, Marriott International, Best Western International, Starwood brands, and Sheraton hotels, Resort Inn, Bass Hotels and Wyndhan International. Hilton hotels face a tough competition from Hyatt hotels which is considered to be the best hotels internationally. Hyatt is a global hospitality organization which is widely recognized all over the globe with its tradition and innovation which has been its core competencies since its inception. The mission of Hyatt is to provide hospitality to its customers but with a difference. The company focuses on the mission in quest of becoming the desired brand in each of its segment. Hyatt manages its own franchisee of branded hotels, residential, resorts and vacation properties around the world. In the financial year 2011, Hyatt had a portfolio which constituted of about 483 properties. Hyatt gives high importance to environmental impact associated with its hotels. Hyatt has taken up the initiative of maintaining the environmental sustainability through Hyatt Earth, which aims to measures the performance with respect to the impact in the environment. The sustainability commitment of Hyatt is based on premise such as leveraging innovative strategies which reflects the environment of its properties around the world (Hyatt, n.d). Hyatt has recorded annual revenue of $3698 million dollars in 2011 as compared to its previous financial year. The net income recorded was $52 million in the fourth quarter of the financial year 2011 as compared to 6million dollar in the previous years. The company added almost about seven properties in the fourth quarter of 2011. The company continues to invest in the long term-in its brand, people and hotels, and achieving its goal of becoming of becoming the most desirable and preferred brand (Hyatt-a, 2011). Promotional Plan Hilton hotels being a huge brand, has an advantage of its brand awareness and brand image that has created over the years. But as said every brand needs to focus on its promotional activities and similar is the case with Hilton hotels. The promotional activities will address services and facilities that it being offered to its customers. The name of the promotional activity would be ‘Golden Hilton’ because of the privilege and facility that would be provided to its customers and would continue for 2 months. The promotion is needed to bring back its customers as well as to attract new and potential customers from all across the globe. Due to the slow economic downturn Hilton has lost many of its customers thus by offering new schemes and services would retain the lost customers. Hilton has launched iPhone application in order to provide services and some added features to its customers. 4Ps Product: The product that would be promoted is a service that is being offered through iPhone applications to iPhone users (Hilton-a, 2012). This application would take care of all the necessary information such what will be the check in time, check out date and time, booking of room and all the other facilities required to its customers. Price: The price charged will be the normal rate plus 10% of the charge of its application services. Place: The promotions would takes place in all the places where Hilton hotel has its presence mainly the entire globe. Promotions: The promotion of its service would take place through mobile marketing, concentrating on the web and making promotions through its online web sites. Also since the application is made available through iPhone, advertisement would be made in association with the iPhone. In the promotion process that is decided to be carried out for 2 months would take into consideration extensive use of the web since most of the advertisement would be made through it websites and other online sites. Thus the promotion would start by advertising in its own websites about the new facility made available to iPhone users, this would generate more traffic in its own websites also by advertising to other websites would also help it to promote. This application would target the business and the working people who visit the hotel for business trips. Thus almost 60% of the promotion would make through the internet and rest with the help of events such as tie up with major industries and publicity. The total budget required in the promotion process is £ 165000 Budget (in £) Advertisement in other websites (Google) 40000 Mobile marketing 55000 Events 30000 Maintenance of the website 40000 Total 1,65,000 Reference BAR-AV, A., 2009. Theres An App For...Hilton; New Hilton iPhone App Launches With Impressive Numbers. [Online]. Available at: [Accessed 3 May 2012]. BDI Code, No Date. Hotels 2011. [Online]. Available at: [Accessed 3 May 2012]. Economy Watch, 2010. Hospitality industry. [Online]. Available at: [Accessed 3 May 2012]. Environmental Leader, 2009. Hilton Hotels Go Green. [Online]. Available at: [Accessed 2 May 2012]. Fine, L. G., 2009. The SWOT Analysis: Using Your Strength to Overcome Weaknesses, Using Opportunities to Overcome Threats. Create Space. Green, N. A., 2004. Human Resource Management: International Perspectives in Hospitality and Tourism. UK: Cengage Learning EMEA. Grosvenor, No Date. H I LTO N H OT E L. [Pdf]. Available at: [Accessed 3 May 2012]. Hilton Worldwide, 2011. Brand portfolio. [Online]. Available at: < http://www.hiltonworldwide.com/portfolio/home-2-suites/> [Accessed 3 May 2012]. Hilton, 2012. About Hilton. [Online]. Available at: [Accessed 3 May 2012]. Hilton-a, 2012. The Hilton Free iPhone® App Puts You in Touch with the World. [Online]. Available at: [Accessed 14 May 2012]. Hughes, J., No Date. About US. [Pdf]. Available at: < http://www.hiltonworldwide.com/assets/pdfs/brands/H2S_ABOUT-US_12222011.pdf> [Accessed 3 May 2012]. Hyatt, No Date. Environmental Sustainability. [Online]. Available at: < http://thrive.hyatt.com/environmentalSustainability.html> [Accessed 3 May 2012]. Hyatt-a, 2011. Investor’s relation. [Online]. Available at: < http://investors.hyatt.com/phoenix.zhtml?c=228969&p=quarterlyearnings> [Accessed 3 May 2012]. Johnson, G., 2008. Exploring Corporate Strategy: Text & Cases, 7/E. South Asia: Pearson Education India. Yousef, D. K., 2012. Hotels feel impact of Arab Spring. [Online]. Available at: [Accessed 14 May 2012]. Read More