Marketing Principles Hilton Should Deploy to Become Successful
To: Managing Director, Hilton Hotel International
: A report on Hilton Hotel Analysis and Market Plan
The marketing process elements are regarded as a set of controllable instruments, which an organization requires to produce a response which it so requires in the target market. These elements include all things, which an organization is willing to do in order to increase the sales of its products (Kotler and Armstrong, 2004, 145). The marketing mix elements, which are also popularly referred as the 4Ps of marketing include Price, Product, Place and Promotion Kotler Armstrong, 147). When these elements of the marketing mix are analyzed using the case of Hilton Hotel, it provides a good example of how the 4Ps of the marketing mix can help a firm in scaling to new heights with expanded marketing share and subsequently increased sales. A careful adherence to the brand’s position strategy will assist in insuring that, each of the decisions in the marketing mix creates value to the targeted clients.
Place, Product Positioning
As Gambetti (2010) points out, product positioning relates to the creation of a perception on the target consumers’ minds regarding the products and involves the development of the product image directly against the competitor’s offering (223). Product positioning will enable the target market to develop a specific perception of the company and its new brand offering in relation to competitors (226). Hilton should be careful in positioning its products/services in order to influence the perception of target market positively. In addition, this will enable a creation of an image of value, quality, uniqueness and reliability compared with similar offerings in the hospitality industry (234). This entity should make sure that there is a high product identity associated with the brand compared to similar competitor products in the market.
According to Ho and Merrilees (2009), the process of product positioning constitutes defining the target market, identifying the qualities, which make the product stand out from others in the market. It also involves gathering information from the target consumers on their views concerning the products and their qualities, (pp. 384 - 408). The company should conduct research in order to find out what the target consumers think (their perception) regarding the new products as well as their opinions and suggestions.
Successful positioning of the brand and its products will enable the company differentiates its products from its competitors (Malcolm, 2009, 45). Further, this will enable the company to address the relevant criteria which consumers use in purchasing and articulate the significant qualities of the product. The general price of the products and services should also not be higher than those of the competitors in similar categories or rating in order to attract the market shares (Malcolm, 2009, 51).
Hilton should position itself in a manner that is appealing to a wider audience. One way of doing this is to redesign its outlets and make them more modern, upscale and comfortable for guests and clients. Alongside, creating flexibility, the company should also avail itself on the digital front, whereby its services are promoted online. The online campaign and promotions will ultimately help the company in positioning it has a digital innovator and strength the brand.
Currently, Hilton has eight brands and competes in most segments that include short- term living arrangements. The company positions its urban hotels as the Homewood suites, which designates a kind of hotel room. Hilton’s suits may have created a perception among customers of the conveniences associated with a home with a residential setting. In essence, this gives an existing and potential customer, a perception that he or she will experience a home away from home experience while in the hotel context. In addition, the guests are also provided with the comforts, privacy and convenience, typical of a home. However, this strategy has sometimes confused customers, as there are those who assume that the suites are large rooms with premium implantations. It is therefore, imminent that the company puts its focus on perceptual factors and avoids a distorted image of its branding (Chuck, Gee, 2012, 112).
Product branding is closely similar to positioning. It involves the product’s name, image and even the whole experience, which the target consumers have with the product (Tetzeli and Karpel 2011: pp. 82-94). Hilton Hotel has stood out among its competitors because of its exceptional brand management, leadership in sustainable practices, significant global presence and a commendable approach to its client management. According to Tetzeli and Karpel (2011), a strong brand if effectively established is a powerful tool to influence the purchasing decisions among customers. A strong brand will create an attitude of quality, value, trust and can be used to command a premium in terms of price. Stated differently, customers will be willing to pay for the services regardless of the price being charged. In addition, it can help in retaining existing customers as well as facilitate differentiation in its products.
Hilton should, therefore, take time in creating the necessary trust among customers by creating a strong brand. This will entail creating awareness of the brand to potential and existing customers, and enforcing a consistent brand message in its customer interactions. Most important, the management of this hotel must come up with services that are appealing to customers, as well as creating differentiation in this service and product delivery. Brand marketing is also another counterproductive measure that can help in creating awareness to potential and existing customers.
With respect to advertising and promotional measures, Hilton should deploy sufficient resources in promotion or advertising campaigns because this is the most expensive of the marketing strategies (Gregory, 2010, 13). It should consider advertising and creating awareness on its brands through such avenues as television, other electronic media advertisements, as well as in print media. The company should also utilize social media networks to promote the products and to create more awareness among consumers.
In advertising and marketing, customers are known to develop an acuity in their minds regarding their view of a specific brand, and they equate it with that of rival’s. According to Wernick, customers are always persuaded by something to make a purchase from one provider and not the other (2008). This is their preference, and therefore, they need to make in favor of a trader, in this case, Hilton hotel. Consequently, the strength of a brand may be the determinant in customer persuasion, but according to statistics (Gregory 13), there is a possibility that customer persuasion is attributed to sales promotion. Therefore, Hilton should ensure that a creative sales promotion should be in place, as well as brand complementary. These should match the customer’s communication canvas. In the light of this, Hilton hotel should deploy sufficient resources in promotion or advertising campaigns since this appears to be the most expensive of the marketing strategies.
Distribution is also a critical marketing strategy. This is because it ensures that the company’s products get to the market so that the target consumers can access and buy them. Additionally organizational success in the market depends on the effectiveness of the distribution channels used. The distribution channels ensure that the company’s products reach the market for the target consumers to access them (Gambetti 2010: pp. 34-51). Hilton’s marketing department should incorporate an intensive distribution strategy to ensure that all the companies’ offering are available to its branches and customers. This should include the online distributed where customers are given the opportunity to book at their convenience.
According to Kotler (2008), Proper pricing will ultimately lead to enhanced sales and will act as the foundation of the business prosperity. Wrong business strategy will establish problems that may be irreversible to the business (115). Hilton should price its products based on each countries’ currencies in relation to the pricing of similar products. Further, the pricing should be secured after calculation of the anticipated profit from service or product provision and the market share to be generated in relation to those of the competitors. Other factors to be considered in its pricing include the production and operation costs. The market survey could assist in ascertaining if the set prices were favorable to customers (Kotler, 2008, 189). The initial prices in new markets should be set in a manner that will facilitate the penetration through the regional markets and expand its market share.
However, in some cases charging low prices and at the same time offer valuable and high quality services may not be sustainable. Hence, a strategy needs to be formed on how to go about this process. Overall, it could not be meaningful to charge high fees in relation to competitors in the same class and attract lesser customers in the process. It is, therefore, important that the management leverage the pricing in order to create a competitive edge in this industry.
Enhanced Accommodation Services
Currently, accommodation services at Hilton include provision of guesthouses, self-catering services, and breakfast and bed services. However, the companies need to differentiate this service for international business travelers and conventional people. In other words, the accommodation services offered to international travelers should be different with that given to the locals. It should be considered that in this industry, the purpose of the trip is the beginning of the segmentation process. The company should consider the mission of their clients, whether it is for leisure, or business related matters and tailor the services accordingly (Chuck, 2012, 215).
Business travelers are keen on effectiveness and efficiency in a faster manner since they are focused on chasing their business prospects. The segment will, therefore, include, individual, corporate and conventional market. Individual’s business travelers are those businessmen or women who are travelling for business related purposes. Independent business professionals such as doctors, accountants, lawyers, consultants, and contractors (that is, those working in the corporate environment) are included in this market segment. These people make their decisions solely on how, where, or when to travel in conducting their businesses. The company, should therefore, tailor the services to meet the needs and preferences of such customers so that they in turn develop a preference on this brand. On the other hand, local customers may be contented with the normal processes since they may not be in a hurry (Medlik and Ingram, 2000, 118).
In this perspective, the management of Hilton should take into consideration that the new generation of business travelers is technologically savvy, more social, and easy to reach than other travelers. In addition, these Millennial business travelers (those that are more social and technological survey are increasing at a constant basis and will according to Mauss (2010, 12) continue to do so in the future. For successfully marketing the services to these travelers, the management at Hilton should target the preference of such people and design effective ways of interacting with them. It is time for the management to utilize social media platforms in creating awareness on their offerings. In addition, they should be allowed to book through online mechanism to make it convenient for them. Further, the management should train its employees on how to communicate to such people in a shorter time since they do not have much time to “waste”. The company’s online content should as well be appealing in order to make the clients livelier.
Customers are more likely to select brands, which offer convenience in terms of bookings and service delivery. Through online means, they can be able to know if there is room rather than going to the hotel and finding that the guestrooms are full. In terms of advertisement, the customer may opt to check in the hotel advertised on the internet rather than the one he or she is little aware of.
As a matter of positioning itself among its rivals, Hilton should adopt relationship-marketing approach. Adoption of relationship marketing strategy increases the retention rate through increased personalization of service, customer collaboration and consistently widening communication with various contacts. Studies have affirmed that, the more a company interacts with their clients at different levels, the more it is demonstrating its value, and the significance of their products or services. This company needs to embrace the idea that customer service and marketing are intertwined elements, and should be considered as a single activity or operation. This will as well harbor a broader implication such as assisting in improving recommendations, and verbal referrals which in most cases are easier to close in comparison to a cold prospect (Mauss 2010, 6).
In essence, effective productivity of the market depends on the extent of the range of cooperation between entities and their stakeholders, since they ultimately depend on one another. It is obvious that market expansion, and improvement depends on the efficiency of the existing communication, and transportation networks. However, without the information from customers regarding quality and prices, improvements in communication and transportation mechanisms will not be enough. An enterprise can only offer propositions that are value based. In this perspective, the consumer is expected to determine value and effectively participate in the production process. The tangible product is entrenched with the knowledge that has value potential for the final user, but not with value. Hilton could make value propositions that strive to be more appealing and better that those of the competitors (Zimmerman, 2012, 99). This is the reason many firms including Hilton should move away from gearing messages towards customers and actively engaging themselves in dialogue and interaction with them.
Incorporation of digital presence at Hilton guesthouses will ultimately boost its sales and market share (Shukla, 2009, 1). The company should come up with a direct on- line booking systems to create convenience to its customers in various parts of the world. This method will be useful in acquiring customers from many places who are now able to find the companies’ services online. Customers should be offered the opportunity to communicate and interact with the company staff at the comfort of their offices, homes, and using any device that has the internet connection any time of the day.
Effective Employee Relations
Human resource management is increasingly becoming significant for the success of organizations. A strong culture is the basis of formulating effective strategy. This owes to the fact that it makes employees to be committed to their works and in turn enable the company to realize enhanced performance (Rashid, 2008, 708). Creation of a strong culture at Hilton will enable the management to identify and manage the perceptions and behavior of individuals and groups in this organization. Motivated employees will in turn develop the right attitude for work, serve guests more efficiently and interact with them a lively manner.
Diversification of food items at this hotel is also an important factor for its success. This is because; customers with different preferences and tastes are satisfied and enjoy their experience while in this restaurant. Indeed, for global restaurants to flourish, they are expected to view the purpose of their menu in a comprehensive and broad role. The type of menu produced by a particular restaurant may be in itself, a marketing tool, communication tool, and cost control tool. In addition, treatment of customers is an important factor for its success.
The market research will help Hilton Hotel in deciding how to present its enhanced services to the niche market. This involves creating an image, and the experience, which the consumers will have with the product/services. The research will help this company in developing an in-depth understanding of the potential customers, their various demographics (in terms of age, sex and lifestyle), their perceptions, motivations, preferences, and reservations. Besides, it will allow exploration of the competitive firms in this industry, and, thus, make it easy to differentiate the service offerings with those of the competitors. The research will also facilitate identification of unmet needs and, hence, enable the company determine the best way of fulfilling these needs through its service provision. The market analysis will serve to identify the possibilities of the new offering and refine the definition of the target market through these possibilities. In essence, a market research is crucial in determining the starting point for this idealities (Kotler & Pfoertsch 2010).
According to Kotler, proper pricing will eventually lead to enhanced sales and is the path to the prosperity of the business (2008). Wrong business strategy will result in problems that may be irreversible (Kotler 115). The management of Hilton should determine the best prices and pricing strategy for its products and service offerings after conducting the market research. However, the pricing should be secured after calculation of the anticipated profit from the market share in relation to those of the competitors. Other factors that Hilton should consider in its pricing include the production and operation costs. Additionally, the firm ought to consider that the initial prices especially in new markets should be set in a manner that facilitates easy penetration through the new markets and expand its market share. For this reason, the prices set should be favorable to customer expectations and help in positioning the company’s products in the new market.
The company should deploy an online distribution channel in order to increase its revenue. The online distribution mechanism will help the company stay put in this highly competitive industry. This emanates from the sense that, there has been an increasing trend for online booking and reservations, thus the reason the company has to embrace the online reservation system. This channel will be able to generate much business through provision of payments in various currencies as well as keeping visitors and guests develop an interest in the place.