Elizabeth Ujunwa Chuks 13596

14

ICON College of Technology and Management

BTEC in Hospitality Management

Sandhya Thirungari

Tableof Contents

Introduction 4

LO 1: Task 1 5

Part A: 5

1.1 Definition of marketing 5

1.2 Marketing process 5

1.3 Concept of marketing 6

Part B: 6

1.4 Marketing environment 6

1.5 Consumer market 7

1.6 Marketing segmentation 8

LO 2: Task 2 10

2.1: Importance of components of marketing mix 10

2.2: Pricing strategies and policies 11

LO3: Task 3 13

3.1: Role of promotional mix 13

3.2: Advertisement plan 14

Strategy 14

Tactics: 14

Plan: 15

3.3: Role of sales promotion 15

LO 4: Task 4 17

4.1: Relevance of market research 17

4.2: Analysis of marketing research 17

4.3: Suitability of different media 18

4.4: Implementation of the marketing plan 19

Conclusion 20

Recommendations 20

Bibliography 21

Marketing in Hilton Hotel

Introduction

Hilton UK is a part of an international chain of full service hotelsand resorts. The parent company is Hilton Hotels and Resorts, whichis an international hospitality enterprise. The founder of the mainHilton Hotel was Conrad Clinton. Mr Conrad began the hotel as WacoHilton back in 1927 (Wharton 2001). The Hotel was the first one ofits kind to have air conditioning and running cold water. On top ofthis, the hotel went on record to have televisions, attracting highprofile customers. Given its reputation, the hotel begun makingrecord returns from business, prompting further developments. The UKHilton Hotel featured stylish bars and incorporated a high classresort mood by embracing innovation in design. For instance, theLondon Hotel pioneered the 360-degree view design, which was lateremulated by other hotels.

In the recent years, the company has made more innovations in orderto improve its customer rating, and they have been largelysuccessful. The management took a proactive approach to increasingthe Hotels’ energy efficiency. This was by installing the firstgreen controls in hotels and resorts, which would enable thecustomers to control heat and lighting in an eco-friendly manner.This, together with other developments, helped the hotel to maintainits five-star rating. However, given the dynamic nature of the hotelindustry, the hotel chain has been facing steep competition. Thiscompetition is facilitated by the increased investment in thehospitality industry by giant players, and emerging newcomers. Inretaliation, the management has resorted to new tactics to controlthe niche market, for instance, providing cheap accommodation.However, this has a negative impact as it adversely affects thehotel’s rating. This paper reviews Hilton UK’s existing marketingplan and suggests a new marketing strategy to reposition someproperties to achieve 5-star rating.

LO1: Task 1 PartA:1.1Definition of marketing

Marketing refers to the interactions between firms and consumers inthe creation of lasting relationships beneficial to both the firmsand consumers. During these interactions, firms must find means todiscover unsatisfied clients’ needs and offer the clients goodsthat gratify those needs. In this regards, the marketing processinvolves situational analysis, marketing approach, marketing mixdecisions, and application and control.

1.2Marketing process

According to Cravens and Piercy (2008), it is up to the management ofthe firm to find out anything that is making the customersdissatisfied, and work upon improving it. The marketing processtherefore involves a number of tasks. The first one is environmentalanalysis. Environmental analysis is a strategic tool that is used toidentify both internal and external elements that affect the overallperformance of the organization. It entails investigating any threatsand factors that may hinder customer’s satisfaction. Secondly,market segmentation is the process of defining and dividing thehomogeneous market into parts or segments that have similarcharacteristics.

The third element of the marketing process is targeting, which helpsthe organization to identify the groups of customers to attract andserve. There is undifferentiated targeting, concentrated targetingand multi-segmented targeting. Cravens and Piercy (2008) say that noparticular strategy suits all consumer groups. Positioning isdescribed as the process of developing a product and brand imagewhich the customers can identify with.

Implementation is the phase of marketing plan which involvesexecution of the plan that the company has in place to improve itsbusiness (Baker and Hart, 2008). It includes advertisement. Finally,control is an evaluation stage which the organization uses toestablish its marketing plan.

1.3Concept of marketing

The general concept of marketing postulates that an organization mustanalyse the customer’s needs and implement decisions to help meetthose needs. The marketing concept is composed of four majorelements, which are the production concept, the product concept,selling concept and the marketing concept. The production conceptholds that there is a tendency of customer to prefer products thatare cheap and readily available. As such, organizations must ensurethat they produce low cost products and distribute them as widely aspossible. The product concept postulates that an organization has tounderstand the dynamics of user products and design theirs to containhigh standard features, as such, marketer spend time in the market tounderstand the products before advising the production managers. Theselling concept on the other hand holds there is that need for theorganization to make an aggressive effort and promotion to help sellproducts to the consumers.

PartB:1.4Marketing environment

The marketing environment refers to the force that influence theability of an organization to make and maintain a positiverelationship with its clients (Cravens and Piercy, 2008). The macroenvironmental factors that influence decision making in thehospitality industry are economic, political, social andtechnological.

Economic and technological factors are the main macro environmentalfactors that influence Hilton UK’s marketing strategy. Economictrends, such as the 2008 global economic meltdown, have been centralfactors in the marketing strategies adapted by the company. The rateof major currencies such as the Euro and dollar have also affectedthe decision making process at the company (Wharton 2001).Technological trends have also influenced the direction taken by themanagement in marketing the hotels. Use of innovative platforms suchas social media and cloud marketing have provided the hotel’smarketing department with means of reaching customers, especiallyinternational travellers.

Two main microenvironments influence the marketing decisions made byHilton UK. These are the customers and competition. Cravens andPiercy (2008) identifies three main customers, which are Business toBusiness, Business to Consumer, local and international. As forHilton UK, the local and international customers mainly influence themarketing decisions. These groups determine the advertisementchannels to be used, and amount of investment for the same. Over theyears of operation, competitors have influenced the company’smarketing strategy. Major rivals such as Hotel Intercontinental andHyatt Regency have influenced the prices and rates set by Hilton UK.Presently, the company has one of the cheapest accommodations forHotels if its calibre.

1.5Consumer market

There are four main factors that influence the consumer behaviour.The first one of cultural factor. This is crucial when it comes tounderstanding the needs of the customers. Customers are culturallyinfluenced by the society where they were brought up, which teachesthem values and behaviours. Additionally, there are sub-cultures andsocial classes that influence the overall behaviour of the customers.The second one is social factors. These factors have three maincategories, which are reference groups, family and social roles.Accordingly, the groups in which a customer belongs to will influencehow they behave, for instance, the services and products they willuse. Understanding the social factors of the target group helps anorganization to structure its marketing and promotions.

Cravens and Piercy (2008) assert that personal factors alsoinfluence the characteristics of the consumers. They include age andway of life, purchasing power and revenue, personality, andself-concept. One of the strategies to attract customers isunderstanding the personal factors influencing their purchasingtendencies, and making products that they can personally identifywith. Finally, psychological factors play a big role in influencingcustomer behaviour. They are motivation, attitudes, beliefs,perceptions and learning. Similarly, organizations have to understandthe psychological factors that drive the customers’ purchasingtendencies, and develop strategies to attract them by exploitingthese factors. According to Baker and Hart (2008), understanding theCSPP helps organizations to work and better understand the customer’sexpectations, which is helpful in designing the marketing strategy.

1.6Marketing segmentation

Marketing segmentation entails dividing the general market intosubsets, which share similar characteristics and needs. Segmentationentails identifying the geographical position of the business,demography of the clients, physiography and client behaviour. HiltonUK has identified two main market segments. These are solo travellersand business travellers (Katsikeas et al. 2004). The Hotel offerscheap packages for these clients, hence attracting more from time totime. For instance, the company offers per-night accommodations,which can be paid at the reception, without having to go through thebooking process. The hotel has also created common lounges andcommunal facilities, which can be used by the travellers. Accordingto Akbaba (2005), business travellers are a highly treasured consumergroup. This is based on their willingness and ability to pay highprices for accommodation. Given the long periods they spend in theirrooms, Hilton UK has specialized services for these customers, suchas 24-hour room service offerings and free high-speed internetaccess.

LO2: Task 22.1:Importance of components of marketing mix

The concept of marketing mix has evolved over time. In thehospitality industry, this has been facilitated by the growingcomplexity of the definition of products and services. As such, thereare a number of models that have been advanced by scholars, all whichattempt to prioritize the major elements of marketing in theindustry. However, according to Akbaba (2005), the most applicablemarketing mix variables in the hospitality industry are price,product, promotion and place.

Price is the value that the hoteliers place on their products andservices (Yoo et al. 2000). In the hotel industry, there are monetaryand non-monetary prices. The monetary prices include rates and fees,for services such as parking, while non-monetary prices include thoseincurred in traveling to reach the establishments. By defining thecorrect and most customer friendly prices, it is likely that thehotel will retain more customers. In order to reposition thecompany’s hotels back to 5-star rating, it is suggested that pricesfor the peak season be reviewed and reduced accordingly. At the sametime, adjusting valley season services would help the management totend more to the few guests we will receive, in the process improvetheir loyalty.

The promotion element includes all communications associated withmarketing the hotel’s products and services (Yoo et al. 2005). Inthe high-end hospitality industry, it mainly involves advertisementon mass-media. Many companies determine their promotion mixes basedon their clientele areas. Given the size of Hilton UK, mainly usesmagazines, internet and television. The company should further takeadvantage of the popularity of social media for promotion.

In the hotel industry, the product element of marketing mix includesa package are bundle of services that amount to the total offering(Yoo et al. 2005 Armstrong et al. 2000). For instance, when payingfor a hotel room, the client gets alongside the guest room otherservices such as pool, restaurant, fitness centre and housekeeping.Hilton UK uses a number of variables such as packaging, warrantiesand quality to guide the product decision making by the customers. Itis recommended that the marketing department introduce core products,peripheral services and facilitating products to improve the generalproduct of the company.

Place and distribution refer to the accessibility of the products tothe consumers (Armstrong et al. 2000). Many companies use eitherdirect or indirect distribution methods to reach to the customers.Some of the direct methods are personal telephone calls and mediaadvertisements. Indirect methods include travel agents, third-partyonline representatives and event organizers. In order to improve onthis marketing mix variable, some hoteliers choose to switch theiroperations to locations that are more favourable. New resorts havebeen built for improvement over the years. Currently, the Hilton UK’sdistribution strategy relies on information technology and internetto reach the customers. It is advised that a new strategy which willuse IPhone and android platforms to distribute the products andservices. This is based on the popularity of these platforms in themodern hospitality business arena.

2.2:Pricing strategies and policies

In the hotel industry, pricing strategies are used divided intofour main categories. These categories are penetration, skimming,economy and premium pricing (Constantinides 2006). The economypricing is influenced by the purchasing power of the consumers, whilepenetration pricing involves offering of high-end products andservices. Those who use skimming strategy offer higher price productsand services than that in the market, and this is driven by thedesire to associate products with exclusiveness. Finally, the premiumpricing strategy involves cashing in, products, and services onperceived quality. Hilton UK uses premium-pricing strategy. Thecompany, looking to instil a sense of achievement, high status andluxury, only offers 4-star and 5-star at premium prices.Constantinides (2006) says that his strategy is effective forproducts and services that are perceived to be unique.

LO3:Task 33.1:Role of promotional mix

Sunday and Bayode (2011) defines promotional mix as a set ofpromotional methods that are used for a set of products. There are anumber of elements of promotion mix, which include point of saledisplays, merchandising and direct marketing. Advertisement, as oneof the key elements of promotional mix, is a form of communicationthrough which the company’s products and services are identified.It also allows the company to reach to a large number of people in awide geographic location. Hotels use television, newspapers andsocial media to promote themselves. Public relations are anothersignificant promotional tool that is used by Hilton UK. The CharteredInstitute of Public Relations (CIPD) defines is at an organizedattempt to create a positive image of a company to the public (Black2013). The company’s public relations are maintained throughcommunication with clients by using private and public organizations.This includes scheduled online and offline press releases, and anofficial company website (Black 2013).

Personal selling is another key element of promotional mix in thehotel industry. It involves company sales representatives, which aresent to contact clients through certain selected channels. However,one of the disadvantages of this element in the hotel industry isthat it is costly and the number of clients reached is notsatisfactory (Terpstra et al. 2012). This, alongside reasons such asthe nature of business, exclude this element from Hilton UK’spromotional mix. Finally, sales promotion is an element of thepromotional mix that involves persuading potential clients topurchase a company’s products and services (Foxall 2014). Giventhis element’s popularity in the hospitality industry, Hilton UKuses it intensively. This is specifically by engaging in salespromotion by using the official website to award discount vouchers.

3.2:Advertisement plan

A new advertisement campaign will target customers from an extensivegeographical locality. One of the key objective will be to re-brandthe company image and marketing the products and services to newcustomers. The campaign shall also provide a visual representation ofthe hotel as a first choice destination where the clients can spendtime to relax and plan their stay. Additionally, the campaign shalltap into the idea that the management looks forward to provideforgetful experiences for international travellers. The main targetaudience of the campaign will be business executives.

Strategy

  1. There will be use of Hilton UK’s acclaimed reputation as a platform

  2. Social medial will be the central tool for marketing the hotel’s products and services.

  3. Maintain one-one-one communication with external stakeholders such as travel agencies.

  4. Make the ‘customer-first’ the centrepiece of the campaign.

  5. Outsource campaign managers to handle the promotion activities.

Tactics:

  1. Build a close relationship with foreign travellers.

  2. Work with government tourism agencies to promote the company’s name.

  3. Launch a low key, whisper style publicity campaign in major airports and travel agencies.

  4. Maintain close communication ties with first time clients to instil a sense of loyalty.

  5. Launch an interactive platform to engage the public, especially targeting foreign travellers.

Plan:

The advertisement campaign shall run for 6 months. It will run oninternational cable television networks such as the BBC, CNN and AlJazeera. At the same time, the hotel shall be advertised in dailymagazines and travel magazines. The campaign tagline shall be “AtHilton UK, we promise value and satisfaction, or else, you don’tpay! That’s the deal”. It is hoped that this draws immediateattention from the potential clients.

Large companies in the hospitality industry have either publicrelations department or outsource the services for purposes ofmaintaining the company’s image and communications with customers.According to Grunig (2013) and Hendrix et al. (2013), one of the mainadvantages of investing in public relations is that improves acompany’s profit by increasing sales. By making the company’sproducts and services well known by the public, Hilton UK has beenable to attract more customers, especially international travellers.Also importantly, public relations have helped the hotel to safeguardits reputation. The Hotel is recognized as a high class establishmentwhich offers high quality services to all customers. By engaging inpublic relations, the management has been able to maintain this imagein the public, and made the hotel one of the most popular in the UK.

3.3:Role of sales promotion

Hilton UK uses sales promotion as an incentive tool to increase shortterm sales in low seasons. The company uses promotions such asfrequency programs to increase the number of customers that use itsproducts and services when the travelling seasons are low. Thisprogram is designed t reward the customers who are frequent visitors,for instance, by reducing the room prices and expanding the productpackages at fixed prices. Additionally, the hotel uses salespromotion to attract new customers and rewarding the existing ones,hence increasing the level of customer retention. Additionally, thecompany has been using this tool to increase brand awareness. HiltonUK is listed as one of the top brands in the United Kingdom, thanksto the television and internet promotions that increase itspopularity.

LO4: Task 44.1:Relevance of market research

Over the past few decades, research in the marketing and hospitalityindustry has improved significantly. Wilson (2013) and Hendricksonand Ailawadi (2014) say that the major role of marketing research inthe hospitality industry is measuring service quality. As such,marketing research plays a key role in the decision making process.Hotel managers use this tool to better understand the needs andrequirement of the customers, and their views about the business’products and services. Additionally, Zikmund and Babin (2012) andSolomon et al (2014) identify six roles played by marketing researchin the hotel industry. They are:-

  1. Keeping hospitality businesses in touch with the market.

  2. Identifying and solving problems.

  3. Venturing into new areas of business.

  4. Promoting the public interest

  5. Reducing wasteful habits and promoting green-business

  6. Developing goodwill.

4.2:Analysis of marketing research

This marketing research is to collect information about the hotel’swireless internet connectivity service. The management identifiesfree wireless internet is one of the latest trends in improving roomservice in the hotel industry. Desk research will be conducted, whichwill involve reviewing of existing information about wirelessinternet connectivity in UK hotels. The main resources will be salesfigures of hotels providing this service, and customer feedback.There then will be a primary field research, which will involvecollection of information from the clients regarding the strength andefficiency of the hotel’s wireless internet. Questionnaires andfeedback forms will be distributed to the clients. The data will beanalysed and the findings forwarded to the management to makedecisions based on the analysis report. If the data is not sufficientto initiate a decision, the data collection and analysis processeswill have to be repeated.

4.3:Suitability of different media

A big number of business class customers use magazines to getinformation about hotels to accommodate them while on businesstravels. As such, it is proposed that the hotel markets its luxurysuites to the business executives through magazines. According toCrouch and Housden (2012), the aim of magazines is to engage thereaders by employing appropriate modes of address. As such, most ofthose advertising on magazines aim to persuade the clients to buytheir products and services by showcasing their value and class.Luxury travel magazines are some of the most efficient in advertisingluxury suites to the business travellers. According to Luxury Travel(2015), over 70,000 customers use their luxury magazines to learnabout luxury suites offered in the countries they visit. Themagazines are distributed directly to the target clients whiletravelling. Below is an analysis of advertising value of themagazines.

Magazine

Monthly page views

Value per visitor ($)

Vacations and travel

33340

0.66

Australian traveller

39558

0.65

Signature

956

0.65

Luxury travel

508803

1.02

4.4:Implementation of the marketing plan

Before initiating the marketing campaign on magazines to advertisethe luxury rooms, there shall be a trial campaign and measure itsresults. The online magazine performance of the campaign will bemeasured by using Google analytics. The major activities to beinvolved will be monitoring the number of visits per week, andfeedback from the customers. Outsourced IT professionals will conductthe analysis. However, the management team will handle the results,which will also be responsible for decision making.

The implementation stage will involve three major activities. Thefirst one will be communicating with the staff. The staff will beinvolved in making changes to the marketing campaign, such asupdating information about the luxury rooms and any new services. Ifnecessary, a new marketing staff will be recruited to handle thecampaign. Secondly, the marketing team will keep contact with HiltonUK’s unique selling proposition, which will help in setting acompetitive advantage. The third implementation activity will bemonitoring of progress, which will also use experts from ITconsultants.

Conclusion

This marketing report covers Hilton UK chain of hotels. The HiltonCompany is one of the leading hospitality establishment in the UK,and attracts one of the biggest numbers of both local andinternational travellers. However, given some of the recent trends inthe industry, the hotel has suffered a setback, especially in termsof ratings. It is crucial that the management reviews the existingmarketing plan, and develop new strategies to get the hotels back toa five star rating. As such, the report has conducted an overview ofthe company’s marketing mix in order to gain an understanding ofthe marketing cycle in the services environment. While a number ofstrengths in the existing marketing plan have been acknowledged, anew strategy is been recommended. The reported strategy involves theadoption of a new marketing campaign, which specifically aims atadvertising the hotel’s executive suites to business executives.Magazines are identified as the most effective marketing media tool,and the proposal supported by findings from an analysis of tool.Adoption of the report is expected to help the hotel regain the5-star rating it crucially needs for success in the hospitalityindustry.

Recommendations

The report recommends the following:-

  1. Further studies to evaluate the potency of adoption of the recommended strategy.

  2. Involvement of third-party stakeholders in fact finding.

  3. Development of a new interactive platform to collect information from customers for purposes of improving the services

  4. Policy revision to come up with a flexible plan for implementation of future plans.

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