Essay Sample: Hilton Hotels and Resorts - Marketing Segmentation and Strategy

Hilton Hotel and Resorts is among the leading intercontinental companies in the hospitality sector across the world. The company was started by Mr. Conrad in Cisco in 1919 (Belembaogo, 2013). The Hotel involves about 3000 hotels worldwide with approximately 550,000 luxurious and deluxe rooms in 80 countries (Belembaogo, 2013) and its team has increased with approximately156, 000 members worldwide. Currently, Hilton hotel has developed technologies and expanded geographically to improve the experiences of their customers (Miranda, 2004). Due to the stylish and efficient services that the company offers, it has a team that is dedicated to satisfying the interest of both their stakeholders and customers globally. Hilton Hotel has some branches that showcase its brand to customers, for example, Hilton Conrad hotels and resorts, Hampton Inn, Hilton Garden Inn, Hilton Grand Vacations, and Waldorf Astoria Collection (Karppinen, 2011). Customers not only enjoy luxurious services and mid-priced hotel services, but also they enjoy the using social media networks like Facebook, YouTube, and Twitter in engaging with the hotel (Diplomica, 2007). Therefore, Hilton Hotel remains to be an international and stylish leader in the tourism and hospitality industry. The company carries out marketing based on business aspects, which provide an excellent service and picture to its clienteles (Forbes, 2011). The company carries out marketing activities differently when compared to its rivals, giving it a sense of purpose and direction. The company's marketing segment has sufficient staff, a well-defined team and well-planned schedule, which is dedicated and responsible to their duties (Belembaogo, 2013).

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No hotel has more brands that span more lodging segments than Hilton does. The company provides services and products for both business and leisure travelers. It provides values and benefits to its consumers centered on its reasonable rates and amenities. Hilton offers its customers with products and services, from luxurious full-service hotels and resorts to extended-stay suites and misprices hotels (Forbes, 2011). For business convenience, the hotel offers business center, audio/visual equipment rental, meeting rooms, business phone service, printer, and photocopying service. For family's convenience and comfort, the hotel provides Kids' menu, high chairs, and cribs. For recreation and fitness convenience, the hotel offers sightseeing tours and fitness room. Thus, because of its service, amenities, and products, Hilton hotels and resorts continue to remain stylish and innovative restaurant in the hospitality industry (Lee and Carter, 2012).

Market segmentation is the separation of the market into segments or groups by looking at the market characteristics. The segments that are most attractive are based on services and products the hotel is targeting. Thus, segmentation in Hilton Hotels and Resorts is instrumental in developing marketing strategies, identifying clients better and identifying opportunities and assessing the strengths and weaknesses of Hi[ton hotel (Morrison, 2010). Targeting is defined as the manner in which the market segments are selected to develop improved products and services, which center on the segments (Hudson, 2008). Targeting enables the company to aim at satisfying the needs of customers. The target markets for Hilton Hotel and Resorts include:

Geographic Segmentation

Geographical segmentation targets specific groups of customers by focusing on their geographic locations in both national and international levels. The geographic segmentation for Hilton Hotels concentrates on the local preference and the site of the market (Karppinen, 2011). The hotel packages its services and products based on its geographical destination and destinations culture. This involves segmentations through the territory, region, state, and religion since customers defend and preserve their cultures and belief systems (Edwards and Ewen, 2004). For instance, Hilton Kabul is situated in an Islamic city has to observe Islamic laws and regulations touching on its market segments (Fletcher J et al. 2013). In other secular regions like Sydney, this does not occur because of the different view of religion by people in Sydney (Dudovskiy, 2013). Thus, the market segment should be segmented both locally and internationally since consumers come from different parts of the world.

Demographic Segmentation

Demographic segmentation uses different variables, for example, social class, lifestyle, income, gender, life cycle stage, and age (Karppinen, 2011). Hilton Hotels and Resorts can use this segment to represent both middle-aged and senior professionals with augmented income from the upper social class (Adcock, Halborg and Ross, 2001). Thus, the hotel needs to pursue customers with luxury lifestyle by charging high prices for its products and services. Psychographic SegmentationPsychographic segmentation focuses on the behavior of clients by looking at their feelings, personality, lifestyle, and values as a segmentation variable (Tourism Report, 2010). Hilton Hotel uses psychographic segmentation in targeting eager customers who love to express their high status and perceived achievement by staying in luxurious rooms at premium prices. The nature of Hotel businesses enables the company to focus on high-income individuals in business or disposal individuals since the products and services from the hotel match their lifestyles, personalities, and values (Dudovskiy, 2013).

These segments need to be targeted by Hilton Hotel and Resorts especially the geographic segments and psychographic segments for the reason that the services and products offered are high. Thus, whenever Hilton Hotel selects a marketing approach, the renowned market method is the finest where the marketing mixes focus on more segments.

The current key drivers of external change influence service provision in Hilton Hotel include:

Pricing Strategy

Hilton Hotel should not set a single price; instead, it should use a pricing structure, which reflects variations based on costs, purchase timing, the frequency of delivery, and other factors. These pricing strategies can be categorized into the pricing strategy matrix: premium pricing, penetration, and economy, which influence service provision in the company (uweteamextreme, 2013). Economy pricing strategy includes the delivery of high-quality products and services to increase the company's market share (Miranda, 2004). Skimming is the penetration of the company's product and services at reduced prices than their competitors. Premium pricing strategy is the provision of services and products, which have excellent quality and additional characteristics at higher prices (Baines, Fill and Page, 2013). Economy pricing strategy, the company will get a low-profit margin, dilute brand image, and result in complaints from retailers due to the lobbying of the retail price. Through skimming, the company will be able to sell more products compared to its competitors, increasing the market share and profit margin in the company. The premium strategy may reduce the sales of the goods and services that have additional characteristics and excellent quality. The premium strategy may also be used as a promotional strategy to increase the profit in each unit of the goods sold by the company. Thus, premium, penetration and skimming strategy may be considered as forms of promotional discounts that give an extra boost to sales by stimulating interests of customers to buy.

Technology

Through technology, Hilton Hotel can interact with its customers using a different platform. Through online services, it becomes easier for the company to promote its products and services (Frolick and Ariyachandra, 2006). This empowers Hilton Hotel to communicate more efficiently and directly to clients and attracts new customers by promoting the company's brand awareness. However, if Hilton Hotel continues using social media to increase deeper understanding with their customers may give customers an advantage whenever they want to complain about poor service or products publicly (Bateson and Hoffman, 2011). Fostering a good relationship between the customer and the Hotel will further enable the company to be more valuable and informed in offering services that can satisfy the needs of customers (Wirtz, Chew, and Lovelock, 2016).

Keeping track of the current changing needs and latest development helps the Hilton Hotel and Resorts to create its segments to suit its business operation (Reid and Bojanic, 2010). There is no wrong route to segment the target market as segmentation is based on the creativity of the company and the reasonability of the segments to penetrate the market. Organizational success is determined not only by the firms investment but also through establishing a good relationship with customers (Hartlen, 2004). The current key drivers of external change that influence service provision in Hilton Hotel are technology and pricing strategy. Hilton should use premium, penetration, and skimming strategy as forms of promotional discounts that give an extra boost to sales by stimulating interests of customers to buy. The hotel should also use social media to communicate more efficiently and directly to clients and attract new customers thereby promoting the company's brand awareness.

References

Adcock, D., Halborg, A. and Ross, C. (2001) Marketing: Principles and Practice. 4th ed. Harlow: Financial Times Prentice Hall. (available as an e-book).

Bateson, J.E.G., and Hoffman, K.D. (2011) Services Marketing, 4th International Ed., Andover: Cengage.

Baines, P., Fill, C. and Page, K. (2013) Essentials of Marketing. Oxford: Oxford University Press.

Forbes, A.M., 2011. The Trinidad Hilton: a cost-benefit study of a luxury hotel. In Using shadow prices (pp. 15-42). Heinemann London.

Diplomica VerlagRutherford, D. G. (2007) Hotel management operations London: John Wiley & Sons.

Edwards, M, and Ewen, A, (2004). How to manage performance and pay with 360-Degree feedback, Compensation and Benefits Review.

Fletcher J et al. (2013) Tourism: Principles and Practice, 5th Ed., Harlow, England: FT/Prentice Hall.

Frolick, M, and Ariyachandra, T. (2006). Business performance management: one truth. Business intelligence, winter, 41-47.

Hartlen, B. (2004). Playing Politics: Debunking the Myths That Block a Successful BPM Implementation. Business Performance Management, June, 1012. Hilton worldwide (2010). http://www.hiltonworldwide.com/ [Accessed 24 May 2016].

Hudson, S. (2008) Tourism and Hospitality Marketing. A Global Perspective. Los Angeles: Sage. (available as an e-book).

Lee, K. and Carter, S. (2012) Global Marketing Management, 3rd Ed. Oxford: Oxford University Press.

Morrison, A. M. (2010) Hospitality and Travel Marketing. 4th Ed. New York: Cengage Learning.

Miranda, S. (2004). Beyond BI: Benefiting from Corporate Performance Management Solutions. Financial Executive, 20(2) 5861.

Tourism Report. (2010). Company Profiles: Hilton. Business Monitor International, Q3, 49. Travel Courier. Check in: Hilton. June, 25.

Belembaogo, N. H., 2013. Hilton Worldwide Strategic Plan Presentation. [Online] Available at: https://prezi.com/-e3idviwgqef/hilton-worldwide-strategic-plan-presentation/[Accessed 24 May 2017].

Dudovskiy, J., 2013. Hilton Hotels Marketing Mix. [Online] Available at: http://research-methodology.net/hilton-hotels-marketing-mix/[Accessed 24 May 2017].

Dudovskiy, J., 2013. Hilton Hotels Segmentation. [Online] Available at: http://research-methodology.net/hilton-hotels-s...