Marketing Concept In The Hospitality Industry: A Case Study Of Hilton UK

Marketing Environment and Consumer Market in Hospitality Industry

The report talks about the marketing concept on the hospitality industry. The hospitality industry is a broad category of the fields that include the fast food chains, restaurants and the other food and beverage hotels. The report is based on Hilton Hotel UK; the corporation is having leading hospitality chains. The company currently consist of more than 3,500 hotels across the world in more than 103 countries and territories.

The report shows the marketing environment that affects the working of the company along with that it consists of the consumer market. It consists of the decision-making process and consumer behavior factors. The marketing segmentation and the pricing strategy are discussed along with marketing mix that helps the company in making right strategy.

Hilton Hotel UK is one of the largest and the fastest growing hospitality companies in the world who is having the more than 5,100 properties with more than 838,000 rooms in approximately 103 countries and territories. This brand is a most recognized brand in the world and also consists of Hilton Hotels and Resorts brand. In total 69 members of the company enrolled in the award-winning customer loyalty program (Hilton, 2017). The company is having many outlets in the UK, especially in London.

The marketing concept is the philosophy that the firm makes use of to analyze the needs of their customers and according to this requirement of the customers, the decision is taken by the companies. According to Philip Kotler, marketing management is a managerial and social process with the help of which the individuals or firms take what they need or want through generating, offering, exchanging products of value with each other (Srivastava, 2011). Kolter said that marketing concepts are the philosophies used by the Hilton organizations to guide their marketing efforts. The author says that the core concept of the marketing includes the need, want and demand along with products, value, cost and satisfaction (Pahwa, 2017).  

• Need- the need is the state of being deprived of some basic satisfaction which includes clothing, safety, food, and shelter.
• Want- Want is the desire for the specific satisfier of need.
• Demand- When the want of the particular product convert into the ability and willingness to buy the product.
• Products- Product can be service or particular think that helps the company in satisfying the need and want of the customers.
• Value- the decision of the purchase of the product is depended on the value/cost satisfaction delivered by product/offering. Value is products capacity to fulfill the needs and wants according to the customer expectations or estimations (Srivastava, 2011).

According to AMA’s the concept of marketing is the activity, set of processes for delivering, communicating and exchanging offers that have value for the clients, customers, partners and the society at large. AMA’s says it is a way to analyze and evaluate the customer needs and expectations with the help of the framework. American Marketing Association defines a marketing management as the process of executing and planning the conception of pricing, promotion, distribution of serviced and ideas to create exchanges that satisfy individual and organizational goals.

Marketing Strategy for Hilton UK: A Case Study

Each and every company works with the objective, Hilton hotel also has an objective to provide the exceptional experiences to the customers which help the company to improve the market share. The company has an objective to expand the business across the world and to grow in the industry of hospitality.

The vision of the Hilton Hotel is to fill the earth with the light and warmth of hospitality by delivering exceptional experiences to every guest in every hotel and every time. The mission of the company is creating heartfelt experiences for the guests, high value for owners, an opportunity for team members and the positive impact on communities (Hilton, 2017).

Each and every company maintain some of the values similarly the values of Hilton hotel are-

• H- Hospitality (company believes in delivering memorable experiences to customers)
• I- Integrity (company believes in performing right activities)
• L- Leadership (company believes that they are leading in community)
• T- Teamwork (company believes that they are players)
• O- Ownership (company is responsible for the actions and decisions)
• N- Now (company believes in maintaining the discipline and urgency)

The business environment is the marketing environment that includes the factors which can affect the ability of the company to make the decision. The major marketing environment consists of the macro and microenvironment.  

Strength

• The company has strong brand recognition of Hilton in the UK.  
• The company makes use of technical innovations to enhance the customer experiences and constant upgrade the business processes.
• The brand maintains a good brand reputation in the UK market.

Weakness 

• The company maintains the limited market share despite having brand recognition.
• The business operation of the Hilton gets affected due to different government policies and the parameters (Mba Skool.com, 2017).

Opportunities 

• The company can make use of digitalization and the better use of technology.
• The company can bring innovations in the customer services to enhance the customer satisfaction.
• The company considers London as the prime location and this is the reason its most of the hotels are situated in London. The company has an opportunity to expand business at different locations.

Threats 

• The company might face the threat from the other international brands present in the UK.
• The threat of the pricing strategy can be faced by the company; the pricing strategy will enhance the competition in the market.

The microenvironment nearly factors that affect the ability of the company to serve its customers and these factors consist of suppliers, customers, distribution channels, and the general public (Chand, 2017).

• Suppliers- The suppliers of the company can affect the reputation and the profit of the company. Each and every company try to maintain the good and smooth relationship with the suppliers. The Hilton UK obtain their products locally from the suppliers and this is the reason company maintain the partnership to discover the sustainable products. This is said by the company that their success depends on the ability of the support of the local suppliers (UWE Hilton, 2013). The support of the suppliers can create an impact on the company ability.
• Customers- Hilton believes in offering the variety of services to its customers such as family fun packages, wedding ceremonies, and some parties relate to the Hollywood galas. Apart from these facilities company also provide some of the general facility to the customers. Though customers are expecting more from the company such as tourism and business travel purposes and this expectation of the customers affect the company while making the decision.
• Competitors- Company maintains the large scale of branding and reputation in the market and this is the small independent firm find it difficult to compete with the Hilton. This is the reason the threat of the new potential entrants is very low. The company offers different facilities to the customers such as loyalty programme and redeemed rewards and offers to the customer who visits on the frequent basis (Hollensen, 2015).
• Media Publics- The website of the Hilton is the best source for accessing the information for the public with the pictorial content and it is easy to visualize the hotels and their rooms. It also engages the media concerning the hotels across the world like Annual Corporate Responsibility Report. Currently, the company reduced the water consumption by 10% which became popular in front of the media. This helps the company in enhancing the reputation and brand name in front of the general public.

The company makes use of the PESTLE tool that helps the company in analyzing the factors that affect the Hilton UK revenue and the long-term growth objectives.

(Source: Marketing Minefield, 2017)

• Political factors- The Company get affected due to political instability as in London on 7^thJuly 2005; the UK was temporarily branded as the pace that accommodated a set of extremist religious organizations. These risks and the threats of the terrorism in the UK affect the Hotel industry (UWE Hilton, 2013). There is likely decrease in the number of visitors to London due to the terrorist attacks the UK and this creates the impact on the Hilton performance in this market.
• Economic factors- The economic factors affect Hilton hotels and resorts situated in the UK. At the times of UK Olympics in the year 2012, the most of the hotels were fully booked and occupied and once the Olympics game were over then the situation was completely different. The economic crises which took place in the year 2007-2009 in the UK set and this created a risk factor for another economic crisis. The changes in the currency rate and the inflation rate might lead to the crises.
• Social factors- The travel and tourism industry is having the highest contribution in the UK. The total contribution of the industry in the UK was GBP 101 billion in the year 2011 or it can be 6.7% of total GDP. The company provides the services considering the customer needs.
• Technological factors- Hilton make use technology as the company offers the facility of the online app to its customers. The customer can check the room availability and can book and pay the amount for the rooms. The company does provide the facility of the Wi-Fi and the updated technology device in hotels so that customer can browse the features of the company.  
• Environmental factors- The hospitality industry is responsible for exploiting the environment. Hotels are contributing to enhancing the number of carbon emissions which leads to the issue of global warming (Dudovkisy, 2017). The company is following regulation of decreasing the carbon footprint, inevitable increasing levels of operational costs of the company. The corporate responses of the company show that they have taken the steps to reduce the population levels.
• Legal factors- The Company fulfill the laws and regulation of these laws and regulations can impact the working of the company. In the hotel industry, the company follow the health and safety laws, minimum wage law and provide the benefits to the employees (Della Corte, 2016).

The consumer market refers to buyers who purchase the goods and services for the consumption rather than resale. Each customer is having their preferences and the buying habits in the single market so this is the fact that the factors which can affect the consumer’s behavior of buying products.  

There is presence of some of the factors that can affect the consumer buying behavior and some of these factors are discussed below:-

Cultural factors- Cultural factors are the basic factors that create the impact on the consumer behavior. The cultural factors consist of value, perception, geographical regions, social satisfaction or classes. London is the place where most of the hotels of the Hilton group are present. The place is a well-known tourist where the people like to visit and whoever visits the place will like to stay in the 5-star hotel. The consumer believes that the facility provided by the Hilton is impressive and attractive that grabs the attention of the customers (Horner, and Swarbrooke, 2016). Though, the services of the company are available for the high-class group this might affect the customer preferences.

Conclusion

Social factors- The social factors include the group, family, social roles and status that can affect the consumer behavior towards the products and services offered by the company. The family members of the consumer can share their opinion or force the consumer which leads to change in the buying behavior. The Hilton hotel and resort are mostly recommended by the family and friends of the consumer because the services provided by the company is outstanding.

Personal factors- The consumer might have some of the personal factors due to which the decision of buying the product might get affected. These personal factors consist of age and stage in a life cycle, economic conditions, lifestyle and values and occupational. The consumer can’t afford to buy the products and services offered by the company because of high prices. The economic condition of the consumer can affect consumer buying behavior (Cohen, Prayag, and Moital, 2014).

The customer decision process is important for the organization because if in case the organizations won’t understand their customers they can fail. The customer decision process starts with the problem recognition and ends with the post-purchase behavior.  

• Problem recognition- The buying process starts when the consumer recognizes a problem in making the choice among the various available options that can meet the expectations of the customers.
• Information search- The major information sources used by the customers are friends, family members and the commercial sites (advertising and websites).
• Evaluation of alternatives- The choice of the hotel is dependent upon the factors like location, price, cleanliness, and atmosphere. Considering all the factors the consumer will shortlist the hotel (Solomon, 2014).
• Purchase Decision- The purchase decision made by the consumer not only dependent upon the factors but also depend upon the price of the product.
• Post Purchase Behaviour- The post-purchase behavior matters a lot for the consumer, after buying the product if the product is not able to meet the expectations of the customer then it is going to spoil the image of the hotel.  

The consumer decision-making process gets affected due to cultural, social, individual and the psychological factors. The culture value includes the myth, values, and customs that can affect the consumer to buy the product. The consumer gets influence with the opinion shared by the friends and family members of a customer (CCF Marketing, 2017). The psychological factors also affect the consumer buying decision which includes the perception, motivation, learning and beliefs and attitudes of a consumer.

The market segmentation is the process which consists of markets divided into different segments or groups. This segmentation process is essential for each and every company because these segments help the companies in identifying the best suitable segments on which they can target efficiently and effectively (Hemsley-Brown, 2017). Similarly, Hilton UK needs the process of market segmentation so that company can use their corporate resources effectively which helps the company for the better strategic marketing decisions. The segmentation also helps the company to target the segment from which they can achieve the growth and success and this success helps the company in enhancing the position (Dudovkisy, 2017).

The geographic segmentation refers to as targeting specific group considering the location. The organization makes use of the geographic segmentation and the company believes in targeting the popular places where tourists most like to visit. In the UK, London is one of the places which are selected by the company and in London also the company selected the prime locations such as Aldwych, Canary Wharf, Tower Bridge, and Trafalgar Square. These places are selected by the company because of the company knowers that most of business and travel visit occur at these places.

This segmentation consists of gender, age, income, lifestyle, social class and many other factors. Hilton UK targets the middle and the senior age professionals having high income and belongs to the upper-class society. The prices of the products and services provided by the company are relatively high that is suitable for the people who belong to the premium lifestyle (Anderson, and Xie, 2014).

The psychographic segmentation includes the consumer values, personality, and lifestyle. The company target the UK customers who perceive the high status and believes in availing the services offered by the luxury brand as they believe this will add value to their status.  

The marketing mix is defined as the set of marketing tools that are used by companies to pursue its marketing objectives in a target market. The 8p’s of the marketing mix; product, price, place, promotion, People, Packaging, partnership, Programming together play a vital role. This marketing mix helps the service industry to determine the right marketing strategy for the company. These marketing strategies help Hilton UK to eliminate the failure in the marketing strategies formed by the company (Bhasin, 2016).

(Source: Bhasin, 2016)

Product- The product of the Hilton hotel and resort consist of the quality services, deluxe rooms, restaurants, and bars. The company provides the facility for event celebrations, wedding, and banquets and some gala experience to their guests.

Place- Hilton UK selected London as their prime place where the company maintains many properties. London is selected by the company because the company knows this very well that this is the well-known tourist place. The company believes that the selection of the place includes the surroundings to enhance the experiences (Bowie, Buttle, Brookes, and Mariussen, 2016).

Price- Company follows premium pricing strategy for its delight services. The company has a dedicated team of researchers and the experts that helps the company in deciding the prices for their services.

Promotion- Hilton is the well-known brand in the market of UK still the company makes use of unique promotional activities in which the company provide the exclusive membership to its customers. The company should make use of social media strategies for promoting products (Tuten, and Solomon, 2017). The costing of the company on the other promotional activities is shown below:-

Items	Cost (in Euro approximately)
Advertising	1.2 million Euro for 1 year
Marketing campaign, sponsorship	3 million Euro
Website maintenance	Euro 50,000
Other promotion	1 million Euro

People- People include the staff and the employees working in Hilton UK. The company is having a well-dedicated and focused team who bring the new strategies towards the company that helps the company in attracting customer because of its unique and innovative services (SINGH, and KUMAR, 2015).

Packaging- The packaging includes the packaging of the product, the products, and amenities provided by the company. It also includes the online experience provided by the Hilton hotel to its customers.

Partnership- The company is the wholly own subsidiary there is no as such partnership of the company. The company is expanding the business and entering the market through wholly owned subsidiary so there is no partnership.

Programming- The programming includes the process followed by the company and the hotel believes in providing the delight services. To provide the services company performs the research and development and IT activity.

Every business makes use of pricing strategies while selling a product or service in the market. The price is kept by the company so that the company can maximize the profit by selling each unit (Nagle, Hogan, and Zale, 2016). There are certain pricing strategies like skimming, penetration, product mix, penetration, product mix, price adjustments, competitor analysis, and policy (cost-plus, break-even, value-based, competitors-based).

• Skimming- In skimming pricing strategy the company keeps the high prices of the products to sacrifice the high sales to attain high profit (Spann, Fischer, and Tellis, 2014). Similarly, the Hilton keep the high prices of the product and this is the reason company is able to make more profit and this profit is help company to expand the business across the world.
• Cost-plus pricing- This method is a cost-based method that is used by a company to sell the products after adding the markup percentage in the product, this markup percentage is profit margin (Nagle, Hogan, and Zale, 2016). Hilton adds up the profit margin percentage in the direct material cost while selling the products and services.
• Competitor analysis- Many companies do keep the prices of a product after doing an analysis of competitors pricing strategy. Similarly, Hilton keeps the prices of a product after comparing the prices kept by competitors so that they will be able to provide the best price to the customers which help the company to attract more customers. The competitors of Hilton include Marriott, Hyatt Hotels Corp, and Wyndham Worldwide.

A marketing plan is a comprehensive blueprint or document that outlines a business and marketing efforts for the following year. It involves business activities that help in accomplishing particular marketing objective within a set time frame (Baker, 2014). The marketing plan works like a roadmap that is drawn to help the company to make the goods and services available to customers. The implementation of the marketing plan for Hilton hotel is given below: –

Milestone	Starting Time	Ending Time	Duration
Setting of mission and objective	January 2017	January 2017	1 month
Analysis of the market environment (PESTLE analysis)	February 2017	March 2017	2 months
Analysis of SWOT (to identify strength and opportunity)	April 2017	May 2017	2 months
Evaluation of the consumer market	June 2017	September 2017	3 months
Identification of the target market	October 2017	December 2017	3 months
Development of the marketing strategies	January 2018	February 2018	2 months
Evaluation of the cost/finance required	March 2018	May 2018	3 months
Execution of plan	April 2018	June 2018	3 months
Evaluation of Plan	July 2018	October 2018	4 months
Implementation of changes in Plan	November 2018	December 2018	2 months

The above is the implementation plan of the Hilton Hotel as the company for the expansion of the business in the market across the border. The company has to set the mission and objective so that the company can accomplish the objective but to accomplish the objective the company need to analysis the external environment. The analysis of the SWOT analysis is required to identify the opportunity which is going to help the company to expand the business. Each and every business tries to convert their weakness into the strength.

The Evaluation of the consumer market helps the company in identifying the availability of the opportunity in the business or the company will be able to achieve the success or not. In the particular consumer market, the company identifies the target audience to whom the company wants to provide the products. The company then form the marketing strategy that helps the company to make the space in the market. The strategies are related to the price kept by the company for the product and company also develop promotional strategies. After the formation of the strategies, there is an evaluation of the cost required so that execution of plan takes place. The company evaluates the plan so that company can bring the changes in the plan if required. 

Conclusion 

The report throws light on the marketing philosophies and practices of the company. The company selected for the analysis is Hilton Hotel; the report is based on the service industry which is one of the growing industries in the current competitive market. The report includes the impact of the marketing environment on the industry. These factors can impact the decision of the company (Czinkota, and Ronkainen, 2013). The consumer market analysis is discussed in the report which shows how the company gets affected due to changing behavior of buying product. Along with this, there are some factors that affect the company’s decision-making process. Marketing Segmentation helps the company in identifying the target market which helps the company in generating revenues. The marketing strategies formed by the company are discussed below along with the implementation plan.

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