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This report aims to conduct a PESTLE analyse to better understand Hilton's marketing environment and create efficient tactics to delivery value proposition to customers in the following six months. Facing the external factors of recession, decline in overseas tourism and even the Volcanic Ash. Some tactics are adopted ,which focus on different customer groups, ranging from the hotel's service itself to promotion, public relation and distribution.. Furthermore, some key performance indicators and ROMI will be used to measure the performance.
UK hotel industry has been growing rapidly. As mentioned in Keynote(2009) that ‘‘ between 2004 and 2008 the value of the hotel market increased by 29.1% to reach £15.87bn in 2008''.
Keynote(2009) indicates that the UK hotel industry based on two fundamental elements. These included corporate and consumer.
Hilton hotels are one of the most world class accommodations in the world, which owned by Blackstone group and operated in more than 80 countries(Keynote,2009). When looking at Hilton financial situation,'' in the year ending 31st December 2007, Hilton International Hotels (UK) Ltd had a turnover of £58.1m, compared with £65.4m in 2006''(Keynote,2009).
For competitor analysis it can be clearly said that Hilton Hotels has direct and indirect competitors. Direct competitors are, which include luxury hotels such as Ritz Carlton and Marriott hotels. Indirect competitors are accor hotels and substations such as staying in caravan.
An understanding marketing environment crucial for companies. PESTEL analysis can be an useful tool to analyse marketing environment. As Worthington and Britton(2009:475) mentioned that ‘‘PESTEL analysis looks at likely changes in political, economic, social cultural and technological factors and seeks to predict the extent to which change is likely to occur and its possible consequences for the organisation''. PESTEL analysis will be shown below:
l The rejection of visa application (especially by non-European and non-US nationals) will lead the booking cancellations of hotels.
l The economic downturn lead to the decline in overseas tourism which influences turnover and profits in the hotel industry adversely. (Keynote, 2009).
l In tougher economic times, some less-expensive types of accommodation (e.g. Self-catering) becomes a great threat to hotel industry.
l The recession brings hotels the opportunities to target guests with home-based stays instead of potentially trips abroad which is more expensive.
l The UK market incorporates a number of internationally well-known brands and chains. Hilton hotel as a strong brand, it has advantages to attract customers and it also cooperate with other companies and charity organisations.
l The short-breaks market could target the ageing UK population as well as an increasing number of adult households. (Keynote, 2009)
l The Internet enables easier booking of rooms and provides all kinds of information about Hilton hotels including reviews made by previous customers.
l Social media provides a new way that Hilton Worldwide interacts with guests. The customers are sharing their hotel stories and through online services such as TripAdvisor, Twitter and Facebook. If the Hilton hotel is active and available through these popular channels, it can not only develop brand awareness but also attract new customers.
l It is necessary for hotels to comply with environmental related regulations and laws , reducing possible impacts on the environment from the operations of the hotel.
l Due to the Iceland's Volcanic Ash, most flights delay and airports closures. Hotels are directly affected by this situation.
Current Marketing Activities
Hilton Hotels do cooperation with IBM for assistance of technical system, worldwide booking system, global e-mail service and data driving system. All of these technology innovations give Hilton Hotels a convenient flat-top building to promote their service effectively.
Public relation plays a key role to improve business performance. As Copley(2004:236) advocated that'' public relation a strategic necessity as opposed to a tactical tool in order to that organizations are able to make the most of opportunities''. Hilton has already become sponsorship with some organisation in UK. For instance ‘‘Hilton Hotels has agreed a three-year deal to become one of Premier Rugby's exclusive partners, and the official Hotel Partner of the Guinness Premiership''(www.marketingmagazine.co.uk).
Six Months Tactics
A creating efficient marketing tactics may bring some advantages to organisations. As Copley(2004:123) advocated that ‘‘creativity is an important factor in over communicated society, especially when developing a position to differentiate product/services''.
The aim of creating these tactics is 15 % increasing the occupancy rate of Hilton Hotels. Different tactics can be created for different customer groups. Such as for organisations, new couples, royal suite customers.
Firstly, cooperating with companies may enable Hilton Hotels to make a good profit and increase its market share in hotel industry. UK has a strategic location for business. Hilton can aim to make contract with some companies, which may generate 400 room nights in six months in its UK hotels. As an action Hilton Hotel groups can contact businesses to make appointment in order to do presentation, which may be an efficient way to explain Hilton's honour for its customers, advertising in business magazines or both, flights first class, business class and cruise ships can be also a very useful way to introduce Hilton's excellence benefits for customers. Some promotional tactics can be improved. These may include to provide a free meeting room and free airport pick-up service for companies. In addition, after each agreement Hilton may donate to charity organisations, which can be 1 % share of profit for each agreement. Therefore, Hilton group and its customers may have a good image in the eyes of the world and many companies may want to have cooperation with Hilton Hotels.
Secondly, the customers, who want to stay in Hilton's royal suite room should have an excellent service, because these people are on the most profitable customers for hotels. It is vital to create differentiation and unique service for customers. Providing free limousine service for these customers during their staying days in Hilton hotels can be a good way to attract these customers. Unlimited food and drink options also can be an efficient way in terms of adding customer value. Furthermore, personal assistant can be hired to these customer, which may enable to solve their problems immediately.
Finally, Hilton groups also can create some promotion for new couples. Hilton group can provide an excellent wedding organization service for its customers. An efficient slogan or message should be created and in this point a value proposition is a fundamental. As Shimp(2010:218) point out that'' a value proposition is the essence of a message and the reward to the consumer for investing his or her time attending to an advertisement''. Slogan can be ‘‘ Make her dreams come true''. The customers who will get marry by Hilton organisation, will have a tremendous wedding ceremony and honeymoon, which can include romantic atmosphere and special room decoration, food and drinks such as premium wines. Social networks, such as Twitter and Facebook can be used for advertising.There is a dramatic increase in the amount of social network users, it just takes Facebook and Twitter two years to reach an audience of 50 million. According to Harris and Rae, businesses are now realizing the potential of these communities in developing their brands and building relationships with key customers (Harris&Rae,2009). Moreover, wedding magazines can be an efficient way to promote Hilton's excellent services.
According to Blythe (2009), KPI's are often used to measure the performance of the business and to assist in making organization's strategy .Some KPI's are crucial to Hilton hotels, such as effective advertising, new customers acquired, revenue generated by different segments of the customers and customer satisfaction.
During the report writing process, our team faced with several problems. However, by all group members' hard work, finally we went through these problems successfully.
At different stages five group meetings were organized for the report in all. Firstly we needed to decide which brand to choose, by reviewing Keynote's industry report and related company profiles, the well known hotel brand Hilton appealed to us. Then related information of Hilton from various sources was collected and shared by each of us. In order to present the strategic considerations and detailed marketing tactics in the following six months for Hilton in this brief report, we discussed about the structure and critical part of the report and then assign everyone with different part. With the purpose of making future marketing tactics for delivering value proposition which is key to Hilton hotel, our group members put forward kinds of tactics and solutions according to books, journals and other references in this area.
Nevertheless, some conflicts between different members emerged in the process, for example, some of us emphasized on the importance of service itself while others paid more attention to promotion. Taken cost, practicability, ROMI and other potential benefits into account, the importance degree of different tactics were evaluated and compared, finally an agreement reached according to the result of the analysis.
This report provides an opportunity to apply theories of delivering value proposition to practical marketing tactics. On the other hand, our team work skills also enhanced as a result of cooperation.