Market Segmentation of Hilton Hotels
Discuss about the Value Proposition Evolution and Corporate Ventures.
The aim of this paper is to introduce the marketing concept of Hilton Hotels. The marketing concept is used to analyze to meet the need of customers. It is helpful in satisfying customer needs, increasing sales and maximizing profits. The marketing concepts include concepts of production, product, selling, marketing and societal marketing. The study is based on the Hilton Hotels. Hilton is one of the leading hotels. It has multiple chains in many countries. The report defines the purpose of marketing segmentation which is useful for the hotel. The target market is discussed to define target customers. The market theory is used to identify value proposition of product to the target market. The innovative gallery is the new product of Hilton which is used to explain the task.
Market segmentation is a marketing concept. It is the process of dividing market potential customers into group or segmentation. A market is segmented on the basis of individuals who have same interests. The individuals from the same segment react in a same way. Hilton has different customers from different backgrounds (Du, Yang, Liang & Yang, 2016). The marketing segmentation of Hilton Hotel includes the benefits, demographic, geographic and behavioral segmentation. The market can be divided into the following segments for the innovative gallery:
Hilton hotels is a leading hotel worldwide. The company have expansion and set base in over 78 countries. It is an exclusive provider of luxury services (Vigneron & Johnson, 2017). This information bears a certain perception in the customer’s mind. The attitude and behavioural aspects towards brand is expected. On the basis of these perceptions and knowledge, the hotel has created an interesting segmentation of customers. It is creating a place in the high end community (Tanford & Malek, 2015). The governments and international dignitaries also prefer to choose Hilton for their launch and meetings.
Hilton hotel is a high class and exclusive service provider. The company has 530 hotels and resorts worldwide. The benefits segmentation includes segmentation on the basis of benefits customers who aim to obtain products or services offered by the company. Hilton provides benefits to the potential and existing customers. The benefits include a sense of achievement and high status in society (Xiang, Magnini & Fesenmaier, 2015).
The geographic segmentation focuses on the location and local preferences. The hotel decides it’s service packages according to the culture and geographic locations. This segmentation is done on the basis of culture, religion, state and territory (Rondan-Cataluña & Rosa-Diaz, 2014). It involves targeting a specific group of customers on the basis of geographic locations in both national and international level.
Target Customers of Hilton Hotels
The demographic segmentation includes the middle and senior aged professionals with a higher level of income. This section preferably belongs to the upper social class who chase luxury lifestyle. On the basis of need and preference of customers, the hotel can easily target market. The company also targets foreign tourist and delegates.
After the process of segmentation, targeting formulates various marketing strategies and promotional schemes as per the taste of the particular segment. After the process of segmentation, an organization uses various strategies to target them. The hotel can easily target customers on the basis of need and preferences. After segmenting the market, best customers are targeted. The target markets of Hilton are:
The higher level of income group can be easily targeted by the hotel as they are ready to pay any amount for their convenience and accessibility to the things. The upper social class looks towards innovative products. So, Hilton can target them by introducing innovative gallery. The innovative gallery is very effective for the foreign tourist and delegates. As they can use earpieces available there to communicate to staff through an app called new stress intervention in any language. The tourists are attracted by the innovative gallery as it represents the culture of a particular country (Firat, Ozaltin Turker & Metin, 2014).
An organization tries to build up an image of it’s product after deciding target market. Hilton can create an image of it’s a new product that is an innovative gallery in the mind of consumers through positioning (Blankson, 2016). It helps to create the perception of the product in the mind of the target audience. The hotel provides various features through the innovative gallery. The positioning also focuses on differentiating it’s products. So that it can better position itself in the market.
The value proposition is one of the most overlooked features of hotel marketing. It states the benefit and way of providing them. The value proposition is the promise which is given to the customers to assure them to deliver value. It is the statement which explains the benefit provided by the organisation. It helps company to maintain growth. It is useful in creating differentiation from competitors. The value proposition is beneficial in improving operational efficiency and increasing revenue. The value proposition conveys value to the customers, sends clear message and provides proper information about the products of company (Covin, Garrett, Kuratko & Shepherd, 2015). It maintains interest of customers and turns them into the potential customers. It defines the ideal guests of hotels and the value provided to guests by the hotel. In case of Hilton it’s products are the value proposition of company. Hilton hotel offers the best and personalised service to the guests. The hotel includes essential in every room, such as internet connection, access to meeting rooms with audiovisual and technology needs (Pesonen, 2015).
Innovative Gallery of Hilton Hotels
Hilton has launched Innovation gallery, an incubator and experimental showcase for cutting-edge development products. The gallery is filled with products. It includes an earpiece that translates the conversation between employees and guests through an application and a device called new stress intervention (USA Today, 2018). The gallery is designed by the Rockwell group. The gallery displays a variety of technologies such as design elements and dining concepts which ranges from noise cancellation and sleep prompting devices to more sustainable and functional material. It enhances all aspects of the experience of guests. The innovation gallery is divided into five areas:
Product showcase: The product showcase is a space for the visitors to interact with physical and virtual products which hotel is exploring to use in hotels. It features the items which are being tested or will be tested at the hotel. The current installations are Nightingale, a noise making product, Somabar, a mixology solution, Pilot, a real-time transaction solution and Neural, customizable digital art display.
Food and beverage concept studio: This section offers an opportunity to experience and display the concepts developed by hotel’s food and beverage team along with technology to flick and webcast. This place offers to experiment with the latest concepts of the restaurant from the menu to the design of uniforms (Hinterhuber & Liozu, 2014). The hotel tests concepts of 40 different restaurants before adopting a one.
Virtual reality stage: In this space, guests can use virtual reality handsets and experience new concepts without traveling to get to them. The guests will be able to view model room from two of it’s brands, Tru by Hilton and Canopy by Hilton. A person can put on VR device and take a tour of rooms and guestrooms.
Darkroom: The darkroom is a guestroom which lets guests touch linens, walk on carpets, lay on beds and sit on sofas. The dark rooms also contain hotel’s new connected room where guests can control most of the functions of the room such as lighting, curtains, temperature and TV through the Hilton honors mobile app. The guests will be able to dim lights and find their favorite channel.
Innovation theatre: The innovation theatre is a meeting space for the hotel to brainstorm new and innovative ideas which can be used for the hotel room of the future (Taylor, Snipes & Barber, 2018). The design highlights the functional and social aspects of a modern space while high-end presentation technology for sound and lighting.
Value Proposition of Hilton Hotels
The marketing mix is the set of actions which is used by the company to promote it’s brand or product. It is the main element to increase profits and success of the business. It is useful to understand customers and their needs (Chen, 2015). The purpose of the marketing mix is to aware customers about it’s products. It helps the company to make decisions at the time of launching products. It is all about putting the right product in the right place, at the right time and the right price. The marketing mix is made up of 4Ps, product, price, place and promotion. These parameters are used by the manager to control the constraints in the marketing environment.
Hilton is a global chain and provides a variety of hospitality services worldwide through it’ s hotel chains. The products of the company are deluxe rooms, stay suites, restaurants, bars, resorts and more. In supporting all these products Hilton is focused on the innovative gallery which has enough features to attract customers. The hotel is not just for the guests but is a great choice for business and the corporate clients (Shawky, Aziz & Abdel-Aleem, 2015). The hotel arranges meetings, conferences and seminars for the corporate clients. It also provides facilities for photocopying, projector, fax etc. The interior of Hilton is crafted with all the modern and advanced amenities. The restaurants provide the amazing food menu. It includes all types of dishes. The hotel also entertains customers with additional amenities like free Wi-Fi, massage and sauna services, water sports etc.
Hilton has unique and tailored price strategy in each of it’s property worldwide. It mainly depends on the economy, penetration and premium pricing strategies. The economy pricing includes the products with lesser attributes; the products are sold at lower cost. The penetration pricing reflects the products with higher attributes and sold in the market at lower prices. The premium pricing strategy is the opposite of penetration pricing (Richard, 2017). It expands the products with higher attributes and includes the high-quality features and sold at higher prices. It includes a higher margin of cost. Hilton provides four and five-star services with high-quality service and a wide range of products. The price of Hilton varies as the resorts situated at beaches gives unique experience and charges higher prices. The brand is maintained by it’s exclusive customer segment which pays premium tariffs.
The hotel chains of Hilton are in 103 countries along with 5100 properties. It has made remarkable growth with time. The hotel has focused on western countries to target exclusive segment of society. It is also focusing on countries like India and China. The company is growing it’s international business in the new emerging markets. The company has expanded it’s business in both countries. The company maintains different marketing and distribution strategies along with differentiated brands. The services provided by hotel focuses on the best services which result in selecting the best location for the setup of hotels and resorts. The chains of Hilton are small towns, cities, airport hotels, luxury hotels and holiday resorts as per it’s requirement (Diener, et. al. 2014).
Hilton is a well-established brand in the hospitality industry. The chains of hotels are focused on the exclusive services and customer satisfaction. The target customers of the hotel are business customers are a segment of higher income group. So, the hotels have collaborated with business companies, multinational companies and institutes in every country where it has property. The payment banks have also done a collaboration with Hilton hotel for the variety of food provider. It has resulted in more reach to hotels (Cortese & Sahli, 2015). It is among the promotional strategies of the hotel. The other promotional tools used by the hotel are the content of premium magazines and customers reviews on websites. The chain also has a talented and hardworking team which conducts research and plans to attract customers. The promotional activities such as campaign are also conducted by the hotel to encourage the involvement of customers (Wang & Chung, 2015).
The marketing has an important role in establishing relationships between Hilton hotels and customers. It helped the company to satisfy the need of customers and increase it’s market share. The market segmentation helped the company to understand customers in a better way. The market has been segmented on the basis of benefit, geographic, demography and behaviour. The target market is defined which causes the great number of sales. Further, the value proposition has stated the benefit and way of providing them. The value proposition of Hilton’s new product innovation gallery has been discussed. It is a unique feature added by Hilton hotels. Finally, the marketing mix is described in the form of product, price, place and promotion. The marketing has promoted the business and mission of Hilton hotels.
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