Service Marketing Mix at Hilton Head Hotel
- Product
In order to capture every opportunity in the market, Hilton operates hotels and other related services in the accommodation, gambling, and entertainment areas. Few areas are entirely new for the Hilton Group, including a gambling business.
Hilton Hotels & Resorts offers mainly accommodation services through its hotels, resorts, apartment hotels, etc. Most of the revenue is generated from selling hotel rooms to customers. There are also a range of other services and products that contribute to the level of the revenue stream, such as restaurants, bars, smaller shops, spas, laundry services, travel desks, business centers, banquet halls, etc. Among these products and services, the core one is room divisions, which brings in most of the revenues.
Generally, products are divided into three levels: core, facilitating, and supporting products.
Core products can be explained as the basic form of a product. To put it simply, core products are the main reasons customers purchase from a business. For Hilton Hotels & Resorts, the core product is hotel rooms that customers stay in for a specific period of time. Peripheral services can be explained as additional products and services above the core product that businesses offer to get a competitive edge in the marketplace.
Facilitating products involve services that assist consumers in the consumption of core products. Hilton offers a set of popular facilitation products, such as customer services, bars and restaurants, and online reservation facilities.
Supporting products include additional products and services that are offered in order to obtain a competitive advantage for the business by increasing the value of core products and services. A range of supporting products offered by Hilton Hotels include 24/7 room service, free newspapers and magazines for business travelers, concierge services, etc.
Augmented products are benefit offers made by businesses that consist of core products and peripheral services. The enhanced products offered by Hilton Hotels & Resorts include membership discounts, luxurious room and exterior designs, high-class restaurants, and a relaxed hotel atmosphere.
- Price
Within the framework of the Pricing Strategy Matrix, pricing strategies used by businesses are classified into four broad categories: economy, penetration, skimming, and premium pricing strategies.The economy pricing strategy involves selling products with basic features and characteristics to consumers with low budgets. A penetration pricing strategy, on the other hand, involves offering high-quality products and services at lower prices than the competition in order to increase market share.
Skimming, as a pricing strategy, is opposite to penetration in that products and services are offered at a higher price than the competition. The main rationale for the choice of a skimming pricing strategy may include the desire to associate products or services with exclusivity and high quality.
Premium pricing involves charging high prices for products and services that are perceived to have excellent quality and additional characteristics and features.
From the classifications provided above, the type of pricing strategy adopted by Hilton Hotels & Resorts can be specified as premium. Hilton only offers five- and four-star rooms, and the company is able to charge its customers at premium levels because, beyond the core product, Hilton also "sells" a set of intangible benefits such as a sense of achievement, high status, and luxury.
- Promotion
Hilton Hotels & Resorts uses a promotion strategy that incorporates various elements of the promotion mix.Generally, major elements of the promotion mix include advertising, public relations, personal selling, and sales promotion.
- Advertising
Advertising is "a paid, mediated form of communication from an identifiable source, designed to persuade the receiver to take some action now or in the future" (Klever, 2009, p. 25).
The new advertising slogan of Hilton Hotels & Resorts is "Stay Hilton." "Go Everywhere" is aimed at communicating the marketing message of the hotel being a large global brand and maintaining a high level of quality in all of its hotels.
This marketing message is communicated through a set of specific elements of an advertising and promotional strategy, such as advertisements in newspapers and magazines popular with senior-level management professionals such as Forbes, Fortune, The Economist, and the Financial Times. Moreover, the communication of Hilton Hotels & Resorts' marketing message is also facilitated through broadcast advertisements on selected television channels.
- Public Relations
Officially, public relations is defined as "a planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics" (CIPD, 2013; online).In simple terms, public relations can be explained as a one-way communication between the company and the public.
Hilton Hotels & Resorts' public relations are maintained through communication with a range of parties, such as customers, employees, and other private and public organizations. Specific methods of public relations used by Hilton Hotels & Resorts include issuing online and offline press releases in a regular manner and communicating through newsletters with organizational stakeholders. Moreover, the company website serves as an effective platform for Hilton Hotels & Resorts to engage in public relations.
- Personal Selling
Personal selling involves company sales representatives contacting potential customers through various channels with the aim of making a sale. The advantages of personal selling include the possibility of attracting customer attention, the application of interpersonal skills in order to make the sale, and the potential for forming and maintaining long-term customer relationships.
At the same time, the personal selling promotion mix has some disadvantages, such as being overly expensive to conduct and reaching fewer numbers of prospective customers in a given period of time compared to other elements of the marketing promotion mix. The promotion strategy used by Hilton Hotels & Resorts does not involve personal selling due to the nature of the business.
- Sales Promotion
Sales promotion refers to attempts by a business to persuade potential customers to purchase products or services by introducing various incentives. Sales promotion is popular in the hotel industry, and accordingly, this specific element of the promotion mix is used by Hilton Hotels & Resorts in an intensive manner.
Hilton Hotels & Resorts promotes sales through its HHonors points-based rewards program and discount vouchers available on the company's official website.Moreover, Hilton Hotels & Resorts offers a wide range of deals on their website in order to increase the level of their revenues.
Hilton Hotels & Resorts gains practical benefits from sales promotion in the form of increased revenues and better utilization of their rooms.However, it is important to note that by introducing aggressive sales promotions, Hilton Hotels & Resorts may be risking compromising brand value in a way that sales promotions and the possibility to use the brand's services at cheaper prices might compromise the level of exclusivity of the brand.
Furthermore, sales promotions only offer short-term advantages, so this element of the marketing promotion mix is best used in an occasional manner.
- Place
The ultimate aim of the distribution strategy for a hotel firm can be specified as making the products and services available to consumers where, when, and how they prefer them.
Hilton Hotels & Resorts' distribution strategy heavily relies on information technology and the internet in various formats. Firstly, the official website of the company serves as an effective platform for service distribution as it is supplied with a wide range of features and capabilities, providing practical assistance to customers such as booking a room, planning events and weddings, scheduling meetings, and booking airport pick-ups.
Moreover, the distribution of Hilton Hotels & Resorts' products and services is also facilitated through convenient mobile applications made available for iPhone and Android platforms. Hilton Hotels & Resorts is using social media as another effective tool in the distribution of its products and services.For example, the official page of the company on the leading social networking website, Facebook, has been "liked" by more than 405,300 people who receive the latest news about the company and special offer announcements through the website.
The main reason behind the selection of the internet as the base of Hilton Hotels & Resorts' distribution strategy relates to the wide range of conveniences associated with the internet. Specifically, the internet presents Hilton Hotels & Resorts customers with the possibilities of purchasing products and services in advance on the go and within a timeframe of a few seconds.
- Process
The process element of the marketing mix is approached by Hilton Hotels & Resorts according to its selected business strategy. Specifically, the company aims to maintain the process of service provision at premium levels in a luxurious manner. Generally, most of the hotels run their businesses 24/7, unlike banks or schools.
It is because accommodation services must be available all year and 24 hours a day.In order to remain competitive, the marketing process used by the hotel is very important. According to Rutherford (2007), the marketing process of a hotel should begin with deciding what to be and what to offer to whom. The key marketing processes that can help to achieve a competitive advantage are raising consumer awareness and stimulating demand.
- Physical evidence
Physical evidence can be explained as the tangibility of Hilton Hotels & Resorts' services and the physical outcome that is generated from the consumption of those services. Specifically, physical evidence for Hilton Hotels & Resorts includes luxurious interior and exterior design, the attitude of the hotel workforce towards customers and service provision, and the inclusion of tangible goods within the service.
- People
There are various groups of people that play a vital role in the success of Hilton Hotels & Resorts. Broadly, people that have direct implications on Hilton Hotels & Resorts' performance can be divided into three categories: customers, employees, and suppliers.
Customers represent an important group of people for Hilton Hotels & Resorts for obvious reasons. Generally, hotel firms target a wide range of customers, from leisure to business travelers, people who want to eat outside, etc. One of the biggest challenges in hospitality marketing is satisfying the different mindsets of customers. Over a period of time, these customers’ needs and wants will also change.
Employees are classified as another group of people that can have a tremendous impact on service outcomes and, consequently, on the level of profitability of Hilton Hotels & Resorts through their performances.
Moreover, Hilton Hotels & Resorts rely on a wide range of suppliers, and the performance of people employed by suppliers might also have indirect implications on the performance of the company.
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