Contemporary Service Marketing Level 2
Worksheet 1 60% Hand in date week 6 via boxes
Copies of this work sheet will be available on web CT so that work can be typed up.
ALL WORK SHOULD BE TYPED Maximum 2,500 words
HAND WRITTTEN WORK SHEETS WILL NOT BE ACCEPTED
Named organisation…HILTON INTERNATIONAL HOTEL……………………………………..
1. Identify and explain the segment the company is targeting. Identify and explain the key positioning strategy being used by the company.
(20 Marks)
The Hilton international is recognized presently as the world best-known hotel. It triumphed at the prestigious UK National Business Awards for a second year by winning the coveted ‘Broad-system Customer Focus Award 2005’. Previous year the organization won the Best Marketing Strategy Award. (National business awards, 2005). The Hilton International has operated a business strategy that makes its customers to have the best quality of service. The organization embrace a creative marketing agency, campaign works. This has supported Hilton’s new brand strategy. The strategy first embraced industry and customer research. Innovation Hubs were set up to turn lifestyle analysis and research into a contemporary hotel experience and conventional thinking was challenged which contributed to the creation of the new customer brand promise. The next phase saw the development of innovative internal and external marketing tools that communicated and delivered the brand strategy throughout the organization and to the customer.
One way in which the Hilton Hotels have influenced in the lives of its customers is through the rendering of services to suit their local cultural way of life; including taste and type of food, they eat and how they prefer their accommodation to be set up.
The embraced strategy of Hilton International has led to its outstanding success with significant commercial returns. Hilton is now the number one hotel brand in every global market with higher guest satisfaction, improved team member satisfaction and increased financial performance (ibid).
The Hilton International is expanding its work force knowledge through its Hilton University. Currently, there are 8000 team members, team leaders, departmental managers and general managers in 70 countries in the Hilton University.
The university is recognized as a world standard for management development in the hospitality industry. It has a primary focus of a web- based delivery of core management and skill development with the goal of maintaining excellent customer service throughout the Hilton International organization.
The Hilton International sees it as a challenge to increase and broaden the reach of the university to serve even more employees worldwide, to increase the sophistication of learning activities it offers and to more directly link learning and skills development with the company’s business results. The Sum Total learner management system is aimed at developing more in-depth, blended learning programs, incorporating employee competencies by job role and function, and aligning them with specific content and business goals. (elearnity.com, 2004)
According to John Guthrie, head of International management development at Hilton International, ‘what sets Hilton apart is the immense pride we take in the standards of service we deliver to all our guests. Sum-Total will help us measure the effectiveness of certain training programs- for example in e-commerce and reservations – in increasing customer satisfaction”(ibid)
In year 2000, Hilton International unveiled a plan to double the speed at which it opens hotels around the world. The shares of the organization enjoyed a massive 40 per cent rise since Hilton announced plans to expand Ladbrokes, into internet betting. The online betting becomes interesting to investors, even though its hotel business accounts for more than two thirds of the group’s profits. (Lindsay City, 2000)
The present crave for internet betting has made the organization take its turn in partaking in the business. Turnover of the Hilton in 2000 slipped to 4.23 billion pounds from 4.68 billion pounds, mostly as a result of selling off the Corals betting shop chain. The hotel division, bolstered by Stakis, saw profits rise from 181 million pounds to 264 million pounds. In year 2003, the Hilton International sees the increase in its revenue. Hilton reported a pretax profit before exceptional and goodwill for the first half, of 110.5 million pounds, down from 130 million pounds the previous year. Hilton plans to open 17 new hotels in 2003, with most of them incorporating either management contracts or franchises, and will continue to open around 20 each year going forward.
2 Define and outline the four key characteristics of heterogeneity, (variability), perishability, intangibility and inseparability.
Include references from key texts. (20 Marks)
Define and discuss (include reference)
Heterogeneity (variability)
Hilton International organization is a name to be reckoned with when it comes to hostel industry world over. It has spread its tentacles to developing programmes such as esprit and Hilton University used in training its work force. The Hilton International Hotel operates with the aim of achieving varieties of goals and objectives; not just profit maximization for its shareholders. According to Conrad Hilton, “Hilton International Hotels were constructed not only to earn Hilton shareholders a profit, but also to make a political impact on host countries; an integral part of my dream was to show the countries most exposed to communism the other side of the coin….the fruits of the free world” (Wharton, 2001). Hence, the American government had assisted the corporation in no small measure in expanding its base internationally. The capital for the construction of the earlier Hiltons was commonly provided not by the corporation itself, but by institutions in the host countries, with occasional subsidies from the American Economic Co-operation Administration with the support of the US Department of state.
Hilton envisioned a global peace where universal capitalism reign. The consistent modernity of the original Hiltons has made it lost its authority and bears no utopian meaning. This has to do with the remodelling of Hilton International in order to make it remain fashionable.
The broad objectives of the Hilton International Organization is a propelling force making the organization strive towards giving qualitative services to its timing customers. Thus Total Quality Management has being a hall mark of the organization in making it obtain its diversified and heterogeneous objectives and goals.
The quality services and product has always being the reckoning force for successful business organizations. Thus, most successful business organizations have adopted the Total Quality Management (TQM) as a tool for the expansion of their success rate and also curving an edge for themselves over their counterparts in contemporary business world. Total quality is about bringing about a fundamental culture change within an organization. The foundation of the new culture has to be faith- that there is a better way of doing things, and that we are really fully committed to it. According to KPMG (2005), “Total quality means adopting a customer- oriented business strategy.” This Hilton International organization has strived in achieving.
Perishability
In Hilton International Hotels, the organization has moved from one state of development to another. With its expansion, spanning to several countries which it operates effectively. The state the Hilton Hotel has assumed now has gone beyond the level where it would collapse or perish. The services provided by the by Hilton Hotel are imperishable in the sense that they are not tangible goods and they are of quality. The historical and present operations of the Hilton International have shown that the organization strategy is a strong base for its success in years to come. Total Quality Management as a management tool is used by the organization to continue to win its customers’ patronage. The strategy sees that customers are given the best standard quality of services. This business strategy has made the Hilton International to win the UK National Business awards for 2004 and 2005. The Hilton Business strategy, as discussed earlier on, has a creative marketing agency, campaign works which help in supporting industry and customer research, innovative internal and external marketing tools that communicate and delivers brand strategy throughout the organization and to the customer. This is in practice in the organization.
In addition, the divers and expanding business operations of the Hilton International would make the organization to continue to succeed. Even, if one or more business unit of the Multi Corporation experiences down ebbs in its operational level, other chains and units that are successful would keep the organization going.
Inseparability
The services of the Hilton Hotel cannot be separated from the organization’s mission statement of giving qualitative services to its customers. This view of obtaining a broad and wide coverage of customers’ need is pursued by the organization through its qualitative service rendering to its customers.
In all the countries the Hilton Hotels are established they are madder to ensure that qualitative services are rendered. No outlet of the organization is made to serve its customers below the organization standard of quality service. Thus, the organization services are inseparable from the quality standard it has laid for itself over the years.
Intangibility
The services of the Hilton Hotel are intangible in the sense that they are not goods or product that can be felt with the physical touch. The services are delivery of comfortable resting places and accommodations for guests and visitors to the organizations hotels. In addition, other supplementary services are given to customers to make them comfortable and stick to the Hilton Hotel for its services.
3. Review the key characteristics of services and the implications to the marketing mix (7p’s) for the company chosen. (1000 words) (30 marks)
The Hilton Hotels carry out the operation of its marketing mix with the view of coordinating it in the most effective pattern for it to successfully achieve its objectives. As already stated the products (services) of the Hilton Hotels are quality base and rendered for customers satisfaction. This satisfaction comes in the form of keeping a clean environment, tasty food and refreshment for customers, prompt call service, adequately furnished accommodation and guest rooms, conference halls, sophisticated drink bars, among many other services geared towards making customers satisfied.
An organization provides core services and goods to its customers. This core services or products are the main organization’s operation, which they render or sell to customers. According to Iacobucci (2001:323), “An organization that provides services, either as its central provision or in a value-added capacity in a bundle of attributes included in a customer’s purchase of some goods, may find it useful to distinguish those elements of the services purchase experience that are ‘core’ from the supplemental”. Therefore, core services or core product of an organization is that function that forms the business identity. For example, a car manufacturing company will have its core product as the finished cars sold to customers. On the other hand, supplementary goods or services are those additional services that an organization gives to customers as a way to augment the core goods or services that was purchased or rendered by the organization. “The supplementary services are the components of the service delivery system that are intended to facilitate and enhance the customer’s experience” (ibid).
Hilton Hotel has adequately utilized its supplementary services in endearing its customers to the organization. This include the rendering of extra services as e-commerce and reservation made over the net, internet betting services, university for training workforce and other business executives willing to learn under the tutelage of the Hilton University, among other supplementary services from the organization.
The next ‘P’ in the marketing mix, which stands for place, has to do with how the distribution networks of the Hilton Hotels are conducted. The Hilton Hotels is an international organization having franchised its organization in several continents comprising of over seventy countries, from its native home country being USA. The customers of Hilton Hotels have the pleasure of getting the services of the organization in the different countries they travel to far away from home.
The Price the Hilton Hotel charge for its services is competitive; considering the quality of service, it renders to its customers. Since the organization always make sure that customer gets the best quality, thus, price for quality service cannot be measured on what is obtainable in the average industry price setting, but the satisfaction which customers derive in the rendered services.
Promotional activities for the Hilton Hotels are carried out through wide reaching mass media; such as the internet, cable and satellite TV, local TV promos, radio advert, and print media advertisement. The Hilton Hotels is a well-known organization resulting for its wide publicity and promotional aids through effective advertisement and public relations built up it has accumulated for it self over the years.
People oriented services are generated in Hilton Hotels to meet its customers yarning expectations. Here, the people cultures are taken into cognisance as the organization strives towards meeting their needs.
All processes and activities of the Hilton Hotels are directed towards making qualitative delivery of services to customers. This has being the focal point of the organization in the conduct of its activities. The organization’s staffers are made to under go training in its university to maintain the organizational culture of quality service provision. According to Andrew R. Eckert, CEO Sum Total, ‘There are few industries whose success relies more heavily on the delivery of quality customer service than the hospitality industry. That makes learning initiatives targeted at improving customer satisfaction mission critical in organizations like Hilton International” (Elearnity.com 2004).
Physical attributes help the Hilton Hotels in creating an inviting and serene atmosphere for customers’ pleasure. The environments in Hilton Hotels are kept clean and facilities installed to make customer have a worthwhile time at the length of their stay. Physical environment in Hilton Hotels are built in way of attracting even the cream-de la-cream in the society to the Hilton Hotels worldwide.
4. Outline the key communication message used to attract customers and how the key characteristics of services influence this communication. (15 marks)
The Hilton Hotels have maintained the slogan of ‘putting back a little that which life takes out”. This is aimed at giving the best of services, no matter how stressed or depressed the customer may be, the endnote is to give satisfaction and create smile in the faces of the organization’s customers.
In addition, the Hilton Hotel maintains a philosophy of ‘Equilibrium’. Here, products and services from the organization are designed and developed to reflect how the organization behaves both with each other and with its customers. ‘ equilibrium has been the inspiration for many of Hilton’s new products and services; its team member development programmes such as Esprit and Hilton University; exciting new bars and restaurants; industry leading web communication; and the industry’s leading recognition and reward programme” (National business award 2005).
Through these communication messages and philosophy adopted in the organization, customers are made better off through the qualitative services they tend to enjoy from the organization.
15 marks for references and bibliography
References
Birmingham Post (2003), “Hilton Revenue Increases continue into Second half” in the Birmingham Post, August 29. P21.
Chaturvedi, Siddharth (2005), “Strategic Human Resource Management” (http://www.humanlinks.com/manres/articles/shrm.htm) (13/8/2005).
Elearnity.com (2004), “Hilton University adds power With Sum Total” (http://www.elearnity.com/A555F3/reserach/reserach.nsf/Bykey/DWIN639DKW) (14th December, 2005).
Iacobucci, Dawn (2001), “Services Marketing and Customers Service’ in Iacobucci, Dawn (ed.) Kellogg on Marketing. New York: Wiley
KPMG (2005), “Jumping the Q” (http://www.wherewordswork.com/othermekpmg2.htm) (25th July, 2005)
Lindsay City, Robert (2000), “Hotel Giant Hilton is Planning to up tempo” in The Birmingham Post. February 25, p31.
National business award (2005), “Hilton International Wins Best Customer Focus Awards at the National Business Awards” in (www.nationalbusinessaward.com) (23rd November, 2005)
Wharton, Annabel J. (2001), “Height of Fashion” in New Statesman, Vol. 130, issue 4555. September 17, p38.