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Case Study on the Hilton

Case Study on the Hilton

Hilton segmentation strategies:
One should start by saying that Hilton currently is one of the largest global hotel and entertainment companies. Hilton has presence in over 50 different countries and is well known for its Hilton hotels. In order to diversify its business activities and benefit from growing gambling and entertainment business, Hilton engaged in gambling business and opened several hotels in Nevada (Las Vegas and Reno) let alone in other states. In order to succeed in the new market, Hilton needs to properly assess the segmentation and positioning strategy for Hilton as one will find out later in the paper.

Segmentation is the process of dividing the desired market into groups based upon important consumer characteristics attributable to the given market. In other words, a reasonable marketer in order not to spread resources too thin by randomly searching clients for their goods/services should divide customers into several groups and focus on the groups to market the goods/services to.

The advantages of segmentation strategy over general appeal strategy in my personal opinion are the following: The individual customer needs are better met, New Ideas are promoted, Winsome marketing mix strategy is developed, Efficient allocation of corporate resources based upon attractiveness of individual segments.

The Market segmentation for any product as well as Hilton gambling can be done based on the following characteristics as seen later in the essay.

Geographic. This strategy focuses on local preferences, nature, and geographic location. For instance if in the marketer found out that in the South or West, where the majority of the USA elderly goes to retire, then the Hilton starts to present services for exactly that group namely recreational hotels and gambling for the elderly.

Demographic. This strategy speaks about personal characteristics of age, gender, income, affiliations, etc. In other words, young kids that no chance of getting on to use Hilton gambling facilities compared to adults, thus Hilton focuses on delivering the message through mass media to the target group.

Behavioral segmentation strategy for Hilton as well as other products is based on buyer behavior in acquiring the product and considers the usage occasions (pleasure, business), rates (weekly, monthly), loyalty (Hilton or Mirage, or Mandarine) etc.

Psychographics is the strategy directly connected to the Demographic and Behavioral strategies (that were mentioned in this paper for the purpose of making the psychographics strategy more comprehensible) that attempts to answer the question of why customers buy Hilton’s services.

There are several answers:
1) Lifestyle. People who travel would prefer Hilton’s hotels to be located near major airports /in every city and possess similar services.
2) Personality. The Users of Hilton are self-conscientious, fun-loving people with long-term planning horizons
3) Social Class. Virtually any social class can use at least some services from Hilton Group, although it appears that Hilton prefers to serve the upper middle class and the upper class to use Hilton’s services.
4) Decision making. Who makes the decision regarding the flights entertainment, the family budget and gambling?

Customers and Segmentation
The customers of Hilton are primary families/tourists 70%, Business travelers-20%, others-10%. Overall in the entertainment/hotel industry the individual customers take up the major part of the total market. With tourists taking up over 60% of the “non-business” travelers.

The majority of travelers (70%) are people aged 25-45 years of age, thus, one should assume that the gift shop sales of merchandise should be directed towards this group.

The current trends show that the market for entertainment and gambling is constantly growing, so Hilton will likely to start to reap the profits rather soon.

SWOT
Strengths. Hilton already is in the hotel businesses, so will not envisage any problems regarding accommodation in the new gambling + hotel places. Hilton has a recognized brand name so does not need to engage in unneeded expenditure associated with less known brands and necessity to create theme parks/theme hotels.

Weaknesses. Hilton relies mostly on the US markets for revenues, knowledge and data obtained by the company. Hilton’s profits are tied to the USA economy

Opportunities. Cooperate with major gambling companies if Hilton wants an update on most popular slot machines and card games. Hilton should penetrate the third world countries of Russia and Ukraine as well as South America and establish the corporate chain. After a while, open entertainment/gambling place, too.

Threats. Hilton does not have experience dealing with gambling and entertainment so there is a threat that Hilton will not survive the competition.

Target Market is the conclusion that can be derived from the segmentation strategies. Formally it represents the most likely buyers of the Hilton services that we are marketing. From what we have researched regarding the Hilton services one can say that the target market for such services is rather large and is growing. The age group for our various services ranges from 21 to 70 years for gambling/entertainment1, middle class people of conscientious nature, who also like active life, health, and freedom.

Positioning equals Segmentation plus Differentiation. In order to successfully market the product one needs to slot the product in the mind of the consumer. The Hilton services have to possess distinctive quality and affordable price to satisfy the clients from virtually all strata of society not only in the USA but also internationally.

Critical Success Factors of Hilton.
Critical success factors of the Hilton are key areas which can be identified from conducting a SWOT (internal environment), PEST (external environment) and Porters Five Forces model.
1. WEAKNESSES –the biggest weakness that needs addressing is a limited number of Hilton’s gaming facilities located primarily in Las Vegas..
2. OPPORTUNITIES – the area that presents the most opportunities is the Eastern Europe that is currently not as competitive as the western European markets for entertainment and gambling.

POLITICAL – the current political system supports Hilton and its industry. There do exist numerous requirements with respect to hotel, gambling and entertaining industries yet Hilton confirms to all the requirements.

ECONOMIC – the current US and global economy is supportive of the hotel, hospitality, gambling and entertainments industries, yet one needs to cover additional markets in order to protect oneself from the economic declines in highly correlated European markets.

SOCIAL – The social system supports hotel/entertainment industry as the business and leisure travel is the norm.

TECHNICAL – Hilton utilizes the help from the outside construction companies to create a new facility. The company utilizes sophisticated software to keep track of customers and technology. Hilton can even book rooms in a real time mode and even receive payment via credit cards while online.

COMPETITOR ANALYSIS – Mirage, MGM, Mandalay, and Luxor the main competitors for hotel/entertainment industry that currently attempt to cover or already covered the same geographic routes and areas currently covered by Hilton. It appears that larger institutions neglect smaller towns and distinct interests of customers.

These are Hilton’s critical success factors which this hospitality/entertainment company needs to pursue in order to be a success. One needs to input the Critical Success Factors in the corporate strategy of Hilton in order to make use of them.
1. All industry participants must adhere to the various financial security and safety requirements (Political) in order to keep the license for gambling and hotel services..
2. All industry participants must remain competitive and remain within the certain cost brackets if they want to remain successful and profitable.
3. All industry participants must constantly explore the new markets to assure a proper niche placement for their services.

Core competencies of Hilton were analyzed in Hilton and shown in the essay below:
add significant value to entertainment, gambling, hotel services perceived by end-users because of promotion, learning the new expertise, customer support, phones, etc.

are difficult to duplicate by the competition because for the other hotels it poses high costs than for Hilton that is able to provide that service. Also the coverage of smaller towns and villages across North America and presence of Hilton in over 50 countries allows Hilton to remain competitive because of its structure.

work in a wide variety of markets. Certainly it works in over 50 different countries worldwide. It should also work well in the third world countries and in other countries around the globe.

From the information obtained from the case study and other sources, one can assume that Hilton is qualified enough to create individual business activities that would be partially sponsored in school. So, yes, Hilton should pursue the formation of entertainment and gambling facilities in New York, LA, and other larger metropolitan areas in order to diversify its services and gain new ground for conducting business.

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