Running head: HILTON’S MARKET SEGMENTATION 1

Hilton’s Market Segmentation

Name

Institution Affiliation
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Introduction

Hospitality is depicted as the connection between a host and a visitor. In this specific

circumstance, it infers the activities and practices of getting and engaging visitors with due

generosity and benevolence. The hospitality industry is, for the most part, made up of

casinos, clubs, restaurants, hotels, and resorts. This paper will indicate how Hilton s is

segmented in the Hospitality industry, its target markets, and the selection procedure for that

objective market. Building up a marketing methodology is imperative and to do that it is

critical to comprehend the organization's target clients.

Market Segmentation

Marketing segmentation is the task of separating potential markets into visible subsets

of customers with common needs or traits then presenting one or more segments to the target

market with an unmistakable blend of factors which can be controlled by an organization to

influence clients to buy its products (Cross, Belich & Rudelius, 2015). It is used by

identifying market needs, such as the product, the expense of the product, and the quality of

the product. Marketing segmentation allows for a more personalized customer experience by

offering a more effective marketing strategy.

A commercial segment for success is when individuals journey to an area or arena to

perform work. Commercial segment is busiest during Monday through Thursday, and

demands in the segment are elevated during mid-spring and beginning fall but slow down in

the summer time. According to HVS (2018), monetary and demographic trends likewise have

an impact on business lodging request; changes in Terminate (real estate, insurance, and

financial), benefit, discount exchange, and aggregate work; involved office space; and air

traveler checks give the most immediate connections.

Meeting and Group segment for business success is when groups of ten or more travel

to seminars, conventions, and trade shows. The demand is also elevated during spring and
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beginning fall slowing down in the summer time. (HVS, 2018) “They usually book hotels

with wide meeting area, business technology, and outlets for food and beverages.” The same

with individual commercial visitors were demand is strongest on Monday through Thursday

nights.

Leisure segment for business success is when traveler’s book weekend stays during

holiday time. HVS (2018) argues that demand for leisure in markets is created by attractions

in the line of shopping malls, amusement parks, museums, and outlet stores. Also, college

graduations, and family and friends visits, additionally offer incentives for leisure travel in

this market with the stay usually being one to four days.

Extended- Stay segment for business success is when traveler’s book

accommodations for more than five nights, where the hotel is offered or current as an

extended stay hotel. “The demand is usually related to business and incorporates hospital

research, insurance organizations utilize for corporate project, large-scale construction

projects, insurance claims, (HVS, 2018). It is an extension of commercial demand, but with

long-term corporate social responsibility occurring in this area.

The importance of market segmentation in organizational success is that it lets a

business distinctly reach a customer with particular needs and wants. It also benefits the

business, because it will allow the company to use the resources in such a manner to make

better marketing segment decisions. Some advantages of marketing segmentation that can

lead to organizational success would be; cost reduction, product development, new markets,

and business focus. The main benefit of marketing segmentation is an effective to use of

resources and positioning. Marketing segmentation will and can definitely take your business

to the next level of achieving your company goals by understanding your customers’ wants

and needs.
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Examples from the business world would be; commercial penetration where hotels are

basically brand driven by corporate contracts. Meeting and Group penetration that provides a

large amount of space at the hotel or surrounding areas and leisure penetration that is in

surrounding areas of leisure demand generators. So, hotel market segmentation is a way to

disguise customer groups and will enable companies to grow and prosper by reaching new

and existing customers, maintaining prices and compelling purchasing power, achieving

customer buy-in, offering more and staying innovative.

Bases and approaches to market segmentation

Geographic segmentation

Geographic segmentation includes focusing on particular shopper gatherings as per their

geographic areas in global and national levels. The geographical segmentation of Hilton, for

the most part, centers on building inns on areas mainstream with the target client section

(Cross, Belich & Rudelius, 2015). In London, for instance, Hilton lodgings are found in well-

known business and travel areas, for example, Canary Wharf, Aldwych, Bankside, Trafalgar

Square and Tower Bridge.

Demographic Segmentation

An arrangement of factors utilized in the demographic market incorporates life-cycle

stage, sex, age, social class, salary, and way of life. Hilton, from this point of view, targets

client segment represent senior and middle-aged experts with high levels of income

belonging to the upper social class. Besides, Hilton Inns and Resorts for the most part target

people that seek after the lavish way of life, and in like manner, the organization charges

premium costs for its items and administrations saw to be of a significant quality.

Psychographic Segmentation

According to Cross, Belich, and Rudelius (2015), psychographic segmentation goes past

socioeconomics as it inspects how a man considers, feels and carries on, utilizing identity, a
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way of life and qualities as fragmenting variables. The idea of psychographic segmentation

utilized by Hilton includes focusing on yearning people who might want to express their

apparent high status and accomplishment by remaining in five-star rooms offered by the

lodging at premium costs.

Benefits Segmentation

Benefits Segmentation includes actualizing market segmentation based on advantages

clients intend to acquire utilizing items or potential benefits offered by the organization

(Cross, Belich & Rudelius, 2015). Likewise, real or perceived benefits offered by Hilton to

potential and existing clients incorporate the feeling of accomplishment, a high status in the

public arena, and extravagance.

Market Segmentation and Competitive Advantage

Hilton usually depends on a top-down global brand strategy to guarantee brand

standardization across the global marketplace. The hotel chain usually focuses on a niche

market characterized by affluent world travelers, big corporate companies, businessmen, and

wealthy individuals. The target groups in such a niche market have identical expectations

thus; Hilton’s brand identity must be consistent at each location. The company is positioned

as a global ultra-luxury brand mostly linked with superior individualized customer services

and world-class deluxe facilities (Cho, Bonn & Brymer, 2017). Hilton’s global brand which

is equated to a superior customer service truly creates a competitive advantage leading to

greater global credibility and customer recognition. The exceptional customer service

supports its differentiation strategy allowing it to compete effectively. The hotel’s employee

recruitment and training are focused on instilling service standards to meet and exceed

customer needs. The service standards ensure guests have a greater sense of control,

convenience, and comfort. Additionally, it provides a twenty-four hour personalized services

seek to ease stresses related to travel. The hotel usually runs simple errands for many of their
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clients who might be inconvenienced. The global brand strategy seeks to identify common

needs for its target markets and customers. Ultimately, the customers feel rejuvenated,

pampered, and understood. Besides, it offers a standardized welcoming environment,

superior hygiene, security, and luxury amenities which lead to an overall enjoyable

experience (Cho, Bonn & Brymer, 2017).

Drawbacks of Market segmentation

Market segmentation has a few drawbacks. Market segmentation is the point at which

an organization isolates the populace depending on specific variables, for example, age,

topography, and levels of income. One drawback of this technique is that the fragment that

might be picked might be too little to pitch enough items to make a profit. Another limitation

is that the shoppers in the market section could be misjudged. Market research might

demonstrate that the populace needs a specific item or service, yet it may not contemplate

that there might be various types of that item or service (Cho, Bonn & Brymer, 2017).

There are different confinements that additionally exist. Organizations ought to decide

the expense of focusing on a populace. Additionally, organizations ought to realize how

much rivalry as of now exists in that showcase. On the off chance that there is a ton of

rivalry, including one more item, may not be effective or advantageous. The business must

make sure that the shoppers recognize what they need. On the off chance that the customers

are confounded or dubious, that could be tricky. At long last, there will be no statistical

surveying for new items. The company will continually need to examine how the item or

service is getting along by promoting it to the majority and changing as required.

The chosen Company and Market Segmentation

Hilton Worldwide that was formerly known as The Hilton Hotels Corporations is an

American based multinational hospitality company that was founded by Conrad Hilton (Choo
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and Bontis, 2002). It is owned by the Blackstone Group, which is a private equity firm.

Hilton Corp. is among the biggest or largest hotels in the world with its branches in more

than 95 countries. The Hilton Worldwide brands have encompassed more than 4,440

properties and more than 750,000 available rooms. As per revenue and size recognition,

Hilton Worldwide is the 38th largest company operating in the U.S (Hilton Worldwide,

2015).

Hilton, world-wide’s vision is, “To fill the earth with the light and warmth of

hospitality” (Hilton Worldwide, 2015). In reference to Cho, Bonn, and Brymer (2017), this

vision statement is elaborated by the hotel's mission. Hilton has a mission to be the

distinguished global hospitality company, the first choice of guests, employees and owners

alike. To achieve all that the hotel must provide exceptional customer service and

experiences. Also, it has to remain technologically advanced (Ireland, Hoskisson, and Hitt,

2006). Hilton Worldwide must treat both its employees and guests with respect. Furthermore,

the hotel must keep abreast of the community and remain eco-friendly, remain success-driven

and grow continuously (Choo and Bontis, 2002).

The Hilton is currently the industry leader as far as market share is concerned, which

was the reason for the choice of the industry and Hilton as the specific corporation. Their

brands also span some different segments of the population. The corporation’s brands include

Hilton Hotels, Hilton Garden Inn, Embassy Suites, Double-Tree, and Homewood Suites,

Hampton, and Conrad. Hilton also has a timeshare brand called Hilton Grand Vacations. The

hotel’s headquarters is in Texas, U.S. Currently; there are approximately 4,000 locations of

the hotel worldwide and more than 150,000 employees (Choo and Bontis, 2002).

The company has clearly listed its Strategic Objectives and Challenges in its strategy

(Roney (2004). The Hilton Hotels relies on its scale of operation, using its loyalty program in

gaining members and continuously expanding its hotel network. The Hilton Hotels is also
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increasing its focus on more individuated properties. These properties target at an

increasingly emerging class of travelers and tours which are seeking individual traveling

experiences (Hilton Worldwide, 2015).

Marketing Inconsistency: Tourism strategy and the Presentt campaign

When building abroad, Hilton Hotels is expected to face many challenges, which

could limit its expansion or force it to partner with local other companies. For instance,

corruption in Asia-Pacific continues to obstruct the business environment (Choo and Bontis,

2002). Corruption is widespread in many of the region’s countries including the Philippines,

Indonesia, China, and Vietnam. This inflicts additional expense on businesses raising the cost

of doing business. Furthermore, consumers also feel the effect of corruption since higher

costs turn into higher prices (Hitt, Ireland, and Hoskisson, 2007). In the Asia-Pacific area,

the inadequate operating infrastructure is another major hindrance to economic and business

development. Apart from key markets such as Singapore, Japan, Taiwan, and South Korea,

the rest face infrastructural problems. In these countries, expanding economic activities,

growing urbanization, and increasing consumption have put strains on the existing

infrastructure (Hilton Worldwide, 2015).

On its product and distribution, there is a clear strategy. As the leader in its industry,

Hilton aims at using technology leadership in service provision. In 2008, Hilton Worldwide

launched an Online Group Booking System, including main provisions for all time-strained

travelers. Originally only available to business travelers, the web portal of Personalised

Online Group (POG) allows leisure travelers to customize a web page for their group events.

Individuals using the POG can download itineraries, book accommodations, check e-

Brochures and keep themselves informed about the event (Hilton Worldwide, 2015).

In 2010, Hilton Worldwide launched www.hilton.com in German, Spanish, and

Japanese. This was aimed at providing clients with a more tailored internet experience and to
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allow them to use their native language to search for hotel accommodation. Ever since, the

company has been staying at the front of hospitality technology and has made technology its

main competitive advantage (Ireland & Hitt, 2006). Brand Strategy is also one of the

company’s management strategies. The Hilton brand uses the statement, ‘Take me to Hilton’

as its campaign philosophy (Choo and Bontis, 2002).

From innovative focused-service hotels to iconic luxury properties, Hilton’s brand

portfolio is the highest performing and most diverse in the industry (Hitt, et al., 2007). These

include convention hotels and conference center, 5-star city center hotels, suites, mid-priced

and extended stay hotels with high service levels. The hotel also offers airport hotels,

destination resorts, and holiday ownership in its brand. Ottman (2017) outlines that each

brand under the Hilton Corp. Offers differentiating touches, for instance, the Hampton Inn's

complimentary breakfasts and the Doubletree warm cookie welcome. Notably, while having

a distinct brand positioning, Hilton has not forgotten its origins that it is its responsibility to

"share the light and warmth of hospitability (Hilton Worldwide, 2015).” The Hilton’s

philosophy is that it is not in the hotel business but rather in the business of hospitability

(Ottman, 2017).

Recommendations

It is prescribed that Hilton seeks after a diversifying system to enter the market as this

postures more benefits. Additionally, Hilton needs to separate its items and services from the

current offers in the market to guarantee that it has addressed every one of clients' needs.

Adjusting itself deliberately will require the lodging to guarantee that it has correctly

comprehended the powers in both inward and outer market that will in all probability obstruct

its development and productivity in London and think of systems to counter these powers.

The vital administration will likewise be required to profit by lodging abilities to exploit

advertise openings and innate qualities.

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References

Choo, C. and Bontis, N. (2002).The strategic management of intellectual capital and

organizational knowledge. 1st ed. Oxford: Oxford University Press.

Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market

segmentation: An exploratory study. In Proceedings of the 1990 Academy of

Marketing Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.

Cho, M., Bonn, M. A., & Brymer, R. A. (2017). A constraint-based approach to wine tourism

market segmentation. Journal of Hospitality & Tourism Research, 41(4), 415-444.

Hilton Worldwide. (2015). Company Description http://hiltonworldwide.com/about/

Hitt, M., Ireland, R. and Hoskisson, R. (2007).Management of strategy. 1st ed. Australia:

Thomson/South-Western.

HVS, 2018. Retrieved from https://www.hvs.com/article/4150-Hotel-Demand-Segmentation-

101-Identifying-Demand-Segments-and-Understanding-How-They-Relate-to-Property-

Performance

Ireland, R., Hoskisson, R. and Hitt, M. (2006).Understanding business strategy. 1st ed.

Mason, OH.: Thomson Higher Education.

Ottman, J. (2017). The new rules of green marketing: Strategies, tools, and inspiration for

sustainable branding. Routledge.