What are the 7 elements of a marketing mix?

Answer 1

The Product

Description of Hilton Hotels Products and Services

In order to capture every opportunity in the market, Hilton operates hotels and other related services in accommodation, gambling and entertainment areas. Few areas are entirely new for 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 through selling hotel rooms to customers. There are also a range of other services and products that contribute to the level of revenue stream such as restaurants, bars, smaller shops, spa, laundry services, travel desk, business centre, banquet halls etc. Among these products and services the core one is rooms divisions which brings most of the revenues.

Generally, products are divided into three levels: core, facilitating and supporting products.

Core products can be explained as a basic form of a product. To put it simply core products are the main reasons for customers purchasing from a business. For Hilton Hotels & Resorts 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 competitive edge in the marketplace.

Facilitating products involve services that assist consumers in consumption of core products. Hilton offers a set of popular facilitating 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 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 travellers, concierge services etc.

Augmented product is benefit offer made by businesses that consist of core product and peripheral services. Augmented products offered by Hilton Hotels & Resorts include membership discounts, luxurious room and exterior designs, high class restaurants and relaxed hotel atmosphere.

Price

Hilton Hotels Pricing Strategies

Pricing strategies used by businesses are divided into four broad categories within the framework of Pricing Strategy Matrix: economy, penetration, skimming and premium pricing strategies. Economy pricing strategy involves selling products of basic features and characteristics to consumers with low budgets. Penetration pricing strategy, on the other hand, involves offering high quality products and services in low prices than the competition in order to increase market share.

Skimming, as a pricing strategy is opposite to penetration in a way that products and services are offered in a higher price levels than the competition. The main rationale for the choice of skimming pricing strategy may include the desire to associate products or services with exclusiveness and a high quality.

Premium pricing strategy involves charging high level 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 star 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 sense of achievement, high status and luxury.

Promotion

Hilton Hotels Promotion Strategy

Hilton Hotels & Resorts employ promotion strategy that utilises various components of promotion mix. Generally, major elements of 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).

New advertisement slogan of Hilton Hotels & Resorts 'Stay Hilton. Go Everywhere' is aimed to communicate 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 advertising promotional strategy such as advertisements in newspapers and magazines popular with senior level management professionals such as Forbes, Fortune, The Economist, and Financial Times. Moreover, the communication of Hilton Hotels & Resorts marketing message is also facilitated through broadcast advertisements in selected television channels.

Public Relations

Officially, The Chartered Institute of Public Relations (CIPD) defines public relations as "planned and sustained effort to establish and maintain goodwill and mutual understanding between an organisation 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 organisations. 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 organisational stakeholders. Moreover, the company website serves as an effective platform for Hilton Hotels & Resorts for engaging in public relations.

Personal Selling

Personal selling involves company sales representatives contacting potential customers through various channels with the aims of making a sale. The advantages of personal selling include the possibility to attract customer attention, application of interpersonal skills in order to mage the sale, and the potentials for forming and maintaining long-term customer relationships.

At the same time, personal selling promotion mix has some disadvantages such as being overly expensive to conduct and reaching fewer numbers of perspective customers in a given period of time compared to other elements of marketing promotion mix. Promotion strategy used by Hilton Hotels & Resorts does not involve personal selling due to the nature of the business.

Sales Promotion

Sales promotion relates to attempts by a business to persuade potential customers to purchase products or services through introducing various incentives. Sales promotion is popular in hotel industry, and accordingly this specific element of promotion mix is used by Hilton Hotels & Resorts in an intensive manner.

Hilton Hotels & Resorts engage in sales promotion through HHonors points based rewards program and discount vouchers available on official company website. Moreover, Hilton Hotels & Resorts offer a wide range of deals on their website in order to increase the level of their revenues.

Hilton Hotels & Resorts gains practical advantages from using sales promotion in the forms of increasing the level of revenues and achieving utilisation of their rooms at a greater extend. 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 promotion and the possibility to use the brand services in cheaper prices might be compromising the level of exclusiveness of the brand.

Furthermore, sales promotions only offer short-term advantages and thus this element of marketing promotion mix is best used only in an occasional manner.

Place Hilton Hotels & Resorts Distribution Strategy

The ultimate aim of the distribution strategy for a hotel firm can be specified as making available the products and services to consumers where, when and how they prefer them.

Hilton Hotels & Resorts distribution strategy heavily relies on information technology and 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 mobile convenient applications made available for IPhone and Android platforms. Social media is adopted as another effective instrument by Hilton Hotels & Resorts in distribution of its products and services. For example, the official page of the company in leading social networking website, Facebook has been 'liked' by more than 405,300 people who receive latest news about the company and special offer announcements through the website.

The main reason behind the selection of internet platform as the base of Hilton Hotels & Resorts distribution strategy relates to a wide range of conveniences associated with internet. Specifically, 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.

Usage of Three Ps of Extended Marketing Mix by Hilton Hotels & Resorts

Traditional four P's of marketing mix discussed above have been specified as product, price, promotion, and place, and additional three P's of extended marketing mix have been adopted as process, physical evidence and people.

Process

The process element of 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 in a premium levels in a luxurious manner. Generally most of the hotels are running 24/7 their businesses unlike banks or schools.

It is because the accommodation services need to be provided around the year and 24 hours in 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 from deciding what to be and what to offer to whom. Creating awareness and stimulating the demand among the consumers are the key marketing process can help to achieve the competitive advantage.

Physical evidence

Physical evidence can be explained as tangibility of Hilton Hotels & Resorts services and physical outcome that is generated from consumption of the service. Specifically, physical evidence for Hilton Hotels & Resorts includes luxurious interior and exterior design, attitude of hotel workforce towards customers and service provision, and inclusion of tangible goods within the service.

People

There are various people groups that play a vital role for 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 travellers, people those are want to eat outside etc. One of the big challenges to the hospitality marketing is satisfying the different mind-set customers. Over a period these customers' needs and wants will also be changed.

Employees are classified as another group of people that can have tremendous impact on service outcome, 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 also might have indirect implications on the performance of the company.

7"Ps" are:

Product

Price

Promotion

Place

People (Only for services)

Physical Environment (Only for services)

Process (Only for services)

and arguably there is an 8th P in Marketing mix which is Packaging(which sometimes people argue is in the Promotion part).