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MKT00128 Tourism And Hospitality Sales And Promotion
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MKT00128 Tourism And Hospitality Sales And Promotion
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Course Code: MKT00128
University: Southern Cross University
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Country: Australia
Question:
As the Marketing Manager for an existing Destination Marketing Organisation (DMO) or for an existing hospitality or tourism enterprise of your choice, you are to write a promotion campaign report addressed to the management team for approval of a conceptual idea and expenditure, with the following sections:
a) A relatively brief overview of your selected DMO or hospitality enterprise, presenting its main attributes such as size, turnover, visitation numbers, occupancy rates and similar data that contextualises the report.
b) Determine a suitable promotional campaign strategy for your chosen DMO or enterprise; provide a clear rationale based on academic sources for this choice of strategy. Preferably focus on one element of the promotion mix, and only briefly describe links to other potential elements of the promotion mix your campaign would be a part of.
c) Establish target market(s) for the specific promotional campaign you are developing; include rationale based on detailed market research, and academic literature for their selection.
d) Depending on where your DMO/enterprise is situated in its business cycle, determine the communication objective(s) of your promotional campaign. Substantiate your claims with reliable data or arguments to prove this point.
e) Identify the competition – what regions enterprises are predominately competing for the same/similar target markets – back up this data with research and statistical data.
f) Outline what types of communication channels you suggest should be used for this campaign and the duration of your campaign. Be specific – give detailed examples so that your readers can grasp how this promotional campaign will be communicated.
g) Explain, with detailed rationale, how the results of the campaign will be measured. Establish suitable Key Performance Indicators that can be tracked and used to prove the success of your promotional campaign.
h) Provide a brief, but realistic, budget for your promotional campaign. This requires you to do some external research to find out costs, for example, for printing posters and fliers, or how much advertisements cost in print, online or visual media sources – depending on the campaign you develop.
Answer:
Overview
Hilton was founded in 1919 by Conrad Hilton. It is the most recognized name in the history. The innovative approach of the hotel towards products and services makes it synonym with the hotel across the globe. The hotel makes travelling easier by it’s smart design, innovative concepts and the authentic hospitality. Hilton continuously makes commitment towards global community. The team members at hotel are always ready to provide friendly and hostile services to the guests. It offers services in order to meet needs of the customers. Hilton has 570 locations across six continents. The property of the hotel is managed, owned or franchised by the individual operators. Hilton targets at business and leisure travelers. The Hilton hotels are located at city centers, convention centers and at popular destinations. The hotel books loyalty program to book directly through owned channels. The hotel is continued to make expansion on the global basis.
The Hilton hotels at Australia are successful in attracting tourists as the country has popular destinations such as Sydney, Brisbane, Adelaide and more. The visitors visited hotel is mostly above 30 as the hotel has customers mainly from the business segment. Usually the customers belong to the higher class and are enthusiastic to spend more to consume the products and experience services. The economy of Australia is also growing well and promotes to the businesses like Hilton in order to promote tourism activities. Such activities have contribution in the GDP of the country. Therefore, the government supports such activities. This report explains the promotional campaign of the Hilton to make expansion in terms of the growth and sale.
Promotional campaign strategy
The promotion mix is a tool used by an organization to generate, uphold and upturn demand for the goods and services. Promotion is one of the 4 Ps of marketing mix which emphases on generating attentiveness and urging customers to induce the purchase. The tools which assist the advancement objective of an organization are known as promotion mix (Awad & Soliman, 2017). The elements of the promotional campaign strategy are:
Advertising: The advertising is a compensated form of non-personal demonstration. It can be used by the Hilton for the promotion of amenities by the recognized sponsor in the interchange of a fee. The hotel can build a pull strategy through advertising, in which a customer is prompted to try the service at least once. The whole material along with the smart visuals of the services can be presented to the customers in order to seize their attention. It impacts to the purchase decision of the customers (Becker, Sprigg & Cosmas, 2014).
Personal selling: It is the traditional form of promotional tool. In this method, a salesman contacts with the customers directly and visits them. It is a kind of direct interface between the hotel and the customers with the objective to inspire the customers to use the services.
Sales promotion: It is the shortest term incentives provided to the consumers to have an improved sale for a prescribed period. Usually, the sales advancement schemes are used in the market at festive or at the end of season (Camilleri, 2018). The hotel can easily focus on the increased short term profits by using sales promotion to attract existing and the new customers.
Public relations: Hilton can make a auspicious image in the market by forming relationship with the general public. Several public relations campaigns can be carried by the hotel with the objective to supporting people associated directly or indirectly. It intends to bring interesting evidence to the public. For instance, Hilton can tie up with the local government to support the campaigns (Cassia, Magno & Ugolini, 2015).
Direct marketing: The hotels can reach to the customers by the use of technology without any mediator. The tools of the direct marketing are e-mails, direct marketing, fax and more (Chang, Ku & Chen, 2017). For instance, Hilton can inform to the customers for the extra benefits provided to the customers having membership (Choi, Fowler, Goh & Yuan, 2016).
Target market
A laser focused approach can be adopted to sell hotel rooms to achieve excellent occupancy levels. The marketing efforts should be done towards a specific audience rather than targeting everyone. It is helpful in maximizing value. The market can be targeted on the basis of four different groups given below:
Geographic segmentation: Hilton’s geographic segmentation strategy mainly focuses on the native preferences and the location. For instance, Hilton opens up the hotels in Australia to attract business class and the service also focuses on the business travelers (Dzhandzhugazova, et. al. 2016).
Demographic segmentation: The segment targeted by Hilton is mid and senior aged professionals with the higher level of income fitting to upper social class. The hotel also targets people who pursue luxury lifestyle (Erdem & Jiang, 2016). Consequently, the hotel charges finest price for it’s products and services which is declared to be of substantial quality.
Psychographic segmentation: As per this segmentation, the hotel targets aspiring individuals who like to perceive extraordinary status and accomplishment by staying in five star rooms accessible at finest prices.
Benefits segmentation: The assistances are offered by the Hilton to the latent and surviving customers. It includes a sense of accomplishment and high eminence in society. Hilton can use both offline and online marketing campaigns for targeting audience.
The demographic and sociographic segment helps to target market aiming at different variety of the consumers. Hilton can also hire an independent consultancy to boost expertise in the target market.
As per Butler’s 1980 Tourist life cycle model, there are 6 phases of tourist area progress.
The exploration phase: At this stage there is less number of tourists. It is founded on the main tourist attractions. It can be ordinary or cultural. This stage involves no secondary tourism fascinations. The tourism has no commercial or communal implication to the local residents (Huang & Cai, 2015).
The involvement stage: The local residents involves in the tourism. There is rise of secondary tourism amenities such as guest houses (Leonidou, Leonidou, Fotiadis & Aykol, 2015). A tourism season can be developed in this stage. The pressure also develops for the local government to advance transport facilities for the tourists.
The development stage: There is high number of tourists in this stage which can surpass the confined population during the peak season. The heavy promotion can form a well-established tourist market. The participation and control of the government falls of quickly in this stage. The natural and cultural fascinations are established and marketed (Leung, Bai & Stahura, 2015).
The association stage: The evolution of the tourism slows but the tourists surpass the local population. The economy of the area is secured to tourism. The marketing and advertising are wide reaching in this stage. The resort areas have well established amusing business district.
The stagnation stage: The number of visitors reaches at peak in this stage. It is also seen that the tourism also causes environmental, social and economic complications. The artificial tourism switches the original main attractions.
The decline scenario: At this stage, the hotel seems incapable to participate with newer tourism fascinations. The tourism services are interchanged by the non-tourism activities. Eventually the hotels become slum or drop out of the tourism market entirely (Nwos & Onah, 2016).
Communication objectives of promotional campaign
A promotional campaign is a planned arrangement of messages with the aim of a specific objective to be delivered to the specific and targeted customers. The purpose of the promotional campaign is to achieve a sales objective. The communication objectives of the promotional campaign are:
Brand recognition: It is one of the important objectives of the promotional campaign to maintain brand recognition. The recognition represents what is shown to the customers as brand logo or symbols. The customers can identify the hotel by it’s logo or slogan. It is critical for the hotel to understand and connect customer loyalty and profits with the brand image.
Purchase intent: Once the customers become familiar with the brand, it is the next step to inspire purchase intent. The promotional activities include trial offers and getting customers to switch and encourage loyal customers to buy more often. A variety of promotional tools are used to increase the market share.
Sales growth: The promotional campaign leads to optimize profit margins. The objective is to drive revenue in the short term campaigns. Hilton can use this aim along with the promotions to build customer base and collect revenue to make expansion. Hilton can also use sales-motivated promotions to generate business during low seasons.
Goodwill: The goodwill is commonly associated with the public relations campaigns in order to promote goodwill with the customers. The cause related marketing campaigns can also neb sued by the hotel to support customers and communities. The advertising can also be used to promote positive attributes of Hilton (Owler, 2018).
Identification of competition
Hilton has high brand recognition and good reputation in the market. Hilton hotels have huge competition from the hotels like Marriott, Hyatt, Peninsula, Starwood, IHG, Choice hotels, four seasons and more. These hotels target the same market as Hilton hotels. They aim to target people of medium to higher class who prefer to sustain luxurious life. Hilton is affected by the competitors if they start providing any additional service at the same charges. Three things which can differentiate Hilton from competitors is having loyal customer base, immediacy to key markets and accessibility to multi skilled and flexible workforce. When it’s compared with the competitors then it is seen that Hilton constantly upgrades it’s business and has good employee retention. The group has 540 hotels in more than 78 countries. The annual revenue of the Hilton is $9 B which is second highest among it’s top 10 competitors (Pritchard & Howard, 2015). The hotel provides customers with a great customer experience at the desired locations. It has also won many awards at the international level for the quality of services delivered by it. As a result of immense investments into various segments, the hotel enjoyed greater income growth compared to it’s competitors. The net income in the 2016 grew by 106.67% faster than the competitors. The revenue of the Hilton is shown in the appendix.
Hilton ranks second from the number of employees among it’s competitors. It is clearer from the graph given below:
(Source: Owler, 2018)
Communication channels for the campaign
The communication channels are the means by which the campaign reaches it’s audience. Print media, modern audio-visual video, internet, interpersonal channels are the better way to reach it’s customers. For the effective messaging, a perfect communication channel should be used to capture the target audiences. Newspaper, magazine, television and directories are perfect example of advertising. The newspaper can be used to promote hotel to wide range of customers (Saxena, Chaturvedi & Rakesh, 2018).. The most suitable advertising option depends on the target audience and the effective way to reach as many possible. The advertising option should reflect the appropriate environment for the products and services. If the target market reads a specific magazine then advertisement should be publish in that.
Display advertising involves graphical advertisements and placing such content on the websites, emails and other applications. The advertisement can be seen anywhere while surfing internet or going through the mails. The adverts are required to show relevant contents to the people are looking for. The achievement of display advertising can be evaluated by the number of clicks an advert receive and the number of times impression made by the consumers. The adverts can be targeted as per the consumer behavior, demographic and physiographic. Hilton can provide the attractive discount to the tourists to not letting go to other hotels. The display advertising helps to drive leads and promote brand awareness (Sprigg, 2017).
Measurement of campaigns
The campaign can be measured by the key performance indicators (KPI) to track and measure progress towards a defined objective with in the promotional campaign. The KPI of the campaign of Hilton are given below.
Sales revenue: The campaign can be measured by the sales revenue earned by the hotel after successfully completion. The growth in the sales is the best way to measure it’s promotional activity. Hilton has seen a good change in it’s sales revenue. The measurement of the sales growth is essential for the long term health of the hotel. It is not only a good indicator but identifies the trends for growth (Statista, 2018).
Customer Value: It is the best way to measure campaign by reaching to the current customers. It not only helps to generate leads but helps to reduce churn and expand customer’s life time value. The leading nurture campaign should be developed in order to reach existing customers.
Inbound marketing: The inbound marketing helped Hilton to assess monthly and annual performance. It is a capability to start planning strategies and budgets for the coming year. The return on investment determines the future with the promotional campaign (Xiang, Magnini & Fesenmaier, 2015).
Social media traffic:
The leads and customer conversions are generated via social media channel. The social media platforms like Facebook, Twitter, LinkedIn and Google + breaks down by the number of leads, customers coming from each helps to determine where efforts should be focused. The numbers of visitors visiting websites of Hilton in a month were 300. With the help of promotional campaign, the number of visitors increased by 70-80%. The changes can be easily identifiable from the sales revenue and inbound marketing.
Budget for promotional campaign
It is a challenge for the Hilton to stay on top. The leading hotels are increasing their budgets to for the social media and digital marketing to grab customers and attract customers. The advertising spending of Hilton was 269.1 million in 2012. However, the hotel reduced advertisement expenses to 188.9 million in 2014 (Statista, 2018). The amount spend on the social media by Hilton accounted to 457.6 billion in 2018. The expense on the posters and online media sources make up 38.3% of spend worldwide in 2018. The response rates in these two areas are higher than any other category. The budget of the promotional campaign resulted in the huge profits to the hotel (Zervas, Proserpio & Byers, 2017).
(Source: Statista, 2014)
The hotel has brought all the ecommerce and digital efforts four years ago. Hilton initiates and encourages customers to book directly through company’s website than wasting time on the third party. The customers do not have need to book through 25 different websites. It will give more benefits to the customers for booking with Hilton. The commercials of the hotel will also be supplemented by a court with an announced artist and promotional event in London. The brand is focusing on marketing and making an effort to market themselves to the consumers (Zhang, 2015). The hotel claims more than 4600 hotels in more than 100 countries. It is further aiming to be at top of mind with millennial. A new initiative is also set up by the hotel known as Tru by Hilton, aiming to be trendsetting generation.
Conclusion
Hilton can successfully promote it’s activities with the help of promotional campaign. This report includes the promotional campaign strategy of Hilton. The target market is identified along with the communication objectives of campaign. The report has also identified the competition faced by the Hilton in Australia. Further the communication channels for the campaign are identified and advertisement has main role in it. The campaign is measured with the help of KPIs. Finally, the budget has been defined for the promotional campaign.
References
Awad, N. and Soliman, S.S., 2017. Studying the Impact of Egyptian Hotels’ Websites Marketing on Customers’ E-Satisfaction. International Journal of Tourism and Hospitality Management in the Digital Age (IJTHMDA), 1(2), pp.53-63.
Becker, K., Sprigg, J. and Cosmas, A., 2014. Estimating individual promotional campaign impacts through Bayesian inference. Journal of Consumer Marketing, 31(6/7), pp.541-552.
Camilleri, M.A., 2018. Integrated Marketing Communications. In Travel Marketing, Tourism Economics and the Airline Product (pp. 85-103). Springer, Cham.
Cassia, F., Magno, F. and Ugolini, M., 2015. The perceived effectiveness of social couponing campaigns for hotels in Italy. International Journal of Contemporary Hospitality Management, 27(7), pp.1598-1617.
Chang, Y.C., Ku, C.H. and Chen, C.H., 2017. Social media analytics: Extracting and visualizing Hilton hotel ratings and reviews from TripAdvisor. International Journal of Information Management.
Choi, E.K., Fowler, D., Goh, B. and Yuan, J., 2016. Social media marketing: applying the uses and gratifications theory in the hotel industry. Journal of Hospitality Marketing & Management, 25(7), pp.771-796.
Dzhandzhugazova, E.A., Kosheleva, A.I., Gareev, R.R., Nikolskaya, E.Y. and Bondarenko, A.P., 2016. Business administration in hotel industry: problems and solutions (by the example of the Russian Federation). International Journal of Applied Business and Economic Research, 14(14), pp.651-660.
Erdem, M. and Jiang, L., 2016. An overview of hotel revenue management research and emerging key patterns in the third millennium. Journal of Hospitality and Tourism Technology, 7(3), pp.300-312.
Huang, Z.J. and Cai, L.A., 2015. Modeling consumer-based brand equity for multinational hotel brands–When hosts become guests. Tourism Management, 46, pp.431-443.
Leonidou, L.C., Leonidou, C.N., Fotiadis, T.A. and Aykol, B., 2015. Dynamic capabilities driving an eco-based advantage and performance in global hotel chains: The moderating effect of international strategy. Tourism Management, 50, pp.268-280.
Leung, X.Y., Bai, B. and Stahura, K.A., 2015. The marketing effectiveness of social media in the hotel industry: A comparison of Facebook and Twitter. Journal of Hospitality & Tourism Research, 39(2), pp.147-169.
Nwosu, B. and Onah, G., 2016. The role of government in driving human capital development in the tourism industry in Nigeria: A case study of Cross River State. Worldwide Hospitality and Tourism Themes, 8(2), pp.221-234.
Owler, 2018. Hilton’s Competitors, Revenue, Number of Employees, Funding and Acquisitions. [Online] Available at https://www.owler.com/company/hiltonworldwide [Accessed on 25 August, 2018].
Pritchard, M.P. and Howard, D.R., 2015. Measuring loyalty in travel services: A multi-dimensional approach. In Proceedings of the 1993 World Marketing Congress (pp. 120-124). Springer, Cham.
Saxena, A., Chaturvedi, K.R. and Rakesh, S., 2018. Analysing Customers Reactions on Social Media Promotional Campaigns: A Text-mining Approach. Paradigm, 22(1), pp.80-99.
Sprigg, J., 2017. Brand versus portfolio: Using targeted marketing to drive individually relevant brand strategies. Journal of Brand Strategy, 6(1), pp.6-13.
Statista, 2018. Hilton Worldwide Holdings advertising spending in the United States from 2012 to 2014 (in million U.S. dollars) [Online] Available at https://www.statista.com/statistics/308920/hilton-advertising-spending-usa/ [Accessed on 25 August, 2018].
Xiang, Z., Magnini, V.P. and Fesenmaier, D.R., 2015. Information technology and consumer behavior in travel and tourism: Insights from travel planning using the internet. Journal of Retailing and Consumer Services, 22, pp.244-249.
Zervas, G., Proserpio, D. and Byers, J.W., 2017. The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry. Journal of Marketing Research, 54(5), pp.687-705.
Zhang, Z., 2015, June. Economical hotels in email marketing strategy. In Computer Science in Industrial Application: Proceedings of the 2014 Pacific-Asia Workshop on Computer Science and Industrial Application (CSIA 2014), Bangkok, Thailand, November 17-18, 2014 (p. 177). CRC Press.
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