Company and Industry Analysis Report

Company and Industry Analysis Report

Brief Overview of the Company

Hilton Worldwide is the US Company founded in 1919. It owns and manages an international network of hotels and resorts and includes more than 4,400 hotels in 97 countries. The company has 12 brands. The most popular of them are Waldorf Astoria, Hilton, Hilton Garden Inn, and DoubleTree. Due to the franchising, the company works with nearly 1,500 hotels worldwide (‘Discover our vision’ 2015).

The company defined its vision in spreading the cordiality and hospitality around the world. Its owners and staff work on the common mission to make Hilton Worldwide an outstanding global company in the hospitality industry and the preferred choice for guests, employees and owners of the hotels. The goals of the company are to provide conscientiously a memorable experience for its guests, to incorporate the teamwork in everything, work quickly, show self-discipline and responsibility, and to be a leader in the hospitality industry. Thus, its values are hospitality, integrity, teamwork, ownership, the highest service quality, and timeliness (‘Discover our vision’ 2015). Due to these values, the staff of the Hilton hotels is extremely polite, tender and friendly to the visitors. The company also protects the confidentiality of the visitors within the law and adheres to the principles of the optimization of the usage of natural resources and maximization of the economic performance.

To ensure the success of the offered services, Hilton Worldwide uses following marketing techniques. To improve sales, the company does not miss the opportunity to introduce new products and services at various public events (Kotler 2002). Hilton Worldwide also has a guest loyalty program, called Hilton HHonors, which proposes discounts and attractive offers to its members (‘Explore HHonors’ 2015). The company also successfully uses the point of sale: it proffers to book room directly through the Hilton website for earning HHonors points, which one can spend within the loyalty program. Hilton Worldwide also uses such promotion techniques as advertising, press releases regarding new products or services, update and maintenance of the Websites, and spreading of the holiday brochures produced by the tour operator (Pereira & Almeida 2014).

Tourism in Kyiv (Ukraine)

According to the Ukrainian Department of Statistics in Kyiv, the visitors of Kyiv can be divided in several groups. Business tourists form the first one, including in total about 1.2 million in 2013, 80% of whom are arrivals from abroad and 20% are people who live in the country. The individual and group tourists make about 40% of the city guests. The total amount of Kyiv visitors was 2.2 million in 2013 and due to the unpleasant political situation, in 2014 this number reduced by 30% (Ukrainian Trade Guild 2014).

The foreign visitors, who come to rest, are mostly 30-50 years-old experienced tourists. They plan to get acquainted with the local culture, to confirm previously heard evidence or to disprove stereotypes. The other group of tourists from abroad is relatives. They are the former Ukrainian citizens, who emigrated to Europe, the USA and Canada in 1990th or the ongoing citizens of the CIS countries.

Kyiv regularly hosts concerts, staring world-famous singers as well as locally, and thus undoubtedly attracting tourists from all over the country and the nearest abroad. Kyiv was also the UEFA’s EURO football championship host city in 2012 and hosted various national and international sport events.

Large industrial companies, operating in the food, textile and mechanical engineering sphere, are concentrated in Kyiv. The largest of them are the manufacturers of the medical supplies (“Darnitsa”, “Farmak”), the corporation “Obolon”, which produces beer, the railcar repairing and aircraft manufacturing plants. Kyiv is also one of the biggest trade centers in Ukraine. Here are located the head offices of the corn trading companies, exporting their products to the European countries. It is also a huge scientific center, which unites diversified academic institutions, the business partners of which are the foreign companies from the USA, the European Union, the CIS countries and China (Ukrainian Trade Guild 2014).

The SPA Service in Hilton Kyiv Hotel

The five-star hotels in Kyiv provide their services predominantly to the foreign business tourists, who spend a lot of time on traveling and need a proper rest. Therefore, to provide high-level comfort and relaxation services, Hilton Kyiv hotel has an 800 sq. m. health and fitness center with a pool (‘Hilton spa centre’ 2015). It also offers a full complex of SPA procedures that allow their guests to achieve an overall refreshment without leaving the hotel. It is an exclusive service among the five-star hotels in the city while it is a well-known practice for the hospitality enterprises in other countries.

The established price for visiting the Hilton health center for the people, who are not living in the hotel, is €24. The visitor also has to pay for the SPA procedures, the cost of which ranges from €22 to €104 depending on the type of the ordered services (‘Hilton spa centre’ 2015). The SPA prices at Hilton Kyiv hotel are higher than in the other SPA salons of the city. Usually, if someone is the hotel resident he/she has some privileges, and should pay only for SPA procedures because the cost of the health center attendance is included in the room price.

The Segmentation, Targeting, Positioning and Competitive Advantage of the Hilton Kyiv SPA Service

Segmentation

The SPA service, provided by the Hilton Kyiv Hotel, is segmented based on the income level of the customers. Therefore, the citizens and the guests of the city, who are not at least the middle-class representatives, are not able to afford themselves such expensive procedures. From the other side, this service is segmented by whether the customer is staying in the hotel or not (Nicholls & Sydney 1989). Thus, those visitors, who are the hotel’s residents, pay less for using the Health center.

Targeting

The SPA service uses the concentrated targeting technique, based on the “staying” segmentation. Thus, the foremost goal of the company is to engage the residents of the hotel. Therefore, the applied SPA service makes Hilton Kyiv more competitive among the other five-star hotels.

Positioning

The Hilton Hotel provides high-quality services, but their price-quality ratio is too high due to some reasons. It makes the SPA service less competitive among the other SPA salons, which provide the same services for lower costs. Even the exclusive cosmetics are not enough to make it more competitive. However, one cannot talk about badly positioned product because it still achieves its initial goal, make the hotel more competitive in general.

The competitive advantage

The competitive advantage of the Hilton Kyiv SPA service is long working hours, starting at 6.30 am and finishing at 10 pm (‘Hilton spa centre’ 2015). Another advantage of the company is the use of exclusive cosmetics, which can be bought only in the Hilton Kyiv hotel. It is important to add that the Hilton Kyiv is located in the cultural center of the city. All these advantages make the Hilton SPA more competitive among the other SPA salons in Kyiv.

Service Design Process, Branding, and Service Quality of the Hilton Kyiv SPA Service

The SPA service designed process consisted of the following factors. Firstly, the service strategy was chosen. It provides additional pleasant and useful procedures. Then the target market was selected and the number of customers was predicted. After that the accommodation for providing the service was built and the staff was hired. Finally, the hotel’s guest priority was set in the way that the people, who do not stay at Hilton Kyiv, have to pay for visiting the health center.

The SPA treatment, being one of the Hilton Kyiv exclusive services, is an integral part of the hotel. Thus, since the hotel belongs to the Hilton Hotels & Resorts brand, the health and beauty center located there belongs to the same brand as well.

To provide and ensure the service quality, the company hired highly qualified staff with desirable communication skills and provided additional training for them. It also signed a contract with Italian, French, and Spanish cosmetics manufacturers for providing exclusive cosmetic lines for this health and beauty center (‘Hilton spa centre’ 2015).

Customers’ Needs and Loyalty Achievement

Kiev is an extremely stressful city. To stay there, the residents must work a lot and hard. The fierce competition conduces various and numerous stressful situations to emerge. Thus, the residents of the city have constantly to look for the ways of getting rest and relax. Hilton Health Club and SPA Center is miraculously suitable and needful place in these situations.

Weary and agitated people, who come to the SPA salons, want to feel comfortable, relaxed and pacified. Thus, Hilton beauty and health center’s mission is to meet their needs by creating a peaceful and relaxing atmosphere. As it is a part of Hilton brand, all employees of the SPA center, who provide all the services, are highly qualified, extremely polite and helpful. They were selected in the highly competitive environment and got the preliminary training according to Hilton’s tradition (Ahammad 2013). All that in conjunction with the relaxing environment and high quality and potency of spa treatments, allow Hilton SPA center to succeed in customer satisfaction.

The exclusivity of the cosmetics used in spa treatments, highly qualified and well-trained staff, a lovely peaceful atmosphere of pure relaxation and carefully elaborated system of membership cards and discounts allow Hilton Kyiv to ensure the customers to stay loyal.

Marketing the SPA Service to the Customer

The Distribution Channel and Marketing Intermediaries

The Hilton Kyiv for promoting the SPA services uses direct marketing, which assumes a direct communication between the company and customers. This channel presumes neither wholesaler nor the retailer (Tompkins County 2012). Marketing intermediaries are individuals or firms, who help the company to sell, resell or promote the product though agents, distributors, wholesalers, retailers and so on (Bessy & Chauvin 2013). Although the room in Hilton Kyiv can be booked in advance using the booking system of Hilton Worldwide or any other reservation systems, distributors do not participate in the implementation of the sales of SPA services, which are available in the health club of the hotel. Therefore, the procedures of buying a club card or paying for a one-time visit to the SPA center is direct and, thus, the customer has to do it right at the hotel without the participation of marketing intermediaries.

Personal Selling and Direct Marketing Strategies

The Hilton Kyiv SPA center uses personal selling technique. It is implemented only at the reception of the hotel. Managers suggest customers to visit the health and beauty center, located in the hotel. As a direct marketing strategy, to engage the visitors and loyal customers, the Hilton SPA uses the leaflets, which look highly professional and extremely attractive. There are also various promotional gifts, for instance, additional massage session in case of purchasing a club card, the usage of which can be determined as a part of the direct marketing strategy (‘Hilton spa centre’ 2015).

The Marketing Tools, Used by Hilton SPA

However, there are a few other marketing tools that can be used by Hilton Kyiv to promote its SPA service. One of them is advertisement of the offered services through the Internet and on the billboards in the city. The other one is the usage of brochures and leaflets.

Conclusion

Hilton Worldwide is an owner of the international network of hotels and resorts, including 12 brands and more than 4,400 hotels in 97 countries. Within its vision, which is to spread the hospitality around the world, the personnel of the company ensures that Hilton Worldwide is an outstanding global company in the hospitality industry and the preferred choice for guests, employees and owners of the hotels. To increase the attendance of the hotel, the company uses such marketing techniques as the introduction of Hilton new products and services at various ceremonies and public events, the usage of guest loyalty program – Hilton HHonors, advertising, press releases regarding new products or services as wells as updating and maintaining Websites.

In 2014, Hilton Worldwide built a new hotel in Kyiv, which was the first one in Ukraine. A great annual number of business tourists (about 1.2 million visitors) is quite typical for the destination, and about 950 thousand are guests of the country. This number can be explained by the fact that Kyiv is the capital of Ukraine. It is cultural, industrial, scientific, and commerce center and the enterprises located in the city are working in close collaboration with the companies from Europe, Canada, the USA and the CIS countries.

The Hilton Kyiv is the only five-star hotel in the city, which provides an exclusive SPA services. It has 800 sq. m. health and fitness center with a pool, where the hotel’s guests and the residents of the city can experience a full complex of SPA procedures and achieve an overall refreshment without leaving the hotel. The SPA prices in the Hilton Kyiv are higher (€ 22 - € 104) than in other SPA salons of the city (€ 15 - € 90). It is due to the exclusiveness of the cosmetics, used for the procedures, and the highly qualified staff. It is noteworthy to mention that this SPA center belongs to the Hilton Hotels & Resorts brand and the company undertakes all the necessary measures to ensure the proper level of service quality.

Analyzing the opportunities of the local citizens, the SPA service, provided by the Hilton Kyiv Hotel, is segmented based on the income level of the customers and is destined for at least the middle class representatives. It is segmented also by whether the guests are staying at the hotel or not. Hilton SPA service in this destination has doubtless competitive advantages, but it is not enough to make it competitive enough among the other SPA salons, which provide similar services for lower costs, due to the extremely high price-quality ratio of Hilton’s services.

The exclusivity of the cosmetics used during SPA treatments, highly qualified and well-trained staff, and lovely peaceful atmosphere of pure relaxation ensures customer satisfaction, meeting their desires and demands. The carefully elaborated system of membership cards and discounts allows the SPA service of Hilton Kyiv to keep its customers loyal.

The distribution process of the SPA service in Kyiv used by Hilton involves direct marketing, without involving any intermediaries and is based on the direct marketing strategies, which assume the dispensation of leaflets, personal selling technique and offering promotional gifts.

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