16/11/11

Service Management System Model in Practice

Service Industry Service Management and Customer Relations
Loredana Bujanovschi Ina Chavova Giulia Vanessa Chirilov Victor Chipac Class: 1sokE

Signature:

I/the group hereby confirm that this submission has been designed by the undersigned and is consistent with existing rules on cheating and copyright. And I understand that plagiarism, whether done deliberately or accidentally, leads to the academic penalties.

Hilton Worldwide
Introduction When Conrad N. Hilton opened the first hotel to bear the Hilton name in 1925, he aimed to operate the best hotel in Texas1. Mr. Hilton started his way to the top in the hospitality industry in Texas, by buying his first hotel, The Mobley. Nowadays, Hilton Worldwide brands2 consist in more than 3,750 hotels opened in more than 80 countries. Among its brands there can be identified Hilton Hotels & Resorts, Waldorf Astoria, Conrad and so on. There are approximately 90 years since Hilton hotels offer to their guests including business and leisure travelers, a beacon of innovation, quality and success3. The continuous development of this business is due to being soldiery to their Vision, Mission and Values4. Therefore, their vision consists of introducing light and warmth5 in the hospitality industry. Their mission is defined by becoming the first choice of guests, team-members and owners alike6. As for the values they managed to associate them with their name: Hospitality, Integrity, Leadership, Teamwork, Ownership, Now7. As consequence, in this assignment, based on the Service Management System model, we will design a detailed analysis of the Hilton Worldwide enterprise, by focusing on the market segment, the service concept, service delivery system, image, culture and philosophy. The Market Segment Hilton Worldwide is one of the leading hospitality companies, its lodging sector ranging from luxurious full-service hotels and resorts to extended- stay and mid-price hotels8. Firstly, the majority of the hotels are focusing on the mid-market segment9, which is characterized by providing modest service but sufficient10 for satisfying its guests, who include businesspeople, individual travelers, and families from all over the world. Hotels offering mid-range services consists of 150 to 300 rooms, and among its services may include a specialty restaurant, or all-day dining room, and lounge in order to provide entertainment in busy days.

http://www.hiltonworldwide.com/about/history/ http://www.facebook.com/HiltonWorldwide?sk=info 3 http://www.hiltonworldwide.com/about/mission/ 4 Ibid. 5 Ibid. 6 Ibid. 7 Ibid. 8 http://www.facebook.com/HiltonWorldwide?sk=info 9 http://www.hoovers.com/company/Hilton_Worldwide_Inc/rfkyyi1.html?CM_ITE=Factsheet&CM_CAT=Google&CM_VEN=Biz_Dev&CM_PLA=Free 10 M. L. Kasavana and R. M. Brooks, Managing Front Office Operations (Michigan: Educational Institute of the American Hotel & Lodging Association, 2001), 22 1
1 2

Loredana Bujanovschi Victor Chipac

Ina Chavova

Giulia Vanessa Chirilov

Secondly, the luxury market segment is represented by business executives, celebrities and wealthy guests11. Hilton Worldwide owns luxurious full-service hotels, for instance brands like Hilton and Conrad12. This type of hotels includes various amenities and services, such as upscale restaurants and lounges, concierge service, elaborately furnished and decorated public areas13. Therefore, the luxury market segment requires the highest level of services available in the full-service hotels, having an experience that can be hardly forgotten. The last market segment consists in travelers whose purpose is to stay more than five days and do not require high quality of service14. Hilton also owns extended stay hotels, which provide the services demanded by this market segment. For instance, one of well-known extended stay brands is Homewood Suites by Hilton Hotels15. Among the facilities offered by this type of Hilton hotels are spacious one and two-bedroom suites with separate living and sleeping areas, spacious closets, fullyequipped kitchens16. As a result, the mission of the extended stay hotels is to offer an experience that induces in their guests a homelike feeling. This market segment choose this type of hotels in order to enjoy moments with friends or family, escape from the day-to-day life, relax after the stressing routine at work. To sum up, depending on each market segment with the affiliated type of hotel, Hilton Worldwide must base their choice on economic groups, geographic region, lifestyle, family circumstances as well as reasons why purchasing the service, just like the authors, Johnston and Clark, stated. The Service Concept To start with, as mentioned in the introduction, Hilton Worldwide promotes the pineapple concept, by making guests feel welcomed in their hotels. This concept is also reflected in the connection they made between Hilton and symbol words like, Hospitality, Integrity, Leadership, Teamwork, Ownership and Now. We will develop the service concept analysis for Hiltons Worldwide primary customer group represented by mid-market segment17. One of the brand that is part of the mid-price hotel category is Hampton by Hilton18. In order to provide a detailed analysis of Hamptons by Hilton service concept we will use The Molecular Model developed by Bateson and Douglas and also design a figure where we will present the service concept in details (see Fig. 1).

Kasavana and Brooks, Op. cit., 20 http://www.hoovers.com/company/Hilton_Worldwide_Inc/rfkyyi1.html?CM_ITE=Factsheet&CM_CAT=Google&CM_VEN=Biz_Dev&CM_PLA=Free 13 Kasavana and Brooks, Op. cit., 20, 22 14 Kasavana and Brooks, Op. cit., 10 15 Kasavana and Brooks, Op. cit., 11 16 Ibid. 17 http://www.hoovers.com/company/Hilton_Worldwide_Inc/rfkyyi1.html?CM_ITE=Factsheet&CM_CAT=Google&CM_VEN=Biz_Dev&CM_PLA=Free 18 http://hiltonworldwideglobalmediacenter.com/index.cfm/page/7005/n/705 2
11 12

The core product of the service enterprise is offering accommodation. However, nowadays, hotels not only focus on this aspect, they also take into consideration how to offer to their guests more than just a service, but a memorable experience. The core product is underpinned by both tangible and intangible elements, which are interconnected. On one hand the tangible elements19 which make the services offered by Hampton Hilton available are building, rooms, comfy Hampton beds, bed-linen, chairs, desks, tables, Innovative Savvy Sofa, flat-screen HDTV, food and beverage, personnel, fitness centre and so on. On the other hand, the intangible elements are those which combined, transform the service delivery into experience delivery for hotel guests. For instance, intangible elements20 in Hampton hotels are professional staff, warm greeting, comfortable environment, the feelings induced in guests by the tangible elements, feelings like self-satisfaction after using the fitness-centre, energy after free hot breakfast and more. The Service Delivery System Hiltons Worldwide service delivery system highlights the tradeoffs between the search for operational efficiency and the need to create marketing effectiveness21, in other words, it represents a way of differentiation from the competitors22. Therefore, it plays a crucial role in the perception that customers will have regarding the final service product, which the hotel offers. To start with, as stated in the marketing mix model23, the service delivery system consists of three subcomponents: people, process and also physical evidence. In order for the service to be delivered successfully, employees as well as customers have to participate as well as to cooperate in the service process. Every hotel is divided into two main departments which assure the failure or success of the organization, front-office and back-office. First of all, to many guests, the front office is the hotel24, which emphasizes the profound impact that contact personnel has on the customers service perception, owing to the fact that it represents the first guest-hotel contact (e.g. reservation, check-in, check-out). Due to the important role they play in the organization, front-office personnel needs to poses excellent communication skills, be patient, innovators, responsible, motivated, multi-skilled, and also to be able to mask their role conflicts because they represent the public face25 of the hotel.

http://www.hamptonbyhilton.com/hamptonExperience/ourRooms.html http://www.hamptonbyhilton.com/hamptonExperience/servicesAmenities.html 21 K. D. Hoffman, J. E. G. Bateson, Service Marketing: Concepts, Strategies & Cases (USA: SouthWestern CENGAGE Learning, 2010), 113 22 K. D. Hoffman, J. E. G. Bateson, Op.cit, 115 23 http://www.learnmarketing.net/ 24 Kasavana and Brooks, Op. cit., 91 25K. D. Hoffman, J. E. G. Bateson, Op.cit., 229
19 20

Loredana Bujanovschi Victor Chipac

Ina Chavova

Giulia Vanessa Chirilov

Second of all, back-office of the hotel is equivalent with the managerial part which assures the good functioning of the enterprise. Management is accomplishing desired goals and objectives of the organization by planning, organizing, staffing, controlling26. Professional personnel is needed in the managerial part, who has to posses, depending on department, administrative, time-management, organizational, planning and implementing skills, as well as the ability to communicate in an efficient way with the employees. Furthermore, technology plays an important role in the service delivery system, by making easier the accomplishment of various functions. For instance, Hilton Garden Inn offers to its guests revolutionary, modern and comfortable beds with an advanced technology system27. This bed conforms to your body by cradling your neck, back, legs and spine providing pressure-free support, it has the possibility to adjust the temperature and has been clinically proved to be healthier by sleeping deeper in less time28. In addition, Hilton gives high-speed free internet access by status, to its loyal guests, especially business travelers29. What is more, customers can be involved at different levels and participate more or less in the service delivery system. Based on their performance, there are two types of guests, novices, who do not know how to perform and may disrupt the process, and experts, who know how to be part of the service delivery system, understand its complexity and can be more tolerant with the contact personnel30. The Image Image is a mental picture or impression of something or a mental conception held in common by members of a group31. Hiltons Worldwide image is reflected by the companys name, which suggests availability, popularity, luxury, harmony, variety, security and comfort. Their website32 is another element that outlines the image of the enterprise, by transmitting warmth, lightness, relaxation, modernism, elegance and innovation. Moreover, the image can also be reflected by the companys slogan33. Hilton started with the slogan Minimax, trying to suggest minimum price for maximum service and later adopted slogans such as Across the Nation, Around the World and So nice to come home to, supporting the ideas transmitted by the companys name. The guests perception regarding the company also contributes to creating the image. Hiltons contact personnel play a crucial role in shaping guests opinions about the hotel. Further we will present several reviews from customers posted on the internet: Excellent and friendly service performed by all of the

http://en.wikipedia.org/wiki/Management http://hiltongardeninn.hilton.com/en/gi/promotions/hgi_sleepdeep/index.jhtml 28 Ibid. 29 http://www.gadling.com/2010/08/03/hilton-gives-free-internet-access-by-status/ 30 K. D. Hoffman, J. E. G. Bateson, Op.cit., 261 31 http://www.Webster.com 32 http://www.hiltonworldwide.com/ 33 http://www.tshaonline.org/handbook/online/articles/dghbv 4
26 27

staff. Will definitely use this hotel again.34, A really first class service.35, Perfect Stay! Service cannot be beat.36, which outlines the high quality level of the service. The Culture and Philosophy Hiltons Worldwide philosophy and culture are defined by their vision, To fill the earth with the light and warmth of hospitality37, by a simple premise: at the heart of every great experience is a gracious host38, and also by their mission, which is To be the first choice of guests, team members, and owners alike.39. As we mentioned in the introduction, Hilton associates its values with its name: Hospitality- they are eager to deliver exceptional guest experience, Integrity- they want to satisfy all its guests and employees, Leadership- they want to be the industry leader and outperform their competition, Teamwork- suggesting the cooperation between employees and management, Ownership- highlights companys responsibility for their actions as well as decisions, Now- they operate with a sense of urgency and discipline.40 Conclusion To conclude, the Service Management System helped us better understand all the various elements involved in the Hiltons Worldwide service operations as well as realize the complexity of the company. Moreover, we analysed the enterprises market segment, service concept, service delivery system, image, culture and philosophy, which are highly interconnected and cannot stand alone.

Characters: 11 221

http://www.holidayextras.co.uk/airport-hotels/birmingham/hilton/reviews.html Ibid. 36 http://www.tripadvisor.com/Hotel_Review-g32655-d78694-ReviewsHilton_Los_Angeles_Universal_City-Los_Angeles_California.html 37 http://www.hiltonworldwide.com/about/mission/ 38 http://hiltonfranchise.com/SF/Overview/HiltonFamilyOverview.pdf 39 http://www.hiltonworldwide.com/about/mission/ 40 Ibid.

34 35

Loredana Bujanovschi Victor Chipac

Ina Chavova

Giulia Vanessa Chirilov