The problem identified is that Hilton HHonors need to decide how to approach a different positioning stand and focus on differentiating its loyalty program from the recently announced Starwood Preferred Guest and other competitors rather than to match their program with Preferred Guest. It is recognized that other competitors such as Hyatt and Marriot who are part of the big players in the hotel industry have not respond to Starwood’s announcement. Thus, Hilton will need to decide how to differentiate HHonors from other competitors.
Identification of alternatives
One alternative is that Hilton should focus on positioning HHonors program as being able to offer a better loyalty program. This should be approached by seeking more strategic partnerships and develop collaborations for promotion activities. Additionally, Hilton should consider on communicating their ability of being able to deliver more ways for members to earn rewards faster and more choices of rewards to earn. Another alternative is that Hilton should focus on communicating the flexibility services of HHonors program that can be offered to their members and this should be conducted by conveying to customers a consumer-oriented message in their advertising program (Refer to Exhibit 2). Hilton should approach to conveying their flexibility in providing services by building a strong message tagline which enable guests to relate emotionally to the Hilton brand. Another alternative is that Hilton should focus on communicating specific benefits which only their loyalty program is able to provide over its other competitors (Refer to Exhibit 3). This includes focusing on the benefits which other competitors are not able to provide, thus proving to guests that HHonors program is unique compare to others, gaining a unique selling proposition (USP) which enables brand recognition in the market. Evaluation of Criteria
Solutions | Criteria 1: Financial Cost (Weight= 0.2)| Criteria 2: Duration (Weight= 0.3)| Criteria 3: Significance to positioning strategy (Weight= 0.5)| Total Score Weight = 1.0| Strategic partnerships & collaborations for promotion activities| Value- 5; 5*0.2= 1| Value- 88*0.3= 2.4| Value- 88*0.5= 4| 7.4| Strong message tagline to communicate program flexibility| Value- 77*0.2= 1.4| Value= 66*0.3= 1.8| Value- 88*0.5= 4| 7.2| Communicate specific benefits | Value- 55*0.2= 1| Value- 77*0.3= 2.1| Value- 99*0.5= 4.5| 7.6|
Solutions| Pros| Cons|
Strategic partnerships & collaborations for promotion activities| -Able to keep investment costs down at a maintainable level -Increase places for collecting rewards for customers thus increasing incentives to utilize the loyalty program| -Possibility of facing competitors competing for partnerships in their loyalty program-Poor selection process of partners may cause damage to Hilton’s brand name-Partners may request specific rate for reimbursement or commission so as to gain some earnings| Strong message tagline to communicate program flexibility| -Able to communicate strong brand image with emotional aspects-Able to provide differentiation point for guests in the market| -Guests may not understand the message tagline which Hilton desire to communicate to guests, thus may cause confusion and negative feedbacks.| Communicate specific benefits which differentiate Hilton HHonors from other competitors| -Enable guests to recognize the benefits that only HHonors provide as compare to other competitors| -Time taken to communicate such specific benefits may be a long period which may lead to delayed creation of different positioning stand in the market|
Recommendations and Justification
Hilton should approach the third alternative as the creation of a unique selling proposition (USP) enable Hilton to communicate their specific benefits which only their loyalty program is able to provide over its other competitors. This also enables Hilton...