The Economic environment is a major consideration for any business. According to Kotler et al. (2010), the economic environment is directly related to factors affecting consumer spending and buying patterns. Marketers need customers with buying power in order for any business to succeed. The most affluent group that have the highest income demand the highest quality products and services, they’re also willing to pay for it. However, due to the world economic slow-down and recession of 2007, has resulted in higher interest rates and unemployment. Differences in income create different groups which have extremely different spending powers and needs, wants and demands. At the paradoxical end of the wealthy scale are the lower socio-economic class that struggles to cover the basic bills. Inequality in incomes has lead to marketers creating a new concept called value marketing (Kotler et al, 2010). This concept works on the basis that on the condition that the customer feels that they are receiving good value in the service or product that they purchase. They will purchase the product or service. This is relative to the product or service offered but the concept of value creation covers all of the income scale. Hilton has adapted to the change in consumer spending and also the demand for increased perceived value creation in the following ways: 1)
The Hotel chain has a multi-tier level of hotels, spas, resorts, long term suite hotels and villas that offer many different pricing options across each division. However, each option within the offering also has many different pricing scales and room options. With room only being the most basic option, with suites with all inclusive meals, drinks and activities at one of the luxurious resorts. By creating these options Hilton are offering to the customer an increase in perceived customer value. Customers are able to purchase a basic room and then add on what other services they may or may not want (Hilton 2013).
Please join StudyMode to read the full document