Marketing Audit of Airbnb

Marketing Audit of Airbnb

Type of Organization

Airbnb Inc. is an online marketplace which arranges and offers lodging and majorly homestays and tourism experiences. Airbnb company does not own any real estate or, and it does not host events, however. It acts as brokers where they receive commissions from every booking. Airbnb gets a 3% commission for any booking from hosts and 6-12% from guests. It is based in San Francisco in California, United States. Additionally, Airbnb was conceived after its founder introduced air mattresses in the living rooms, which turned them into apartments with bed and breakfast. Its main aim was to offset the high cost of rent incurred in San Francisco. Its brand name, Airbnb, is a short form of its original name of AIrBedandBreakfast.com. It was founded in August 2008 by Brian Chesky, Joe, and Nathan. Airbnb is a privately owned company that is a lodging industry.

The founder was traveling in 2007 to a conference, but he was unable to pay for their housing, so they chose to rent their apartments they could pay for their trip expenses. This scenario sparked the idea of founding the company. They aimed at changing the way people viewed traveling. So in 2009, they engaged in a partnership with Y Combinatory, which expanded its little offerings. They then continued growing and raising capital efforts for facilitating their operations, where they acquired Accoleo. Now, the company operates in over 191 nations and can afford to pay rent our rooms, homes, and castles for as long as they wish. Further, the company is aiming at expanding internationally. For instance, it has been able to initiate its operations in Cuba and other countries where legality could have been questioned. Hence, it has grabbed the niche of catering for travelers like high spender and penny pincers.

Service Offered

Airbnb majorly is a trusted community marketplace where travelers list, discover, and book-specific accommodations around the world. It uses simple business models that permit hosts to lease and rent out spaces for travelers who seek short term lodgings. Even though Airbnb is still a small business, it also offers its clients the ability to booking specific tourism events or even local reservations using the site. Hence, Airbnb Company offers lodging services where it provides a site for extra spaces in their homes for travelers by giving them cheap areas than hotel lodging. Anyone can use Airbnb if there is internet access from anywhere.

The External Marketing Environment

Political Factors and Legal Factors

Even though people allow people to rent their homes, rooms, or apartment to strangers, but Airbnb is a unique business. The company runs its operations legally. Few locations that are available for renting do not follow the set housing laws and regulations. For instance, some states one has to live on a property that is legally rented for a short period, further, other locations demand when renting out hoses they pay for tourist taxes or pay hotels during their holidays. However, the company has faced May fine and court proceedings in Barcelona and New York since it failed in following the local tourism laws. So there is a need for ensuring that they follow all the housing guidelines lest they open the firm to legalities with the unregulated housing laws.

Economic Factors: Benefits to Hosts and Cities

In this sharing economy, Airbnb has emerged to be a leader. It is one of the developing trends where available resources are used by both individuals and corporations, just like uber. The company has grown to become a prominent competitor to hotels and motels. It offers cheaper options for renting than hotel booking.

Further, Airbnb has grown drastically for a short time. For instance, it serves over 8 million people internationally. Still, it offers jobs to its hosts who often rent those rooms and guests. Their services are more demanded in cities where there are no hotels and motels. The company is beneficial to states form its million spending habits and the creation of full-time jobs. Like in New York, its activities have generated over $600 million and have created over 4000 jobs.

Social, Cultural Factors: New Experiences

Airbnb is naturally a social business where the hosts provide homes to their guests in exchange for money. It requires all the visitors to document their experiences online through social media, which then gives a platform for information to spread, making it grow from word of mouth. Their hosts share experiences where they leave their reviews through subreddit and credits.

Technological Factors: Tech Necessities

Airbnb majorly relies on technology since visitors book their room through a website or an app, and that’s where they live their reviews. When there is a bad review, then the host will experience difficulties in future bookings. Additionally, there is the use of automation, like when a host odes do not respond to a message, then one can text them.

Competitive Factors

Just like any other marketplace, the company’s most significant competitive advantage is its network effects. The extended the host’s lists on their website, the more guests and clients they will get, and the largest the number of clients will book so the more hosts it will get. Its competitors include Flipkey and VacayHero.

Part II

Market segment

Sixty percent of airing guests are millennials. The companies target demographic is people that are traveling and looking spacious and comfortable accommodation, which are affordable and functional. However, these target guests vary from one host to the other and space to space. Further, its target audience is travelers and hosts. For travelers, it entails people that travel but not spend the most money on hotel rooms. They prefer spending their visiting tourist places as they go since they will not spend most time and money where they are staying. Further, the target audience for the company is the hosts who entail the owners and renters that are willing to rent their homes.

In Airbnb, there are demographic and behavioral segments of clients. Under demographic, they consider occupation and the degree of loyalty of the client. Whereas, behavioral segmentation uses the benefit sought and personality criteria to offer its clients.

The targeting marketing strategies for Airbnb services, which is one of the world’s leading hotels, include; a brand partnership that offers exposure and generates much buzz. All its events and product launches ensure that they invite most social influencers such as journalists and bloggers, which help in policing the industry. For example, the company has partnered with celebrities, which help in gaining media love. Taking risks is a target marketing strategy that Airbnb has adapted. It is not afraid of appearing cheesy or portraying a lousy press which they have received as an opportunity. Additionally, Airbnb appreciates the essentiality of high-quality imagery that why they prefer offering free professional photography for maintaining consistency across the media.

Airbnb uses two types of positioning, which include multi-segment positioning. The international lodging industry utilizes multi-segment kind of positioning, which gets more than one segment using different service packages. For instance, the firm makes a list of cost-effective apartment for renting for all the cost-conscious customer segments. Its packaging targeted clients, entails those with value advanced quality and design are willing to pay more. Currently, the company has launched a platform of lux line of the premium apartment, which involves extraordinary homes with everything being five stars targeting only the premium customer segment. Additionally, Airbnb utilizes anticipatory posting, which it has launched service for the market segment with low turnover with anticipation of its turnover increase in the future. Such services include around the world using 80 days and are some of the services that are mentioned under Airbnb anticipatory positioning.

Product strategy

Airbnb entails an online marketplace which arranges and offers lodging such as homestays and tourism experiences and serves as brokers who receive commissions for every booking. Its services are of wide selection such as single rooms, apartments, houseboats as well as castles through their Airbnb website. Further, it gives a free listing of the property, so hosts do not have to pay for them. The listing involves description and user profiles where prominent clients get to know more about their hosts. Hosts are given the freedom to set their prices per night or month. They offer customized searches in their database with dates, location listing prices, type of property, and languages of the host.

Airbnb is the brand name of the lodging industry, which is a short version of the original name of airbed and breakfast.com. It works under the belief that product-market fit is the primary thing that matters since if no one wants what you are offering, then you don’t have a business. It uses product differentiation strategy. It ensures that it different its services, making them stand out from the other companies in the market. Its advantage is that it offers a variety of choices for its customers hence enhancing the customer’s responsiveness in the service market. It helps in the advancement of supplier creativity, making it survive in the competitive market, which motivates in inventing new products that enable them to remain relevant. Its disadvantages are that it demands more resources and costs as well as a hinder market entry for new firms or branches.

Pricing Strategy

All the price reservation for Airbnb are based on nightly rates that are set by hosts in addition to other fees and costs determined by the firm or the host. Such expenses include Airbnb service fees for guest services, which helps the company to charge and run smoothly. Additionally, there are extra guest fees that host care in case the limit of guests is reached. There are also security deposits and value-added tax and other local taxes. The company uses geographical pricing, where all the paid fees are based where the lodgings and stay ways are.

In some cases, the geographical pricing strategy increases when there is a need for recouping shipping costs that tend to grow when one books them. It leads products to be perceived to be of high value because of their rarity and cache. In case of such obstacles, then it demands to increase in prices to break even.

Promotion strategy

Airbnb uses twitter, Facebook, YouTube, and LinkedIn as the social media networks for advertising itself. It uses these media since they give access to different markets and a large mass of people using a short time. Further, it uses blogs and designers to adverting their services.   The main trade sales promotion is through the quality and quantity attributes displayed on the reservation performance.

Further, it uses incentives of discounts to its clients, which helps in increasing the demand for their products. Through offering high-quality products to guests leads to work to mouth sales promotion hence reaching a broader market more cheaply. Further, it uses coupons, price off offers on their products, and in some cases, they use consumer sweepstakes where they call for clients in submitting their names for a draw. Then the guest’s rooms are included in the prize immixing contest list where the winners get prizes.

There is personal renting of homes where homeowners place their homes where clients can book and rent them for some time. Additionally, the company ensures that all the forms of communication and messages concerning booking and renting are carefully linked together. There are positive and negative aspects of promotion strategies used by the company. The positive aspects are that it helps in increasing brand awareness and make appropriate information available to clients. Further, it helps in improving customer traffics as well as assists in building sales and profits. The negative aspect of the promotion strategy is that it is expensive and sometimes might not be effective in reaching the target market. However, this promotion strategy has helped the company in growing to over 190 countries.

Distribution strategy

Airbnb uses different distribution challenges for hotels. For instance, the firm launched its global hotel technology in partnership with site Minder, which is a leading cloud platform for the hotels so that they could attract book guests intentionally. These new technologies have developed jointly two firms that help in making it possible for hotels to connect booking information to their existing management system. Further, the product distribution is very intensive to ensure that the company reaches a mass population, increasing the market know-how of the firm. The distribution strategy is good for the company since it helps in the reduction of cost, increasing market efficiencies, and helps in reaching out to more clients. Then, it helps in expanding the company’s core competencies.

In conclusion, after carrying out a marketing audit for Airbnb Company, I have learned different strategies that any marketing strategy should adopt. A company should ensure that content marketing is a culture. This means that content marketing should not be limited to one campaign or even one department. Hence content should be a company-wide initiative that begins from the top. Additionally, one should learn what room they are in and must always provide an actual value by focusing more on what customers are looking for, which is valuable content. What I have learned after carrying this marketing audit is that the information concerning services or products should be disclosed to clients. Again I have learned that any company should use a promotion distribution and customer strategy, which favors their brand.