Question

MARKETING QUESTION

Airbnb is one of the world’s largest marketplaces for unique, authentic places to stay and things to do, offering over 7 million accommodations and 40,000 handcrafted activities, all powered by local hosts. An economic empowerment engine, Airbnb has helped millions of hospitality entrepreneurs monetize their spaces and their passions while keeping the financial benefits of tourism in their own communities. With more than half a billion guest arrivals to date, and accessible in 62 languages across 191 countries and regions, Airbnb promotes people-to-people connection, community and trust around the world. Basically, Airbnb is an online community marketplace that connects hosts who want to rent out spaces in their home with guests who are looking for accommodations. Airbnb doesn’t own any lodging properties. It is a platform that just brings buyers and providers together and facilitates interactions between them. Bookings and payments are made the secure interface of Airbnb. For property owners or hosts, all they have to do is register their listing and provide photos and details of the property and decide on the price. For guests, they can search by country, location, size, and price then book based on what they are looking for and other guest reviews. Recently, Airbnb issued the following statement:

Airbnb’s mission is to create a world where anyone can belong anywhere through magical travel that provides unique, authentic and local experiences, and we are focused on reimagining travel by building an end-to-end travel platform that combines where you stay, what you do, and how you get there, all in one place.

From our origins in a San Francisco apartment, we have grown into a global community with hosts across more than 191 countries and 81,000 cities. Powered by network effects that began with our founding in 2008, today Airbnb is truly a global platform, with more than 5 million listings in over 191 countries. In 2013, there were nine city regions with at least 100,000 Airbnb guest arrivals; in 2018, there were over 350 city regions with at least 100,000 Airbnb guest arrivals.

This global growth is increasingly being powered by tourism to destinations in emerging markets. According to the World Travel & Tourism Council (WTTC), travel to emerging economies is expected to increase at twice the rate of travel to advanced economies from now until 2030. By 2030, more than 1 billion travelers will arrive in emerging economies annually.

Airbnb is especially well-positioned to be a major driver of this continuing growth. Airbnb’s popularity has long been built on a growing desire for authentic, local travel that takes guests off the beaten path, and in recent years the Airbnb community has surged across emerging destinations around the world, especially those in Asia Pacific, Africa, and Latin America. By 2030, Airbnb expects that over 400 million guests will have used the platform to arrive at listings in emerging markets since the company was founded.

The Emerging Markets: Powering Airbnb’s Global Growth report we prepared outlines the ways in which emerging markets are becoming an increasingly powerful segment of the Airbnb community (alongside the markets in developed countries such as U.S. and Europe), and highlights three themes: (1) The rise of emerging markets in global tourism; (2) Airbnb’s surging growth in emerging markets, including the world’s fastest-growing large economies: India and China; (3) How Airbnb’s infrastructure positions it for continuing success in emerging markets

Indeed, with its unique distribution, positioning, and pricing strategies, Airbnb is disrupting the room rental industry as well as related industries.

1) What are Airbnb's distribution, positioning and pricing strategies? (elaborate)

2) What isAirbnb offering as opposed to its competitors? Apply the marketing mix to explain the offering.

3) Outline Airbnb's communication strategy.

Answer 1

Ans 1

Airbnb uses Direct selling distribution channel means selling via internet through e-business sites and mobile applications. Airbnb is an online accommodation booking platform. It offers a platform to customers to book their accommodation online usually for holidays at a much cheaper rates than hotels. In this the property owners post their pictures along with the details of the property to the Airbnb's online platform then the Airbnb match the customer requirements of accommodation with these property owners.

Airbnb is using customer benefits as a positioning strategy. It focuses on offering customer benefits as it offers highly different experience to its customers through accommodation services of staying in someone's house. It offers the highest possible quality through the experience life of local.

Airbnb is using cost plus pricing strategy where in the total cost of product or service provided a percentage of profit margin is added to arrive at the price of the product. As for arriving at total cost the various expenses are added in the rentals like taxes , maintenance fees, cleaning fees , and the use of amenities.

It also follows competitive pricing in which it prices its products according to the prices as charged by the competitors in the market for the similar thing. It allow property sellers to check their details of the property with that of other properties of competitor and compare their prices and set the prices according to the competitors through the Airbnb's search features. Airbnb management software allows sellers to smartly take pricing decisions .

Ans 2

Marketing mix is a set of actions taken by the company to promote its products in the market. It has four elements that is product, price, place, and promotion.

Below mentioned are the elements of marketing mix explaining the Airbnb offering as opposed to its competitors:

1. Product.

Airbnb offers a unique product features to its customers that is it is offering accommodation services with a different experience as compared to what is offered by the competitors. It offers accommodation services with a experience of local life and sleep in which the customers feels they are part of the city. As they can enjoy the city while living in between them as they do not live separately as they live in hotel apart from the city crowd.

2. Price.

Airbnb offers a very cheaper rates accommodation to its customers as compared to the prices as offered by the hotels.

3. Promotion.

Airbnb opted various promotional strategies like that of social media marketing in various social media websites like Facebook . Another technique is  content marketing where it produces relevant content to attract the customers.

4. Place.

Airbnb offers its services through a digital platform and covers the global market. Since it doesnot own any lodging properties.It has opted for the virtual market where the buyers and sellers meet through internet as compared to its competitors offering their products through physical market where buyers and sellers physically meet each other.

Ans 3.

Airbnb is a digital platform for accommodation and lodging. Its communication strategy comprises of content marketing, word of mouth publicity and internet via company's websites and social media websites.

1. Content Marketing.

Content marketing communication strategy is concerned with meeting objective of marketing communication by sorting relevant data for the public to attract the premium customers for their product.

2. Social Media Marketing.

Social media marketing is marketing through the medium of social networking websites like Facebook to create the product awareness among the public and also attract customers .

3. Print Media.

It also include print media as one of the tool of communication strategy by printing magazines with the proper content of highlighting Airbnb product features in order to attract customers.