Question

Question 2 (600 words)

Does Airbnb’s entry into the business travel market represent a product extension or diversification? Explain. Also, analyse Airbnb’s target market strategy and positioning strategy.

Answer 1

Airbnb’s entry into business travel market can be considered as a product diversification. This is because it is a hospitality company providing lodging, holiday cottages for the people to stay. Whereas airline business is considered to be under aviation industry.

Product extension is introducing a new product with the same brand name. in this case airbnb has expanded its market or in other words, developed a new product called airlines. Hence it is more apt to say it as product diversification rather than extension.

Airbnb’s target market & positioning strategy:

According to airbnb, majority of its customers are vacationers. It has designed a tool for business travelers. This will help the travelers to filter homes and apartments that airbnb has made business travel ready. It also offers services through mobile apps for apple, android users. Where the registration and account creation is considered to be free.

The content designers at airbnb play an important role in the positioning strategy for the company. The terms of the product are ensured to be the same all over the product. And the language that is used for an on boarding screen mirror’s the actual interface, the confirmation email, marketing message etc.

Hence it is the communication of the message, the design pattern of the message all these plays an important role in positioning the product in the minds of the customers.