Airbnb Marketing Strategy Essay

INTRODUCTIONAirbnb, founded during the sparing d ca dropturn of 2008, is unitary of galore(postnominal) an(prenominal) a(prenominal) forward- odouring dutyes operating indoors the growing sh bed permitnce. Airbnb allows an alternative to the traditional hotel ancestry and altogetherows blank space fool goters, termed entertains, to advertise and guide their extra space, be it a excess room, a gaugement or treeho expend. Guests search by dint of the Airbnb website, read reviews and connect with emcees to find less(prenominal) conventional and, often much than, affordable lodging. find out to Airbnbs business success is establishing a framework of aver on which twain legions and leaf nodes elicit rely, a dodge Airbnb has veritable by dint of a strong market strategy and done circumstantial practices that instigate troops and client throughout the letting process. Building this framework of trust in the system is a wildness non further for Air bnb, hardly is in accompaniment emblematic of a confederacy operating in the raw portion out scrimping.WHAT IS THE SHARING sparing?The manduction miserliness is a smart economic opportunity for guests to doorway goods whenever they be required at that moment with access trumping ownership. For example, if a person and uses a simple machine at erstwhile a month, they could bring a car from a manduction rescue corporation wish ZipCar instead of paying a periodic car payment for a car they b bely use. Following the economic recession, m any the Statesns comport be sustain less inefficient in victimisation their economic resources. In addition, more Ameri dissolves argon expressing an interest in being more preferablely sensible of green initiatives and separate loving responsibilities (Neilson). These trends gull resulted in a new focus on shell outd resources. Beyond just the economic benefits, good entrust and community absorb atomic number 1 8 important drivers of the sacramental manduction forgetnce. Today, nation who givel the burden of the cur riptide economic period may prefer to mesh or sell to their peers instead of give their business to major corporations.Furthermore, the Consumer-to-Consumer (C2C) business personate is whole(a)owing many soulfulnesss to exploit their own resources to acquit additional income without the high startup be and long-term commitment for business sustainability. Although the desire of sh atomic number 18 is an old idea, the ability for sharing to generate profit is relatively new. The sharing economic system is greatly influenced by online calling and genial media. Online transaction has made it easier forpeers to sh atomic number 18 their goods and values with one a nonher using trusted financing service through websites such as PayPal. Social media has helped circulate the economic and personal benefits of the sharing economy and has served as the fundamental marketing machine for the growth of countless cooperative uptake companies. Companies functioning primarily in the sharing economy consistently urge their sub military strength absubstance abusers to sh be their catchs via Facebook, Twitter and other companionable ne cardinalrks. These affectionate platforms induct become so integrate in web transactions that once a guest has confirmed or paid, they argon prompted to immediately post their money-saving or moneymaking success forthwith to their cordial media page of choice.Also referred to as collaborative spending, the social economy follows the idea that batch give setoff use what they have, borrow, swap, make and thrift items before they actually bar stimulate for fewthing mug new (Anderson). The marketers of these sharing economy companies primarily target a few segments but be constantly expanding. urban areas and members of the X and Y propagations are chance on demographics for the sharing economy. Demo graphically, the majority of sharing economy companies will target Generation Y due to their concern for environmental and social issues that influence their finis to save and utilize resources (Kotler, Philip, and Kevin Lane Keller, Chapter 8). Statistics shew that the newest generation of adults buys few houses and fewer cars than its predecessors (Ciccone). Furthermore, Generation Y is attracted to original practices such as the sharing economy and is highly social, able to spread the word.Generation X is more kindredly to be those who are rental out their goods and services. As Generation X has more responsibilities, they taste the extra income that helps them finance their obligations, such as children and paying a mortgage. People are collaborating informally in their communities out of both necessity and as a life-style choice. A sharing economy high society should concentrate on clothe uping, ne twainrking and experience to batten down its success (Olson). Brand ing is attain because sharing economy companies want consumers to have authorization in their leaf blade. The sharing economy is at an benefit, being relatively new with a market that is interconnected through online commerce and social media.Outside of spreading the work, a sense of community is built in spite of appearance the network. Finally, a sharing economy community has to concentrate on node experience. Customers are looking for ease ofuse and harvest-feast entertain. When these desires are met, consumers will return to use the service as well as recommend it to others. One very lucky example of a company with the sharing economy employing these factors is Airbnb, who in less than a decade has built a major competitor to the centuries old hotel industry.WHAT IS AIRBNB?Brian Chesky and Joe Gebbia founded Airbnb in San Francisco, when they began renting out airbeds in their apartment to community attending a local throng to generate additional income in 2008. The archaean business poseur for Airbedandbreakfast.com, by and by renamed Airbnb, rivet on large conferences such as the Democratic and Republi shtup Conventions, which created bustling business in the 2008 election year. In 2009 the founders, straight off including Gebbias former roommate and technical school wiz Nathan Blecharczyk, received $600,000 in bug funding from Sequoia Capital. In that a standardized year, acknowledging that renting to complete strangers made many people uncomfortable, Chesky and Gebbia flew to New York City, berth to many of their users, to meet with multitudes in person and view for authorisation improvements.This was an unusual strategy for an profits company but it later proven to be profitable. Over the next two years, Airbnb made several key strategic changes that gave it direction and force in the securities industry. Of concomitant none was the establishment of Airbnbs cistrons payment flummox and the decision to bring in professional s to vulnerabilitygraph server homes. By the end of 2011, Airbnb had gone outside(a) and r separatelyed decisive mass (Geron). Forbes estimates that Airbnb likely unconnected money in 2012 in favor of accelerating growth, a hit the company could stretch forth due to the influx of nifty from divers(a) Silicon Valley venture capital firms (Geron). Their market penetration is comparatively strong, correspond to Tech Crunch, with Airbnbs booking judge to have surpassed that of Hilton in 2012 (Empson), and hosts renting to an estimated 2.5 one thousand thousand people according to the Economist ( altogether eyes on the sharing economy).The Wall Street Journal treasured Airbnb at $2.5 billion in October 2012, and Privco communicate their revenues for that year to be at $one hundred eighty million (Melby). In exchange for customer persist, website maintenance and various amends and protection features, Airbnb employs a broker-style payment assume, taking a portion ofthe rent al expense mingled with 6% and 12% from the guest, depending on the prescribe price, and a 3% service fee from the host (Geron). Airbnb has come into its own financially, musical composition still maintaining an individuation that, though not especially anti-corporate, is certainly fresh, young and progressive. From the company logo, with its pornographic, curly lettering and informal design, to its emphasis on direct interaction with say-so users, Airbnb has built its brand for the generation stir by innovation.The motto give way like a human emphasizes the difference betwixt the traditional, impersonal, corporate travel experience and the opportunity Airbnb presents to users to build their personal networks with hosts in off the beaten track(predicate) off places, at a trim back cost. As is perhaps to be expect with an internet company, Airbnb relies heavily on social media to create and perpetuate its brand identity. A key aspect of the company brand is the travel experience. They post a traveler of the week on their Facebook, Twitter and Google positivistic pages, and recently concluded a photo contest using Instagram, with Airbnb travel impute as the intrude. spot the choice of prize may be a mo opportunistic, the interactive concept to use the mainstream photo-sharing app, and the punish both fit well with the Airbnb brand and kept the focus on travel rather than profit motive. Naturally, travelers blog posts that advert Airbnb, whether they focus on the company or simply mention it in passing, are often promoted through re-tweets and posts on the Airbnb blog.The experience of travel is only one view of a company identity that is as bangfully well-rounded and collectioning as its users. Airbnb in any case emphasizes its interest in the fashionable local movement with its Living topical anaesthetic shows, a part of its AirTV series. Each online succession features a tour of a rummy Airbnb host property, and interviews with th e for the most part personable host or hosts. Beyond that, Airbnb is aware of the aggregation of its unique and tech-centric business model to technology and tech nerds. The company provides content supply directly to this audience through its specific engineering blog nerds.Airbnb.com and its Tech blather YouTube series, where young tech enthusiasts present on innovative new technologies and how they can and are being harnessed to build businesses (YouTube). These videos, generally around an hour in length, provide an in-depth review of current technological and business innovations.Airbnb also uses social media to associate itself with other organizations, not unlike cross branding, whichestablishes Airbnb as ethnicly present and economically innovative season also eliminating the costs of a major advertising campaign. Their Facebook page, for example, lists SXSW, TED, Virgin America, lone(prenominal) Planet and Business Punk as organizations that Airbnb Likes. Each of t hese associations streng thuss their brand Virgin America connects them to another untraditional travel company and to Virgins maverick CEO, Richard Branson, whose appeal to young professionals has made him by faraway the most followed Influencer on professional social media site LinkedIn (LinkedIn Today Top minds, big ideas).Similarly, their public association with SXSW reveals a pagan affinity in line with that of their clientele, and functions in tandem with the demand for lodging during the festival, to which Airbnb has devote a specific section of their site. by these trys, the company has branded itself as young, innovative and culturally and technically savvyall traits that exist outside of its travel-focused revenue stream, but which are inherently appealing to the clientele, both hosts and guests, on which Airbnb relies.AIRBNB FOR GUESTSAirbnbs business model focuses on consumer-to-consumer (C2C) transactions based on trust. Its model is similar to the familiar C2C market place of eBay where buyers and sellers engage in transactions that are each evaluated by man-to-mans for their direct of seek on the basis of detailed profiles, history, product, price and other resources. However for Airbnb, the relative level of investment for guests and hosts is significantly higher on a per transaction basis. Travelers are take chancesing their holiday experience, synthetic rubber and in most cases, a relatively higher dollar value than a single product purchase. legionss are offering their homes, their personal retirement and their own preventative, as well as their animated experience for the time that their place is firmd by a guest. With these personal investments in mind, the success of Airbnbs ability to instill confidence, trust and safety throughout their network was critical to the success of the company.Airbnbs roadmap to build safety and guarantor for their renters includes a private message system that allows users to learn about each other prior to booking while holding private breeding to be disclosed at a later time. Another system is Airbnbs support ID badge where users willregister their social networks such as LinkedIn, Facebook, Airbnb reviews and official sustenance from their photo ID and/or passport. With the proof of all of these resources matching up, those users will receive a Verified ID badge with their account information demonstrating to other users that their identification has been vetted. In April of 2013, Airbnb began indiscriminately selecting users to complete this profile and expect to have this expanded worldwide for all Airbnb members in the near future.Over the last two years, Airbnb has made efforts to increase their resources to expand security and sustain the trust in the marketplace by doubling the size of their customer support staff with 247 support, creating a dedicated Trust & guard department and designing tools to verify user profiles and facilitating richer commun ications among guests and hosts prior to booking. With these canonical features, the usability, consistency and accessibility to hosts and the Airbnb support team up continue to be critical characteristics to Airbnbs service roadmap. Although, when travelers are shopping they also have the business of maximizing their use of these tools and take care in evaluating their own transaction risk by peruse host profiles, reviews, social networks and even connecting with their host on a regular basis.AIRBNB FOR HOSTSHosts are just as much Airbnbs customers as guests so while they moldinessiness extol guests to stay in an individuals conformity, Airbnb must simultaneously inspire trust and confidence in the Airbnb model for hosts. Airbnbs actions and interactions with hosts and likely hosts are meant to regurgitate an image of image, confidence and community for the host, with a particular focus on doing so administratively, financially and socially. To simplify and centralize th e hosting process, Airbnb manages all the administrative functions of becoming a host, which provides a support system and protection for the host and his or her property. Rather than having hosts build a new website for their rental, the site is already created (in sixfold languages and currencies) and all he or she must do to get started is create a profile. Airbnb has a free customer service team to help first-time hosts understand the process. piece of music Airbnb makes it clear on their website that under stand up task and legal status for hosts is theresponsibility of the host, Airbnb provides type documents and answers to common questions on their website.Although Airbnb maintains the site architecture, hosts are in complete control oer the rental price, amenities and house rules. Airbnb in some cases will even offer free professional photography for host properties. A secure online payment system is built into the website to guarantee complete, on-time payment directly to the host (Why Host). Hosts are essentially allowing a stranger into their home (or boat, treehouse, etc.) so a sense of control is key for their confidence in this model. To do so, Airbnb creates systems to offer protection to hosts persons and property. Hosts have arrive control over who rents their itemisation. A potential drop guest puts in a stockpile request through the online system and thus the host has 24 hours to accept or decline the request. During this time the host and potential guest can communicate through the website communications system and reference the aforesaid(prenominal) verified ID system. However, the rental address is not given out until the owner accepts the guest and hosts also have access to the 24-hour customer service hotline (Trust).Since most hosts are renting first-string residences or rooms, protect against potential damage is much more important than if this was a hotel or business. while normal renters or homeowners insurance is the res ponsibility of the host, in 2011 Airbnb launched its Host Guarantee property protection program. In May 2012, it took insurance underwritten by Lloyds of London to keep up the Host Guarantee to up to $1 million in property damages. This covers guest damages beyond the scope of apt wear and tear in 23 countries. No additional cost or actions are required for the host to have this protection (Guarantee). The financial bonus is a key reason people become hosts. In a observe of members of Airbnb in San Francisco in November 2012, over 90% of hosts rented their primary residences to visitors and spent almost half(a) the income they made on living expenses (Lawler). To boost more people to become hosts and to support existing hosts, Airbnb also focuses on facilitating the financial aspects of renting. Firstly, it is free to create a listing using Airbnb.For online payments, the guest submits payment and once the reservation is accepted Airbnb processes and collects the payment in ful l. Airbnb holds the payment until 24 hours after sign in (and after the guest-host walk through). This helps uphold host cancellation policies and provides a neutral third-partyfor financial exchange. The Airbnb website also facilitates cleaning fees which are held until the property is vacated. The secure payment of fees and usage is a key way Airbnb builds confidence for hosts in addition to the social and cultural aspects of hosting. While the first reason most hosts decide to rent their space is financial, another reason is a desire to meet new people, show off their city and be part of the appropriated economy.Airbnb allows hosts to rent out primary and secondary residences, but 50% of hosts rent private rooms in their residence while they are there ( vitality). On the Airbnb site, there are legion(predicate) forums and guides for people to learn about becoming a host, exchange ideas and form a deeper community within the sharing economy. The social community built in Airbnb , gain the financial and administrative support systems, promote new and repeat hosts to open their homes and lives up to the world because they trust in the brand and system created by Airbnb.NEXT stairsAirbnbs success did not come without the expected growing pains of any startup company, and especially one autocratic a dominant market share in the new sharing economy. While its impact on the tourist trade, individual income, revenue to small businesses and economic stimulant are remarkable, the personal price some individuals have had to pay using Airbnbs service is important not to overlook. From city-issued sanctions to individuals violating consume regulations, to vandalism of personal property and identity theft, the safety, benefits, opportunity costs, and sustainability of Airbnbs service has been questioned in the media. To alleviate some of these concerns and remain a viable business, Airbnb should examine these obstacles in an effort to institute awareness through i ts community. They can continue to find ways to provide a more comprehensive and scrutinized ID verification process for all of their users to minimize the cosmea of bad apples.The level of care that hosts place on evaluating their individual transaction risk and understanding of regulations specific to their city has a direct impact on their safety and success as an Airbnb host. Through consumer forums, hosts, guests, and potential consumers and guests can communicate on a network to learn from their peers. Airbnb should also have expanding the countries covered and the items covered under theHost Guarantee to increase host protections locally and internationally. Moving forward, Airbnb has to be conscious of the popular pitfalls fellow sharing economy companies have faced. In a Campbell Mithun study, consumers were concerned with the following, in descending order What I play could get lost or stolen, I might not trust others in the network, my privacy might be compromised, sh aring is not worth the effort, and the goods or services might be of poor quality (Olson). As described above, Airbnb has taken requirement measures to help defend the safety and privacy of its host and guests. However, as the sharing economy evolves, this could get more difficult and new safety concerns can arise that Airbnb will need to resolve quickly.collaborative consumption represents a major economic, social and cultural shift as it moves out of early childhood and toward acceptance. These companies need to find the balance between the potential of the sharing economy and the standing regulation of the government. The current brick and mortar companies that are participating in highly-regulated industries like hotels or rental cars now have to repugn with services that do not go through the same rigorous levels of followup or qualifications to ensure public safety (Lawler). communion economy companies could make a solid argument for self-regulation. Airbnb should take ca re that they currently have the proper worry to ensure there are no nefarious parties in their business traffic and that their brand is strong enough to self-regulate (Lawler). For a well-rounded approach, shared economy companies should look towards or at least be aware of how the government may let down regulations to see how they might help or hinder Airbnbs progress.There will come a time when companies like Airbnb will need to defend their maverick and minimally regulated services, and should now put into place a team that can defend them. Lobbying municipal and state governments in high usage areas is a more traditional but still relevant area for Airbnb to protect its business model and by extension its users. The greatest advantage that collaborative consumption has when defending their stance to the economy is that they exist to help people in their communities to meet their goals (Metcalf, Warburg).These companies need to supplement their community-based benefits as a way to gain support and appeal to those wanting great government intervention. Preparation and understanding of user needs, government regulations and economic trends will bridge over the nascent sharedeconomy into a strong, sustainable economic force. Therefore, if Airbnb continues to focus on building a brand that consumers can trust in and created mechanisms to support hosts and guests then it can be a durable, profitable company for years to come.WORKS CITEDAirbnb. YouTube. Web. 27 June 2013. https//www.youtube.com/user/AirbnbAnderson, Lauren. 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