Skip main navigation

£199.99 £139.99 for one year of Unlimited learning. Offer ends on 28 February 2023 at 23:59 (UTC). T&Cs apply

Find out more

Airbnb’s Marketing Process

Watch Raj Venkatesan explain Airbnb's marketing process.
So let us talk about the marketing planning process using the Airbnb case study. Now, Airbnb is a famous vacation rental portal in the sharing economy space. The first step in the marketing planning process is to talk about the objectives. Now the objectives is about customer, company, competitor, collaborators, and context. Now, how do this look in the Airbnb case study? So the objective could be, how to improve customer experience? That is the objective of the Airbnb vacation rental portal. Now, that objective is informed by the customer, company competitors, collaborators, and context. So who are the customers of Airbnb? You and me. Everyone who is looking to travel is a customer of Airbnb.
You could go to Airbnb, find apartments that are available for rent on the Airbnb portal, choose one of them and use that in your next travel plans. Now the company, Airbnb, what is their capability? Their capability is the portal itself, and allowing customers to look for these vacation rental places that they could use that are available on the portal. The competitors are hotels, those are the standard, traditional companies that have these facilities available with rooms that you can go rent and the competitors could also be other people like VRBO or Kid & Coe, that are also vacation rental portals. Now, who are the collaborators? Who are the suppliers to Airbnb?
Now, this is where it gets interesting in the sharing economy space. Airbnb allows you and me to actually put up our apartments, our houses for rent on their portal and someone else who’s looking to travel or coming to our location could be
looking at the portal and saying, at our apartment and picking it up for rental, so Airbnb goes around the traditional competitors like hotels and connect suppliers, you and me, with customers. Again, are those, like you and me who is looking for renters. So that context is actually the sharing economy context where it allows customers to transact with each other and share something that they have, maybe an apartment that they’re not using right now. To be able to be rented by someone else using this portal. Now Airbnb is trying to address the objective of how to improve customer experience under the context of the sharing economy and informed by the five C’s.
Now the next step in the marketing planning process is to look at the strategy. Now to understand, to improve the customer experience, Airbnb first needs to understand who the customers are. How can I group my customers who come to my portal into different categories and the way you categorized the customers is called segmentation. There may be many ways in which you could categorized this customers. That could be based on location, where people want to travel. It could be based on what they look for in their travel like adventure, or food, or whatever they look for in their travel. It could be based on price. Our customer’s looking for cheaper places to rent or higher places to rent.
Can customers be group based on their price sensitivity? It could be based on the purpose of the travel. Is it for vacation or is it for business? It could be on who is travelling, the composition. Is it families or singles, that are looking to travel. Or it could be whether it is students or working professionals that are looking to travel. So that could be many different ways in which Airbnb can segment its customer base. And targeting is about looking at which segment to focus on when you do the segmentation.
Does Airbnb want to really focus on people who look at different locations or does it really want to focus on people who are families who are looking at vacation rental spaces? Now, once you identify the target, let’s say Airbnb chooses families, it could be based on, what is the value proposition that Airbnb proposes for these families. One could be basically, a home away from home. I can speak from my own experience, traveling with my two boys and my wife. That it’s very difficult to have them in one hotel room. I mean, that just doesn’t work for them, and they get very impatient. Now, a room, a whole house, is better. They’re happy. We’re all happy.
We can actually have a vacation. So that could be a value proposition that Airbnb provides over and beyond the hotel experience. So that’s an example of positioning to a target segment that is families. Now, the next step after this is to look at the four Ps, product, price, place, and promotion. So to do that we are going to look at an apartment that a colleague of mine, Fred, who has put up for rent on Airbnb. In my conversations with trusted camera men Kyle indicates that this is a thumbs up apartment really, and let’s look at that apartment.
So this is the apartment that Fred has for rent and here is Fred with his lovely family and he has rented a one bedroom apartment that can hold two guests and has the bed. Now, this is the product that Airbnb makes available for other customers to rent from. The next step is looking at the price, Fred rents it for $60 per night. Then we go to location. This is where it’s up 29 Knot, here in Charlottesville, which is very close to a lot of shopping malls. And that’s the location of this apartment, and promotion really in the Airbnb world is from reviews, that if you rented Fred’s apartment in the past, you would provide a review describing your experience.
So here this says somebody there posted a review on March and it says that this was my first experience at Airbnb and it was a delightful one. So this is kind of the reviews that people post and you and I look in these reviews and decide whether we want to rent from Airbnb.
The next step is financials, and the financials are really about margin, ROI, and CLB and it’s really about how does Airbnb make money.
This article is from the free online

Marketing Analytics

Created by
FutureLearn - Learning For Life

Our purpose is to transform access to education.

We offer a diverse selection of courses from leading universities and cultural institutions from around the world. These are delivered one step at a time, and are accessible on mobile, tablet and desktop, so you can fit learning around your life.

We believe learning should be an enjoyable, social experience, so our courses offer the opportunity to discuss what you’re learning with others as you go, helping you make fresh discoveries and form new ideas.
You can unlock new opportunities with unlimited access to hundreds of online short courses for a year by subscribing to our Unlimited package. Build your knowledge with top universities and organisations.

Learn more about how FutureLearn is transforming access to education