Ch 8 Segmentation and Targeting Markets

Airbnb’s users are divided in two markets segmentations.


People that are looking for places and people that are willing to rent out theirs.

Travelers: This market segment involves mostly people that wants to do tourism. Travelers sometimes, have different purposes rather than just exploring new cities. The reasons could be many, but definitely all of them share a need to stay over somewhere else than home.

Hosts: These include owners or renters who are willing to rent out their places. The reasons vary as well. They might want to make some money out of an unoccupied space or simply they just want to meet interest pople. Whatever the reason is, all hosts are looking to list their current place on Airbnb.

Both -- travelers and hosts, are the main target market of Airbnb. 

TARGETING

We know that a lot of companies choose to focus their marketing strategy in one segmented marketing at a time. Airbnb in the other hand, is able to deal with both at once. The company’s model follows a structure where both marketing segments complement each other. Like the hotel industry for example, they need to have a location where to host people and these travelers are aware of hostels and hotels existence. This is almost the same case of Airbnb because they shared most of the common interests and characteristics of travelers that would stay in a average hotel. However, Airbnb is different from average hostels and hotels. Airbnb competitive advantage is the variety of rental choices and prices. In addition, these places are also Airbnb user’s (hosts) homes.
To sum up, both-- hosts and guests need each other in order to follow Airbnb’s marketing concept.

Positioning

Here is what Airbnb users perceive from the product.

From a host perceptive:

• Making money:People get the opportunity to increase their income when renting out their rooms. By renting a place per night, the monthly average price, is two or even three times more of what the rent actually costs.
• Competition winner: Luckily there is not so much out there. Airbnb relies on the big amount of feedback from users. Other rental websites like“ Couchsurf” does not have the popularity of Airbnb.

From a guest perceptive

• Variety of prices: With a “low from high” price option in the web site, guest get to choose their favorite match in a wide range of costs.
• Variety of Places: From couches to Islands and castles, guests are able to explore dreamlands of destinations listed in the web site.
• Amenities: Not every hotel offers you a jet ride with a personal tourist included. Tennis courts, pools, bikes, etc are part of the nice perks of airbnb lists.

Ch 11 Developing and Managing Products

Introducing neighborhoods in to the airbnb community
A global expansion takes a while with so many places to explore. For example Airbnb took 3 years to open offices in the UK. However, this travel network has tested its limits and took a chance into incorporating a new product in the market. A week ago the website launched “Airbnb neighborhoods” in some European countries. This new product offers a handbook or a tourist guide where travelers can explore the neighborhood where they are going to stay during their trip. This way they get to familiarize with their destination before they arrive. It is a simple concept but a clever strategy to optimize the friendly and welcoming concept of Airbnb - “travel like an human”.

When booking a place in the UK, Spain, France, Italy, Germany and Russia, people will be able to see the ad campaigns and video  featuring Airbnb neighborhoods. Every guideline has been translated the country choice Language.

This new product is a test marketing effort, limited for now to a few European countries. We will definitely check out this product life cycle and be tuned for the possible diffusion of more Airbnb neighborhoods into the rest of the world. 

Ch. 16 Integrated Marketing Communications

Why is it so important to have good communications on Airbnb?

Airbnb forms part of an old industry where business like hotels and rentals require integrated communications skills in order to ensure the necessary safety that customers demand. Airbnb uses the e-commerce benefits to implement strategies that assure the travel network a lead to be successful in this market.

“ Travel like a Human”

The marketing message of Airbnb is the key that has opened the imagination of users that are willing to try a new way of traveling. Along with the rest of promotional strategies, Airbnb makes sure that the communication process works correctly and that the marketing message gets delivered to the target audience.

Informative promotion

Youtube promotional advertising campaign strategy was one of the most important mediums that helped Airbnb to rise in popularity. It has been an essential promotional tool for the travel network 
because Airbnb is relatively a new product that needs to be introduced to market.

A pull strategy

Airbnb recognized the need of enhancing communications between hosts and guests. The final booking is the final step or the purchase decision in this case. The travel network marketing managers incorporated text messages to facilitate bookings. Some of the advantages of this feature are:

• confirm a bookings through their phone from any place.
• cut costumer service expenses by eliminating the need of calling users that need to complete the booking.

                          IMPROVING 

Flexible Marketing Integration

E-commerce makes it easy these days. With so many media services, tech startups like Airbnb can access many ways of marketing that helps to coordinate all marketing messages and also helps by integrating new features that can maximize the bookings rates.

Twilio and Airbnb

Twilio is one of the companies that offers automated mobile communication services. Airbnb sends the host’s information in a text messages to potential the user, facilitating
the booking which also reminds them to do the purchase decision before the booking time expires.

Besides helping to improve the percentage of successful bookings, Twilio saved precious time and expenses to the travel network.

Ch 10. Product Concepts

Product Concepts 

Product type

Airbnb’s product can be called an unsought product. It is still unknown for many potential buyers because it is pretty new. Airbnb is just 4 years old. The advertising and word of mouth have been the principal tools to create the awareness of Airbnb’s product in the marketplace. Their product varies so much. Besides offering a place to rent, Airbnb also offers a way to earn money. Then, we can say it is also an heterogenous product. 







Modifications and Product Warranty

Airbnb’s product had to go through some functional modifications. In order to reinforce the security against apartments vandalists, the travel network had to implement an insurance policy to protect users against these inconveniences.






Competition

One of the reasons of the sudden success of Airbnb is due to the limited competition. Among the travel networks out there such as “couch surfing”, Airbnb is the most know out of all of them. The heavy advertising launched as an attempt of introduce the new way of traveling, worked out even better than everyone imagined. 


 


                          COUCH SURFING




 







Branding

A big part of the succes of the travel network, was the branding strategy. Due to the product benefits that come with at private brand, Airbnb became a loyalty product that has created a connection between hosts and guests. It also enjoys the advantages of being the most popular in terms of price offers when the customer has to chose between it and the competition. Airbnb offers a totally difference experience. It goes beyond renting a room. Now it persuades the costumer with the implementation of the service in entire neighborhoods.






Packaging and Labeling

The e-commerce advertising plays the same role when companies like retailers feature products but in a different way. Airbnb’s presentation is the key component of differentiation with the competition. There is a reason why this travel network provides photographers for free to customers. It is all about the pretty pictures. The most important part of the advertising strategy among the description of the apartment, house or castle and the pink offers tags, is the good presentation of the product that Airbnb utilizes to do the best it can to influence the new travelers to book places.

Ch.18 Sales Promotion and Costumer Selling

How do the online companies promote special discounts and offers?


The revolutionary e-commerce companies have different promotional strategies such as :

• Free Merchandise

• Sweepstakes

• Free shipping

• Coupons codes

Most of the online companies have a physical product where free shipping and handling can be applied. 

How can companies without a physical product such as Facebook and Airbnb offer promotions? 

In the first place, signing up for Facebook is free. Most of Facebook profits do not come from promotions. Instead their high revenue numbers come from selling advertising to other companies who are promoting their products. On the other hand Airbnb offers a service and not a product so their promotions are mainly focused on coupons that come with specific codes that the user enters in the coupon box option when booking a place. 

Discounts coupons 

The best way to get a discount coupon is through a simple google search. The first results show numerous coupon websites such as “coupondiona.com”, “cuponsleo.com”, etc. There are several kinds of promotion codes like the ones listed below.

Off booking coupons: When a traveler decides to rent a place with Airbnb, the price listed goes down by entering the coupon code.

Airbnb: €20 Off on Your Next Airbnb Booking (min. €125)

Enter this coupon code when you checkout – EUROPE2012

Location coupons: Sometimes Airbnb offers these coupons on a specific country or city.

Airbnb France Coupon Code

Travelling in France? France $25 discount on your next stay on booking value of $120 or more in France.

Coupon Code – TOURDEFRANCE

Events coupons: These ones are offered in special dates and events, knowing that this parties are the reason of traveling for many potential users. 

Airbnb: Oktoberfest Coupon

$25 off exp 08/21 Munich only.Use code AU_OKTOBERFEST2012

New Hosts only coupons: These ones, offer discounts on transactions fees as a strategy to attract new users. 

New Airbnb hosts only

List your unique space for free and receive bonus credit of $50 at time of first payout.

Coupon Code – 4KZWAS

Facebook - Airbnb coupons: These one have a purpose advertising for facebook.

25 Off When You Register and Book Your Accommodation

Coupon Code – FACEBOOK

Click here to book and use this coupon

Free samples

Photographer for free: Airbnb hosts can sign up for a free photographer to snap professional shoots of the place that hosts are planning to rent. The intention is to compel travelers with nice pictures of the hosts properties hoping that this can help guests to make a purchase decision.

Property cards: These are giving for free to hosts for networking purposes.

Airbnb relationships 

Airbnb hosts play the role of sales representatives. When a potential guest is interested in renting a place, it is highly recommended that guests ask as many questions as possible to make sure that both, guests and hosts are in the same page and comfortable with each other. The ultimate consumer decision depends of everyone's expectations. Here are some examples of frequently asked questions of guests in Airbnb:

Are you pet friendly?

Are you planning to have some friends over? 

Is there any public transportation that I could use?

Can you low the cleaning fee?

Can we use your kitchen to cook?

It does not really matter what the question is about as long as the host responds to it. In fact, by answering any of these questions, hosts get points that boosts their search engine results and future sales.

Guests are sellers too

Not every new traveler is welcome. Even though Airbnb has a high number of satisfied customers, Airbnb hosts want to be cautious as possible without hurting their high growth. Guests also are welcome to ask as many questions as they want. They can even friend their possible hosts on Facebook. After all they are strangers and at least their profiles and history in facebook can throw offer assurance and peace of mind.

This is the way users build up a relationship with the other. Airbnb has a higher rate of successive sales because travelers get involved in an Airbnb culture.  



Customer service available now! 

Airbnb understood the importance of consumer satisfaction in business. Especially in this case, Airbnb relies on word of mouth that users will spread on its reputation. After having a couple of red flags over the last few years with vandalism cases, Airbnb implemented a 24 hours a day emergency service to help with any customers inquires.

Ch. 17 Advertising and Public Relations

Fantasy Advertising


How did Airbnb convince people to stay at homes of complete strangers? 

$

225

per night
The Seashell House ~ Casa Caracol

By showing nice pictures of places to the right target market. Travelers like the idea of getting the local experience at exotic locations, when they see all these pretty pictures and imagine themselves in these beautiful places advertised in Airbnb.  

Airbnb users seem to like the idea of being part of a community. When we split the equation, we can see that there is demand for new hosts in need of profits. Travelers need those hosts to fill their locations and budget expectations. They both need to trust each other. As a result we have happy hosts and travelers.

Airbnb unlike some of its competition such as Wimdu, decided to focus in the community aspect. It wants to change the way that people do business when traveling

.

“Travel like a human”

It is the slogan of the company. Clearly, it is trying to persuade people to be more sensitive and open their friendly and humanity personality when they interact with their hosts and guests.

Some of the hosts are pet friendly...How nice!!

Managing crisis with the word of mouth

How did Airbnb get away with the unfavorable publicity with blogs about ransacked places? 

An insurance policy with a guarantee of a $1 million. Surely this does not convince every person but apparently positive reviews and feedback do. We assume that every one of those 2 million users do not have perfect experiences using Airbnb. Sometimes, the services just do not fill their expectations. Impressively, most of them seem to approve it, or at least that is what their review lines say. 

Statistics based on user’s reviews, say that 40% of the feedback is directed more to the positive experiences with hosts and guests rather than descriptions of the main place. Users that liked the relation with hosts and guests, have fulfilled their expectations good enough to like the service and even better, use it again. 

Other good Strategies  

Photo and video ad campaigns

These explain how the site works. They present the perks and advantages of their service. With every ‘click’ on the video, every potential user is targeted and Airbnb make sure to  advertise him as much as possible.

“Farming” Craigslist 

Craigslist is a company that also uses listings to sell services like renting places. Airbnb uses spam accounts to track possible target markets. However, Airbnb’s real strategy to use the Craigslist is to encourage users to list their places on it, as an alternative to promote their places somewhere else besides Airbnb.

Product design and functionality

The platform of the website makes it really easy for users to get to get setup with their listings. Hosts have access to charge-free professional photographers to make sure their lists look the best to attract those travelers. It also has alternative links like the “wish list”, that offers a collections of people’s dream places. This among other characteristics help to persuade future users.

Ch. 15 Retailing

Retailing Marketing Strategies

Victoria’s Secret success is not a secret. The Lingerie company has a personal experience that is incomparable in pricing and products. Victoria’s Secret understands why it is so important not just to acquire new customers but also to keep the current ones wanting more.  

Location

The franchise is in more than a 1000 cities in the Unites States, and it's open from 8:00 until 9:00 pm every day. It started selling lingerie and now sells womens wear and beauty products. With several sub brands and departments the stores mark the difference in the competitive market.

Target market

VS business products come from various sub-brands for different target markets -- such as ''Pink'' and the ''Bridal Collection' '-- but they all keep the sexy appeal that characterizes Victoria's Secret as a brand. Pink for example persuades young girls that have a fun and adventurous personality whether the Bridal Collection reaches more mature women that are engaged into a wedding dream.  

Products

Victoria’s Secret sub brands include: The Miracle Bra, Bridal Collection, Pink, Body by Victorias Secret among others. Its product involve a wide variety of women’s apparel fragrances, cosmetics, sports outfits, bags, etc. 

The price is what I love

A single bra can cost even $60. This one like other products can go sometimes over our budget but Victoria’s Secrets makes offers look irresistible.

• Free panties coupons: mailed to every customer once a month.
• $10 of a purchase cards: It can make a big difference with a $20 bra.
• Annual Sales: Panties with an original price of $20 can be in $4 on Christmas or Thanksgiving day  
• Online deals: Off season products can be at 50% off and there is a reduction of the shipping cost after a purchase of $100 or more.

Customer Service

Behind every purchase there is a process that employees are trained for in order to make a purchase successful. They enforce the fitting strategy. 70% of the customers that try on a piece are the most likely to buy it. Customers that are looking for just discounts, tend to doubt their purchase, minimizing the profit for the store. Victoria's Secret employees are very helpful with sizes and every need during the trying on and fitting process. 

Presentation

The atmosphere of Victorias Secret is totally girly. The silhouettes of different colors representing the store, websites and catalogs products, match the decorations and feminine taste. The design of the platform in their website is practical and efficient. Products are well incorporated into and specific department . The environment urges clients to take a look and try out the products.