Professional Documents
Culture Documents
FINAL ASSIGNMENT
SUBJECT: PRINCIPLES OF MARKETING
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I. SUMMARY THE CASE: AIRBNB - MAKING HOSPITALITY AUTHENTIC.......................3
1. AIRBNB - Air Bed and Breakfast..............................................................................................3
2. Two million rooms – No two alike..............................................................................................4
3. Seeing The World As The Locals Do..........................................................................................5
4. Executing on the Promise:...........................................................................................................5
II. SUMMARY AIRBNB’S THEORY...............................................................................................7
1. What is service?...........................................................................................................................7
2. Products, Services, and Experiences..........................................................................................7
3. Level of products and services....................................................................................................8
4. Service Marketing........................................................................................................................8
a. The features and nature of a Service......................................................................................9
a. The Service Profit Chain.......................................................................................................10
b Services marketing categories................................................................................................11
c Marketing Techniques For Services Businesses...................................................................11
6.Branding Strategy: Building Strong Brands............................................................................13
a. Brand Equity and Brand Value........................................................................................13
b. Brand Positioning..............................................................................................................13
c. Brand Name Selection.......................................................................................................14
d. Brand Sponsorship............................................................................................................14
e. Brand Development...........................................................................................................15
III. DISCUSSION QUESTION........................................................................................................15
8-18. How do the four characteristics of services apply to Airbnb? How does Airbnb deal with
each characteristic?.......................................................................................................................15
8-20. How does Airbnb differentiate its offer, delivery, and image?..........................................17
8-21. How much of a threat is competition to Airbnb?...............................................................18
IV. REFERENCES............................................................................................................................20
V. PLAGIARISM CHECKING:......................................................................................................22
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I. SUMMARY THE CASE: AIRBNB - MAKING HOSPITALITY AUTHENTIC
Airbnb attracts clients by creating a digital community that brings people who
want to rent out property in their flats with visitors who need to stay. It connects
buyers and sellers and makes transactions between them easier. One side needs
money, and the other side needs an authentic experience. Housing costs are reasonable
and a genuine feeling of what life is like in the location you visit are the key factors
that make Airbnb unique and valuable.
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history, Airbnb has outperformed the world's largest hotel chain, the 100-year-old
Hilton Worldwide.
In the opinion of Brian Chesky and Joe Gebbia, Airbnb merely reliased that the
tourism sector had become disconnected with its clients by providing the same options
—ticky-tack rooms in sterile hotels and resorts. In the long term, it makes customers
bored with artificial green spaces - crowded. Hence, they tend to seek out ideal areas
that are closer to nature and more local.
Property owners who wish to rent out space on Airbnb must first register and
go through a verification process to confirm their legality. Consequently, listing a
property on Airbnb or renting one to stay in is a rather simple process. Rent listings
might include structures, such as a house, a single room, a boat, or even a tree hut,
which may qualify. Imagine it as temporary housing—a marketplace where people
can rent out their homes. Some hosts even charge a fee for the use of the area in their
gardens where guests can set up a tent. Over two million rental homes are available,
and each one is as unique as its owner. Hosts set the price and other specifications for
their service and listings, and reservations are booked by the time. Only 3 percent of
the booking fees are retained by Airbnb; the remainder is promptly given back to the
host.
Reservation:
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Challenges:
The founders of Airbnb were rejected by every venture capitalist they sought in
the company's first year. Because investors strongly support the idea that strangers
should never remain together and that terrible things will therefore occur. Moreover,
they struggled to persuade visitors; few people were eager to take a chance on staying
with someone they had never met.
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4. Executing on the Promise:
The company’s logo has had a hand in the company’s success. The business replaced
its first simple text logo with a much more abstract design - a sign like a puffy capital
letter "A" with both sides crossing over.
Vision:
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experience possible. This is by no means intended to create a strict, standardized
model as the traditional hotels did in that it promotes relationships with guests. At the
Airbnb Open, Checky shared that: “What’s special in your world isn’t just the home
you have," “It’s your whole life.”
The rapid expansion of Airbnb in every market across the world has
undoubtedly drawn the attention of major hotel companies. Developers are starting to
construct hotels in locations where they would not otherwise. The Airbnb experience
“home-sharing” is suited for a large Airbnb market but not a typical tourist
destination, so even if hoteliers try to encroach on Airbnb's territory, they will find it
difficult to replicate it.
Although Airbnb has had breakthroughs and success in the tourism market, it
still continues to struggle for legitimacy. Some towns forbid renting out personal
property for periods shorter than 30 days. And many tourists may favor the Airbnb
experience, but they still harbor reservations about living with strangers. With
ideological enthusiasm, Airbnb is tackling these difficulties and connecting people
from other cultures to make people understand each other more. In addition, they can
enter into the realm of establishing world peace where you can belong anywhere and
where people can live in a place instead of just traveling to it”. Chesky concludes, “I
think a lot of conflicts in the world are between groups that don’t understand each
other."
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1. What is service?
- Products are a key element in the overall market offering. A company’s market
offering often includes both tangible goods and services. At one extreme, the market
offer may consist of a pure tangible good, such as soap, toothpaste, or salt; no
services accompany the product. At the other extreme are pure services, for which the
market offer consists primarily of service.
- Today, as products and services become more commoditized, many businesses are
taking a new approach to create value for their customers. To differentiate their
offerings, they are building and managing customer experiences with their brands or
organizations, rather than merely making items and providing services.
- Product planners must consider goods and services on three different levels. Each
stage raises the value to the customer.
+ The most basic level is the core customer value. Marketers must first identify the
essential, problem-solving advantages or services that clients want before building
products.
For Example: “In the factory, we make cosmetics; in the store, we sell hope.”
And purchasers of an iPhone 14 purchase much more than just a smartphone. They are
purchasing leisure, efficiency, and interaction with their friends and family..
- At the second level, product planners must identify the core benefit into an actual
product. They need to come up with a design, a quality standard, a brand name, and
packaging for their goods and services.
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For example, the iPhone is an actual product. Its logo, design, system software,
chips, packaging, and these other factors have been carefully mixed to provide the
primary customer value of being connected.
- Finally, product planners have tto design an enhanced product around the main value
and actual product by providing extra consumer services and perks.
4. Service Marketing
- In recent years, the service industry has expanded considerably. Currently, services
make for over 80% of the US gross domestic product (GDP). In the worldwide
economy, services are growing even faster, accounting for more than 63 percent of the
total GDP. The service industry is extremely diverse. Employment services, courts,
clinics, military services, fire departments, and schools are all provided by
governments.
- Service intangibility means that services cannot be seen, touched, tasted, heard, or
smelled before purchase. For instance, when you purchase an airline ticket, all you get
is a piece of paper and the assurance that you'll get to your destination on time.
Ex: a customer going to a hair salon for a haircut. The barber is the producer of
the service and haircut product service. The haircut cannot be provided without the
barber; hence inseparable.
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- Service variability that the level of service quality varies depending on who delivers
them, as well as when, where, and how they are given. It will be difficult to establish
consistent criteria for assessing the quality of services. Each consumer will have
different feedback after using the service.
- Service perishability cannot be stored for later sale or usage. This is one of the most
crucial traits since it significantly affects financial outcomes. Inseparability and
intangibility lead to perishability.
For instance: airline flights, auto repair, theater entertainment, and manicures
In a service industry, the interaction between the client and the front-line staff
member helps to co-create the service. The ability of front-line service staff to interact
effectively also depends on the support systems that enable this interaction. Therefore,
effective service businesses give equal attention to their clients and employees. They
are aware of the relationship between service business earnings and employee and
customer pleasure, or the "service profit chain." Five links make up this chain:
=> Internal service quality is the primary determinant of service success when
choosing and developing the preeminent employee. Ensuring that they have a
comfortable workplace and massive support such as commissions, and perks for
employees who interact directly with clients, as a result.
=> Satisfied and productive service employees: when internal employees are
satisfied with the company's compensation, more devoted, committed, and talented
employees will be created, which results in....
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=> Greater service value: Front-line employee-client connection will advance, as
will be more efficient and productive in terms of consumer value generation,
engagement, and service delivery, which results in....
=> Satisfied and loyal customers: a great service will establish a huge loyal
customer base with this brand. Customers will come back with purchases, and word of
mouth to other customers, which results in . . .
=> Healthy service profits and growth: profit company contribution and service are
higher, and the firm's reputation will be advanced and specifically positioned in the
service industry.
● Internal Marketing
Internal marketing entails that the service provider must direct and motivate
both its customer-facing staff and its support staff to collaborate as a team in order to
satisfy customers. According to marketers, all employees within the company need to
be customer-focused.
● External Marketing
It is the practice of marketing and selling goods or services, which may involve
conducting market research and advertising to current and future customers. Small
firms utilize external marketing to reach out to their target market and broaden the
reach of their brand.
Ex: websites, social media interaction, print, TV, and radio ads.
● Interactive Marketing
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marketing of services, the quality of the service is influenced by the manner of
distribution as well as the service provider. Therefore, service marketers need to
comprehend interactive marketing strategies.
+ The offer may incorporate cutting-edge elements that distinguish it from offerings
made by rival businesses.
+Service providers can distinguish their service delivery from the competition by
hiring more competent and trustworthy staff, creating a better physical space in which
to provide the service product, or improving the delivery process as fast as possible.
+ Service businesses can also concentrate on defining their images through branding
and symbols.
- Managing service quality: enables firms to stand out from the competition by
continually providing higher quality than what they do.
+ Good service recovery may convert dissatisfied customers into loyal ones.
+ It is more difficult to define and evaluate service quality than product quality. The
greatest way to gauge quality is possible through customer retention.
+ High standards for service quality are set by reputable businesses. They keep a
careful eye on competitors and their own service performance.
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+ The company can improve employee training or acquire new staff who will work
harder or more skillfully.
+ Finally, a service provider can utilize technology to save costs and time in
manufacturing firms.
-> Therefore, businesses must be aware of how they develop and provide
customer value when working to increase service productivity. They ought to
take care not to detract from the service.
- Brand equity is the difference in how customers react to a product or its marketing
based on their familiarity with the brand name.
+ When people pick a brand over a generic or unbranded version of the identical
product, the brand's brand equity increases.
+ It evaluates the brand's ability to win the choice and loyalty of customers.
+ A powerful brand has high brand equity such as Coca-Cola, McDonald’s, and
Nike,..
- Brand value is the estimation of the total financial value of a brand. It is challenging
to measure this value.
- A corporation can get various competitive benefits from having strong brand equity.
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+ protection from intense price competition and other competitor marketing tactics.
b. Brand Positioning
Before positioning a brand, the businessman should define the brand's goal and
vision for what the brand should be and do. A brand is a company's promise to
customers that it will provide a specific set of features, incentives, services, and
experiences on a continuous basis. The brand promise must be succinct,
straightforward, and honest. They can position brands at any of three levels:
+ At the most fundamental level, they can position the brand based on product
attributes.
+ A brand's standing can be improved by associating its name with a desirable benefit.
+ They are built on strong beliefs and values, and they engage customers on a deep,
emotional level.
A good name may considerably increase the success of a product. Finding the
perfect brand name, on the other hand, is a challenging task. The following are
desirable attributes for a brand name:
1. It should imply something about the benefits and attributes of the product:
Snapchat, Pinterest, Foodie
4. It should be scalable.
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d. Brand Sponsorship
2. Private brand (also called a store brand): a product that is made for and
marketed by a particular merchant, competing with name-brand goods.
Examples: Kirkland Signature, Trader Joe's, Morphe
e. Brand Development
A firm has four options when it comes to developing brands. It can introduce line
extensions, brand extensions, multi-brands, or new brands.
1. Line Extension: current brand names are extended to new forms, colors, sizes,
components, or tastes of an existing product category.
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4. New Brands: A corporation realizes that its current brand name is fading and that
a new brand name is required. As a result, it may develop a new brand name in
order to reach out to more people.
8-18. How do the four characteristics of services apply to Airbnb? How does
Airbnb deal with each characteristic?
=> To deal with this characteristic, giving photographs of hospitality services as well
as thorough information that explains the hotel or house so that clients can get a sense
of what the area will look and feel like, as well as satisfaction guarantees for guests.
Additionally, before booking a stay, travelers can contact the hosts for additional
information effectively. These can help travelers have an understanding deeply about
the accommodation before they decide to book a stay and decline customer
dissatisfaction.
2. Inseparability: the service provided by Airbnb that cannot be separated from the
landlord (the host) and the clients since they have a close relationship. The reason
why:
1. Airbnb is an online platform where visitors can use an online payment system to
pay for rent.
=> As a result, the online payment service is a critical element to Airbnb and its
customers, and it cannot exist apart from the firm and its consumers.
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2. Furthermore, Airbnb functions as a middleman service, providing a new lodging
and social experience that may assist landlords in advertising their properties as well
as consumers in selecting their perfect house. The firm then offers its clients a
landlord assessment system in order to enhance landlord services and create a rental
fresh environment in which everyone may feel secure and pleased.
=> Airbnb services are typically given by landlords; the landlord's money is brought
by Airbnb and consumed by clients at the same time, if these services are separated
from the firm, they have a profoundly detrimental effect on both the users and the
running of Airbnb's organization. Thereby, they cannot be separated and have a strong
win-win relationship.
=> In order to better balance supply and demand, the company thoroughly evaluates
and identifies the needs of its clients and landlords. Then it develops efficient ways to
achieve this. In addition, Airbnb offers reservations through an online platform that
allows clients to choose the host, location, and other details as well as to negotiate
over the price before confirming their reservation.
4. Variability: Depending on the service provider, the location, the time, and the
method used to deliver the service, the quality varies. Since Airbnb chooses to offer
the authenticity of an experience from another location, it differs from other
traditional businesses.
=>Airbnb tackles this problem by ensuring that its services are supplied to its
customers in the best way possible to ensure that the quality of services is excellent.
Customers are given excellent service and a high level of security by Airbnb. In this
way, the firm asks the hosts for personal information, a house ownership certificate, a
photo, and an ID in order to determine whether they are suitable, which can ensure the
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security of the customer's rental. On the other hand, visitors must also offer personal
information to the business in order to contact the landlords more easily. The
organization then offers a mechanism for evaluating landlords in order to assess
clients' needs and offer the best possible service. This can boost client satisfaction
8-20. How does Airbnb differentiate its offer, delivery, and image?
These days, marketers often stress about the trouble of distinguishing their
services from those of competitors, owing to the significant growth in the service
industry, which has created a stiffer pricing rivalry.. As a result, the answer to Airbnb
that can attract customers' attention is service distinction based on:
Offer:
Instead of providing the standard and traditional hotel experience, Airbnb has
revolutionized the hospitality industry. According to Airbnb's founders, visitors who
use the service get a one-of-a-kind experience while visiting a foreign nation, and
travelers who use Airbnb do not only get the conventional tourist experience, but
rather an experience of living like a host who is a native of the nation they visit. One
thing that Airbnb excels at is allowing clients to choose a property that meets their
wants and expectations. Aside from that, by providing a unique experience, Airbnb is
able to bridge the gap between different cultures and ethnicities.
Delivery:
Airbnb also has several suggestions for hosts, such as picking up visitors from
hotels or taking them on a tour of the city; these are some techniques to improve the
contact between the host and the guest.
Image
One of the tips that Airbnb can draw customers' attention to is a rebranding
campaign through images and logos. Airbnb revamped its visual identity only once in
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its history, changing the original blue icon in 2014 to pink and white together in the
logo to portray love, protection, and feelings of tenderness. The soft colors have
helped the brand stand apart from the crowd. Its slogan is "Bélo", "the universal
symbol of belonging".The name is pretty simple to recall and gives clients a positive
first impression of the company. Along with it, a new tagline called "Belong
Anywhere" was developed and included in several marketing articles in order to help
Airbnb build its brand.
=> In conclusion, the public still prefers classic hotels. Even though Airbnb now
has a greater market share, they still need to develop additional strategies or
rules to deal with the struggle for legitimacy before hotels catch up with their
growth pace.
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IV. REFERENCES
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April 26). Retrieved from https://bnbduck.com/what-is-an-airbnb-and-how-
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https://www.investopedia.com/articles/personal-finance/032814/pros-and-cons-
using-airbnb.asp#:~:text=Airbnb%20stands%20for%20%22Air%20Bed,to
%20help%20cover%20the%20rent
3. Jansen, M. (2021, November 11). Airbnb logo: Meaning, history and
controversy. The Design Blog by DesignBro. Retrieved from
https://designbro.com/blog/inspiration/airbnb-logo-evolution-controversy/
4. Pretorius, F. (2016, August 12). Internal vs external marketing. LinkedIn.
Retrieved from https://www.linkedin.com/pulse/internal-vs-external-
marketing-francois-pretorius
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5. CFI Team. (2022, January 27). Products and services. Corporate Finance
Institute. Retrieved from
https://corporatefinanceinstitute.com/resources/knowledge/other/products-and-
services/
6. Kotler_pom17e_ppt_08 (1). презентация онлайн. (2018). Retrieved October
18, 2022, from https://ppt-online.org/579562
7. 8 1 principles of marketing chapter 8 product. SlideToDoc.com. (n.d.).
Retrieved October 18, 2022, from https://slidetodoc.com/8-1-principles-of-
marketing-chapter-8-product/
8. News, B. (2022, May 11). Airbnb is finally offering meaningful customer
service for guests - BNN bloomberg. BNN. Retrieved October 18, 2022, from
https://www.bnnbloomberg.ca/airbnb-is-finally-offering-meaningful-customer-
service-for-guests-1.1764303
9. Airbnb: An overview free essay example. StudyMoose. (2020, August 11).
Retrieved October 18, 2022, from https://studymoose.com/airbnb-an-overview-
essay
10. Kotler, P., & Armstrong, G. (2018). Principles of Marketing (17th ed.)
Pearson.
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V. PLAGIARISM CHECKING:
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