Principle of Marketing

Airbnb Making Hospital Authentic

Prepared For Dr. Tamer Awad

Prepared by:
Islam Sami Abdel Fattah.

| Marketing Management | Jan, 15,2023

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Table of Contents
Prepared For Dr. Tamer Awad .............................................................................................. 1
I. Executive Summary ...................................................................................................... 3
II. Introduction ................................................................................................................... 3
III. How They had successes ............................................................................................... 4
- Mission and Core Values .............................................................................................. 4
IV. Business Plan – SWOT Analysis: ................................................................................ 4
V. Developing strategics for Growth ................................................................................ 5
VI. Marketing Strategy ....................................................................................................... 5
A. Content Marketing Strategy .............................................................................. 6
B. Influencer Marketing Strategy ......................................................................... 6
C. Referral Program .................................................................................................. 6
D. Marketing Campaigns– Made Possible by The Hosts ............................ 6
VII. Marketing Mix .............................................................................................................. 7
A. Product Strategy: ......................................................................................................... 7
B. Price Strategy ................................................................................................................ 7
C. Place Strategy ............................................................................................................... 7
D. Promotion Strategy...................................................................................................... 7
VIII. Marketing Return on Investment (ROI)..................................................................... 8
IX. Branding Positioning & Differentiation...................................................................... 8
A. Human Experience ................................................................................................... 8
B. Culture Experience ................................................................................................... 8
C. Cultural Experience for Hosts ................................................................................. 9
X. Target Market Segmentation ....................................................................................... 9
A. Demographic Segmentation ........................................................................................... 9
B. Geographic Segmentation .............................................................................................. 9
C. Behavioral Segmentation ................................................................................................ 9
D. Psychographic Segmentation ....................................................................................... 10
XI. Branding ...................................................................................................................... 10
A. The brand identity: “Belong Anywhere”............................................................... 10
B. To better capture the idea of “belonging” ........................................................... 10
C. The rebranding strategy ........................................................................................ 11
XII. Learning Objective ..................................................................................................... 11
XIII. Conclusion and Suggestion......................................................................................... 12
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 I. Executive Summary

Airbnb has established a very successful business by analyzing what its clients want/need and
then supplying solutions that meet those needs. They were able to engage with a portion of
the travel market that thought their alternatives were quite restricted by promoting
themselves as a method to experience travel rather than simply an accommodation booking
engine. By providing a guarantee of security, they alleviated their host greatest anxiety,
guaranteeing that they feel secure renting out their house.

II. Introduction
Airbnb originated in 2007 when founders Brian Chesky and Joe Gebbia could not afford their
rent. The two young designers put three air beds for rent in their living room and offered
breakfast to tenants for $80 per night to split the rent. The service was named
“AirbedandBreakfast” as they provide both air mattresses and cereal breakfast for guests. By
the end of May 2014, “AirbedandBreakfast” began testing a service called “Local Companion”,
which allows travelers to ask questions with locals and have them provide shopping, travel
guidance, and assistance with ticketing, car rentals, baby care, etc. It is headquartered in San
Francisco, CA with 5,597 employees as of 2020, 150 million users by 2018, more than 4 million
hosts by September 30th. 2020. As of 2020, Airbnb has 5.6 million active listings worldwide,
100000 cities with active Airbnb listings covering over 220 countries and regions. Airbnb’s
mission is “to help create a world where you can belong anywhere and where people can live
in a place, instead of just traveling to it.” The mission statement incorporates components
such as the improvement of life, exceeding expectations, and creating a sense of belonging.
Their vision statement is simply: “belong anywhere”, which ties into their official purpose that
states: “To make people around the world feel like they can ‘belong anywhere.” They made
sure to incorporate feelings of belonging, hospitality, and global presence in their vision. Their
values include the following: “Champion the Mission”, “Be a Host”, “Simplify”, “Every Frame
Matters”, “Be a Cereal Entrepreneur”, and “embrace the adventure”. Although Airbnb has
been a leading company in the lodging industry, it still faces many problems and challenges,
such as the impact brought with the global pandemic leading to a decrease in Airbnb’s
revenue, hidden cameras found in many Airbnb’s houses provided that invaded customers’
privacy, parties hosted in Airbnb’s houses that significantly bothered neighbors’ regular lives,
and many more. On the other hand, as the operating model of Airbnb is not quite challenging.
As it only provides one type of service, it is easy for many companies to enter this market and
provide similar services that would compete with Airbnb and take away some of Airbnb’s
market share. By divining into websites, operating systems, and services owned by Airbnb’s
competitors, it is not hard to see that the most prominent problem for Airbnb right now is to
figure out the strategy for it to stand out among its competitors as well as new companies
that are entering the market. It is extremely important for Airbnb to better position itself in
the lodging industry and be more differentiated to keep its leading role in the competition.
Thereby, this study conducted an array of analyses concerning its current situation, brand
visual design, and brand equity, the results of which are used to derive pertinent
recommendations for the ensuing development of Airbnb.

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III. How They had successes

The success of big firms isn't a luck fledgling while it's based on systematic steps leading to
such success like strategic planning in addition to mission statement.
- Mission and Core Values
- Defining the company mission:
which it is to create a world where anyone can belong anywhere, and we are focused on
creating an end-to-end travel platform that will handle every part of your trip”.
- Defining the company core value:
The core values at Airbnb are:
A. Champion the Mission
We’re united with our community to create a world where anyone can belong
anywhere.
B. Be a Host
We're caring, open, and encouraging to everyone we work with.
C. Embrace the Adventure
We’re driven by curiosity, optimism, and the belief that every person can grow.
D. Be a Cereal Entrepreneur
We’re determined and creative in transforming our bold ambitions into reality
IV. Business Plan – SWOT Analysis:
A. Strength:
Strength cannot be farfetched; the partners they are working with and them management
team have robust experience in the hospitality industry and online based business, the
customer’s services is second to none amongst them competitors and facilities listed under
platform are top notch.
Airbnb is considered as a cheaper alternative to other resorts and hotels. The prices for
the services are competitive that are based on location. Customers can shop around, and
they can choose the place that fits in their budget.
Airbnb provides goods customer service 24/7that is one of the main strengths of the
company. When they make the customers happy, there are a lot of users for them.
B. Weakness:
The perceived weakness could be that they are a new business, and they may not have the
financial muscle to sustain the kind of publicity they want to give them business or to
generate the needed funds from angel investors who may want to stay by the side line to
see how far they can grow before releasing funds.
Airbnb business model is easy to copy, and it is a huge weakness for its success.
Airbnb has been criticized for resulting in ahigh price for the stay. The rental prices in a few
areas have increased due to keeping their properties off the long-term rental market and
instead of that get higher rental rates for short-term housing through Airbnb.

C. Opportunities:
The more consumers travel domestically, the more likely they are to spend a night at either
a bed and breakfast or a hostel. The number of domestic trips around the world residents

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 is expected to increase in 2019, presenting a potential opportunity for the industry. they
are well –positioned to take advantage of the opportunities in the industry.
Airbnb can expand into emerging markets having less competition. This provides a huge
business opportunity
Airbnb can expand its product mix and offerings. this will help them to serve the customers
better. For example, it can expand its product by providing travel guides, car rentals.
D. Threat:
Rising competition from other types of accommodation has limited revenue growth.
Airbnb has been criticized for allegedly resulting in increased housing prices. Since
the company’s globalization, many governments have passed various regulations limiting
operations of short-term housing rental companies, such as Airbnb. The expansion of
Airbnb and similar services has constrained revenue growth.
Airbnb services are available across in about 192 countries. Each state and country have
got its laws and regulations to obey. The company should carefully rely on guests and hosts
so that they could meet the local laws.
The Company is already facing some lawsuits and fines across the world in places like New
York, Florida, etc. The Barcelona Authorities has fined the Airbnb Company with about
30,000 Euros for violating the tourism laws. Even the New York Authorities has fined
Airbnb for running illegal hotels

V. Developing strategics for Growth

Airbnb have developed a strategy for growth is consider as mix between three kinds of
developing strategies as the following: -
A. Market penetration strategy by enhance user experience of Airbnb by adding a new
value between Host and Guest.
B. Product Development by Airbnb’s recent acquisition links directly to strategic goal of
creating trips and experience service which guests can purchase their whole trips in
one app which includes flight ticket, local transportation, city tours and restaurants.
C. Diversification Strategy which in order to emphasis on wealthy audiences, acquisition
of luxury hotel operations is significant to improvement of Airbnb’s accommodation
inventory. This [articular listings offer high-end villas, apartments with outstanding
services.
VI. Marketing Strategy
Airbnb has been incredibly successful for a few reasons, and it’s not just because of its
website design. Given Airbnb’s growth, its marketing strategy has played a huge part that
made it such a big success.

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 It is one such company that has worked out the art of marketing itself. They have created
and developed a system to attract new users while also retaining the old ones.
Airbnb’s marketing strategy includes offline marketing, blogging, referral programmes,
etc. So let us go through some of its popular marketing strategies and campaigns in the
coming sections.

A. Content Marketing Strategy

Airbnb’s website is an excellent example of a service-based business using content

marketing.
As a service-based business, they don’t focus on selling its services but focus on showcasing
and selling the unique experiences that customers have had using Airbnb in the form of
blogs and video content.
his is how Airbnb’s content marketing strategy helps it showcase its authentic self.

B. Influencer Marketing Strategy

Airbnb’s influencer marketing strategy is one of the most well-thought-out marketing

moves. It collaborates with high-profile celebrities to advertise extensively to reach new
audiences.
In these collaborations, the celebrities usually post pictures of their luxurious Airbnb stay
on popular social media platforms, especially Instagram. Thus, driving increased website
traffic and leads generation.
C. Referral Program

Airbnb’s referral program is one of the company’s most effective methods for making new
friends and encouraging word-of-mouth referrals. It is a comprehensive referral
programme that provides the community members with rewards for inviting new users to
the platform.
If you tell or onboard a friend on Airbnb, the company will give you and your friend a
discount on your next booking. It’s not only generous but also good business sense since
for every $100 in revenue generated by this programme, they receive another $20 in
revenue and it costs them only $1 to send out a discount code.
This marketing tactic helps the brand expand its pool of consumers through existing users,
reducing the high cost of customer acquisition.
Executed via the company’s main website and mobile app, the programme ensures that
customers receive travel credit for every successful referral which may, in turn, be spent
on Airbnb stays and Experiences.
D. Marketing Campaigns– Made Possible by The Hosts

Airbnb has always focused on stepping up its efforts to build a strong community of hosts.
The campaign called, “Made Possible by Hosts”, highlights the positive contributions that
Airbnb hosts make when opening their homes to strangers around the world and also
thanking them in a way for their constant support.

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VII. Marketing Mix
A marketing mix is a marketing model used to appraise the effectiveness of the different
marketing strategies combined.
The essential idea behind the marketing mix model is to release a product or service in
the right manner, with the right price, and at just the right place by using the right
promotion tools; Thus, let us by understanding how Airbnb’s marketing mix has been
staged.

A. Product Strategy:

Airbnb provides a home-sharing platform that offers the opportunity to rent a room in
someone’s home, condo or apartment. They connect people to unique travel experiences,
at various price ranges, in more than 1,00,000 cities and 220+ countries.
The aim of its product strategy is to connect travelers with hosts who provide
accommodation through its online platform. It provides a variety of options to choose
from, right from choosing just one person room to booking an entire place. With all the
necessary filters in place, it helps travelers to conveniently find a stay through its mobile
app or on its website.

B. Price Strategy

Airbnb started with one simple price strategy — price your offerings below the market
average to undercut hotels and make your place stand out.
They knew that people were willing to pay more for hotel rooms, so instead of competing
on price, they competed on hospitality. Their main objective was to provide a sense of
familiarity, providing a type of home experience for their guests.
Airbnb, as of today, is known for providing relatively low-cost services compared to the
hotel companies.

C. Place Strategy

Whenever we talk about any hospitality industry, the place parameter plays a vital role
because It’s always about the place at which the property is located.
No traveler would want to book a place out of the city. No traveler would like to book a
place far away from the Airport and nor book a place where the conditions are not
pleasant. So, place parameters play a very important role.
Talking about Airbnb’s place strategy, it has over the years gone on to aggressively expand
its marketplace listing portfolio. Not just that, it also made sure that the quality of its
offerings remains as same as they offered since day 1. Furthermore, it also shares the
unique experiences of past travelers on its website.
Today, Airbnb has a presence in more than 1,00,000 cities along with 5 million+ active
listings on its websites helping travelers engage with their new travel experiences.

D. Promotion Strategy

Airbnb has several marketing channels as it uses both, online and offline forms of

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 approach to showcase its offerings.
The promotions are mainly targeted at local customers to make them aware of Airbnb
through city guides and unique experiences through its website. A lot of promotions are
also done to create social buzz about the Airbnb brand through social media accounts and
word-of-mouth
Unlike other global brands like Coca-Cola, McDonald’s or Starbucks, Airbnb is looking at
alternatives to market itself locally instead of globally. So, this is how Airbnb has worked
out its promotion strategy.

VIII. Marketing Return on Investment (ROI)

Airbnb's revenue model is based on three key components: hosts, guests, and Airbnbmag.
Airbnb earns most of its revenue from hosts, who list their properties on the platform and
pay a fee for doing so. Guests also pay a fee to book accommodations through Airbnb. In
addition, Airbnb charges a service fee to both guests and hosts.
Airbnb also generates revenue from Airbnbmag, its online magazine that offers travel tips,
recommendations, and stories about interesting places to stay around the world. While
Airbnb does not charge for access to Airbnbmag, the magazine does generate revenue
through advertising and affiliate marketing.
Airbnb charges hosts a 3% commission fee for every booking made through the platform
In addition to the commission, Airbnb also charges a service fee to both guests and hosts.
The guest service fee is typically around 6-12% of the total booking cost, while the host
service fee is usually approximately 2.5%
Airbnb's business model has been incredibly successful. In 2018, the company generated
$2.6 billion in revenue and surpassed 70 billion in 2022. Airbnb is also one of the most
valuable start-ups in the world.
While Airbnb's revenue model is simple, it has been incredibly effective. The company has
grown rapidly since its inception in 2008 and is now one of the most successful startups
in the world. Thanks to its strong growth, Airbnb is well-positioned to continue to be a
major player in the travel industry for years to come.

IX. Branding Positioning & Differentiation

A. Human Experience

One of the exceptional advantages of Airbnb was the human experience — the intimate
interaction a guest has with the host that could not be copied by hotels. Usually, when people
travel, they would feel alone. In Airbnb, the host becomes a part of that travel, helping the
guest to immerse himself/herself in the local culture. It is similar to how Chesky and Gebbia
became friends with their first set of guests. Airbnb focuses on providing a human experience
with personalized touches.

B. Culture Experience

The critical experience Airbnb offers for a traveler is to experience new places as the locals
do. It helps a customer to have a personalized experience. It was the underlying message

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 behind Airbnb’s marketing campaign — Don’t Go There. Live There. They say that Airbnb is an
opportunity to immerse yourself in the local culture. “The Live Their campaign is about
tackling the tension that so many people feel when they travel,” said Jonathan Mildenhall,
Airbnb’s CMO. “We know travelers want more. People around the world have told us they
want to live like a local. They want a deeper connection to the community, to genuinely feel
part of the places they visit. At the heart of this campaign is our antidote to commoditized
travel — the unique, human connections that happen when you truly Live There.”

C. Cultural Experience for Hosts

Along with the guests, the hosts also gain cultural experience. They get opportunities to
connect with people of different cultures across the world. They learn about their guest’s life
and travel experiences.

X. Target Market Segmentation

A. Demographic Segmentation

The Airbnb target demographic is broad, covering all consumer age groups. For
accommodation, the Airbnb demographic is aged 18-45, while the target audience for
experiences is wider, spanning 18 to 60 years.
This correlates with the employment status of guests – for accommodation and experiences,
the target segment is students, employees and professionals, while for experiences, the target
market also includes senior managers and executives.
For the older and more financially established group, the traditional (and more expensive)
hotel stay is clearly still an attractive option, although they are open to Airbnb-style
experiences.
The target market for Airbnb skews female, with 54% female users and 46% male users.

B. Geographic Segmentation

Airbnb is a truly global brand, with close to 13 million listings worldwide in 2021. Europe is
Airbnb’s biggest market, with close to 5 million listings that year, followed by Asia Pacific with
over 3 million listings, and North America with just over 2.5 million listings.
Despite coming in third in terms of the number of bookings, North America is by far the
highest revenue driver, bringing in close to $23 billion in gross revenues in 2021, compared to
nearly $16.5 billion in Europe.
This is due to the fact that vacation rental prices in the US tend to be significantly higher than
those in Europe and elsewhere.

C. Behavioral Segmentation

For Airbnb guests, cheaper cost and variety are the key drawcards. Beyond apartments,
houses, and cabins, Airbnb guests can choose from an incredible range of accommodation
styles, such as farms, boats, yurts and even private islands. In fact, during December 2019,
over 2,500 Airbnb guests booked castles and over 1000 chose to vacation in treehouses!
For people booking Airbnb experiences, variety is important, as is the ‘uniqueness’ of the
activity. This points to the authentic, local promise of the Airbnb brand. With Airbnb, guests
expect and receive a different kind of tourist experience than even 10 years ago.

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 D. Psychographic Segmentation

Not surprisingly, the typical Airbnb customer profile tends to be an easygoing, novelty-
seeking personality type. As evident, in their latest marketing video, Airbnb encourages users
to go “into the unknown”, let go of fear and tap into their adventurous side.
or accommodation guests, the typical personality is also defined as ‘determined’, a necessary
attribute for discovering the world in a unique way on a budget. On the other hand, those
who book experiences are noted as being ‘ambitious.
This calibrates with the status of older and more financially established demographic who
make up a part of the target market for the Experiences category. They are accomplished high
achievers who want experiences beyond the standard but without compromising on quality.

XI. Branding
A. The brand identity: “Belong Anywhere”
The company began to realize that the Airbnb community had greatly increased in size since
its foundation and was now outgrowing the original Airbnb brand. Managing directors of the
company needed to rework the brand as it was evolving, and asked themselves: “What is our
mission? What is the big idea that truly defines Airbnb?”

B. To better capture the idea of “belonging”

“Belonging is the idea that defines Airbnb, but the way we’ve represented Airbnb to the world
until now hasn’t fully captured this”, stated Brian Chesky.

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 Having never actively sat down to design an overall brand beyond a series of logos, Airbnb’s
founders recognized the importance of this to be able to push the company forward to the
next level.
They, therefore, asked global brand and design agency to rebrand Airbnb towards the idea of
“belonging”. Together, they designed a refreshed brand identity and developed a new brand
strategy for the company.
C. The rebranding strategy

The major change in Airbnb’s transformation is a new symbol the company named the “Bélo”.
The Bélo takes the form of an upside-down heart or a paper clip symbol, which also looks like
the letter “A”. It was designed to represent four things: people, place, love, and the “a” of
Airbnb.
“Belonging has always been a fundamental driver of humankind. So, to represent that feeling,
we’ve created a symbol for us as a community,” Airbnb CEO Brian Chesky wrote in a blog post.
“It’s an iconic mark for our windows, our doors, and our shared values. It’s a symbol that, like
us, can belong wherever it happens to be.”

XII. Learning Objective

The Airbnb business case study reveals that its business model is pretty simple. The company
provides a platform for people who need a place to stay with people who need to rent out
extra space. Airbnb makes money by charging a commission on each booking.
A few things make Airbnb's business model unique and successful. First, the company has built
an incredibly efficient platform that makes it easy for renters and landlords to connect.
Second, Airbnb has been very clever in its marketing, using word-of-mouth and social media
to attract users.
Finally, and most importantly, Airbnb has worked hard to create a community of users who
trust and recommend the platform to others. This community is what makes Airbnb so unique,
and it's also what makes the company so successful.
Airbnb's success is due to a combination of factors, but the company's values and mission are
definitely pivotal. The Airbnb business case study reveals that this company fosters
community and provides people with an affordable and convenient way to travel. These
values have resonated with users and helped the company to snowball.
To continue its success, any business, just like Airbnb, needs to keep these values at the
forefront of everything they do. The company also needs to continue to innovate and find new
ways to make travel more convenient and affordable for its users. If it successfully does so,
the company will consequently reflect on and possibly replicate Airbnb's success.

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XIII. Conclusion and Suggestion

It is clear to see from this analysis that Airbnb has huge competitiveness against other
companies and is a leading power in the market. There is no doubt that Airbnb has many
strengths, especially in providing convenience to consumers who choose Airbnb and in
spreading positive values around the communities. However, as the company has been
operating in the industry for years since 2007, it is facing some threats inevitably and has many
areas of improvement. There is some recommendation that might be beneficial for the further
development of Airbnb’s business. From this analysis, it suggests Airbnb expand its variety of
services by not only focusing on providing short-term and long-term rentals. To have a better
understanding of what consumers want, Therefore, with these findings, this paper suggests
Airbnb partner with local travel agencies and undertake event organizing roles in order to
enhance its diversification and differentiate it from other competing companies. Though
Airbnb is one of the first companies to change traditional hotel bookings and providing short
and long-term housings for customers, the operating system behind its service is not quite
challenging that left chances for competitors to imitate what Airbnb is doing and create
competition. With the rising of new companies entering the market, Airbnb needs to expand
its business and find new possibilities. As consumers’ demands and wants may shift over time,
it is even more critical for Airbnb to introduce new services or products that may be eye-
catching and differentiating. It would definitely be helpful for Airbnb to survey consumers to
gain feedback and opinions. Meanwhile, as the travel and lodging industry’s continued
growth, laws and government regulations are getting stricter. Airbnb, therefore, needs to pay
extra attention to monitoring its services and make sure that no violations occur in the
services it provides for both its hosts and guests. To sum up, though Airbnb has become a
mature brand, it still needs to diversify its production and make its policies feasible and
detailed. When facing such a changeable and unknown market, Airbnb is required to take
initiatives to conduct market research to get a deeper and more comprehensive sense that
can better help Airbnb in strengthening its current advantages and take effective actions in
solving any potential problems.

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