Product Development Case Analysis

Parth Gupta Uday Sethi

GROUP 4 Riya Singh Akanksha Poorna
Ayush Bhatia Manik Bhatt
• Onefinestay: A company that offered travellers a chance to stay in
distinctive private homes in the world’s greatest cities while the owners
were out of town.
• Branding at Onefinestay was challenging because the company, as a two-
sided marketplace, served two customers.
1. Homeowners, hosts who supplied the company's unique
inventory of properties.
2. Guests, who were an incredibly diverse group - vacation travellers,
business travellers, those traveling alone, and those traveling with
families.
• Positioning the fledgling brand against competitors was also a challenge,
as Onefinestay viewed itself as a pioneer in the emerging sharing
economy for hospitality.
• It was unclear what the competitive frame of reference should be.
• Two options were available with Greg Marsh:
• Depth strategy
• Breadth strategy
A Business Idea Emerges
from a Business Trip
• The idea for Onefinestay occurred to Greg Marsh when he had a “dreadful stay” in a “dreary
airport hotel”.
• He notice the many luxury residential properties in his neighbourhood that appeared empty for
vast portions of the year.
• He called it a “no-lightbulb moment,” noting “the lights aren’t on because nobody is home.
• So, he developed an idea for a business that would offer high-end home rentals to travellers who
sought a more authentic and local experience than a typical upscale hotel could provide.
• In September 2009, Marsh co-founded Onefinestay with Demetrios Zoppos, Tim Davey, and Evan
Frank and raised €200,000 from the help friends and family.
• Series of Funding:
o 2010 – Series A- Raised $3.7 million & signed 100 new house owners
o 2012 – Series B – Raised $12.2 million & started operations in New York
• Boosted by tourism during the summer London Olympics, the company had 1,000 member
homes in New York & London and employed a team of more than 100 people.
• The company continued to expand and by September 2013, launched its operations in Los
Angeles & Paris.
• By the fall of 2014, the company had 250 employees & an additional 250 contract staff who
managed 2,000 houses with 5,000 rooms, in a portfolio worth over $5 billion.
 The Rise of the Sharing Economy
• The sharing economy (also known as “the peer-to-peer rental
market”) referred to the exchange of assets or services among
individuals, aided by a digital matching process via desktop and
mobile applications.

• The best-known examples of sharing economy companies

included Uber, Lyft, Airbnb, Task Rabbit etc.

• Forbes estimated that the revenue flowing through the sharing

economy would grow 25% to exceed $3.5 billion in 2013.

• The challenges faced by sharing-economy companies included

establishing trust, providing demonstrated value, and
addressing the “chicken-and-egg problem” of ensuring enough
supply and demand.

• The biggest hurdles were legal & regulatory. Some locations,

such as San Francisco, Washington, DC, & the United Kingdom,
were developing regulations to support and aid the economic
growth of the sharing economy, while other regions were
moving more cautiously.
 Managing an upscale
Two-Sided Market Place
The company completely disagreed with the point that Onefinestay was an “High-end Airbnb”
• The main point being that the guest never interacted with the hosts & Onefinestay was
vertically integrated service-enabled market. Onefinestay was described as a hospitality
company & a very complex logistics company.
1. Homeowners Hosts: Managing the Supply Chain
• The properties listed on Onefinestay were homeowners’ residence. They were emotionally
comfortable that Onefinestay is managing their property on their behalf as a trusted
partners.
• It was expected of the homeowners that they made their home available for the company
for at least 4 weeks per year.
• Two-third of homeowners came from ‘word-of-mouth’
Process of signing up homeowners:
Step 1: Sales Meeting
Step 2: Selection
Step 3: Registration
Step 4: Photoshoot
• The price range was $250 per night for one-bedroom apartment to over $2500 per night
for grand house.
2. Attracting Guest: Managing the Demand Side
• Onefinestay caters to wide variety including family travels to business travels.
• About 80% of the guests learned about the company during online search. By fall 2014,
most of the unpaid traffic was generated from bookings that were made either through
online or offline channels.
• The travel agent channel was kind of new for Onefinestay. About one-third bookings were
coming from offline travel agents such as Virtuoso and around two-third from online travel
agents such as HomeAway, Expedia, etc.
• The company had a greeter to help the guest during their stay.
• In addition to this, the company provided the guests with an iPhone which had an
Onefinestay app installed with a ”contact us” button for helping them out during their
stay.

Onefinestay Virtual Marketplace

• The website worked as a virtual store for both guests and homeowners.
• One side of the website contained information necessary for the guests such as
testimonials, pictures of home, etc.
• The other side of the website contained information regarding the benefits etc. for the
homeowners.
 The First
Branding
Exercise
• During its branding exercise, the company took the
route of a brand onion model to understand its various
layers.
• At the heart of the whole branding effort was curiosity.
• The several layers of the onion explained the various
aspects of the brand.

• Behavioural aspects of its major customers as well as

hosts- Playful, adventurous, and considerate.
• Personality traits of its major customers as well as
hosts- Smart, thoughtful, whimsical and the aesthetic
Romantic

•This exercise was the first step towards getting an insight

into what the brand really stood for.
•Getting to know what kind of people it associated with.
 ThTThe company also came up with a brand tagline ‘Unhotel’ in order to create a
stark difference between its services from that of Hotels, the traditional mainstay of
the Hospitality industry.

The company also invested for a brand logo,

created by 99designs.
This was the first step towards creating brand
elements.
 Revising the Brand Strategy

• By 2014 the business had rapidly expanded and wanted to take a step back
to re-assess which were the elements that truly expressed the brand story.
• The brand revision had to be more than just changing the colour,
typography or logo.
• The company was also toying with the idea of refocussing the brand’s
communication strategy from the features to the stories of guests and
hosts.
• Focus was on Onefinestay’s unique point of differences and how it can
help in driving growth.
• The company was also contemplating redoing its tagline from ‘Unhotel’
SEGMENTATIO
N
The company segmented its customers based on two folios. The first was based on needs and
included Work and Family. While the other two was based on risk vs cost basis and included
Prestige and Explorer.

• Work: People travelling for work were more likely to select an apartment or a small home

• Family: People would generally prefer a bigger home..

• Prestige: People who wanted to keep the experience of staying in a private home as close to the hotel experience.

• Explorer: People with a lot more flexibility with neighborhood and kind of houses they chose.
What did the segmenting exercise do for
the company?
Helped its customers in navigating the site more easily and using the groupings as a new way to
choose.

Helped the company in realizing that just adding segments would not be enough and they might
need to add and maintain a unique service envelope for the homes in each of the four categories.

Helped the company in realizing the gaps which was stopping business travellers from using their
product.

Helped the company in realizing the next area it needed to work on - segmenting their
marketing efforts based on the folio to perfectly meet expectations of the consumer.
DEFINING THE COMPETITION | OVERVIEW
• Rising tourism and disposable income levels had contributed to industry revenue growth of roughly 5% per year since 2009.
• By 2014, demand for hotel rooms was outweighing supply, and global hotel and resort revenue was expected to reach $717.1 billion.
• The top four hotel operators—Hilton Worldwide, Marriott International, InterContinental Hotels Group, and Accor Group—accounted for
approximately 12.1% of available worldwide industry market share.
• While leisure travel accounted for the majority of tourism, growth in business travel was expected to outpace it.
• Hotels were increasingly catering to millennials—those born between 1981 and 1990—using mobile technology and social media, and
through the style and design of their brands.
LUXURY HOTELS
• The hotel industry was frequently segmented by price, quality, and
service, using a five-star system.
• Most major competitors maintained a wide portfolio of brands, ranging
from budget to luxury and boutique hotels.
• The luxury hospitality industry was valued at $164.4 billion in 2013, &
was seeing a shift in customers - unique, individualized, and
experiential travel.
• Most luxury hotels were responding with enhanced technology
offerings and even greater levels of personal service.
• 94% of exhibitors at an International Luxury Travel Market conference
believed that luxury travelers most wanted an “authentic local
experience”.
 UPPER UPSCALE
BRANDS
Hilton Hotels:

• Hilton is a global flagship brand & ranks number one for global brand awareness in
the hospitality industry.
• The brand primarily serves business and leisure upper upscale travelers and
meeting groups.
• Hilton hotels are full-service hotels that typically include meeting, wedding &
banquet facilities, restaurants & lounges, swimming pools, gift shops, retail facilities
and other services.
• Hilton has 554 hotels and resorts in 80 countries and territories.

Marriott Hotels:

• Marriott Hotels is a global flagship brand, primarily serving business and leisure
upper- upscale travelers and meeting groups.
• Marriott Hotels’ properties seek to be “brilliant hosts” to guests who blend life and
work and who are inspired by how modern travel enhances both.
• Properties are located in downtown, urban, and suburban areas, near airports, and
at resort locations.
 LUXURY MAJOR INTEGRATED
CHAIN
Ritz-Carlton :

• The Ritz-Carlton is one of the world’s leading global luxury lifestyle brands,
renowned for their extraordinary locations, inspired design, and legendary
service.
• The brand is designed to appeal to the guest who enjoys genuine care and
comfort, seeks to provide unique, memorable, and personal.
• The properties include elegant spas, restaurants led by celebrity chefs,
championship golf courses, fitness & business centers, etc.
• The Ritz-Carlton is the only service company to have twice earned the
prestigious Malcolm Baldrige National Quality Award.
• They have 87 hotels in 29 countries and territories

Waldorf Astoria Hotels & Resorts:

• 24 hotels in 10 countries and territories, with 10,529 rooms
• In landmark destinations around the world, Waldorf Astoria Hotels &
Resorts reflect their locations, each providing the inspirational
environments & personalized attention that are the source of unforgettable
moments.
• Properties typically include elegant spa and wellness facilities, high-end
restaurants, golf courses, 24-hour room service, fitness & business centers,
banquet facilities etc.
 LUXURY EXCLUSIVE
SMALL/ MEDIUM SIZE
Four Seasons:
• 95 hotels in 39 countries
• Four seasons specializes by offering only experiences of
exceptional quality.
• Their objective is to be recognized as the company that
manages the finest hotels, resorts and residence clubs
wherever we locate.
• By creating properties of enduring value through superior
design instilled with ethic of personal service allows Four
Seasons to satisfy the needs & tastes of their customers.
VACATION
RENTAL/HOME
SHARE OPTIONS

• The rental of private properties or rooms generated $38.7 billion in revenues globally in 2013 and was expected to grow to $46 billion
by 2018.
• While the sector had existed for some time, the success of Airbnb had dramatically increased its profile.
• HomeAway was the largest online marketplace for vacation rentals with over 1 million paid listings, the vast majority of which were
vacation properties.
• According to the research firm Mintel, approximately 10% of U.S. adults had used a home rental/home service
 VACATION
RENTAL/HOME SHARE
OPTIONS

HomeAway :
• HomeAway is the world’s leading online marketplace for the vacation rental
industry, with over one million paid listings across 190 countries.
• HomeAway, owners & property managers offer an extensive selection of
vacation homes providing memorable experiences & benefits, including more
room to relax & added privacy, for less cost than the traditional hotels.
Airbnb:
• Airbnb is a trusted community marketplace for people to list, discover, and
book unique accommodations around the world—online or from a mobile
phone.
• Airbnb connects people in more than 34,000 cities and 190 countries.
• Airbnb is the easiest way for people to monetize their extra.
• Airbnb had 1 million listings, 25 million guests across 34,000 cities and 190
countries
 HOME EXCHANGE
PROGRAMS
• Home exchange programs were where homeowners agreed to
swap properties for a certain time period without a monetary
exchange.
• Most home exchange sites charged membership fees,
although pricing varied dramatically.
• Leading home exchange companies included HomeExchange,
HomeLink, and Intervac.
EXPANSION PLAN

• After London, New York City was the first

location in international expansion.
• They fine tuned the London operations
before launching in New York.
• It took more than 14 months in London to
reach 100th homeowner signup
• However it took only 6 months in New
York to achieve that milestone.
• After that it took only four and five
months in Paris and Los Angeles markets
respectively to achieve 100th homeowner
signup.
Marsh was proud of company’s expansion plans and eager to
grow quickly. He wanted to be present in every key market.

There were two options:

• OPTION 1:
To add 10 new cities to the footprint by 2018. As the company will grow
to new cities, the customer acquisition costs decline and lifetime value
increases.

• OPTION 2:
To increase Onefinestay’s market penetration in its existing location.
The company could leverage the fixed marketing and operational costs
and adding properties in existing cities could help it strengthen its
brand equity.
 Decision regarding Branding around Hosts
or Guests

onefinestay- Hospitality or Property

Management?
Making
Decisions Trade-off between host’s needs or guest’s
needs

Creating a balance
Suggestions
Dual Strategy- offering stability and growth

Depth:
• Penetrate existing markets and making products
widely available
• Business enhancement- improve long term position

Breadth:
• Geographical Expansion
• Advertising
• Research and Development
Thank You