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Running head: MARKET SEGMENTATION AND PRODUCT STRATEGY 1Market Segmentation and Product StrategyKathleen ShanahanCapella University
Running head: MARKET SEGMENTATION AND PRODUCT STRATEGY 2AbstractThis research paper explores the market segmentation for Airbnb, a company that operates an online marketplace to enable people to rent short-term lodging from others. Airbnb targets two market segments, hosts, and travelers (Zunila20, 2015). An effective market strategy will have a clear market definition and position the product for that specific market segment (Luther, 2011). Airbnb targets travelers and inspires them to not just to travel to the locations, but “live like a local,” thus pushing the Airbnb brand of renting where others live (Benner, 2016). Positioning the Airbnb brand is important to keep the public’s interest in peer-to-peer accommodations and differentiate Airbnb from the competition. This document explores Airbnb’s market strategy towards these two market segments and offers some recommendations to improve product positioning in some subgroups such as families and business travelers.
Running head: MARKET SEGMENTATION AND PRODUCT STRATEGY 3Market Segmentation and Product StrategyAn effective marketing plan is geared toward a specific target market, the customers that the marketing strategy is targeting (Luther, 2011). Market segmentation is the identification of customers with similar interests or wants (Luther, 2011). Market segmentation is important to ensure the market strategy is targeting those specific wants of those customers. The following are the objectives of market segmentation:Reduce the risk in deciding where, when, how and to whom a product will be marketed (Boundless, n.d.).Increase marketing efficiency by directing efforts and resources towards the designated market segment (Boundless, n.d.).The paper will identify two markets segments for Airbnb and explore how Airbnb serves the wants and needs of each segment. Also, this research will evaluate the growth potential for each of the defined market segments and the effectiveness of Airbnb’s marketing strategy towards each of those segments. Alas, this document will outline some recommendations for an alternatestrategy that will better position Airbnb in their target segments.