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Company OverviewAirbnb is an online marketplace for the public to list and book accommodations around the world. Airbnb was founded in 2008 in San Francisco as an alternative to the traditional hoteling accommodations (Airbnb, n.d.). Airbnb offers a unique experience to visit and tour the world in more than 65,000 cities and 191 countries (Airbnb, n.d.).Airbnb’s mission statement is “to make people around the world feel like they could belong anywhere” (Gallagher, 2017). Airbnb wants to stand for something bigger than travel;
Running head: MARKET SEGMENTATION AND PRODUCT STRATEGY 4“community and relationships and using technology for the purpose of bringing people together”(Gallagher, 2017). Jonathan Mildenhall, Chief Marketing Officer (CMO) and former Coca-Cola employee, convinced the founders that the Airbnb’s mission statement should be expanded into Airbnb’s tagline, “Belong Anywhere” (Gallagher, 2017).Airbnb does not fall within the hoteling industry, nor is it government regulated by hoteling laws and regulations. Airbnb is strictly a marketplace to bring hosts and visitors together. Airbnb does not own a hotel or any living space; it is a website that allows homeowners to provide a space to potential renters, short-term or long-term. Some of Airbnb competitors are Vacation Rentals by Owner (VRBO) and Vacation Rentals; both belong to the HomeAway Family, a company that has over 20 websites and boasts “the worlds' largest selection of vacation rentals” (HomeAway, n.d.).Target Market Segments and Market StrategyAirbnb targets two market segments, people looking for places to rent, also known as travelers, and people wanting to rent out their space, also known as hosts (Zunila20, 2015). The travelers market segment is comprised of people that want to engage in tourism (Zunila20, 2015). Although the reasons for tourism will be different amongst the travelers within this market segment, the main need is a place to stay somewhere other than home (Zunila20, 2015). The hosts market segment is a group of people that have a space to rent (Zunila20, 2015). As with the travelers, the hosts could have different reasons for renting their space. However, all hosts share the ‘want’ to list their space on Airbnb. The growth potential of both of market segments are large and can be measured by the number of hosts and the number of travelers using the Airbnb site. Airbnb’s current marketing
Running head: MARKET SEGMENTATION AND PRODUCT STRATEGY 5strategy to increase hosts and guests is based on a referral system (Airbnb, 2014). In a recent Tech Talks presentation, Gustaf Alstromer, team leader for the Growth Team at Airbnb, explainedthe “Airbnb Funnel” and Airbnb reaches potential customers (Figure 1).