Segmentation-Targeting-Positioning: Airbnb Building a brand driven culture is a lifelong commitment to a mindset and a way of life that takes time, planning and persistence. Let’s see the value propositions of Airbnb —. In Airbnb, the host becomes a part of that travel, helping the guest to immerse himself/herself in the local culture. Airbnb uses the following types of positioning: 1. Airbnb uses anticipatory positioning, launching services for a market segment that has low turnover with the anticipation that the turnover will increase in the future. They say that Airbnb is an opportunity to immerse yourself in the local culture. Airbnb segmentation, targeting and positioning consists of a set of consequent activities that divide customers into different groups and identify specific groups to be targeted. b) Overdeliver — One of the ways to determine what experience a company should sell is to go beyond the present customer needs at each touchpoint. Multi-segment positioning. At that time, Chesky was working at a design studio firm in Los Angeles. Airbnb provided its own tally about individual hosts versus professional ones in the S-1 statement. Airbnb brand strategy / positioning case study If you want to get access to Airbnb brand strategy analysis including brand essence, brand values, brand character, brand archetype and expert commentary register or log in. Adventures services such as ‘Around the World in 80 Days’ and experiences of “Becoming a Beekeeper” can me mentioned as examples of Airbnb services with anticipatory positioning. Creating A Category — A category is defined based on the brand’s value propositions. An Airbnb report says that most millennials would prioritize travel over buying a home or paying off debt. It’s not just physical but also virtual touchpoints. Positioning statements, as a genre, are impractical. The guests loved their stay. He followed the same rule while designing the Airbnb website. An economic empowerment engine, Airbnb has helped millions of hosts delight guests by providing unique travel experiences, entire homes with private amenities, and immersion in local communities while keeping the financial benefits of tourism with the people who make it happen. While this is … By Branwell Johnson 17 Jul 2014 The company has unveiled a new symbol it calls the “Bélo” that it believes can be adopted globally and says it wants “to stand for something much bigger than travel”. Thus the idea of Airbnb was born. Airbnb is positioning that program to meeting attendees as an enticement to expect a heightened level of attention toward their specific needs. He or she will allocate more time only if the product/service offers pleasant experiences. The Solution — Chesky and Gebbia pondered the idea of creating a bed-and-breakfast for the conference, from the available space in their home. Chesky and Gebbia had several reasons behind their decision —. California coast vacationers, friends gathering for weekend get togethers and convention goers and I get all of the above. Chesky moved to San Fransisco and took one of the rooms. a) Think from a Customer’s Perspective — When Chesky and Gebbia developed the website for the first time, they thought from the customer’s shoes — Why are they coming to the design conference? Airbnb mission statement is “is to live in the world where one day youcan feel like you’re home anywhere & not in a home, but truly home, whereyou belong.” The mission statement displays the impact the company expectsto have on the lives of its client. It is similar to how Chesky and Gebbia became friends with their first set of guests. “As of December 31, 2019, 90% of our hosts were individual hosts, and 79% of … Chesky and Gebbia also showed their guests around the city — they took them to their favorite Taco place, Ferry building, and Stanford’s design school. When we start a business or a new brand, it is essential to aim for a long-term payoff for all our efforts and investments — A sustainable ROI. Chesky and Gebbia had several reasons for continuing to target millennials. Design blogs saw it as a crazier idea and promoted it. The global lodging company uses multi-segment type of positioning targeting more than one segment with different service packages. Airbnb Case Study 1 The strategy statement we d propose is Our goal is to provide not only a sense of belonging but also deliver local experiences directly to. They were thankful to Chesky and Gebbia and became close friends with them. Don’t ask -What specific experience would we offer at each touchpoint? Airbnb has about 150 million users. Though both worked at different places, they remained in touch and continued to brainstorm ideas for their venture. Feature your community front and center. You could probably guess what type of business Uber operated in on the basis of its positioning statement. At the heart of this campaign is our antidote to commoditized travel — the unique, human connections that happen when you truly Live There.”. Gebbia also happened to have three air mattresses in his closet. The Solution — After generating and reviewing several ideas, Chesky and Gebbia zeroed on one idea — Short term renting out a part of their homes. It implies that the business has to choose a niche market. The report also comprises discussions of Airbnb business strategy, ecosystem and addresses issues of corporate social responsibility. In this way, the brand would gain maximum value without any additional investments of money, time, and effort on expensive marketing. Airbnb supports /dev/color, a non-profit organization dedicated to advancing the careers of black software engineers through community support. It particularly emphasizes the extent ofsatisfaction that would position it as a coveted marketing place. Narrower the segment, it is easier for the entire company to focus and meet the customer needs, wants, and desires. It's your responsibility to determine what, from your total amount earned, to report as taxable income on your tax return. “The Live There campaign is about tackling the tension that so many people feel when they travel,” said Jonathan Mildenhall, Airbnb’s CMO. Chesky and Gebbia made a rudimentary website and called it Airbed & Breakfast. Exceeding expectations 3. 2. Airbnb segmentation, targeting and positioning consists of a set of consequent activities that divide customers into different groups and identify specific groups to be targeted. Recently, the platform launched its Airbnb Luxe line of premium apartments that has been positioned as ‘extraordinary homes with five-star everything’ targeting premium customer segment. One of the ways to achieve that is to strive for getting maximum value from each customer(higher Customer Lifetime Value(CLTV)) — It means the brand should look for developing loyal customers. Airbnb does a stellar job in differentiating itself from the rest of the sharing economy by fine-tuning every component of their brand identity. Moreover, they hated the monotonous experience. Airbnb also focused on another niche — In the beginning, the brand targeted hosts from cities instead of vacation destinations in resort areas. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Airbnb. The company predominantly became an urban phenomenon — 70 percent of Airbnb’s full-home listings were studios, one-bedroom, and two-bedroom units. Chesky and Gebbia began to target other conferences — South by Southwest convention, the tech, music, and film festival — Democratic National Convention, Denver, and several other events. Coke is the first cooldrink to enter the consumer’s mind under the Cola category. It should not be more than three clicks away from booking a room. A part of millennials might choose lower-priced rooms but would extend their days of stay. And, from the beginning, one component played a critical role in its initial success — It was Airbnb’s website. They listed three airbeds in their apartment for eighty dollars apiece. A vision statement and mission statement are two separate ideas typically combined into one sentence. The questions helped Chesky and Gebbia to provide a pleasant experience to the customers. The Rising Action — As months passed, Chesky began to find his work monotonous and dull. They thought that they could sell a cheap place to stay and even offer breakfast — and they could also advertise their offer on the known design blogs. This positioning also met the two crucial criteria — a)It was compelling to millennials, and b)It differentiated the brand from competitors. For Airbnb, being a digital platform, virtual touchpoints are as critical as the physical ones because several activities happen over the website — Seeing ads, opening the webpage, searching a destination, booking it, paying, contacting the host, reaching customer care, and various other activities. The Bottom-line Impact — Would lower-price not lead to reduced profits? Millennials are also called as Digital Natives as they grew up interacting with the virtual world. They make you think “Aha! - For local and international travelers, AirBNB is the only booking website that connects you to unique experiences all over the world because we offer the largest selection, most diverse, top-rated and personalized places to stay… Live There. As such, EY and Airbnb assume no responsibility whatsoever to Airbnb Hosts or other third parties as a result of the use of information contained herein. Within a few days, they had booked three guests who were professional designers on a budget. Overpriced Monotony — Before Airbnb, the Millenials were frustrated with hotels as several of them charged higher rates when the rooms were in demand. We’ve got a winner!” But in real life positioning statements serve nothing except building up illusions. What would they need to achieve their objectives? So, Chesky and Gebbia’s idea wasn’t an original one. Airbnb has taken the first steps to filing for a proposed initial public offering. Digital Marketing Strategies During Ramadan. They would be the ideal segment for a web platform like Airbnb. Using the classic one sentence consumer positioning statement format including Brand, target customer segment, benefits delivered, and unique supported point of difference. Though Millennials loved to have authentic, local experiences, they are also cost-conscious. A category is defined based on the brand’s value propositions. Airbnb’s digital experience played a significant role in its initial growth. So, he quit the job. People around the world have told us they want to live like a local. 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. Millennials wanted a greater sense of adventure at an affordable cost. Exploring Strategy Study Case about AirBnb. One concept which could help a business’s journey towards establishing a brand name in the market is the three step process of “Segmentation-Targeting-Positioning. Thus, Airbnb’s niche was millennials and urban destinations. Cultural Experience for Hosts — Along with the guests, the hosts also gain cultural experience. employ market coverage and positioning strategies to attract them. Two of them were millennials like Chesky and Gebbia. And, the product/service experience directly appeals to the emotional mind. Chesky often told that when Steve Jobs conceived the iPod, he wanted never to be more than three clicks away from a song. The accommodation and experience marketplace positions its services in a way that best appeals to the needs and wants of members of this group. Airbnb is just the opposite. How to find out? 21 Essential BUSINESS LESSONS From The World’s BEST BRANDS: -A Guide for Every ASPIRING ENTREPRENEUR by Shah Mohammed M. References: The Airbnb Story by Leigh Gallagher, Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne, Positioning: The Battle Of Mind by Al Ries and Jack Trout, What is Strategy-HBR Article by Michael E. Porter. The first step in building a loyal customer base is to position your brand inside a consumer’s mind that is called Brand Positioning. It helps a customer to have a personalized experience. So, the product experience matters. Apartment rental business Airbnb has created a new visual identity and positioning to help in its international expansion. How Brands Built Its Sustainable Competitive Advantage? Most of them were comfortable with venturing into the home of someone they’d connected with online. Here’s how their core values evolved. Their goal was to make it as easy as possible to book a room in someone’s house. CONCLUSION — To Summarise, for brand positioning, a brand has to determine the niche market. Research shows that in the beginning, most of the millennials were motivated to book Airbnb accommodations because of their low cost. So, the preliminary niche market of Airbnb was Millennials and Urban areas. Link: CMO Momentum 2017: Airbnb reveals how to build a purpose-led superbrand - CMO Australia Some wonderful stuff in this article. You didn’t face any problems. Once you become a leader in the niche market, you could grow your market. Booking.com – position 1; Wotif.com – position 5; Airbnb – position 82; Airbnb seems to be cognisant of their low organic positioning for generic [location] accommodation terms, and so acts to ensure they are in position 1 of ad placements for high volume targets. Seven-up is the first cooldrink under the Un-cola category. How about water in the fridge for them, toiletries in their bathroom?”, But, Chesky continued to ask himself, “What’s a 7-star experience be?”, “How about a host allowing the whole kitchen for the guest to use? A brand positioning statement is one of your measuring sticks. The Crisis — At the same time, Gebbia’s roommates suddenly moved out of the three-bedroom apartment after his landlord raised the rent. Chesky and Gebbia, being millennials themselves, had sound knowledge of the target customer’s needs, pains, and desires. How were they different from other brands? How could we help them to realize their trip goals? Thecomponents associated with this mission statement comprise. (8 … We’re powered by people of all different backgrounds and beliefs, each with our own outlook and our own story to tell. The Exposition — During college days, Brian Chesky and Joe Gebbia had become friends by working together on several projects and social initiatives. The value proposition of the lower-price accommodations turned out to be the primary appeal of Airbnb to most millennial travellers.