The AirBnB 4Ps Marketing Analysis
About Airbnb
Airbnb is a platform (web application) to facilitate hosts all over the world to offer unique stays and one-of-a-kind activities that make it possible for guests to experience the world in a more authentic, connected way (Airbnb website, 2021).
How Airbnb brand has evolved and where it is heading
Based on research done by Makarand Mody and Monica Gomez in 2018, Airbnb has changed the game for the experience economy by emphasizing the sharing lifestyle and a sense of community, cleverly incorporating the societal trends such as:
- A shift to a new luxury
- Increased mobility
- The changing nature of brand loyalty: from long-term relationships to consumers’ needs for instant gratification and personalization.
- Changing the nature of ownership
- A co-everything world where work, play, and life blend.
In the future, it was predicted that customers will value emotion and experience compared to money or other material things, therefore, an Authentic Brand will be more favorable compared to an inauthentic one. Brand Authenticity can be built by creating a brand story using the storytelling method. This brand story can come from many sources: a brand’s values, personality, heritage, uniqueness, or its quest and purpose. In November 2016, Airbnb’s focus on authenticity, eyes of a local, and travel experiences became a full-fledged reality when they launched an “Experiences” feature on their app. Experiences allow hosts to offer tours, hands-on events, and other curated experiences to their guests. (Clement, 2021).
The Airbnb 4P’s of marketing
- Product: Airbnb doesn’t provide the product directly to their customer. They use the sharing economy concept, which means they only provide a platform to connect the hosts and the prospective guest. So what is the product of AirBnB? The product is the accommodation provided by the host for the customer to rent. Based on the Airbnb website, the products offered by the Hosts range from shared rooms to private islands. There are four types of places: entire places, private rooms, hotel rooms, and shared rooms.
- Price: At first, Airbnb started with a clean strategy that is set the offering price below the average hotel room rate. At that time, they know that people are willing to pay more for hotel rooms compared to private lodgings. Interestingly, this strategy didn’t work for a long time. Based on research done by Kwok, L., Tang, Y., & Yu, B. (2020), Price is listed as the least important element (only 1% of customers think that price is a significant element). Customers of AirBnB stays mainly reflect on their overall impressions or feelings about the intangible aspect such as experience, the hospitality of the host, condition of the lodging, etc. In the end, Airbnb offers the rate based on the experience offered by the lodging. Airbnb charges a service fee of 3% for the host and 14,2% for the guest. There is an additional fee only for the host. The host-only fee typically ranges from 14% to 16% and is mandatory for hotels and some other hosts (Airbnb website, 2021).
- Place: Right now, there are 2.9 million hosts, 7 million listings, in 220 countries and regions on Airbnb worldwide in 2021. (Deane S., 2021). It seems that place has become an important element for the future guest because most of the guest reviews mentioned: Service Product (at about 26 %) and Physical Evidence (at about 25 %) most often, followed by Place (at about 19 %) and Participant (at about 15 %). Service Process was the element that was mentioned less than 10 %, with Promotion (at about 2%) and Price (at about 1%) listed as the least talked-about element (Kwok, Tang & Yu, 2020).
- Promotion: Airbnb has several marketing channels to showcase its offerings. One of the most essential channels is the listing review. The prospective guest can see the review of the listing and see the rating of the listing based on these parameters: Cleanliness, Communication, Check-in, Accuracy, Location, and Value.
Value Proposition of Airbnb
Airbnb offers guests amount of choices, unique stays, and experiences while offering the hosts additional income and accommodation management tools.
References:
Kwok, L., Tang, Y., & Yu, B. (2020). The 7 Ps marketing mix of home-sharing services: Mining travelers’ online reviews on Airbnb. International Journal of Hospitality Management, 90, 102616. https://doi.org/10.1016/j.ijhm.2020.102616
Airbnb and the hotel industry: The past, present, and future of sales, marketing, branding, and revenue management. (2018, October 31). Boston University. https://www.bu.edu/bhr/2018/10/31/airbnb-and-the-hotel-industry-the-past-present-and-future-of-sales-marketing-branding-and-revenue-management/
Airbnb uses community storytelling to build a brand. (2021, July 15). Nxtbook Media. https://www.nxtbookmedia.com/blog/airbnb-brand-storytelling/
2021 Airbnb statistics: Usage, demographics, and revenue growth. (2021, May 11). Stratos Jet Charters, Inc. https://www.stratosjets.com/blog/airbnb-statistics/
Shastri, A. (2021, August 21). Marketing strategy of Airbnb — A case study | IIDE. IIDE. https://iide.co/case-studies/marketing-strategy-of-airbnb/
Note:
This article is written based on University of The People Marketing Management (BUS 5112) written assignment by Fristy Tania in September 2021
