CASE STUDY SUMARY
Over the decades, the hotel industry has refined its standardized offerings, with typical rooms measuring around 13 by 25 feet and including a bathroom, closet, and basic furniture This uniformity often masks negative experiences, leading to guest dissatisfaction By relying on a one-size-fits-all model, the travel industry risks losing connection with its customers and failing to meet their diverse needs.
Airbnb, founded by Chesky and Gebbia, has revolutionized the hospitality industry by offering a unique online marketplace that connects homeowners with available rooms to travelers seeking accommodations Unlike traditional hotels, Airbnb does not own any real estate; instead, it facilitates seamless transactions between hosts and guests, challenging the conventional norms of the hospitality sector.
Unlike traditional hotel chains that adhere to strict industry models, Airbnb diversifies its property offerings by catering to both guests and hosts The platform allows property owners to rent out a wide range of accommodations, from couches and single rooms to entire apartments, yachts, and even castles Hosts can set flexible booking durations based on pricing, while providing detailed information about their listings, all for a minimal 3% booking fee.
Airbnb simplifies the booking process through its user-friendly website, which offers photos, detailed descriptions, and direct contact with property owners, making it easier for guests to select the ideal room Additionally, a service fee ranging from 6 to 12 percent of the payment is applied to ensure the security of deposits.
Airbnb faces a significant challenge in implementing a new technique within a stable model, particularly when few users are willing to take risks on their first experience The company must explore strategies to encourage user engagement and build trust among potential customers.
In recent decades, the hotel industry has refined its standardized offerings to enhance customer experience To facilitate the adoption process, companies like Airbnb employ two key strategies Firstly, they utilize a standardized rating system that assesses the credibility of both lodging providers and renters through reviews and a transparent booking process Secondly, Airbnb enhances user confidence by offering a verification process and safety tips, making the platform more accessible Additionally, hosts benefit from an included insurance policy that mitigates various risks, providing them with further protection While these measures may not eliminate all potential damages, they create a significant competitive edge over traditional hotel chains.
Airbnb has transformed the hotel industry by offering travelers unique experiences that exceed their expectations Understanding that many travelers enjoy engaging with locals, Airbnb encourages guests to stay in local homes, allowing them to immerse themselves in authentic cultures At the annual Airbnb Open event in Paris, the company emphasized that their offerings enable guests to feel like a part of the local culture in a new city This successful positioning strategy has solidified Airbnb's brand identity in consumers' minds, showcasing that they provide not just travel experiences, but authentic and unique living experiences.
Airbnb has expanded its brand through a line extension, introducing new logo designs, text, symbols, and slogans The updated logo and slogan, "Belonging Anywhere," convey a message of inclusivity and connection that transcends cultural differences.
Airbnb's primary focus has consistently been on delivering authentic experiences for both guests and hosts The company prioritizes its community, viewing hosts as key customers in its mission.
Airbnb has strategically developed a vast global network of lodging providers to uphold high service quality Their mission extends beyond hospitality, aiming to promote world peace through fostering engagement and enhancing cultural understanding among travelers This innovative approach has significantly influenced the hotel industry.
Some huge hotel chains were trying to expand their perception and innovate new
In recent decades, the hotel industry has refined its standardized offerings to enhance guest experiences However, replicating Airbnb's innovative approach and unique customer experiences cannot be achieved quickly or easily.
In its brief eight-year-existence, Airbnb has proven their vision with magnificent success.
Their global network includes greater than 2 million options to sixty million guests throughout 34,000 cities in 191 countries which built a market value reaching $25 billion.
Airbnb defeats the accomplishments of the biggest hotel chain worldwide, 100-year-old Hilton with the number of 765,000 rooms, 4,660 properties, along with a market value of
Airbnb's rapid growth and remarkable success come with several challenges Many cities impose regulations that mandate personal property rentals for periods exceeding 30 days Additionally, potential guests often feel uncertain when considering this alternative lodging option Despite these obstacles, Airbnb remains committed to addressing these issues through its sustainable principles.
RELATED THEORIES
Customer value
Customer value encompasses the practical benefits and advantages that a buyer gains from purchasing a product It is often assessed based on its worth to customers, particularly when they evaluate it against various alternatives in a competitive marketplace.
Having a deep understanding about customer value and how to apply this theory can assist service providers to price products fairly and reduce friction within the customer experience.
Level of product and services
Over the decades, the hotel industry has refined its standardized offerings to meet evolving customer expectations This continuous improvement has enhanced guest experiences and established a competitive edge in the market By focusing on quality and consistency, hotels are better equipped to attract and retain customers, ensuring long-term success in a dynamic environment.
Initially, Airbnb targeted budget-conscious customers by offering competitively priced listings However, the company soon recognized that travelers seek more than just affordability; they desire unique and authentic experiences As a result, Airbnb repositioned its services to emphasize the value of these distinctive experiences, enhancing customer satisfaction through a focus on quality products and services.
Level of product: Philip Kotler devised a model which divides products and services into 3 levels This concept helps us actively estimate the nature of a product further.
The CORE product: Is the main benefit of a good and service that consumer really receive.
It’s the intangible product that we can see or touch For Airbnb example, their core product is not an available room, it is a unique and realistic experience
The actual product consists of tangible, physical items that offer practical benefits In the case of Airbnb, its brand image, standardized rating system, user-friendly website, and the quality of accommodations play crucial roles in enhancing guest experiences.
The AUGMENTED product offers significant added value for Airbnb users, encompassing essential elements such as guidelines, protective policies, and a supportive lodging provider community These components are vital for customizing offerings to meet the specific needs of each individual customer.
Adoption process
Adoption process: Are plans, strategies of a company as they publish a new product It is like a mental process to help a customer to pass from heristation of first learning The aim
In recent decades, the hotel industry has refined its standardized offerings to enhance customer experience This strategic evolution aims to transform individuals from being completely unaware of hotel services to becoming regular users, ultimately fostering loyalty and repeat business.
There are five stages in the adoption process:
Awareness When The consumer hears about a new product or service but they have very little information related to it.
Marketers must focus on raising product awareness by highlighting the unique aspects of their innovative approach compared to competitors Additionally, it is essential to address and clarify any customer confusion or issues to ensure a clear understanding of the product's benefits.
Interest The potential consumer who is delighted, starts to find more information about the product Depending on their purposes – along with suitable features, price and additional services.
Evaluation: The consumer takes considerations about the pros and cons when they stop using certain products and others try.
During this phase, marketers start communicating the best use cases, emphasizing their strengths, setting their product apart from other suppliers.
Consumers often opt to trial a new product or service to evaluate its value against their previous choices If the new offering aligns better with their specific needs, they are likely to make the switch.
Adoption occurs when consumers consistently choose to purchase a new product, highlighting the importance for marketers to demonstrate that their offering provides the best value To maintain customer loyalty, it is essential for brands to ensure that consumers feel they are receiving superior benefits compared to competitors.
Different consumer segments require tailored marketing strategies to effectively capture their attention and engage primary customers Key factors that influence the adoption rate of products include relative advantages, compatibility with existing solutions, complexity of use, divisibility into smaller parts, and the ease of communication regarding the product's benefits.
In recent decades, the hotel industry has refined its standardized offerings to meet evolving customer expectations and enhance guest experiences This ongoing evolution reflects a commitment to quality and consistency, ensuring that travelers receive reliable services across various locations As a result, hotels have become more adept at catering to diverse needs, ultimately fostering customer loyalty and satisfaction.
Service
According to Philip Kotler’s definition, service is defined as an activity, advantage, or satisfaction a company offers to their customers They are intangible “products” and unable to be owned.
Service marketing
Service marketing focuses on building relationships to enhance customer value, making it essential for service providers to effectively promote their offerings As services play an increasingly vital role in the global economy, companies must prioritize this aspect of marketing to distinguish themselves from competitors, particularly in emerging markets.
Marketing services are not similar methods to marketing products because of 4 significant elements of services including intangibility, perishability and inseparability and variability.
Expanding internationally presents several challenges for companies, including the need to identify suitable offerings for diverse customer segments Additionally, they must balance standardization with adaptation to meet global market demands Maintaining service quality while conveying a clear and consistent brand message is crucial for establishing a strong international presence Furthermore, effective strategies can help minimize marketing costs while preserving productivity and quality across various service aspects By adapting their product offerings, companies can successfully navigate these challenges and enhance their global competitiveness.
Four characteristics of services
Over the decades, the hotel industry has refined its standardized offerings to enhance guest experiences and meet evolving customer expectations This continuous improvement has allowed hotels to maintain competitiveness and adapt to market trends effectively.
Service intangibility poses a challenge for customers who cannot see, taste, or feel a service prior to purchase, making it difficult to assess its value To enhance customer decision-making, developers must focus on making their services more tangible by providing clear signals that communicate quality differences, particularly regarding platform security.
Service inseparability highlights that services are inherently intertwined, relying on the interaction between staff and customers for successful outcomes Both parties play crucial roles in the service delivery process, with customers not only purchasing but actively participating in the experience In the case of Airbnb, hosts directly influence the quality of service provided to guests, while the guests themselves are essential resources that enhance the value of the service Therefore, fostering effective provider-customer interactions is a key objective for developers in the hospitality industry.
Variability in customer service highlights its flexibility, influenced by providers, timing, location, and delivery methods For example, Airbnb faces challenges in maintaining consistent service quality as it connects guests with lodging providers, some of whom have better reputations than others Consequently, the quality of service can fluctuate based on the hosts' attitudes and mindset during the booking process.
Perishability is a key characteristic of services that prevents them from being stored for future sale This aspect is not problematic when market demand is stable; however, when demand fluctuates, service providers face significant challenges.
For instance in some hotel service providers as Airbnb, it’s too difficult for their
Over the decades, the hotel industry has refined its standardized offerings to better meet customer needs, particularly during peak travel seasons when demand surges This focus on optimization is crucial, as travelers often face limited choices during busy periods Conversely, hosts may experience higher vacancy rates during off-peak months As a result, service firms are under pressure to effectively balance demand and supply, ensuring that they provide the best options for customers while managing occupancy levels throughout the year.
Brand Positioning
Brand positioning refers to the strategic process of shaping a company's offerings and image to establish a unique presence in the minds of its target audience, as defined by Kotler Essentially, it highlights the distinctive qualities that differentiate a brand from its competitors and the attributes that resonate with consumers To effectively position a brand, a company must develop a clear strategy that communicates its image and values, ensuring that it fosters a positive perception among customers.
To effectively position themselves in the market, companies must transcend mere attribute or benefit positioning by establishing strong, sustainable visions and values that foster deep connections with consumers For example, Airbnb's research indicates that booking accommodations involves more than just securing a convenient room; it enhances customer experiences by offering opportunities to engage with local culture and communities, allowing travelers to immerse themselves and feel like "locals" during their journeys.
To effectively implement this strategy, the company must establish a clear mission and vision that all employees can easily adhere to This commitment ensures a consistent delivery of characteristics, benefits, services, and experiences to consumers, reinforcing a strong and coherent message.
Airbnb, for example, was a successful positioning strategy defining stable characteristics for their brand in the consumer's mind Airbnb does not give you the best travel
Over the decades, the hotel industry has refined its standardized offerings to enhance guest experiences This evolution aims to provide travelers with authentic and unique stays, ensuring that each visit is memorable and goes beyond just affordability.
1 How do the four characteristics of services apply to Airbnb? How does Airbnb deal with each characteristic?
Airbnb's services are defined by four key characteristics: intangibility, inseparability, variability, and perishability These traits present unique challenges that the company's developers must navigate By selecting innovative solutions, Airbnb distinguishes itself from its competitors in the market.
Airbnb offers a platform that streamlines the booking process for both property owners and renters, with hosts investing in features such as customer support and security to enhance their rental opportunities Guests, in turn, pay for diverse rental options, booking assistance, and unique experiences However, these intangible services are often difficult to assess before the initial experience To encourage wider adoption, developers must focus on making their offerings more tangible and user-friendly.
“signals” to communicate quality differences, especially their platform security There are some methods Airbnb has applied to deal with this issues:
Listings feature realistic images and detailed descriptions, allowing potential guests to gain an accurate understanding of their stay Guests are encouraged to reach out to hosts with any questions prior to making a booking.
Using a standard rating system which can measure both hosts and guests credibility through reviews and a clear booking process
Hosts received further protection by insurance policies minimizing most of their risks.
In recent decades, the hotel industry has refined its standardized offerings to enhance guest experiences and meet evolving market demands This focus on improving service quality and consistency has become essential for attracting and retaining customers in a competitive landscape.
Service inseparability highlights that services are intertwined with the experiences of both guests and hosts, making them integral to the service outcome In this context, lodging providers directly influence the quality of service received by guests The interaction between hosts and renters significantly impacts the overall experience, emphasizing that the number of renters is crucial for evaluating the quality of Airbnb's service.
Developers enhances provider–customer interaction in these ways.
Airbnb consistently enhances its services to streamline the booking process and deliver a unique experience for guests The platform prioritizes its lodging providers as a key customer segment, offering them additional protections to ensure their success and satisfaction.
Users can attain staff member status in the customer service department by participating in the standard rating system Developers enhance motivation by awarding a "superhost" status, which guarantees an improved booking experience and ensures high-quality service.
The number of lodging providers and guests, along with user demand and real estate placement, significantly influence Airbnb's customer service flexibility Since guests stay in local homes without a standardized model, their experiences vary based on individual hosts and the providers' mindset This variability poses a substantial challenge for Airbnb in maintaining consistent quality To address this, Airbnb employs two main strategies aimed at upholding their service standards.
Airbnb ensures stability in its activities by focusing on user retention and customer resource management The platform prioritizes fostering a vibrant global community of hosts who share a commitment to the Airbnb vision.
Airbnb sets their standards by giving host guidelines to maintain the similar booking experience.
Over the decades, the hotel industry has refined its standardized offerings to enhance guest experiences and meet evolving customer expectations This continuous improvement has allowed hotels to remain competitive and cater to diverse traveler needs effectively.
Airbnb's objectives and direction remain the same through the years They have clear goals on providing authentic experiences to both guests and hosts and create people connections
Airbnb's accommodation services are perishable, meaning they cannot be stored and are subject to fluctuating demand, particularly during peak travel seasons This creates challenges for travelers who may struggle to find suitable options when demand is high, while hosts often experience more vacancies in off-peak months Consequently, service providers must effectively manage the balance between supply and demand to optimize the guest experience.