Airbnb’s Strategy: Marketing for Hosts and Audiences – A Case Study

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“Air bed and breakfast”, this term is not quite popular but it is the original name of today’s popular home rental company, Airbnb. It is the world’s most popular accommodation website valued at over $35 billion as of 2019.

This marketing case study on Airbnb focuses on explaining the 4Ps of the marketing mix, the marketing strategy it undertakes to market itself and its digital presence. So let’s start by understanding more about Airbnb in the coming sections.

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About Airbnb

Airbnb is an online marketplace that allows people to list, discover, and book unique accommodations around the world – from a bedroom in a Parisian apartment to a castle or a treehouse in Guatemala.

 

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Founded by three friends, Brian Chesky, Nathan Blecharczyk and Joe Gebbia, Airbnb was established as AirBedAndBreakfast.com back in 2008 and is currently based in San Francisco.

Being a service-based company, it is currently present in about 220 countries and has around 5.6 million active listings on its website providing home rental and lodging services.

It is a publicly traded company present on the Nasdaq stock exchange in the US and also has about seven subsidiaries to its name.

Now that we know about Airbnb in brief, let us understand the 4Ps of the marketing mix that Airbnb deploys to achieve its business goals and customer connect in the coming section.

 

Marketing Mix of Airbnb

A marketing mix is a marketing model used to appraise the effectiveness of the different marketing strategies combined. 

The essential idea behind the marketing mix model is to release a product or service in the right manner, with the right price, and at just the right place by using the right promotion tools. 

So let us by understanding how Airbnb’s marketing mix has been staged.

 

Product Strategy of Airbnb

Airbnb provides a home-sharing platform that offers the opportunity to rent a room in someone’s home, condo or apartment. They connect people to unique travel experiences, at various price ranges, in more than 1,00,000 cities and 220+ countries.

The aim of its product strategy is to connect travellers with hosts who provide accommodation through its online platform. 

Marketing Strategy of Airbnb - A Case Study - Marketing Mix - Product Strategy

It provides a variety of options to choose from, right from choosing just one person room to booking an entire place.  With all the necessary filters in place, it helps travellers to conveniently find a stay through its mobile app or on its website.

 

Price Strategy of Airbnb

Airbnb started with one simple price strategy — price your offerings below the market average to undercut hotels and make your place stand out. 

They knew that people were willing to pay more for hotel rooms, so instead of competing on price, they competed on hospitality. Their main objective was to provide a sense of familiarity, providing a type of home experience for their guests. 

Airbnb, as of today, is known for providing relatively low-cost services compared to the hotel companies.

 

Place Strategy of Airbnb

Whenever we talk about any hospitality industry, the place parameter plays a vital role because It’s always about the place at which the property is located. 

No traveller would want to book a place out of the city. No traveller would like to book a place far away from the Airport and nor book a place where the conditions are not pleasant. So place parameters play a very important role.

Talking about Airbnb’s place strategy, It has over the years gone on to aggressively expand its marketplace listing portfolio. Not just that, it also made sure that the quality of its offerings remain as same as they offered since day 1. Furthermore, it also shares the unique experiences of past travellers on its website. 

 

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Today, Airbnb has a presence in more than 1,00,000 cities along with 5 million+ active listings on its websites helping travellers engage with their new travel experiences.

 

Promotion Strategy of Airbnb

Airbnb has several marketing channels as it uses both, online and offline forms of approach to showcase its offerings. 

The promotions are mainly targeted at local customers to make them aware of Airbnb through city guides and unique experiences through its website. A lot of promotions are also done to create social buzz about the Airbnb brand through social media accounts and word-of-mouth. 

 

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Unlike other global brands like Coca-Cola, McDonald’s or Starbucks, Airbnb is looking at alternatives to market itself locally instead of globally. 

So this is how Airbnb has worked out its promotion strategy.

 

People Parameter of Airbnb

By now we know that Airbnb is a marketplace that connects hosts with travellers around the world. Over the years, through this service, Airbnb has become one of the catalysts in the hospitality industry and all the credits go to the people of the organisation. 

Airbnb has become Airbnb today all thanks to its hosts who provide their properties to strangers. Right now, It has over 4 million hosts on its platform sharing property spaces worldwide.

As Hosts are one of the driving forces of the organisation, Airbnb released a campaign called, Made Possible by Hosts, to thank fellow associates for their support.

 

Marketing Strategy of Airbnb - A Case Study - Marketing Mix - People Strategy

 

Process Parameter of Airbnb

In the process of booking a space for a stay or be it the process of becoming a host on the platform, Airbnb has always worked on giving users the most seamless experience possible.

Booking on Airbnb is a very simple process. It does not require any kind of special skills or background.  Anybody who is a registered user of Airbnb can book and host their property.

 

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Physical Evidence Parameter of Airbnb

Airbnb is a service providing company, it operates without a specific physical presence. Instead, the entire process takes place through the digital platform. The company doesn’t maintain a physical location which allows them to reduce their cost, maintain low prices and improve the customer experience in line with the competition.

The only physical interaction customers have with Airbnb is when they book their stay.

 

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Now that we know how Airbnb has worked on its marketing mix, let us now understand the strategies it implemented to market itself in this increasingly digitized world.

 

Marketing Strategy of Airbnb

Airbnb has been incredibly successful for a few reasons, and it’s not just because of its website design. Given Airbnb’s growth, its marketing strategy has played a huge part that made it such a big success. 

It is one such company that has worked out the art of marketing itself. They have created and developed a system to attract new users while also retaining the old ones. 

Airbnb’s marketing strategy includes offline marketing, blogging, referral programmes, etc. So let us go through some of its popular marketing strategies and campaigns in the coming sections.

 

Content Marketing Strategy of Airbnb

Airbnb’s website is an excellent example of a service-based business using content marketing. 

As a service-based business, they don’t focus on selling its services but focus on showcasing and selling the unique experiences that customers have had using Airbnb in the form of blogs and video content.  

 

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This is how Airbnb’s content marketing strategy helps it showcase its authentic self.

 

Influencer Marketing Strategy of Airbnb

Airbnb’s influencer marketing strategy is one of the most well-thought-out marketing moves. It collaborates with high-profile celebrities to advertise extensively to reach new audiences. 

In these collaborations, the celebrities usually post pictures of their luxurious Airbnb stay on popular social media platforms, especially Instagram. Thus, driving increased website traffic and leads generation.

 

Marketing Strategy of Airbnb - A Case Study - Influencer Marketing Strategy

 

Marketing Strategy of Airbnb - A Case Study - Influencer Marketing Strategy

 

Referral Program of Airbnb

Airbnb’s referral program is one of the company’s most effective methods for making new friends and encouraging word-of-mouth referrals. It is a comprehensive referral programme that provides the community members with rewards for inviting new users to the platform. 

If you tell or onboard a friend on Airbnb, the company will give you and your friend a discount on your next booking. It’s not only generous but also good business sense since for every $100 in revenue generated by this programme, they receive another $20 in revenue and it costs them only $1 to send out a discount code.

This marketing tactic helps the brand expand its pool of consumers through existing users, reducing the high cost of customer acquisition. 

Executed via the company’s main website and mobile app, the programme ensures that customers receive travel credit for every successful referral which may, in turn, be spent on Airbnb stays and Experiences.

 

Marketing Campaigns of Airbnb – Made Possible By The Hosts

 

Marketing Strategy of Airbnb - A Case Study - Marketing Campaign Strategy - Made Possible By The Hosts

 

Airbnb has always focused on stepping up its efforts to build a strong community of hosts. The campaign called, “Made Possible by Hosts”, highlights the positive contributions that Airbnb hosts make when opening their homes to strangers around the world and also thanking them in a way for their constant support.

 

 

This marketing campaign of Airbnb was launched in February 2021. This also marked the first time that Airbnb had invested in TV ads in five years. The campaign ran across a wide mix of promotional channels, including primetime shows.

With this, we have come to an end of Airbnb’s case study. Let us summarize the final points in the final section.

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Conclusion

Airbnb has been a part of countless people’s travel experience. Founded in 2008, Airbnb has revolutionized the way we travel, as well as how trust and authentication are created between two parties.

Its explosive growth has made a booming business with a $35 billion valuation. Despite the steep price tag that it offers to its customers,  Airbnb has well-positioned its marketing strategies in place to attract future expansions in the years to come.

Liked our work? Interested in learning further? Do check our website for more. Also, if you’re interested in Digital Marketing, you can check out our Free Digital Marketing Masterclass by Karan Shah.

Let us know your thoughts on this case study in the comment section down below. Thank you for reading, and if you liked our then do share this in your circle. 

Until then, see you next time!

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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