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Airbnb Target Market Analysis

1414 Words6 Pages

Target customer segment
A company generally creates value for a specific group of customers. The definition of the market scope (Afuah and Tucci 2001) provides the foundation on where the firm does or does not compete – a specific geographic or demographic segment of consumers. Furthermore, Internet offers these firms the opportunity to target a wider scope of customer segments in comparison with traditional offline businesses. However, Porter (2001) warns that competition is higher for e-businesses as the barriers to enter any market are lower than for brick-and-mortar businesses. Airbnb caters to the needs of two customer segments: guests (personal travelers) and hosts (residential asset owners). Guests include personal travelers – which …show more content…

Osterwalder and Pigneur (2002) draw on Porter’s value chain framework in order to define the value creation process in a business model. While businesses employ a different activity configuration, this normally includes a value creation process of intermediary activities or service providers. In order to reach critical mass Airbnb uses both online and offline activities (Guttentag 2013). The main activities of the company include platform development and maintenance as well as local community management of their home owners – through online and offline events to create a sense of community and involvement. The firm also has an extensive marketing and customer support team in many different countries. Expanding its marketing efforts is critical for Airbnb in order to increase its network and complete the disruption of the travel accommodation market – Bed and breakfasts (B&Bs) and, ultimately, traditional hotels (Christensen …show more content…

First, the firm needs to define the strategy to gather customer information and to leverage this information to create premium customer relationships. Second, the firm uses this information in order to discover new business opportunities and to ameliorate customer satisfaction. The understanding on the customer buying behaviour can be used to create what Hamel (2000) calls the positive feedback effect. For Airbnb, a good user experience and support is crucial to deepen the relationship between hosts and renters. For this reason, the company puts great effort into setting up online and offline events to strengthen this relationship and to prevent home owners from renting their space through a different platform (Geron 2013). While this meant losing money at the beginning, Airbnb knew of the importance of creating loyal customers as this would mean revenues for many years. Consequently, the platform offers 24/7 customer service so that all potential problems are solved as fast as possible. Furthermore, the company identified and gathered two main customer service metrics in order to understand its customer behaviour: top issues – the most frequent issues customers ask for support about – and cost per ticket – how much it costs the company to solve a

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