Final Project Strategic Brand Analysis PDF

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Final Project: Strategic Brand Analysis

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MKT-400 Final Project: Strategic Brand Analysis Sarah Roman April 18, 2021

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Airbnb was founded in August 2008 in San Francisco California, by Brian Chesky (their current CEO), Joe Gebbia, and Nathan Blecharczyk. The idea came to them in 2007 when Chesky and Gebbia moved to San Francisco from New York with no jobs. Strapped for cash and knowing hotels would be booked out due to a local Industrial Design conference, they bought a few air beds and launched a website called “Air Bed and Breakfast.” They charged $80 a night and soon had their first Airbnb guests. The company has grown globally and has welcomed around 800 million guests. Airbnb was able to develop and grow its brand by having engaging internal stakeholders, identifying the legal and ethical issues they had to face during this time, understanding the brand’s marketing mix, and implementing marketing strategies that were effective and efficient. One way that Airbnb engages in developing their brand and building the brand identity is through their internal stakeholders. Employees are so important to the business because they are they represent and are the face of the brand. When employees are emotionally invested in a company, they put more care and effort when building and expanding the brand. This also leads to more productivity and happy customers that leave positive reviews and word-of-mouth marketing. According the Glassdoor’s best workplace rankings, Airbnb was number one in 2016. Nearly 90% of the employees that were surveyed said they would recommend Airbnb to others. Airbnb keeps its employees happy by giving them great benefits and having a unique work culture. The employees, also known as the “Airfam,” have great healthcare packages available for them, 22 paid weeks for maternity leave, flexible spending accounts, Apple equipment, options to work remotely, and 3-weeks of paid time off They also have stock options, commuter benefits, and breakfast lunch and dinner are provided for them. One of the more unique benefits that Airbnb offers their employees is $2,000 per year for travel so the Airfam can have their

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adventures wherever they want. The culture at Airbnb reflects their mission statement to, “help create a world where you can belong anywhere and where people can live in a place, instead of just traveling to it.” When people walk into the Airbnb office in San Francisco, they are transported to a chic city apartment that houses colorful offices and is decorated to inspire their employees. Airbnb can have internal stakeholders who help build and expand the brand and its identity by giving them the space to have open dialog at work. They share ideas through biweekly meetings with Airbnb offices around the world. Airbnb also made a group of employees that are referred to as “ground control” who are in charge of looking after the workforce environment, internal communications, employee recognition, celebrations, and events. Another one of their internal stakeholders that help build and develop the brand is the users of the platform. They are the ones that keep the company running by booking rooms, writing positive reviews, renting out their own space, and providing positive experiences for other users. The company would not be where it is today without its 150 million users. During the brand development stage, there are many legal and ethical issues that Airbnb should be concerned about. Since this is the beginning stages of a brand, Airbnb should be filing for patents, licenses, and copyrights, and trademarks of their brand, services, software technologies, and IP framework to protect themselves from theft and other legal issues. To protect their brand in this way, Airbnb should keep their pending patents a secret, have anyone who is in the know to sign NDAs (non-disclosure agreements), create a formal contract agreement of ownership for the IPs and inventions, and file trademark applications as soon as possible to protect the brand. The American Marketing Association has identified six standards that brands should uphold to stay ethical. Those standards are honesty, responsibility, fairness,

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respect, transparency, and citizenship. Airbnb should do its best to follow these standards while developing and marketing its brand. To have an effective and efficient marketing strategy, a company needs to identify the brand's marketing mix. The marketing mix is key factors of the product or service which are product, place, price, and promotion. Airbnb’s service is providing a platform for people to use to rent out their house or room to others on the platform needing a short-term place to stay. In the beginning stages of Airbnb, the service was only local to San Francisco but grew to be nationwide, and is now used around the world (more than 119 countries and territories). Their consumers can use the Airbnb website or download the app right to their smartphones. Airbnb pricing is mostly up to the person who is listing their home/room for rent. The host does have to pay a 3% fee to Airbnb unless they are Airbnb Plus hosts or use Super Strict cancellation policies may have a higher percentage fee. One of Airbnb’s first promotional efforts was to use Craigslist. Since the company did not have much money to spend on a marketing strategy, they would browse through Craigslist listings, and email the homeowner to direct them to Airbnb’s platform. They eventually made a scripted automatic email that would be sent to new listings on Craigslist letting them know of their platform. As the company grew, so did its marketing strategies. Airbnb’s marketing mix that they have developed impacted the overall brand perception. Brand perception is the feeling the consumers and target audience feels and thinks when they encounter the brand (sees, hears, or interactions). Airbnb is seen as a young innovative company that has changed the way people travel and experience different places. Airbnb fits any budget allowing more people to be able to afford that vacation they deserve. They were also one of the first of their kind in the industry to break away from the regular hotel and motel stays and allows for everyday people to make some extra cash. This brand always has its users in mind and

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always evolving its platform to ensure they have an easier and positive experience and to stay competitive. The function of Airbnb’s multiple internal stakeholders applies to the marketing mix in the development stage in many ways. For example, their users are a huge part in keeping the service going. If no users were willing to rent out their space to others, there would be no consumers using the platform. They also are a big part in shaping the brand of Airbnb by providing interesting and unique places for users to stay and experience travel that fits the customer’s budget. These internal stakeholders also provided a way for Airbnb to grow and becoming an international company. The employees are also responsible for applying the marketing mix during the development stage. They help ensure that the service and platform are running smoothly. They also create innovative ways to improve and build the company and brand. They also have a brilliant marketing team that comes up with brand marketing strategies and advertisements to bring in new and keep current users. Airbnb has had many successful marketing strategies in the past. As mentioned earlier, one of their first initiatives was an email marketing strategy that took Craigslist listings and directed the homeowners to their platform. The founders noticed that to stay competitive with hotels they needed to have better quality photos of these homes to post on their platform. Since homeowners were using digital cameras and their early versions of iPhones to take their pictures, Airbnb decided to hire professional photographers to go out to these homeowners’ houses and apartments to get better pictures of the rooms. . This way when customers were comparing Airbnb options to hotel rooms, the higher quality pictures were able to compete. Airbnb also gained users by offering a $25 travel credit for new members after their first trip and a $75 credit for new hosts.

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Airbnb’s marketing strategies were effective during the brand development stage. All of the strategies implemented enabled the brand to become what it is today. Taking high-quality photographs of the places offered by Airbnb’s website sets a standard for the brands image. It also made the clients see Airbnb as an attainable and affordable option when vacationing without sacrificing quality. Airbnb wanted to develop the message for their brand that traveling does not need to be expensive and should be accessible to people. To follow that message, they offered credits to new members and hosts. With any developing company, there will be legal and ethical issues that will arise and impact the brand. One legal problem that has occurred with Airbnb is that it is not legal in every city even though you can find listings in those cities. For example, unlicensed rentals in Barcelona are illegal. Airbnb was fined 600,000 euros in 2019 for refusing the follow the local law (The Invisible Tourist, 2020). If renters were found out by law enforcement, the occupants were removed from the premises, and the owner fine 60,000 euros. Places with similar restrictions on Airbnb are major cities like Paris in France and Berlin in Germany. As a result, the brand is very limited in those areas. An ethical issue that Airbnb faces is that it has a negative effect on the local’s quality of life. Having more tourists can increase rent and real estate pricing. Residential rent prices went up 40 percent in Palma de Mallorca, Spain after experiencing tourism demand rose 50 percent (Jen Rose Smith, 2020). There are so many marketing strategies that a brand can implement when in the development stage. One marketing strategy Airbnb can employ is search engine optimization (SEO). SEO is search algorithms and criteria used to capitalize on the number of users to a website through search engines like Google and Bing. By using the right words in the website’s titles, links, and word links, along with a good reputation website, a brands’ website will appear

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high on the list of search results. This strategy is free and creates organic results. Another marketing strategy that a brand can use at this stage is starting a referral program. This is a type of word-of-mouth marketing with an incentive. An example of a referral program would be giving a discount to a current user when they refer them to a friend or family member. This will increase brand awareness and reach. The growth stage of the brand life cycle occurs when the consumers become more attentive and responsive to the brand and its products or services. As a result, the company starts to see sales and revenues increase and make profits. Another attribute to this stage is an increase in competitors in the market. This can lead to pricing changes to stay completive within the industry. Brands can also start evaluating themselves and see where they can make improvements on their current product or service and introduce these innovations to the customer. This is another way they can stay ahead of their competitors and remain unique. An example of a brand that is currently in the growth stage of the cycle is Netflix. Netflix is a popular streaming service that started in 1999 as an online video rental platform. They were one of the first successful streaming platforms to enter this industry but now have many competitors to keep up with. Netflix uses the marketing mix elements to continue to grow their brand and stay competitive in the streaming wars. The product Netflix offers is a subscription-based streaming service that allows its customers to stream TV shows, movies, and documentaries commercial-free on any device that can access the internet. Customers may also download content to their devices to watch later off-line. Netflix does have different plans available for their consumers at different price points. All of the streaming packages have unlimited movies and TV shows that allow you to watch on any device. The basic streaming package is $8.99 per month and allows one screen to stream at a time and one phone or tablet to

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have downloads on. The standard package is $13.99 per month and it allows two screens to stream at a time and two phones or tablets to have downloads on. The standard option also has HD available. The premium package is $17.99 per month that allows four screens to stream at a time and four phones or tablets to have downloads on. It also has HD and Ultra HD available. Netflix still offers their DVD online rentals that would cost $7.99 per month. Netflix is available in over 190 countries and its library of shows and movies varies depending on where the customer is streaming from. Netflix also started creating original content that is only available on their streaming platform. Netflix invests a lot of money in its promotional efforts. In 2019, Netflix spent $2.65 billion in marketing. They use multi-channel marketing to promote their streaming services and original content to bring in subscribers. Some marketing channels that they have used social media, television, radio, email, and print. Netflix also uses personalized content to keep its subscribers engage. By using the data collected on what customers watch and are interested in, each subscriber has a unique home screen and recommendations. Netflix’s marketing mix has a major impact on the overall perception of the brand. According to an AlphaWise/Morgan Stanley survey, consumers believe that Netflix has the best original programming on premium and over-the-top services (BMI, 2019). Netflix was able to achieve this recognition because of their quality product and promotional efforts in the marketing mix. The brand was also ranked number one n YouGov’s annual buzz rankings, scoring an average of 33 on a scale of -100 to +100 based on negative and positive reports from consumers (Marketing Dive, 2019). Consumers see Netflix as one of the first of its kind with an easy-to-use platform. Because of this, Netflix’s competitors, like Hulu and Amazon Prime video, will always be compared to them. Their multi-channel marketing gives the brand so much exposure that they

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were the fastest growing brand in 2019. According to Marketing Dive, the value of Netflix jumped 105%. The internal stakeholders take on many important roles at the growth stage of the brand cycle. The internal stakeholders are the people invested in the company such as employees, management, board of directors, and major investors. In the growth stage, one of the roles internal stakeholders should be focusing on is monitoring what competitors are rising and how to innovate the service to remain unique in the industry. The employee’s role is to continue to provide great customer service and voice their ideas and concerns when growing the brand. The Board of directors should be directing management to be more aggressive with the marketing mix so the brand can stay competitive in the industry. The leadership team is responsible for defining the brand direction and creating messaging for their teams to follow. The last stage of the brand life cycle is brand decline. This stage is when the market for a service or product starts to diminish. There are a variety of reasons that a decline can happen. Some examples are market saturation, product no longer fulfilling the customers’ needs and wants, competitors have a better product or strategy, and there are problems within the company like poorly trained staff or leadership failures. A major attribute of brand decline is a decrease in sales which leads to lower profits. Companies usually decrease their advertising and marketing spending due to loss in profits and focus on other aspects of the business that have a better return on investment (ROI). The company's main effort is the product and will hold out in the hope that their competitors will remove their product first which will create a demand again. They can also decrease the cost of the product or find a new use for it. In some cases, the decline stage can lead to companies closing and going out of business.

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An example of a brand that is in the decline stage is Blockbuster. The product and services they provide are video and gaming rentals. These services were primarily offered in storefronts across the United States and later expanded into streaming, DVD rentals by mail, and video on demand. During the decline stage, Blockbuster closed all of its stores except for one that is located in Bend, Oregon. The way Blockbuster priced out their rentals was based on the rental period and whether the rental was a new release or if it was an older movie. Blockbuster also used to have a late fee charge before removing the policy in order to remain competitive with subscription services. Blockbuster is currently finding success in being a nostalgic brand by selling Blockbuster brand merchandise and even released a Blockbuster Board Game in 2019 that focuses on movie trivia. It comes as no surprise that Blockbuster has minimum promotions and marketing strategy due to being in the decline stage. They recently have been more active on their social media accounts but do not run advertisements or campaigns across any channel. The marketing mix has a huge impact on Blockbusters’ brand perception during the decline stage. Because Blockbuster was at one time, dominating the movie rental industry, they are viewed as a cautionary tale for all brands. At the peak of their success in the ’90s, Blockbuster had 9,000 storefronts, 65 million registered customers, and was valued at $3 billion. Flashforward to 2010, they are filing for bankruptcy due to the fact they just could not keep up with innovative companies like Netflix and Redbox. One of Blockbuster's biggest mistakes that lead to their decline was not launching their online services until years after Netflix did. The role of internal stakeholders during the decline stage is vital and can make or break a company like Blockbuster. Leadership within the company needs to find ways to adapt to a changing or saturated market or be forced out of it. Internal stakeholders should be innovating their products and services or create new ways that customers can use them in order to come out

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of the decline. Management should be looking for ways to use technology and automation in order to reduce costs and their pricing. They can also look into other channels that they can introduce their product or service in order to gain more customers. Management and executives should also be monitoring their competitors. Blockbuster made this mistake with the rising popularity of Netflix and Redbox, Blockbuster was scrambling to stay competitive. Because of this, they were making business decisions that hurt them in the long run. An example of this was when they decided to stop charging customers late fees to try and stay competitive. This became a problem because Blockbuster was making $800 million, about 16 percent of their revenue, in late fees.

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Reference: Airbnb. (2021). What are airbnb service fees? - airbnb help center. Retrieved March 21, 2021, from https://www.airbnb.com/help/article/1857/what-are-airbnb-service-fees American Marketing Association. (n.d.). Codes of Conduct: AMA statement of ethics. Retrieved March 21, 2021, from https://www.ama...