Analysis Case Solution & Answer

Analysis Case Solution

1.Executive Summary

This case is based on three well-known and successful ventures, which have grown very effectively due to an expansion in their customer base. These three well-known organizations are UBER, Airbnb, and Etsy, which provide two important lessons: creating an exceptional experience and thinking like a customer. The case illustrates different marketing strategies used by UBER, Etsy, and Airbnb companies, while acquiring new-customers and how have they succeed in those diverse approaches. These companies utilize two-sided marketing online platforms, and their top priority is to increase the numbers of customers for a significant growth. A two-side marketing platform might face challenges when it comes to the creation of more value for customers and generating suitable revenues, for which these companies are increasingly dependent on disruptive innovation. Looking for a particular challenge in the business and providing creative solutions can be more efficient methods for the companies to create a competitive edge in the industry.Additionally, the ventures which execute with two-sided marketing, have budget restraints and their marketing expenditure is limited. In order to expand their customer base; these companies develop cost-effective and effective marketing approaches.

By using the technique of the two-sided market platforms; UBER, Etsy, and Airbnb have made themselves prominent in their respective industries. These companies have well-established themselves and are operating competitively in their respective industries. They have employed marketing strategies to not just sustain their growth but also to retain their valuable customers.

1.Problem Statement The new entrants usually compete with the companies that are already operating in the industry, by grabbing the customer base of these pre-existing companies through offering unique and cost-effective quality products or services. UBER, Etsy, and Airbnb have acquired an extensive amount of customers by adopting-online two-sided marketing platforms. By doing so, these companies have earned their recognition as the noteworthy online startups, as they have tried to match the clients ‘demands for physical products, rent assets and online services.

Two-sided platform is recognized for shaping  rapid growth for the companies like UBER, Etsy, and Airbnb. This platform creates a positive impact over the businesses, as it helps in attracting more customers.

Therefore, the case objective is to determine the marketing strategies and platforms of the aforementioned companies which they have applied in order to increase their customer base and to fulfill the increasing demands of products and services for these customers. Furthermore, we have also identified the potential risks and opportunities associated with the two-sided platform, in an inclusion to which, we have also suggested suitable strategies for these companies to have a significant growth in their customers.

2.Situation Analysis

AirBnb, UBER, and Etsy

Customer factor

            AirBnb, UBER, Etsytarget the customers at broader segments. They have both the market segments, i.e. high-end and low-end. They position their products in the niche market. AirBnb, UBER, and Etsy’s brand awareness is high among their customers. The targeted market segment has a steady growth rate, and their customer segment is family with children. AirBnb, UBER, and Etsy operate in the product category of low-involvement, as low-involvement markets are challenging in comparison to the high-involvement markets and low-involvement markets also have lower switching cost. Customers of AirBnb, UBER, and Etsy are more sensitive to the price,so in case of the changing taste preferences and price sensitivity; these companies need to invest in their customer research in order to monitor consumer behavior.

Strategy of AirBnb in Renting Properties

            At the initial growth stage,the booking percentage of clients was low on AirBnb. The company identified reason behind such a low booking rate to be the low-quality pictures of the places to be rented, so the company invested its time and cash on recruiting individuals with better photography skills.

To increase the demand and supply for the rental business;AirBnb used the strategy of email marketing and it also started contacting those customers who were on craigslist. This better explain the benefits and features of the renting business.

Strategy of Etsy for Handicraft Goods

            Etsyhas a website showcasing unique handicraft goods to its customers. The customers can not only buy these handicrafts but they can also become clients for the company’s website and sell their own handicrafts on the website. Etsy sellers make unique products and then they list those products for sale on the company’s website. 75% of the customers consider Etsy as a business shop. Etsy has 21.7 million customers who actively buy the products. Its core strategy is to provide a single platform to both the buyers as well as the sellers. As Etsy’s success is dependent on its seller’s success in selling their handicrafts; when sellers will make money so does Etsy.

Strategy of UBER for Cab Service:

            UBER has a strong customer base. It has created a brand within a few years of operating in the ride-share industry. UBER has earned a loyal customer base due to its customer-centric approach and two-sided market. UBER provides convenience to its customers residing in the mega cities throughout the world. It follows two strategies, which are: cost leadership and differentiation. UBER’s cost leadership strategy indicates it provides its services at a lower cost in comparison to other ride-sharing companies. Uber’s  differentiation strategy is that it provides different services as compared to the normal taxis operating in the cities. Differentiation strategy can also be denied as innovative strategy, and UBER has enhanced its services through using innovation.

Basic strategies used by the companies:

  • Target customers in bulk:

The companies have identified the gaps between the demand and supply, such as: where the highest demand and lower is, within their particular domains. Then the companies have created their marketing strategies to target the customer base. They have spent less amount on their marketing strategies. AirBnb has utilized Craigslist to get more clients for its business, besides which, it has also emphasized on providing better experiences to its customers, such as: great hospitality,better depiction of properties and more pleasant photography of the places to be rented on AirBnb. By doing so the company has earned a large customer base. Etsy has tapped the handicraft  industry by providing a platform to not just the buyers of uniquely handcrafted goods but also to their sellers. It provides a platform where the artists buy and sell products, through which the company increases its clients and generates profit.  UBER has identified the market gap in the transportation business, and has grabbed the opportunity of providing differentiated services in the cab industry, in order to succeed……………

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