Evaluating Airbnb Success in Property Sales & Development - Essay Sample

Introduction

Every product brought in the market aims at generating revenue to the investor (Gao & Kotabe, 2011) .However, the time that a product may take in the market to determine its success, depends on the product category and the targeted market as well as the set duration for the product by the investor to start generating revenue (Cedergren & Parida, 2012). In relation to this, the move to evaluate Airbnb company product and service success in property sales and development would take a certain time after the product development. Estimating, the Airbnb product success evaluation would probably be about two years from the time of its release in the market. This is because, the entire process of ensuring the product is absorbed into the market is characterized by a series of events such as marketing which may take different platforms such as digital marketing and manual process of marketing. After the set period of two years by the company since the product launch, the successful evaluation of the product would then occur which involves different procedures. This includes:

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Number of Active Users

Based on the product objectives, which mainly as per the Airbnb development of housing program, the objective was to acquire more customers to rent their built premises and also sell other facilities permanently. This step plays a critical role whereby the procedure helps the company to make predictions of their product growth basing their analysis with time and number of new users acquiring the product. For instance, in the case of the Airbnb housing project, the number of people who may have rented the houses since their introduction in the market could prove the product success through comparison with the company’s target sales at that specific time. If the product meets the company’s target, then the product proves to be successful. If the product proves to be slightly near to the set target, the product still projects reaching to success but in delayed time. However, if the product registers a target that is far from the company’s expectation, the situation projects the company to think otherwise, either quite from the investment or seek an alternative root either outsourcing the project to another company or having the project sold.

Evaluating the Product Growth Rate

For every new product introduced in the market, its growth rate is determined by the number of users subscribed to the product at a specific set time by an investor. In relation to the set period by Airbnb company to measure the success of its property sale and development, the product success may be estimated through exploring the number of facilities sold either quarterly or annually. This value of sales may further be analysed per month and established the trend of product sales achieved per month. Further, the success of Airbnb property sales and development may be evaluated by analysing the rate at which the facilities are purchased permanently compared to the rate of renting. Through this trend, the company would be able to differentiate the one which has a higher rate and determine either to continue investing in the product or quite. But all will depend on the total income generated compared to the organization target.

Frequency of Usage

Other than the absolute number of users of a certain product, the duration of usage of a product also plays a critical role in determining the success of a product in the market. Product purchased in mass numbers but its rate of use keeps on diminishing, it predicts high chances of market failure in the future. Relating this statement to the Airbnb project of property sales and development, the frequency of product usage would be evaluated through analysing the number of people who retain their facilities after purchase to those who resell their facilities after purchase. If the number of reselling exceeds those who retain the facility, then, the project should be put to dought by the company. Whereby, either the company should conduct research from the various individuals and determine the cause of reselling. This would allow the company to make some changes which in return could align with the company's projected success. The company on the other hand could decide to outsource or sell the project to another company of higher customer loyalty.

Depth of Usage

The intensity at which a product is utilized proves how quality the product is. Thus, the degree of utilization of a product launched in a market determines the degree of success of that product as per the estimated period or even earlier by the investor. The degree of utilization of part of Airbnb property sold and those rented would be used in evaluating the success of the product. This could be possible through observation on how the resident utilizes their homes in unusual days which many individuals prefer spending outside their homes such as Christmas holidays and on friends parties such as a birthday. Through analysing on average the event celebrated within the sold or rented Airbnb property the company would be able to determine the success of their product. In case the company finds that most of the people never like spending time in their homes even on the holiday seasons, the company may find an alternative method such as upgrading on their future facilities through adding of attractive features such as swimming pools and recreation point which would attract individual attention. This move could revive the previous diminishing success of the product due to the lower degree of product usage.

Feedback Loops

For a company to ensure its newly launched product succeeds in the market, the company ought to exercise some extra mechanisms in its normal operation which involves engaging in regulars and obtaining feedback loops from the customers (Hamilton & Tee,2013). To ensure the Airbnb facility has attained its success, the company requires analysing its marketing deepness and exploring whether their product has really reached its expected magnitude of awareness among the targeted customers. Further in the case of Airbnb, the company may analyse its set strategy of attracting the customer and if noticed that the set strategy does not reach the level of customer attraction, the company may set to adjustment. For instance, in a case whereby the company property selling or renting was on total cash, the Airburn may consider introducing payment on instalment which may be either monthly or quarterly. Also, the introduction of discount allowance to the customers who made their total price in a single payment may also contribute to the success of the product since most of the customers may consider making the entire payment in a onetime pay to get the introduced discount.

Further, through customer feedback, an investor is able to identify loops on the product and determines the best root to take to retain the product value in the market. For instance, if the Airbnb property sale and development product would not have achieved it success target after the set period of evaluation by the company, it would be appropriate for the company to engage in carrying out research from the customers regarding their satisfaction with the product and seek their opinion on what they would prefer to be rectified on their facilities. Further, through also seeking opinions from the company employees would help in upgrading the product to meet the target success by the company. The move by the Airbnb company to seek an opinion from both the public and its employee would help the organization to come up with the clear understanding of what the targeted customer expect in the product and proceed with that suggestion in creating the product. Additionally, frequent evaluation of the customer opinion regarding the product which could be carried either per Annam would also enable the company to continue monitoring the trend of the product and determine where change is needed.

Other Factors

Other than market challenges that might affect the success of a new product launched in the market, external factors in the product environment could pose a threat to the product. Thus before any product idea is developed by a company, it is important for the company to conduct an analysis of such factors that might affect the product in the future and determine the best course to take. This process requires the company to conduct an environmental scan procedure to identify both internal and external factors that might affect the new product if launched in the market. In regard to the Airbnb property sale and development project, it would be appropriate for the company to conduct a clear environmental scan to explore the environmental factors that might affect the company’s new idea in the future.

Procedure for identifying other factors that would affect the new idea

Generally, the entire procedure of conducting an environmental scan consists of four steps:

Step One: Event analysis

Every society is characterized by certain events either, social, political, or cultural events. Thus as an investor intending to release a new product or a service in the market, it is appropriate to first analyse your product idea objectives to the existing event in the business environment targeted by the product. Product ideas such as that of Airbnb of property sale and development, require analysing the market environment such as political environment which includes government policies, political stability, and tax policy.

Step Two: Trends of Event

After the identification of the existing event in the market environment, it is advisable for the investor to analyse the tendency at which the established event occurs. The trend of the event might be either positive or negative whereby through their observation, the investor would be able to identify any change in the frequency and suggest changes in respective areas of the intended product launch. In projects such as housing projects, as it is in Airbnb, the observation of government policies such as tax regulations would be very important since through this the organization would be able to set its prices that would ensure it will not go into a loss in case of a change in policies.

Step Three: Issues

From the event and their trend of occurrence, the routine may result in concerns which as an investor, you have to try and identify so that one can take corrective measures to control them at early stages. The identification of the emerging issues proves to be very difficult by organizations since their resultant occur due to unexpected gradual changes either from the government side or social desertification in the market. This may involve the change of product perception in the market either due to what is offered by the competitor or increased cost of living which could lead to low demand for the product.

Step Four: Expectations

From the three procedure steps of identifying other factors that might affect new idea, then follows the expectation step which helps the investors to predict what could be expected as a result of the surrounding environment of the business. For instance, through the establishment of likely issues from events in a business environment, companies such as Airbnb may be able to structure its strategies in a way that its product would be able to cope with any issue that may come across its implementation.

However, through the grouping of the four procedures, an organization would be able to come up with a concrete plan that could ensure the factors are countered. For instance, the move by an organization to have a clear idea on the possible event, their trend, issues related to trend and the final expectation, companies such as Airbnb could be able to establish strong mitigation mechanisms such as adjustin...