Real Estate Marketing
Seminar paper, 2000, anja rassmann (author).
Free online reading
Table of contents:
List of Figures
2 particularities of the real estate market.
3 Market Research 3.1 Market Analysis 3.2 Market Investigation 3.3 Market Forecast 3.4 Methods of the Market Research
4 Marketing Policy Instruments 4.1 Product Policy 4.2 Pricing Policy / Terms Policy 4.3 Communication Policy 4.3.1 Corporate Identity 4.3.2 Advertising 4.3.3 Public - relation 4.3.4 Direct Communication
5 Marketing Plan 5.1 Formulation of the Targets 5.2 Marketing - Mix
6 Marketing in the USA - Warehouses
Marketing is basically a creative corporate activity involving the planning and execution of the conception, pricing, promotion and distribution of ideas, products and services in an exchange that not only satisfies customers´ current needs but also anticipates and creates their future needs at a profit (P., F., Drucker, pp. 37-39).
Marketing is not only much broader than selling, it also encompasses the entire company’s orientation toward customer fulfilment in a competitive environment. In other words, a marketing strategy requires close attention to both customers and competitors. Quite often marketers focus excessively on satisfying customers needs while they are ignoring their competitors. In the process, competitors have outmaneuvered them in the marketplace with better, lessexpensive products (S., P., Schnaars, pp. 13-15).
By marketing one means all efforts of a company, to prepare their products to be soled at the market. Thereby the market should be made to the centre of all decisions. This makes marketing to an answer to changing market situations (E. Murfeld, p. 509)
After the Second World War goods were tight. Because of this companies concentrated primarily on manufacturing goods as economic as possible. They did not take much care for the distribution. On most markets the demand for goods exceeded the supply. A market with a such conditions is called sellers - market. Only the increasing saturation on the markets and the emerging harder competition made it necessary to worry intensely about the price- and quality awareness of the customers (ibid).
That was the beginning of a development form a seller’s market towards a buyer’s market. However the housing market remained unchanged for a much longer period of time than other markets. At the beginning of the eighties, as an increasing number of empty rented flats was registered. The idea of marketing found also entrance in the thinking of housing companies (ibid).
The real estates marketing is subject to particularities, which emerge from some features of real estates. Real estates are capital intensive products with a long production and marketing process (H., Diller, p. 96).
Real estates are durable assets, which are changeable only under employment of high costs. Therefore replacement demand exists rarely, but at most new or changed need e.g. because of changed family cycle or changed income situation. Real estates are not substitutable goods. The sale and the rental of real estates require much consultation. Real estates are products for which much explanation is required. Additional decisions have to be made, for instance in reference to financing, location or move (B., Heuer, pp. 27).
The most enterprises are found in narrow regional markets. This influences on the point of main effort of marketing the instruments and the marketing mix. The attempt to transfer marketing concepts of other branches to the real estate economy, showed that this is only possible under some restrictions (M, Hellerforth, p. 14).
3 Market Research
Market research is the systematic effort to gain knowledge, which is important for the attainment of the company - goals. Not only the markets themselves are object to market research, but also elements, which can influence the market from outside. Without market research the entrepreneur hovers in a vacuum in finding his company - goals (E. Murfeld, p. 511)
3.1 Market Analysis
The market analysis is a view over the market at a fix defined point of time. The market analysis is an instrument to determine singularly or in certain intervals the market characteristic elements of a certain market. The market analysis gives information about the structure of the market and the conditions of local, regional and national sub market including information about the current offer and demand situation (ibid).
Beside the market - determinants supply and demand, amount of disposable income, number of people living in a household, structure of the age pyramid to the analysis examines other influencing elements as well. Such influencing elements could be:
- the level of the capital-market interest rate - tax and subsidy policy - legal basic conditions - public material handling equipment (ibid).
3.2 Market Investigation
The market analysis determines essential elements of a market to a certain point of time by using scientific methods. The market investigation records the development of these facts the in the lapse of time. The market analysis is an observation during a period of time, and because of this it is a permanent task to the companies. Proceeding from the data delivered by the market analysis the future developments and trends are registered by permanent observation. These results are then considered in the prognosises (ibid).
3.3 Market Forecast
The prognosis tries to describe the future market situation. The prognosis is based on the results of the market analysis and the market investigation. Apartments are very durable and cannot be simply transported to another region if it is required. Because of this, a precise prognosis is so important. This applies to politics as well as to a regionally active housing company (ibid).
3.4 Methods of the Market Research
The necessary information can be obtained by two basic methods:
- desk research - field research
The desk research evaluates already available documents. This could be e. g. statistics of associations, information produced by ministries or results of public opinion polls.
In-house sources should be included likewise. Such sources are e. g. Marketing statistics, these are also often marked as sales statistics or sales figures. Companies can prepare without large expense:
- inquiry statistics and quotation statistics - statistics concerning orders received, sales statistics and - complaint statistics.
These statistics can present detailed results marketing achieved in a period. Code numbers can be determined, change in the lapse of time can be recognized, this makes it possible to recognize trends.
Information can be recorded through a field research. Field researches are more expensive than desk researches. Doing a field research two methods can be used: public-opinion survey or observation.
4 Marketing Policy Instruments
4.1 product policy.
The product policy includes first of all the determination of the kind of the immovable, therefore a fundamental distinction between housing real estates and industrial real estates as well as between new and used real estates. Also the kind of acquisition of ownership, which means after direct or indirect acquisition, corresponds with the target group definition, which means the distinction within self-interests and investors in the segments. Besides this the product policy depends on the respective performance of the company, as there are e. g. rental, mediation, property management, supplements, the establishment, sale and trade (M., Hellerforth, pp. 56).
The particularity of the product policy of real estates results also from the fact, that each immovable is a individual product. One consequence of this fact is, that standardizations can only include components (H., Corsten, p. 181). The individual enterprise usually has only a narrow spectrum of products to its disposal, which can be adapted quit quickly to a change of the market situation (B., Falk, p. 200).
4.2 Pricing Policy / Terms Policy
The price as a classic marketing instrument is in the centre of marketing activity. The price influences the success demonstrable (W. Hill, p. 89). The pricing and terms policy record the entirety of all measures, which serve the performance formation of price and output e. g. terms of delivery, terms of payment and crediting terms. It depends directly on the sales negotiations or tenancy agreement negotiations.
Price policy and terms policy are short-term changeable, in contrast to the product policy which is long-term. For that reason payment terms, like amount and kind of the bail and the rent formation, are often object of intense negotiations (H., Meffert, p. 260)
The price - margin is limited by the quality of the offer and the prices of the competitors (M., Hellerforth, p. 81).
Price differentiation means, to demand different prices for equal products. There are tow types of price differentiation, a spatial one and a temporal one (H., Corsten, p. 187).
- The spatial price differentiation is offering products on geographically different markets to different prices. For instance a builder sells his condominiums in conurbations at a higher price per square meter as in the surrounding countryside (M., Hellerforth, p. 85). - A temporal price differentiation can often be observed at construction firms. At the purchase is price differentiation more rarely, the demand is influenced greatly by other elements e. g. at internal use it is the family cycle, interest rates and material handling equipment, for investors by write-off facilities. After rehiring out of an apartment of long-time tenants the prices can differ for living space within a house. A temporal price differentiation means also the reduction of the price for the last unsold unit of an already completed construction project (ibid).
4.3 Communication Policy
"What is marketing if it is not communication?" (F., Brassington; H., S., Pettit, p. 568). Marketing is the interface of the enterprise to his environment. Target of these communication policy is the active formation of the information directed on the markets about the performance level of the information directed on the markets and the products to be put down (H., Corsten, p. 189).
Communication policy begins at the staff members, that means in the own enterprise. Necessary conditions for this is a company philosophy, which should be increased structured sensible. Credibility can be mediated only to the outside, if all action instruments of an enterprise come in an uniform frame inwards and outside to display. That is what Corporate Identity means. (M, Hellerforth, p. 107).
4.3.1 Corporate Identity
Corporate Identity has the task as strategic that means for the differentiation in the competition. It can be separated into sectors:
- Corporate Behaviour - Corporate Culture - Corporate Communication - Corporate Design
Corporate Communication and Behaviour include the entire internal and external presentation of an enterprise. This includes everything form the friendly switchboard operator and competent consultants up to the expert and interesting display in the media.
The Corporate Design marks the entire optic appearance of the company, to which belongs e. g. letterhead, calling cards, advertising design, brochures and leaflets, an exhibition stand, construction signs, give aways and so on.
The construction of an image respectively of a Corporate Identity and particularly the change of an existing image is a lengthy process. Accordingly professional communication policy requires strategic concepts (D., Franz, p. 395).
Helpful in advertising is a so-called briefing. In this briefing the own advertising is described as well as the advertising of the competitor, farther the advertising goals are defined, which are the basis of an effective advertising conception. This presents the integral draft of the planning and of the realization of advertising. In addition to this following points must be determined: the target group, the message, the advertising budget, the advertising media as well as the timing of the advertising and the decision, who does the advertising. Afterwards a judgment and control of the impact of advertising should take place (M; Hellerforth, p. 109).
The essential advertising goals are sale and rental; additionally targets can be reached as well,
- to produce attention - to mediate the knowledge about the particularities and features of the offers - to influence the outlook facing of certain offers - to increase the fame of the enterprise and his products - to raise the need to act of the interested people and - After Sales (ibid).
According to the target group defined already as a part of the product policy are rational effects like economy, functionality and particular technical equipment more significantly (industrial real estates) or tax respectively financial criteria (investor) or emotional aspects like humour, love, delight, luck, satisfaction (self- interests) (ibid).
The advertising intention should make it possible to identify the respective real estate offers and a differentiation of that of the competitors. Beside language and style here are formal elements like size, colouring and placement important. The deviating from rival offers, here are a certain uniqueness or courage to new presentation techniques and new solutions required as well (ibid).
4.3.3 Public - relation
Public relations work is conscious, planned and constant effort of an organization to build up trust, understanding and support in the public. Public relations coheres narrowly with the Corporate Identity and presents indirect advertising. It has not only an external effect, it includes also the staff members of the enterprise and their social associated area, and so one speaks also of human relation (A. Meyer, pp. 297).
Abbildung in dieser Leseprobe nicht enthalten
Figure 1: Target groups of public relation
The goal of the public relation work is the construction and the conservation of a positive marketplace image. Public relation is especially important in the real estate industry to build up the confidential relation to the public. The customer has to provide payments often before the completion of the object, so the company is expected to be solidity (B., Falk, p. 200).
An enterprise must know the public and the target groups, to provide efficient public relation. Public relation radiates not only from the company into the public, it is also an input - output - system. That means that the enterprise is noticing the environmental opinions, environmental attitude and environmental way, analyses and reflects these and develops thereupon future public relation strategies. This interaction is significantly, the success of a business depends on - just in the sensitive real estate industry - greatly on the public opinion respectively the successful dialogue with the public.
One can mark the task of an effective public relation also as agitating instead of reacting. So far professional public relations work carries their fruit just in difficult times and in the relation with critical themes, like ground contamination, controversial, large-scale projects, ecological building and alternative energy systems.
The characterization of press work as an input - output - system the necessity of the intense care of the contacts emerges also to editors and journalist, the prompt reaction at the request of journalists and accurate observation of the press work of the rivals (M., Hellerforth, p. 119)
Public relation measures are e. g. office parties to take care about the relationships within the enterprise, more important are however “round - table - conversations” to the motivation and integration of different areas and planes. Beside images brochures and event - marketing at occasions like official openings it also important to report about the events your are doing in the editorial part of newspapers and other media. Instruments could be, for instance press conferences, exhibitions, competitions, sponsoring and events, organized and guided inspections of constructions, cultural events or other good - will - events (ibid).
4.3.4 Direct Communication
Direct communication is the direct address of the customer without insertion of distribution middleman. That is the usual form of the sale in the real estate branch. These aimed individual address should make it possible to have a dialogue respectively an interaction between the one who makes the marketing, and the individual which is to be influenced (W., Hilke, p. 10).
Direct communication happens by letter, telephone call, pamphlet or catalogue as well as at the personal sale. Direct communication is used also for the inquiry of new real estate operators or to take care of relationships to customers and suppliers (ibid). Other media can be likewise the direct communication, like posters or the radio, respectively with clear invitation to get contacted (M. Hellerforth, p. 122).
- Personal Sale
The personal sale is the most intense form of the individual address. One speaks also of "1:1 - marketing" or "Face - to - marketing" (W., Hilke, p. 10). Just with products which needs to be explained like the real estates plays the personal advice and the personal sale a particular role and is in most cases a requirement for the purchase or the rent. The job specification of the clerks requires characteristics like negotiating strength, and not persuasiveness, competence and action flexibility. Likewise the appearance and the taken care of appearance belong in this area as well (M. Hellerforth,p. 123).
- Telephone Marketing
Also the telephone is an individual address - mouth-to-mouth-marketing - and makes it possible the demanded dialogue respectively the interaction. In contrast to the telephone sale is in the real estate branch the telephone only means, to arrange a personal appointment. At the telephone - directly - marketing there is a particularity to consider: The unasked acquisition call in the privacy is prohibited and only limited allowed in the industrial area (W., Hilke, p. 10).
- Direct mailing
Direct mailing is the personal or written address of marked down customers. The case of the written, addressed individual address presupposes, that the name and address are known of the target person. The clear preference to the addressed in contrast to the un-addressed advertising results from the knowledge, that personally addressed advertising is bringing the larger success. For all written words the own name wakes the supreme attention. Advantages of Direct mailing in contrast to the classic print - advertising:
- It exists the possibility to address to exactly selected target groups. - The personal, that is the nominal and individual address can be orientated exactly at the demand of the situation. - This advertising will get higher attention as advertisements in a mass medium. - Direct mailing is short-term usable (ibid).
Despite all advantages of direct mailings the response rate is very slight, partially under 1%. This has different reasons on the one hand because of the improved computer science are sent very many of such mailings to customers. Potential investors receive weekly up to ten of such writings. On the other hand a mailing has no success, if it displays certain irregularities.
5 Marketing Plan
5.1 formulation of the targets.
Marketing plan is to be institutionalised also organizationally in the enterprise, so that their task can be solved. It is a continuous process, to solve under inclusion of the present situations the future market weakness.
Figure 2: Formulation of the Targets
Help at the decision on striven planning strategy gives the so-called portfolio - analysis. It was developed first of all for the optimal grouping of stocks, to decrease the total risk as slight as possible. This matrix serves the display of the present and planned position the individual operating area; for the housing companies e. g. condominiums, senior residence, rental apartments and so forth .
The idea is to develop a product - portfolio, which combines products with different market risks and market chances so with the strength and weaknesses of the enterprise, that the long-term security of the enterprise can be guaranteed (E., Murfeld, p. 531).
5.2 Marketing - Mix
Under marketing - mix one understands generally the combination of sales policy instruments, which an enterprise vests to a certain point in time. The meaning of the individual instruments depends on the company kind, on the product and on the purchase pattern. In some products the price plays an essential role, in other is the product policy important, and for cars, computers and so forth is a well functioning customer service indispensable. Optimal was the marketing - mix, if the desired goal was reached. So a constant control is to be done and if necessary adjustments need to be done as well (ibid).
The industrial marketing in the USA has a completely other meaning as in Germany. The industrial marketing divides in office market and in industrial. This professional marketing we do not have in Germany. The reasons for it are abundant, on one hand can occur in the USA international marketing. There exist no language barriers within the continent, likewise occurs a continental marketing, in contrast to Germany where only a largely national marketing occurs. In the USA no customer should wait longer than 24 hours for his product, therefore is warehousing necessary. Often are large removals between production plant and consumers. The locations of warehouses are chosen that each customer can be reached within a truck day trip.
Considerably simplified health and safety regulations make it possible to settle warehousing, production and packaging in one large hall. Warehousing is subcontracted in a lot of companies. Outsourcing of warehousing can reduce your costs. Investment for properties and buildings will not be needed as well. The firms have no own properties and halls, they rent them from warehousing companies.
There are 6 large centres for warehousing in the USA:
- Los Angles - New York - Miami - Dallas - Atlanta - Chicago
In Dallas is for instance more than 28 millions square meters storage space. In contrast to Germany is the demand of storage space enormous. That requires an other marketing, a professional marketing. You will notice a big difference in performing real estates in the USA. A lot more and better quality leaflets are given to the customers like aerial photos of the location, brochures and extensive plans. This procures a relatively large market transparency. This make you able to compare different offers irrespective of the location of the real estates. The information are better and more comparable than in Germany. Also the time to response to an inquiry is obviously slighter than in Germany.
In the USA almost no real estate deal is transacted without a broker. Tenants as well as landlords have a broker. The commission of the broker will be 6.75 % of the rental value, the broker is the key to the customer. The broker takes much more care of the customer than in Germany, during the negotiations as well as after signing of the contract. The brokers organize Events, Open House parties and marketing out of Office.
Since the middle nineties are economic and social structures changing in Germany. These changes on the real estate market and the changes of the costumer behaviour the real estate branch has to deal with not known challenges. These challenges are only to overcome if tenants - more than they are now - get in the centre of the entrepreneurial thinking and trades. Costumer orientation is called the slogan. It is requirement for an efficient target group address and for the use future marketing opportunities. Thereby sectoral differentiated market investigation as well as regular tenant interviews deliver regular and important information.
Market orientation and costumer orientation needs a corresponding marketing concept. Marketing is the consciously market-oriented leadership of an enterprise.
I am convinced that, no real estate company can secure the business or can maintain itself in the hard growing competition without a marketing concept in the long run. Important will be that each real estate company defines for itself long-term goals and measures for example to secure rental, to reduce fluctuation, to increase costumer loyalty by corresponding price policy, product policy and service policy.
Thereby should be concentrated first of all on important areas and the transformation is to be planned in small steps.
Decisive for the success will be, that systematic marketing is understood as a long-terms task and it is bound in the development of a corporate strategy.
Brassington, F.; Pettit H., S.,: Principles of Marketing , London 1997, p. 568.
Corsten, H.: Betriebswirtschaftslehre der Dienstleistungsunternehmen , 2nd edition, München 1990, pp. 181-189.
Diller, H.,; Lorch, K.: Marketing , in Dichtl, E / Issing, O. (editor): Vahlens Großes Wirtschaftslexikon, Bd. 2: L-Z, München, 1987, pp. 96-98.
Drucker, P., F.: The Practice of Management , New York 1954, pp. 37-39.
Falk, B.: Das große Handbuch Immobilien-Marketing für Wohn- und Gewerbeimmobilien , Landsberg/Lech 1997, p. 200.
Franz, D.: Immobilien-Marketing , in: B., Falk: Das große Handbuch Immobilienmanagement , Landberg am Lech 1997, p. 395.
Hellerforth, M.: Praktiker-Leitfaden Marketing in der Immobilienwirtschaft , Hamburg 1999, pp. 14-123.
Hill, W.: Marketing , Band II, 5th edition, Bern, Stuttgart 1971, p. 89.
Hilke, W.: Direkt - Marketing, Schriften zur Unternehmensführung, Band 47, Wiesbaden 1993, p. 10.
Heuer, B.; Nordalm, V.: Die Wohnungsmärkte im gesamtwirtschaftlichen Gefüge , at: Jenkins, H. W. (editor): Kompendium der Wohnungswirtschaft, München 1996, pp. 27-41.
Meffert, H.: Marketing Grundlagen der Absatzpolitik , 8th edition, Wiesbaden 1998, p. 260.
Meyer, A.: , Kommunikationspolitik von Dienstleistungsunternehmen , Wiesbaden 1994, pp. 297.
Murfeld, E.: Spezielle Betriebswirtschaftslehre der Grundstücks- und Wohnungswirtschaft , 2nd edition, Hamburg 1997, pp. 509-531.
Schnaars, S., P.: Marketing Strategy , New York 1991, pp. 13-15.
- No comments yet.
Sustainability, Fairness and Competit...
The effect of the European Central Ba...
Real Estate Price Bubbles as Irration...
Real Estate Market UK: Development of...
A bubble about to burst? The Spanish ...
Real Estate Bubble in Germany. The Ge...
The Behavioral Intention to Adopt Pro...
Micro-Apartments as an Emerging Real ...
Real estate market in Berlin. Is ther...
Key Factors for new High-Rise Residen...
Electronic Real Estate in Europe
Structuring the Family Office. Insour...
Pan-European Real Estate Investment a...
An Examination of the Office Market i...
Public Real Estate Management – Ergeb...
Marketing strategies for open-end rea...
An Analysis of the Real Estate Invest...
Aufgaben und Chancen des German Real ...
Your term paper / thesis:
- Publication as eBook and book - High royalties for the sales - Completely free - with ISBN - It only takes five minutes - Every paper finds readers
Publish now - it's free