Factors to consider for marketing 300 Medium Cost Apartments Q3

Q.
As an estate agent, you have been appointed to market a development project consisting 300 units of medium cost apartment. Discuss the factors that you take into consideration in the preparation of the marketing plan for the project.

(20 marks, 2012 Q3 Real Estate Agency Practice D11)

A.
Similar questions were asked in

2011 Q7 here; and
2014 Q6 here.

This is closely similar to the 2014 Q6 question (link above) on drafting a marketing plan for a developer who is launching a new housing project.

Due to the emphasis on factors which are to be considered in preparation of Marketing Plan, it is not in fact, a Marketing Plan. This is different from the other posts.

The question specifically mentioned the 300 medium cost apartments. To come out with a good strategy, certain factors are more pertinent than others. Hence, a detail study of the existing trend and competition faced in the vicinity is necessary. Thus, the scope of the answer should be limited to other marketing mix, namely Promotion, Placing and Product, leaving Pricing to a minimum.

As factors specific to this case are '300' 'Medium Cost' and 'Apartments', it is definitely not similar to the earlier postings of 'Fun Living' or 'Elegant Living' where emphasis were on exclusiveness and lifestyle. In this case, it is but basic necessities and amenities for probably a good spectrum of working class population, including those blue collar workers who earn below average wages.

The Marketing Plan would likely to take consideration factors like:

1. Cost of promotion as medium cost project may have limited promotional budget.
2. Product feature limitations, as build of the apartments may be limited by space and material used.
3. Mode of promotion as cheaper mass advertisement is preferred than expensive launches, parties and celebrity endorsements.
4. Timeline of promotion may be shorter as limited by promotional budget.

In the various parts of the Marketing Plan, various factors are emphasized over the others. They are further elaborated below.

1. Executive Summary - specifying the key selling point for the 300 units of medium cost apartments. In this context, the salient points should include the promotional strategies to be deployed and the specified period that activities are to be carried out. The naming of the project and the slogan of the promotional theme. Emphasis should be given to the enormous demand for this types of housing and ability of the project to satisfy this demand.

2. Background Analysis of the housing market in general, the demography of the local population and its supply and demand for medium cost apartments. Factors to consider in analysis are recent trend of urbanization and development of transportation facilities in the region. These are important because general public who are burdened by higher fuel cost would rely on public transportation. Therefore, density and transportation are factors affecting the right target segment for this project.

3. The study of such market would direct the effort of the promotion to the right target group, hence the key strategy of the Marketing Plan. In this part, competitor analysis is important. A thorough understanding of the existing housing schemes at the surrounding ares are to be studied, their pricing and target market. The SWOT analysis would hopefully come out with a distinctive strategy for a target segment group that would build the basis for this Marketing Plan.

4. General population increase. A major factor which drive people to buy this medium cost apartment is probably scarcity of land as a resource. This segment of the market is always in demand because of unsatisfied public. This economic factor is inevitable as scarcity is going to stay and not going away. Faced with a growing population, this demand for medium cost living is going to escalate. Thus, satellite living in apartments, condominium and high rise buildings is going to be a norm.

5. Pricing strategy. Although price factor is no more a variable in the Marketing Mix as it is medium cost, pricing strategy might be limited to a small window of 10% variation from an average. It is still an important factor to consider as perception of value may differ among buyers. Therefore, different localities may differ in price. A premium is to be paid for the easily accessible units and those with less frontage, be given discounts. This would prevent some isolated or remote units being left unsold.

6. Along the community living concept, the Marketing Strategy should consider the factor of Product Positioning. For example, the slogan "Compact-Community Living" may deliver the message of 'Economic Living and Accessibility' to surrounding amenities and townships. This positioning factor would differentiate the project from the existing housing developments in the vicinity. As construction is probably limited by space and material used, medium cost apartments are for practicality and convenience - a 'one size fit all concept'. Hence, compact living can also be promoted as cost effective living among the sophisticated city life. This is the strategic position of the Marketing Plan, and a re-branding, if deemed necessary and approved by the developer.

7. It being a Medium Cost Apartment project, factor of cost in promotion would render the Marketing Plan short and sweet. The promotional strategy may deploy advertising in mass media and social media as it is fast and cost effective. Subsequently, the marketing plan would need to include action plans and implementation timelines, for example:

a) booth display at major banks can be named 'Bank Promo' and list out the fishtails and brochures as well as head count of staff required to station for each promotional activity.
b) Advertisement in the local newsprint, for example would be listed as 'Newsprint' and which newspaper, which article or who is to write its content, how frequent it appears and the cost involved.
c) special referral discounts if buyer recommends friends and relatives to buy.
d) bonus scheme and competition for negotiators who can achieve most sales in the project.

8. The last stage of the Marketing Plan would be Control. This part explains the intervals of review and assessment for the Marketing Plan. As cost is a major factor in promotional spending, these reviews can be primary data collection by surveys and questionnaires given to prospecting buyers. Another cost effective review is by sales performance monitoring and feedback directly from buyers. Contingencies and alteration to Marketing Plan would require discussion with the developer. As it is a "Medium Cost Apartment" much cost should be contained within the original budget. The developer would likely be turned off by extravagant promotional plans.

To summarize, key factors to be considered for Marketing Plan of 300 medium cost apartment should be cost, execution of action plans and practicality. The plan has to be easily understood and simple in execution. It is probably the implementation that is more important as the variables of the marketing mix are limited in innovation and differentiation. In such consideration, the cost factor is of paramount importance, and thus over exorbitant spending in marketing activities might not be favourable.

Ref:
Own account with reference to earlier posts.