Marketing Plan - Strategies and Action Plans
Core purpose of a Realtor is to either match a buyer to a seller or a seller to a buyer. It is a business of match-making.
However, in modern day, this purpose is painted with the graphics of VALUE, be it a bigger PROFIT for the Seller or bigger DISCOUNT for the Buyer. Therefore, the key issue here is 'VALUE'.
VALUE can be in two basic forms - Monetary Value or Beneficial Value.
- Monetary Value - very direct and immediate - Ringgit Malaysia.
- Beneficial Value - more complex, and may not be realized immediately. These are like Investment Upsides, Convenience of Living, Ambient, Style or 'Forced Saving'.
- frequency of transaction, and
- value of transaction
MY-RealProperty is a Regional Property Realtor with the vision of Improving Living and Property Investment of Average Men on the Street. The firm's mission statement is "Property for Everyone, Everywhere".
Thus, it is a mission of the firm to realize the VALUE of property through the creation of demand for investment among the GEN Y (30-35) and follow through till their middle age (50-55) in a 20 years productive working life.
Demographic pattern of Malaysia shows the potential explosive growth of the middle age group now to the next 30 years (2010-2040). As a nation transforming from agricultural economy, Malaysia has ample supply of land. Future supplies will foster secondary subsale as people upgrade and start owning more investments in real estate. This resembles a big reservoir of supplies for the firm to match with the demand for property.
As more estate agents qualify for profession, demand of better services and government intervention will streamline agents into high-performance agents and sub-specialized agents. There will be pressure on the existing agency firms to innovate to cope with the increasing competition, and new entrance of multi-disciplinary practices. This will yield what we call "future agents".
Future Agents:
- The high-performance agents are specialized by geographical regions, whereas
- the sub-specialized agents are those with expertise in special product types.
Both types of agents will exhibit knowledge base selling and enhance investors' choice in investment and buying decisions. Estate agents who are into high-tech, high knowledge based selling will be ahead of the competition. On the other hand, new trend in the estate agency practice will incorporate ancillary services e.g. valuation, property management (collection of rentals) and handling of the strata titles property in the practice. Future multi-discipline firm may even combine various investment products like mutual fund, REIT, insurance, etc to deliver a one-stop supermarket for investors.
Owing to the complexity of the investment/property market, additional education and certification would be required to equip the future agent for this multi-discipline work. This competition will foster evolution of the agent, and well managed network, training and marketing would be key to success of a firm. Agents will work with their clients on a long term basis rather than 'once in a life time' deal currently seen.
Lastly, electronic media and ICT will have indispensable role in the success of property business. Developers would likely promote their products with the help of specialized broad based firms, saving cost from their own sales force.
Estate agency firms would likely work on a national level as investors are more fluid. Thus, knowledge and professional management is key to wider customer acceptance in line with the education level and socio-economic infrastructure of the nation. This is pertinent to the fact that repeat investors are attracted to successful and sustainable formula of a firm and its innovation on a long term. Inevitably, this is only achievable with a network of well trained agents and negotiators.
Hence, the strategies of My-RealProperty are:
1. To create sustainable network by training negotiator and junior agents in the peripheral regions of 'hot spots' where value and transaction number are high.
Action Plans: These are potential areas for future growth where sustainability is key to success. Key areas are Selangor, Johor and Penang-Perak where junior agents are to be selected in all these townships and nurture to become principal agents in the future. This strategy is to retain talents and achieve 'mass' and economics of scale. Network is key to communication and best VALUE for clients. Immediate plan is to complete the Estate Agent Examinations and guide future agents who are keen to come together with long term plans, to build a sustainable network.
2. To equip the network with value added services so as to maintain and retain potential high-performance and sub-specialized agents for a long term relationship.
Action Plans: A one-stop real estate and investment supermarket. To embark on ancillary services like conducting AGM (ICSA) for stratified properties, maintaining a good system of records for rental collection by landlords, long term follow up for clients - a data base of clients and properties. Ancillary services like providing contacts for renovation, plumbing works, etc. to clients.
3. To develop a system of ICT to communicate with GEN Y (30-35 years old) clients in long term for sustainable network of customers.
Action Plans: To deploy innovative ICT methods to maintain a group of potential clients on a long term basis for continuous value enhancement and portfolio building. Repeat sales and creation of value are key to efficiency (not to waste time on 'once a life time order'). Highly knowledgeable clients like professionals (doctors, technocrats and teachers) are key target audience. This will serve as a repository for future buyers and investors.
Market Share to achieve:
An assumption of the total number of Real Estate Agents in Malaysia in 2020 is made, and a percentage of this number is taken as market share.
Historical number 2013 - 1,797 (REA)
Current numbers 2015 - 1,862 (REA), 505 (PEA) addition of 65 REA in 2 years.
Forecast numbers 2020 (REA) - 2,407. (see table below)
Forecast numbers 2020 (PEA) - 1,100 (Doubling in 5 years)
Total workforce of REA and PEA = 3,507 (3,500).................................... (1)
However, there will be a large number of REN in the field. These numbers will maintain for a period of time as they are not interested in passing the examination, but just in for the money.
Let us estimate their number to be 10,000.
Total REA, PEA and REN = 13,500............................................................ (2)
My-RealProperty Workforce:
Historical number 2013 - 0
Current numbers 2015 - 0
Forecast numbers 2020 (REA) - 10
Forecast numbers 2020 (PEA/REN) - 40 (ratio 1:4)
Total workforce of REA and PEA = 50........................................................ (3)
Percentage of total (Aggressive) = 50/3,500 = 1.4% ...........................using (1)
Percentage of total (Conservative) = 50/13,500 = 0.37% ...................using (2)
Total Property Market Value in Malaysia:
Historial 2013 - RM152 billion
Current 2014 - RM163 billion
Forecast 2020 - RM208 billion
Forecast 2020 - 50% Real Estate Agent - RM104 billion (RM100 billion round-down)
Assumption 1. Market Share (Aggressive)
Total Workforce percentage of 1.4% (refer 4 above) should have a market share of:
RM100 billion x 1.4% = RM1.4 billion (RM1,400,000,000)
Commission payout - RM1.4 billion x 2% = RM28 million (RM560k per head).
Assumption 2. Market Share (Conservative)
Total Workforce percentage of 0.37% (refer 5 above) should have a market share of:
RM100 billion x 0.37% = RM370 million (RM370,000,000)
Commission payout - RM370 million x 2% = RM7.4 million (RM148k per head).
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Average take back commission per REA/PEA/REN is between:
RM148,000 to RM560,000 per year.
Continue to Part 7 here.
Ref:
Own account with reference to earlier posts.
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