Real Estate Market essay
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In Australia’s housing market, consumers are influenced by many factors e.g. federal government policy and financial assistance to the first home buyers, interest rates, and the level of income. Though interest rates can vary over the term of mortgage, the price paid for the house always does not change. If house prices double, mortgage payments will also double, whatever the interest rate. Housing remains the most unaffordable in Australia, except for the single market in China (Hong Kong) (Kotkin 2010). This is because of the more restrictive land use policies introduced by the government. The report also revealed that Mildura, Launceston, Bunbury, Albury-Wondonga and Shepparton, which had the least affordable homes in the country, were all rated seriously unaffordable. This makes competition for houses to be high in these areas and as a result, the prices are highly increased. Marketing real estates in these areas, therefore, needs careful scrutiny of the ideas and strategies put in place to win a target market.
To be successful in markets in which there are many competitors requires a well-developed marketing strategy. The strategy should take into account the portfolio of products, customers and the expected moves of competitors. A good marketing strategy is one that is absolutely essential to the success of a business. In fact, the ability to properly market a product or service is actually more important than the product itself. The marketing function in any business therefore requires creativity and absolute judgment. Many businesses find it difficult to know whether their marketing strategies are working or not. This is because they do not have better means of evaluating their businesses. The following are some of the ways of evaluating a business’s marketing strategy:
- The sales should be going up. But one has to consider what you measure because some firms have a longer sales cycle than others.
- Ask clients: Always check to find out where the clients heard the business. This will help give have an insight into how clients select products and services.
- Check if advertising produces direct responses. Always use the right media that targets your intended clients.
- Check if networking activities in place create new opportunities for the business.
- Check if marketing tactics make it easier to sell services. To be successful in this, always attract qualified prospects, work on questions or concerns from prospects, and focus on clients needs.
- Check the client’s conversion rate
- Check if the plan has a positive return on investment.
The above steps are used to evaluate Century 21’s business. The business developed a marketing strategy which focuses mostly on the sellers and least on buyers. It is a good marketing approach. Broom said that they spend 90 percent marketing towards sellers and 10 percent marketing towards buyers. This shows that they were mainly concerned by their larger market. Figure 1 below outlines Century 21 Westside’s business focus.
This choice helps them to have a ready stock for buyers as well as make their listings (Reality Biz Coach 2008). The listings help them in the following ways:
- Easy leverage: They can work with more sellers at a time than buyers. This because they target mostly sellers.
- Help them have a predictable income flow: Listings are like inventory in a store. If priced well, they sell quickly and generate good commissions to them.
- Get more loyal clients: Through listings, it is easier to get clients who commit to work with them extensively. It also helps to store clients’ contacts and evaluate them.
- Help market services: Listing helps to attract both home sellers to list their homes and buyers who are interested in purchasing, to get from the listings.
- Helps in networking: Listings help them to network with other real estate agents in the area to find a buyer or a seller. It also helps sellers to bring other interested sellers to the agents. This is referred to as referral. Referral requires a proactive approach to be taken not a passive one. It requires that a client does not assume that a satisfied client will bring a customer to him, he should ask for that referral from the client. Tell people who your ideal clients are and ask for help in finding these clients (Robertson 2011). An agent, for example, who represented a seller, should send the client a card every year reminding him that he loves referrals.
Moreover, their use of only 10 percent marketing towards leasing is appropriate because it is unlikely to find individuals to lease their residential houses. They always either buy or rent. Leasing is mostly done with businesses, which do not form part of the Century 21’s larger market target.
Their focus on geographical areas is another aspect. As we know, everyone might be a potential customer. However, marketing to everyone would be expensive and time consuming. The business, therefore, had to define their ideal customers in terms of geographical locations. The tables below show the employment profile and family characteristics in different regions chosen by the real estate company.
Their focus on postcode area 4069 is a better marketing strategy for the agents. The place has people with the highest income and houses with highest prices. The residents are university educated, have a double income and are families with children. It is also composed of entrepreneurs, managers and chief executive officers. From figure 1 above, their median individual per week is above $600. This represents the highest end of income. Residents are therefore financially able to purchase homes. They have the biggest permanent assets. The challenge comes in helping them to procure and sell those their massive assets. Some of the challenges that are likely to be faced by the agents are. Finding a buyer to such expensive assets is not easy.
Another challenge that the agents are likely to face is shown by table 2. From the table, the total percentage of couples’ families with children is 55.0. This is a high percentage and considering that couples with families do not always like to shift from one house to another, they are most unlikely to sell their houses or buy another. This is because they normally like to settle in one place so that their children can go to schools in one place.