Market Segmentation for the Real Estate Business

Before you can select your target market and hence pursue with the first of the three marketing goals mentioned in my last post, you have to go through market segmentation.

The Real Estate Dictionary defines market segmentation as "The process of defining the socio-economic characteristics of the demand for a specific property or properties." For Example: Market segmentation shows that the tenants for a new garden apartment complex are likely to be young married couples with incomes between $40,000 and $60,000.

A market is driven by customer needs and since there are many different groups within a market that hold differing needs, it is very important to divide these groups into segments such that each segment can be thought of to consist of customers with similar needs and similar reaction to a marketing action.

How you build these segments is quite up to you, the prevailing marketing environment you face and the decision that you have to take. But overall, conventional marketing offers the following basis for market segmentation:

• Geographic Variables; such as region, population density and growth rate, climate etc


• Demographic Variables; such as age, income, education, gender, religion, profession, socio-economic conditions etc


• Psychographics Variables; such as personality, lifestyle, attitudes etc


• Behavioral Variables; such as benefits sought, brand loyalty, usage frequency, price sensitiveness etc

For a market segment to be viable as a target market it should be of a substantial size, should be accessible for targeted marketing communication and of course it should have similar needs and respond similarly to marketing mix strategies.

Another important point is that it's not necessary to target only one segment of the market. You can by all means cater to a number of these segments, however you'll need to have seperate marketing strategies for each of the target markets, e.g. different kind of properties for families with different income levels and different advertising messages that are customized for these segments.

A few interesting case studies for market segmentation in real estate scenario are listed here:

Single Female Homebuyers - Who, Where and What
An interesting case study that looks at one of the fastest growing segment of the home buying market.

A Growing Market Segment - New Immigrants
Not really an in-depth case study but you can see the application of market segmentation in Canadian real estate market.

Related Links:
Market Segmentation

What Are The Goals of the Marketing Process?

The marketing process, when explained in detail, will almost take the lenght of a book.

In a nutshell, it starts with the situation analysis, moves towards strategy, gets down to tactics and the last is nothing but implementation and control of the formulated startegy and tactics. That's quite a simplified view because at the moment we are more interested in the goals of this marketing process.

The marketing process is carried out to help the business:

1. Select a Target Market


2. Identify the Needs of this target market


3. Attract, Retain and Grow a profitable customer base

No matter how simple the above three goals seem, it's an irony that not many businesses follow them in a structured manner. The difference between strategically planning for these goals or running on a day-to-day ad-hoc basis can make or break your real estate business.

Why Every Real Estate Manager Should Take A Marketing Class?

There is a lot more to marketing than just advertising or sales.

Marekting is an overall process that a business must conduct in order to identify the needs of customers it will be serving, develop products or services to be offered to these customers and then attract and retain these customers for profitable transactions.

The knowledge of marketing is so common sense, we all assume to be possessing it from day one. However, it's not in the bits and pieces of marketing that we know but the real benefits lie in our ability to build a system within our business firm whereby the complete marketing process is carried out.

In a nutshell, the marketing process is greater than the sum of its parts and that's why it's very important for any business to practise it as a whole.

A course in marketing will definitely help you gain the right knowledge required to apply marketing principles for your firm's advantage. You'll be able to deliver a lot more goals in short term as well as the long term.

Short Term Forcus:

• Identify more prospects for your services
  
• Generate more leads for the properties you are managing


• Improve the conversion ratio of these leads into actual sales

Long Term Focus:

• Improve customer satisfaction and build a customer base that is more loyal to your Real Estate Agency


• Build a better image in the real estate maketplace than your competitors and stay ahead of them


• Help you establish a mechanism for sensing the market conditions, predicting its movements and delvelop a winning strategy based on this information

Revisitng Marketing ... Back To Square One

So many things have changed in my life and in the world that surrounds it, but I was glad to know that the definition of Marketing is still the same: "Satisfying Customer Needs at a Profit".

Revisiting a marketing class after such a long break is kinda eye-opening. It's so easy to learn the concepts of marketing in class and forget about them as soon as it is over. I've been running a small web hosting business since 2003 but I can hardly recall a time when I sat there infront of a PC or notebook dedicating time for a marketing plan. Forget a detailed plan, I've hardly touched the SWOT analysis or marketing models such as Ansoff or BCG matrices. All I could devote time was for things like Search Engine Optimization and web promotion that can deliver immediate results. Needles to say that now when I look back at it, I find my hosting company without a solid marketing base.

Marketing is a wonderful art or science or better yet a hybrid that when performed intelligently can build the base of a very profitable business and help you keep it growing. In the next few posts, we will have a look at basics that every business must follow.

The Basics of Property Law

Property Law can simply be defined as Law that relates to property matters. Now ain't that overly-simplistic introduction?

What's interesting to note is that contrary to the definition of property as done by ordinary men, law doesn't consider property as a thing, but the right to own and make use of that thing. So in essence, any piece of land or a building is a thing and my property is the right of ownership I have over this land or building.

Property is of movable and immovable types and Property Law mainly deals with the latter one.

At the core of Property law is the Transfer of property ACT 1882 that defines how property can be transferred from one living person to the other. Getting yourself acquainted with this Act is a must if you are serious in real estate business in Pakistan or any other country that follows the UK law.

Before we move on to the names of other Acts and Ordinances that constitute Property Law, it should be noted that a transfer of property doesnt necessarily mean that a transfer in ownership has taken place. A transfer can also mean a transfer of owners' interest in the property only. Every owner of a property also enjoys the following rights to his property:

- The right of possession
- The right of control
- The right of exclusion
- The right of enjoyment
- The right of disposition

Reference: http://realestate.about.com/od/ownershipandrights/f/bundle_of_right.htm

If the owner gets into an agreement with another party, such as a financial institute, and this agreement results in an inability for the owner to exercise his rights, a transfer has taken place. Mortgage would be a classic example.

Apart from the Transfer of Property Act, there are a number of other Acts that contain matters related to property and these are:

- The Limitation Act 1908
- The Registration Act 1908
- The Succession Act 1925

An Introduction To The World of Real Estate

"You are all here for one purpose ... Make Money"

That's how Amanullah Panjwani broke the ice in our first class of real estate management.

Honestly, his judgement is as close to truth as white is to white. No matter what be the background of any participant and whether his goals are of short term or long term nature, the purpose is to make as much money out of the knowledge learnt during this course as possible.

A brief overview of the real estate industry is what I'll try to cover in this blog post.

A real estate agency is the first thing that comes to one's mind when thinking about property business. However, it is only one of the three major ways of making money in real estate business. The other two are investment and operation. Let's have a closer look at each one of these.

Real Estate Investment means aqcuiring real estate for the purpose of either generating an income through it, mostly in the form of rental charges, or holding it to be sold later when the price increases. A lot of capital and risk is involved with investment activities, however the gains are rewarding as well.

Real Estate Operation is another division that involves lots of money. Here the real estate entrepreneur engages in buying as well as improving the condition of his real estate for significant gains.

It's the operation part of real estate that consists of activities involving the development of land and construction of buildings. New housing schemes are mostly vacant tracts that real estate developers buy in wholesale and in not-so-great condition, and invest money to improve and develop these wild pieces of land into smaller plots that can be marketed to the general public. The development of streets within the housing society in addition to securing road access and public utilities is also an important aspect of this real estate operation.

Apart from the land, real estate operation also involves construction of buildings and structures either for a one-off sale or recurring income generation purposes.

Real Estate builders and developers belong to this division of real estate business.

Real Estate Agency, last but not the least, means dealing in real estate on behalf of others. These deals could either be buying and selling of real estate between two parties as negotiated through a real estate broker of the appointed agency or these can also include rental agreements for residential or commercial properties, again assisted via the real estate broker. Apart from the brokerage activities, an agency also has to dedicate management staff towards keeping a positive balance between its income and expenses.

Setting up a real estate agency is the lowest cost option and needless to say attracts more businessmen than the other two divisions of real estate business.

Back To School - Pakistan Institute of Real Estate Management

Re-entering the classoom environment after almost eight years is not an easy task. But thanks to the aged participants of this class, I feel a lot younger.

It's interesting to note what brought me back to the classroom. Back in year 2000, I completed my Post Graduate Diploma in Marketing. Life has never been a straight line and instead of securing a formal marketing position, I ended up being a freelance Internet Marketing consultant as well as running my own Web Hosting business.

Since then, there have been various occasions that I wanted to pursue my continuing education goals. Apart from ever-hunting for the right Masters or MBA, I was always interested in taking Linux classes but never made it through.

The credit goes to Pakistan Institute of Real Estate Management for offering such a unique and useful course that an Internet savvy person like me, who rarely has anything to do with any kind of real life business let property alone, couldn't afford to miss.

But once the introductory session was over, I knew it wasn't just me. Course participants come from varying backgrounds and find it wothwhile to attend these evening classes after a tiring day at office.

The truth is that everyone comes across matters related to property at some stage in life. And even those who do not want to build a career in real estate will find this course very informative and tempting. There always was a good market for a course that could teach one about the ins and outs of matters related to property, related law and documentation etc and thumbs up to PIREM and Amanullah Panjwani, the man behind the Institute, for launching such initiative.

Who's Amanullah Panjwani?

"Trainer: Amanullah Panjwani"

That's what an advertisement for a Certificate course in Real Estate Marketing mentions in bold.

I'm not sure how well-known Mr. Panjwani is in the idustry, but for sure he has taken a great initiative towards the education of real estate. He has laid the foundation of Pakistan Institute of Real Estate Management and so far there is not other institute in the country that promotes the training and education of real estate matters.

I was also informed that the Institute had its first certificate award ceremony hosted at Muhammad Ali Jinnah University, courtesy of Dr. Abdul Wahhab. So it seems that Mr. Panjwani's efforts are now bearing fruits. I'll see if I can get hold of some pictures of this ceremony.