Topic 1 - Develop Marketing Plan for Property
CPPDSM4013 Market property for lease
The property industry, like all businesses, continues to go through transformation and development, placing a greater onus on businesses to determine and then satisfy the needs of customers. With greater levels of competition the ability to distinguish or create distinction between an organization and its competitors is also becoming increasingly important. As a result, the marketing concept has become crucial to the continuing success of small and large businesses alike. Today’s successful businesses are customer focused and often create competitive advantage through superior value and excellence in customer service.This topic will develop and identify marketing strategies that can be used for the rental of a property and assist in preparing a marketing plan for properties. As a property manager, the successful marketing of your organization and your products and services becomes an integral part of your job.
A basic premise of marketing is to understand customer profile. By this we mean that you understand the crucial make-up of your potential tenants. If you know your tenant you will be able to develop a far more effective marketing plan which will target the desired market much more efficiently in terms of dollars and effectiveness.
When marketing you may assume that every person on earth is a potential customer. However, it is very difficult and expensive to get a message to every person on this earth. So in this scenario, let’s assume that every person in Australia is a potential tenant. You have limited your potential market from about 6 billion to just 23 million but the likelihood of finding a buyer amongst the 23 million is much greater.
However, getting to the entire 23 million is also very expensive, so we attempt to limit our potential market further. We do this by target marketing. You can target a market by analysing your potential tenants in terms of the following:
> Geographical location
> Socio-economic background
> Fashions and trends
> Family grouping &
> Cultural background
The more narrow the target, the more effective will be your marketing because all your dollars will be aimed at a specific group.
Examples of this type of marketing could include aiming a unit dwelling at younger people; marketing a large house to families; marketing an expensive house to the wealthy and so on.
There are many different ways of marketing a rental property. Every agency has its own method. Franchises all claim that their method is the ‘best’. Even independent agencies claim when talking to a potential owner that their methodology is better than any other agents in that town. Rather than list all the benefits of each method, below we will merely list the methods and leave it up to the individual agency to determine the best method:
> Place advertisement in local paper or magazine
> Advertise using the electronic media (radio/TV)
> Advertise using ‘letter-box drops’
> Expression of interest
> Place the advertisement in your window
> Advertise in out of town media
> Advertise to your ‘client list’
The above strategies should be discussed with the vendor prior to any marketing taking place. When discussing the above, the advantages and disadvantages of each should be discussed as well as a time frame for when each will be carried out.
Costs of marketing activities
When going through the various marketing activities, one of the main decision factors will be cost. Today, most agencies charge a marketing fee to the owner. The owner will want to get the best result for each dollar amount spent. If the agency is going to issue a marketing charge then the owner must be given a detail account as to where and why this money is being spent.
Some forms of advertising can be very cheap such as a photo in the window. Others can be very expensive. Television, radio and glossy magazines tend to be the dearest and these are not appropriate marketing media for rental properties. The local newspaper may be the most effective form of marketing for rental properties.When listing the property full costs and benefits must be given to the owner. In this way the owner can decide if they wish to proceed with the listing in the way you have outlined. The owner may also wish to make recommendations as to how the property should be marketed. This is fine, as long as they are contributing to the marketing costs.
The marketing plan is the central planning tool around which all marketing strategy is developed, and it is therefore essential to the understanding of the marketing process. Let us look at the marketing plan in terms of compiling a marketing plan for different property types.
The typical marketing plan consists of the following elements:
- Analysis of the firm’s external environment- e.g. interest rates, demographics, changes in council planning etc.
- Analysis of the specific market –e.g. is demand high or low, is the property in a sought after area.
- Analysis of the company- e.g. is the company well positioned to deal with the property e.g. large commercial development site, strata management. Does the company have the expertise and the resources?
- Analysis of the competitive situation-e.g. how many similar properties are for rent? How is our property positioned compared to other similar properties.
The idea of marketing objectives is to develop clearly expressed statements of what the plan is to achieve. For most residential properties the objective is to rent the property at the rent desired by the owner in the most efficient and effective manner. In order to be worthwhile, objectives should be specific, measurable and realistic.
Identify groups of people or organisations whom you wish to direct your marketing efforts. Whether it be the young renters, older family style renting or maybe commercial or industrial renters, it is crucial that the target market be identified. By doing so your efforts will be conducted in a more efficient and effective manner with minimal wastage of resources.
Positioning can be defined as how we wish our product/property to be perceived by our consumers. What image do we want our property to have, how do we want our tenants to perceive the property? Consider the many catchphrases used by agents. All of these phrases conjure a certain image and attract a certain clientele.
Typically in the marketing of an organisations products or services the marketing mix is the combination of the four major elements that make up a company’s tactical marketing program, that is, product, price, place (distribution) and promotion. In terms of property we must select the correct property for the correct target market and marketing objective, we must consider how we will present the property, which features we will highlight , our pricing determination and method of pricing, how and where we will promote the property, which promotional tools we will use etc.
Budgets and controls
The success or failure of your marketing efforts must be measured and evaluated. The amount of resources both time and money spent on the rental of a property are seen as an investment by the organisation for which it wants maximum or targeted returns. These results should be checked at timely intervals.
Once you have developed your marketing plan along with your full costings and recommendations, these should be presented to the owner. This presentation should be done professionally: the pages could be bound and include coloured photos. Examples of the type of advertising you are talking about should also be included. Some agents just give a black and white summary of what they are going to do. The owner has the right to accept or reject what you have put together. The owner also has the right to make recommendations. You have the right to accept or reject these.
Once you are in agreement, the plan and all associated documentation should be signed off by the owner. In this way, you have a record that the owner has accepted your recommendations and can’t come back at you later saying that he/she did not know that a certain thing was or was not going to occur.
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