PROPERTY MARKETING

"Marketing of Property/Real Estate" is a social and managerial process by which

individuals and groups obtain what they need and want through offering and exchanging land
and creating, offering and exchanging buildings directly and indirectly to others.

In order to understand and analyze this definition, various terms will be defined. Those terms
are: real estate market; market; needs, wants and demands; price; cost; satisfaction; value of
real estate; market value of real estate; real estate appraisal; and sale and exchange.

The Real Estate Market/ Property Market

"Market" - A market is a place where man takes part in exchange of merchandise. The term
"market" originally meant a physical place where an exchange occurs i.e., where people came
together to sell and buy things.

A virtual market has come to exist with the invention of the Internet. The Internet is the
largest marketing tool and it expends rapidly. This marketing tool is definitely the most
important one in this century. Today, it is also possible to find tens of thousands of web sites
on the Internet that offer the entire scope of property assets all around the world. There is
land for building, offices and shops for purchase or rental, luxury apartments and less
expensive ones. There are even sites where tenants seek partners to share the rent.

Market includes all potential consumers who need and want a certain product and are willing
and able to give something of equal value in return. The term "market" relates also to a group
of consumers who are interested in a specific product; i.e. those interested in land and
buildings operate in the real estate market.

Needs, Wants, and Demands

‘Need’ is a desire to have something e.g., desire to own your own home. People have a
"need" for a dwelling, and space from which they can make a living. That need is an essential
need, and is not a need created by a specific society or by marketing.

The term "demand" refers to the willingness and ability of people to purchase the good or
service in the market. The demand relationship expresses that willingness and ability for the
whole range of prices. To say that a person has a demand for a particular product is to say
that the person has money with which to buy and is willing to exchange the money for the
goods. People will not demand what they do not want or need, but a want or a need unbacked
by purchasing power is not a demand.

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Price and Cost
There is a difference among the price of a specific real estate asset, its cost, its market value,
and its worth or value, as far as the purchaser and seller are concerned.
"Price" - The price is the amount paid by the buyer to the seller for a specific asset. When
Solomon pays Abraham the agreed price of $100,000 for his apartment, this price is a fact
regardless of the market value or the value, which each party might put on it.
A price, once finalized, represents the amount a particular purchaser agrees to pay and a
particular seller agrees to accept under the circumstances surrounding their transaction.

"Cost" - The term cost is used in relation to production, i.e., the cost of a building is the
price paid to purchase the plot, to the architects who prepare the plans, to the contractor who
built the building etc.

Value of Property/Real Estate

Value is an estimate of the price that would be achieved if the property were to be sold in the
market. Any good or service is said to have value in economic terms when it possesses:
utility, scarcity, demand, and transferability
• Utility – usefulness to potential buyers; the greater its potential for use for different
purposes, the greater its utility;
• Scarcity – this does not mean that it literally has to be very scarce, merely that the supply is
limited and insufficient to meet total demand;
• Demand – this has to be effective, so that there are potential buyers who wish and are able
to purchase;
• Transferability – ownership has to be able to be transferred otherwise it cannot be sold.

Market Value of Property/Real Estate

The estimated amount for which an asset or liability should exchange on the valuation date
between a willing buyer and a willing seller in an arm’s length transaction, after proper
marketing and where the parties had each acted knowledgeably, prudently and without
compulsion.

Principles of marketing
Marketing is a social and managerial process whereby individuals and groups obtain what
they need and want through creating and exchanging products and value with others.

Other definitions
a) Marketing is a process of delivering customer satisfaction at a profit, by attracting new
customers, promising superior value and keeping current customers.
b) Marketing is the process of planning and executing the conception pricing, promotion,
and distribution of ideas, goods, and services to create exchanges that satisfy individual
(customer) and organizational objectives.

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c) Marketing is defined by the American Marketing Association as “the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large.”

If you read the definition closely, you see that there are five core concepts:
 Needs, wants, demand
Needs – States of felt deprivation, part of human makeup – Physical and social needs
Wants – The form needs take (e.g. food like hamburger) – Shaped by culture and personality
Demands– When wants are backed by buying power

 Products and services

Products – Anything that can be offered to satisfy a need or a want
– Physical products, services, experiences, persons, places, organizations, information, ideas
Example: “smoking is bad” idea can be a product, a person can be a product in an election
– Aka: satisfier, resource, marketing offer
Services – Just one kind of a product that is not physical or tangible example …..

 Value, satisfaction, quality

Value – Difference between “value gained by owning and using a product” and “cost of
obtaining the product”
Satisfaction – Perceived performance relative to expectations
Quality– Closely related to satisfaction
– Narrow definition: no defects
– Broad definition: ability to satisfy customer needs

 Exchanges, transactions, relationships

Exchange – Obtaining a desired object from someone by offering something in return
– Offerings could be money, product, service,

Transaction – A trade of values between two parties; marketing's unit of measurement!

– Monetary transactions and barter transactions

Relationship (Marketing) – Going beyond short term transactions

– Long-term relationships with valued customers, partners, etc.
– Marketing network – company and all its supporting stakeholders.

 Markets
Economist's definition – Place (virtual or physical) where buyers and sellers meet
Marketer's definition – The set of actual and potential buyers of a producte, the sellers of
a product are labeled as the “industry”.
Industry, marketer's definition – The sellers of a product

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 Property Market Research
Market research is the systematic and objective identification, collection, analysis and
reporting of information for the purpose of assisting organizations in decisions relating to the
understanding of the behaviors and attitudes of people and their organizations, the ultimate
aim being the development and implementation of solutions to problems or opportunities.

Marketing research is the function that links the consumer, customer, and public to the
marketer through information—information used to identify and define marketing
opportunities and problems; generate, refine, and evaluate marketing actions; monitor
marketing performance; and improve understanding of marketing as a process.

Marketing research specifies the information required to address these issues, designs the
method for collecting information, manages and implements the data collection process,
analyzes the results, and communicates the findings and their implications

Market research is the preparation, gathering, sorting and analyzing of data relevant to
marketing or campaign decision making. The role of market research is to enable
organizations align themselves towards:
(1) their customers; in the narrow context of consumers and in the wider context of the
general public
(2) their organizational goals, which will reflect government policy and vary across
individual Economies
(3) changing market conditions
The role of market research

The descriptive function of market research is the most important. It can inform the agency
about the level of awareness of current campaigns, and equally measure levels of customer
satisfaction with the agency.

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Market research has diagnostic ability, wherein the data is analyzed and behaviors and
attitudes explained. It can also be used to predict evolving trends, especially where studies
are conducted over time.

Markets research is a proactive tool that allows organizations to adapt their marketing mix to
changes in the environment.

What Marketing Research Does

 Links the customer to the organization
 Identifies market opportunities, problems and issues
 Generates, refines and evaluates actions
 Specifies the information needed
 Designs the method for collecting information
 Manages the data collection process
 Analyzes the results
 Communicates findings and recommendations

Whether to conduct a research study

No organization should commence a research study before assessing the value of such work
in relation to the expense. Hence, the very first task is to assess whether to conduct market
research at all. There are several situations where it may be best not to proceed:

(1) Limited financial resources. This is a highly relevant issue for all Economies, but
particularly so for Developing Economies which will have many deserving and competing
priorities for available resources. There are two principle situations in which a lack of
funding should prevent marketing research:

(a) When the organization lacks the funds to do the research properly. If a project requires a
sample of 500 respondents but the budget allows for only 100 interviews, the quality of the
findings will be undermined.

(b) When funds are available to do the research but are insufficient to implement any
recommendations from the findings of the research. A public awareness study which aims to

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provide insights into the best strategy is pointless if funds are not available for the subsequent
advertising or Public Relations campaign.

(2) Precise objectives have not been formulated. Research should not be undertaken until
objectives are specified and agreed by senior management. Preliminary or exploratory studies
can be used to better understand the nature of the problem and how best to gather the data
required for intelligent analysis.

(3) The costs of conducting research outweigh the benefits. This may be a complex
assessment relating to internal objectives and attendant metrics. Obviously, the project has to
be designed so that the findings are useful.

(4) Inappropriate timing. If, for example, the readiness of the public or enterprises for a
change in policy is to be measured in order to devise appropriate education programs, the
research has to be finalized in a timely fashion.