CONTENTS

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| CONTENTS
CHAPTER01

02

03
04
05
06
07
 CHAPTER 1

1.1 Overview
This assignment presents the study of market segmentation in the market for estate agency Malaysia.
The report is the conjunctions upon the provisions of the Valuers, Appraisers and Estate Agents Act
1981 and the Valuers, Appraisers and Estate Agents Rules 1986. A comprehensive market intelligence
and market research has to be done to be able to predict and satisfy the needs of house buyers. Greater
knowledge of real estate consumers and their behaviour will lead to better understanding and prediction
of decision-makers’ actions in the real estate market. Every product not required by everybody. Although
advertising may cost money, property developer should look at it as an investment. It will help them gain
more exposure from the public and can help increase sales. It is essential for them to determine the costs
for advertising that will generate the most profit.

The best way for a company to analyze its success is through profit maximization. Property
developers must apply different sets of marketing strategies for different target group of house-buyers to
ensure that they could successfully communicate with each specific segment separately. In view of these
statements, this assignments attempts to discuss and identify market segmentation in Psychographic,
Demographic, Geographic and Behavioral. Marketing segmentation is a marketing strategy that involves
dividing a broad target market into subsets of consumers who have common needs and application for the
relevant goods and services. One of the main reasons to use market segmentation is to gain a competitive
edge by understanding the needs of a specific customer base. Correctly using market segmentation allows
you to better know your customer base, and align your marketing efforts and messaging strategy.
Marketing advertisement are then designed and implemented to target these specific customer segments.

1.2 Objectives
1. The study’s objectives are to identify and describe market segmentation in the market

2. To identify and indicate the property advertisement falls under distinct market segmentations
group: Psychograhic, Demographic, Geographic and Behavioral.

3. To develop a profile of house purchasers based on market segmented.

4. To be able to evaluate the success of market segmentation for business

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1.3 Methodology

Daily newspaper and major magazines available in local bookstore and newsstands available
in Malaysia are source of finding information for this assignment.

CHAPTER 2
LITERATURE REVIEWS

MARKET DEFINITION, CONCEPT OF PROPERTY MARKET & MARKET

SEGMENTATION

2.1 What is Market?

A market is an aggregate of people who, as individuals or organizations, have needs for products in
a product class and who have the ability, willingness and authority to purchase such products
(conditions needed for an exchange).

2.2 Concept of Property Market

The property market is an integral part of the economy. It is involving different groups of market
participants. Generally the property market is a heterogenous, multi-commodity market, segmented
by a number of elements such as psychographic, demographic, geographic and behavioral
characteristics.

2.3 What is Market Segmentation?

A market segment is a group within a market that is clearly identifiable based on certain criteria.
There is limited interaction between the parties to other transactions, with prices and levels of
service in one segment having little relevance or impact on other segments. According to Philip
Kotler, “Market segmentation is the sub-dividing of market into homogeneous sub-sections of
customers, where any sub-section may conceivable be selected as a market target to be reached
with a distinct marketing mix”.
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Hence, the concept of market segments, which has become the integral part of modern marketing,
had been propounded by Smith in 1956. Nowadays, the market is stiff; thus market segmentation
is one of marketing imperatives in business success. After decision is made developer will
design the best advertisement of their product or service to satisfy the needs and preferences of
target consumer segments. By analysing segmented market it helps to maximise the amount of
sales and minimise the risk of oversupply and unsold property in the market. These segments
can later be used to optimize products and advertising to different customers.

At its core, market segmentation is the practice of dividing your target market into approachable
groups. Market segmentation creates subsets of a market based on Demographics, Behavioral,
Psychographic or Geographic criteria used to better understand the target audience.

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 2.4 Why Segment Your Market?

The primary reasons for carrying out market segmentation for market trend analysis are :

1. To avoid wastage of precious company resources.

2. To divide the market into various segments, or target groups.

3. To target each profitable segment in a unique way that suits that particular segment, and
provides adequate returns.

4. To avoid overlapping and redundant information to one particular segment.

5. To get maximum response and sales from each segment.

2.4 Advantages of Segmentation

The main advantage of market segmentation lies in a better understanding of the consumer
needs and behaviour so that a marketer can plan accordingly. In brief, market segmentation
helps: 1. Understand potential customers; 2. Pay proper attention to particular areas; 3.
Formulate marketing programmes; 4. Select channels of distribution; 5. Understand
competition; 6. Use marketing resources efficiently; 7. Advertise the products and launch sales
promotion programmes;and 8. Design marketing mix- product , price, place and promotion.

2.5 Flow Chart of Segmentation Process

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2.6 Criteria for Successful Segmentation
Substantiality, Identifiably, measurability, Accessibility, Responsiveness and Actionable

CHAPTER 3
DEMOGRAPHIC SEGMENTATION

3.1 Introduction

Demographic segmentation is one of the simplest and widest type of market segmentation
used. Most companies use it to get the right population in using their products.

3.2 Characteristics

Segmentation generally divides a population based on variables. Thus demographic

segmentation too has its own variables such as Age, gender, family size, income, occupation,
religion, race and nationality. Demographic segmentation can be seen applied in this
advertisement.

Project : CITY
OF ELMINA
Developer : SIME
DARBY
PROPERTY
Source : THE
STAR
MALAYSIA
Market Segmented
: Demographics
Demographics
Segmentation :
Age, Family Size,
Income, Social
Class & Life cycle

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 DEMOGRAPHIC SEGMENTATION

The property market has different price and cater

for all ages and family size. For example low cost
houses has small land and build up area, to be
compared with bungalow that has a huge and
spacious layout area – therefore big family or a
family who opted raising their kids in big-scaled
area or caring their elderly parents need a plenty
areas will choose and purchase a huge and
spacious bungalow. Thus in this case, the
segmentation is being done by Sime Darby
Property of City of Elmina on the basis of ages
(children and adults) and family size which is a
part of demography segmentation. As people age,
their needs and lifestyle changes. Sime Darby
Property has done a market intelligence and
research on this subject; they tends to focus on,
well buyers who has a nuclear family (young
home-buyers) who willing to spend money on
their kids development to ensure they are living
and flourish in. Whereas an extended families (a
big family) who needs a quality, hormonious
living environment. Similarly, Age, life
cycle stages, gender, income income level,
gender, family size, religion, race, nationality,
language can be used for market segmentation.
The word of “plenty areas” has been emphasized
in this advertisement to lure prospective buyers to
purchase this property.

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 CHAPTER 4

BEHAVIORAL SEGMENTATION

4.1 Introduction

Behavioral segmentation is defined as the process of dividing the total market into smaller homogeneous
groups based on customer buying behavior. Behavioral segmentation is done by organizations on the basis of
buying patterns of customers like usage frequency, brand loyalty, benefits needed, during any occasion.
Behavioral segmentation concepts can be used in real estate which includes purchase frequency, buying
status (potential, first time, regular, etc.) and purchase procedure (sealed bids, negotiations, etc.). By
drawing on these concepts, analysts can develop more valid and reliable predictions of market behavior
that drives the supply and demand proposition for real estate and hence its market value. Therefore
property developers need to segregate their mass market into sub markets based on the type of market
segmentation that suits your products or services to reach the right targeted audience.

4.2 Characteristics

This type of market segmentation divides the population on the basis of their behavior, usage and decision
making pattern. For example – young with career people will always prefer living in prime area which
has an access or adjacent to shopping malls, whereas a matured families prefer living in suburban which
has an options more grants in additional space. See below is an example of behavior based segmentation.

Project : CITRINE
AT THE LAKE
VIEW

Developer :
SUNWAY
ISKANDAR

Source : THE STAR

Market Segmented :
Behavioral
Segmentation

Behavioral
Segmentation :
Usage Rate, Benefits
Sought

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Based on the advertisement above, millennial are the primary market target of Sunway
Iskandar. Property developer realising there is a ready market; young professional home-
buyers juggling workplace stress with the daily routine pressures. It is now becoming trendy
hotspot for young professional entrepreneur couples to have a home and business at one place.
Benefits sought of the purchased property in this strategic location is one of the behavioural
segmentation characteristics. High-speed internet played a vital part of millennial daily life.
Thus, all these findings and research; Sunway Iskandar Sdn Bhd find the popular niche market
by creating a place with where work and life balanced and offering a panoramic view of nature
and neighbourhood country in focusing on this segmentation.

CHAPTER 5

PSYCHOGRAPHIC SEGMENTATION

5.1 Introduction

Psychographics segmentation similar and have overlap characteristics with demographic data.
While demographics generally measure an area’s population in terms of size, age, income, and
ethnicity, psychographics measure the lifestyles and purchasing behaviors of the residents.

In a psychographic profile, households in a trade area are categorized into segments. For
instance, one segment may comprise young, affluent married couples with children. This
segment lives in the suburbs and buys child-centered products. Their children participate in
karate, soccer, and other sports. Another segment also is composed of young, affluent married
couples with children. However, these families live in a rural setting and purchase camping
gear. These two segments are similar in their demographics (age and income), but very
different in psychographics (lifestyle and buying habits).

Psychographic variables are also known as IAO variables - Interests, Activities and Opinions.
Property developer needs to analyze these 3 factors primarily in order to understand the psyche
of the customers.

Knowing the demographics of your marketplace can be very helpful. However, understanding
another very important marketing principle known as “psychographics” can give you a
competitive edge especially when marketing luxury real estate

Using these factors as a base, property developer can determine how a particular group of
customers will respond to the launch of a new product. This form of segmentation should not
be confused with demographic segmentation, as demographic segmentation primarily takes
into consideration the age and the gender of the targeted customer group.

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 Project : ICON
RESIDENCE
PENANG
Developer : MAH
SING GROUP
Source : THE
STAR
Market Segmented :
Psychographic
Segmentation
Psychographic
Segmentation :
Interests, Value,
Lifestyle
Personality

5.2 Characteristics

Psychographics are comprised of the personality, values, attitudes, interests, activities and
lifestyles of your target market. Most luxury property developer are familiar with the concept
of demographics. If you were to segment the population of your marketplace into gender,
race, age, income, educational attainment, employment status you would get an objective
overview of who lives there.

Selling an exclusive luxury property is a challenge. Property developer have to be able to reach
far to find the special buyer that resonates with the location, the lifestyle and the distinctive
features For example advertisement below, marketplace is Icon Residence in Georgetown
Penang, it is the extravagant project leading developer by Mah Sing Group. Target market
high-end buyers, property developer have ads with catchy tagline “here’s to having it all”,
building brand trust, exclusive, glamorous personality and eye-catching image. The
minimalist, exclusive design of advertisement portray Icon Residence prestigious, luxurious
symbol of an unparalleled urban lifestyle.

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 CHAPTER 6

GEOGRAPHIC SEGMENTATION

6.1 Introduction

Dividing the market on the basis of geographic factors is easier. It is well known that people
with similar demographic and psychographic characteristics tend to live nearby, for example,
in suburbs, counties, shires, states, regions, countries, etc. People living within the same
geographical boundaries often exhibit similar buying patterns. Geographic segmentation is
advantageous for real estate businesses. However, the needs and preferences of all customers
of a particular geographic unit may not be the same. This is in part due to similarities in
demographic and psychographic characteristics of residents. So, geographic segmentation
works well, if used in conjunction with others. Your potential customers will have different
needs based on the geography they are located in. Businesses can segment their market
geographically when they are trying to focus on one particular area. Integrated marketing
strategies allow for very easy geographic segmentation that can be cost effective and drive
business.
Home-buyers that live in different geographic regions typically display varying needs, wants,
and cultural characteristics that can be specifically targeted for more efficient and better
marketing.

6.2 Characteristics

In the advertisement on geographic segmentation, based on property advertisement below, a

property developer Bina Puri Berhad has segmented prospects in geographically by neighbourhood,
region, density and growth population. This advertisement highlighted this project Opus@KL is the
place to envy for its convenience and its accessibility. All city pleasures at fingertips, shopping mall,
recreation, dining, chill-out and transportation. Opus @ KL may just be the answer to your dreams
with its lower price tags but still central location less than a few kilometres to the heart of the city.

Geographic segmentation is an effective methodology used by organizations with large

national or international markets to better understand the location-based attributes that
comprise a specific target market. The knowledge and consideration of the different location-
based wants and needs of these geographical segments allow the property developer to
efficiently market the right products and features to the right home-buyers.

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 Project : OPUS @
KL
Developer : BINA
PURI
Source : STAR
SUNDAY
Market Segmented
: Geographic
Segmentation
Geographic
Segmentation :
Density, Growth
and Size of
Population,
Region

CHAPTER 7

FINDINGS AND CONCLUSION

This assignments the overview for the market segmentation in real estate industry and the
characteristics what come into place. The task of market segmentation analysis is imperative
for the success of the marketing activities of every company. Based on these four market
segmentation, Demographic, Psychographic, Behavioral and Geographic; a collective groups
is separating a market into distinct groups of potential buyers who share common
characteristics and interests and who are likely to be attracted to particular properties. Market
segmentation analysis helps property developer determine what populations to target within
their trading areas, thereby laying a foundation for successful product launches through an
advertisement. Segmentation allows property developer to create best advertisement which fit
the needs of customers more efficiently. This is what market segmentation is for, which
divides the infinite pool of potential clients into smaller, better defined and more manageable
groups. The benefits of market segmentation are extensive, as are its objectives. The most
obvious benefits in market segmentation is more efficient advertising, new segment,
new focus, maximize sales and profits.

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APPENDIX A

REFERENCES

Kotler, P. & Keller, K. L. 2006, Marketing Management, 12th Edition, Prentice Hall.

Decker, R. (2006). A Growing Self-Organizing Neural Network for Lifestyle

Segmentation. Journal of Data Science, Vol 4, 147-168.

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