Real Estate Development Marketing

Chapter 1
INTRODUCTION

1.1 Origin of the report

This report is a partial requirement for the course EM-510: Principles of Marketing
of the EMBA program. Dr. M. A. Mannan, Professor, Department of Management
Studies, Faculty of Business Studies, University of Dhaka, assigned me to prepare
a formal report on Real Estate Development Marketing. This report is prepared to
comply with that instruction.

1.2 Objective of the study

 The overall broad objective of preparing this report is to gain idea of the
concept of Real Estate Development Marketing.
 To know about marketing Procedures of Real Estate Developers.
 Gain an Understanding of Broad sense of marketing.

 Gain an Understanding of Marketing Strategies of Real Estate Development.

1.3 Scope of the study

This report specially has given emphasizes on Real Estate Development Marketing
and also it analyze about the topic. What is Real Estate Development Marketing &
how it is conducted, Reason for Marketing, Survey was conducted and questions
were asked to Marketing manager, how they are planning and evaluating.
Conclusion drawn, which has given a real life scenario of Real Estate Development
Marketing.

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1.4 Sources and method of collecting information

The information used in writing this report has been collected from both primary
and secondary sources.

a) Primary sources:
The primary source includes Observation and asked to the Manager of Marketing
of my organization “ADC”, an architectural & engineering consultants of Real State
Developers.

b) Secondary sources:
The secondary source for this report was various web pages available in Internet,
also used various books as a theoretical source of information.

1.5 Limitations
I have faced some usual constraints during the study. These are as follows:-

1. The concept of Real Estate Development Marketing in Bangladesh is newly

accepted in some organization.
2. Sufficient supporting paper, reference books, information from online are
not satisfactory.
3. Time for preparing the report is not enough.
4. Also the Marketing Planning concept is found only in the multinational
organization.
5. At the time of survey so many organization are not so conscious or aware
or in a helping mood.

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Name of the Firm

Architects’ Design Centre (ADC)

An Architectural, Engineering Consultants & Developers.

This is the firm where I have been working since 2004 as a Project Manager.
My main responsibilities is to supervise all projects including selection of
contractor, issuing work order, maintaining program schedule & flow of materials,
quality control. Marketing is also a part of my duties.

In engineering section, I am responsible for execution of the work . In marketing,

Marketing Manager is fully responsible for marketing of real estate development.
The manager is taken all necessary steps for marketing the projects. Marketing
Manager engaged some experienced executives for proper marketing. Marketing
department helped the executives with proper suggestions & guidelines.

When I am going to prepare the term paper, I asked the Marketing Manager how
he planning & implementing the marketing strategy. The Marketing Manager gave
me the all procedures which I analyzed & discussed in this term paper.

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Chapter 2
Marketing: A Key to Long Term Success

Many companies use the term marketing interchangeably with the term sales.
Their focus is totally different in many ways. Sales are concerned with the here
and now. Marketing is aimed at the long term. Marketing is aimed at building the
company image, building the basis for sustainable competitive advantage for the
long term. The concept of marketing is to help companies to build their
sustainable competitive advantages over time so the companies will survive and
prosper. Example: In 1837, there were 18 companies that made soap and
candles. One survived: Proctor and Gamble. Why? Because they followed a course
of action that differentiated themselves from the others. They gave the company
an image of quality and an image of innovation. They developed sustainable
competitive advantages which brought the public to buy P & G products, like Ivory
Soap. Ivory Soap was a good product, but a good product without the sustained
effort of building an effective image would not/will not sell as well as one that has
the image in the market place.

Image can be made up of small things, not just large, expensive ones. Example:
One paper boy noticed that a lot of people would cross the street to purchase a

paper from him, when there were other paper vendors more conveniently located.
One day he asked one woman why she bought from him instead of the others,
and she answered, " Because you always say 'Thank you.'"

2.1 Marketing-The Long View

To build up image, reputation, a perceived value one should bring to each

transaction over time, so that it will be sustainable over time. Example: Johnson &
Johnson. A number of years ago Johnson & Johnson made a commitment to their

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market places that they would behave according to a predetermined set of values.
They codified this in their Mission Statement. When they were subjected to the
brutal attacks on their credibility with people lacing their product Tylenol with
arsenic, they acted upon those stated values, pulled all of the product off the
shelves, instituted new safety procedures and, when they reintroduced the same
product in safe packaging, the public rewarded them with confidence in the
product and reliance on the integrity of the company. Because they had built up a
long term image for reliability and quality through effective long term marketing of
those qualities, and because they reacted exactly as the public expected, with
total honesty and integrity, they got through the crisis with no long term damage,
and, essentially, an enhanced image. Had they not built this image over time
through effective marketing of their image, it well could have ruined the company.
An extreme case, but well worth considering how effective this long term, long
view process was for them.

 Knowledge of customers’ choice is a key to knowing what they will need in

the future. It will also provide with some positive publicity, and the results
should be helpful in overall marketing approach.
 knowledge of competition is also important.

2.2 Market Segmentation & Target Markets – Improves

Marketing Plan Success

Marketing plan will contain certain objectives for a certain period of performance.
A usable strategy for identifying and learning more about target customers, this
constitutes marketing plan success. This endless cycle of continual improvement
means big growth for organization. Targeting the target customers solidifies
company’s niche while making the marketing plan easier to implement.  This
entire strategy orients company towards those most likely to purchase. This will
fulfill the objectives of marketing plan and success will be onwards.

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There are three Big Reasons for market segmentation & Target markets:-

1. To target customers who will buy the product.

2. It gives direction to company’s product or service.

3. It is easier to plan an effective marketing strategy.

2.2.1 Identifying Target Customers

While a marketing plan outlines general characteristics of customer base, only by

concentrating action on target customers will achieve the greatest returns.  While
marketing plan provides guidelines for marketing, knowing who are the target
customers are helps to turn those guidelines into actionable steps relevant to
these customers needs.  Relevancy is the key.  The more the message talks to the
needs of target customers, the more likely to listen. Since target customers have
to be found, there is a simple strategy for identifying them. 

While this is a simplistic method for determining your best customers, it works
well for most companies to improve customer targeting.  The method that will
work best for organization may be more complex. 

2.2.2 Discovering Customers' Needs

To enhance marketing plan and fuel the targeting efforts, one should remember
the customers’ needs. To learn more about target customers use the three-step
extraction plan-

1. Identify –target the customer.

2. Survey – in order to target customers, company must know what this
group wants, desires, and needs to reach their own business objectives.

3. Test – putting what company has learned about its target customers into
action with marketing plan.

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Implement this three-step extraction plan repeatedly; best done quarterly if

market dynamics change frequently, but can be done as little as once a year
for more stable markets.  The key is to survey customers’ regularly,
highlighting the concerns of the target customers in implementation.  This
process gives the rich details about what market wants. So company may give
it to them.

2.3 Pricing Products

Price is an often overlooked marketing strategy, as many tend to focus on

promotions or advertising. Pricing strategies, however, can have a large impact on
sales and (more importantly) profit.

For clarification purposes, price is defined as a customer pays and/or what the end
consumer pays for a product or service. In the case of products not sold directly
to the end user, pricing is often described as “wholesale” and “retail.” When the
distribution channel is long (such as when there is a manufacturer,
broker/distributor, retailer, and end consumer), multiple mark-ups can occur
between the wholesale and the retail price.

2.3.1 Pricing Strategies

There are a variety of pricing strategies in existence. Each strategy is used in a

different set of circumstances. Some of the things to consider when choosing the
best strategy for the situation; both short term and long term sales and profit
goals; competitors’ activities; and customer lifetime value. The more popular
pricing strategies to consider are:

 Cost plus mark-up: Selling price is simply the costs plus pre-determined
profit number. This approach helps keep profitability top-of-mind, but may

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also result in prices that are out-of-line with customer expectations and
worth of product or service.
 Competitive pricing: When competitive pricing, company look at the

prices different competitors are charging and use those prices as a
benchmark when pricing for company’s own products.

 Price skimming: This technique is used when company offer a unique or

scarce product with few or no substitutes. The price is set high, resulting in
high margins for the seller. Buyers are those that are willing to pay the
price because of the product’s prestige and/or uniqueness. In the case of a
scarce but necessary product, customers pay the price because they have
no choice. Often, price skimming is a short-term strategy as competitors
enter with their own products, bringing prices down. Before considering this
technique, be aware that if customers feel company has taken advantage
of them, company will be building “bad will” for its business and
undermining the trust of customers. And this will be create a bad effect on
company’s products or services.
 Penetration pricing: This is the opposite of price skimming. Prices are set
low in an effort to gain large market share. Because the penetration price
does not cover costs, this is also a temporary strategy. For this strategy to
be profitable,customers must be willing to pay normal,higher price later on.

 Loss leader: Price one or more products below cost to attract customers.
This strategy is often implemented as part of a short-term promotion.
 Close out: This is a tactical move to clear slow-moving or excess products
out of inventory. Company sells the inventory at a steep discount to avoid
storing or discarding the product. End-of season merchandise, perishables
that are about to expire, and prior software versions or book printings are
examples of eligible closeout items.

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 Multiple unit pricing: Also called quantity discount. The customer gets a
lower price for purchasing multiple units or large quantities.
 Membership or trade discounting: Some customers (those that
company know are heavy or frequent purchasers) are given an elite status,
which gives them the privilege of a price discount on their purchases. This
elite status can be based on occupation, membership in an organization,
subscription status, or some other criteria.

 Variable pricing: With a variable pricing strategy, different customers pay

different prices. Often, this strategy is used for project work. Each project
has unique characteristics so is priced by the job.
 Versioning: This is offering similar products with different levels of
functionality. Each level is priced differently and includes a different bundle
of attributes.  Software and Web hosting companies often use this pricing
strategy. A trial or very basic version may be offered at low or no cost.
Upgraded versions are available at higher costs.

 Bundling: Several items are sold together at a price less than if they were
purchased alone. By bundling a popular item with lesser-known products,
company can increase their sales. Additionally, in the case of inventoried
items, company may be able to avoid a closeout.

2.4 Marketing Promotion, Advertising, Sales Promotion

Obviously, if people don't know about the company and the company’s
product/service, it will be most difficult to sell them anything. So company does
need to get company’s name out there and keep it in front of public. Company
may advertise in local papers, local magazines, the regional trade press or even
national trade magazines. While the traditional press in some form is an
appropriate vehicle for advertising, companies can be advertising on the internet.
But there also are a large number of no or low cost things company can do which

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will keep its name out in front of the public. Volunteer for local charities and other
activities. Send birthday and anniversary greetings to company’s customers and
prospects. Send personal notes to people who get recognition in local papers and
trade journals. Be ingenious. Watch how other similar businesses advertise, and
learn what works and what does not.

Obviously this is not a complete treatise on marketing, but it is a good selection of

ideas that can help the company to understand their customers' needs and
preferences. Included are a number of ideas which are no cost or low cost, but
which will possibly help to gain insight into ways to better approach the task of
marketing. The goal is to build company’s image so that when customers need
products or services, The company’s name are the first one they think of.
Marketing should help a company to learn the best approaches to its prospects
and could help lead to improved results for prospectus business.

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Chapter 3

Real Estate Development Marketing

3.1 Real Estate
The real estate industry is realizing the importance of branding. For the
commercial and residential high-rise sector, the marketing of buildings as
“products” that can provide “experiences” and maintain client loyalty is becoming
more important in the marketplace. To work closely with clients involved in real
estate development, to obtain financing, enhance or reposition brand or provide
marketing and sales programs to get projects off the ground.

3.2 Changes in Real Estate Markets

The real estate financing process and decision making have also been influenced
greatly by changes in the real estate markets. Shifts in the types of housing
demanded by a changing demographic structure of the population, migration
pattern shifts, and varying regional growth rates have all affected the demand for
mortgage funds.

Shifts in the types of income-producing properties being developed and equity

investors' changing attitudes toward the use of debt in the capital structure of
investments have also influenced real estate financing. New investors, such as
pension funds, real estate syndications, and foreign investors, have caused new
problems and a complex environment for decision making.

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3.3 Real Estate Development

The most typical real estate development procedure may be outlined as follows:

1. Create the development idea

2. Control the vacant site or undeveloped land

3. Complete a preliminary market feasibility study

4. Have the preliminary plans and specifications drawn

5. Obtain a mortgage financing commitment

6. Cause the final market feasibility study to be completed

7. Complete the engineering final plans and specifications

8. Estimate the final total costs, direct and indirect

9. Complete a Discounted Cash Flow analysis of inflows and outflows

10. Analyze various risks associated with the proposed development

11. Begin actual construction

12. Marketing and Selling

Each of these development steps is interrelated. While they are listed in a specific
order, these steps cannot always be treated in this exact order or in isolation. For
example, a real estate developer may already own the land, and then proceed to
determine its highest and best use.

3.3.1 Development Idea

The real estate developer must have an idea, usually based on experience in the
market place, or intuition, about a residential real estate development that he/she
believes the market demand for exceeds market supply. For example, if the

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population and number of households in a local market are growing, and the
developer believes that he has an idea for a residential subdivision with innovative
amenities and attractions, and if the developer has a strong desire for creating
that type of development, then the developer should pursue the creation of that
development. The two key factors about having an idea for a real estate
development are:

(1) Strong market demand for that type of development or a market niche, and
(2) A strong emotional and financial commitment by the developer to create that
type of residential development.

3.3.2 Purchase an Option on the Site

After the developer has a clear development idea in mind, he should review the
number of available appropriate sites in the market area. Hence, the first step in
selecting the vacant site is to define the market area. The market area could be a
city, county, or a specific neighborhood in a city or county. Obviously, the market
area should be located in a high demand area, typically indicated by a growing
population and number of households. The development example used in this
article will be a single-family residential subdivision; however, the real estate
development procedure would be similar for various types of real estate
developments.

Once the market area is clearly defined, with boundaries and limits, a simple way
to locate available potential sites is to tour the market area and review the listings
of local real estate firms. Once potential sites are located, the developer should
select the optimum site based on location, access, topography, zoning potential of
highest and best use, and available utilities. When the optimum site is selected,
the developer should purchase an option on the land, or negotiate a contract for
purchase subject to zoning, final market feasibility, and specific financing terms
and conditions. The key to negotiating an option agreement on the land is to

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minimize the cost of controlling the site during the period of preliminary market
feasibility and arranging financing and zoning.

3.3.3 Preliminary Market Feasibility Study

When the developer has executed an option agreement or a contract to purchase

the site, he/she must complete a preliminary market feasibility study. An
independent real estate expert usually completes it. The study involves the
research and analysis of demand based on population demographics and supply
based on an investigation of competing single-family residential developments in
the market area. An accurate preliminary analysis of demand is critical to the
market feasibility of any proposed development. For a proposed single-family
subdivision, the number of existing households in the market area should be
estimated and the expected or forecasted growth of the number of households
during the next five years should be estimated. This data is readily available from
local planning agencies. The data available annually from "Sales and Marketing
Management’s Survey of Current Buying Power" is categorized by states, counties,
and metropolitan areas. The reported data includes current total population and
population by age groups, the number of households, total retail sales by store
groups, total and median effective buying income by percentage of households,
and buying power index. The "Survey of Current Buying Power" also includes five-
year data projections for major urban areas by counties; this data includes
population, households, effective buying income, retail sales, and buying power
index. Household demand can be categorized by income levels, which can be used
to estimate the prices of lots and homes demanded.

In addition to the number of existing and forecasted households in the market

area, the annual income distribution within the market area per household is
important. Such information reveals the income available for housing expenses,
and hence, the likely price ranges of lots and homes in the proposed subdivision.

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In addition to estimating the demand side, the market analyst must consider the
existing and planned competition for the proposed development in the market
area. The analyst must tour the market area to inspect the competing subdivisions
in the trade area. The local planning authorities should be contacted to discover
any proposed subdivisions that have been approved for development. Then the
analyst must compare the total existing competing developments plus the
proposed subdivision developments with the forecasted demand for single-family
lots and homes within the market area. If the forecasted quantity of demand
exceeds the projected quantity supplied, the preliminary market feasibility study
would indicate potential success for the proposed development. Of course, if the
existing competing developments that are available exceed the forecasted
demand, then the developer should not pursue the development of this new
single-family subdivision.

3.3.4 Preliminary Plans and Specifications

If the market feasibility study indicates sufficient demand, the developer must
contact an engineering and/or architectural firm to draw preliminary plans and
generate specifications for the subdivision development. In the case of a single-
family residential subdivision, the plans should include the road layout, the
preliminary lot designs (including the number of lots and typical size and
frontage), the layout of electric lines (either overhead or underground), the layout
of the water lines, and the layout of any sewer and drainage systems. Typically,
the preliminary plans and specifications are sketches with preliminary cost
estimates. As a general rule of thumb, the cost of the development should be
allocated 33% for the raw land or site cost, 33% for development costs, and 34%
for profit to the developer. Although many developers use these figures as a
general rule, a discounted cash flow analysis should be completed.

When the preliminary plans and specifications are completed, the developer
should coordinate his plans with the appropriate zoning and planning authority. If

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a zoning change is needed, it should be reviewed and evaluated early in the

development process.

3.3.5 Financing Commitment

After the preliminary plans and specifications are completed, the developer may
apply for a development mortgage loan. Because of the riskiness of such loans,
the normal loan-to-value ratio may be in the range of 60-66% of the total retail
prices of the lots. The developer should shop for a development loan as he/she
would in shopping for a car or a home. He/she may contact many mortgage
lenders and actually present a loan submission to two or three lenders. The
information furnished in the loan submission should include the preliminary market
feasibility study, the preliminary plans and specifications, a description of the
proposed development, the proposed mortgage loan terms and conditions, a
financial statement, and a resume showing the developer’s experience.

Typically, the development loan provides sufficient funds to pay for the site
acquisition and the development costs. The term of the loan would normally be a
short-term loan, one to three years, depending on the absorption forecast of lot
sales. Because of the short term of the development loan, the interest rate is
usually fixed. The loan is repaid as a percentage of each lot sale, for example 50%
to 75% of each lot sale would be deducted at each lot closing to repay the
development loan as the lots are sold. The mortgage lender will require that the
development loan be repaid faster or more proportionally than 100% of the lot
sales. For example, the lender may want 100% payback within 75% or 80% of
the lot sales. This would, of course, require that the developer receive most of
his/her profit during the later stages of lot sales.

3.3.6 Final Market Feasibility Study

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Once the developer receives a mortgage loan commitment, the developer should
have the final market feasibility study completed. This study should include a
detailed analysis of the population demographics including the number of
households, income per household, typical expenditures per household, and an
estimate of housing costs by income levels per household, or housing
expenditures by income levels per household. The final market feasibility study
should describe in detail all existing and proposed, competing residential
developments in the defined market area. It should also include an informed
estimate of lot absorption and prices, or how many lots are expected to be sold
each month and the suggested prices of those lots to fit with the supply and
demand analysis.

3.3.7 Final Plans and Specifications

Concomitantly with the final market feasibility study, the developer should work
with the engineering firm to finish the final working drawings for the proposed
subdivision development. This would include final engineering drawings for the
roads, exact legal descriptions of each lot, the plating and staking of the lots, as
well as any engineering drawings regarding earth moving, and utility layouts.
These final plans and specifications should be coordinated with the construction
contractor and the appropriate utility companies. Once the final market study and
the final construction working plans and specifications are completed, the
developer can close the development loan, acquire the property, and begin
construction of the roads, utilities, and lots.

3.3.8 Cost Estimates

Cost estimates are categorized as direct and indirect costs. Direct costs are land
acquisition costs, engineering costs, construction costs, and marketing costs.
Indirect costs include professional fees for market feasibility analysis and
appraisal, legal and accounting fees, and financing costs. Based on the author’s

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development experiences, cost overruns can be disastrous to be expected profits;

hence, development costs must be estimated accurately and include a contingency
fund to pay for unexpected additional costs.

3.3.9 Discounted Cash Flow Analysis

A Discounted Cash Flow analysis should be completed to calculate the present

values of the cash outflows and the present values of the cash inflows for financial
purposes.

3.3.10 Risk Analysis

The primary risk in developing a residential subdivision is the marketing risk, or

the risk of selling lots per quarter at the average price per lot. Of course, there are
additional risks: development costs overruns, bad weather, increased interest
rates, labor strikes, and others. However, given the assumptions in the
development example, the breakeven point is relatively low at 66% of lot sales,
and the net present value is attractive.

3.3.11 Construction

All during the initial phases of the development, the developer should coordinate
with a construction contractor for the building of roads and installation of utilities.
For marketing purposes, the developer may want to build a single-family model
home and some amenities. Frequently subdivision construction is done in stages
so that finished lots may come on line for sale as quickly as possible. Also, during
construction the developer will initiate advertising and other promotion to
stimulate presale of some lots. The developer may even sell packages of lots with

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favorable financing to local homebuilders so that construction of speculative

homes in the subdivision can begin promptly.

3.3.12 Marketing

The most critical stage of development is marketing and selling of the finished
lots. Marketing includes promotion, advertising, and sales. A marketing plan must
be planned and implemented that meets the sales goals based on the absorption
and prices forecasted in the final market feasibility study. Promotion activities may
include announcements in local newspapers, radio, and television, locating
directional signs to the new subdivision, holding open houses, and creating
brochures. Advertising can be classified according to the most effective medium. It
may be specific, name, or institutional advertising. The advertising media should
be selected based the results of the market feasibility study and it may include
billboards, newspaper, magazines, radio, television, home shows, or other
appropriate media. The developer should measure advertising results to insure the
cost effectiveness of advertising expenditures. An employee sales person or a local
real estate brokerage firm can conduct the sale of lots. In either case, the sales
commissions are a marginal expense and should be considered in the financial
forecasts.

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3.4 Pricing Strategies of Real Estate Development

Marketing
The right pricing strategies are crucial for maximizing incremental profit and
absorption potential without requiring additional assets, lead times or overhead.
Instead of the overly simplistic pricing models typically used in the industry,
Taking a global view of the home purchase decision to:
Disregards cost basis and approaches from a value
proposition

Maximize profit potential

Create equitable options for the consumer

Differential strategies for base pricing vs. premium upgrades

3.5 Real Estate Development Marketing Tool

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Real Estate Development Marketing Tool consists of following these components:-

 A strong and consistent marketing message that defines the real estate
brand,
 A logo that generates recognition within marketplace.
 Marketing materials that reinforce messages and brand.
 A real estate marketing plan for working with smarter, not harder.

 3.5.1 Real Estate Brand

Real state brand focuses on the clients and highlights the competitive
advantages.
Brand Identity is a critical real estate marketing tool.

Building a brand makes it easy for people to remember.

The brand is translated into a graphic image so that it is easily remembered. 

Display it in marketing promotion.

Brand is not only a symbol- make the brand come alive with more
development
with marketing procedures.

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3.5.1.1 Bringing Real Estate Brand to Life

As the foundation of marketing strategy, branding creates a visual identity

for
company that reflects target market--it allows the company to step out of the
ordinary
and differentiate from the sea of competitors.

3.5.2 Designing a Real Estate Logo

Logos can be designed very simply, So, even if logo consists of words, make
sure

they are always shown in the same way.  The use of Images can also be effective

way to promote instant recognition.

3.6 Real Estate Development Marketing Plan

Planning process orchestrates interactive planning sessions and analyses to create

a

vision of the future and program map for attainment.

Phase I
Collect data/assess current market conditions

Analyze in detail market trends, customer demographics, underserved

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and saturated market segments and other relevant factors

Phase II
Provide insight into projected markets/competitive environment

Evaluate risks/opportunities that may impact future market conditions

Phase III
Outlines your desired positioning

Identifies obstacles and process/system changes needed

Creates action plans and timelines to achieve your goals

3.7 Real Estate Development Marketing Strategy

A solid action plan can become challenging when have to evaluate what works,

what doesn't, and what to maximize to bring the best results.  A good marketing

plan and turn it into an effective strategy it must begin with an evaluation
process.  

Creation and Implementation of Customized Marketing Plan are--

Step 1:  A good marketing strategy to understand the business, where want to

go over the next 12-18 months in getting to goals of the plan. This creates a

  CLARITY of vision of what should be done and how it should be accomplished.

Step 2:  Creating or Improving of Brand - strong at creative direction and

coming up with how to position in the marketplace based from the target

market. Depending on what determine in Step 1 will determine what brand

and how the messaging of the brand should be.

Step 3:  Carrying the Brand to all Marketing Channels.

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3.8 Researching the Market of Real Estate Development

 Social demographics
This is an important factor. Due to an increased population rate and an ageing
population, the number of single people wanting homes is rising quickly.

 Supply and demand

This is another important factor. There has been a consistent shortfall in
housing provision in countries. Recent years have seen lower interest rates and
low unemployment which have led to an increased demand which, in turn, has
seen an increase in prices. The boom of a few years ago has eased, yet despite
predictions of a housing crash, house prices have continued to rise between
5 and 10%.
 The local economy
This will determine the supply and demand.

 Target the property or development

Analyze the market- is the idea really going to fit the market? Will it suit the
locality? Or more importantly will it fit the ways in which people want or aspire
to live in that locality? The obvious fundamental principal of developing at a
property is to buy low and sell high.

 Converting a property
A relatively simple, conversion could be to take a house and turn it into flats,
however, this still involves complex budgeting and financing. A professional
developer would avoid using their own money to fund a major conversion.
This is worth remembering if it is considering investing all your own funds.
Quite often there is a large gap between the value of a house and what it
might fetch once converted to flats - but there are also a lot of costs involved,
and often a lot of pitfalls. Occasionally it may be more profitable to convert

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flats back into a single house. Planning consent will normally be required in
both scenarios.

 Demand of potential customer

Young professionals and affluent older couples without children or dependants
can like stylish, city centre apartments near the centers that they want to spend
their money. Take a look at the current fashions and consider the type of
accommodation. Will it maintain its value because of its quality and location?
However, families will wants to live in up and coming neighbourhoods where
there are good schools, good transport links, safe environments for children and
sufficient parking. They will need more space both inside and out. They will also
look for lower running costs, however, they will still want good design.

3.9 Future Marketing Strategies of Real Estate

Development
In Bangladesh, Real Estate development projects are demanding day by day.
To meet the growing demand, every company should take the perfect marketing
strategy for fulfillment of buyers satisfaction.
The internet has dramatically changed the way companies must conduct business in
order to be successful. The internet’s pervasiveness gives users access to infinite
vendors and suppliers, creating increased competition among business and the
elimination of geographical limitations for both buyers and sellers. This is particularly
true for real estate industry. This environment is a boon to those real estate
companies and agents that use effective web marketing strategies. However, this
environment is potentially devastating for those who primarily rely on traditional
methods of advertising or don’t understand that simply having a website is not the
same as having an effective web marketing strategy.

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 Real Estate Development Marketing

Chapter 4
CONCLUSION

Real estate development can be very exciting, creative, and profitable. An

experienced developer may have the opportunity to borrow all of the
development costs. However, there are real risks associated with real estate
development because risks and returns are directly related, and expected high
returns usually indicate high risks. Some common subdivision development risks
are cost overruns, bad weather, too few sales per month, lower prices, higher
marketing costs, and labor strikes. Larger developments that require large initial
development costs and longer absorption periods are considerably more risky
than smaller developments. The trick is to sell lots much faster than interest
accrues on the development mortgage loan and before economic conditions
change. Marketing strategy can show the right path which should be followed
the company to return the investment as well as the profits and the buyers also
satisfied with their requirements. Marketing is very important in every Real
Estate Developers company and they give more effort to make a proper
marketing plan and to evaluate and to accomplish the proper marketing plan
with appropriate knowledge of customer satisfaction.

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