Setting up a Real Estate Business in Washington the USA - Assignment Example

Setting up a Real Estate Business in Washington – USA New Opportunity: The property prices in USA observed steep decline during 2008 – 2009 because of economic recession. Indeed, the property sector debacle after failure of subprime mortgage scheme across United States resulted in up to 70% reduction in prices of property units that not only increased inventory at hand but also escalated the losses. Nonetheless, the improvement in US economy in 2010 and availability of relatively better employment opportunities have once again created demand of property units, thereby attracting more real estate businesses who wish to make profits in anticipation of better prices in this industry. Mission: To offer top quality real estate services (documentation, sale or purchase assistance, leasing, mortgage, rental and consultation etc.) in an ethical manner and create long-term business relationships with valued clients. Target Market: The sole proprietor has chosen to target individual investors and genuine buyers (households), which demand real estate services such as consultation, purchase assistance and documentation for acquisition, leasing, rental and mortgage of low and medium cost residential and commercial property units. Indeed, the owner will first opt to establish relationships with property investors and potential customers after which it will enter in high level property sector. Obviously, a property broker or agent does not succeed in market unless it has strong base and reputation in the marketplace. Marketing Mix: Product: The products to be offered are, of course, residential and commercial plots (including SBs - shops and buildings), apartments, flats, ready shops and leased business premises, houses, villas etc. The real estate agency will receive permission from actual sellers to offer their properties in market after which estate services will be rendered. In between, the owner of agency will also invest in some units to ensure additional income from sale – purchase of self-owned units. Pricing: The commission will be charged at the rate of 1 - 3% depending upon the nature of property, which includes its location, elevation, designing, interior, interest of buyers, facilities and living environment in surrounding areas etc. Usually, the commission rate will be higher if agent has to put extra efforts to bring interested parties on negotiation table and persuade to reach consensus. Similarly, if many buyers are available for a single property unit, the broker may persuade a specific party (that will offer higher commission rate) to reach agreement with the seller, thereby neglecting others for that unit. Place: The office will be located at a busy commercial street or residential area, so that maximum number of customers will be attracted. The office will be established at a leased shop as it is not possible for the owner of estate agency to acquire a premise after full payment. Indeed, the better the location of our office, the greater the probability that we would entice more customers. Promotion: The estate agency will use print media (Newspapers, Magazines, publications etc.), radio, and internet media (such as Face book and Twitter) for publicity and promotion of property units. Website – http://www.linksestate.com will also used for providing basic information about available units, prices, features, location of company’s office, contact numbers etc. Billboards have proven to be a very effective marketing strategy for a very long time, mostly on top of a high-rise building and/or in front of a public building with a lot of daily traffic passing by. In addition, the commission charged from parties will be no more than 1% in first 6 months to enhance clientele. After some improvement in business, the commission rates will be increased to normal level to maximize earnings. Perceived Threats: The business may observe slowdown if US economy does not recover and come out of recession at a faster rate. Indeed, if US economic managers fail to meet GDP growth, aggregate production and consumption forecasts, then new opportunities will not be created and unemployment may increase. Since, the recovery of property sector is directly related with increase in employment and GDP growth in USA, any negative elements or factors will have adverse impact on related and supporting industries. In short, the rise in inflation and unemployment followed by economic contraction will shatter consumer confidence as well as reduce their Per capita incomes. The subsequent aggregate decline in savings will adversely hit property (construction and real estate) sector. Marketing Goals: This is a 2-year plan (January 1, 2011 – December 31, 2012) 1) To sell property units to US citizens and touch annual net income of $30,000 in first year followed by the target of $40,000 – 45,000 in second year of business operations. 2) To understand the recessionary impact over USA and adopt competitive pricing strategy so that sales target could be achieved. Indeed, the company has reduced its commission rate to entice maximum customers. Marketing plan 2: Acquiring Dealership of Iphone models from Apple Incorporation and Selling through retail outlet in New York City New Opportunity: The Apple Incorporation has constantly focused on production development, innovation, differentiation and positioning. Indeed, Apple’s all newly products such as Iphone, Ipad, IPod, and other mobile, music and computer devices received greater consumer acceptance and popularity. Consumers in every geographical region have inclination to acquire Apple’s products because of quality, durability, reliability and authenticity. In other words, all distribution channel members associated with Apple also reap financial benefits as they directly contribute in sales to end-users. Considering the above, the investor has also decided to acquire Apple’s dealership for Iphone models and to market through a commercial retail outlet, which would be established at mobile market in New York City. It has been forecasted that the store will attract a large pool of buyers who demand Apple’s products from an authorized dealer so that they do not face future problems in case of any defect or technical fault. Mission: To offer Iphone 3-G and other models to potential clients who have inclination to deal directly from an authorized distributor. To focus on providing shopping experience to valued buyers; thereby building cordial relationships, maximizing satisfaction, loyalty and monetary profits in the long run. Target Market: The seller will target consumers in age bracket of 15 – 65 from middle-middle, upper-middle and elite households in New York (USA), which demand Iphone models (3G, 4 etc.) The store will target the above mentioned market segments and is quite hopeful that sales growth will be observed because consumers are inclined to Apple’s products. For instance, there is greater probability that the owner will extend portfolio and start marketing other Apple products in near future. As far as demographic features are concerned, it is worthwhile to mention that over 80% US population lives in urban areas where live is fast and people require advance mobile devices for communication and business connectivity. These have actually become the necessities having relatively inelastic demand. Hence, the demand of cellular phones and appliances is extremely higher because of better purchasing power of people in urban areas (Internet: indexmundi.com). For instance, Median household income in USA is above $76,000 per annum; hence this shows the ability of consumers to make purchase decisions (Internet: srds.com). Marketing Mix: Product: The major products are all Iphone models that will be acquired from Apple Incorporation after payment of cash or advance checks. Pricing: The distributor will initially reduce its profit margin, thereby charging relatively lower prices in first 3-4 months of business operations. The reason behind this strategy is to tempt maximum buyers towards commercial retail store of Apple’s products. It should be recalled that competition is intense in the marketplace because Apple continued its growth even during economic recession. Also, the company already has an organized distribution network that increases its sales. Place: The store will attract customers mostly from surrounding neighborhoods of New York traditional mobile market. However, there is also greater probability that the store will entice customers, from distanced hometowns and areas, who do not compromise over quality and reliability against some time in travelling and purchasing from an authorized dealer. Promotion: The advertising budget is limited; therefore, the research will use print media (Newspapers, Magazines, brochures and pamphlets.), radio, and internet media for publicity of store location and promotion of Apple Iphones. The owner will benefit from Apple’s well-established brand name and its strong informative and persuasive advertising through television. Also, company ads also provide customers information about selected dealers and selling points. Website – http://www.iphonedealer.com will also be used for providing basic information about available models, prices, features, store location, contact numbers etc. Customers may also choose and reserve models at website because of Reservation System. Billboards will be used as they have proven to be a very effective marketing strategy for a very long time, mostly on top of a high-rise building and/or in front of a public building with a lot of daily traffic passing by. Perceived Threats: The biggest external threat is economic recovery of USA. If US economy fails to recover at expected rate, the demand of Iphones may decrease. Also, the inflation has increased in last few months because of higher international oil, cotton and grain prices, which has been negatively affecting consumer segments and decreasing their real income. Marketing Goals: 1) To touch minimum daily sales of 10 – 15 units per day in first month of operation, 16 – 20 units per day in second and third months followed by minimum sales of 25 units per day from fourth month. 2) To maintain current sales level and to expand in future by increasing business portfolio. References: No author (2010). “United States Demographics Profile 2010” Indexmundi.com [Online] Available at http://www.indexmundi.com/united_states/demographics_profile.html No author (2010) “Demographics USA 2010” Srds.com [Online] Available at http://www.srds.com/mediakits/us_weekly/demographics.html Read More