Marketing Proposals for Jones Lang LaSalle - Essay Example

? Marketing Proposals for Jones Lang LaSalle no. submitted & No. of leader Table of contents Executive summary 3 An overview 4 Introduction 5 Literature Review 6 Services marketing objectives 7 7 marketing mix 7 Product 7 Price 8 Place 8 Promotion 8 Physical evidence and service scope 9 Service blue print delivery 9 People 10 Marketing plan 10 Marketing time line 11 Contingency plan 12 Conclusion 12 Annexes 14 References 17 Executive Summary In my previous study about marketing opportunities for Jones LangLaSalle (JLL), it was established that there is a growing interest of multinationals to branch out in Hong Kong. This is a marketing possibility that could position JLL as a leader in the realty services in this country. Taking this opportunity into context, a marketing strategy is proposed to offer two new properties of JLL to respond to the opportunity that is at hand. JLL must act speedily on the matter to become ahead of competitors who are also eyeing this same market. A marketing timeline of one year is proposed to implement the marketing strategies of JLL, and a service blue print is designed to assure delivery to customers. A second proposition is to establish partnership with the government in its effort to provide affordable housing to the Hong Kong locals. Tenancy management is proposed by JLL to service this area. A contingency plan is also done in case projections of rentals decline. The proposal is recommended to take advantage of marketing opportunities in this market. Marketing Proposals for Jones Lang LaSalle An overview Jones Lang LaSalle is a leading company in property and corporate facility management services operating in 13 countries abroad. The company has 200 corporate offices and operates in more than 1000 locations. In a global environment that is constantly changing, Jones Lang LaSalle hopes to deliver and create value services for its shareholders, clients and its employees (Jones LangLaSalle). There are indications of economic opportunities coming from the growing interest in corporate rentals, investments and government housing priorities in Hong Kong that is a sign of rebound of its economy. In this context, it is proposed to take this opportunity to maintain its leadership in the real estate business and strategic proposals are presented to implement this decision. In my earlier study about this company, I have found out that the corporate rentals in Hong Kong show promising opportunity and it is an area where Jones LaSalle should act speedily. Competition is putting JLL in a difficult situation as it is getting a big share of the market. Competitively, JLL is financially strong, it has expertise and capable of handling a project of this magnitude. However, there are certain areas that bother its operation such as responding to the environmental laws and regulations of the government. The immediate plan is to respond to the interests of multinationals to establish offices in Hong Kong. Second is to support the government’s housing project for the locals. JLL is managing properties that could easily be used as corporate offices and be offered to multinationals. On the housing project, partnership with government is an ideal set up to get the project off from the drawing board. Marketing Proposals for JLL 1. Introduction A marketing plan is proposed in order to take action on the opportunity to increase sales and revenue of Jones LangLaSalle. My previous study confirmed the interests of foreign companies in doing business in Hong Kong and in renting office spaces. Another business opportunity comes from Hong Kong government policy in providing affordable houses to its citizens. Taking this into account, a proposal is presented to address the opportunities present. As an evidence of foreign confidence to Hong Kong, the Hong Kong Financial Secretary, in a speech delivered at a seminar on office development, reported that the city of Victoria in Hong Kong has 6,500 foreign companies that give employment to 350,000 people (news.gov.HK 12 March 2011). He said that more than 3,600 companies have established their regional offices and headquarters signifying their preference to this country. Admittedly, he described Hong Kong’s rental rate as one of highest in the world only because of the high value attached to it. The FS reported new territory developments that include Causeway Bay, the location of JLL’s property. U.S. Department of State (15 March 2011) reports the continued bilateral agreements between United States and Hong Kong that stated there are 1,400 U.S. firms, 817 regional offices and over 60,000 Americans residing in Hong Kong. USDS figures accounts for a U.S. foreign investment in Hong Kong as of 2009 to be around $40.5 billion that makes it the principal investors in Hong Kong. Other countries are China, the British Virgin Islands, Bermuda, Japan and the Netherland. Looking at these statistics, these foreign countries are proposed to be the target markets of JLL because of their business interests in Hong Kong and that they are more likely to hold their offices here. 2. Literature review. The need for specifying marketing objectives and spelling it out in a marketing mix is basic function in marketing. Its benefits to the company have been accounted for in several studies. Riley explains that it directs the goals the company wants to be achieved in specified targets. Killmonds and Associates specify that strategic planning is always part of a marketing plan and should be done for a new business venture. Normally, it has been suggested by these group that a strategic planning be done once a year to identify the goals that should be achieved on the next fiscal year and funds will be allocated for the purpose. Robinson (2005) and Worth (2010) both suggest that there are benefits for strategic planning. More importantly, both authors draw a statement that it is a structure that guides the daily decisions in operations and everyone involved in decision making are aligned in a single direction. Ross suggests that strategic target gives focus particularly on use of resources to provide more benefits. Robin posed a fearsome comment on the disadvantage of planning because of the belief that we do not hold the future and sometimes it does not happen as anticipated. If this happens, what is the contingency plan? Is there a need for drawing an alternate plan? In case something distasteful happens with the plan, a contingency plan is designed as a fall back plan. A contingency plan according to Tatum (2003) and Power (2005) stressed importance of identifying in advance possibilities of things going wrong with the strategic plan rather than hoping that everything will go fine 2. Services marketing objectives Specifically, there are two target objectives of JLL to take advantage of the opportunities at hand. First is to concentrate on the commercial leasing of properties to attract long term relations with tenants. Target: to be able to close rental contracts of Hysan Place by 80% of available spaces by 2012 and by 90% to LHT by end of 2011. Second objective proposes the property management of the apartment buildings being constructed by the government for local residents. Target: To be able to negotiate a deal with the government tenancy management in 2011. 3. Services Marketing objectives for each of the 7 marketing mix Product   We will be concerned here with management and leasing products of JLL as this is more related to the interest of multinationals to establish their offices in Hong Kong. In global leasing, JLL has a retail portfolio of 272 million square feet of property under management and leasing that includes more than 21,000 retail locations in four continents (Jones LangLaSalle). For this year, in Hong Kong, JLL is expected to open the Hysan Place in Causeway Bay in 2012 (See Annex 1) and the LHT Tower completed in 2011. This will be the scope of concentration of strategy for 2011 to 2012. We propose to go into partnership with the government for management of its properties. Management will include one stop integrated services for clients’ needs. In the initial stage, JLL offers building and consultancy services. Next, when the building is completed, it will offer operating services, leasing and tenancy management. Details of this will be discussed and agreed upon by contracting parties. Price Developing of rental prices will depend on the prevailing market price in the area. Rental price in Causeway according to the estimate of Wong,K. (18 April 2011) is $833 per sq.ft. Causeway, as Wong said, is the second most expensive retail area in the world. Colliers International has placed office rentals in Central Hong Kong to be HK$120 per sq. ft. Jones LangSalle, in its commentary news, reported they entered an LHT contract at HK$ 1,000 per sq. ft. that means price is more than the estimate of Colliers. For purposes of strategic planning, let us hold the Hysan Place at US$833 per sq. ft, and LHT at HKD1,000 per sq. ft. Price is subject to change depending on the prevailing interest rate and demand. Wong, in a separate analysis presented a graph of demand and supply in Hong Kong (see Annex 3) showing the demand in an increasing status while the supply remains at still, thereby pushing higher cost of rents. According to Wong the economic recovery in Asia is the reason that drives demand for office space in Hong Kong. Wong said that recovery in the western countries is only below three percent while Asia is recovering at six to-eight percent. Under normal economic conditions when the price goes up, the demand goes down, but the Hong Kong situation is different. The graph shows that even if the price of rentals increases the demand for rental remains steady. Place of operations. Marketing of properties will be maintained in its present 6 offices in Hong Kong. Sales and other transactions can also be available thru JLL’s other offices worldwide. Promotion As the target customers are multi nationals, media to be used is the internet website that will contain significant information on the 2 new properties promoted. The promotion will also be carried out by other JLL offices abroad thru brochures and representations of support teams of JLL. Support to sales is advertising, trade conferences, demonstrations and field trips. There is no need for promotion with government transaction as it will be a direct negotiation or bidding. Physical evidence and service scope. The better proofs of physical evidence are the construction of Hysan Place which is due to be finished in 2012. The perspective of the hotel is a proof of the service to be provided by JLL. LHT is already completed and ready for occupancy. It could be visited for a meticulous inspection and viewed in the internet. For partnership with government, management contract will specify provisions needed to be implemented in the project. Service blueprint delivery. The service process of JLL in this project will be drawn as events transpiring between the clients and JLL. This will include following activities: Knowing the client’s requirements and knowing the company. Introduction of JLL and presenting proposals. Preparing a service agreement Holding series of meetings to discuss details of requirements Set deadlines for the project Delivery of JLL. A time frame is agreed upon by client and JLL which normally takes time or depending upon the need of client. During the whole process, client is always coordinated to produce a satisfactory result. People. JLL considers people as its best asset. JLL in Hong Kong has 3,000 work forces that can support the project (Jones LangLaSalle 19 June 2008). A continuous hiring and recruitment is proposed to support the development of the two new projects. Invitation of qualified applicants can be done thru on-line hiring, media placements and thru recommendations. Training is also recommended as they are the first line defense of the company in meeting clients. 4. Marketing plan a. JLL will go into a comprehensive marketing plan that will engage announcements in media about the plan. Use internet, print, radio and TV for announcements. Produce a lot of brochures and mail it to companies, trade associations, travel agencies and other offices of interest (See annex 2 for sample of news letter of JLL) b. Mobilize existing JLL offices worldwide to inform multinationals about JLL proposals, services and resources in Hong Kong, particularly on the two new buildings. c. It will also announce to the stockholders of the company about the plan to gain financial support. d. Present proposals to known multinationals that have shown interest in Hong Kong. e. Negotiate with the proper government authorities regarding housing projects f. Hiring, recruitment and training of personnel to support project. 5. Marketing timeline  Marketing timeline developed by askmar.com consists of marketing analysis, quantitative analysis, strategic planning, product planning, promotional communications, internal communications and sales and other support. This is used in preparing the timeline for JLL. In a span of one year, JLL should conduct the following: MARKETING TIMELINE 1.Market analysis Identifying core competencies of JLL Measure growth opportunities by identifying target customers; Identify technologies needed; looking at clients’ needs and competition 2. Quantitative analysis Looks at rental trend, sales growth and profitability 3. Strategic planning Make policies in implementation of project using input from 1 & 2 4. Product planning Defines product, presents market position and process of selling. 5. Promotions Advertising, press, speaking engagements, presentation, contract development, demonstration, and use of brochures and leaflets 6. Internal communications News letters and cost justifications (to stakeholders) 7. Sales support Trade shows and seminars, special calls to clients, corporate visit and phone calls Source “Marketing timeline” ask.mar.com Contingency Plan Planners of the company should be prepared to reply to worst scenario questions that could serve in preparing a contingency plan as Power suggested. Tatum posed that a secondary marketing plan should always be ready. In this case, JLL should be prepared to handle the situation and should include worst scenarios in their assumptions. JLL offers other services aside from multinational offices rentals. In case rentals decline, the building could be converted into other uses such as apartment rentals, condominiums and business uses of locals in Hong Kong in case rental marketing does not take place as projected due to unavoidable circumstance. A separate study should be prepared in this aspect. Conclusion The proposal of marketing the two new properties of JLL is set up to be ready for anticipated needs of foreigners in renting office spaces in Hong Kong. The Haysan Place and the LHT Towers have been identified as the JLL properties that could accommodate the foreigners’ need for office spaces because of its ideal location. The other identified need in the study is the housing priorities of the government, in which the proposal is for tenancy management and support for the housing project. Based on the projections, the rate of growth of office rentals will remain steady for the next years and that supply cannot meet demand. In this case there is a clear indication that the two buildings will meet its target quota of occupancy. Timetable for implementation is one year which is the normal process for planning to ensure that resources are available for the project. The target dates of accomplishments will have to be evaluated at the end of the year to see if they have been accomplished according to plan. In case the plan does not materialize, a contingency plan is proposed to replace the marketing plan. Annex A. Perspective of the product/services of JLL 1. Perspective of Hysan Place in Causeway Bay 2. At the foreground is a government housing project building. Source: Jones LangLaSalle Annex 2 SAMPLE Press release Redeveloped LHT Tower ready to rejoin Central’s precious stock 40% of the office floor under negotiation, occupation ready in early Q4 this year. HONG KONG, 14 July 2011 – The redeveloped LHT Tower, previously known as the Luk Hoi Tong Building, now provides an eco-friendly, boutique Grade A mixed-use commercial building, located at the heart of core Central. Given the critical undersupply the Central market is facing and the quality of the building, the development has been attracting a lot of attention. Approximately 40% of the building is currently under negotiation. Situated at 31 Queen’s Road Central and adjacent to the Central MTR station, the site was originally a mixed-use block built in 1961 called the Luk Hoi Tong Building, which used to accommodate retail and office space as well as the historical Queen’s Theatre. The redevelopment includes a Grade A office building, with 21 dedicated office floors and 6 storeys of retail. The building is anticipated to be ready for occupation by early 4Q this year. ‘With its location at the very core of Central and the superb quality of the building, LHT Tower is a very rare new supply in the district. Since the pre-launch last year, the building has received very strong leasing interest from the FIRBES industry,’ remarked Gavin Morgan, Deputy Managing Director and Head of Leasing of Jones Lang LaSalle Hong Kong. The supply of Grade A office space in core business districts is extremely limited. Central is currently experiencing a vacancy rate of just 3.7% compared to the ten-year average of 6.1%. It is expected that only 440,000 sq ft of new supply will become available in Central from now until 2015. ‘With a limited supply of expandable sites and new commercial developments in Central, redevelopment of existing old buildings into Grade A offices is one of the options to boost supply to cater the strong demand,’ said Morgan. The retail element faces both Queen’s Road Central and Theatre Lane, which benefits from excellent frontage. In an environment where international brands fight for prime retail space to capture lavish spending by tourists particularly those from mainland China, LHT Tower has attracted a lot of interest from retailers and restaurateurs given its prime location.   The building has been developed by The Luk Hoi Tong Co Ltd, a privately owned development company with an excellent track record of developing a range of commercial and residential properties. LHT Tower features 117,000 sq ft of Grade A office space with a lettable floor plate ranging from 5,364 sq ft to 5,793 sq ft with a typical efficiency rating of 90% and clear headroom of 2.85 m (9.4 ft). The building has also incorporated green elements in its design including the use of double-glazed clear insulated glass units with high performance low-E coatings for its curtain wall. LHT Tower has obtained recognition for achieving Eco Building Platinum Standard from the Hong Kong Building Environmental Assessment Method (HK-BEAM) Society under its BEAM scheme, which defines over 100 best practice criteria to address environmental issues at each stage of a building’s life cycle. Whilst LHT Tower will inject new stock to the Central market, it is unlikely to affect rentals values in the immediate future. ‘As the economy continues to bloom and the number of inbound mainland Chinese tourists keeps growing, corporates and retailers are constantly looking for space at prime locations for expansion and will continue to provide support to rental. In fact, office rental has already increased by 15% overall and 16.4% in Central in the first half of 2011. We expect this trend to continue for the rest of the year,’ concluded Morgan. Source:http://www.joneslanglasalle.com.hk/HongKong/EN-GB/Pages/NewsDetail.aspx?ItemID=22437 Annex 3 Graphing it Out Source: Wong, Kevin (15 Sept. 2010) References Colliers International 2Q 2011. The Knowledge. Research & Forecast. Hong Kong real estate market. Killmond & Associates with Janis Barlow & Associates. The strategic planning process. Viewed 6 October 20121 Jones LangLaSalle (19 June 2008). Jones LangLaSalle Management Services Limited appoints HSBC Insurance as new MPF service provider. Viewed 5 October 2011 Jones Lang La Salle (14 July 2011) News detail. Viewed 06 October 2011 http://www.joneslanglasalle.com.hk/HongKong/EN- GB/Pages/NewsDetail.aspx?ItemID=22437 Jones Lang LaSalle (n.d.) JLL> Retail market commentary. Viewed 05 October 2011 Resourrces/AP/Marketing/HongKong/JLL_HK_Retail_Market_Commentary_Q22011.pd f. Jones LangLaSalle (2011)What’s new at Jones LangLaSalle? Viewed 05 October 2011 “Marketing timeline” (n.d.) Askmar.com. Viewed 05 October 2011. http://www.askmar.com/Marketing/Marketing%20Timeline.pdf News. Gov. (12 March 2011) HK. Financial Secretary John C. Tsang. Speech by FS at Seminar on Office Development. Viewed 05 October 2011 < http://www.info.gov.hk/gia/general/201103/12/P201103120090.htm> Power, Dan. (03 October 2010) What is contingency planning? Viewed 05 October 2011 Riley, Jim (n.d.) Strategic planning – the link with marketing. Tutor2u. Viewed 05 October 2011 http://tutor2u.net/business/strategy/strategy_marketing.htm Robinson, Ron (21 November 2005) The advantages and disadvantages of strategic planning. Charity village.com. Viewed 06 October 2011 http://www.charityvillage.com/cv/research/rstrat36.html Tatum, Malcolm (2003). What is a contingency plan? Wise Geek. Viewed 05 October 2011 U.S. Department of State (15 March 2011). Background note: Hong Kong. Retrieved 06 October 2011 http://www.state.gov/r/pa/ei/bgn/2747.htm Worth, Ross. A (2010). Benefits of strategic planning. Viewed 05 October 2011 http://www.entarga.com/stratplan/plngbenefits.htm#Top Wong, Kelvin (18 April 2011) Hysan Says Causeway Bay Rents to Narrow Price Gap With Hong Kong’s Central.Bloomberg.com. Viewed 05 October 2011 http://www.bloomberg.com/news/2011-04- 18/hysan-says-causeway-bay-rents-to- narrow-price-gap-with-hong-kong-s-central.html Wong, Kelvin (15, Sept. 2010). Rents in Hong Kong’s tallest towers ICC to rise 30% in two years. Bloomberg.com.Viewed 08 October 2011 Read More