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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®








 Marketing your brokerage
Analyzing the Business Climate


  

Setting Marketing Strategies

Analyzing the Business Climate

Creating Your Market Identity

Planning Your Advertising

Coordinating Company and Salesperson Marketing

Developing Public Relations Strategies

Enhancing Customer Service 		  The 4 Ps of Marketing

E. Jerome McCarthy first coined the idea of the four Ps marketing mix, and it still remains the foundation of marketing plans today. How you mix these elements together will determine how you develop and implement your marketing plan.

1. Product. What do you want to sell? What need does it address? Yes, you sell homes, which provide shelter. But is the underlying need for a safe neighborhood where children can play, a restful retreat from stress, or a fashionable address near the hottest shops?

2. Price. What price levels of properties will you offer? Will you take a property at any price?

3. Place. What geographic areas will you serve, and where will you locate your office to serve them. The answer to this question will depend in large part on the answers to your first two questions.

4. Promotion. How will you create awareness of your company and its services? You must chose from a combination of many promotional options, including print advertising, direct mail, Web sites, and public relations.

The 4 Ps of Real Estate Marketing

Albert J. Mayer IIICRB, CRS, a speaker and consultant to real estate companies, offers advice applying the four Ps relate to marketing a real estate company.
  • Product. If your product choice is too broad, you’ll find it difficult to establish an image. As real estate broker/owner you need to determine what product niches exist in your market and which of those you want to focus on. In five years, what do you want your company to be known for? Mayer says: “You can’t sell everything or you’ll spread yourself too thinly.”

TIP:Be sure that there are enough of the product type you chose in your market to enable your business to make a profit. Set a realistic goal for the percentage of market share you can achieve in a year based on current competition. Then decide if listing and selling this number of houses will allow you to reach your income goals.
  • Price. Be sure that there’s a correlation between the product and the price you choose and there are enough properties in that category to allow you to operate a profitable business. It’s also important to determine how aggressively you will encourage sellers to price homes within your niche. Do you want to commit to obtaining the highest prices possible or price lower to encourage for turnover? Mayer says: “Choose the lower price as a way to hold down marketing costs.”

TIP:The commission percentage you decide to charge for your services and how you split commissions with your sales associates are also part of your overall pricing strategy and will affect your business profitability. Commission rates can be determined based on your business costs, what the competition charges, and what the market will bear.
  • Place. Once you’ve chosen the basic geographic area you plan to serve, find the most strategic location for your office within that area. Mayer says: “The best-placed offices enjoy both high visibility—they are easy to see—and good access—they are easy to get to.”
  • Promotion. The promotion mix you chose will depend on your advertising budget, whether your company is new in the market or has a well-established identity, and the balance between long-term and short-term promotional goals. Public relations, institutional advertising, and many forms of personal promotion are designed to create a long-term image. Vehicles such as classified advertising and listings on your Web site are intended to produce the immediate result of a listing or sale. Mayer says: Never mix image advertising with advertising designed to sell a specific product. To be effective, an ad must serve a single, clear purpose.

TIP: Base your decisions about the four Ps on a market study. Talk to consumers, identify the basic characteristics of your target market, check out your competitors, and familiarize yourself with real estate practices in your community. Look for unfulfilled wants and needs, and use the four Ps to fill them.

TIP: Remember that buyers and sellers act on emotion, not logic. Thus, the goal is to create positive feelings. Buyers and sellers don’t analyze their motivations for choosing a specific real estate company, they just know when a company is right for them.

Adapted from Paul Christian, “The Power of a Positive Image,” in Real Estate Business,Winter 1990

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