CHAPTER 11
MARKET RESEARCH : A TOOL FOR GENERATING IDEAS
Market a public gathering held for buying and selling merchandise
Market (in real estate development) subgroup of a general population that considered to
contain potential buyers or users of a spesific type of property, the word potential includes
perspective of demographic makeup (age, income, household size, education, and so on) and
motivations of constituents.
Market research is a tool for discovering who buyers and end users are and what motivates
them to buy.
THE BASIC OF MARKETING AND MARKET RESEARCH
Market research done by collecting, organizing, and interpreting data from local, regional and
national sources to determine potential sales of a product, service, or facility. It is combine
skills in detective work, statistics, interviewing, and data organization to create an end
product that is timely, informative, and concise. Common area of research can take the form
of demographic summaries, analysis of current state of the geographic area and comparable
projects, and use statistical method to make a projection about the future.
Research aspect of the development :
Due intelegent conducted before buying real estate property
Entitlements to understand the most desirable zoning and development conditions
Programming to determine what should be built and when, thatis to define the
sequence, product mix, and amenities
Project positioning informs the market niche for the project
Sales to determine the most effective marketing and sales programs.
Major and minor forces that influent society
1. Macrolevel (technology, tastes, demographics, sosio cultural developments, political
attitudes, legal structures, and economic trends).
2. Microlevel (potential suppliers, customers, and competitors)
Marketing intermediary function between product development and sales (not only selling
but also understood and satisfying human wants and needs)
Marketing (Philip Kotler) is a social and managerial process to obtain human wants and
needs through creating, offering, and exchanging products of value with each other
Marketing management process of planning and executing the conception, pricing,
promotion, and distribution of goods, services, and ideas to create exchanges with target
groups that satisfy customers and organization goals.
Purpose of market research :
1. Product positioning
2. Product type and characteristic
3. Amenities
4. Product mix
5. Price point
6. Absorbtion rates
TEN CRITICAL QUESTIONS THAT MARKET RESEARCH MUST ANSWER
1. What are the trends in this type of development?
2. What is the current market?
3. What is the depth of this market?
4. What are the markets preceived value?
5. What opportunities and challenges does to current market profile present?
6. How do you determine and gain an understanding of your target market?
7. What are market position, development programs, price points, absorbtion, and lesson
learned for competitive projects? Who are their buyers?
8. What are market position, development programs, price points, absorbtion, and lesson
learned for comparable projects? Who are their buyers?
9. What are the opportunities and challenges presented by the competitive and
comparable projects?
10. What are conclusions can be drawn about all aspect of the projects?
So the market research must answer ; the market, positioning, the development program,
marketing strategy, opportunities between differentiation, price points, and absortion rates of
the development programs.
Workchart of market research.
ANALIZING THE DATA AND DRAWING CONCLUSIONS
Data must be carefully selected and placed in meaningful framework that links the proposed
project with the market and connects the present with the future (projection). The process of
project planning and decision making is never stop, because products, markets, the
development organization, the competition, and the environment changes continously.
THE CONECTION BETWEEN MARKET RESEARCH AND DEVELOPMENT
IDEAS
With market research applies to the development process, the process can be return to stage
one, discussion to create better development ideas. Not only a briliant ideas, the developers
also need to understand themselves, their company, the competition, the other players who
help build and finance projects, the regulatory and sosioeconomic environment, and the most
important potential clients.
ASKING THE GREAT HOW COME?
INPUT (DATA)
Macrolevel (technology,
tastes, demographics, sosio
cultural developments,
political attitudes, legal
structures, and economic
trends)
Microlevel (potential
suppliers, customers, and
competitors)
PROCESS
Data organizing and
selecting, Analizing,
Forecasting, make
decision and planning.
Answer ten critical
questions
OUTPUT
1. Product positioning
2. Product type and
characteristic
3. Amenities
4. Product mix
5. Price point
6. Absorbtion rates
Once the developer believe that they have good ideas and choises for a proposed
development, they must still ask one nagging question :
How come no other developper has stumbled across this fine opportunities? Is something
wrong with the idea? Why do we see the opportunity more clearly than others?
This is the final filter to go to the next step of development.