Review of marketing strategy for Ray white
The improving financial conditions, economic and steady population growth are driving the development of property investment in five years, which make it an opportunity for Ray White to expand the market. It targets the markets with higher income level and higher requirement of the living environment. After targeting the market, Ray White positions it to provide high-end product and services to the customers. It provides modern and comfortable services. And it set the price a little higher than the average level in the market. It can improve its market share by providing more augmented services
Table of Contents
In different market, the marketing strategies are different. This repart will choose Ray White as the objective. It is aimed to review the appropriateness of its current product for a target segment.
Ray White Real Estate Company is one of the largest real estate agencies in the Australia. The real estate industry is growing fast nowadays. However, there are a lot of market uncertainties as well.
The real estate industry in Australia will be discussed in this repart. Following this, it will make a detailed description of the product Ray White offer. Then, it will analyse and discuss the defining characteristics of the target segment.
The STP theary is widely used by the marketers when analysing the market (Iwahashi, 2013). This repart will analyse whether the product Ray White offer will satisfy the demand and need of its target market basing on the external and internal environment it face.
The limitation of this repart is that the information used are from the database, textbook and Internet. And it is lack of field investigation.
It is assumed that there is not large change in the real estate service industry. And the characteristic of the market is sustainable for a long time.
The marketing strategies are set up basing the internal and external environment of the company. Real estate industry is a special industry when compared with other consuming industries. The demand is a obvious factor. Firstly, the demand in different districts and areas is different. In different cities, the demand is of great difference. On the other, the demand in different area in the same city is not alike. Basing on the income level of the customers, the demand can be divided into three parts, and they are high-price, middle-price and low-price house (Sotkiewicz & Vignolo, 2006).
Nowadays, there is a growing trend of the real estate market in Australia. For the economical factor, the GDP has maintained steady growth these years. On the other hand, there is no inflationary pressure in the country (Miraldo, 2009). The unemployment rate is 5.1%. It can be seen that there is a decreasing trend of the unemployment rate. The better economic environment is one of the reasons why there is a growing trend of the real estate market. Secondly, the population growth rate of Australia is over 2 percent. The population growth rate of some big cities such as Sydney and Melbourne is far higher than 2 percent. In this term, it promotes the housing demand. On the other hand, the policies and environment in Australia has attracted more and more immigrants, which will boost the development of the real estate industry. For the social factors, the customers have a great demand of good-living houses. They pay much attention to the convenience. For the technological factor, the technological factors, the internet is more and more important in marketing. More and more consumers get to know more information through the internet.
In 2013, the revenue of real estate service industry was about $9.4 bn. And the profit was about $ 1.1 bn. The annual growth reached about 0.9 percent. It is expected that the improving financial conditions, economic and steady population growth will drive the development of property investment in five years. Therefore, the revenue of this industry is forecasted to increase 2.3 percent over the five years (IBIS World Industry repart, 2014).
The product can be segmented into several parts, and they are property sales, property management, property leasing and other services (Pantano, 2014). Property sales accounts for more than a half share. And more and more real estate agencies are participating in facilities management so as to gain more management fees. It also can be segmented by residential and non-residential part (Penrose, 2008).
There are two largest competitors in this industry, and they are Ray White and LJ.Hooker Limited. Ray White accounts for about 5.6 percent of the market share. And LJ.Hooker accounts for about 6.2 percent. Other competitors account for the residual part. First National Real Estate, LPI holdings, Raine & Horne, Colllers International Holdings CBRE accounts for 3.5%, 3.2 %, 3.0%, 2.3% and 2.1% respectively. LJ. Hooker has a network of more than 700 agents and franchises. And it manages about 100000 properties (IBIS World Industry repart, 2014).
The core product of Ray White is its property sales in the retail market. Selling residential subdivision is its core product. The detached houses and condominiums are included in the residential property. The middle-high rise buildings and villa are two major kinds of product Ray White offers. They focus on the high-end houses. When planning, Ray White makes the houses more modern. For the design of the building, the design should be novel and the colour should be coordinate. The design of building and houses are modern so as to attract more customers.
Ray White is concentrated in a range of services such as property sales, tenant representation, corporate facilities management, agency/ property leasing, real estate investment management commercial servicing and mortgage origination and so on. They provide services to the investors and lenders in office, industrial, retail market. It provides buildings in the business and retail market.
Insurance is important for most customers. Ray White makes it convenient for its customers. Ray White insurance offers contents and home insurance to the customers. On the other hand, consulting service is another important part for Ray White. It can provide more value to the customers.
Ray White offers mortgages mainly through two brands. And they are Loan Market and Ray White Financial Services. These two brands are writing over $ 3.5 billion in the home loans market. For the houses it provides, it mainly focuses on high-end brand. The image it provides to the customers is high-end. It transfers to the customers the information that the customers can get more value with a certain amount of money.
The design of building and houses are modern so as to attract more customers. In addition, Ray White pays much attention to the artistic design.
Marketing strategy is of great importance for a company to successfully enter into the market and gain the market share. The marketers need to segment the market first. And then the suitable market is targeted. Then, it is necessary to position their product. According to the STP strategy, Ray White segment the market into several parts, and it target the market basing on its ability and resources. The market can be segmented by the factor of demographics, behaviour, geographic and so on. Ray White mainly segments the market by the product factor. People with different income level and demand will need different kind of product. The market can be segmented by the area and comfortable degree. There are mainly three parts. The first one is affordable housing. The second one is medium-level housing. The third one is high-level housing. Ray White mainly focuses on the second one. The probability that customers in this segment will buy other houses is higher than that of another market (Yan, 2011). On the other hand, the probability that customers in this segment will save enough cashes without mortgage is higher as well (Palmer, 2004). They buy the houses for their own housing but not investing. They think that if the house is good enough for them, they will get good value for money. The income level of buyers in this segment market is relatively higher.
In this market, people with higher income will choose to buy more comfortable and larger houses. They have a higher requirement of the area and comfort level. Leisure and entertainment are also important factors in the customers’ mind (Baigmohammadi, 2007). Since customers in this segment buy houses not for investment but for their own housing, they pay much attention to the comfort level of the houses. In addition, they require for a larger area and more comfortable houses. What is more, complete sport and entertainment facilities are also required by the customers in this segmented market. Multiple functions in this market are necessary for the customers. They pursue for high-grade residential quarters. In addition, the potential buyers think a high greening rate is necessary. The claim to the property management is higher. Security, clean sanitation, housing maintenance, landscaping, and some special services are also required by the potential buyers in this segmented market.
After targeting the market, Ray White positions it to provide high-end product and services to the customers. In the segment market where buyers with a higher demand of comfort level, Ray White implement the 4P strategy to satisfy the needs and wants of the potential buyers(Keller, 2006).
The service system of Ray White is complete. And the quality of the properties provided is high. The product strategy of Ray White is providing high-end housing with excellent living environment, excellent property management system. The middle-high rise buildings and villa are two major kinds of product Ray White offers. There are three main points that Ray White offers to its customers. First of all, the high-end design of building will make it the living environment more comfortable. Secondly, the services such as property management are complete so as to make it more convenient for the consumers. Thirdly, the natural environment is important for Ray White. The product Ray White offers can mainly satisfy the needs and wants of the potential buyers. In addition, Ray White pays much attention to the artistic design. The style should keep up with the trend. For the outdoor design, Ray White pays much attention to the greening rate.
For the price strategy, Ray White set the price maintain a little higher than the average level in the market. The high-end product it provides should require a higher price in the market so as to raise the revenue. The higher price set has little influence on the buyers’ decision since the income level of this market is relatively higher.
For the place strategy, Ray White set up about 1000 offices across the country so as to increase its sales volume. It has a network of more than 500 agents and franchise. The network system plays an important role in marketing (Mangram, 2012).
Ray White implements the promotion strategy to increase the sales volume. It takes advantages of the advertising mediums such as print ad on magazines, billboards and newspaper. Therefore, the information about the company can be transported through the advertising medium, which can help the potential customers have a better understanding of the brand (Sinha, 2010). On the other hand, Ray White takes advantages of outdoor advertising. It set up the large billboards in the CBD area of the cities so as to attract more customers. The billboard in the crowded area can transfer more information about the brand to the customers, which can be effective to the increase of sales volume and make more customers get to know Ray white. This measure is effective for Ray White to promote the product and raise the brand awareness. The promotion strategy can be improved through the internet so as expand the market share.
To improve the customer value, Ray White should pay attention to some augmented services such as housekeeping, ordering tickets, childcare, etc. The convenient services can attract more potential buyers. In addition, Ray White can make the design rich of artistic atmosphere. To expand the market, it can develop more housing with natural landscape. For the promotion strategy, Ray White should pay more attention to internet marketing. Nowadays, more and more customers use the Internet to get more information. Thus, Ray White should make its website service complete for the potential customers. For the place strategy, Ray White should make its sales network more perfect to manage the properties so as to expand the market share.
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