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Strategies to Market Commercial Properties. Lesson 3. Marketing Principles. What is Marketing?. Definition: A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
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What is Marketing? Definition: • A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others
Marketing as a Management Function • Marketing is a part of four key management functions: • Marketing • Production • Finance • Human Resource
Goals of Marketing The four goals of a marketing system: • Maximise consumption • Maximise consumer satisfaction • Maximise choice • Maximise life quality
The New Marketing Paradigm Old View of Marketing: Making a Sale – “Telling & Selling” New View of Marketing: Satisfying Customer Needs
The Strategic 3Cs Concept 3CsKey Objectives • Customers To satisfy the needs, wants and expectations of target customers • Competition To outperform competition • Company To ensure corporate health and profit
Production Orientation • Assumes the availability of production capacity creates a decisive competitive edge and that production is the bottleneck • Found in the complete absence of competition. For example at the end of WWII, when virtually everything had been destroyed and reconstruction was just getting underway. Anyone who could produce found purchasers, as the market was drastically under-supplied.
Production Orientation • Symptoms of production orientation include, disregarding the customer’s wishes, the arrogance of the monopolist, pronounced hierarchies, a tendency towards bureaucracy, and an inclination amongst staff to cultivate personal interests if there is a lack of control. • Example of production orientation include the ferry service of an island which receives a lot of visitors in summer but can only be reached by one shipping line. Centrally controlled economies are production oriented in principle. • Production orientation will cause a firm to fail when competition emerges and the firm cannot radically reorganize itself very quickly.
Product Orientation • If competition develops in a production-oriented economy, as in many economies after WWII, then a product orientation will tend to emerge. • As the supply situation is still not adequate, good, affordable products are much in demand. Customers are quite prepared to seek out and tolerate waiting times to obtain the product. • Assumes that the availability of good products creates a decisive edge in competition. The obstacle to corporate success is therefore product development.
Product Orientation • A product orientation focuses on the superiority of the product, not the cost, and the quality of the product, not the volume. • Symptom of product orientation such as a pronounced technical culture in the firm, where managers in R&D strive to extend scientific boundaries and lay claim to high status in the firm. • Long delivery times are seen as an indication of superiority. But a product orientation can sink a firm, if competitors with an aggressive pricing policy imitate or launch similar products on the market, and the supplier is not able to keep the imitators at bay by means of continuous product improvement.
Sales Orientation • When supply improves such that several products are available that can satisfy customers, competition intensifies and a stronger orientation towards selling will develop. • The reason for this is that buyers will tend to prefer suppliers who make purchasing easier, cheaper, and more agreeable for them compared to others offering similar products. • A sales orientation is one in which management assumes that the availability of a good sales team and low prices create a decisive edge in competition. Sales is thus the area restricting the success of suppliers.
Sales Orientation • The reason for this situation emerging in Germany was that production plants had been built, and development teams had produced several new products which were available on the market. However, there was a lack of sufficiently experienced and motivated sales teams, so that the best and most successful suppliers were those mastering production, product development, and sales best. • The attributes of a sales orientation are stocks of finished products, the aggressive use of instruments of “hard selling”—the deployment of sales people and trade fairs, and the greater use of advertising, pricing, and credit policies.
Sales Orientation • A firm can fail when pursuing a sales orientation because the means used are expensive and their effect quickly evaporates in a competitive world. • Production, product, and sales orientations constitute orientations to the functions of a supplier (what we call a supplier orientation).
Customer Orientation • A customer orientation emerged in America earlier than elsewhere. The reason for this lies in the lead time which the US markets had in attaining maturity, i.e., fully mastering the supply of goods to purchasers. • Symptoms of “affluence” began to appear • Success in competition could no longer be achieved through production, product, and sales orientations. • Customer orientation represents a complete switch from a focus on the solutions of the supplier’s problems in terms of functional bottlenecks to the one that focuses on the customer.
Customer Orientation • Assumes that a knowledge of the customer’s requirements and a coordinated marketing effort to manage and meet the customers’ expectations generate a decisive edge in competition. • The obstacle to increasing success is the knowledge of customer requirements and the ability to gear the offer to the requirements of the customer. • This orientation constitutes the shift to a modern understanding of marketing • The core of the marketing concept is a radical shift from a production, product, and sales orientation to an approach to business planning that starts with the customer.
Market Orientation • As competition further intensified, an additional dimension of market orientation was added to the way firms oriented themselves to the market, i.e., a simultaneous orientation to customers and competition. • Whereas, it may have been sufficient to pursue a policy of customer orientation to gain a lead, it is now the relative position of the supplier compared with its competitors that is critical. • One result of increased competitor and customer orientation is the spreading culture of benchmarking, which is the systematic comparison with the best in the sector and the best in a particular function (i.e. best practice).
Marketing Mix • The marketing mix developed by E. Jerome McCarthy consists of 4Ps – Product, Price, Place and Promotion – all of which influence buyer’s decision and responses • Each Ps relates to and is dependent on every other Ps • The Ps are controllable variables that a company may use in mapping a successful marketing strategy
Marketing Process • Geographic • Demographic • Psychographic • Behavioural Market Segmentation Research Market Targeting Market Positioning • Product • Price • Place • Promotion Marketing Mix
Types of Commercial Properties (Strata Titled / Non-Strata Titled) • Commercial Properties • Office • Retail • Shophouse • Mixed developments - commercial & residential buildings e.g. Residential with commercial use on the 1st storey only
Categories of Office Buildings URA REALIS Data Dictionary • Category 1 Office Buildings: Category 1 office buildings are defined as those located in core business areas in Downtown Core and Orchard Planning Area which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area. • Category 2 Office Buildings: These are the remaining office buildings which are not included in Category 1 office buildings.
Categories of Office Buildings Industry Standards 1) Location Located in CBD and other locations outside CBD including Marina Centre, HarbourFront, Alexandra Road, Beach Road, Bouna Vista, Jurong East and the new Paya Lebar commercial district. 2) The Building The height of a building is one way to determine a Grade A office building. These buildings are usually easily visible, new constructed and ecstatically appeal with modern glass curtain walls façade. 3) Building Lobby Sheltered drop off area, full glass doors, premium floor to ceiling height, marble floors and walls, concierge or security counter and building access control security system, etc. 4) Tenant Mix MNCs and companies established in their industry as a major player
Categories of Office Buildings Industry Standards 5) Office Space Floor plates of 10,000 square feet or more, raised floor system to accommodate the underfloor trunking and cable system, large glass windows that let in plenty of natural light and offer great views of the surroundings, ceilings with at least 2.8 meters between floor and suspended ceiling and column free 6) In-House Amenities Covered car-parking facility, Conference & Meeting Facilities, In-House Food Court, Fitness Centre, Outdoor Space, Childcare Centre, Shower Facility ad Bicycle Parking Facility 7) Environmental Friendly Sustainable design and construction - Greenmark certified by the Singapore Building & Construction Authority.
Offices in Industrial Buildings • Industrial buildings are categorized as • Business 1 (B1) - For industries that do not require more than 50m nuisance buffers as classified by National Environment Agency (NEA) • Business 2 (B2) - For industries that require nuisance buffers of more than 50m as classified by National Environment Agency (NEA) • Business Parks - For non-pollutive industries that engage in high-technology, research and development (R&D), high value-added and knowledge-intensive activities • Typically, manufacturing, assembly, R&D, warehousing and workshops are all considered as activities to be housed within industrial building or factories.
URA Business Park Space Regulations • Tenant in all Singapore business parks are required by the Government agency JTC to comply with the 60%/40% ratio of space set out by the Urban Redevelopment Authority (URA)
Retail Space Public • HDB-Owned retail space e.g. Toa Payoh Hub • HDB shop units • Properties owned by government agencies Private • REIT-owned e.g. Plaza Singapura • Property-fund-owned e.g. Liang Court • Developer-owned e.g. United Square • Strata-titled Retail Space e.g. Thomson Plaza
Retail Space International Council of Shopping Centers Classification of Shopping Centers
Retail Space International Council of Shopping Centers Classification of Shopping Centers in Singapore
Marketing Commercial Properties Office • Location • Accessibility • Neighborhood • Ground floor lobby (frontage) • Floor plate – space efficiency • Specifications • Vertical transportation • Car parks • Air-conditioning • Floor level
Marketing Commercial Properties Retail • Location • Location w/in location • Anchor tenants • Vertical transportation • Trade mix • Parking facilities • Load / unloading facilities
Location Assessment • The appropriateness of a specific site is based upon the retailer’s strategy (retail formats, merchandise, pricing strategy, etc.) and is influenced by a substantial number of factors that need to be investigated.
Marketing Commercial Properties Childcare Centres / Commercial Schools Examples • URA Change-of-use lodgement • Fire Safety Bureau (FSB) application • Licensing requirement • Register with the Council for Private Education Singapore (CPE) under the mandatory Enhanced Registration Framework (applicable for commercial schools)
Factors Affecting the Pricing of Commercial Property • Location • Age of property • Tenure • Size • Condition • Accessibility
