30 | BUSINESS The 55+ lifestyle WORDS |Margaret Wylde
BUSINESS Getting it right
Errors can be devastating in today’s economy, which is why you should ensure that the development and the community you create is exactly what your target market will buy. You need to know who the buyers are, what they want, how much they will pay, and what would make them choose you over the competition. You also want a base of qualifi ed prospects. Margaret Wylde explains why.
optimize your product and price, and differentiate your community from all others. A relatively small investment can
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yield: 1. Knowledge about your market. 2. Knowledge of which residential products will sell, how many should sell annually (if you have a reasonable marketing program and build what buyers want), and the price your customers will pay. 3. An optimally priced product. You can test pricing specifi c to various elements of the community and learn what your customers value enough to pay more for, and what they won’t buy despite the price. 4. The products that will sell best, at the highest price. 5. The mix of amenities that will yield the highest market share. 6. The amenities customers are willing to purchase. 7. A list of interested prospects.
A Case Study
ProMatura completed a research study for a resort destination targeting age 50+ consumers in another country. The results are not valid for other communities because the research was specifi c to this community.
The Target Market The target market sector included households headed by someone 50 to 69 with a $40,000+ annual household income who is considering buying a primary or secondary (vacation) home. The resort is approximately 1 km from the coast. The developer contemplated purchasing a beachfront area and building a beach club.
tatistically valid research can pinpoint exactly what will increase your market share,
The Types of Homes
The developer planned to build 296 residences. • 116 detached homes on 1345 m2 lots. • 168 detached homes in clusters of eight surrounding a central courtyard with a swimming pool. • 12 condominium fl ats (six per building, three down and three up.) We recommended including a semi- detached home (duplex) on the 1,345 m2 lot to learn if prospective buyers would be interested in this product.
The Amenities and Services We tested additional amenities and services the prospects might want beyond a traditional club house and pool. These included: • A beachfront beach club with a club house, small restaurant, beach tables, chairs and umbrellas, and other amenities and services.
• A public bakery, bar and grill (BBG) located at the edge of the community. • Exterior and interior home maintenance.
The Research Method The ProMatura Proof Positive Process was used and included: • Conducting a screening survey
“Asking participants how many bedrooms they want is pointless is they cannot afford the home”
to find qualified households who would consider purchasing a home in the community. • Providing the prospective buyers information about the developer, the community, location, amenities and services available in the nearby
town, home designs, fl oor plans, photographs of the site, model homes and the area; possible amenities and services, and pricing. • Conducting a conjoint analysis survey after prospective buyers viewed all the information about the community and area.
Conjoint Analysis Conjoint Analysis is a research tool that best simulates the decisions involved in purchasing a high-price, complex product. The research participants chose one, or none, of three homes they would buy (see Figure 1). The participants selected one home or none for 15 separate conjoint questions. Each description in the options of the conjoint analysis task is generated by a computer program that tracks each attribute in every option.
The research participants consider all the potential options simultaneously
Option 1
Figure 1. Sample Question in Conjoint Analysis Which of these residences would you buy? Option 2
Option 3
Detached Home, Contemporary Architecture Plan CDS1 bed,1.5 bath, 1480 SF
Exterior and interior home maintenance
Beach Club No Bakery, Bar & Grill
25% Fractional Ownership: €72,329
Monthly Homeowners Fee: €145
Duplex Home, Traditional Architecture
Plan CDM 1 bed, 1.5 bath, 640 SF Exterior home maintenance
No Beach Club Bakery, Bar & Grill 100% Ownership: €90,000
Monthly Homeowners Fee: €145
Condominium, Spanish Architecture 2 bed, 2 bath, 1175 SF
Exterior and interior home maintenance
No Beach Club Bakery, Bar & Grill 100% Ownership: €153,000
Monthly Homeowners Fee: €115
Source: ProMatura Group
www.opp.org.uk | FEBRUARY 2011
None
I would not buy any of these.
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