Magazine article Journal of Property Management

Selecting the Best Market Research

Magazine article Journal of Property Management

Selecting the Best Market Research

Article excerpt

One of the most important marketing developments in recent years was the discovery that consumers can be asked about what they want in a product, before the product is actually marketed. Unfortunately, too many managers substitute their own opinions of what customers want for actual market research.

Apartments, condominiums, and townhouses are generally designed to suit the tastes of developers, who relied on the "feel" of the project instead of the preferences of potential renters.

In the typical scenario, it is often the responsible of property managers and leasing agents to determine the primary market of renters after the fact. Without a good idea of the types of people who will find the complex attractive, a marketer will probably cast a very broad net, hoping to catch as many prospects as possible. When a prospect is caught, it will be pretty much by accident.

By contrast, when management begins by defining a target market, the entire leasing effort can be crafted to appeal specifically to that group.

Thus, an apartment building that is designed for the athletically inclined would emphasize its sports facilities, and might include illustrations showing residents in active settings. The company might even consider placing an ad in a sports-oriented media, such as after a cable workout show or in a fitness magazine.

While there are many techniques for conducting market research, two of the most useful for the real estate manager are the focus group and the research questionnaire.

Focus groups

A focus group consists of a number of people brought together in a group interview setting to focus on a specific product, organization, or service. Because the intent is to obtain personal viewpoints, the group is usually small; twelve people or fewer is optimal.

A moderator asks group participants questions about their personal preferences in housing. The members of the panel are carefully chosen so that the group's composition will have the same general demographic characteristics as the target market (age, economic status, occupations, and so forth). The participants are usually paid a small fee for attending, either in cash or a gift certificate. In addition, refreshments may be served as a means of making everyone comfortable.

The session should be held in comfortable surroundings away from the property, with seating arranged in a semicircle or horseshoe shape. The meeting may last as long as two hours, and the proceedings are often tape-recorded or videotaped. Panel members are encouraged to participate actively, but the moderator may have to intervene to ensure that no single member of the group dominates the discussion.

The moderator selected should have training in group dynamics and consumer behavior. In addition, he or she should have some knowledge of real estate and the overall purpose of the discussion. However, the moderator must be absolutely disinterested in the outcome of the discussion. Otherwise, the moderator might become an active member and influence the discussion by intruding into the proceedings, via tone of voice or body language.

In general, the moderator for a focus group should not be a property manager or anyone who is associated with the marketing or management of that particular apartment community.

The moderator of a focus group is often a professional market researcher whose responsibilities may include finding participants and developing the program. This person is usually compensated with a consulting fee. Consulting fees and participant compensation vary widely and depend on the nature of the "product" being analyzed and the qualifications of the participants.

Participants in a focus group are told very little about the subject matter they will be discussing. The selection of the panel members for an apartment marketing focus group is dependent on two things: They must have demographic characteristics similar to those of the target market, and they must have moved to an apartment building in the neighborhood of the subject property recently or have the intention to do so within a fairly short period of time. …

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