The value of project market analysis is dependent on the scope and quality of data collected and the analytics used to translate data into useful applications.  The project market analysis utilizes a broad array of data sources that include primary and secondary, quantitative and qualitative research methods.  The overall project market analysis should be designed to evaluate the five core components of every project: Product, Price, Position, Promotion, and People.

When evaluating the competitive price position of the project it is necessary to weight raw price data with construction, design, and location factors.  The more detailed the data the more accurate the price analysis.  The product data breakdown typically should include the interior and exterior materials by type and dimension; appliances and fixtures by brand and specifications; ceiling heights; window systems; HVAC systems; and every other project component relevant to cost and quality.  When formatted in side-by-side view, the data provide a basis to compare each building component with market comparables and lay the framework for an array of design, product, and pricing decisions.  In addition, the project comparables analysis is a valuable tool to train the sales team to effectively communicate the project’s attributes and key points of differentiation through sales scripts and presentations.

The strength of the project’s market position is determined by the overall design, price and features as well as consumer perceptions developed by the project’s brand and messaging.  Collaboration of the development team with sales and marketing early in the planning and design phase is an excellent method to help align the project’s position in the marketplace with consumer demand. The insights gained from sales and marketing will add valuable input for planning decisions; among them creating project differentiation and evaluating the likely impact of value engineering on buyer demand.  While product design and price are core structural factors in determining the project’s position in the marketplace, the marketing brand, advertising, promotions and all forms of communications shape the project’s position in the minds of consumers and real estate agents.

Advertising media selection and overall promotion of projects are going through significant transformation.  As newspapers’ revenue decline and the value of their content diminish, marketers and developers are seeking alternative promotional channels and tactics.  The use of the internet by consumers is quickly becoming the preferred method buyers use to begin their search for a home.  This is not to say that a project can be promoted exclusively via the internet.  Other media and promotion such as specialized publications, direct mail, networking through real estate agents and other established channels should still be part of the marketing mix.  However, creative channels such as social media, networking through social and business spheres of influencers, segmented direct mail, and intensive data-mining are among marketing methods that are becoming more prominent in the marketing strategy.  In addition to seeking more effective promotional channels, the development team is placing greater importance on the correlation between promotional initiatives and their measurable return on investment.

The final piece of the project’s competitive position is the performance of all the people representing  the project.  How does the development team stack up against the competition; what about customer service; marketing, construction management, and the front line sales representatives?  Major projects require competency at all levels.  It is critical that the development team select the best available vendors and allow each vendor to perform at their highest level.  Of course, the site sales team must meet the highest standards of excellence since they are the most visible to the public and the real estate broker community.  Site sales professionals must be able to clearly and accurately communicate all attributes of the project, build trust and rapport with prospects, and present themselves in a manner that compliments the project and creates a positive experience with every consumer and real estate agent contact.

When the development team begins the project on the right foot with a detailed and accurate market perspective based on solid research, and keeps the data current throughout the project sellout, the project has the best chance of a successful launch and the ability to make strategic and tactical adjustments as needed based on changes in the marketplace.

Developers tend to implement market research during various phases of a real estate development.  Secondary research, the collection and analysis of available data, is typically a significant component of the feasibility study.  Continually updating secondary data through the sales phase helps the development team keep current with changes in market conditions.  Available data can be adequate to establish a general market perspective; however, primary research methodologies such as interviews with consumers and real estate agents, focus groups, and surveys are often required to more accurately access the validity of project assumptions.  Architectural design, unit mix, common area space allocation, amenities, and price represent some of the project categories that can be tested with primary research to ensure that the project is properly positioned to capture market share.

Market research can be very cost effective when integrated into the overall sales and marketing plans.  For example, web registrants generated during the pre-launch awareness campaign can be used as the research sample; this is a simple method to leverage the advertising budget to support research.  Also, marketing initiatives such as promotional events and outreach to real estate agents can be excellent opportunities to include market research.  Incorporating research as a component of overall project marketing and promotion effectively lowers research costs through leveraging promotional and advertising expenditures.  In addition, the growth of web survey applications significantly reduces traditional data collection costs.

Web survey applications include functionality to administer simple surveys or advanced question sequencing required to support complex conjoint analysis.   Web survey applications also include built-in reporting features that automatically produce tables, charts, and graphs.  Once the survey goals and objectives are clearly defined and the questionnaire written, the survey can normally be launched within a week.  In addition to larger scale periodic surveys, short web surveys are ideal to include as a regular feature on the project website.  This form of continual collection of market input keeps the pulse of buyers; provides dynamic consumer input on product and marketing questions throughout the project; and, when survey questions are of interest to buyers, publishing survey results will encourage repeat buyer visits to the website.  While quantitative data supports statistical analysis to identify preferences, tolerances, trends from data sets, conducting qualitative research adds the human connection to data.

Qualitative research methodologies are especially effective tools to understand consumer perceptions and gain subjective insights.  Many researchers prefer to implement qualitative research prior to quantitative as a means to write the survey questionnaire.  Alternatively, adding qualitative methodologies after a quantitative study can add clarity to the data analysis.  As with all forms of research, qualitative participants must be carefully screened to ensure that their comments are representative of the demographic and psychographic buyer profiles.  Qualitative research can also be cost effective by pulling participants from the prospect database and tapping into knowledgeable real estate agents.  Formal focus groups conducted by a moderator and observed by clients behind a two mirror are often the method people associate with qualitative research.  The formal approach may be merited; however, other qualitative methods such as more casual one-on-one encounters, conversations with small groups, or focus groups with direct interaction between the client and respondents are very effective methods.   Face-to-face interaction between research participants and the development team can establish greater empathy with prospective buyers and be a catalyst for insights that may not have been as apparent when viewed behind the two-way mirror or on video.

Research, when properly designed and implemented, will improve the knowledge base  of the entire development team throughout the feasibility, design, and sales phases of the project.  Incorporating secondary and primary research into the overall marketing plan, leveraging the advertising and promotional expenditures, and using cost effective web-base survey tools makes research more affordable and thereby better utilized to ensure the sales success of the project.