Market Research: A tool for generating ideas Reading: RE Development, Principles and Process. (Chapter 11)

Outline What is it? Some basics Ten critical questions to answer Utilizing data analysis Link between market research and inception of idea Market Research

What is a market? A market is a sub-group of a general population that is considered to contain potential buyers or users [and financiers] of a specific property type Comprises of the following located in a specific geographical area: Types of property Owners (players in the capital market) Tenants (players in the space market) Market Research

What is market research? Market research is the tool for discovering who buyers and end users are and what motivates them to buy It is a means of discovering specific intelligence about your market Of interest is: The demographics of the market constituents ... and what their motivations are Market Research

Some basics How? What skills do you need? By collecting, organizing and interpreting data from local, regional and/or national sources to determine the potential sale (disposal) of a service, product or some facility What skills do you need? Detective work, statistics, interviewing, data organization etc >>> basic research skills Market Research

Some basics Areas of research? Purpose? Demographic summaries Analysis of current stat of the geographic area Comparable and competitor products Etc Purpose? Used in making projections Market Research

Some basics The primary purpose of a market research and reporting include: Determining the size of the market Supporting feasibility analysis Determining the marketing strategy Communicating findings to stakeholders Gaining entitlements Providing background information for funding processes Market Research

Some basics It is an integral part of entire development: Due diligence Conducted before a purchase considering macro- [technology, political, socio-cultural etc] and micro- [potential suppliers, customers, competitors etc] levels of the market Entitlements Understand desirable zoning and development conditions >>> do and don’ts Market Research

Some basics Programming Determine what to build and when >>> sequence, amenities, product mix etc Project positioning Informs the market niche for product Sales Determine the most effective marketing and sales programmes Market Research

Some basics Some strategic conclusions that a good market research can result in include: Product positioning Product type and characteristics Amenities Product mix Price points Absorption rates Market Research

Ten critical questions a market research should answer What are the trends in this type of development? What is the current market? What is the depth of this market? What are the market’s perceived values? What opportunities and challenges does the current market profile present? How do you determine and gain an understanding of your target market? Market Research

Ten critical questions to answer What are market positions, development programs, price points, absorption, and lessons learned for competitive projects? Who are the buyers? What are market positions, development programs, price points, absorption, and lessons learned for comparable projects? Who are the buyers? Market Research

Ten critical questions to answer What are the opportunities and challenges presented by the competitive and comparable projects? What conclusions can be drawn about all aspects of the project? Market Research

Utilizing data from market research 1. Analyse the data Method of analysis used is determined by: Type of data collected The instrument used The mode of data collection What the expected outcome is The tools available to aid in analysis etc Market Research

Utilizing data from market research 2. Draw conclusions Descriptive Measures of central tendency – mean, mode, median. This information can be displayed in charts, graphs, tables etc. Inferential Correlations, regression etc. This information can also be graphed, coefficients are listed to show relationships and their strength Market Research

Utilizing data from market research Conclusions can help to .... Identify the strengths, weaknesses, opportunities and threats (SWOT) of a product its competitors its comparables Market segments geographically, financially and/or behaviourally General market conditions and requirements Market Research

Link between market research and Inception of Idea A developer needs good understanding of the following to fuel good idea generation: Themselves Their organizations Their competitors Financiers Other players Potential clients Market Research

Link between market research and Inception of Idea Most importantly, the probability of the idea to have the following qualities in increased: Competitive edge Price advantage Product quality Appropriateness of location Appropriateness of amenities and detailing Timely deliveries Market Research