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Developers need sophisticated market research.

Developers have been utilizing model homes for years as primary marketing tools in their overall sales programs. But in today's highly competitive real estate market, where advertisements promoting Grand Openings of new communities dominate almost every weekend real estate section, many developers are missing the boat by not correctly positioning their model homes to reach and satisfy their target market. They are either creating a dream that their customers are unable to afford or, conversely, not making their customers feel that they have arrived at where they aspire to be.

The best method to avoid these pitfalls is to initiate sophisticated market research before architects sketch their first floorplans to identify exactly who the target buyers are and what they're looking for. Such hands-on direction is necessary to ensure that the model homes convey the right message. In addition, it enhances the ability of the sales team to make sure the homes are demonstrated correctly.

These critical steps are designed to help developers avoid both under- and over-merchandizing the model - which yield. equally negative results.

While model homes can be merchandised. inexpensively, they must still be done in a way that makes prospective buyers feel that they are moving in a desired direction - from point "A", where buyers are presently, to point "B", where they want to be.

On the other hand, "going the extra mile" by filling the model with expensive decorator upgrades might so overwhelm prospects with upscale features and amenities that an unrealistic expectation is created.

When a buyer is attracted to a community that advertises homes priced from $200,000, he or she expects to see a model that helps them perceive what they can get in that price range. If the model home is merchandised and upgraded to a cost of $350,000, the prospects will understandably fall in love with a dream they cannot afford. Consequently, the developer has created a fantasy that can not be fulfilled.

In the past year, our company has been contracted to advise clients developing a variety of residential communities in New York, New Jersey and Connecticut whose sales paces were lagging behind their competition. Not surprisingly, we found that the majority of the sites presented model homes that did not reach out to the proper target market.

Clearly, without an appropriate strategy for merchandising model homes, the remaining elements of a marketing program - from advertising to public relations to a strong sales demonstration - are almost destined to fail.

On-Site Sales & Marketing, LLC is a full-service marketing company based in Westchester, and is a licensed broker in New York and New Jersey.
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Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Focus On: Marketing & Networking
Author:Atkin, Tom
Publication:Real Estate Weekly
Date:Jul 16, 1997
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