How to apply distribution strategy and pricing strategy to real estate?

Distribution channels refer to all enterprises and individuals that acquire ownership or help transfer ownership when a commodity or service is transferred from producers to consumers. It mainly includes merchant middlemen, agent middlemen, and producers and consumers at the beginning and end of the channel. Under the condition of commodity economy, products must move in the form of value through exchange, so that products can be transferred from one owner to another until they reach consumers. This is called business flow. At the same time, along with the business flow, there is also the spatial movement of product entities, which is called logistics. The combination of business flow and logistics enables products to reach consumers from producers, which is the distribution channel or mode.

Pricing strategy is a key component of marketing mix. Price is usually an important factor affecting the success or failure of a transaction, and it is also the most difficult factor to determine in the marketing mix. The goal of enterprise pricing is to promote sales and gain profits. This requires enterprises to consider not only cost compensation, but also consumers' ability to accept prices, so that the pricing strategy has the characteristics of two-way decision-making between buyers and sellers. In addition, price is the most flexible factor in the marketing mix, which can make a sensitive response to the market.

I. Pricing Strategy

Generally speaking, the total market supply and demand and competitors' prices are only reference, while cost and consumers are the fundamental factors that determine the price strategy. After in-depth analysis, we can find that cost+competition and consumer+competition are two basic strategies for real estate pricing.

The decision-making process of cost+competitive pricing strategy is roughly as follows: calculating the total cost of the project → detecting the price of competitors → adding the expected profit (according to different proportions of the target) → obtaining the real estate price.

The decision-making process of consumer+competitive pricing strategy is: what are the properties and prices provided by competitors → to inspect the development of differentiated properties in this lot with competitors and adjust various price variables, what kind of properties consumers will be willing to accept at what price → what kind of properties to develop, how to develop and achieve strategic goals → the final specific price of the property.

Obviously, at present, most developers choose the pricing strategy of cost plus competition, because it is the simplest and easiest, because it can "know clearly how much profit they can make" and because most developers only consider the price when the house is ready for sale. However, from the above comparison, we can see that this is a typical "product-oriented" strategy, which does not conform to the market development trend, because it contains two risks: one is the risk of unsalable products that are overpriced. In the buyer's market, consumers are the main body of the market, but this pricing model excludes consumers from the price system. The reality is that only when consumers think that they can get relative or even excessive value by paying the price can the transaction become a reality. Once the design and construction can't effectively meet the needs and desires of consumers, the price set by the cost+profit method can only be a "virtual price", which can't get the response of consumers, so the products are unsalable, so the expected profit when setting the price. Secondly, it is the risk that the price is too low to win ultra-high profits. At present, the real estate market is developing rapidly from the beginning, and the gap in consumption level is getting bigger and bigger. Therefore, we can often rely on new planning concepts, new architectural design, new apartment design, innovative community environment creation, new building materials and new technology applications to establish a completely different image from popular products in the market, bring special added value to consumers, and enterprises can easily win super-high profits. However, this pricing model is product-centered and cost-oriented.

The biggest advantage of consumer+competitive pricing strategy is that it takes consumers' potential psychological acceptance of prices as the starting point and competitors as the reference. Therefore, planning, design, building, apartment layout, supporting and marketing are all based on the principle of meeting consumers' needs, and always pay attention to distinguishing or following competitors, so that various measures, means and processes to achieve development goals (high profits or quick return of funds) are always in a controllable state, which can achieve the highest development efficiency.

However, this pricing strategy requires developers to have an open mind centered on the market and consumers. We should realize that price is a systematic strategy, which is interrelated with products, markets, sales, image and publicity. It needs a lot of professional research in the early stage and a lot of management talents with both professional knowledge and market knowledge. Therefore, at present, among the domestic developers, only the big developers in big markets such as Vanke, Shenzhen Jintian, China Merchants, OCT, Beijing Zhonghongtian, Guangzhou Jinye and Shanghai Huachen can do it, but conversely, starting from the market and starting from consumers is the main reason for their repeated success.

Second, the price strategy

Price strategy is the key link of real estate marketing, which is related to the success or failure of the project. Even if everyone is pricing in the mode of cost+competition or consumer+competition, different people and developers of different styles will set different development goals. We can simply divide it into three categories: silver should be sold at the price of gold, gold can only be sold at the price of silver, and gold, silver and silver must be sold at the "real price".

"Selling silver for gold" is of course the dream of most developers, because it can maximize profits, and chasing profits is the nature of businessmen. In the current immature but rapidly developing market environment, it is not difficult, but it is not completely impossible, while the demand gap at the consumption level is constantly expanding and there is not much real "gold".

To achieve this, we must first achieve "silver has some characteristics of gold", that is, we need to give real estate some high-level and high-quality elements, such as innovative planning and design, innovative apartment types, innovative materials application, innovative scientific and technological achievements application, etc. Although these inputs do not need the price of "gold", they give real estate an inherent advantage over competitors, thus having the "gold quality". Second, make "silver look like gold". This requires superb architectural image and shop packaging skills, and must make the building look more noble and elegant than its competitors in terms of external image, communication image and shop image. Finally, we must convince consumers that real estate has the same value as "gold", which requires large-scale, high-standard, high-level news hype and integrated promotion to convince consumers.

The benefits of selling silver at the price of gold are self-evident-you only need to complete 50-60% of the business to get a good profit. Once it is sold to 90%, it will be really profitable. However, in today's increasingly competitive market environment, this strategy is becoming more and more difficult and the risk coefficient is getting higher and higher. Only suitable for enterprises with particularly strong internal control ability, innovative spirit and ability.

In recent years, a few developers have found that "profit maximization" reduces financing costs and improves capital efficiency. Sometimes they treat "gold" lightly, but the gains are often unexpected. So someone took the initiative to choose "selling gold as silver". Because "value for money", as long as there is a correct communication strategy to make the target consumers realize that this is a piece of gold, it is not difficult to achieve 100% sales. There are not a few such examples. This strategy is especially suitable for enterprises that need to withdraw funds quickly or have a strong demand for market share for special strategic goals. After all, it is difficult to make a decision of "having money but not earning".

Although most developers want to earn the highest profit, in fact, most developers choose a more down-to-earth strategy: "Gold is gold, silver is silver", which is worth the money. After all, this is a cautious strategy with little risk and no small gain. However, this "caught in the middle" strategy also has its disadvantages: the sales cycle is long, so the risk of control failure in the sales process is not small; Low price is not only boring, but also not conducive to establishing the company image. It is difficult to gather popularity and complete sales quickly. Once the sales encounter resistance, the market will be unacceptable because of the price increase, and the price reduction will damage the company's brand and fall into embarrassment.

Of course, the most powerful strategy is to make the property "look like gold" through packaging, but only sell the price of silver, "squeeze out the water in the price as much as possible", so that the price can return to value as much as possible, so that developers can make profits and consumers are willing to accept it. This requires adequate, professional and powerful planning.