RE Marketing Unit 7

T or F: It is difficult to use packaging to attract different buyers because properties are virtually the same (roof, plumbing, windows, bedrooms, etc.).

False Properties could be virtually the same, but different packaging will attract different buyers. This means that the home does not have to change for every prospect. However, packaging specific real estate features attracts different groups from the total market. This is because the amenities of specific features benefit prospects in different ways, therefore, those features must be packaged in different ways, even though the house never changes.

total product concept

is a way of describing a quality product or service that exceeds the customer's perceived expectations.

Packaging

makes the prospects want to experience more. Packaging draws attention to the product—it creates curiosity and encourages comparisons. by packaging specific real estate features, we attract different groups from the total market.

As part of a product strategy, which of the following encourages comparisons between products?

packaging

Which of the following is TRUE? A) Agents should find out what results sellers were seeking when they established their price. B) Inflation is the result of many factors that cause prices to fall. C) Agents shouldn't be concerned with what value buyers will pay. D) To increase growth the Federal Reserve may take steps to reduce demand.

A

Which of the following is a common result when agents list properties that are overpriced? A) All of these are correct. B) Sellers experience continued disruption in their daily lives as buyers walk through their home yet make no offers. C) Advertising costs increase. D) Channels of distribution close down.

A

Which of the following is not true with regard to a cause for inflation? A) Inventory that can't keep up with demand B) Declining demand for a rising or stable supply C) Demand that exceeds supply D) Rising demand for a declining or stable supply

B

The total product: A) includes expressing what the agent knows of the prospect's perceived benefits of the physical property or service. B) may include the added security of a home warranty plan. C) incorporates all of these. D) includes how efficiently the closing process unfolds.

C

There are many ways agents can enhance the value of the properties they sell. Which of the following is one of those ways? A) They can explains the benefits of R-value insulation in infomercials and in their presentations. B) They can discuss the relationship between lower energy costs and wide overhangs during the presentations. C) They can advertise their listing is free of radon gas. D) All of these are correct.

C

Which of the following adds value? A) Buyers that perceive they are getting more value from their purchase decision B) Supplying a quality product that meets the needs of the target market C) All of these D) Listing properties that meet the demands or need of a target market

C

Price fluctuations are caused by the following

Changes in the cost of lumber and plywood Increased costs of permits and environmental paperwork Increased costs of appliances, concrete, or lumber Increased costs of labor Increased energy and transportation costs

Which of the following has been true of real estate over the past 50 years? A) Real estate values have declined. B) Real estate prices have remained stable. C) Real estate values have remained stable. D) Real estate values have increased.

D

T or F: If agents took listings at above market value, channels of distribution would open up because of the potential for earning higher commissions.

False During qualifying interviews with the sellers, an agent should take the time to find out what motivates their pricing decisions. Doing so establishes a more realistic price and helps keep the marketing mix in balance. If agents took listings at prices above market value, then channels of distribution may close down (some agents may be unwilling to show an overpriced property) and advertising costs increase as it may take more time to market the property.

T or F: To compete with the higher price of money, agents should counsel their sellers to increase their property prices.

False Higher interest rates make it more difficult for people to afford a home. Sellers who must sell should reduce their prices to compete with the higher price of money (interest rates).

T or F: Declining demand for a product that is stable or increasing in supply is one of the more common reasons prices rise in the real estate market.

False Inflation is the result of many factors that cause prices to rise. However, rising demand for a product that is in declining supply or stable supply is one of the more common reasons prices rise in the real estate market. At some point, inventory cannot keep up with demand. Increasing prices eventually hit a level that is too high for the market to accept, thereby choking off demand. As demand decreases, prices decline.

Pricing Strategy

Price provides a way to measure the value of real estate and a means of comparing the value of one product with another.

Which of the following is an example of an element within the product strategy?

Providing to sellers a list of general and specific items that need attention

What is the usual outcome of higher interest rates?

Sellers may have to reduce their prices to compete with the higher price of money.

When the property offers more than prospects expect, when prospects feel they are getting more than the price represents, or when agents handle all the paperwork and transfer problems, prospects are experiencing

The total product

T or F: When one person trades three oranges for one apple this is a form of bartering.

True

T or F: After taking a listing, agents must look for ways to increase the perceived value of the property before they attempt to market it.

True After taking a listing, agents must look for ways to increase the perceived value of the property before they attempt to market it. Enhancing the value of a property is quite a challenge, but it is part of the total product obligation. Obviously, the features of a home cannot be changed and an agent cannot say things that are false. However, in both the marketing and sales process you can determine the buyers' motives for purchasing a property and explain the benefits of owning the selected listing so that the buyer perceives, understands, or recognizes a value that is at least equal to or higher than the listed price.

T or F: Price provides a way of measuring the value of real estate or comparing one product with another.

True If we were told we could get a car for $50,000, we would probably perceive the car to be a quality vehicle. However, a different picture may come to mind if we were told we could get a house in southern California or south Florida for $50,000. Price provides a way of measuring the value of real estate or comparing one product with another.

T or F: Clutter, disrepair, or soiled carpets and walls demonstrate a potential lack of quality, or cause a prospect to feel that the property is unsafe.

True Packaging draws attention to the product; it creates curiosity and encourages comparisons. Often, as part of the product strategy, agents make sure that the house is in showcase condition. Clutter, disrepair, or soiled carpets and walls demonstrate a potential lack of quality, or cause a prospect to feel that the property is unsafe.

T or F: Buyers and sellers expect agents to return their calls in a timely manner. This expectation is also known as a part of the total product.

True Sellers want more from agents who sell their property. They expect agents to handle all the paperwork and problems that may arise prior to the transfer of the property to the buyer. Buyers want agents to return phone calls in a timely way, show up for appointments on time, and explain the features in a home in terms that help them understand how the solution solves their problem and satisfies their needs.

T or F: The words commission, fee, and monthly investment are some of the alternative ways we say price.

True Some agents don't like the word commission and say instead that they are compensated by a fee. When it comes to the monthly payment for a home some agents have been trained to say monthly investment, suggesting that price has many names, such as value, cost, charge, rate, fare, tuition, dues, and more.

T or F: The more features you convert to benefits and solutions, the easier it is for the buyer to make the purchase.

True The more features you convert to benefits and solutions, the easier it is for the buyer to accept the price and make the purchase. Additionally, the agent can also make it easier for the buyers to "look good" in front of their friends as the buyer can brag about the great "deal" they got. When they brag about the low price they paid for the property, they almost always tell their friends about the agent who helped them get such a find.

T or F: The total product includes the prospect's perceived benefits of the physical property or service.

True The total product includes the efficiency of the closing process, the security offered by home warranty plans, having more time with the kids, but it also includes the prospect's perceived benefits of the physical property or service.

T or F: Value is a perception that buyers and sellers may hold of the products and services they buy.

True There are several ways to define and exchange things of value. Value is indicated by price, but it is also a perception that buyers and sellers may hold of the products and services they buy. One prospect may look at a home with a beautifully landscaped front yard and see a loss of time and money to maintain its look. For them, the property has less value than for someone who perceives the yard to be something that may help get them noticed.

T or F: Value doesn't necessarily mean only price.

True We are conditioned to think that price indicates value or quality in some way. For our purposes, this isn't always the case. When agents discover the needs of their target market and list properties accordingly, their listings will have more value to the target market. Value becomes integrated into the total product.

A college provides an education to its students, but when it also offers classes that start on time, teachers that are accessible, and exams that are returned on time, it also offers

a total product

An agent that talks about the cost or the rate they charge for their services is actually talking

about the price of their service

An agent takes a listing on a beautiful home, except for the temporary hollow core front door. It's dulled and splintered by the sun, and it not a very appealing entry into the home. However, the agent tells the seller he wants to try something and not to replace it for a few weeks. Instead, he paints the door a bright purple. On his first showing he stops in front of the house and tells the prospect, "I bet you're wondering about that front door. It's temporary, but the owners wanted to make sure you noticed it. They will replace it with a door of your choice at the close of escrow." This is an example of

an intentional or conspicuous presentation.

Agents might react to inflation in different ways. Which of the following is generally not one of those ways? A) They don't react to changes in inflation. B) They find the value or prices their buyers are willing to pay and list inventory that matches that criteria. C) They react by listing properties at prices just ahead of the inflated market prices. D) They react by listing more inexpensive homes.

c

Successfully packaging a property makes prospects want to experience more. Packaging also

draws attention to the product

The purpose of pricing in a capitalistic society is to

efficiently allocate goods and resources.

T or F: A three-bedroom home is an example of a total product.

false A total product is a quality product or service that exceeds the customer's perceived expectations. From the example, a product is a three-bedroom home, however, a total product would include a home that offers years of enjoyment with quality touches.

Intentional Presentation

identifying features within the home; through intentional, repetitious, or conspicuous presentations, agents help the prospects remember that feature and how it may relate to their perceived needs. Conspicuous presentations of a feature implant it into the prospect's mind in such a way that it makes it difficult to forget.

value

indicated by price. Value is also a perception that buyers and sellers may hold of the products and the services they buy.

There are several ways to define and exchange things of value. Value can be a perception that buyers and sellers may hold of the products and services they buy. One prospect may look at a home with a beautifully landscaped front yard and see a loss of time and money to maintain its look. For them the property has less value than for someone who perceives the yard to be something that may help get them noticed. One measurement of value is

price

When agents find a ready, willing, and able buyer, they have earned their commission. When agents handle all the paperwork, solve problems as they come up, return phone calls in a timely manner, and show up for appointments on time, that's known as

the total product

Which of the following describes a quality product that meets or exceeds the customer's perceived expectations?

the total product

Coined by William Zikmund, what concept describes the expectations of a seller that an agent handles all the necessary contingencies prior to the transfer of property?

total product