Market Segmentation
The term market segmentation is mostly used in marketing for assembling prospective buyers in groups based on their needs and their response to a marketing action. One definition of market segmentation is the market’s division into subsets of customers to simplify targeted branding and marketing strategies. When you know who you are trying to attract, you know what they are interested in, it’s easier to approach them.
What is Market Segmentation in Real Estate?
Real estate market segmentation allows real estate companies, investors, and brokers to target specific groups of buyers who would get the biggest benefit from a type of property. The purpose of market segmentation in real estate is to identify and target specific groups of buyers to offer them real estate that was tailored or branded precisely for their needs.
Market segmentation for real estate can be done based on different factors like the type of property (residential or commercial), demographics (millennials or baby boomers), geographical location (one city or state versus another). Based on the type of market segmentation applied and the reason for which it was applied, it can be used in different ways.
Examples of Real Estate Market Segmentation
Real estate agents use market segmentation to find their niche based on the types of buyers or sellers. They can also use it to improve their business depending on the client they work with, the buyer or the seller. Applying market segmentation to their strategy helps them improve their brand and communication towards their targeted audience.
Investors and real estate developers look at market segmentation to evaluate performances. For instance, during economic strife, some segments of the market might be more profitable than others. The commercial real estate market might not be as affected by an economic downturn as the residential market. Similarly, the rental market might drop while the homeowners market skyrockets. In some cities, single-family homes might be more profitable than high-rise apartment complexes or vice versa. Being able to determine this through market segmentation helps investors and developers supply a growing demand while also increasing their revenue.
Popular Real Estate Terms
A company that is terminated within 3 years. According to the tax law, a gain arising from the sale or liquidation of such a business is considered ordinary income to the individual ...
An account into which payment is made for particular expenses to assure that money will be available. An example is a special account the homeowner's attorney establishes for advance ...
Also called functional depreciation. Loss of value that results from improvements that are inadequate, outdated, overly adequate, or improperly designed for today's needs. May be curable or ...
Device that cuts off an electric circuit when the current becomes to strong. ...
Most typically, the definition of real estate spread implies the difference between the price offered by a home buyer and the initial amount asked for by the seller of real property. It ...
Structure built into the water from the land providing a facility for boats to tie up. A dock will often provide utility access ...
Restoring real property to an improved state. The restoration is usually needed because the property's condition has worsened. ...
A method of brick construction where the bricks are laid with their sides facing outward. ...
Return before taxes on the capital invested in real estate property. ...
Have a question or comment?
We're here to help.