UNIVERSITI TEKNOLOGI MARA THE EFFECTIVENESS OF MARKETING MIX STRATEGY CASE STUDY: SETIA ALAM

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1 UNIVERSITI TEKNOLOGI MARA THE EFFECTIVENESS OF MARKETING MIX STRATEGY CASE STUDY: SETIA ALAM HIZMA RAZLIATI BINTI ABDUL RAHIM SEPTEMBER 2011-JANUARI 2012

2 JABATAN PENGURUSAN HARTANAH FAKULTI SENIBINA PERANCANGAN DAN UKUR UNIVERSITI TEKNOLOGI MARA THE EFFECTIVENESS OF MARKETING MIX STRATEGY CASE STUDY: SETIA ALAM A project prepared as partial fulfillment for the award of Bachelor of Estate Management (Hons) HIZMA RAZLIATI BINTI ABDUL RAHIM SEPTEMBER 2011-JANUARI 2012 i

3 STUDENT S DECLARATION Academic Project Title: THE EFFECTIVENESS OF MARKETING MIX STRATEGY CASE STUDY: SETIA ALAM I declare that this report is the result of my own research, unless otherwise indicated or acknowledge as referenced work. In the event that my report be found to violate the conditions mentioned above, I voluntarity waive the right of conferment of degree and agree be subjected to the disciplinary rules and regulations of Universiti Teknologi MARA Signature :.. Student s Name : Hizma Razliati Binti Abdul Rahim Date :.. ii

4 SUPERVISOR S DECLARATION Academic Project Title: THE EFFECTIVENESS OF MARKETING MIX STRATEGY CASE STUDY: SETIA ALAM I admit that I had read this report and from my opinion it has fulfilled the requirements and qualified for the purpose of conferment of Degree of Bachelor of Estate Management (Hons) Signature : Supervisor s Name : En. Mohamad Isa Abdullah Date : iii

5 ACKNOWLEDGEMENT I would like to give a special thanks to Allah S.W.T because give strength to finish this Academic Project on time even though facing a problem. The entire problem I face in finishing this project I will consider as the experience for the learning process that never end. I also want to give a special thanks to my supervisor of this Project Academic, Encik Mohamad Isa Bin Abdullah for his guidance and support in finishing this Academic Project. I also thank you for the courage in giving the guidance. The cooperation given from SP Setia Berhad in sharing the information are really appreciated, especially Miss S. Rubavathy, Sales & Marketing Executive from SP Setia Berhad Group and also all the staff and for all who giving co-operation in completing the survey. Last but not least, thank you to my beloved parents, siblings, course mate and also to all my friends who is involved directly or indirectly for helping me finished this Academic Project. Only Allah S.W.T can help me give back what you all have been done to me, thank you. iv

6 ABSTRACT The problem regarding marketing mix strategy of new property development project is various inclusive of 7P s and still no certain of the marketing mix strategy in the 7P s shall be implement by developer. Although there are many books regarding the marketing strategy or tools for be implemented on the matters that can be used, but it still do not contain the overall process on marketing mix strategy that need to be done. This research is being done to identify the marketing mix strategy of 4P s practice applied by the developer and also to study the effectiveness of the marketing mix strategy of 4P s based on customer perception. To achieve the first objectives of this study, an interview session with Marketing & Sales Executive from SP Setia Berhad Group and for the second objective, a survey on customer perception in Setia Alam was carried out. In arising the specific marketing mix strategy for the marketing the property and also the effectiveness of the marketing mix strategy, analysis on the survey was being done qualitatively. Outcome of this study showed that the effectiveness of the marketing mix strategy of 4P s implemented. Every developer do not need to focus only one marketing mix strategy to be implemented, they can used many other marketing mix strategy for giving the effective result in marketing their product and property. Although developers do not think that the marketing unit is a necessary, however the aspects of marketing need to be proper and improve so that the marketing activities will be smoother and organize. v

7 TABLE OF CONTENTS CHAPTER ITEM PAGE Title Cover Page Student s Declaration Supervisor s Declaration Acknowledgement Abstract Table of Contents List of Tables List of Figure i ii iii iv v vi x xi CHAPTER 1 INTRODUCTION TO RESEARCH 1.1 Introduction Problem Statement Research Objectives Scope and Limitation Significances of Research Research Methodology Arrangement of Chapter Conclusion 6 CHAPTER 2 LITERATURE REVIEW 2.1 Definition of Marketing Marketing Objectives Marketing Process Stage A: Assess the Situation 9 vi

8 2.3.2 Stage B: Developing Potential Client Contact Potential Client Marketing Strategy Marketing Mix Strategy Product Price Place Promotion People Physical Evidence Process Relationship of Marketing Mix Organization Marketing Organization Marketing Organization Function Property Development Property Marketing in Perspective The Marketing of Property Marketing Differentiated from sales Property Development Concept Gated and Guarded Mix Use Development Garden City Concept Conclusion 29 CHAPTER 3 CASE STUDY 3.1 Introduction Case Study Background of Shah Alam Background of Setia Alam Interlink to Setia Alam Land Use of Setia Alam Developer Background 37 vii

9 3.5.1 Property Development Construction and Infrastructure Wood Base Manufacturing & Trading Description of Case Study-Setia Alam Setia Alam Project Development Concept in Setia Alam Description of Case Study-Setia Eco Park Setia Eco Park Project Development Concept of Setia Eco Park Marketing Mix Strategic of 4P s Product Price Place Promotion Financing Approval Conclusion 53 CHAPTER 4 DATA ANALYSIS 4.1 Introduction Research Methodology Types of Research Methodology Data Collection Observation Interview Document Data Analysis Frequency Analysis Analysis Result Part A: Respondent Profile/Background Part B: Housing Information Part C: Marketing Mix Strategy of 4P s Conclusion 75 viii

10 CHAPTER 5 CONCLUSION AND RECOMMENDATION 5.1 Introduction Summary of Study Conclusion Recommendation Strategic Marketing Plan Strategic Marketing Method Prepare Good Product Pricing 80 BIBILIOGRAPHY 81 APPENDIX 85 ix

11 LIST OF TABLES NO. OF TABLE ITEM PAGE Table 3.1 Types of Properties 46 Table 3.2 Price Range of Properties in Setia Alam 47 Table 3.3 Price Range of Properties in Setia Eco Park 47 Table 4.1 Gender of Respondent 59 Table 4.2 Race of Respondents 60 Table 4.3 Status of Respondents 61 Table 4.4 Occupation of Respondents 62 Table 4.5 Household Income of Respondents 63 Table 4.6 Respondent s Type of House 64 Table 4.7 Respondent s Type of Ownership 65 Table 4.8 Respondent s Type of Transaction 66 Table 4.9 Effectiveness of Marketing Mix Strategy of 4P s in Setia Alam based on Customer Perception 67 Table 4.10 Effectiveness of Marketing Mix Strategy of 4P s in Setia Eco Park based on Customer Perception 69 Table 4.11 Influential in Choosing Property in Setia Alam and Setia Eco Park 72 Table 4.12 Percentage of Influential in Choosing Property in Setia Alam and Setia Eco Park 73 x

12 LIST OF FIGURES NO.OF FIGURE ITEM PAGE Figure 2.1 Marketing ABC 9 Figure 2.2 Elements of a Marketing Strategy and its Environmental Framework. 13 Figure 2.3 From 4P s to 4C s 16 Figure 2.4 The management and marketing process 24 Figure 3.1 Map of Shah Alam 32 Figure3.2 Location of Setia Alam, 33 Figure 3.3 Setia Alam Interlink Map 35 Figure 3.4 Land Use of Setia Alam 36 Figure 3.5 Master Plan of Setia Alam 40 Figure 3.6 Setia Eco Park Master Plan 42 Figure 3.7 Relationship between developer and house buyer using BTS 52 Figure 4.1 Gender of Respondent 59 Figure 4.2 Race of Respondents 60 Figure 4.3 Status of Respondents 61 Figure 4.4 Occupation of Respondents 62 Figure 4.5 Household Income of Respondents 63 Figure 4.6 Respondent s Type of House 64 Figure 4.7 Respondent s Type of Ownership 65 Figure 4.8 Respondent s Type of Transaction 66 Figure 4.9 Effectiveness of Marketing Mix Strategy of 4P s in Setia Alam based on customer perception. 68 xi

13 Figure 4.10 Effectiveness of Marketing Mix Strategy in Setia Eco Park based on Customer Perception 70 Figure 4.11 Percentage of Influential in Choosing Property 74 in Setia Alam and Setia Eco Park xii

14 CHAPTER 1 INTRODUCTION TO RESEARCH 1.1 Introduction Recently, there are rapidly increasing number of development mostly in the properties sector. The developers are chasing with each other to build the township with many specific design, layout, and others marketing strategies that would compete with the others developers. Every developer has their own marketing strategies and plan in order to attract buyers to invest in their development. They also have their own marketing objectives which include to achieving desired market share, product and brand awareness, establishing distribution channel and developing positive relationship with customers. These objectives are achieved through a series of marketing activities that include market research and positioning, product planning and development, pricing, channel development, promotion and advertising, and sales force training and deployment. These activities require decisions at both strategic and tactical level before and during the implementation. Control of marketing decision is the process where decisions are controlled to ensure coordination and effective use of marketing resources. There are difference ways in marketing strategies and the implementation of the strategies that have been developed. 1.2 Problem Statement When we talk about the marketing of goods and services, it is a common activity performed by the manufacturer. According to research carried out by Tay (2001), he found that most developers have neglected or less concerned with the problems of marketing activities. For the SP Setia Group Berhad, they really take a good ways in marketing their project by adopting different marketing mix strategy. There are many 1

15 differences of marketing mix strategy that usually being used by the developer to market the property in order to attract buyers and to maintain and upkeep their property price. Thus this study to identify the strategies used in the marketing mix and what is the most effective marketing mix strategy based on the customer s perception. Thus a mixture of good and effective marketing mix strategy can be used to help developer to grow. This can increase product sales and increase the profitability of the business to the developer. Various marketing mix can be carried out by developer to market the property. The marketing mix strategy carried out shall give benefits to the developer to gather information and attract prospective buyers or consumers before the further action. 1.3 Research Objective In order to effectively investigate the marketing used by the developer, this research has several specific objectives that need to be carried out. 1) To study the marketing mix strategy of 4P s employed by developer. 2) To identify the effectiveness of marketing mix strategy of 4P s by developer in property development based on customers perception. 1.4 Scope and Limitation Scope The scope of the study are basically to study the marketing concept that being use by the developer in marketing the product. There are many projects being develop recently and have their own marketing strategies. Therefore, the scope of this study is a survey covering the: 1. To study the marketing mix strategy of 4P s that implemented and being used by the SP Setia Berhad Group. 2. To focus for their projects in Shah Alam only. 2

16 1.4.2 Limitation The study has several a numbers of limitations. The main is limitation on the amount of information available. Particularly there are limited number of book or reference book about the marketing concept and strategies that being used by the developers. So that, there will have limitation in gathering specifically information on this topic. There might be some up to date information on the topic kept by relate with the developer itself but this information is treated as confidential and thus not released. Then, it is been proved impracticable to obtain first hand information, based on survey, due to the geographical remoteness of the study areas, coupled with constraints of time and finance. So, this study has to be prepared within these limitations. 1.5 Significances of the Research This research attempts to remedy many limitations encountered in the earlier research as stated in the research problem. Specifically, this research expects the findings of this research to contribute to the developer ways in marketing their projects. This can help the developer to figure out the best way before marketing their project. This research can bring the marketing field more synthesized as the marketing fields are very wide. This research includes considerations of the target market (business vs. consumers) into the research stream of control of marketing decisions. Recent research in business marketing outlined stark difference between business-oriented and consumer-oriented marketing, especially in the areas of technology, sale process and relationships building. Different target markets are likely to have difference imperative to control in marketing decisions. 3

17 Studies conducted are also expected to benefit and contribute new ideas to students of real estate profession, particularly the marketing of real estate services and the need for a marketing organization structure. 1.6 Research Methodology Research methodology is designed to guide researcher in carrying out the study. Research methodology is also used as guidelines to achieve goal and objectives as well as limitation of study. The methods of these studies that will be implemented through several stages are shown in the flowchart of study s approach First Stage: Preliminary Study Preliminary stage is the progression of constructing the research structure as contained in this chapter. Basically, this chapter is covering goal and objectives, scope of study, problem statement and etc. At this point, researcher is required to do a lot of reading, marketing curiosity in the specific term that progress the overall study topic. Thus, this will guide the researcher to cover the needed data to achieve the goal and objectives of the study Second Stage: Literature Reviews Theoretical study is important to build specific knowledge that is related to the studied topics. Literature reviews basically will cover theoretical aspect that is related to the marketing aspects, the background of the research and the material that will be use in finished this research. Besides, it also covers the history and implemented strategies of the marketing strategies that are used by other developers Third stage: Data Collection Data collection is gathered through different method. The method are collecting secondary data produced by individuals, developers, government and 4

18 private agencies such as articles, journals, paper cutting, annual reports and also required the interview session with the developer and distribution of questionnaire to the customers. Considerably, a check list of required data will help researcher to implement data collection conveniently, reduce negligence such as omission of required information Fourth stage: Analysis and Findings Analysis and findings also explain correlation among variables as well as to prove how data of that have been collected by the developer and the findings on the data collected in promoting their project Fifth stage: Summary of Findings and Policy Implications Finally, findings from the analysis are concluded and at this stage, the goal of study should have been answered. However, findings will be generalized and thus will identify the specific marketing plan that the developer use for their development. 1.7 Arrangement of Chapters Chapter 1 This chapter introduces the research background, problem, objectives, research scope, research methodology and the arrangement of the chapter. Chapter 2 In this chapter is devoted to literature review. Key studies on management and marketing decisions are reviewed. Important concepts are synthesized and clarified. Following that, limitations and gaps in the previous studies are identified. 5

19 Chapter 3 In this chapter, the researcher will discuss about the case study of the project under held under the developer of SP Setia Berhad Group in Malaysia central region. In doing so, the details of elements and the background of the case study will also taken into account. Then, the researcher will look into the case study. Chapter 4 In this chapter, the researcher will analyze the data collectively. Researcher will describe the analysis. The analysis will be explain in this chapter Chapter 5 In this chapter, the researcher will also provide appropriate recommendations to increase the performance of the developer in marketing. The researcher will review the information obtained from this study and do research and formulation of research conclusions. 1.8 Conclusion In this first chapter clearly describes the introduction to the study conducted. Understanding of the issues studied, a clear statement of the problem, the scope of the study and preparation of measures and methodology of the study will be conducted is extremely important to achieve the objectives of the study. It will also help as a guide to writing the next chapter with more structured and has a good flow studies. In addition, the preparation of a chapter is to facilitate the study is proceeding on schedule and organized phases during planning. In the next chapter, author will discuss the literature review on the need of a marketing unit of the structure of its own services in a professional real estate services firm. 6

20 CHAPTER 2 LITERATURE REVIEW 2.1 Definition of Marketing The Chartered Institute of Marketing defines marketing as "the management process responsible for identifying, anticipating and satisfying customer requirements profitably."a different concept is the value-based marketing which states the role of marketing to contribute to increasing shareholder value. In this context, marketing is defined as "the management process that seeks to maximize returns to shareholders by developing relationships with valued customers and creating a competitive advantage." There are many different definitions and understanding of marketing from the founder of marketing theories and institutions around the world. Kotler (2003) provides the definition of marketing is to meet the needs and wants through an exchange process. This definition in line with the definition given by the Institute of Marketing United Kingdom, where marketing is a management process responsible for determining, anticipate and meet the needs of users satisfaction (Gronroos, 1996). Overall, marketing is not just the business of selling, but is starting the process of determining the overall objectives of the management to the solution of the initial objectives have been set. Marketing is about all the things done to find or keep customers (Biech, 2003). Referring to the definition above, an organization of marketing activities requires a clear or management so that all marketing activities can be conducted more smoothly. Marketing is an effective method in generating a new business (Katz, 1988). In carrying out its business activities, research and surveys on the state of the market 7

21 (Biech, 2003) either for marketing a product or service should be identified in advance. Every activity carried out with the objective or goal and a purpose. The Marketing Concept is a philosophy. It makes the customer, and the satisfaction of his or her needs, the focal point of all business activities. It is driven by senior managers, who are passionate about delighting their customers. Marketing is not only much broader than selling; it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of the final result, that is, from the customer's point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise. (Peter F. Drucker) 2.2 Marketing Objectives Every activity carried out has its own objectives. This is to ensure that everything is done according to and achieving the objectives set in advance. Similarly in the marketing activities. Overall, the marketing objectives were developed based on a type of business or services performed. For marketing that involves the client, the objectives to be achieved are cover (Connor and Davidson, 1985): - i. Ensure that the main client (retaining key clients). ii. Develop services to existing clients. iii. Improve or replace client "marginal". iv. Managing the image of the target firm and the client and the client. v. Generate control and profit growth. vi. Offering services that meet the needs and expectations of the client and the client's prospectus. vii. Attract clients prospectus. The objectives of this marketing are aimed at enhancing the image of the firm and expand the firm to become more developed and competitive. Next, it is also to ensure the survival of a business carried on in giving confidence to potential clients or investors have to enter and make an investment on the business or service. 8

22 2.3 Marketing Process There are a variety of marketing processes in marketing a product or service. Biech (2003), has introduced a marketing process that is "Marketing ABCs". Each activity needs to be done requires advance planning. This is to ensure that the firm will not lose customers or clients, so that businesses do not have problems when setting up the market and others in connection with travel firm. A firm must first assess the situation, develop a policy to contact customers and potential customers. This process can be described by ABC as shown in the diagram below. Marketing ABC A Assess the situation C Contact Potential Client B Developing Potential Client Figure 2.1: Marketing ABC Source: Biech (2003) Step A: Assess the Situation Assess the situation means to assess whether the firm from both internal and external angles. The interior to see what services offered by the firm while in exterior view of the competitors and clients. A marketing plan is based on the circumstances in which the firm at present and how the firm is in the near future. Revision of planning and business strategy starts from knowing who we are as a 9

23 firm in the market, what services and products offered, the uniqueness of the firm compared to competitors that exist in the market, not separate well on the financial status of existing firms. These matters is crucial considered before a business strategy and marketing plan is designed. For example, if only there is a firm that offers computing services in a small town, then this is the unique advantage of the firm and the pricing of services which can be determined without regard for the market. But when there are other firms offering similar services in the area, then the firm must study how to compete with other firms, especially in terms of price and services offered. In this situation, firms must identify existing weaknesses and identify the opportunities and threats to be encountered in the future. Customers or clients also require evaluation. Potential clients must be identified first. First, determine the client's needs, assess current clients, whether there is a potential new client and others. After assessing the situation of internal and external firms, competitors and clients, the firm must develop a client base of potential customers Step B: Developing Potential Client Profession services is a unique profession which requires a unique marketing plan. For this phase, it requires three things to do. Firstly, the data obtained during the phase A must be analyzed first. Secondly, the marketing plan will be developed. Next identifiy specific client or potential client group. This phase will analyze what has been obtained during the assessment phase to determine which clients are potential targets. Various techniques are required, such as promotional marketing, publicity, broshur, exhibitions, etc. related to the marketing of a service. Finally, the marketing plan will be prepared in which all marketing ideas will be documented on paper based on the existing financial, time and all the resources owned by the firm. 10

24 2.3.3 Step C: Contact Potential Client This phase is the phase of sales in the marketing process. Potential clients will be contacted and convinced them to use services offered by a service firm such as developer or estate agency firm. It was the culmination of sales in the marketing process to improve relations firm with existing clients and convince new clients to use its services. Word of sales and marketing are interrelated. Although it is a separate and distinct activities, but they are interrelated. Marketing focuses on the whole people and organizations while sales of just focusing on individual or organization only. Consulting services will put the sales process along with a marketing plan, and potential clients will know about the consulting services of the marketing activities carried out and will contact the consultant or firm. After the discovery made by the consultant, then the client will decide whether to use the services of consultants or not. 2.4 Marketing Strategy A marketing strategy is an overall, companywide program for selecting a particular target market and then satisfying consumer in that market through a careful blending of the elements of the marketing mix which include product, distribution, promotion, and price of which is subset of the overall marketing strategy. (Source: Kurtz/Boone 2006: 44) Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. 11

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