Market Segmentation
Definition of "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
refusal of one party to a contract to carrying out his or her responsibilities under the agreement. An example is when a builder refuses to perform previously agreed services for the buyer ...
(1) Surrendering voluntarily or involuntarily ownership of property or an interest therein. (2) Court order to give up possession or the right to property such as in the case of an ...
Offer to buy real estate provided certain conditions are met. ...
Legal document that conveys real estate to the lender after the borrower defaults on his or her mortgage payments. The borrower should demand cancellation of the unpaid balance and a ...
Federal government agency monitoring and regulating corporate financial reporting and disclosure, use of accounting principles, auditing practices, and trading activities. Its regulations ...
An equity-to-value ratio is an excellent tool for those homebuyers that want to understand how profitable an investment is based on the amount of money invested and the actual value of the ...
The operating expenses definition is the sum of costs or expenses a company deals to operate as a business. The term operating expenses is used in any business field and is commonly ...
Mortgage loan not insured or guaranteed by a governmental agency such as the Federal Home Administration or the Veterans Administration. This type of loan is repayable in fixed monthly ...
Suppose you’re fascinated with making “easy” money with real estate. In that case, wholesale or wholesaling real estate might be your cup of tea. But what is wholesale ...
Have a question or comment?
We're here to help.