Report on Marketing Strategies of Borak Real Estate - Assignment Point
Report on Marketing Strategies of Borak Real Estate
Subject: Business, Marketing | Topics: ,

EXECUTIVE SUMMARY

The internship report is concentrated in the real estate sector of Bangladesh. I have tried to analyze the industry as well as the company BORAK REAL  ESTATE (PVT) LTD.  I have selected ten renowned real estate companies through some criteria. I have surveyed these companies for our research purpose. The real estate business concept was developed in Bangladesh in the sixties’ decades. Ispahani and EHL are the pioneers of this business. This business was flourished in the first eighties’ decades. Now a days there are more than 126 real estate companies are in this sector and this number is growing day by day because of the profit margin of this sector. By showing plans and locations they sell apartments. For this reason this product is called “unseen” product. Companies have to borrow a negligible amount of taka from the banks. The growth rate of industry is about 15%. Profit margin is about 15% – 25% on an average. It attracts the new business firms to this sector. The industry is in the transition to maturity stage of its life cycle. Again some companies’ growth rates are higher than others. This rising sector may be collapsed for some dishonest entrepreneurs. In this research report I have discussed the overall situations on management style, land procurement, design and engineering, marketing, legal and logistics of the industry and the company BRE (PVT) LTD. with SWOT analysis. Since entry and exit are free in this sector so day by day market is being competitive. Bargaining powers of the clients are increased in this competitive market. In this situation some companies are kicked out of the market for their poor management. These weak companies’ market shares are acquired by leading companies.

BRE (PVT) LTD. is one of the leading companies in the industry though it was established in 11 may 1987. They own 10% shares of the segmented market areas partially one and two. The current growth rate of the company is about 40%.The experienced top management is conscious about the changing market behavior. They are flexible in their management style that is they are situational. The top demand. They recruit young personnel’s for their mid –level management to get maximum benefit from those fresh persons. The strong marketing, land procurement and design department help the organization to achieve its objective. But the logistics department is not structured which incurred high production cost. They do not identify the logistics activities clearly for getting better benefit by using the modern approach of logistics. To hold the market leadership they have to improve this department. The company has 50 projects within which 5 projects are completed and 21 projects are under construction. Most of the apartments are at Gulshan. Few of Baridhara, Dhanmondi and Banani. In Gulshan they have established themselves quite well and have general confidence about the market. All decisions are taken by the Chairman and Managing Director of the company. Now they are trying to delegate the authority to the mid-level management to take prompt decision for the company. BRE (PVT) LTD. is committed to excellence and believes that achievements exist forever.

INTRODUCTION

MEANING OF REAL ESTATE

In our day-to-day life, real estate is being used in various manner; we make use of real estate resources to provide shelter, comfort, convenience, and privacy, a place of work, recreational facilities and related service. In an estimate real estate represents more than 40% of national wealth. Therefore, the manner welfare of our people the success or failure of business firms and the general prosperity of the country.

The name given to the commodity reality which includes not only land but also all human improvements placed on the land. The name given to the business engaged in by those people who conduct commercial transactions in real estate.

The main component of real estate as a commodity is land. It states not only the surface of the earth but also the property rights and interests that attach to owner ship of reality, including subsurface minerals. Thus the real estate means acquisition of land and building which is called inherent right. The people who are the owner, user, maker, financier or marketer of the property have some rights to the property.

BACKGROUND

Multistory living is a relatively new phenomenon in Bangladesh in late 70s apartment project was started in Dhaka city in early 80s the business started flourishing. Until recently multistoried are built for office and commercial purpose only. But today there is a boom in building high rise buildings as living quarters, known as apartment or condominiums. This process started after the developers had taken up the business of constructing high rise buildings and selling the apartments. Is it a welcome phenomenon or an approach to the forward upon?

There are ample reasons why people have taken to liking multistory living. Extreme sortie of open space in the important area of Dhaka city, hazards of purchasing land and construction building and increasing in population have encouraged people to like multistory living. The populate is increasing leaps and bounds and land is scarce. Sprawling growth with single unit housesin subdivisions is not very feasible because service like access of roads, electricity, water, gas, etc. do not reach peripheral regions very easily. All the concentrations have to take place in the central part of the city. Peripheral land is usually bought by speculators. Some services gradually creep into peripheral regions for their demands. The process has usually taken about a decade. Travel from periphery to the central part of the city has become so difficult because of traffic chaos & jam, which takes hours. So important person of business wants to live as close to the center as possible. A renowned economist once mentioned that in Dhaka with
sufficient money most of the services need of an individual can be met. Faulty water supply can be overcome by sucking water from the supply line by a pump or sinking a tube-well if necessary. In case, school is not available for one is child’s one can start one good. For medical services one can take a trip abroad for consultation or treatment. All these can be done with sufficient money but one cannot avoid the traffic jam & fly to the office every day. Accessibility is the most serious problem that cannot be solved individually. Hence proximity to the place of work is a priority. Increase in land value encourages raising buildings. The higher the value of land the higher the buildings tend to rise.

In Dhaka land value is increasing day by day. The fact is that if the cost of one square foot of land is more than one square foot of built area, developers will go for high rise buildings. Cost of construction per square feet at present is among 700 to 1200 taka. Whenever the cost of land per katha that is 721 sft is more than taka five lacs, there is sufficient incentive for building high rise.
Apartments building and selling being a relative very new type of business, e.g. real estate business. It has started in the last seventies. Little is known about its different aspects as yet. But from observation evident investment in this type of business is quite big. As well as the prices of apartments are also high. The buyers of apartments are well off and have acquired the temperament of community living. They want to buy apartments for security and consider it a symbol of status.

All these issues create genuine interest to get ideas about this type of real estate business sector and with that end in view the present study report was undertaken. This study aims at understanding the overall aspects, specially marketing & logistics aspects of the industry as well as the company BRE (PVT) LTD.
Total House holds position in Dhaka (SMA)

Year No. of Applications
Received by RAJUK No. of plans passed by RAJUK
1991 3701 2913

1992 3897 2809

1993 5532 3872

1994 8202 5905

1995 6995 4966

1996 8112 6012

Source: Primary data from RAJUK.

OBJECTIVES OF STUDY

The main purpose of the study is to evaluate and understand the present overall situation and also to measure the future prospect of this sector as well as the company BRE (PVT) LTD.
• To know about marketing aspect of the industry.
• To know about marketing aspect of the company.
• To analyze the logistics activities of the company.
• To analyze the SWOT of the company.
• To know about the legal side of this industry and the company.
• Recommendations for overcoming those problems that are found in our

JUSTIFICATION

The report is mainly based on the marketing aspect of the real estate sector and special concentration on the company BORAK REAL ESTATE (PVT) LTD. So I have chosen the title “Marketing Aspects of the Real Estate Business and Prospects of BORAK REAL ESTATE (PVT) LTD.” In this report I have also described logistics support and legal side of this business but not in depth. For this I have avoided to mention it in the title name.

METHODOLOGY

For my study purpose I collected information from both primary and secondary sources.

Primary sources:

For collecting the primary data firstly, I personally discussed with different officials of different developers on the basis of the Questionnaire (Annexure 1).

Secondly, data were collected from executives, managers etc.of BRE (PVT) LTD.

Thirdly, a participative discussion was conducted with Mr. Anower Shamim, MD. of BRE (PVT) LTD. from which I have collected information about the company and the industry.

Secondary sources:

• Reports
• Articles
• Bulletin etc
• REHAB

By surveying the developers I came to know about this sector. Their position in the industry their target groups, existing problems and prospect of this sector. I also surveyed some ongoing projects of the developers to know about the construction side. I have visited REHAB ( Real Estate Housing Association of Bangladesh ) to know about the current situation of this sector.

The Research Approach The study approach is to collect the qualitative data and the following three approaches were used:

1. Discussion
2. Personal Interview and
3. The observation method

While collecting the primary data the instant response were found and it was possible to observe the real situation.

Research Instrument Questionnaires are used to collect the primary data from the developers.

Sampling Plan In order to retrieve the necessary information as precisely as possible from the survey, the following sampling plan was pursued:

1. Sample unit: The sample unit the marketing strategies of borak real estate (pvt) ltd.

2. Contact method: The information was collected by the way of face to face interviews and discussions with each developer.

SCOPE OF THE STUDY

The total industry of the real estate is the scope of the study. There are more than 126 developers in the city. Few of them are working in other divisions specially in Chittagong, i.e. The study is concentrated in the Dhaka city only due to the time limitation. But I did not able to consider all the developers in the Dhaka, I only considered those developers who are working in the Dhaka city as well as creating luxury apartments in this city. Moreover in the internship program I have to do a lot of works for my study purpose.

LIMITATIONS
During the internship program I have faced a lot of problems to complete the study. In the short time it is not possible for me to know everything about the total sector. Even then I have tried to know the important side of this sector as well as marketing and logistics that are taken here for the study purpose.
Problems I have faced for the study purpose:
• I did not get up to date information about the sector.
• Maximum developers did not provide me all information that is needed for my study purpose.
• Wrong information is provided by the developers.
• I have to go several times to the developers for getting information which consumes my valuable times.
• Due to the non- cooperation of the management of Shamota Real Estate and Shine Pukur Holding Ltd. I did not get the information about these developers.

STRUCTURE
In the following I have tried to analyze the total industry, specifically on marketing, legal and logistics aspects. And first in brief analysis of management, land procurement and design & engineering aspect of the industry. Then I discussed about the company BRE (PVT) LTD. Here I analyze in brief management, land procurement and design aspect. And in depth analysis of marketing, legal and logistics aspect of thecompany.Thisreportsendswithasummaryoffindingsandrecommendationse management of BRE (PVT) LTD. for successful operation of their business.

CHAPTER TWO

FINDINGS AND OBSERVATIONS

MARKET SEGMENTATION

Marketing department observe and analyze the different factors and or the basis of this information the market is segmented. The market analyzed on the basis of external threats and opportunities as well as the internal strengths and weakness and depending upon this the market is segmented. The market segmentation is categorized by;

a) Apartment Business

b) Commercial Building

Apartment Business

In apartment sector there is no specific target marketers. Those who are able to buy the apartment are the target marketers. On the other hand, the target marketers of any project depend on the location of the site. For example: Gulshan project must have the target marketers of high income people. If the projects location is Elephant Road, which is not so much important place, then the target marketers can be any body.

Commercial Building

Like apartment sector, also in commercial sector the site or location of the project is an important factor. Generally, commercial buildings are building in the commercial areas, such as, Motijheel, Tejgaon etc. So that the project can be sold quickly. The target marketers for commercial sector are generally the higher income groups & famous companies such as Uttara Motors, Nitol Motors etc.

TARGET MARKET

The target clients can be segmented into broad categories:

A) Individual Prospective Apartment Buyer

B) Apartment Developer

A) Individual Prospective Apartment Buyer

Theoretically, anyone who is in the market of acquisition of an apartment is a potential client. VBL would target to provide finance to that particular segment or group who are reluctant to go to public sector financing, or want to reduce their income tax burden or those who want to invest their own resources for other profitable purpose. The clients are likely to be Businessmen, Bangladeshi wage earners working abroad, High officials of

Government and autonomous bodies as well as Executives / Officers working on different international / multinational corporations.

B) Apartment Developer

Targeting growing, developers who have proper record of accomplishment are the other group of potential initial clients. Financing these developers will have the added ad of cutting u. it the term of lending.

MARKETING MIX DEVELOPMENT

PRODUCT STRATEGY

Currently Borak Real Estate (Pvt) Ltd. offering variety of features and facilities for apartment holders such as affordable accommodation in desired locations, health club, roof top garden, and arrangement for children playing, European lift, stand by generator, prayer room, loan facility available , 24 hours security system and after sales service.

PRICE STRATEGY

Borak Real Estate (Pvt) Ltd. sale flat. After finish designing from a repotted architecture, they select price strategy. This price strategy based on some decision. Such as – cost of land develop, cost of raw material , payment of land owner etc. after this they set up a price. This price strategy is two types. One is at a time and another is by installment. If client want at a time payment, he get 10% discount from fixed price. On the other hand, if any one want by installment, he has to paid 30% with in 30 days. And he paid rest amount with 18 installment. Most of the Real Estate company flexi their installment process.

PLACE STRATEGY

The company Borak Real Estate (Pvt) Ltd. is conscious about their placing strategy. Borak Real Estate (Pvt) Ltd. targets a significance customer. BRE (PVT) LTD. also target middle upper class client. So these types of people want middle flat size in residential area. So think matter the company select price strategy. Most of the project of this company’s is Gulshan, also mohammadpur, Uttara, Kalabagan, Kathalbagan, Pallabi and Dhanmondi.

PROMOTION STRATEGY

The company Borak Real Estate (Pvt) Ltd. is very conscious how to promote their product. For the promotion of company’s product they use some media.

News media : They give at least 10 days advertise out of 30 days in news paper for sale their apartment in various location with different offer. Mainly they use the Ittefaq, The Prothom Alo, The Jugantor news paper etc. as media.

Hand note: To promote their product they use hand note process. They give hand note a number of targeted client for publicity their product and its location.

Festoon: To promote Borak Real Estate (Pvt) Ltd. use festoon as media of promotion strategy. Company gives an excellent offer which is mention there and in hang on main road side.

Bill board: Borak Real Estate (Pvt) Ltd. also use bill boards for company advertise. Bill boards are situated in main point in Dhaka city. Like front side of hotel Sheraton.

Web site: Details information of BRE’S web site. A large number of Probashi came to know about BRE’S project and also company and finally they purchase their flat.

SALES ANALYSIS

After end of the year 2007 Borak Real Estate (PVT) Ltd. analysis their sales. The company is successful to reach their visions. At the beginning of the year they make a plan for increasing their sales. They are able to purchase 90 flat in 2007. Marketing department follows different strategies and policies to convince the customer.
As a result marketing department is successful to increase their sales. Flat Sales in 2007 are given flowchart:

Name of the month Quantity
January 7
February 5
March 9
April 12
May 14
June 14
July 18
August 20
September 16
October 17
November 12
December 13

MARKET SHARE ANALYSIS

When Borak Real Estate (Pvt) Ltd. started construction their project was only three. In that year they sale only seven flats. In 2007 their project is 33 and they sold 95 flats in this year.

REHAB fair – 2007 which is held 19 th – 23 th February 2008 the company sale 15 flats. REHAB fair 2005, 120 companies total sold 870 flats and Borak Real Estate (Pvt) Ltd. sold 13 flats which is 1.27%.

In 2007 their total flat sale is 95 and all companies sold 19,975. Here their market share is 0.48%. There are three categories Real Estate company in Bangladesh. First class company sales 3900 total in a year and second class company total sales 9100 in a year and Third class company total sales 6975 in a year.

In 2007 Advance Development Technology sales flat 133, BDDL sales approx. 139, Navana Real Estate ltd. sales approx. 135, Amin Mohammad sales approx. 141 and Borak Real Estate (Pvt) Ltd. Sales 115.

PROFIT ANALYSIS

In the era of globalization, changing mindsets have recognized real estate as an important tool for economic growth and investment. The importance of the real estate recognized as a significant growth instrument. The greater volume of investment and development of real estate will drive economic development and stimulate capital formation in an increasingly competitive environment.

Planning for fund collections: Since it’s a real estate business, we need a huge amount of money to invest in the Company, as we look for the long- term investment and maximize the wealth of the company. In addition, administration and finance sector combined decided that we have a need for Tk. 20 core or above. Only Tk. 1 core have available in our hand, assume that it will provide by the private investment from companies shareholders. Therefore, the rest of the investment would come from the external source and administration of the company give ensures that they are able to create the fund from the following sources:

1. Long-term Sources

Customers’ Investment: 30% of the project. Marketing sector give us ensure that they are able to attract the attention of the buyer of the project and can sell all the apartment with the 30% of the customer’s investment.

Project ‘A’ will bear the cost approx. Tk. 8 core and will sell for Tk. 9 core. So, 30% of Tk. 9 core is Tk. 2 core 70 lac which is 33.75% of the total cost.

Bank Loan: Tk. 3 core with a interest rate of 10% for the 10 years, which is 37.5% of the total cost.

2. Intermediate–term Sources

Lease Financing Tk. 50 lacs for 5 years with a interest rate of 7% of the total investment. This will be to buy the companies equipment.

3. Short-term Sources

Short-term loan Tk. 80 lacs that is 10% of the total cost of project ‘A’. This amount will collect from the people of the company as a private loan with an interest rate of 6% according to the company Act of Bangladesh, 1994.

Retain Earnings

Retain earnings is the portion of companies profit which is not allocated to the shareholders of the company. These earnings will be termed as one of the sources of fund. As the company starts from new, retained earnings is not available since now. However, after the project ‘A’, we hope that some retain earnings will earn. This amount will investor further investment in the company. However, this is depends on the dividend policy of the company.

It is noted that we estimate only for the project ‘A’. However, after a period we add with the project ‘B’ and then we need the amount of Tk. 10 core. We will collect the fund according to the way of project ‘A’. Rest of the Tk. 10 core will acquire from the earnings of project ‘A’.

As the company starts from now, dividend will be paid after 2nd year, when project ‘A’ and project ‘B’ will finished. Payment policy such that we can reinvest the majority part of retains earnings.

PRODUCT

Belch and Belch define product as – Anything that can be offered to a marketer for attention, acquisition, use on consumption and that might satisfy a want and need. Products include more than just tangible goods. Broadly defined, product includes physical objectives, service, events, person, places organization, ideas or mixes of these entities. Thus throughout this test we use the term product broadly to include any or all of these entities.

There are some kinds of product. These are as follows:

• Consumer product
• Convenience product
• Shopping product
• Specially product
• Unsought product
• Industrial product
• Materials and parts
• Capital items

Borak Real Estate (Pvt) Ltd. sold residential apartment. Apartment is their product. Now-a-days 21 projects are under construction. They already hand over 4 projects. Before they made apartment, first they bought land from landowner by cash or ratio or both together. Before finish apartment, they have already purchase their product. Client purchase flat with at a time payment or by installment.

PRODUCT MARKET ANALYSIS

The segmented market areas are described below:

Segment 1: Baridhara, Gulshan, Banani, DOHS, Uttara.
Segment 2: Dhanmondi.
Segment 3: Segunbagicha, Shantinagar, Kakrail, Malibagh, Shahabagh,
Kalabagan etc.
Segment 4: Mirpur.
Segment 5: Old Town of Dhaka city.
Segment 6: (For office building only) Motijheel, Dilkusha, Fakirerpul, DIT extension Road, R.K Mission Road, Kawran Bazar, etc.

SERVICE PROCESS

TO WHOM ALL THESE PRESENTS SHALL COME, I MR. RAFIQUL ISLAM S/O. Late Kamal Uddin, House – 74, Road 11/A, Dhanmondi, Dhaka addressed to as the “Land Owner” First Party which expression where the context so admits shall include his heirs, successors, administrators, executors, legal representatives and assigns of the First Party, hereby known as the “Executants”.

Borak Real Estate (Pvt) Ltd. at 51/B, Kemal Ataturk Avenue, Banani. P.S.- Gulshan, Dhaka owned by Managing Director, MR. ANWAR SHAMIM S/O late Shamsul Haque, District-Dhaka, by faith Muslim, by Profession- Business and Bangladeshi by National hereinafter referred to as the “Developer” which expression where the context so admits shall include their successor, administrators, executors, legal representatives and assigns of the Second Party to construct two separate 6- storied Apartment Buildings, one on 10 (ten) Kathas land in the Eastern Part and another on 5 (five) Katha land on the Western Part of the Schedule- A Land at plot No.21, Road No. 4, Dhaka Cantonment, Dhaka measuring a total land area of approximately 15 (fifteen) kathas.

WHEREAS I am desirous of appointing the Developer Second Party as my ATTORNEY for carrying into effect the aforesaid purpose.

NOW, KNOW YE AND THESE PRESENTS WITNESS that I do hereby dominate, constitute and appoint the Developer Borak Real Estate (Pvt) Ltd. at at 51/B, Kemal Ataturk Avenue, Banani. P.S. – Gulshan, Dhaka owned by Managing Director, MR. ANWAR SHAMIM S/O late Shamsul Haque, the Second Party irrevocably to be my true & lawful attorney to do execute, perform all or any of the acts, deeds, matters, things in my name and on my behalf and authorities hereinafter mentioned.

1. To manage, superintend, conduct, protect, and maintain the scheduled land and to do all acts, deeds and things with regard to the scheduled land as the Developer shall think fit and expedient.

2. To construct two separate separate 6- storied Apartment Buildings, one on 10 (ten) Kathas land in the Eastern Part and another on 5 (five) Kathas land on the Western Part of the Schedule- A Land, obtain sanction of the plan from Rajdhani Unnayan Katripakkha (RAJUK) after the preparation of Architectural & Structural design, take WASA connection, Water connection, Electrical connection and Gas connection in the scheduled land and proposed buildings thereon.
3. To invest money for the construction of the aforesaid two separate 6- storied Apartment Buildings on the scheduled land.

4. To negotiate and enter into Agreement with the prospective buyers of the Apartment / floor space / cubicles of the building to be constructed on the scheduled land.

5. To take all steps for obtaining income tax clearance certificates for registration of sale deed / deeds of conveyance relating to the sale of the said properly at the Second Party’s own account.

6. To sell, exchange, allot and dispose the Floor space / Cubicles / Apartments to be constructed on the scheduled land including undivided and undemocratic share or proportion of the scheduled land to the buyers at a price to be determined by the Developer and receive money from the buyers and give receipts of the same and to execute the above mentioned documents. However the Second Party will have the right to transfer the Apartments transfer can not be effected prior to full completion of the entire project and handing over of building B’I to him Land Owner First Party.

7. To affirm and swear the affidavits as required by the Bangladesh Transfer of Immovable Property (Temporary Provisions) order, 1972 or any other law of for any other purpose in respect of the said property.

8. To appear before the Registrar or Sub- Registrar and present for registration of the sale deed, exchange deed, power of Attorney or any other deed or document in respect of the said property executed by the Attorney in favor of the Lenders, Buyers or any other persons.
9. To appear, represent and act in all civil or criminal court or Arbitration and the judicial and revenue authorities either in the original or appellate side as well as in the Government departments, local authority, autonomous authority or other body corporate, and to prosecute or to take part in all or any action, application, suit, appeal, proceedings and for such purposes to subscribe, sign and verify all plaint, written statement and the memorandum of Appeal and to do all acts, deeds and things which may be necessary in relation thereto and to executive Powers / Vokalatnamas.

10. To appoint and retain lawyers, Advocates, Legal Advisers, Tax Advisers and to revoke such appointments from time to time and again to re-appoint as occasion, shall require for the aforesaid purpose.

11. To pay rents, revenues, taxes, rates, fees, and all other assessments and legal dues and changes payable by us for the said property to the Government or to any other public body and authority and obtain receipts and discharge there for after the date of signing this power of Attorney.

12. To incur any expenditure that may be necessary for the management protection and maintenance of the said property.

13. To accept on our behalf services of all notices, summons or any other rights issued by any court of Law, Government Department or Office, City Corporation, WASA, Dhaka Electric Supply Authority (DESA), Cantonment Board, Dhaka or any other authorities or local bodies or any company in respect of the said property and to do the needful in connection therewith.

14.To file on our behalf taxation returns, take part in all taxation proceedings and make application for refunds, sign all instruments, forms, documents, letters and other papers relating all taxation proceedings appear personally or through lawyers and advocates or other duly constituted agents before any officers, court or tribunal in relation to any taxation matters or proceedings by or against us including proceeding or the first instances and on reference and or appeals, act and settle assessments and pay all taxes assessed on and payable by us, receive refunds and give valid receipts therefore and generally to act in all matters connected with income-tax, wealth-tax and other taxes whether on capital or revenue in which we may be interested or concerned and to take ail steps as the Developer Second Party shall consider necessary expedient or advantageous in relation to the said property.

15. My Attorney the Development Second Party may exercise all or any of these powers as and in the manner the Developer think fit.

16. And generally to act as my Attorney or Agent for the purpose stated herein and to do all instruments, acts, matters and things as fully and effectually as I could do if I was personally present.

17. And I do hereby agree to rectify and confirm all and whatsoever my Attorney the Developer shall lawfully do or cause to be done in or about my Scheduled Land by virtue of these presents and all acts, deeds and things lawfully done by my Attorney shall construed as acts, deeds and things done by me and that this power of Attorney shall be irrevocable.

SCHEDULE OF LAND

All that piece and parcel of land fully measuring more or less 15 (fifteen) kathas situated at plot No. 21 (Old), 2 (New), Road- 4, under survey Map-40P of Dhaka Cantonment, P.S. Dhaka Cantonment (formerly Tejgaon), Dhaka-1206 butted and bounded by- On the East- Road on the West Plot No. 22, on the North Road, On the South – Plot No.18.

PRICE

In the narrowest sense price is the amount of money change for a product or service. More broadly, price is the sum of all the benefits of having using the product or service. Historically price has been the major factor affecting buyer’s choice.Panera’s CEO says the challenge is to harvest the customer value the company creates.
Dynamic pricing – charging different prices developing an individual customer and situation.

Borak Real Estate (Pvt) Ltd. sale flat. After finish designing from a repotted architecture, they select price strategy. This price strategy based on some decision. Such as – cost of land develop, cost of raw material, payment of land owner etc. after this they set up a price. This price strategy is two types. One is at a time and another is by installment. If client want at a time payment, he get 10% discount from fixed price. On the other hand, if any one want by installment, he has to paid 30% with in 30 days. Some analyze the demand of the apartments for fixing up the price. In the real estate sector markup pricing is used for selling apartments. In this way the developers add a markup such as 20% – 30% on their construction cost and then they offer it to the clients.

In the study some companies are found to take demand into account in fixing price. A little percentage of the industry’s pricing policy and some of the companies follow a pricing method according to convenience.It has been observed that prices of apartments of similar locality vary due to the quality of construction. In the same way similar size apartments vary due to the locations. The following table shows the current price of apartments of various sizes located in different locations.

Locations Price per sft
(In taka) Locations Price per sft
(In taka)
Gulshan
1800-2000 Shegun Bagicha 1600-1750
Baridhara 2000-2200 Shantinagar 1550-1600

Dhanmondi 1650-1860 New Baily Road 1520-1550

Malibag 1270-1400 Eskaton 1575-1650

Price per sft of apartments in several locations.

PROMOTION

The study reveals that the apartment building companies undertook promotional efforts as a part of their marketing programs.

Promotion is defined as the co-ordination of all seller initiated efforts to set up channels of information and persuasion in order to sell goods and service or promote an idea. While implicate communication occurs through the various elements of the marketing mix, most of an organization’s communications with the market place take place as part of a carefully planned controlled promotional program. The basic tools used to accomplish an organization’s communication objective are often referred to as the promotional.
The promotion blend:
Sales people
• Number
• Selection
• Training
• Incentives
Advertising
• Targets
• Media types
• Types of ads
• Copy thrust
Sales promotion
Publicity
It has been observed that 100% of the companies use advertising and 40% of the companies use personal seeling for promoting their business. The companies were found to use different media for their promotional activities. BRE (PVT) LTD. use news paper media.Generally the company use as news paper media Prothom Alo, Jugantor, Daily Ittefaq, and The Daily Star. The company also use TV media, magazines.Arthokotha and Thikana this two organizations publish magazines. The company publishes brochures for every projects.Some times the company provided nice promotional package for the customers by offering excellent rate, quick services, gift hamper. BRE (PVT) LTD. also set a huge experience sale people who are always care for their customers and try to increase the sales. In this industry we see that promotional and entertainment budget of the companies are quite high.
Table 1 percentage of media coverage of the industry

MEDIA PERCENTAGE OF COMPANIES
News paper
Television
Magazine
Hoarding
100
20
85
15
TOTAL 220*
*Total percentage exceeds 100 as companies were found to use more than one media.

PLACE

Place (or placement) are those associated with channels of distribution that serve as the means for getting the products to the target customers. The distribution system performs transactional, logistical and facilitating function.

Distributions decision includes:
• Distribution channels
• Specific channel member
• Inventory management
• Ware housing
• Distribution centers
• Order processing
• Transportation
• Reverse logistics
Borak Real Estate (Pvt) Ltd. is conscious about their placing strategy. The company targets a significance customer, and also target middle upper class client. So these types of people want middle flat size in residential area. So think matter we select place strategy. Most of the project place is Gulshan of this company. But at this time, they also select Mohammadpur, Uttara, Kalabagan, Kathalbagan, Pallabi and Dhanmondi as their project place.

MARKET SEGMENTATION

Marketing department observe and analyze the different factors and or the basis of this information the market is segmented. The market analyzed on the basis of external threats and opportunities as well as the internal strengths and weakness and depending upon this the market is segmented. The market segmentation is categorized by;

a) Apartment Business

b) Commercial Building

Apartment Business

In apartment sector there is no specific target marketers. Those who are able to buy the apartment are the target marketers. On the other hand, the target marketers of any project depend on the location of the site. For example: Gulshan project must have the target marketers of high income people. If the projects location is Elephant Road, which is not so much important place, then the target marketers can be any body.

Commercial Building

Like apartment sector, also in commercial sector the site or location of the project is an important factor. Generally, commercial buildings are building in the commercial areas, such as, Motijheel, Tejgaon etc. So that the project can be sold quickly. The target marketers for commercial sector are generally the higher income groups & famous companies such as Uttara Motors, Nitol Motors etc.

TARGET MARKET

The target clients can be segmented into broad categories:

A) Individual Prospective Apartment Buyer

B) Apartment Developer

A) Individual Prospective Apartment Buyer

Theoretically, anyone who is in the market of acquisition of an apartment is a potential client. VBL would target to provide finance to that particular segment or group who are reluctant to go to public sector financing, or want to reduce their income tax burden or those who want to invest their own resources for other profitable purpose. The clients are likely to be Businessmen, Bangladeshi wage earners working abroad, High officials of

Government and autonomous bodies as well as Executives / Officers working on different international / multinational corporations.

B) Apartment Developer

Targeting growing, developers who have proper record of accomplishment are the other group of potential initial clients. Financing these developers will have the added ad of cutting u. it the term of lending.

MARKETING MIX DEVELOPMENT

PRODUCT STRATEGY

Currently Borak Real Estate (Pvt) Ltd. offering variety of features and facilities for apartment holders such as affordable accommodation in desired locations, health club, roof top garden, and arrangement for children playing, European lift, stand by generator, prayer room, loan facility available , 24 hours security system and after sales service.

PRICE STRATEGY

Borak Real Estate (Pvt) Ltd. sale flat. After finish designing from a repotted architecture, they select price strategy. This price strategy based on some decision. Such as – cost of land develop, cost of raw material , payment of land owner etc. after this they set up a price. This price strategy is two types. One is at a time and another is by installment. If client want at a time payment, he get 10% discount from fixed price. On the other hand, if any one want by installment, he has to paid 30% with in 30 days. And he paid rest amount with 18 installment. Most of the Real Estate company flexi their installment process.

PLACE STRATEGY

The company Borak Real Estate (Pvt) Ltd. is conscious about their placing strategy. Borak Real Estate (Pvt) Ltd. targets a significance customer. BRE (PVT) LTD. also target middle upper class client. So these types of people want middle flat size in residential area. So think matter the company select price strategy. Most of the project of this company’s is Gulshan, also mohammadpur, Uttara, Kalabagan, Kathalbagan, Pallabi and Dhanmondi.

PROMOTION STRATEGY

The company Borak Real Estate (Pvt) Ltd. is very conscious how to promote their product. For the promotion of company’s product they use some media.

News media : They give at least 10 days advertise out of 30 days in news paper for sale their apartment in various location with different offer. Mainly they use the Ittefaq, The Prothom Alo, The Jugantor news paper etc. as media.

Hand note: To promote their product they use hand note process. They give hand note a number of targeted client for publicity their product and its location.

Festoon: To promote Borak Real Estate (Pvt) Ltd. use festoon as media of promotion strategy. Company gives an excellent offer which is mention there and in hang on main road side.

Bill board: Borak Real Estate (Pvt) Ltd. also use bill boards for company advertise. Bill boards are situated in main point in Dhaka city. Like front side of hotel Sheraton.

Web site: Details information of BRE’S web site. A large number of Probashi came to know about BRE’S project and also company and finally they purchase their flat.

SALES ANALYSIS

After end of the year 2007 Borak Real Estate (PVT) Ltd. analysis their sales. The company is successful to reach their visions. At the beginning of the year they make a plan for increasing their sales. They are able to purchase 90 flat in 2007. Marketing department follows different strategies and policies to convince the customer.
As a result marketing department is successful to increase their sales. Flat Sales in 2007 are given flowchart:

Name of the month Quantity
January 7
February 5
March 9
April 12
May 14
June 14
July 18
August 20
September 16
October 17
November 12
December 13

MARKET SHARE ANALYSIS

When Borak Real Estate (Pvt) Ltd. started construction their project was only three. In that year they sale only seven flats. In 2007 their project is 33 and they sold 95 flats in this year.

REHAB fair – 2007 which is held 19 th – 23 th February 2008 the company sale 15 flats. REHAB fair 2005, 120 companies total sold 870 flats and Borak Real Estate (Pvt) Ltd. sold 13 flats which is 1.27%.

In 2007 their total flat sale is 95 and all companies sold 19,975. Here their market share is 0.48%. There are three categories Real Estate company in Bangladesh. First class company sales 3900 total in a year and second class company total sales 9100 in a year and Third class company total sales 6975 in a year.

In 2007 Advance Development Technology sales flat 133, BDDL sales approx. 139, Navana Real Estate ltd. sales approx. 135, Amin Mohammad sales approx. 141 and Borak Real Estate (Pvt) Ltd. Sales 115.

PROFIT ANALYSIS

In the era of globalization, changing mindsets have recognized real estate as an important tool for economic growth and investment. The importance of the real estate recognized as a significant growth instrument. The greater volume of investment and development of real estate will drive economic development and stimulate capital formation in an increasingly competitive environment.

Planning for fund collections: Since it’s a real estate business, we need a huge amount of money to invest in the Company, as we look for the long- term investment and maximize the wealth of the company. In addition, administration and finance sector combined decided that we have a need for Tk. 20 core or above. Only Tk. 1 core have available in our hand, assume that it will provide by the private investment from companies shareholders. Therefore, the rest of the investment would come from the external source and administration of the company give ensures that they are able to create the fund from the following sources:

1. Long-term Sources

Customers’ Investment: 30% of the project. Marketing sector give us ensure that they are able to attract the attention of the buyer of the project and can sell all the apartment with the 30% of the customer’s investment.

Project ‘A’ will bear the cost approx. Tk. 8 core and will sell for Tk. 9 core. So, 30% of Tk. 9 core is Tk. 2 core 70 lac which is 33.75% of the total cost.

Bank Loan: Tk. 3 core with a interest rate of 10% for the 10 years, which is 37.5% of the total cost.

2. Intermediate–term Sources

Lease Financing Tk. 50 lacs for 5 years with a interest rate of 7% of the total investment. This will be to buy the companies equipment.

3. Short-term Sources

Short-term loan Tk. 80 lacs that is 10% of the total cost of project ‘A’. This amount will collect from the people of the company as a private loan with an interest rate of 6% according to the company Act of Bangladesh, 1994.

Retained Earnings

Retain earnings is the portion of companies profit which is not allocated to the shareholders of the company. These earnings will be termed as one of the sources of fund. As the company starts from new, retained earnings is not available since now. However, after the project ‘A’, we hope that some retain earnings will earn. This amount will investor further investment in the company. However, this is depends on the dividend policy of the company.

It is noted that we estimate only for the project ‘A’. However, after a period we add with the project ‘B’ and then we need the amount of Tk. 10 core. We will collect the fund according to the way of project ‘A’. Rest of the Tk. 10 core will acquire from the earnings of project ‘A’.
As the company starts from now, dividend will be paid after 2nd year, when project ‘A’ and project ‘B’ will finished. Payment policy such that we can reinvest the majority part of retains earnings.

CONCLUSION

Borak Real Estate (Pvt) Ltd. has adopted the modern business concept. But even now they do not get rid of from the traditional or conventional style. Moreover, the per unit cost of the products of the company is higher than the major rivals. So, the company has to take initiative to maintain the better quality at the lower unit cost from this moment. If they fail to achieve the target, the opportunity will be closed but threats come as a cyclone. If they want to continue the current sales growth and earn the same or increase the net profit margin they have to have concentrated on their major default point.

In my three months internship program I have tried my best to observe the company BRE (PVT) LTD. deeply. They have a good management team as well as marketing team also. I observed that the top management is skilled enough to run the business smoothly. But delegation of authority which is needed for getting better output from the employees.

For land procurement the company has no own agents to find out lands, they create apartments under joint venture with the land owners. To procure lands they offer both apartment and cash to the land owner.Unlikely the design department is not sufficient for the company. In the design and engineering section, the company has structural engineer, civil engineers and architects for creating apartments. But the company has no other engineers such as electrical engineer. They do it from outside consultants.
The company is creating only one product, apartments of several sizes. The mainly create apartments in the posh areas in the Dhaka city. We came to know that in near future they will create commercial building and apartments in several areas. The company has the opportunity to create apartments in the other metropolitan cities in Bangladesh.
Marketing department of this company is very strong than other departments. The personnel of this department are experienced enough to sell apartments. The marketing strategies of this company are strong to exist in the real estate market as a leader. The pricing policy of BRE (PVT) LTD. is very attractive to the customers as a result their maximum apartments are sold out before construction.

Legal side of this company is structured to face any kind of problems. But the logistics department is unstructured. For this reason, the company has to bear a extra cost. The raw materials procurement system is not structured, they have no substitute suppliers as a result they face problems for constructing apartments.

Overall position of this company in the real estate market is good enough in this short period of establishment. In this short period they create goodwill in the market and their target is to the number one in this industry.

Three months are short time to know everything of a company and it is too difficult to recommend something for the company. Even then I have tried my best to observe the overall position of the company. On the basis of my little knowledge, I may suggest the following recommendations for the smooth & successful operation of their business.

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