marketing - busn 319 - final-course project

Running head: J & J CUSTOM HOME BUILDERS MARKET PLAN 1

J & J Custom Home Builders Market Plan

Gagandeep Bedi Professor Heather Teague

DeVry University BUSN 319

March 27, 2016

J & J CUSTOM HOME BUILDERS MARKET PLAN 2

Table of Contents 1) Executive Summary .............................................................................................................................. 4 2) Company Description ........................................................................................................................... 5 3) Strategic Focus and Plan ....................................................................................................................... 6

Mission/Vision Statements.................................................................................................................... 6 Mission Statements ....................................................................................................................... 6 Vision Statements ......................................................................................................................... 6

Goals ..................................................................................................................................................... 6 Financial ........................................................................................................................................ 6 Nonfinancial .................................................................................................................................. 7

Core Competency and Sustainable Competitive Advantage ................................................................. 7 4) Situation Analysis ................................................................................................................................. 8

SWOT analysis ..................................................................................................................................... 8 Internal Strengths and Weaknesses: Management, Offerings, Marketing, Personnel, Finance, Manufacturing, and Research and Development (R & D) ............................................................ 8

External Opportunities and Threats: Consumer/Social, Economic, Technological, Competitive, and Legal/Regulatory ................................................................................................................................... 9

Industry Analysis .......................................................................................................................................... 9 Competitor Analysis ................................................................................................................................... 10 Customer Analysis ...................................................................................................................................... 11 5) Market-Product Focus......................................................................................................................... 11

Marketing .................................................................................................................................... 11 Product Objectives ...................................................................................................................... 12 Target Markets ............................................................................................................................ 12 Points of Difference .................................................................................................................... 13 Positioning .................................................................................................................................. 13

6) Marketing Program ............................................................................................................................. 14 Product Strategy .................................................................................................................................. 14 Price Strategy ...................................................................................................................................... 14

Breakeven Analysis for .............................................................................................................. 15 J& J CUSTOM HOME BUILDERS .......................................................................................... 15 See the Breakeven Analysis Data is shown in Appendix D ....................................................... 15

Place (Distribution) Strategy ............................................................................................................... 16 Promotion Strategy ............................................................................................................................. 16


Promotional Campaign ............................................................................................................... 17 7) Financial Data and Projections ........................................................................................................... 19

Past Sales Revenues ............................................................................................................................ 19 Five-Year Projections.......................................................................................................................... 20

8) Organizational Structure ..................................................................................................................... 20 9) Implementation ................................................................................................................................... 21 10) Evaluation and Control ....................................................................................................................... 22

Possible Deviations ............................................................................................................................. 22 Possible Solutions ............................................................................................................................... 22

Appendix A - SWOT analysis definition ....................................................................................................... 25 Internal Forces ..................................................................................................................................... 25

Strong market stance adds an aggressive edge ................................................................... 25 Establishes an mid to upper-income position ...................................................................... 25 Attention on operational proficiency contributes to improvement in margins ................... 25

Weaknesses ......................................................................................................................................... 25 Lawsuits might blacken company’s name .......................................................................... 25 J & J Custom Home Builders relies on subcontractors for building of homes ................... 26 High financial influence contributes to increased business risks ........................................ 26

External Forces ................................................................................................................................... 26 Opportunities ............................................................................................................................... 26 Growing immigrant population is likely to provide a demand for housing........................ 26 The developing housing building industry in Houston, Texas. .......................................... 26 There is a rising demand for green buildings ..................................................................... 26

Threats ................................................................................................................................................. 27 A weakening in the growth rate of global real estate management and development industry ....................................................................................................................................... 27 Intense competition might lead to a decline in revenue and margins ................................. 27 Governmental rules may increase construction costs ......................................................... 27

Appendix B - Segmentation list ................................................................................................................... 28 Appendix C - Price Strategy ......................................................................................................................... 29 Appendix D - Breakeven Analysis ................................................................................................................ 30 Appendix E - Segmentation list Promotional Campaign ............................................................................. 31 11) References ........................................................................................................................................... 37


1) Executive Summary J & J Custom Home Builders has established an office in the Houston market, since the Dallas housing market has been on a steady decline for years. J & J Custom Home Builders anticipates great demand for their homes in Houston, Texas, and the research shows that the target market would like to buy a custom built home. J & J Custom Home Builders is also involved in developing their product line into Houston, Texas with new innovated floor plans to draw in potential customers. The framework of this market proposal is designed to demonstrate how J & J Custom Home Builders will market the company, and the various types of analysis needed to enter the Houston market. J & J Custom Home Builders foresees achieving its mission and vision statement. J & J Custom Home Builders will strive to be the leading custom home builder in Houston, and be an inspiration to customers by helping them achieve their desire in choosing a well-designed custom built home. J & J Custom Home Builders has a list of financial and non-financial goals that it wants to achieve within a five year time period. J & J Custom Home Builders understands that its competitors have been operating in the Houston housing industry for many years, and will face some challenges to gain a market share into the Houston housing industry. J & J Custom Home Builders fundamental principle is to attain a competitive advantage, and deny the same advantage to its competitors. J & J Custom Home Builders has a set fundamental principle to help them offer a high quality product that will make its product more noticeable than its competition. J & J Custom Home Builders has assessed the position of the business both internally and externally, and also has conducted an environmental study which has helped to focus attention on social, economic, technological, competitive, and regulatory forces. J & J


Custom Home Builders has identified both the positive and negative trends and has built a strategy to counter-balance the environmental study. J & J Custom Home Builders has identified their Potential Customers as single individuals, married couples, with families, move up customers, and customers who have an income from $195,000 to $1,000,000+. J & J Custom Home Builders has provided a procedure for handling issues that do not go as planned, and they have identified their break-even point and how they will reach it. The current marketing situation has been very open to J & J Custom Home Builders high quality products, and is looking to gain a foot hold in the Houston housing industry.

2) Company Description J & J Custom Home Builders is a custom home builder that uses new construction, and new design techniques, such as AutoCAD Rivet to model customer’s homes, closed celled spray-foam insulation, Energy-efficient windows, Energy-Efficient Lighting, Flexible Plumbing, Energy Star appliances, and Heating, Cooling and Fresh-Air Management, to enhance the home-owning experience. This has resulted in having more individual, cooperative, and an empowered feeling from our homebuyers. J & J Custom Home Builders continually pushes the limits of what’s possible in homebuilding, and this has propeled them to become the 4th largest private home builder in 2015 with sales reaching over ten million dollars in the Dallas area. In order to expand their business, they have decided to expand into the Houston housing market.


3) Strategic Focus and Plan J & J Custom Home Builders is comprised of an enthusiastic team who brings growth to our communities by maintaining existing companies in the community, and assisting our clients in making their ideas become a reality.

Mission/Vision Statements Mission Statements J & J Custom Home Builders, Inc. mission is to deliver the highest-quality workmanship conceivable; and, the way we will accomplish this mission is by using reliable subcontractors, and by providing our staff with a solid work environment. It is our desire for remaining up-to-date with cutting-edge innovations within the housing industry, while being responsive to the environment.

Vision Statements J & J Custom Home Builders, Inc. is an enthusiastic team determined to bring growth to our communities by maintaining existing companies, and assisting our clients in making their ideas become a reality.

Goals Financial

To gain a market share of 20% during the first five years. To keep track of expenditures and find innovative ways to reduce cost

to build a home so that they remain competitive.


To evaluate how much is spent on advertising and determine the most effective ways to spend money on the market plan.

Nonfinancial To achieve a 100% of customer satisfaction. Keeping customers satisfied provides the opportunity for repeat

business. Satisfied customers are more likely to tell their friends or associates about the positive experience they had. This would generate additional customers.

To introduce various types of architectural designs into the Houston housing market.

Core Competency and Sustainable Competitive Advantage J & J Custom Home Builders strives to achieve its core competencies defined below, which will help them to be more competitive in the Houston housing market. Their core competencies are the following:

1. Always offering a high-quality product so their name gets associated with high-quality homes.

2. J & J Custom Home Builders will develop a list of A+ suppliers, vendors, and manufactures for a quicker turnaround time for the delivery of materials.

J & J Custom Home Builders can have a sustainable competitive advantage over its rivals by developing strong ties with their suppliers and vendors.


4) Situation Analysis SWOT analysis

SWOT analysis (strengths, weaknesses, opportunities, and threats analysis) is a framework for classifying and examining the internal and external influences that can have an effect on the sustainability of a project, product, place or person.

Internal Strengths and Weaknesses: Management, Offerings, Marketing, Personnel, Finance, Manufacturing, and Research and Development (R & D)

SWOT analysis

Internal Forces

Strengths Weaknesses Strong market stance adds an aggressive edge.

Lawsuits might blacken company’s name. Establishes a mid to upper-income position.

Reliant on subcontractors for the building of homes.

Attention on operational proficiency contributes to an improvement in margins.

A high financial influence contributes to increased business risks.

External Forces

Opportunities Threats A growing immigrant population is likely to provide a demand for housing.

A weakening in the growth rate of global real estate management and development industry.

The developing housing building industry in Houston, Texas.

Intense competition might lead to a decline in revenue and margins.

There is a rising demand for green buildings.

Governmental rules may increase construction costs.

The SWOT analysis definition is shown in Appendix A

Opportunities of the future There are many opportunities for J & J Custom Home Builders in the Houston housing market.

1. The immigrant population in Houston, Texas continues to grow, which will provide J & J Custom Home Builders with a steady source of customers, and tend purchase homes in the same subdivisions.


2. J & J Custom Home Builders is looking to exploit new green tech as it becomes available so that they maintain a competitive edge over their rivals.

External Opportunities and Threats: Consumer/Social, Economic, Technological, Competitive, and Legal/Regulatory

Environmental Scan

Environmental Force

Positive Trends Negative Trends Social When people are looking for a new

house some people look for the quality of the education available for their children.

If people are in low-paying or dead-end jobs it is likely they will not be able to pay for the basic necessities.

Economic Personal income levels are vital in the valuation in buying real estate.

When mortgage rates rise the housing sales falls.

Technological When a realtor list a home on the Internet it gives the average home a deep penetration into the local marketplace, thus accelerating “the pace of home sales” (Schroder, 2016).

Using new technology can be more expensive.

Competitive “Firms strive to secure a competitive advantage over their rivals” (Articles.bplans.co.uk, 2016).

In the housing market there is a lot of competitor rivalry especial on the price of a house.

Regulatory When people are looking for a new or a used home they will look at the demographics of the area such as school test scores to see what percentage finish and go on to college. The ratio of students to teachers are vital factors in determining the quality of schools.

In many states, the housing market is affected by the local taxes which can have an effect on the supply and demand for homes in certain areas that people are looking to move into.

Industry Analysis

The new home market in Houston, Texas continues its strong performance in the fourth quarter of 2015, “with builders starting construction on 6,591 new homes,” (News, 2015) and there has been a 7.3% increase from the fourth quarter of 2013. According to Houston Association of Realtors, "In January, existing home sales totaled 3,454. That is up 3.8 percent from the same month last year. The average sales price climbed 8.1


percent year-over-year to $242,220 while the median sales price rose 7.4 percent to $175,000” (www.yourwoodlandsnews.com, 2016).

Competitor Analysis The Houston housing market has many competitors such as Toll Brothers, Meritage Homes, Lennar, Darling Homes, Beazer Homes, David Weekley Homes, Ryland Homes, Plantation Homes, and many more. These companies offer many different floor plans and numerous selections to choose from. There are many different options & upgrades that can be used to personalize a client home from each of these builders. The Houston housing industry presents J & J Custom Home Builders with several positive opportunities to enter the Houston market:

1. As a designer and builder of green homes in the Dallas Texas area, J & J Custom Home Builders has steadily noticed arise in the demand for affordable home in Houston Texas.

2. J & J Custom Home Builder will use environmental friendly products whereas their competitors may not (i.e. future lawsuit).

3. Federal Deposit Insurance Corporation views J & J Custom Home Builders favorably by allowing them to acquire distressed residential communities worth near one billion dollars.

4. J & J Custom Home Builders can easily access low-cost capital due to the strength and transparency of their balance sheets, and they have also created associations with the banking industry and capital markets.

There are many competitors that offer the same type of product to the single, married, the well-educated, and couples who are looking to have kids or raise their kids in a good


community. J & J Custom Home Builders will have to offer discounts, promotional upgrades, and competitive prices so they can attract the consumers who are looking to build new homes in the Houston area.

Customer Analysis The customers of J & J Custom Home Builders will be anyone who is looking to build a new home in the Houston area, and the customers will represent single, married families who are raising kids, and well-educated individuals whose salaries annually range from $40,000 and up a year.

5) Market-Product Focus This section describes J & J Custom Home Builders marketing and product development for the Houston area, and it also provides information regarding the marketing and product objectives, target markets, points of difference, and positioning for J & J Custom Home Builders.

Marketing and Product Objectives

Marketing J & J Custom Home Builders strategy is to fill a void between inexpensive, and the most expensive homes on the market by targeting the single, married, the well-educated, and for people who are looking to have kids or raise their kids and income category, a group that values technology and the outdoors and the environment they live in. J & J Custom Home Builders will use a design-build approach, where they will design a home to fit a customer’s budget and then build it.


As changes occur during construction, J & J Custom Home Builders will adjust the design, products, as necessary to make sure the primary budget is upheld. J & J Custom Home Builders intends to use several non-traditional, environmentally-sound materials and methods to strive for the highest energy efficiency, and use a design approach to maximize energy efficiency and functionality.

Product Objectives Builders will take pride in the principles by which J & J Custom Home Builders run its business, and build its homes. While J & J Custom Home Builders anticipate a growing demand for our product and services, we will maintain our mission to produce the highest-quality workmanship possible; and the way we have achieved this is by using trustworthy subcontractors and by maintaining a solid work environment.

Target Markets J & J Custom Home Builders will primarily pursue the people who are looking to build a new home, and commercial construction projects in Houston, Texas which has continued to grow for many years. (See segmentation list shown in Appendix B). J & J Custom Home Builders has a unique offering of 100% ENERGY STAR certified appliances. Which are twice as energy-efficient as the traditional homes that are of the same size.

J & J Custom Home Builders offers many money-saving features:

1. Uses a closed celled spray-foam insulation 2. Energy-efficient

Windows Lighting


LED bulbs. 3. Flexible Plumbing 4. Heating, Cooling and Fresh-Air Management

o Merv 8 to 13 Air Filtration o Pressure-Balancing Enhanced Air Flow o Minimum Seer 14 HVAC o Fresh-Air Management

5. ENERGY STAR appliances The average homeowner will save approximately $50,000 over his or her 30-year

mortgage by using energy-efficient windows, energy-efficient heating and cooling system, by using ENERGY STAR appliances that use less water and energy.

Points of Difference Market Segments of Potential Customers

Points of Difference New ideas for the product Single people Green design. Closed celled spray-foam

insulation. Married couples Reduce radon emissions. Radon Gas Testing and

Mitigation. With Families Different lot choices that are

available. Some of the communities are gated and located near top school districts.

Move up customer bigger selection of floor plan innovative floor plan anyone who has the income from $195,000 to $1,000,000+

Many types of floor plan that people can choose from.

Integrate technology into the home.

Positioning J & J Custom Home Builders would like to offer extraordinary homes to its customers for their pleasure for many years to come. J & J Custom Home Builders has many base models that can be modified to meet the customer’s expectations and desires. J & J


Custom Home Builders prefers to be acknowledged as a company that fulfills our customers’ wishes to improve our customers’ lives.

6) Marketing Program Product Strategy

J & J Custom Home Builders is a contractor focusing in providing quality, comfortable, and affordable homes for the buyer who are concerned about the environment, the future, and streamlining the way they live. J & J Custom Home Builders blends sustainable construction methods, and renewable energy sources to form a systems approach to home design in the Houston area.

Price Strategy J & J Custom Home Builders uses a simple formula to compute how much to charge for different types of homes they build.

Square-foot home * Price/Square Feet = Home price

For example: 2,400 sq. ft. * $ 120 = $ 240,000

Home price / Square-foot home = Price/Square Feet

For example: 240,000/2,400 = $ 120

(See segmentation list shown in Appendix C).


Breakeven Analysis for

J& J CUSTOM HOME BUILDERS Parade of Homes Sales for the month of September 2016

SALES AVGRAGE SALES PRICE $911,087.70

SALES VOLUME PER PERIOD (UNITS) 100 TOTAL SALES $91,108,770.00 VARIABLE COSTS COMMISSION PER UNIT $3,000.00 DIRECT MATERIAL PER UNIT $100,000.00 SHIPPING PER UNIT $40,000.00 SUPPLIES PER UNIT $1,500.00

OTHER VARIABLE COSTS PER UNIT $500.00 VARIABLE COSTS PER UNIT $145,000.00 TOTAL VARIABLE COSTS $14,500,000.00 UNIT CONTRIBUTION MARGIN 766,087.70 GROSS MARGIN $76,608,770.00 FIXED COSTS PER PERIOD

ADMINISTRATIVE COSTS $1,200.00 INSURANCE $500.00 PROPERTY TAX $150.00 RENT $800.00 OTHER FIXED COSTS $750.00 TOTAL FIXED COSTS PER PERIOD $3,400.00

NET PROFIT (LOSS) $76,605,370.00

See the Breakeven Analysis Data is shown in Appendix D

($20,000,000.00)

$0.00

$20,000,000.00

$40,000,000.00

$60,000,000.00

$80,000,000.00

$100,000,000.00

0 10 20 30 40 50 60 70 80 90 100

DOLLA

RS

SALES VOLUME (UNITS)

Breakeven Analysis Chart

FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES NET PROFIT (LOSS)

$3,000.00 , 2%

$100,000.00 , 69%

$40,000.00 , 28%

$1,500.00 , 1%$500.00 , 0%

Variable Costs per Unit

COMMISSION PER UNIT DIRECT MATERIAL PER UNITSHIPPING PER UNIT SUPPLIES PER UNITOTHER VARIABLE COSTS PER UNIT

$145,000.00 , 16%

766,087.70 , 84%

Unit Contribution Margin

VARIABLE COSTS PER UNIT UNIT CONTRIBUTION MARGIN


Place (Distribution) Strategy

J & J Custom Home Builders manufacturing network consist of contracted suppliers, vendors, and subcontractors who supply the necessary materials for the contracted home. J & J Custom Home Builders fixed costs are approximately $80,000 per year, and they have to factor in approximately five to ten percent for all the supplier and vendors. They have also had to factor the subcontractor’s labor, loan payments, equipment costs, and selling and administrative costs into the cost of the home.

J & J Custom Home Builders uses the following formula, to calculate the break-even point for J & J Custom Home Builders:

((Suppliers/vendors)*5% to 10%) + ((subcontractor labor cost)*2% to 5%)) = price of the house

Promotion Strategy J & J Custom Home Builders will use direct and digital marketing, sales promotion, and advertising to promote their home designs in the Houston market. These networks are vital to J & J Custom Home Builders, and they allow J & J Custom Home Builders, to lessen capital requirements, and provide a faster access to established distribution networks. The overall marketing plan for J & J Custom Home Builders is created on the following:

J & J Custom Home Builders wants to target consumers who are looking for new homes in the Houston market.

To capture a piece of the Houston housing market over a fixed period of time.


The distribution channels that J & J Custom Home Builders plans to use so that they can reach the different Houstonian markets is the following: television, radio, sales associates, and mail order.

J & J Custom Home Builders wants to capture 20% of the housing market over the next three years, and has created a promotional campaign. J & J Custom Home Builders is aggressively dedicated to a widespread promotional campaign, and it has set two important sales goals, as follows:

1. To attract home buyers who are looking or renting apartments, first time home buyers, families with kids, families who want to raise their child in one of the tops ranking school district, and people with pets.

2. To draw experienced sales personnel who have a desire to be successful.

Promotional Campaign J & J Custom Home Builders has created a few promotional programs that sales personnel can use to entice the home buyers to buy one of their homes instead one of their competitors, and will use special offers, military discount, refer a friend, and realtors party. J & J Custom Home Builders will use a wide range of promotional strategies such as hiring experienced realtors, using the Internet media, paid advertising, events, printed materials, direct mail, limited-time-only promotion and a staged home will help to them promote their green home designs to the Houston home buyers. (See Promotional Campaign list shown in Appendix E).


Sales promotion schedule January February March April May June July August September October November December

Sales promotions

Direct marketing

Bulk mail Bulk mail Bulk mail Bulk mail Bulk mail Bulk mail Bulk mail Bulk mail Bulk mail Bulk mail Bulk mail Bulk mail Email Email Email Email Email Email Email Email Email Email Email

Personalized letters











Point of sale displays








Point of sale displays Point of sale displays



Digital marketing Company websites Company websites Company websites Company websites Company websites Company websites Company websites

Company websites Company websites Company websites

Company websites Company websites

Social media - Facebook












YouTube YouTube YouTube YouTube YouTube YouTube YouTube YouTube YouTube YouTube YouTube YouTube

Advertising

Outdoor banner and flags












Business directories Business directories Business directories Business directories Business directories Business directories Business directories Business directories Business directories Business directories

Business directories Business directories

Magazines / newspapers







Magazines / newspapers Magazines / newspapers Magazines / newspapers



TV / cinema TV / cinema TV / cinema TV / cinema TV / cinema TV / cinema TV / cinema TV / cinema TV / cinema TV / cinema TV / cinema TV / cinema Radio Radio Radio Radio Radio Radio Radio Radio Radio Radio Radio Radio

Offers by J & J Custom Home Builders

Special offers

$10,000 off $10,000 off $15,000 off $15,000 off $20,000 off $20,000 off $25,000 off $25,000 off $25,000 off $30,000 off $30,000 off $35,000 off

$1,000 towards the buyers closing cost







$2,500 towards the buyers

closing cost $2,500 towards the buyers

closing cost $3,000 towards the buyers

closing cost $3,000 towards

the buyers closing cost


$2,000 off if they use Bank

of America $2,000 off if

they use Bank of America
















Military discount 15% off to all

working and retired

military personal

15% off to all working

and retired military personal













15% off to all working and retired

military personal 15% off to all working






Parade of Homes upgrades

upgraded paint upgraded paint

Standard Edge Granite in

Kitchen Standard Edge Granite in

Kitchen

Free $1,500 Tile

Backsplash Allowance, Free $1,500 Tile

Backsplash Allowance,

Free Soft Close Wood

Dove Tail Drawers with 5 Piece Front

Free Soft Close Wood Dove Tail Drawers with 5

Piece Front Realtors incentives

Inventory home $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 contracted client $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,500 $4,500 $4,000 $4,000


7) Financial Data and Projections Past Sales Revenues

Twelve Months Ended October 31, Nine Months Ended

July 31, 2015 2010 2011 2012 2013 2014

Earnings (loss):

Income (loss) before income taxes $(117,187 ) $ (29,366) $112,942 $267,697 $504,582 $318,019 Interest expense 106,997 80,282 90,521 115,238 142,851 98,069 Rent expense 5,528 4,135 3,728 3,658 4,128 3,099 Amortization 1,374 1,347 1,782 2,952 3,639 2,655 $ (3,288 ) $ 56,398 $208,973 $389,545 $655,200 $421,842 Fixed charges: Homebuilding Interest incurred $ 114,975 $114,761 $125,783 $134,198 $163,815 $117,896 Rent expense 5,528 4,135 3,728 3,658 4,128 3,099 Amortization 1,374 1,347 1,782 2,952 3,639 2,655 $ 121,877 $120,243 $131,293 $140,808 $171,582 $123,650 Ratio (a) (a) 1.59 2.77 3.82 3.41


Five-Year Projections Forecasted Sales for the next five years

2016 2017 2018 2019 2020 Earnings (loss): Income (loss) before income taxes $ 250,187 $ 400,366 $ 550,942 $ 700,697 $ 850,582 Interest expense 56,997 120,282 150,521 115,238 142,851 Rent expense 2,528 4,135 3,728 3,658 4,128 Amortization 2,000 2,347 3,782 2,952 3,639 $ 188,662 $ 273,602 $ 392,911 $ 578,849 $ 699,964

8) Organizational Structure

J & J Custom Home Builders is a family run business which was founded in 1995 in Dallas, Texas. The chief executive officer (CEO) is Colin Jameson, and he has two sons Stephen and Roy. Stephen Jameson has a Bachelor of Arts in Business Administration with a Project Management specialization. Roy Jameson has a Bachelor of Arts in Management with a General Management specialization. Recently, the daughters of Stephen and Roy Jameson have joined the J & J Custom Home Builders family. Maddie Jameson has Bachelor of Arts in Business Administration with a Global Supply Chain Management specialization; and Ruby Jameson has Bachelor of Arts in Business Administration with Business Intelligence, Analytics Management, and Accounting specialization.


9) Implementation J & J Custom Home Builders is rapidly establishing new marketing associations with industry forerunners, and pursuing new home sales in the Houston market. J & J Custom Home Builders market strategy is to capitalize on their relationships by securing land at market value, and continuously looking for new products and techniques to help lower overhead expenditures.

J & J Custom Home Builders will adhere to Occupational Safety and Health Administration (OSHA), the international building code (IBC), and any city or states codes while they are constructing the customer's home such as scaffolding access for the framework. J & J Custom Home Builders corporate strategy is devoted to improving the performance of their critical path of its customers' projects. J & J Custom Home Builders will do this by structuring the company on its core strengths: innovations, design engineering expertise, and project and site management. J & J Custom Home Builders customer service philosophy is ingrained in the organization of the company, which starts at the top and is a critical success factor. J & J Custom Home Builders customer service can be split into two areas: equipment and people. J & J Custom Home Builders is on the cutting edge of technology, and this has enabled them to maintain excellence when it comes to managing their inventory, shipments/deliveries, damage/loss, and invoicing. J & J Custom Home Builders will deliver a highly skilled and well- organized labor force. This will guarantee that schedules and deadlines are met.


10) Evaluation and Control J & J Custom Home Builders is trying to meet their objectives and goals. In the event the goals and objectives are unachievable or the original plan does not follow through, J & J Custom Home Builders will use corrective actions, and preventive measure including solutions to follow through:

Possible Deviations J & J Custom Home Builders has established goals for capturing

20% of the market in a five-year expansion plan. These goals may take more than five years to achieve.

J & J Custom Home Builders may face high competition for their product within the Houston market.

Possible Solutions J & J Custom Home Builders needs to develop a five-year plan in

order to devote time to the market plan and get a contribution from all managers. When the Houston housing market is in a downturn, J & J Custom Home Builders will have to work with their vendors, and suppliers to create better designs that can reduce the amount of waste and speed up construction in the field.

J & J Custom Home Builders use Construction Agreement that provides answers to most problems that are due to inconsistencies between documents such as incorrect custom orders, subcontractors working off of an old set of blueprints, additional occurring cost in the course of construction such as the following: bad soil, termite damage or dry rot,


delays in construction, and well-intentioned mistakes. J & J Custom Home Builders has solved this by creating a Construction Agreement that helps the project manager communicate any conflicts between contract documents or delays in construction to the client.

Incorrect custom orders J & J Custom Home Builders has clearly defined construction specifications for eliminating incorrect order. If a custom order was not completed properly, J & J Custom Home Builders has two options:

1. That they can accept the order the way it is avoiding delays in the schedule thus pushing back your completion date.

2. J & J Custom Home Builders understand that taking an improper custom order usually turns into some benefit for the homeowner because they have to give up something else in return for the homeowners accepting what they didn't order.

Subcontractors working off of an old set of blue prints J & J Custom Home Builders has come up with solutions to ensure that contractor have the most recent plans working while they construct a house; thus eliminating any confusion on which set of plans is most current, and the final set of plans are noted in Construction Agreement and responsibility falls on the subcontractor to verify that they have the latest plans.


Delays in construction

J & J Custom Home Builders has an acceptable list of reasons for delays. When major problems arise, which can impact the project need to be tackled as quickly as possible regardless of whose mistake. “The biggest sin with construction delays is not talking about the delays because it allows homeowner fears to manifest and grow,” ("How to Solve Common Construction Problems", 2016).

Well-intentioned mistakes. Sometimes carpenters and subcontractors often believe that there is a more efficient way to complete their task, but unfortunately doing this may deviate from the blueprints. If this happens, J & J Custom Home Builders has a strict policy that all unapproved alteration must be torn out immediately at the expense of the subcontractor.

If carpenters and subcontractors have a better way of doing the task quicker, they can approach the project manager and explain and demonstrate the new technique for J & J Custom Home Builders approval thus help with the bottom line.


Appendix A - SWOT analysis definition Internal Forces

Strong market stance adds an aggressive edge o J & J Custom Home Builders will hold a leading position, and take advantage

of changes in economic business cycles in the Texas homebuilding industry. Establishes an mid to upper-income position

o J & J Custom Home Builders wants to target middle to higher-income clients such college graduates' who desire new homes over existing construction, and often want customized floor plans to reflect their personal expression.

Attention on operational proficiency contributes to improvement in margins o J & J Custom Home Builders is dedicated on capitalizing on operational

competence by reducing “cycle times, increasing number of floor plans offered for sale, renegotiated costs, reduced its direct cost by an average of 25%” (Lennar Corporation SWOT Analysis.: EBSCOhost, 2016), and J & J Custom Home Builders has become cautious when they are purchasing land to avoid competitive bid situations which can drive the land price over market value.

Weaknesses Lawsuits might blacken company’s name

o Litigation can damage the company's reputation and make it harder to raise money in the future. It might also tarnish company's image in the eye of the customer.


J & J Custom Home Builders relies on subcontractors for building of homes o J & J Custom Home Builders presently has to depend on subcontractors for its

home construction, as well as in choosing and procuring construction materials. Therefore, J & J Custom Home Builders does not have any control over their quality.

High financial influence contributes to increased business risks o When interest rates rise, J & J Custom Home Builders net profits decreases

which can lead to the inability to control production-to-cash. External Forces

Opportunities Growing immigrant population is likely to provide a demand for housing

o Over the last few years there has been a large influx of African, Hispanic, and Asian immigrants moving into the Houston area. This has contributed to the first-time homebuyer market, and this trend continues to rise which contribute to J & J Custom Home Builders potential customer base.

The developing housing building industry in Houston, Texas. o J & J Custom Home Builders predominantly operates in the Texas area, and

their sales are projected to be $300 million dollars. J & J Custom Home Builders is looking to expand into neighboring states.

There is a rising demand for green buildings Green building design is a universal idea that creates understanding that the built environment can have profound effects, both positive and negative on the environment, as well as the people who inhabit buildings


every day. Green building design, “is an effort to amplify the positive and mitigate the negative of these effects throughout the entire life cycle of a building” (Kriss, 2016).

o Over the last few years, J & J Custom Home Builders has been incorporating green building designs into their homes, and this has helped them reduce their operating costs by 13.6%, and it also has helped increased the home value by 10.9%.

Threats A weakening in the growth rate of global real estate management and development

industry o When real estate and development in the housing industry decrease could

affect J & J Custom Home Builders business undesirably. Intense competition might lead to a decline in revenue and margins

o When prices of construction materials go up it can put pressure on J & J Custom Home Builders bottom line.

Governmental rules may increase construction costs o J & J Custom Home Builders has to deal with many complex regulations

which range from “federal, state and local laws and regulations, including zoning, density and development requirements, building, environmental, advertising and real estate sales rules and regulations,” (Toll Brothers Inc, 2014)


Appendix B - Segmentation list Basic of

Segmentation Segmentation

Variables Typical Breakdowns Geographical Region Houston, United States City size 656.3 square miles Statistical area Metropolitan area Media-television 17 designated market areas Density 3,515 people per square mile Demographics Gender Male, Female Age 25-50

Race/ethnicity Life stage Adults; first-time home

buyers Birth era Generation X; Boomers II or Generation

Jones Household size

Never married; married; separated, divorced; widowed; domestic partner

Income $25,000-$34,999 and up

Education People who have Associate; bachelor; master; doctorate Degrees

Occupation Managerial & professional; technical, sales; etc.

Psychograrhic

Lifestyle

Blue Blood Estates; Movers & Shakers; Young Digerati; Money & Brains; New Empty Nests; Young & Rustic; Greenbelt Sports

Needs Quality; service; price/value; health

Behavioral

Direct marketing Mail order, Internet, direct response, mass merchandiser

Product features Situation-specific; general Awareness/intentions Unaware; aware; interested; intending to

buy; purchaser; rejection


Appendix C - Price Strategy J & J Custom Home Builders based model

House Plan Square Feet Price/Square Feet Home's price Saint Charles 1,950 $ 100 $ 195,000

Venice 2,400 $ 120 $ 240,000 Raven 3,250 $ 140 $ 455,000

The Eagle 3,550 $ 150 $ 532,500 Sophie 4,550 $ 164 $ 746,200

Bellingham 5,000 $ 164 $ 820,000 Richard 6,000 up to 7,000 $ 250 $ 1,500,000

Margaret 8,000 $ 350 $ 2,800,000+

J & J Custom Home Builders based model House Plan Square Feet Price/Square Feet Home's price

Saint Charles 1,950 $100 $195,000 Venice 2,400 $120 $240,000 Raven 3,250 $140 $455,000

The Eagle 3,550 $150 $532,500 Sophie 4,550 $164 $746,200

Bellingham 5,000 $164 $820,000 Richard 6,000 up to 7,000 $250 $1,500,000

Margaret 8,000 $350 $2,800,000 Total House Price $7,288,700

Total House Price /

House plan $911,088 Avg. Sales Price Per Unit


Appendix D - Breakeven Analysis SALES VOLUME ANALYSIS: SALES VOLUME PER PERIOD (UNITS) 0 10 20 30 40 50 60 70 80 90 100 SALES PRICE PER UNIT $911,087.70 $911,087.70 $911,087.70 $911,087.70 $911,087.70 $911,087.70 $911,087.70 $911,087.70 $911,087.70 $911,087.70 $911,087.70 FIXED COSTS PER PERIOD $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 $3,400.00 VARIABLE COSTS $0.00 $1,450,000.00 $2,900,000.00 $4,350,000.00 $5,800,000.00 $7,250,000.00 $8,700,000.00 $10,150,000.00 $11,600,000.00 $13,050,000.00 $14,500,000.00 TOTAL COSTS $3,400.00 $1,453,400.00 $2,903,400.00 $4,353,400.00 $5,803,400.00 $7,253,400.00 $8,703,400.00 $10,153,400.00 $11,603,400.00 $13,053,400.00 $14,503,400.00 TOTAL SALES $0.00 $9,110,877.00 $18,221,754.00 $27,332,631.00 $36,443,508.00 $45,554,385.00 $54,665,262.00 $63,776,139.00 $72,887,016.00 $81,997,893.00 $91,108,770.00 NET PROFIT (LOSS) ($3,400.00) $7,657,477.00 $15,318,354.00 $22,979,231.00 $30,640,108.00 $38,300,985.00 $45,961,862.00 $53,622,739.00 $61,283,616.00 $68,944,493.00 $76,605,370.00


Appendix E - Segmentation list Promotional Campaign J & J Custom Home Builders will use Integrated Marketing Communications so that they put out a consistent message about their green home. This will save their homebuyer’s money.

Direct and digital marketing

1. Direct marketing Bulk mail

J & J Custom Home Builders uses postal mail for direct mail marketing campaigns. Sending a postcard to residents of the area in which the homes are located in, or renter households in a certain income range, could be a useful supplement to other marketing techniques.

Email J & J Custom Home Builders will develop an e-mail list of contacts from

people who are looking to be homebuyers so that they can send e-mail “blasts” about new property listings, open houses, and so forth.

2. Digital marketing

Company websites J & J Custom Home Builders will work with the real estate agent’s

website to promote their homes in the areas that they are located. Social media applications such as Facebook or Twitter.


YouTube “YouTube.com has become a popular place for video home tours.

They can be as simple as a silent sweep of different rooms or a hosted tour of the home with the host pointing out key selling features” (Marketing Strategies and Tools, 2016).

Advertising Outdoor banner and flags

J & J Custom Home Builders will create large outdoor banners placed on the front lawn of your homes for sale so that it can draw attention to them.

Magazines/newspapers Newsletter:

o J & J Custom Home Builders may still find people who may want to communicate by reading a printed neighborhood newsletter.

Magazines / newspapers o J & J Custom Home Builders plans to use the local

newspapers, magazines and newsletters to create print media for “home sales might be the weekly real estate guides that are published by your local Board of REALTORS® and distributed free in grocery stores and other retail businesses” (Marketing Strategies and Tools, 2016).


TV J & J Custom Home Builders tends to use the cable television

stations increases awareness about the product. Television advertising, because it is a very targetable medium.

Radio J & J Custom Home Builders will use the radio to spread the

news about the green technology that they are using for their homes, because of the fact that it has a wide range of audiences and the number of stations.

Other advertisement J & J Custom Home Builders will use billboards to promote

housing developments. Listing Sheet:

J & J Custom Home Builders will work with real estate agents so that they can create a customized listing sheet that points out the home’s best features. This can be used by the agent, and your team as a handout during marketing events.

Events Open houses

o J & J Custom Home Builders will make use of open houses which are a time-honored method of getting serious buyers into your home to see the characteristics


of their home firsthand. Interested buyers can also get a tailored tour from someone experienced at determining their interests and presenting the benefits most relevant to them.

Home Tours: o J & J Custom Home Builders will partake in Parade of

Homes to showcase their homes to the Houston market.

o Sales promotion Special offers

Up to $30,000 off the list price of constructing a new home. Up to $5,000 off if they use Bank of America (BoA). J & J Custom Home Builders will pay up to $2,000 towards the buyers

closing costs as long as they use BoA.

The point of a limited-time-only promotion is to create a sense of urgency among potential buyers, giving them a reason to act now instead of later. It can be particularly useful to incentivize the first buyers in a neighborhood that is considered a little high-risk.

Military discount J & J Custom Home Builders will offer 15% off the base price of a

home to all working and retired military personnel.


Refer a Friend J & J Custom Home Builders has just recently launched the Refer a

Friend program in Houston, Texas. This allows the homeowner or contracted buyer to earn up to $500 for every contracted buyer.

Realtors party J & J Custom Home Builders often holds a party for the realtor so that

they can inform the realtor on the company standing, and the different type of home that they offer.

J & J Custom Home Builders will take professional photographs of the homes interior and exterior for the web site.

Produce a personalized flyer/listing sheet on your property. J & J Custom Home Builders will create a customized Google

map showing your home’s location with the nearby amenities such as shopping, entertainment, schools, parks, etc.

Stage the home for sale J & J Custom Home Builders will “Hold open houses for other

agents and potential buyers” ("Home Marketing and Sales Guide", 2016).

J & J Custom Home Builders will use social media channels to promote the home.

J & J Custom Home Builders will keep a front yard sign with a flyer box filled with flyers.


J & J Custom Home Builders will work with real estate agent’s so that they can create a customized listing sheet that points out the home’s best features, and can be used by the agent, and your team as a handout during marketing events.

The Parade of Homes Promotion Free Standard Color Standard Edge Granite in Kitchen Free $1,500 Tile Backsplash Allowance, Free Soft Close Wood Dove Tail Drawers with 5 Piece Front


11) References Exhibit. (2016). Sec.gov. Retrieved 25 March 2016, from

http://www.sec.gov/Archives/edgar/data/89377/000079417015000043/tols3posasr1ex12.htm

Houston real estate market kicks off 2015 with gusto. (2016). www.yourwoodlandsnews.com. Retrieved 25 March 2016, from http://www.yourhoustonnews.com/woodlands/news/houston-real-estate-market-kicks-off-with-gusto/article_2f8a8c6c-1915-5609-b727-904a8b303241.html

Kriss, J. (2016). What is green building? | U.S. Green Building Council. Usgbc.org. Retrieved 25 March 2016, from http://www.usgbc.org/articles/what-green-building

Lennar Corporation SWOT Analysis.: EBSCOhost. (2016). Web.b.ebscohost.com. Retrieved 25 March 2016, from http://web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=97748772-20e9-4fe1-b0dc-9a75b7b4829e%40sessionmgr112&vid=12&hid=130

Marketing Strategies and Tools | Home Marketing and Sales Guide. (2016). Homesales.stablecommunities.org. Retrieved 6 April 2016, from http://homesales.stablecommunities.org/promoting-product-benefits/marketing-strategies-and-tools

News, M. (2015). Market Ends 2014 Strong Even as Oil Prices Plummet - Metrostudy | Housing Starts Here. Metrostudy | Housing Starts Here. Retrieved 25 March 2016, from http://www.metrostudy.com/market-ends-2014-strong-even-as-oil-prices-plummet/

Porter’s Five Forces. (2016). Articles.bplans.co.uk. Retrieved 25 March 2016, from http://articles.bplans.co.uk/marketing-a-business/porter%E2%80%99s-five-forces/328

Toll Brothers, Inc.: EBSCOhost. (2016). Web.b.ebscohost.com. Retrieved 25 March 2016, from http://web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=97748772-20e9-4fe1-b0dc-9a75b7b4829e%40sessionmgr112&vid=17&hid=130


Grading Rubric for Final Plan Submission Category % Description Documentation & Formatting 5/5% Quality work will include a title page, table of contents, proper citations, and a reference page in APA format including at least three references.

Your final marketing plan should be between 10-15 pages. It must have clearly marked headers for each section and sub-section of the marketing plan outline.

Organization & Cohesiveness 20/20% A quality paper will use the marketing plan outline in Doc Sharing for its organization. The content will be properly subdivided into sections (HEADINGS & SUB-HEADINGS ARE REQUIRED) that follow the Marketing Plan outline EXACTLY. The final plan will include a breakeven analysis. It will incorporate feedback provided from your instructor on your Week 4 draft (if applicable). The executive summary will be added, and should summarize your plan. It should include the reasoning you employed in your analysis, as well as any outstanding conclusions you can reach about the marketing plan for your chosen product or service.

Editing 5/5% A quality paper will be free of any spelling, punctuation, or grammatical errors. Sentences and paragraphs will be clear, concise, and factually correct. Content 70/70% A quality paper will have significant scope and depth of research to support any statements. A quality paper will cover all the sections outlined below (from the Marketing Plan Outline doc). The content presented must demonstrate an understanding of the material.

Required Sections FOR FINAL PLAN Include: Executive Summary (4%)


Company Description (2%) Strategic Focus & Plan (10%) Situational Analysis (10%) Market-Product Focus (10%) Marketing Program (added break-even analysis to pricing section) (10%) Financial Data & Projections (10%) Organizational Structure (2%) Implementation (4%) Evaluation & Control (4%) Bibliography / References (4%)

Total 100/100% 220/220 pts

Overall, you wrote an actionable, strategic marketing plan developed on sound research and market potential. GREAT WORK!!

marketing - busn 319 - final-course project

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