1.0 SITUATION (S.W.O.T) ANALYSIS

1.1 Strengths

- Secure capital funding of $2M. Henceforth not needing to raise money and look for investors.
- Innovative design of property. This will attract new and innovative-thinking tenants. Therefore Callan Properties will be able to gain a competitive advantage.
- Callan Homes is an established market homebuilder with existing resources that can be used, henceforth lowering the overhead cost and increasing profitability.
- Potential higher return than average on the property, therefore Callan Properties will achieve higher profitability.
- Experienced marketing manager with own personal experience with renting; therefore being able to give an insight into what is required to attract customers.

1.2 Weaknesses

- Higher costs of maintenance due to the nature of the business setup, affecting Callan Properties bottom line profits.
- Limited selling potential as there will be a limited number of families that have the desire to buy a property with segregated living conditions.
- Lack of production flexibility may cause the properties to be out-of-date because of the high cost and lengthy time required to build or renovate a building.
- Callan Properties is new and inexperienced in the property leasing business, as they have only been homebuilders. This may lead to CP making wrong decisions due to lack of knowledge.
- The high cost of production may lead to an extended period of time before CP can recoup its investment therefore causing a bottleneck in its cash flow.

1.3 Opportunities

- The concept has the potential to attract innovators, young affluent tenants, therefore commanding higher rental rates.
- Recent trends have shown that there has been an increase of international students, greater than ever, which will result in more demand for fully furnished accommodations with an added advantage that all building sites are situated near universities.
- Opportunities are available in the short-term rental market. Higher rent charges can make up for shorter term of lease and it will be a good fit in price point compared to more expensive hotels or serviced apartments.
- As the demand for property around the Perth metro increases, and as the supply decreases, the price of rental properties are sure to rise, giving the opportunity for higher rental rates.
- An upturn in economy may result in the higher prices of properties, thus lowering the number of available rental properties, leading to a low vacancy rate.

1.4 Threats

- There might be a lack of public interest due to uncharted territory (never been done before) causing the whole idea to be a flop and resulting in massive financial loss.
- A downturn in economy might affect the prices of properties to fall, resulting in higher rental properties, which will lead to a porous rental market and a high vacancy rate.
- Occupancy rate can be seasonal and an average is not possible to determine therefore there is no guarantee that all the units will be rented out.
- The tenants have no sense of ownership; therefore property may be damaged due to careless nature of tenants.

2.0 OBJECTIVES AND STRATEGY

2.1 Marketing and Financial Objectives

2.1.1 Marketing Objectives

- Promote the concept/idea as a differentiated product.
- Establish the product in a product-differentiated market.
- Matching people with similar interest in one household.

2.1.2 Financial Objectives

- Generate a gross annual return of 8% in proportion to investment.
- Achieve total occupancy rate of 90% (of which 60% is long term, 30% short term, 10% holiday term)
- Breaking even in x months (Sx = VCx + FC + P)

2.2 Strategy Statement
Develop an innovating life style for the young generation through direct advertising, affordable pricing, quality of product in a convenient environment.

2.2.1 Overall Game-plan
Realise the marketing mix for each of the target markets.

2.2.2 Target Markets

- International and local students, of both genders, with no age limitation. This target market is identifiable due to the large number of students in Western Australia. International students are profitable because they’re prepared to expend a substantial amount of money on their education, as well as lifestyle. The local students are profitable because they receive financial support from the government. They are accessible through promotion by channeling through the universities, and positive word-of-mouth, as most students are within a close knit community.

Ø Product:
- Four self-contained rooms in a normal house layout.
- Features fully furnished rooms with air conditioning to combat the hot Perth weather.
- Brand new up market chic homes.
- Minimal maintenance, easy care.
- Separate billing of utilities, eliminating conflicts amongst tenants.
- An innovative design property that ensures tenants enjoy the comfort of a modern house without the burden of high rental rates.

Ø Place:
- Selective distribution to certain universities.
- Channel of distribution is from manufacturer straight to end consumers (tenants).
- Location of houses will be close to universities and amenities.

Ø Promotion:
- Promotion through universities in notice boards and campus newspaper.
- Word of mouth through universities students.
- Advertising through the campus’s websites.
- Availability of accommodation through homestay.

Ø Price:
- Long term lease (12 months) - $135.00
- Short term lease (6 months or less) - $150.00

- Young adults, of both genders, between the ages of 18-30, innovators and trendsetters, social butterflies in search of new friendships. They are accessible because tenants of this age have the previously mentioned attributes. They are generally employed with a source of income.