in China

1
in China

• Parker Bollinger
• Lily Man
• Kyaw Kyaw Soe
• Maggie Wu
• Xiaofei Yang
• Sarah Yantek

2
Above the Crowd

• Overview of RE/MAX and its service
• Description and analysis of the market --China
  (Shanghai)
• Selected foreign entry mode
• Marketing mix
• Recommendation and conclusion

3
RE/MAX Overview

• Dave and Gail Liniger founded RE/MAX in Denver,
  Colo., in 1973
• World leader in residential real estate
• 5163 offices in 52 countries
• 97,000 sales agents
• Services include
• Consulting
• Buying and Selling
• relocation and asset management
• commercial investment
• and many more

4
RE/MAX Overview Cont.

• Brand Awareness
• Balloon Logo
• Network Size
• Knowledgeable Workforce
• Avg. of 12-year experience
• Nobody in the world sells more real estate than
  RE/MAX.

5
China

• Market Characteristics
• Population totals 1.3 billion
• Culture
• Economic Growth
• 2nd Largest Economy in 2003 (based on PPP)
• GDP growth 9.1 in 2003
• Investment accounts for 43.4 of GDP
• Political and Legal Environment
• Transition toward market economy
• State controlled land rights
• Transfer of rights to use land

6
Why Shanghai??

• Largest City
• One of the 4 Municipalities in China
• Financial Center of China
• Home to one of Chinas two stock exchanges
• Cosmopolitan society
• most foreign investment
• Highest per capita income
• Top Notch Transportation System
• Direct flights from major international cities
• Major seaports
• Trains

7
Competitors

• Main Global Competitors in China
• Century 21
• Worlds largest residential real estate sales
  organization
• 6,600 offices in over 30 countries
• Provide similar services only in the residential
  market
• First mover advantage in China
• Coldwell Banker
• Provide similar services only in commercial
  market
• Operates in 40 countries
• Already in China

8
Competitors Cont.

• Local Competitors
• Many local real estate agencies
• Elite Realty
• One of the largest property brokerages
• Operates internationally
• Shanghai Pearl Company
• Home base in Shanghai
• High Brand Awareness

9
Foreign Entry Mode

• In penetrating other foreign markets, RE/MAX has
  traditionally relied on a franchising strategy.
• Due to special characteristics of China, we
  recommend to establish a joint venture with Elite
  Realty
• Culture
• Guan-Xi
• Less risky than other alternative modes of entry
• More control
• Familiarity of local regulations and standards

10
Elite Realty

• Beijing Based Company
• Actively seeking business opportunities in
  Shanghai
• Agents
• Knowledgeable
• Highly trained
• International experience
• Client Lists
• Motorola, IBM, GE, Nokia and more
• Many of RE/MAX clients have conducted business
  already with Elite Realty
• Common Objectives With RE/MAX
• Service gear towards residential and commercial
  property

11
Marketing Mix

• Services
• Focus on commercial real estate business first
• Provide extensive trainings
• RE/MAX global satellite network
• Management training
• Target Market
• Primary Foreign business firms
• Secondary Domestic business firms
• Future markets individuals --- Residential
  realty
• Price
• Penetration strategy based on
• Location
• Property size

12
Market Mix

• Place

Shanghai
13
Place Cont.
Xian
Beijing
Chengdu
SHANGHAI
Guangzhou
14
Advertising

• Traditional Media
• TV
• Print Magazine and Newspaper
• Non-Traditional Media
• Billboards
• Strategically located in high traffic districts
• Airport
• Bus/Metro Stops
• Internet
• www.remax.com.cn in both English and Chinese
• Paid sponsorship to popular search engines such
  as Yahoo! China

15
IMCs

• Strategies To Increase Brand Awareness
• Give out stress balls and small office supplies
  with RE/MAX logo
• flyers
• Brochures
• Sponsor events
• Sports i.e. Olympics, Chinese Soccer League
• Formula One Grand Prix
• World-expo

16
Recommendations

• Proceed With Caution
• Carefully study Chinese culture and management
  style before final implementation
• Negotiate with Elite Realty to determine fees,
  terms of the Joint Venture, and other policies
• Once Successfully Implemented
• Explore opportunities in other major cities of
  China
• Expand to include residential services in China
  as well as commercial

17
Conclusion

• Shanghai proves to be the most promising market
  for RE/MAX to enter China
• Based on non-tariff and cultural barriers, Joint
  Venture will the best mode of entry for RE/MAX
• RE/MAX has a competitive advantage through its
  well established brand awareness and equity.
• Our carefully developed marketing plan will
  assist RE/MAX to achieve its goal in penetrating
  the Chinese real estate market and the expansion
  of the RE/MAX corporation.

18

• Thank you for your time!