Housing Finance Marketing System:
Housing finance marketing system includes how needs of funds have been identified and satisfied. Housing finance marketing system is the process by which financial institutions identifying housing finance needs, designing, promoting and delivering their market offerings to satisfy the housing needs with view to earning profits as well as considering societal wellbeing.
Housing Finance Market Segmentations and Target Market Coverage Strategy:
Housing finance market performance depends on credit markets and monetary policy of a country. In Bangladesh housing finance market has been segmented on three groups namely
Low Income Group
• Most of the gap in the housing market is for lower income/affordable segment
• The existing dwellings are non-standardized and of the low quality
• The development needs are currently not served by the formal sector
High Income Group and Middle Income Group
• This segment has some access to formal financing and the quality of units is of some standard
• Significant potential for the formal sector to participate in commercially viable high and middle income housing segments through development of housing schemes and standardization which will lower the cost of production.
Developers – Banks/DFIs
• This segment is mostly unorganized but currently supplying some of the housing demand for middle and high income and commercial property in most of the major cities
• This segment is gaining momentum
In Bangladesh both public and private sector have been offering different sorts of housing finance products that means housing loans to satisfy different customer groups. So this industry is following differentiated target market coverage strategies (Segmented Marketing). Obviously this marketing strategy works well. The private institutions may focus on concentrated marketing strategy as lower and middle income group are ignored by giant institutions.
