The of Resident Manager of a 20-Unit Apartment Building Near the Campus of a Major University - Case Study Example

Based on the details available, it will be possible to discover how the future demands of apartments will be met. In another sense, this will also inform how many apartments are likely to remain vacant due to oversupply or changing demographics.

The vacancy rate of apartments is not only a function of the rent charged but also associated with the amenities available in the apartments. In the given case, the available apartments are old, worn, and devoid of any modern facilities. The resident manager’s survey reveals that people have already been paying more for newer complexes that provide facilities of microwaves, swimming pools, work-up units, dishwaters, ceiling fans, and such utilities. This implies that the market is for modern apartments and occupiers are ready to pay for that.

Being near the university campus, the resident manager’s apartments do provide situational advantage and therefore it may appear that most of these apartments should remain occupied; however, that is not the case. These apartments will certainly be preferred by those who do not have transport and have to visit the university campus area frequently for attending classes. The higher vacancy rates reveal that a class of people that prefers apartments in proximity to campus is not much in proportion.

On the contrary, the premium segment needing apartments with all amenities is much larger. It is important to note that people want an apartment with modern amenities even by paying higher rentals as mentioned in this case. Given the above perspective, it appears that even if the resident manager reduces its rental charges, there will not be a significant improvement in occupancy rates. Drastic reduction in rentals could improve occupancy but that will not suffice their purpose. After all, the resident manager is interested in maximizing the absolute revenue on a monthly and yearly basis for a 20-unit apartment and not merely occupancy rates.

Some judgment of price elasticity may help here in the decision-making process. For example, if the demand for apartments is price inelastic then any reduction in the rental will not generate any significant demand for an apartment as people are not looking at the price but the basic amenities (Riley, 2012). Moreover, due to global integration, increasing numbers of international students enter the country for higher education and they want accommodation with all necessary amenities. Possible Remedial Measures Kotlers marketing strategy dictates that to have enhanced demand, the product must fulfill customers' needs.

In this case, customers want modern amenities in the apartments without bothering to pay higher rentals. The resident manager must improve existing units of apartments by adding all modern amenities such as a pool, gym, and kitchen utilities such as microwaves, dishwashers, deep freezers, and ceiling fans. Apartments must look attractive with good interiors and exteriors. All old and degraded furniture must be replaced.