Company Background
First Class Realty (FCR) in Orland Park, IL is an independently owned and operated real estate organization with over 200 sales agents and associate brokers, as well as a 6-person administrative staff. Operating and servicing the real estate needs of South Suburban Chicago, Illinois since 1990, they have the largest amount of real estate agents in the area; and currently service approximately 35% of the market share. Their philosophy is to be loyal to their clients, cooperate ethically with their competitors, and be truthful in their statements and advertisements and to not interfere with the exclusive contracted relationships that other agents have with their clients. In addition, FCR makes a conscious effort to attract and retain the very best of agents by offering the maximum commission plans available in the area; and sharing in company operating fees and overhead costs; all while offering the freedom to agents to operate their business independently with advanced support services. FCR stresses personal development among its agents; training is offered often and strongly encouraged so that everyone can be their best rather in a sales, management or support role. In addition; several discounts and services are available for agents to promote themselves individually as well.
Initially, First Class Realty worked only the residential-side of the business, offering real estate listing and sales assistance - marketing single-family and town-homes, condos and four-unit or smaller multi-level buildings- in addition to foreclosure counseling and property management services. In 2001 they opened their commercial and land sales division; marketing multi-family properties – five units and above, office and industrial spaces, as well as retail establishments. Shortly after, in 2003, in alignment with the real estate boom; FCR embarked on a new business venture of real estate development in both the residential and commercial/industrial arena. FCR has made significant strides in making themselves known throughout the years within the South Suburban community by attending and sponsoring various community service events, making donations to several schools and non-for-profit organizations as well as being a strong force in village and town hall affairs. Their “friendship first; business second;” philosophy has paid off throughout previous years; creating many corporate and personal relationships that has continuously led to repeat business and loyal customers. Despite the downturn of the economy; they have been able to stay afloat; mainly because of their positive and consistent relationships in the residential market; but are seeking ways to increase sales in their other markets as well.
Discussion of the Current Business Issues
First Class Realty has always been a competitive force in the residential-side of the real estate business and has always had the ability, with its community involvement and repeat business; to effectively survive previous ‘down’ markets. At the time of their decision to branch off into other segments of the real estate business the market was ripe for development all over the country with enough inventory locally for both FCR and its competitors to have more than their fair share of the market place. When the recession began in 2008, the market took a huge drop in all areas, with real estate being the main culprit. Companies nation-wide were adversely affected, (enter stats on r/e market) including FCR; making it difficult to produce a profit at all. With the lack of inventory; competition was fierce and for the first time FCR began to wonder if it was doing all it could do to sustain. When they initially entered into the commercial-side of the business; it was a beautiful marriage of immediate success, new developments were everywhere; property values were rising and there seemed to be no end to the stream of income coming in. Seemingly overnight; foreclosures, short-sales and unfinished projects dominated the area; making it a constant struggle to create a profit. (enter stats from commercial r/e and recession). In addition; the faces of its competitors have changed as well. Previously limited to well-known franchisees, such as Re/Max®, Coldwell Banker®, Keller Williams®, and Century 21®; smaller companies are now coming to the forefront offering similar business structures and better technology. Where providing a family atmosphere, honest and reliable service was enough to attract and retain clients in the past, First Class Realty is now in a position where they are operating on antiquated practices and technological expertise. Gone are the days of yesterday where marketing presentations consists solely of a slide book, market analysis of sold and active listings of homes, neighborhood popularity and a knack for creating and nourishing relationships. Although the latter is very much necessary; buyers and developers are looking for so much more. When on marketing presentations with slide show book in tote; FCR’s agents are walking away empty handed as their competition presents its data in a very technologically savvy way; grabbing business right from under them.
With sales being down on a national level; FCR is feeling the pinch all the way around, but particularly in the commercial, land and development areas. They are now seeing the need to implement an affordable technological market piece that can not only reaffirm their position in the marketplace in all areas; but capture new business in the commercial and development areas as well, which were hit the hardest. Funds are extremely limited, and the executive team is seeking suggestions on how to meet customer demand; compete effectively and to increase and retain clientele.
Discussion of Proposed Solution (3pages include how the chosen topic addresses the business issues described As mentioned, FCR is operating on out-dated marketing strategies that are having an adverse effect on their ability to obtain new business and retain its current clientele – particularly in the commercial and development-side of the business. Funds are very limited; thus they are looking for a solution that is affordable and easy to implement.
My suggestion is to employ Virtual Reality Technology in their marketing efforts. Virtual reality technology is a 3-dimensional, computer-generated simulation of an environment using interactive software; special graphics, video images and stereo sounds allowing the user to view and interact within the computerized environment as if the object and scenes really exists (Principles of Information Systems). For virtual reality to work, typically only three factors are necessary --a computer, special software and the individual user.
FCR can utilize virtual reality to create virtual tours that will provide a graphical presentation of the property to its potential clients. The tours are a simulation of the actual location encompassing still, 360-degree panoramic, or video images of videos or virtual models of real location; the term panorama indicates that the view is unbroken or unobstructed in all directions since a panorama can either be a series of photos or panning video footage (Encarta® World English Dictionary [North American Edition] © & (P) 2009 Microsoft Corporation. All rights reserved. Developed for Microsoft by Bloomsbury Publishing Plc.) To make it more presentable, the addition of sound; music; narration and text is an option. Virtual tours are user friendly and do not require additional downloads or plug-ins for the user. They can be used on FCRs website and via a more portable means; CD-ROMs. (http://homebuying.about.com/od/glossaryuthruz/g/VirtualTour.htm)
These tours can be implemented on both the commercial and residential side of the business. In relation to residential; FCR agents can meet with a seller for a listing presentation and present a personalized virtual tour on CD-ROM (initially external picture stills only) showcasing their home in its own limelight in different angles with options to view maps, floor plans, and navigate between rooms; set against a pleasant background with ‘mood’ music and content that makes it appealing to their target buyer. “By transforming the photographic image from a flat, two-dimensional world to a 360-degree virtual reality view, virtual tours allow the visitors to explore the property online as if they were there”, (Virtual tours and its importance). As an upgrade; full-motion video virtual tours should be offered. A video virtual tour is a full motion video of the structure that is filmed while moving from room to room, making potential buyers feel as if they are being ‘walked’ through the property. Both forms of virtual tours should be tailored to the client and should include titles, captions and appropriate back ground music. http://justabouteverythingyoucanthinkofblog.kpgolfpro.com/12526/virtual-tours-pros-and-cons/comment-page-1/ (see figures 1 and 2).

Figure 1 360 degree panoramic tour http://www.outsource2india.com/imaging/real-estate-virtual-tour.asp

Figure 2 Virtual Tour still images http://www.outsource2india.com/imaging/real-estate-virtual-tour.asp
Whether using a camera or video equipment for implementation; the sellers are comforted in the fact that their properties are given the maximum exposure-standing out in a competitive real estate and online market, and buyers are able to obtain a complete view – rather than segments – of the property prior to visiting. This mode of technology has been proven to increase visitors, drive up sales and attract more traffic to the seller’s door (http://www.etoxtr.com/4321.html ). In addition; it allows us to focus on persons who are sincerely interested in purchasing the property rather than non-buyers or window shoppers. In fact; according to the National Association of Realtors, seventy-eight percent of those shopping for homes felt the most important feature when searching was online photos, detailed property descriptions and virtual tours. http://realtytimes.com/rtpages/20050104_virtualtours.htm
By providing both our buying and listing side of the business this virtual reality benefit puts us right in alignment if not ahead of our competition; especially when combining it with our stellar customer service capabilities BUYER’S GUIDE: Virtual Tours. As for the commercial and development-side of the business; instead of creating multiple paper versions or drafts of architectural designs in blueprint format for properties and designs to get approved by our builders and clients; we can present a virtual design using a 3-D software that details both the interior and exterior illustration of the structure. This will afford FCR clients the opportunity to have a clearer depiction of what the final result will look like; and provide the capability to design and tailor it to their specifications right on the spot; rather it be textures, colors, or adding and subtracting rooms and sections. In addition; the client can determine if certain components of the building are possible or not, being that errors will be identified right away http://www.buzzle.com/articles/virtual-reality-in-architecture.html
When deciding on whether to outsource, or create the virtual reality tours independently, FCR has to take a few things into consideration, one being the scale or size of the job. Another thing to take into consideration is that there aren’t too many FCR residential or commercial sales agents and brokers who are technologically savvy. So, to expect them to create a 360-degree panoramic virtual tour independently is unrealistic. However; our representatives on the development-side of the business are already using computer-aided drafting software, albeit, in a more obsolete way. Further; those introducing architectural plans should be equipped with the tools necessary to make changes to the virtual designs in real time, while the client is present to provide input, rather than having to wait for a provider to make the changes to present at a later time.
To hire an independent contractor would definitely make things easier for the sales staff, whose main objective is to sell. Outsourcing can take on a couple of different hats, one being to hire a photographer/videographer on an as-needed basis, that typically runs about a hundred dollars per tour, and either purchase a virtual tour producing software, which typically runs about $1500.00 http://www.realtor.org/archives/buyersguideaug05 and create the virtual designs and tours themselves; or to have a permanently trained internal administrative staff to complete the entire process all together Another option is to outsource the entire project to a third party full-service vendor. Residential virtual tours usually start at a little over a hundred dollars http://circlepix.com/virtualTours.htm depending on how many panoramic images are required; for commercial properties prices vary based on the structure of the building, size, ranging from $1200-$5000 and up. Most companies offer both a full service and self-service option, along with training on how to execute and modify tours. Some things to take into consideration when deciding on which way to go is the budget, down-time to implement, train and acclimate everyone to the new process, and
Recommendations
(summary of previously presented content and consistency with the thesis statement from the introduction) supported by strategic impact of topic over a three year time frame
First Class Realty’s relying solely on an outdated method of advertisement and marketing without keeping up with the shift in technology; and losing business to its competition because of it. According to the RealtyTimes, the real estate competition has been shifting their advertising budgets from traditional advertising, in favor of web-based virtual tour/Internet advertising 40/60 since the early 2000s. FCR has some catching up to do. http://realtytimes.com/rtpages/19991118_challenges.htm
Based on the information presented; First Class Realty should carefully evaluate which method they will use to put virtual reality tours and designs into action. Employment is both affordable and essential in order to strengthen their position in the marketplace in both the residential and commercial, land and development arenas. Initially, I recommend outsourcing the tours to a firm that provides both full-service and self-service options; to ensure that the finished product is professionally done and indicative of the quality of work FCR represents. Also, an administrative staff member from each department should be selected to gain an in depth knowledge of the software needed to create and modify the virtual designs and tours; and to understand the type of camera and video equipment needed to work efficiently with the selected company’s software for smaller projects and the residential side of the business. Between year one and two, emphasis should be made for those on the commercial, land and development side of the business to learn and train on how to integrate these tours and designs into their marketing plan and to become skilled at how to make modifications to them. The residential-side of the business should be equipped with a standard example CD of what the homeowner can expect, and have the option of taking external photos, uploading them onto our purchased software to create a still-shot virtual tour for marketing purposes. A standard 360-degree panoramic virtual tour should be offered automatically, with the option of upgrading to a full-panoramic 360-degree video tour (shown on the sample CD) created by the company we outsource to. To summarize; year one should be outsourced completely, year two should be dedicated to training and becoming comfortable using the equipment and generating, modifying and executing tours and designs to completion; and year three should be committed to becoming self-sufficient with the option of outsourcing for larger projects.
It’s important for FCR to remember that the virtual reality tours are to be executed in conjunction with their current marketing philosophy; “friendship first; business second;” which is what go them to their stellar success in the first place. Today’s buyers are still quite impressed with a company’s ability to be honest, possess integrity, have great communication and negotiation skills and an adept knowledge of the home buying, selling, marketing and design process. http://www.inman.com/buyers-sellers/columnists/dianhymer/assemble-your-real-estate-a-team .”