Track2Realty Survey: The question is what shapes public perception as far as brand premium of a real estate company is concerned? User experience and word of mouth publicity is what matters to them and advertising is nothing more than a medium to know about the new launches.
While the most prominent real estate companies often tout the importance and impact of their advertising presence in creating “brand recognition,” this industry research has shown that awareness of the company’s brand is actually not a factor customers take into consideration when selecting their dream home.
“I bought my house through the recommendation of a close friend because majority of my peer group were buying into the same apartment. Moreover, the broker assured the first buyer in our chain for extra discount on each referral and that worked well in our collective buying decision,” says Ranjana Srivastav, a school teacher in Delhi.
Does brand matter to the real estate consumer? The survey finds the conviction among the buyers that real estate is a local, service business, and that an international brand identity has very little importance or impact at the time of house hunting. In fact, study shows that when choosing the project, consumers relied very little on the company’s brand.
Nearly seven out of ten, 67 per cent were not even bothered and ready to buy a better apartment of a local developer with less brand value than the national developer with brand value and resultant high cost.
“What will I do with the builder’s hyperbole about international tie-ups? For me the concern is the quality of the house the way it was promised. Also, I am more bothered about the necessary amenities. The way they advertise, if 10 per cent of that money is spend on additional furnishing of the flat, I will call that company really worth being called a brand,” says Charles Nandi in Kolkata.
The trend has been more visible in tier-II and III markets as compared to the metro cities and tier I markets where more than four out of ten, as many as 43 per cent, said a branded house is better than the project by lesser known developer. In terms of consumer psychograph such a mindset is more prevalent in the high-end home buyers where nearly seven out of ten, as many as 88 per cent, prefer a branded real estate company.
However, the survey also noted that majority of those, no less than 82 per cent, of the home buyers in tier-II and III cities who are brand conscious are actually investors from the metro cities or the NRIs who are now investing in smaller towns for better appreciation, affordability, home town or as a second home. They are the buyers who are exposed to the metro life and are even otherwise brand conscious in other investment instruments like gold as well.
The brand quotient also differs in each segment of the housing and house seekers with limited budget are not bothered about the brand. In affordable category or low budget housing nearly all, 92 per cent, want cheaper houses with no concern for the brand value of the developer. In mid segment housing, however, more than half the buyers, 65 per cent, want a reasonable brand and local developers with proven execution capability score in this given segment.
But when it comes to luxury living, nearly nine out of ten, 88 per cent are truly brand conscious and ready to pay more for the brand and the neighbourhood. Brand positioning of larger developers with national presence matters the most in the selective category of ‘By Invitation’ kind of super luxury projects.
Unfortunate reality, however, is that developers in this category also fail to position their brand in the right context. More than half of such buyers, 56 per cent were wondering why is there a hoarding of super luxury ‘By Invitation’ project at the down market crossing in the city.
“If I am paying a premium I am not paying for just brick and four walls around. I am rather paying the premium for a destination address, and the kind of overall luxury aura that the developer is known to create around his project. But when I find such a project being sold at the down market crossing, I have reasons to be suspicious about the neighbourhood and class that I have been promised by the developer,” says Yunus Rahman in Mumbai.
…to be continued
