Bottom Line: There is a paradigm shift in the marketing strategies and the project offerings across the budget segment of housing on this Ganesh Chaturthi.
Indian real estate had never been the equal opportunity market due to high demand, forget being the buyers’ market. And hence, the focus was never as much on the buyers as it is today. Definitely the developers have learnt their lessons in the wake of slowdown and hence on the eve of Ganesh Chaturthi this year the market is getting ready for various out-of-the-box strategies to get noticed.
It is no longer about changing the dateline of the last festive season for marketing offerings. Lining up with freebies such as home furnishings and gold coins, offering cash discounts, or sending on a vacation will no longer work. With the increasing exit of investors in the market the tried and tested formula of the developers seems to have already gone for a toss in the last couple of years.
Hence, on the eve of Ganesh Chaturthi and long festivals ahead most of the real estate companies are evaluating their marketing formats to touch base with the end-users and make the best of the festive spirit.
Focus on the festive season this year has suddenly turned on the inventory rather than new launches. Buyers in the market who are mostly end-users are in no mood to go for the pre launches or new launches, even if the offer promises discounts, add-ons or foreign trip in exchange.
Strategic shift
- Mumbai real estate experimenting with new marketing formats this Ganesh Chaturthi
- Symbolic discounts & freebies no longer work to lure home-buyers
- Project differentiation & pricing strategy to be calling card now
- Focus on inventory than new launches this Ganesh Chaturthi
The home-buyers in the Indian property market are today negotiating for a ready-to-move property as it is easier to evaluate the probability of appreciation, the reasonability of the imposed rates by the builder, exact specifications being met or not.
Many of the developers are therefore taking the corrective measures now. With the festive season ahead when most of the booking happens, they are betting their last penny on the 20:80 scheme to beat the slowdown and invoke confidence in the psyche of the buyers. The scheme, also known as the ‘subvention scheme’, is emerging as a popular marketing tool, as the buyer has to pay only 20 per cent upfront, while the remaining 80 per cent is paid at the time of possession.
Does it mean that the tried and tested marketing format over the years has failed? Shajai Jacob, Head – Marketing, Jones Lang LaSalle India says the type of marketing strategies that Indian developers employ to sell their products in a tough market may often seem strange to property marketers in other countries. Nevertheless, these marketing strategies are based on a deep understanding of their target clienteles, which are as variegated as the Indian real estate market itself.
“In India, the aspirational quotient can not be under-estimated and can often be capitalized upon. Certain add-on offerings or freebies often appear to have no logical connection to the actual considerations property buyers would have. However, they in fact address well-researched ‘points of attraction’ within their targeted customer base. This dynamic is especially true in the case of the noveau riche class of buyers, but can apply equally to customers coming from established wealth,” says Jacob.
Some developers have overtly displayed their marketing strategy much in advance, while others are doing it tacitly with the sales channel; yet the fact remains that Mumbai realty has learnt to experiment with the tried and tested marketing format and sales innovations. Some are doing different things, while others are doing things differently. For first movers the strategy has paid well in advance and the sales graph is just indicative of the thought process that has been put into.
Diipesh Bhagtani, Executive Director, Jaycee Homes says selling strategy is different from developer to developer and the developers with inventories are offering attractive unique selling propositions to the buyers in their own way. Some are offering white goods and furniture along with modular kitchens; others are offering free international holidays. These incentives are based purely on the policy of their individual business and cannot be generalized.
“Yes the developers are optimistic of the property market and feel that the market will show vibrancy during the festival season. This is the right time to buy a property as the rates are quite stable now and is expected to go up after the festival season. Also, there are a lot of attractive offers by the developers during the festival season,” says Bhagtani.
A section of analysts believe there are several factors that will have a combined effect in the recovery of realty market, rather than just change in the marketing strategy. While new project launches will happen towards the end of calendar year 2016 or first quarter 2017, the existing projects that would have undergone redesign & resubmissions as per the new DCR guidelines would see a revival in marketing campaigns.
On Ganesh Chaturthi the market is also expected to turn more receptive with the improvement in investment climate and funds liquidity. The customers would have higher comfort in evaluating the building plans with the minimization of grey areas and pricing norms.
There is an emerging trend towards reworking the area formats to enhance the carpet areas, and adopting smaller areas for the conventional 1BHK, 2BHK apartments. These are measures to lower the overall ticket size, and make it a more affordable proposition. In the luxury formats, there is emergence of two trends – Branded Residences & Serviced Residences.
The Branded Residences offer designer homes as per the style standards of international luxury brands; the extent of design play could include furnishings and fixtures in the house. Serviced Residences will be customized offering that include various services as add-on package like concierge, butlers, housekeeping, gourmet kitchen etc.
Everyone seems to be unanimous that the tools used to access the customers would continually evolve depending on the changing customer psychographic profile. The most fundamental element is the product and brand promise. Hence, it is so important to create a product proposition that meets the customer requirement, in terms of specifications and price.
A given project has the potential to command customer premium if it can demonstrate value in terms of space utilization, location advantage, amenities. In case of luxury projects, the ability to create an iconic address is still the biggest draw; the lifestyle amenities are more or less given.
Well, if marketing gimmicks and symbolic festive offers are out of the business, it certainly is the sign of a fast maturing realty market. While the home-buyers are getting more discerning and marketers increasingly being forced to innovate with value-for-money proposition, festivals of 2016 may be the beginning of a paradigm shift in the collective consciousness of all stake holders of Indian real estate.
