Strategy of builders in buyers market

Paradigm shift from sellers market to buyer market. With inflation and home loan rates rising, realty firms have started using unusual marketing tactics to woo buyers.

Developers go the extra mile to woo buyers.

New Delhi:
When real estate company Unique Builders launched a condominium development near Jaipur, 3,510 Hindu priests performed traditional rituals and prayed for divine blessings. The number of priests equalled the number of condos on offer at the development, My Haveli@ Mannat1.An adjudicator for the Guinness Book of World Records was in attendance at the bhoomi pujan (ground-breaking) ceremony in Mahapura village, about 16km from the Rajasthan capital. The ceremony took place when India’s real estate market was starting to cool after a red-hot streak. “The whole idea was to attract attention and create hype around the project,” says Vinay Shenoy, head of marketing at Bangalore-based real estate marketing firm Asipac Group, which conceptualized the event.

Innovative marketing: Dancers at Parsvnath Fiesta, a promotional event organized by Parsvnath Developers Ltd. Real estate companies are adopting new marketing techniques to attract reluctant homebuyers.
The gimmick helped, and the project made up 63% of total residential sales last year in a softening Jaipur real estate market, according to Shenoy. It is an example of how developers are moving away from traditional marketing techniques and adopting novel strategies to attract reluctant homebuyers.

Rising home loan rates and surging inflation have forced both speculators and genuine homebuyers to put purchases on hold, driving developers to think out of the box to drum up consumer interest. Sales in the Delhi suburbs of Gurgaon and Noida have declined by 20-25%, according to estimates by real estate brokers.
Mumbai-based Lodha Group hired an event management company to think up a different on-site experience for potential buyers to sell its luxury villas in Lonavala, a hill station near Mumbai.
The company conducts pre-visit interviews where personal details about the potential buyer are collected. Based on these, buyers are picked up in a luxury car, given their favourite magazine and offered a beverage to sip through the journey to the site, which is then followed up by a personalized trip around the site.
“It is a challenge to sell in a competitive market with consumers being exposed to more variety,” says R. Kartick, marketing head of Lodha Group. “You can’t give out a great advertisement and sit back,” he adds.
Lodha adds a personal touch by clicking a photograph of the visitor on the site. The photograph is framed and then sent to the potential buyer as a memento.
Such personalized marketing techniques lead to increased sales, said Kartick. “There may be a latent desire to purchase but such tools actualize that urge to real buying,” he said.
Unitech Ltd staged special events—a horse race in Delhi and a polo match in Mumbai —to attract buyers when it launched two new towers in its super luxury residential project Unitech Grande in Noida. The events were designed to associate the luxury apartments with pastimes of the rich.
Developers typically spend 1-2% of their revenue on marketing by giving out advertisements in newspapers and airing commercials on radio, television and the Internet.
According to Anuj Puri, country head of Jones Lang La Salle Meghraj, a property consultancy firm, innovative marketing techniques are required for luxury properties and second-home projects, where demand has to be created.
For marketing companies, the real estate slowdown has meant more business
“Such developers have the added task of marketing a lifestyle product and not just a property,” Puri said. “So, you are targeting a customer exposed to international travel and developers are forced to move up the value chain and go beyond the obvious tools of marketing.”
Orange Properties, a real estate marketing agency in Bangalore, has been bailing out mid-sized developers finding it difficult to sell their properties. The agency typically takes up a project for a period of 10 days and markets it aggressively through radio, newspapers and outdoor hoardings, backed by the offer of a range of freebies.
Orange claims that it is successful most of the time. “Buyers don’t have brand recall for smaller developers. So, we have created our own brand, Orange Properties, which we lend to smaller builders and help them in marketing their products,” said a company spokesperson.
In Mumbai, a local developer plans to hand out glasses of lemonade and refreshment towels bearing its brand name to commuters on the local train to Virar to market a residential project it is building in that suburb, said Shenoy of Asipac.
For marketing companies such as Asipac, the real estate market’s slowdown has meant busy—and potentially profitable—times.
Asipac chairman and CEO Amit Bagaria says he is travelling frequently to Mumbai to meet real estate developers who aren’t able to sell their properties and who want him to devise marketing strategies similar to United Builders’ Jaipur bhoomi pujan.
Asipac has received 300-odd emails in the last three to four months from developers, landowners and first-time developers, enquiring about its services. The company used to get two to three such enquiries a fortnight, about three to four months back.According to Shenoy, it is a buyers’ market and the challenge for real estate companies is to cut through the clutter and attract customers.“The projects that are being launched are all the same,” he says. “Today, buyers are making a choice. But the question is how do you draw attention?” That’s where marketing experts are stepping in.

Reference
http://www.livemint.com/2008/06/30222516/Developers-go-the-extra-mile-t.html