What are the Marketing Strategies Developers Use for Higher Sales, During the Festive Period?

by Mr. RAVI SINHA, Track2Realty

Reports the marketing strategies developers use for higher sales, during the festive period

At a time when critics of Mumbai's real estate segment were busy predicting a tough time for the market, with reports suggesting that the city is sitting over 48 months of inventory; there has been an interesting undercurrent in the market, wherein, some smart developers / promoters are devising new strategies to beat the slowdown.

Other developers /  builders too, have started following this trend and hence, the city's real estate, which is an aspiration for one and all, is gearing up to handle new emerging challenges.

Prima facie, it is not easy to resist the temptation of criticising Mumbai city, which has extreme statistics, in general & real estate market, in particular.

However, the inherent resilience of Mumbai's real estate market has survived all odds, be it poor transport links, highest population density or / low rate of development by global standards. Few can deny that it still holds a rank at the top of the global wishlist.

Moreover, statistics only tell half the story & one of the reasons why inventory has been high in the last few years, is the fact that the new business model of Mumbai's real estate has been that developers are entering into joint ventures with the land owners, since buying too much land can pressurise the resources for execution. So, instead of flaunting the millions of square feet of land bank they hold, the focus of developers has now shifted to the completion of the projects.

Mr. Pranay Vakil, Chairman, Praron Consultancy, agrees that this model allows the realtor more flexibility, as he / she is not paying interest on loans taken to buy the land.

"Since all the resources of the developer / promoter have not been exhausted on buying the land, he can start the project from scratch and finish it without bothering about immediate sales numbers. It also gives him more holding power in a bad economy.

 

RAVI SINHA,
Track2Realty

At least half the projects under construction now follow this model.

"Despitethe wishful thinking of a distress sale in Mumbai, the property index has not lost its sheen. A section of analysts believe that the rising inventory is also due to the waning investor activity, due to the overall macro-economic scenario. So, fundamentals of the segment are turning around in due course of time. Had that not been the case,the rentals would not have been rising steadily across the micro-markets of Mumbai.

Mumbai, with its high GDP compared to the rest of India, will continue to command a higher premium in property prices, notwithstanding high inventory. It is generally believed that the right answer to dealing with the rising inventory level is to devise the right kind of sales strategy.

Market watchers maintain that if developers / promoters such as Lodha Group, Omkar Realtors & Developers, are selling premium projects in today's market, so can others, provided that they have right product for the right kind of buyers.

Mr. Bharat Dhuppar, CMO, Omkar Realtors & Developers, agrees that it is time for out-of-the-box thinking to attract customers, since the sentiments are subdued.

"To pick any one specific component would not do justice to other components which contribute in unison for a highly successful project launch. One has to go the extra mile with promotion experimentation. Be it the radio platform to print and OOH; it's important to create a strong positive buzz owing to positioning & customer servicing components. We realised that demand for 2 BHK units in the Goregaon-Malad belt particularly has been strong,"adds Mr. Dhuppar.

Agreeing that it is time for a fresh approach and marketing strategy, Mr. Anshuman Magazine, CMD,CBRE South Asia, informs that the recent policy moves from the RBI vis--vis the rise in repo rate as well as the 20:80 scheme, can possibly dampen investor sentiments in the upcoming festive season. With housing loan rates having gone higher, buyers are likely to continue remaining cautious & delay their purchase decisions further.

Along with the macro-economic factors highlighted earlier as a reason behind the current demand slowdown, the burden of inflated EMIs may be expected to deter buyer sentiments in the upcoming festive period too.

"Although discounts and freebies have been the norm for luring home buyers during the festive season, this year, the season has clearly become a buyer's market. Some builders /promoters  with high unsold inventory levels have begun to face liquidity issues, leaving them with little option but to reduce prices &  offer discounts in a bid to sell off vacant units.

Such sales strategies range from discounts of about 5 to 7% over a limited period; absorbing stamp duty charges; or /  providing furnished homes with air- conditioners,modular kitchens, free parking, etc. This season, certain developers have also been known to offer overseas travel packages to home buyers, "shares Magazine.

Mr. Diipesh Bhagtani, Executive Director, Jaycee Homes, opines that the selling strategy differs from from developer to developer, and players with inventories are offering attractive unique selling propositions to the buyers in their own way. Some are offering white goods &  furniture along with modular kitchens;others are offering free international holidays. These incentives are based purely on the policy of their individual business & can not be generalised.

"Yes,the developers are optimistic of the property market &  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 & are expected to go up after the festival season. Also, there are a lot of attractive offers by the developers during the festival season,"says Mr. Bhagtani.

Ms. Manju Yagnik, Vice Chairperson, Nahar Group, adds that the festive period holds great significance in India and contributes in a big way to the market. Buying a house is an emotional decision and people prefer to wait for an auspicious occasion for a new beginning.

"Mumbai can not be compared with any other city in terms of the property market due to its ever increasing demand for housing. The festive season will trigger a brighter time in the property market as the prices have also been steady since quite some time,giving buyers a good time frame to plan their investments. Despite the rising cost of materials,labour &  land, there has not been a rise in the pricing of properties,"she says.

Some developers / promoters have overtly displayed their marketing strategy much in advance, while others are doing it with sales channel; yet,Mumbai realty has learnt to experiment with tried &  tested marketing format and sales innovations. Some do different things, while others do things differently. For first movers, the strategy has paid well and the sales graph is indicative of the thought process that has been put into it.

About the author..

The  writer Mr. RAVI SINHA is CEO at Track2Realty

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