The Real Estate industry has undergone a sea change in India. A massive transformation from single-unit houses to vertical condominiums has taken place in the 1990s onwards until the booming market from 2000 to 2008. One has seen and experienced first-hand the wild buoyancy of the market, where nuclear families were fast emerging from within the vast Indian middle-class socio-economic segments. Thus, the demand for apartments in the huge “group-housing” sector grew by leaps and bounds. This also led to rampant speculation in the mid-level investor categories. So much so, that the prices started to get inflated artificially.
The role of strategy and marketing in real estate has been historically and universally prevalent in the form of press advertisements and printed materials. Colorful brochures and direct mailers were the old order of the day. Developers largely depended on the actual site visits by potential customers/end users. This was also the time where the ‘Sample Flat’ was the most important factor in the sales process. Also, the importance of the ‘brokers’ in the process was critical. The brokers had built up a large database of clientele, who were the real ‘speculators’. This group of investors was able to make unprecedented amounts of money by buying and selling bits of paper – “the perchi”. The situation was unreal … even surreal! I can distinctly remember people with cheques in their hands, literally lining up outside my chambers.
People coming early in the morning from Moradabad (brass manufacturing unit owners), Haridwar (steel utensil manufacturing associations) all clutching onto 20-25 cheques for the ‘booking amount’. All it took was just one advertisement round in the English and Vernacular newspapers. Two types of brochures were made: the thick expensive ‘Coffee Table’ kind and one which was thinner and less expensive – this was the type which was freely handed out. There was a blank box at the back of these thin brochures where the brokers could incorporate their company’s name and contact details.
Apart from the printed materials, the ‘scale model’ was an important ingredient in the marketing mix. Here, the architectural exterior and the interior graphic renderings were paramount. There used to be great bonhomie and a spirit of co-creation between the chief architects and the marketing team of the developer companies.
Great friendships were forged with Indian firms like Hafeez Contractor, DikshuKukreja, Rajeev Khanna and International companies like HOK, HO & Partners, Benoy, Arcop, and Belt Collins. The learning for the real estate industry was tremendous. Many of our skills developed during this period. But, before we step into the real estate world of 2004-2008, I would like to revisit the 1980s in South East Asia.
I was working with Ogilvy & Mather, one of the leading advertising agency groups in the world, under the legendary Sir David Ogilvy. He sent me from London to Singapore in 1979 where I met one of the most dynamic men I have ever had the privilege to meet, Mr. Robert Kouk. A far-sighted entrepreneur who began developing luxury real estate in Kuala Lumpur and Hong Kong.
The ‘Shangri-La’ group of hotels was also developed by Robert Kouk and his son Ian Kouk. The most successful strategy for marketing those luxury properties was to hold extensive ‘Road Shows’. We prepared very attractive presentations and visited urban centers throughout South East Asia.
Back to 2005 India. Many smaller constructions led companies were getting into land acquisition and development of residential spaces near the urban centers that were being connected via newly sanctioned highways and expressways.
This is the time one saw a surge of mini-townships. For example, we developed a formula and strategy of building similar sizes, pricing, designs and lifestyle features like clubs and security systems, etc…Perhaps the rise of professional facility management and operations really took shape during this period. Notable examples are the advent of “OMAXE CITIES and ‘ANNALS GOLF CITY’.
The role of marketing at that period was to portray the type of life a modern nuclear family can enjoy. Importantly Tier-II and even Tier-III dwellers could now begin to experience. The strategy was to demonstrate to the buyers that the benefits of a large urban metropolis are being made available to them. Here cities like Lucknow, Indore, Jaipur, etc.. started marketing this ‘modern branded’ lifestyle. The investment opportunity was also marketed to NRI’s in the Middle East, UK, Canada, and the USA. Exhibitions in different parts of the world were the order of the day.
The real estate crash and the aftermath of 2008 forced the industry to recalibrate their marketing strategies. No longer were there queues of willing buyers. The strategy needed to be overhauled from a ‘commodity’ based /information-based, awareness creation to proper branded, desire-creation based strategies.
The current marketing strategies are based on creating brands rather than just offering brick–n-mortar buildings. Professional marketing people and well-researched campaigns emerged. Some of the top advertising agencies had started to get hired for all this work.
But we should start at the very beginning of the journey. The conception of the project. This is where market research agencies play a very important role. Developers may calculate the cost of land, construction, staff and admin/operations plus marketing(at 1.5-2% of total sales) to arrive at the basic price per sq ft, plus the profit margins.
But the most important criteria became the type of lifestyle offered, the location and the acceptable price realization. A lot of market research and brainstorming had to go into these strategies. Many projects with themes like ‘Golf-Living’ ‘Near to nature ’,’The Forest’, etc. were developed. These projects were successful in achieving high prices and robust sales. The themes were developed by the marketing teams after very careful planning and research. Of course, there were many developers who just followed the trend. Too many ‘Golf Views’ too many ‘Italian Villas’ too many ‘Rodeo drives’. The themes lost meaning.
Cut to the best practices.
The world is now a digital one. Real estate marketing is no different. The strategy is pretty much focused.
Here is a step by step plan on how we see the role of marketing strategy today-
Targeting the right audience through artificial intelligence algorithms. Once one identifies the target group than it is imperative to focus on their likes and areas of interest. Here are some of the tactics that I have employed with some good measure of success;
1. Understanding the market. Mapping the location of one’s project, accessibility, connectivity and the socio-economic footprint of the area. This will give you a fair idea of the type of sizes, prices, architectural designs, facilities, etc that would be configured in planning the project. It will also be vital in one’s financial planning and projections.
2. Creating advertising on the net. The benefits, of course, are that one gets to measure the results and get genuine leads. Facebook, Instagram, LinkedIn, social media and platforms like Google Adwords, provide for excellent campaigns which are fairly well targeted.
3. The correct positioning of the brand becomes vital in the marketing strategy. The creative
’BIG IDEA’ is still as important as it was when David Ogilvy first coined the term.
4. Customer engagement. This is most effectively achieved at all customer touch-points. At the reception, at the site, online website and all social media interactions.
5. Retraining all real estate sales staff to be Digi-savy is very important. All sales tools should be easily available to them.
6. This would entail, apps, which cover channel partner platforms, Inventory control, Virtual plus augmented reality devices, and practical communication /promotion to qualified databases for engagement and generation of leads.
7. In all the digital transformational activities, one should never underestimate the power of actual physical customer experience either on-site or at the sales centers of the real estate projects.
The future projects in the ever-changing environment should engage in all the best practices that have been developed so far, but should pay heed to some of the key learnings: –
Develop projects that respect and take full cognizance of the health plus wellbeing of residents/tenants.
- Develop projects that show genuine concern for the environment, water conservation, and natural surroundings.
- Modern computerized waste-management.
Provide for integrated plus automated utilities and services.
Indeed, the real estate industry has seen a sea change. The coming years will be highly disruptive. This will also challenge us on how we can adapt our current marketing strategies to meet these new set of social and economic conditions.
Ours is a country of intellectuals and professionals. Therefore, I for one, have no doubt that once again we will take the lead in formulating newer and more scientific strategies.
Dr. Kunal Banerji